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Arizona Dairy Group Building Integrated Dairy-Biofuels Operation

XL Dairy’s integrated dairy-biorefinery concept. Click to enlarge.

Arizona-based XL Dairy Group is building a biorefinery that combines a dairy operation with a biofuels plant and fractionation mill to produce ethanol, biodiesel, milk and dairy products, and animal feed, along with 100% of the energy required to run the plant.

XL Dairy Group projects that its $260 million project, located on 2,700 acres in Vicksburg, Arizona, will generate ethanol with an energy efficiency ratio of 10:1, compared to 1.2:1 for a conventional dry-grind corn ethanol plants and 8:1 for sugarcane plants. For every Btu of fossil fuel energy needed to produce ethanol and biodiesel, XL Dairy Group will produce 10 Btu.

To achieve that efficiency, and generate cost savings of $0.30 to $0.35 per gallon in ethanol production and $0.50 cents per hundred weight of milk, the company will convert waste streams from the 7,500 dairy cows as well as from the fractionation, biodiesel and ethanol processes into energy to power the entire project with recycled, renewable energy.

Environmentally, the project has significant advantages because of low emission of greenhouse gases through the conversion of waste streams to energy and a high energy efficiency ratio. Simply put: as the only biodiesel refinery in the nation with this level of energy efficiency, we will not be energy dependent on fossil fuels and volatile energy markets.

—XL Dairy Group Chairman and CEO Dennis Corderman

Expected output from the integrated operation includes:

  • 54 million gallons of ethanol per year

  • 5 million gallons of biodiesel per year

  • 11+ MW and 155,000 pounds of steam per hour

  • 525,000 pounds of milk per day

  • 110,000 tons of animal feeds per year

XL Dairy Group also is waiting for patent approval on a proprietary, low-cost algae production system, which will then be incorporated into the XL BioRefinery to lower operating costs and expand the production of motor fuels and animal feeds.

"Because algae has a higher oil content than corn, and needs much less acreage to produce much higher volumes, which we will do at the site, we expect to expand to 100 million gallons of ethanol and 25-30 million gallons of biodiesel over the next five years.

—Dennis Corderman

Carbon dioxide produced during the process will be captured and stored on site for sale in various applications including beverage carbonation, cooling and the production of dry ice.

E3 Biofuels has built a 20-mgpy (million gallons per year) ethanol plant at a cattle feedlot in Mead, Nebraska, that is also powered by methane from the cattle manure. (Earlier post.)

(A hat-tip to Derek!)




Wow. Everything but the kitchen sink, here. If they can achieve half the energy return they claim it'll be a success, IMO.


Super. The biggest potential is probably the algae part of the project. Typically an ethanol plant produces three end products in large quantities: 1) ethanol, 2) distillers products, and 3) CO2 from the fermentation process. However, the CO2 is more often wasted and not sold at all. If this algae technology is profitable all existing ethanol plants would be able to benefit from licensing this technology. Another benefit of making bio diesel as well at the ethanol plant is that it can be used to fuel all the trucks and agricultural machines that are made for diesel and not ethanol.

Heiko Gerhauser

Excellent, and if they now also sequester the carbon, they'll make ethanol, not just 100% carbon neutral, but carbon negative. They'd actually be taking net carbon out of the air!


Heiko would you like to pay more taxes to pay for the sequester of the carbon? I know I wouldn’t. And the ethanol plants will not do it unless they are paid to do so.


"Carbon dioxide produced during the process will be captured and stored on site for sale in various applications including beverage carbonation, cooling and the production of dry ice."

AND - When the algae comes on-line, CO2 will be fed to it.


An energy balance of 10 to 1 is quite absurd, given that the mere energy inputs of growing corn limit it to a maximum of 2, maybe 3 to 1, if maximum conversion efficiencies are achieved. No matter the kind of process integration, this never achieves 10 to 1.

But then again, it's a company that's going to work with algae, so we know to be sceptical. All projections made by such companies must be downscaled by a factor of 10, at least.



I think that they are incoporating the waste streams from the dairy operation in their figures, not just corn ethanol. Take a look at the diagram. The eystem is supposed to run off of its own waste alone, generating about 11 MW of power.

Will it work? I don't know and really, neither do you. But they're willing to invest $260 million dollars in it, so they must have some confidence that it will work.

And I wish them all success.


...corn comes as a free energy input no doubt, nothing is used in its production, no oil, no chemicals made with oil, no pesticides made from oil, no irrigation water pumped with oil, no transportation from corn field to arizona requiring trucking requiring diesel from oil, and no oil required to lubricate the corporate perpetual motion machine ...

... for ballroom dancing press 4, to see the sun revolve around the earth, press 1/2 ...


Galileo, LOL!

The 10:1 ratio IS very misleading, especially with regard to energy inputs regarding the growth, harvesting, and transport of corn.

Essentially, this is an ethanol plant that is powered by cow crap. I guess it beats an ehtanol plant powered by coal, no?

Considering that we have ~1.1 billion cattle on the planet, and that their methane emissions are essentially "wasted", projects such as this one should be applauded and encouraged.

BTW: methane has a GWP (global warming potential) rating of 62 compared to CO2 with a GWP of 1.


The 10 to 1 is not out of the question if you look at the whole picture here. The energy costs with respect to corn are most likly based on the starch portion. The remaining distillergrains must be factored in. They are the most valuble part of the process. The fact that the remaining grain does not have to be transported or dried is what probly saves the most energy. It is the intergration that saves energy by reducing excess transportation and waste.


