Bioenergy seminary

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BIOENERGY OPPORTUNITIES
AT GAY & ROBINSON

E. Alan Kennett
President, Gay & Robinson, Inc.

Alan Kennett & Gay & Robinson


President and CEO of Gay & Robinson, Inc.



Gay & Robinson, Inc. is 7,500 acre sugar cane plantation and sugar
mill located on the island of Kauai, Hawaii



G&R is one of only two remaining sugar operations in Hawaii, the other
is HC&S on Maui.

•G&R currently produces approximately 50,000 tons of raw sugar per
annum.



Highest yielding sugar plantation in sugar per acre, over 7 tons per
acre per year



Sugar production shipped to C&H refinery in Crockett, CA for refining.

Hawaiian Sugar Cane

State Policy Support
• State Ethanol Blending Mandate – 10% ethanol as of April 2,
2006
• State Refundable EthanolProduction Investment Tax Credit
– $0.30 per gallon of capacity, 8 years, up to 15 MM GPY ($36
MM)
• Renewable Portfolio Standard requiring “green” energy
• Reduced motor fuel taxes for ethanol and biodiesel
• Price Preference for biodiesel in State contracts ($0.05)

Ethanol & Hawaii
• Importation of all Transportation Fuels
– 450+ MM GPY Gasoline
– $1+ Billion per annum flowing out ofHawaii from gasoline alone.
• Highest Gasoline Prices in US
– $0.25 - $0.35 per gallon above US West Coast
• Declining Agricultural Sector (Sugar)
– Good Potential for Ethanol Production
• Government Policy since early 1990’s has been to promote renewable
energy sources and to lessen dependence on imported petroleum.

Year

2007 (proj)

2006 (proj)

2005 (proj)

2004

2003

20022001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

US G allons

Gasoline Consumption
600

550

500

450

400

350

300

Decline in Sugar Cane Lands

180,000
120,000
90,000
60,000
30,000

04
20

02
20

00
20

98
19

96
19

94
19

92
19

90

0

19

Acres

150,000

Federal Policy Support


$0.10 pergallon Small Producer Tax Credit



Renewable Fuel Standard – 7.5 billion gallons by 2012



Open & Closed Loop biomass to energy tax credits
– $0.019 per kWh if crop dedicated to energy production



Sucrose to Ethanol Incentives in Energy Bill
– Grant Program for sugarcane to ethanol
• Awaiting appropriations

– Loan Guarantees for sugarcane to ethanol production
• Awaitinggoverning regulations



Potential additional incentives as part of next Farm Bill



Government mandate to purchase biofuels, if available

Location Benefits
• Local ethanol enjoys $0.15 - $0.25 per gallon freight advantage
over imported ethanol (varies by island).
Opposite is the case for sugar:
• Hawaii sugar producers incur $0.0125 per lb. discount off #14
contract price(location discount).
• Freight and handling to CA cost $0.025 per lb.
• Total impact is discount of $0.0375 per lb. meaning a #14
contract price of $0.2125 per lb. will yield only $0.175 per lb. to
Hawaii producer.

Operational Advantages
• Sugar cane to ethanol requires less steam and electricity than
sugar production
• Excess energy can be converted to electricity and sold to utility
–Highest electricity rates in US
• Sugar cane to ethanol will enable cane trash to be utilized for
additional energy production, reducing cane burning

Conversions
• 14 lbs. of sugar = 1 gallon of ethanol
• 1 short ton of sugar = 142.9 gallons of ethanol
• 1 ton molasses @ 50% fermentable sugars = 71 gallons ethanol
• 1 ton of bagasse = 1 barrel of oil (equivalent energy)
• 1 ton coal = 3.4tons bagasse (equivalent energy)

Sugar vs. Ethanol Revenue
• Current Sugar
– 7 tons sugar per acre @ $0.175 per lb. = $2,450 per acre
– Molasses @ $76 per ton = $258 per acre
– Total revenue $2,708 per acre
• Current Ethanol (traditional fermentation technology)






7 tons sugar & molasses equivalent to 1,100 gallons ethanol
1,100 gallons ethanol @ $2.70 per gallon =...
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