Domestic Fuel

A subsidiary of Zeeland Farm Services of Michigan recently acquired an idled ethanol plant in Cambridge, Nebraska.

Nebraska Corn Processing (NCP) is the name of the subsidiary that plans to resume production at the plant as quickly as possible this year. The plant was built in 2007 but was idled for much of 2009. “This acquisition will allow NCP to gain a foothold in the energy industry and to further invest in agriculture,” explained Cliff Meeuwsen, company president. “Our goal is to develop viable business opportunities that will benefit NCP, agriculture and the communities in which we reside.”

Zeeland Farm Services is an agricultural and transportation company serving the upper Midwest since 1950. The company’s Grain Division will provide commodity price risk management services to NCP while the Ingredients Division will market the animal feed co‐products that are produced from the plant to the livestock industry.

Texas fuel retailers are now selling 10 percent ethanol. Local gas stations have been updating filters, checking tanks and applying green ethanol-blend stickers to put on pumps, but such a change is not without its cost and problems for retailers. The ethanol mixture is the result of 2005 and 2007 federal energy acts requiring specific benchmarks for refineries to produce cleaner-burning fuel.

“Because ethanol is the only biofuel source with sufficient production and base feed stock to meet these mandates, it has been the most widely used by refiners to meet the new federal mandates,” said Chris Martin, spokesman for the Texas Petroleum Marketers and Convenience Store Association. Mandated amounts of renewable fuels will increase each year between now and 2022, Martin said, thus the 10 percent ethanol mixture will eventually increase, probably to 15 percent.

Any vehicle on American roads can use E10 and should have no problem. Only flexible fuel vehicles can use higher blends of ethanol such as E85. There are currently 42 E85 stations in the state of Texas.

An E85 promotion will be held at the Holiday Kranz Super Stop at 1185 Main Street South in Sauke Center, Minnesota on Tuesday September 29. The alternative fuel will sell for 85 cents off per gallon from 4 p.m. to 7 p.m.

Additional in-store specials will be a 2-liter of Pepsi for 85 cents and 85 cents deluxe car wash with E85 purchase.

Event Supporters include the Stearns County Corn Growers, Kranz Super Stop (Holiday), Minnesota Corn Growers Association, American Lung Association in Minnesota and the Minnesota Clean Air Choice™.

There are now 361 E85 fueling locations in the state of Minnesota; the most E85 stations of any state.

A group of farmer-owned ethanol plants in Minnesota, Iowa and Nebraska have teamed up become the guardians of a former VeraSun facility in Janesville, Minn.

Guardian Energy is a joint venture between ethanol plants in Little Falls, Benson, Claremont, and Winthrop, Minnesota as well as Mason City, Iowa and Minden, Nebraska that last week closed on the purchase of the 100 million gallon per year ethanol plant in Janesville.

“Drawing on the experience of its member plants, Guardian Energy is rapidly working to bring the facility on line this fall,” said interim CEO and Board President Randall Doyal. “We are actively recruiting and interviewing candidates from across the region to fill more than 45 new jobs. We will work closely with local farmers to create a new, value-added market for their corn, as well as with other local suppliers who are already at work completing the plant, putting the finishing touches on the plant site, and bringing in supplies necessary to operate the facility.” Doyal also serves as CEO of Al-Corn Clean Fuel.

Guardian Energy LLC is the cooperative effort six midwestern farmer owned ethanol plants which have a philosophy that the economic benefits of producing ethanol should stay in the local communities and that has been key to the success of each of the member plants involved in Guardian Energy. Guardian Energy negotiated with the banks holding the Janesville facility, and their negotiations led to the successful close and transfer of ownership to Guardian Energy on September 23.

The six facilities comprising Guardian Energy are Al-Corn Clean Fuel, Central Minnesota Ethanol, Chippewa Valley Ethanol Company, Golden Grain Energy, Heartland Corn Products, and KAPPA Ethanol.

The First Coop Association held a grand opening celebration today from 10 a.m. until 2 p.m. for their new ethanol and biodiesel pumps. The station, located on Hwy. 71 South in Sioux Rapids, Iowa featured free food and ethanol and biodiesel specials.

The First Coop Association is one of many stations to take advantage of the Renewable Fuels Promotional Assistance Program sponsored by the Iowa Corn Promotion Board, the Iowa Renewable Fuels Association (IRFA) and the Iowa Soybean Association. Through the Renewable Fuels Promotional Assistance Program, Iowa Corn and IRFA partners with retailers for grand openings for E85 and ethanol blender dispensers. Iowa Soybean and IRFA partners with retailers for grand openings for biodiesel dispensers.

Retailers interested in installing an E85 or biodiesel dispenser can apply for a grant from the Iowa Department of Economic Development.

There are currently 129 E85 facilities in the state of Iowa.

