Where Oil and Ag Mix

Ag and oil are intersecting in North Dakota with a new joint venture between ag giant Archer Daniels Midland and top-ranked petroleum energy company Marathon Petroleum Corp.
By Susanne Retka Schill | December 21, 2021

With a 25% investment share in ADM’s crushing facility under construction in Spiritwood, North Dakota, Marathon is tying up all the soybean oil production. The oil will feed MPC’s retrofitted oil refinery in Dickinson that reached its full capacity of 184 MMgy nearly a year ago, producing renewable diesel and naphtha. When complete in 2023, the Spiritwood soybean processing complex in eastern North Dakota will produce approximately 600 million pounds of refined soybean oil annually, enough feedstock for approximately 75 million gallons of renewable diesel per year.

Utilizing state-of-the-art automation technology, the $350 million crush and refining complex is being built on the site of a former Cargill malting facility. “The project is moving along nicely,” says Ken Campbell, ADM president of North American Oils and Biodiesel. “There’s been a lot of work done on demolition, abatement and environmental approvals. We remain optimistic that we’ll be on time and well within the budget.”

The Spiritwood site lies east of Jamestown, North Dakota, in an industrial park featuring a circle unit train track. At the site, Great River Energy’s Spiritwood Station generates 99 MW of electricity and sends its lower-pressure steam over the fence to the adjacent 70 MMgy Dakota Spirit ethanol plant. Regional economic developers have long worked at attracting another industry to the site, particularly after Cargill announced it would shutter the barley malting plant. Cellulosic ethanol developers, as well as a second group hoping to build a soybean crushing facility, both fell short on financing.

ADM began thinking about the project in 2019, Campbell says. “The site is very strategic for us.” There’s a good draw of soybean acres in several counties surrounding the southeastern North Dakota location, plus it lies 200 miles east of Marathon’s green diesel plant. Sited on a Burlington Northern mainline, the crushing facility has good access to the Pacific Northwest for soymeal exports.

Dickinson RD
Marathon acquired the Dickinson refinery with its purchase of Andeavor/Tesoro in 2018. Tesoro had begun a conversion to coprocess renewable diesel with petroleum diesel. In fall 2018, Marathon started work on full conversion to renewable diesel, installing Haldor Topsoe’s HydroFlex technology.

Denmark-headquartered Haldor Topsoe describes its hydrotreating process as offering lower energy consumption, resulting in lower carbon intensity alongside a lower capital expenditure. The company offers a portfolio of 25 catalysts specific to processing renewable feedstocks. “We were excited about the success of the HydroFlex technology at our Dickinson Renewable Diesel facility, where it exceeded its process guarantees,” says Justin Womeldorff, MPC renewables business manager. “Haldor Topsoe’s technology is the most widely used in renewable diesel and jet fuel production.” The company’s second installation of the technology is underway at its Martinez, California, refinery, which is expected to come online in the second half of this year and reach its full capacity of 730 MMgy by the end of 2023.

Marathon also began operations early in 2021 at a 58 MMgy feedstock pretreatment facility in Beatrice, Nebraska. The pretreatment includes solids filtration and contaminant and moisture removal for a wide variety of potential feedstocks, Womeldorff says. Pretreatment is needed to remove compounds that would foul the catalysts used in the RD process. Campbell says that its refined and bleached soybean oil from the new Spiritwood crushing facility will probably not require further processing.

ADM is not a newcomer to biofuel processing. The company has been involved in biodiesel production since the mid-2000s, partnering in the building of Mid-America Biofuels LLC in Mexico, Missouri, in 2006, and opening its first wholly owned biodiesel plant in Velva, North Dakota, in 2007. Today, ADM has 725 MMgy biodiesel capacity globally, Campbell reports, with 130 MMgy in Brazil, just over 300 MMgy in Europe and 290 MMgy in North America. The U.S. and Canadian plants are vertically integrated with crush, with the two Missouri plants at Mexico and Deerfield using soy and two canola crushers at Velva, North Dakota, and Lloydminster, Alberta. “We’re sized right,” Campbell says. “We have a solid record with quality production volumes going back to the mid-2000s. We are focused now on efficiency and improvements where we have an excellent position globally to supply a variety of markets that are transitioning to a low-carbon future.”

When asked about the viability of biodiesel with all the renewable diesel (RD) capacity projected to come online—and given that RD is a drop-in biofuel that will be competing with biodiesel for feedstocks—Campbell sounded an optimistic note. Acknowledging the greenhouse gas (GHG) benefits of RD and sustainable aviation fuel as well as biodiesel, he says, “I think biodiesel still has a significant role to play in energy transformation as we think about lowering GHGs and lowering the carbon intensity of our products.” He suggests renewable diesel producers will find a blend of RD and biodiesel “a nice way to blend and extend their margin.”

There have been several announcements of planned oilseed crushing expansions, he adds, “obviously to address this new disruptive demand from the renewable green diesel standpoint.” Considering the oil demand for RD capacity due to come online in the next three to five years, plus the anticipated needs of food customers for soy oil, Campbell says, “the North American balance sheet is going to be fairly well balanced.”

The preferred feedstock for many renewable green diesel plants is going to be low-carbon-intensity feedstocks, such as used cooking oil, animal fats, tallow and distillers corn oil, he adds. “At the end of the day, there’s just not enough supply to satisfy that future demand, so they need to look for alternatives.”

