1. Montana Microbial Products A Research and Development Company commercializing microbial products and technology Products –Enzymes for fuel alcohol production –Integrated cellulose and starch process –Barley protein concentrate for fish feed –Bacteria to control plant diseases

2. Fuel Alcohol Industry Developed to address high prices and help with energy independence Renewable Fuel Standard to create mandate and market for biofuels Current US industry based on corn Need for development of fuels from sources other than corn. DOE focus on cellulose ( cellulosic ethanol )

3. Cellulosic Ethanol Renewable Fuel Standards Schedule

4. Cellulosic Ethanol Sources

5. Cellulosic Ethanol Production Thermochemical CHP – generate heat and power for sale on grid, syn gas becomes by- product or co-product High up-front capital costs – access to grid Biochemical (Enzyme Based Focus on low-lignin agricultural waste feedstocks cornstover, wheat straw, sugarcane bigasse Lower up-front capital costs

6. DOE Biofuels Policy High Impact Feedstocks: 100 million tonnesHigh Impact Feedstocks: 100 million tonnes Large Scale BiorefineriesLarge Scale Biorefineries No starchNo starch 25 years and no commercial plants25 years and no commercial plants

7. Cellulosic Ethanol Economics Low density – expensive to haul –$65/ton FOB Plant = $0.76/gal etoh Very absorbent – dilute slurries, high capital costs –$4.50/gal plant capacity = Debt repayment $0.53/gal Expensive processing – enzyme and energy cost –Enzymes =$0.36 to $0.50 gal etoh produced –Distillation 3-4X conventional corn plant

8. Regional Approaches Fit Project to Local Resources –Use all available resources within reasonable distance, i.e. starch and cellulose sources Reduce Costs –Reduce energy costs, i.e. Process changes, lignin –Feedstock collected as a result of some other activity, i.e. wood waste, food processing, etc Create valuable co-products –Barley protein, chemicals, energy products

9. Straw to Ethanol Montana Resources Montana: Barley Straw Fairfield Bench: 7—10 million gallonsMontana: Barley Straw Fairfield Bench: 7—10 million gallons Integrate with feed barley, off spec malt barley, livestock feeding: 15—20 million gallonsIntegrate with feed barley, off spec malt barley, livestock feeding: 15—20 million gallons

10. Add Value Food and Fuel Barley Protein Concentrate Aquaculture Feeds

11. Creating Value  One ton of barley will produce 560 lbs of BPC and 83 gal of Ethanol  BPC will sell for $700-$800/ton (fishmeal sells for approximately $900/ton)  EtOH will sell at prevailing market prices  One ton of barley worth $278,  Conventional ethanol ($153 and DDG $125

12. Aquaculture  Aquaculture is the fastest growing sector of agriculture  Fishmeal is the main diet constituent of farmed trout, salmon, shrimp and other hatchery fish  It takes approximately 4.5 units of wild fish per unit of fishmeal  4,963,000 m. tons fishmeal consumed annually  46% aquaculture, 26% poultry, 24% pigs  Major research effort to develop plant based protein sources to replace fishmeal

13. Conclusion Biofuels from local biomass is feasible – but Requires flexibility (think outside the box) Use all available resources Is capital intensive

14. Thank You Contact: Cliff Bradley, Bob Kearns MMP, 109 S. Parkmont, Butte MMP, 109 S. Parkmont, Butte 406 494 3390 406 494 3390 cbradley@montana.com cbradley@montana.com kearns@3rivers.net kearns@3rivers.net