A group of nine farmer-owned ethanol plants in the upper Midwest got together to purchase the former VeraSun plant in Janesville, Minnesota to make it an even ten.

Guardian Energy LLC, headquartered in Shakopee, Minnesota recently entered into an agreement to purchase the 100-million gallon plant acquired by AgStar Financial Services’ lending group through VeraSun Energy’s bankruptcy in March of 2009. Guardian Energy is a wholly owned subsidiary of Guardian Eagle Investments formed to own and operate this ethanol facility in Janesville. The group also founded Renewable Products Marketing Group, which will provide marketing services for the facility.

Renewable Products Marketing Group CEO Randy Hahn said, “Our group of farmer owned ethanol producers are very excited to see this purchase come together. We strongly believe that the value generated by converting our locally grown corn into renewable energy ought to stay here at home. We are committed to keeping this facility in the hands of local producers and farmers.”

AgStar has now found new owners for four of the six VeraSun plants they are representing. Another announcement is expected this week for a fifth plant in Dyersville, Iowa.

The U.S. Department of Energy (DOE) announced the availability of up to $5.5 million from the American Recovery and Reinvestment Act to increase the use of higher ethanol blends (up to E85). Two areas of interest are targeted: “Refueling Infrastructure for Higher Ethanol Blends” and “Outreach for Higher Ethanol Blends”.

DOE will offer up to $3.5 million to 15 to 30 cost-shared projects that will expand the infrastructure of fueling locations up to 85 percent ethanol. This may include modifications, upgrades, or expansions of existing fuel pumps and other infrastructure at retail stations or the installation of new equipment to accommodate the higher ethanol blends.

DOE will also select up to five national campaign projects and fund up to $2 million in an effort to raise public awareness of the benefits, safety, and use requirements of higher ethanol blends up to E85. This effort will help promote the use of renewable fuels to decrease dependence on petroleum.

Applications for this funding is due by September 30, 2009. For more information, click here and enter Reference Number DE-FOA-0000125.

Green Plains Renewable Energy will acquire two former VeraSun ethanol plants located in Nebraska, to make it the fourth largest ethanol producer in the U.S.

Addition of these plants will increase the Company’s ethanol production capacity by 45%, from 330 million to 480 million gallons per year.

“The acquisition of the plants in Central City and Ord lowers our cost of production and improves our ability to compete in the industry,” said Todd Becker, Green Plains’ President and Chief Executive Officer. “These plants are in excellent locations. Within the 14 contiguous counties surrounding Ord and Central City, there are over 300,000 cattle on feed and approximately 300 million bushels of corn grown annually.”

Sale of the facilities are expected to close in June and Green Plains plans to have the plants fully operational within 30-60 days of the sale closing.

In a time when many plants are shutting down, a new ethanol plant near New Hampton, Iowa has started production.

The Homeland Energy Solutions will produce 100 million gallons of ethanol annually, according to the Iowa Renewable Fuels Association (IRFA), which congratulated the company for its accomplisment this week.

“It’s been a difficult time for the ethanol industry, but Homeland Energy Solutions is proof that we are working through it and finding ways to succeed,” said IRFA Executive Director Monte Shaw. “This locally-owned ethanol refinery will buy Iowa corn and provide good paying jobs in rural Iowa. Homeland Energy Solutions is a welcome addition to Iowa’s growing industry.”

Homeland Energy Solutions Board Chair Steve Eastman said they are excited to start production. “And we are grateful that we missed the commodity boom and bust of 2008 that whiplashed so much of the ethanol industry,” said Eastman. “While margins remain tight, we feel well positioned going forward.”

Fagen, Inc., the Granite Falls, Minnesota design-build contractor, oversaw the construction and incorporated a process design provided by ICM, Inc. of Colwich, Kansas.

As so many ethanol plants have closed in recent months, invester-owned ethanol start-up One Earth Energy LLC is planning to begin production on June 11, 2009. The 100 million gallon plant is located near Gibson City, Illinois.

One Earth Energy, LLC officially organized as an Illinois based Limited Liability Company in November 2005. By acquiring ethanol mills on the cheap, big oil and other players could undercut firms such as One Earth Energy, which spent $166 million to build a plant for distilling corn into fuel.

“The challenge to compete with those new ownerships is they have a lower cost of production because they have less debt,” said Steve Kelly, president of One Earth Energy. Heavy debt loads and historically high corn prices have been lethal to independent ethanol firms.

According to the Los Angeles Times, before launching One Earth Energy, Steve Kelly worked down the road for the Alliance Grain Co. He estimates that the co-op stored about 3 million bushels of corn when he joined it in 1988. The figure reached almost 30 million bushels in 2005, so Alliance needed an outlet for its corn, and One Earth Energy was born.

“It always made sense to me to have the vertical integration, be part of that consumption chain after it leaves the farmer and the storage point,” said Kelly, noting that Alliance will supply One Earth Energy with corn.