The belief that it consumes a lot of energy to produce agricultural products in the US is wrong. This source breaks down total energy consumption for US farmers (http://www.renewableenergyaccess.com/rea/news/ate/story;jsessionid=1C57FE53208E341B2BCB61178F87D54C?id=48405). In 2005, America's farms spent $27.4 billion on energy-related expenses. That breaks down to $3.4 billion on electricity, $12.8 billion on fertilizers and $11.2 billion on fuels and oils required to operate equipment and machinery. The source says that 3.5 billion gallons of diesel fuel is used to plant, tend, and harvest our crops and raise our livestock. For comparison the US use about 140 billon gallons of gasoline and 60 billion gallons of diesel fuel a year.

These farmers are already doing 6 billion gallons of ethanol today and is expected to do 1,7 billion gallons of bio diesel by 2008. In other words, US farmers are already net producers of transportation fuels. Electricity does not need to come from fossil fuel. Wind power will be cheaper than coal or nuclear power when the next generation 5MW turbines (660 feet high) are mass produced in 5 years from now. It is not my area of expertise but as far as I understand fertiliser can be produced without any use of oil or any other fossils. All that is needed is electricity, water and atmospheric air. Is that correct? If that is so bio fuels from agriculture, green electricity and affordable battery technology is all it takes to completely end the use of fossils in all forms.


Galileo is right.

Moreover, look at the diagram: they use cow manure to power their "energy island". As if you don't need energy to feed cows. The distillers grain nor the germ cake from the corn input used for ethanol is ever enough to feed enough cows to obtain so much manure that you get so much energy out of it that you'd get an overall 10 to 1 energy balance for ethanol.

In Brazil they use bagasse to power ethanol plants. And there, the energy balance at best is 10 to 1, but this is so because sugar cane yields 10 times more energy per acre than corn for a given amount of energy inputs. If they were to feed the bagasse to cows (suppose cows convert this just as well as distillers grain), and then use the cow manure to power their plants, the energy balance of the end product, ethanol, would be much lower than 10 to 1. So I don't buy this.

Process integration is very good and needed, but this kind of companies would better be realistic and lower their claims. Just like the many algae companies, none of them have ever given an energy balance sheet, let alone proved their absurd claims of yields in a large scale facility.

It's in the interest of the ethanol industry to be real about what it can achieve.


Everybody go home, Gio has spoken. Well, typed.

Ya know, after the first unit (EROEI 1.0) of bioenergy is made (after the 1 unit of fossil fuel inputs) you're basically cut loose from any external imports ever again. It's amazing to see people keep harping on the amount of fossil inputs are used in agriculture and bioenergy production.

C Harget

You guys are forgetting that they also get milk out of this. Sugar cane doesn't lead to milk production, and we don't have Brazil's climate, anyway.

Other dairy farms get the milk and some hamburger when the cows stop producing, and some fertilizer for your local hardware store. These guys are getting the methane, ethanol, and if they can use their CO2 and what's left of their waste streams for algae biodiesel, that's bonus.

I'm concerned about the near-term viablility of algae biodiesel too, although a professor in Colorado has come up with long, clear, plastic-bag-like tubes to run the water and waste gasses through for algae farming...that or something else might provide the lower capital costs and controlled environment algae needs for biodiesel.


Talk about why but the cow when you can get the milk for free -- this is a prime example -- he,he,he!!!


Today the project probably makes zero economic sense.

But today is not tomorrow.

For today it will dredge every energy and feel-good tax break and subsidy ever imagined out of Washington D.C. and the various AZ government levels. Every AZ pol will beam, pose, and nearly wet their cowboy trousers. Yahoo!!

Never-the-less these projects are necessary. We won't get a better future cheaply or without mistakes. Installations like this will reveal what works, or does not, better than 1000 analysts - or is it chimpanzees? - at word processors.


I think everyone needs to read the full story, "Land of Milk and Biofuel" link after the article, it tells the whole story not just the sumerized version here. It states there that their energy balance does take into account the energy used to produce the corn. Its best to learn all sides of a story and get your facts straight before shooting your mouth off, this goes to everyone.
The whole thing seems like a good idea to me, it will be a net energy producer that doesn't rely on fossil fuels.

C Harget

Another thing that's interesting about this project is, if you do a back of the envelope calculation, 70-80% of this dairy's revenue will be coming from sources other than milk sales.

Given that cattle and dairy have huge problems with waste streams, and that AZ has lots of sun for growing Algae, this integrated project is worth doing for even just half the reasons they are doing it.



Even if the return is 5 to 1, magnificent. It is a model to be admired. The facility will be self powered, producing needed energy and agriculture products, cutting C02.

If they can learn enough to get to 10 to 1, then great. Lets hope they can!!!


Heck, expressing an opinion with out all the information is the American way! :)
Besides, it is easy to pick out who has done their homework and who has not.

Kit P

This is a really great idea. My previous employer was developing something like this 10 years ago back when natural gas was $1/MMBTU. We merged with a pipeline company and building CCGT became the main focus.

The first thing XL Dairy Group has going for it is economy of scale with 7000+ cows. This link provides some back ground on small scale AD:


Then there is the huge amount of process steam from co-generation.

XL Dairy Group also has 7000+ enzymes factories for breaking down cellulose. Mix the manure with the waste from the biofuels plants and more biogas is produce to make electricity.


For daily updated news on biofuels and ethanol industry, please visit:



How many critics here have ever spent $260 million on an "obviously" bad idea? I'll defer to the expertise of engineers and capitalists rather than anonymous internet personalities every time.


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The global warming potential of methane is 21, not 62. But this still means that the effect of 1 tonne of methane has the same effect of 21 tonnes of CO2 in warming the planet.

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