Study will determine ethanol plant size

Study will determine ethanol plant size
By the spring of 2008, trucks will begin hauling corn much shorter distances in Clay County.

The corn will only travel a few miles, to a new ethanol plant that should spring up approximately two years from now on property near Highway 50 between Gayville and Meckling.

The plant will be constructed thanks to the corporate merger of Glacial Lakes Energy (GLE), LLC and Missouri Valley Renewable Energy (MVRE).


"We have first options on the property, and we're going to start doing permitting and soil boring very shortly," said Craig Johnson, chairman of MVRE. "We hope to be on track by the end of this fall and actual construction by the spring of 2007."

"It's exciting," said Reid Jensen, president of the South Dakota Farm Growers, who lives approximately 14 miles north of Vermillion.

Jensen, whose farming operation includes raising corn, said the new industry represents another way for local farmers to add value to the crops they raise.

"It's value-added agriculture right here in South Dakota," he said. "It is also a chance for farmers and local people to be able to invest in the plant, too. The corn growers have been promoting value-added agriculture through ethanol and livestock, but we like the fact that this will give local people the opportunity to invest and keep the returns in their area."

Johnson said June 29 he is pleased that MVRE is joining up with Glacial Lakes Energy to form a larger, stronger company.

The people planning the new ethanol plant know from studies that have already been completed that there is enough corn produced in the area to justify the construction of a facility that produces 50 million gallons of ethanol annually.

"We went ahead (to conduct) a full feasibility study in the next two weeks to see if we can possibly build a larger plant," Johnson said. "Until that feasibility study is done, we really haven't come out with an exact size of the plant. But we know we have enough corn for a 50 million gallon plant for sure."

"This is a fantastic announcement for the whole area," said Kurt Hauser, executive director for the Yankton Office of Community Development. "For the ag industry, it's tremendous."

Jensen said MVRE is doing a corn study in the region with a company called Pro Exporter.

"They will come back with the results of that in the next two or three weeks, and that will tell us the size of plant we can build," he said.

MVRE is made up of several ag producers from throughout southeastern South Dakota, several business people from Vermillion and one of the educational leaders from The University of South Dakota.

"We've been working since the end of February to put this together and things have really come along in the last few weeks for us," Johnson said.

The newly merged GLE and MVRE plans to hold an equity drive to give citizens a chance to participate in this plant's construction.

"One of the things we've been very adamant about is giving an opportunity for local South Dakota ag producers as well as people on Main Street South Dakota to invest in this plant," Johnson said.

He noted that such opportunities are becoming more difficult.

"There are a lot of large investment groups out there today that are building plants, and the opportunity for local investment � the door is almost closed for local investors," he said. "We wanted to make sure that local investors would have an opportunity."

Jensen said a 50-million-gallon-per-year plant likely would employ at least 40 people.

The price tag to construct such a plant, he added, is approximately $80 million.

"It's a big deal," Jensen said.

Several factors led to the decision to locate the plant just outside of Vermillion, including the supply of corn and the availability of a building site served by a railroad.

Johnson said there is also natural gas available, a plentiful water supply for the processing that goes on in the plant, and an excellent transportation infrastructure with Highway 50 nearby.

"It's a win-win situation. We've been working with Vermillion on our regional efforts," Hauser said. "This is one where we all win.

"I know that site has been looked at before," he added. "It's got good rail access and water availability. It really makes for an ideal site."

Once construction begins, it could take from 12 to 16 months to complete, depending on winter weather conditions.

A plant producing 50 million gallons of ethanol annually will need approximately 18 million bushels of corn.

Jensen said local corn growers are excited about what awaits in the future.

"This gives the farmers in the area another outlet, another competitive market for their corn, and it also gives them an opportunity to invest in that," he said. "To me, that's a great deal. It's a natural hedge for farmers � if their corn price is low, then their ethanol investment will make more money; if ethanol's high because of high corn costs, then you're making more money on your corn crop."

A by-product of the ethanol manufacturing process is distiller's grain, which is an excellent feed source for livestock.

"That's an exciting development for the cattle feeders in the area, even as far as northeast Nebraska," Jensen said.

Johnson praised local individuals who helped make the new Clay County industry a reality. They include Ron Heine, Yankton; Jim Ryken and Todd Bye, both of Gayville; Woody Houser and John Olbertson of Beresford; Gary Scott of Alcester; and Harlan Schott, Farron Pratt, Craig Myron, Mike Keller and Nick Merrigan of Vermillion.

The South Dakota Corngrowers and the Corn Council also played instrumental roles in the planning process, Johnson said.

He also noted that Paul Roberts of Clay-Union Electric played an important role.

"He had his office available for us to hold all of our meetings," Johnson said. "It was a real community effort."

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