GRE plans ethanol plant

Talk about it

Local corn producers may be delivering their crop directly to a corn ethanol plant as soon as the 2013 harvest.

Great River Energy is in the planning stages for the Dakota Spirit AgEnergy plant. If financing can be finalized, the project could start construction in the spring of 2012 and be ready to start processing corn into fuel during the fall 2013 harvest.

Plans call for the plant to be located adjacent to the Spiritwood Station coal-fired power plant GRE is completing at Spiritwood. The ethanol plant will use waste steam from the power plant as an energy source for the fermentation and distillation process necessary to turn raw grain into fuel ethanol.

“The 60-million-gallon-per-year corn ethanol facility is phase one of the project,” said Al Christianson, GRE’s business development and government affairs manager in North Dakota. “Phase two is a 10-million gallon cellulosic ethanol plant bolted on to phase one.”

The cellulosic portion of the project uses wheat straw and corn stover as inputs for the production of ethanol. Christianson said the plant may also accommodate the production of ethanol from energy beets, which are specialized sugar beets grown for energy production, in the future as well.

The production of 60 million gallons of ethanol during phase one requires about 21 million bushels of corn. Christianson anticipates that in normal years, almost all the corn will be locally produced.

“Our business plan includes well over 95 percent of the corn delivered by trucks,” he said. “We will have the capability of taking delivery of corn by train in case of crop failures. We anticipate the farmer selling directly to the ethanol plant.”

This level of corn production is within the capacity of the farms in the area, according to Lance Brower, Stutsman County extension agent.

“That level of corn is about 8.5 percent of the corn produced in North Dakota,” he said. “But we produce a lot of that corn right around this area.”

Statistics from the National Agricultural Statistics Service for 2010 estimated corn production in Stutsman County at about 13 million bushels. LaMoure County produced an estimated 17 million bushels. Other counties in the area produced lesser amounts.

“Farmers should get a better price dealing with the end user,” Brower said. “And there should be less transportation costs giving the producer more on a per bushel basis.”

Christianson said the plant will also produce 160,000 tons of dry distillers grain per year as a byproduct.

“Distillers grain can be used for confinement feed lots,” Brower said. “There will be a growing demand if it’s readily available.”

Part of the financing for the ethanol plant is in place. During the July 19 Stutsman County Commission meeting the board approved serving as a sponsor for up to $50 million in Municipal Industrial Development Act bonds. These tax-free bonds, commonly called MIDA bonds, can be used to finance the portion of the plant dealing with waste handling. The tax-free status of the bonds reduces the interest cost for Dakota Spirit AgEnergy. Stutsman County is the sponsoring agency and has no liability in the bonds.

The county also granted property tax reductions amounting to $3.2 million over the first 10 years of the plant’s production. Property taxes on the plant are estimated at $445,000 per year after the exemptions expire.

Project backers have not approached the Jamestown/ Stutsman Development Corp. for any additional funding, according to Lindsey Larson, marketing/business development specialist for the JSDC.

Christianson said the total cost of the project is estimated between $100 million and $110 million. The plant will employ about 36 people when operational. An estimated 300 workers will be employed during the peak of construction.

Sun reporter Keith Norman can be reached at (701) 952-8452 or by email at knorman@jamestownsun.com

Tags: local news, north dakota, news, gre, ethanol, energy