EPM: Briefly tell us about your work at the National Renewable Energy Laboratory (NREL) and PG&E before that?

YANCEY: In my nine years at NREL I held several positions within the Biotechnology Center for Fuels and Chemicals and the Biofuels Program. As the Biofuels Program team leader, I was responsible for developing cellulosic ethanol research and commercialization partnerships with industry. I also managed dozens of contracts for the development of cellulosic ethanol technologies. It was exciting to be a part of the world's foremost renewable energy R&D organization and work side by side with NREL's outstanding scientists. Prior to joining NREL I work at United Engineers and Constructors in Denver, where I designed part of the world's largest hazardous waste incineration facility. At PG&E I worked on geothermal power plants in northern California for 10 years. I did everything from startup testing to research and development and operations management.

EPM: In just over two years with BBI International, you have amassed an impressive list of completed projects. Give us the abridged version of your BBI International consulting resume.


YANCEY: BBI International, under the leadership of its founders Mike and Kathy Bryan, has been providing consulting services to the ethanol industry since the early 1990s. However, in the last two years the BBI Consulting team has completed over 40 feasibility studies and a dozen business plans for our clients. A growing number of these projects are directly related to the conversion of cellulose to ethanol. Corn stover, wheat straw, wood waste and pulp mill sludge are just some of the biomass feedstocks we have evaluated for tomorrow's ethanol plants. Corn, barley and wheat are some of the more traditional feedstocks we have looked at. Our most recent success stories include Big River Resources, Lincolnland Agri-Energy and Central Illinois Energy Co-op, all now under construction. I fully expect two of the projects we are working on in California to result in the construction of new plants and several others are nearing financial close.

EPM: You are director of consulting services for BBI International, which essentially means you oversee all aspects of carrying out ethanol feasibility studies and preparing business plans, site assessments, etc. Perhaps the work is not always glamorous, but it must be rewarding at times, especially when projects come to fruition and are brought on line successfully. What is it that you find most rewarding about consulting the ethanol industry?

YANCEY: Not glamorous? What do you mean? I get to see the heartland of America and meet the people that feed the world – our farmers. I know why they are the most productive in the world because I have to negotiate contracts with them and they are very sharp! Helping our clients develop ethanol projects is very satisfying, but it is also satisfying to tell a client when they do not have a good project, too. That can save them millions of dollars by avoiding a poor investment. You can't build an ethanol plant anywhere in the country and expect that it will compete effectively in today's competitive marketplace. You have to have an edge.

EPM: What do you find most "future producers" groups have in common? What critical information do they typically lack when you begin meeting with them? Are their expectations sometimes unrealistic, or are they generally pragmatic? And how do you mitigate those hopes, fears and expectations?


YANCEY: Most groups have a common desire to add value to agriculture and to improve their communities by creating good jobs and economic development. They also realize that to do this, their ethanol project must make good business sense and be profitable. Most of our clients do not understand how difficult it is to get a project financed, however. The lenders are a tough crowd and will finance only the best projects. I like to work with clients that are skeptical and say, "show me" rather than clients that sometimes overlook the facts and are overoptimistic about their project.

EPM: As a consultant that is paid to analyze information in order to make projections – and sometimes predictions – about the future, do you find it difficult to tell your clients their dream of building an ethanol plant is not viable? How frequently do BBI studies tell clients not to pursue a certain project?

YANCEY: About 20 percent, or one in five, of our feasibility studies has a negative or "no go" outcome. The BBI consulting team works with every client to find that niche or advantage for each project, something that can give the project an edge so that it remains competitive in tough times. It's hard to tell a client that their project will simply not work. We would like to see all of our clients succeed, but that is just not possible.

EPM: Explain how BBI acts as a representative for banks?

YANCEY: Before lending millions for a new ethanol plant, banks review, study and evaluate the project – they do their due diligence. Construction begins soon after loan approval and lenders need to know that the construction is progressing as planned. BBI conducts monthly inspections of several ethanol plants under construction for lenders. We certify that the project is on schedule, that the construction quality meets industry standards and that the project is on or under budget. We also review the status of project permits and look for anything that could delay the startup of the plant.

EPM: How about those "Ethanol One-on-One" sessions? What's that all about?

YANCEY: Ethanol One-on-One is the name of the service that BBI Consulting provides to companies that are looking to get into the ethanol business or to improve their position in the industry. For a very reasonable fee, you get the combined experience and expertise of BBI International President Mike Bryan and myself for a full day, focused on your business goals and strategies. We have had some very good successes in this area.

EPM: Moving on to the industry in general: taking a pragmatic view, where do you see the ethanol industry in 10 years? Past five billion gallons a year maybe? How about the commercial viability of cellulosic conversion to ethanol? Where will that be in 10 years?

YANCEY: I see the U.S. ethanol industry at about six billion gallons in 10 years. This will require 60 new plants with an average production capacity of 50 million gallons each. The availability of capital to build these plants will be a key issue. Because of growing concern about capital, BBI has and will continue to organize seminars deigned specifically for lenders. These meetings, called Ethanol Lenders' Symposiums, allow lenders not familiar with the ethanol industry to become familiar with the issues and opportunities for financing projects.

My crystal ball for cellulose says that we are beginning the "century of biotechnology." Biotechnology will allow the production of new and existing chemicals from non-traditional feedstocks. The development of low cost cellulase enzymes for converting cellulose to glucose is a good example. This and other innovations will make ethanol from cellulose feedstocks a reality in the very near future.

EPM: What trends do you see emerging in the ethanol industry today that you find particularly interesting or remarkable?

YANCEY: I find it remarkable that the cost of new plants continues to decline while the energy efficiency continues to increase. Today's plants cost far less and are more efficient than plants built just a few years ago. We have some very innovative people working in this industry.

EPM: What pitfalls or challenges does the industry need to be aware of? What's our biggest challenge?

YANCEY: A major challenge facing the ethanol industry today is to develop new markets for ethanol in a logical and cost effective way. When new production capacity comes on line, the owner should not only have an ethanol marketing plan, but also a market development plan. Lowering the price of ethanol is not a good market development plan. It will open up new markets for ethanol, but at a significant cost to the entire industry. More effort needs to be made in developing new markets before your plant comes on line. The ethanol market is growing at a rapid pace, let's do it in the most cost effective manner possible. EP