The U.S. EIA reported in 2019 that soybean oil was the most commonly used vegetable oil for biodiesel production with about a 70% share, representing about 30% of domestic soybean oil use. A 2020 report indicates soybean oil represents about 63% of total biodiesel feedstocks.  

Carbon Intensity Reduction
While lowering operating costs and energy inputs has long been a goal in biofuel production, the need to lower carbon intensity (CI) has industry looking at feedstock supplies. About 25% of the CI comes from transportation and processing, Campbell says, but the bulk of soy’s CI—75%—comes from the farm. “There is a significant opportunity for the entire market to address regenerative ag, better farming practices, no till practices. We need to incentivize farmers to think about these things,” he says. “At ADM, we’re constantly thinking about how to engage with the farmer to improve practices so we can lower the carbon intensity of soybean oil, and even meal.” Among the possibilities, he adds, is the inclusion of oilseed cover crops such as carinata, camelina or pennycress. However, given the current commodity prices for corn and soy, he says, “As good as these programs look and sound and feel, obviously [farmers] don’t want to disrupt their opportunities by introducing something that is new and unfamiliar.”

MPC also is looking at carbon intensity reduction measures. Last May, when the company announced a contract with One Energy Enterprises LLC to install five wind turbines at the Dickinson RD plant, the news release said the company’s goal is to reduce GHG carbon intensity by 30% below 2014 levels by 2030. The turbines are expected to generate more than 40 million kilowatt-hours annually, providing approximately 45% of the RD facility’s electricity.

“We continue to explore projects at our Dickinson facility that have to the potential to help us producer a net-zero fuel there,” Womeldorff reports, adding the permitting process for the wind turbines is progressing. “We are evaluating the installation of a system to capture the CO2 produced from our on-site hydrogen plant and then pumping the CO2 deep below the site where it will remain sequestered. We are also working with farmers to identify and optimize practices that reduce GHG gas emissions and increase carbon storage in agricultural lands.”

Biofuel Partnerships, New Ventures
The North Dakota venture is not the first working relationship for ADM and Marathon. ADM has long supplied soybean oil to Marathon’s 91 MMgy biodiesel plant in Cincinnati, Ohio, which the company purchased in 2014. Both companies’ involvement in biofuels goes even further back. In ADM’s case, back to the 1980s, when it added fuel ethanol production to an existing corn processing wet mill. ADM entered the biodiesel market in the mid-2000s, partnering in Mid-America Biofuels in 2006 and opening its first wholly owned biodiesel production facility in Velva, North Dakota, in 2007.

Marathon invested in ethanol in the mid-2000s, via a joint venture with The Andersons Inc. to build a plant in Greenville, Ohio. In 2019, that partnership was extended in a JV called The Andersons Marathon Holdings LLC, producing 475 MMgy of ethanol at locations in Albion, Michigan; Clymers, Indiana; Denison, Iowa; and the original JV in Ohio.

Marathon’s investment in advanced biofuels includes Fulcrum BioEnergy. In July, after more than a decade in development, Fulcrum completed construction on its Sierra BioFuels Plant east of Reno, Nevada. The plant will convert 175,000 tons of prepared municipal solid waste into approximately 11 MMgy syncrude. The process utilizes gasification and Fischer-Tropsch processes to produce syncrude and upgraded transportation fuel products.  Womeldorff says Marathon plans on taking 800 barrels per day of biocrude material from Fulcrum to its refinery in Anacortes, Washington, for processing into transportation fuels.

Marathon is entering the development of sustainable aviation fuel (SAF) through its subsidiary, Virent Inc., which was acquired in 2018 as part the Andeavor/Tesoro purchase. Virent’s BioForming technology converts plant-based sugars into hydrocarbon fuels and chemicals using catalytic chemistry. In October, a United Airlines test flight was powered with 100% SAF in one engine and traditional petroleum-based jet fuel in the other. A second demonstration flight on Dec. 1 included passengers from the companies involved in the effort—United Airlines, Boeing, GE Aviation, CFM International (a JV between GE Aviation and Safran Aircraft Engines), World Energy, Virent and Marathon Petroleum.

Womeldorff explains the Virent fuel is unique in that most SAF is typically a blend with hydroprocessed esters and fatty acids and petroleum-based fuel. “Jet fuel requires a certain level of aromatics content in order to meet fuel and specifications, provided by petroleum fuel. But because Virent’s SAK (synthesized aromatic kerosene) can provide these aromatics, it makes 100% fossil-free, drop-in SAF possible.” The fuel for the test flight was manufactured by Virent using corn dextrose from Iowa.

SAF is on ADM’s radar as well, albeit through its corn processing division, rather than oilseeds. In October, Gevo Inc. announced a memorandum of understanding about 900 million gallons of ethanol produced at ADM’s dry mills in Columbus, Nebraska; Cedar Rapids, Iowa; and Decatur, Illinois, to be processed using Gevo’s proprietary technology, resulting in about 500 million gallons of SAF and other renewable hydrocarbons. Isobutanol is expected to be produced at a proposed facility in Decatur that would employ ADM’s carbon capture and sequestration technology.

In the Gevo news release, ADM CEO Juan Luciano says the potential conversion of more than half of its production capacity represents a major step in the evolution of ADM’s Carbohydrate Solutions business. “We’re continuing to live our purpose, with our entry into SAF representing another step in our strategic efforts to advance decarbonization and use our integrated value chain to deliver more sustainable, environmentally friendly products and services.”

Author: Susanne Retka Schill
Contact: editor@bbiinternational.com

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