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Thursday Podcast: Matt Presley, Chief Technology Officer of Conestoga Energy

Matt Presley was raised in Eastern Kansas and moved to Southwest Kansas in 1993 at which time he began work for Harvey & Son Electric. In 1996, while working for Elkhorn Construction, he received his Journeyman Electrician. At Knab Pipeline, he acquired certification in Automation. In 1999, Matt began working with Duke Energy as a Specialist, gaining Microsoft Gold and DCS certifications. Matt’s love of information systems and networking inspires his success. Currently, Matt is Manager of Information Technology Solutions/Automation for Conestoga Energy. Matt writes and creates programs to make the company excel within the ethanol industry.

Q: Can you tell us more about Conestoga Energy and its work in the Ethanol Industry?

Conestoga started with three corn producers. In 2006 and 2007, Ethanol prices skyrocketed to $2.50 a gallon, with corn costs at around $1.50. Ethanol plants were blooming everywhere. So Conestoga decided to get a team together to develop ethanol plants.

Most of the farmers in southwest Kansas are big farmers that love automation, to the extent that the tractors are mostly automated. They got together and branded themselves as Conestoga. There is a 100million gallon plant in Liberal, Kansas, a 60million plant in Garden City, and a 55million gallon plant near Lubbock, Texas.  With that in mind, we developed two products that would work best for the industry.

Milo (grain sorghum) is made to grow in drought-stricken areas of southwest Kansas, and it’s used to make ethanol blends. Most blends are 50% Milo, and 50% corn ethanol. There is also a pellet mill. Where Conestoga is positioned, there is easy access to rail lines, so corn and ethanol can be shipped across the country, or down to Brazil. Ethanol can also be made into a food-grade product for markets like Europe. Food grade ethanol must be drinkable when it leaves the facilities. In the United States market it’s combined with natural gas into what is called drip oil.

The days of 2006-2007 are over, so today Conestoga margins have shrunk substantially, to +/- $0.01 a gallon. This means that the industry survives solely on automation to reap profits. This means attention to reports, modeling, etc. in order to remain competitive.

We are doing supplemental sales as well, spinning off crude oil that can be purified into corn oil. We capture CO2 to inject it back into oil wells in the United States to increase production of gas and oil.

 

Q: What role does Technology play in solving hard problems in the Ethanol industry?

Every part of the process is automated. Tractors drive themselves via satellite connectivity, and the corn rows are so accurate that rows can be alternated year over year and prevent an additional need to till the soil. Now plowing only needs to occur every other year. Where Conestoga plays a role is in managing the corn silos and balancing moisture levels to blend corn into the correct ratios of moisture to dry corn. Conestoga’s plants require a 17% moisture ratio, and anything more must be rejected. Therefore the control of moisture levels is incredibly important to producers. All of this is done with technology, including testing of corn starch levels to ensure that the most possible ethanol can be produced from each germ of corn.

 

Q: Which areas of technology excite you most right now?

In our industry, modeling plays an enormous role in success. We take reports of raw data and stack it on top of our GP Dynamics accounting system to produce real analytics to forecast output and hedging month to month. Predictive modeling is the only way that Ethanol will continue to thrive from here to the next five years. Without those models in place, ethanol plants will be closing their doors.

 

Q: Where do you see IIoT (the Industrial Internet of Things) going in your industry?

Conestoga already offers a product called Eagle Eye that’s satellite driven and allows operators to start and stop sprinkler systems and check moisture levels. Conestoga owns the patent on their version. The goal is being able to select the grain that comes to Conestoga. The area is in a drought, even with the rainfall totals this year, and it’s important to conserve water whenever possible. Automation helps accomplish a more efficient use of water by ensuring that water isn’t used as liberally if the soil doesn’t need it.

Producers can also analyze corn to make a good estimate of the Ethanol yields. This level of automation is crucial to continuing, so all the information that comes to the farmers is tied to Conestoga’s cloud. Conestoga has its own cloud and offers internet to rural areas in order to send and receive data from these farms. It works well for everyone, because the farmers have access to technology that makes them more efficient, and Conestoga is able to ensure the quality of the corn they receive for Ethanol production. Even the state of Kansas can view the water usage, and the plants can even send corn to feedlots. Many systems are tied together to reduce waste and ensure a top quality end product.

The infrastructure that it takes to provide your own IIoT solution is fairly large – not everyone can act as an ISP and provide their own cloud. But now there are so many options for infrastructure, such as Amazon, and I am excited for more people to take information out of a processing area and stack it on top of accounting. That’s where you’re going to save costs in the long run- predictive measurement of process.

 

Q: Have you seen a lot of changes in Ethanol production over the last ten years?

Well, many avenues of production are closing because they don’t have the available water. What we’ve done is started to use city waste water, and treated it multiple times. Because we process the water, the city gives it to us for a very low cost and doesn’t have to invest in water treatment facilities. We managed to buy and turn around a plant in Loveland, Texas that couldn’t produce enough water. By offering our own water treatment services we were able to make the plant profitable again.

We recycle everything. Our process water is processed through the plant three times, and then goes onto our own field that we use to make feed corn. There’s not much waste in this process.

 

Q: The EPA has made some changes in the renewable volume level set by Congress. Can you tell us how that affected your business?

Conestoga is considered an Efficient Plant, because the EPA has put limits on our gas emissions. The way regulations have affected us include more emissions tests and more downtime. We automate the process now with chromatographs, and now the state comes out about once per quarter, instead of once per week to check emissions. The CO2 bottling helped immensely. Because once we capture the CO2 and send it to the oil companies, it’s their task to safely handle it.

Unfortunately now we don’t get tax credits any longer, but we do get some subsidies for growing sorghum (Milo).

 

Q: How is Ethanol better than oil in the long run?

Well, any time you have a renewable resource you can control supply. There’s also no conflict between ethanol and food, since we are still able to supply plenty of feed. There will always be a supplementary fuel available, but Ethanol is here to stay. Ethanol is hurting now because oil process are so low, but that’s temporary.

 

Q: What trends do you see in ethanol production in the next ten years?

Ethanol changes year to year. Corn could go up, or drought could be ongoing. We just had a meeting to estimate the ethanol space out for the next ten years, and found that we weren’t able to forecast far. But we do see the ethanol industry continuing to play a role, particularly in Europe. Right now the market is a bit saturated, but demand is growing.  Every year the American market is more educated. It does take energy to make ethanol, but there’s a whole picture to this very efficient process. We use every piece we have, and there’s very low waste.

 

Q: Are you seeing much impact from climate change in terms of the drought and rainfall?

Well, so much energy was saved this year due to the rainfall we’ve had, and we were even able to replenish some of the aquifer. It’s been a good year, and I hope it continues.

Q: If someone wants to enter the Ethanol industry, what advice do you have for them, and what training might they need?

There are so many facets to the ethanol industry. Business, chemistry and hard sciences, production, automation – we have the full range of available careers. At Conestoga, we’re big into supporting local college and university Ag programs. We give a $10,000 scholarship every year, and encourage students to come do internships with us. We do want to encourage students because we’re a fully automated industry, and we need people in this space.

The best advice is to work hard, and play hard later.

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