By Sue Roesler, Farm & Ranch Guide
Friday, November 24, 2006
Mick Miller, left, president of Red Trail Energy, LLC, shows the first load of corn that was run through the ethanol plant, along with Ed Thomas, plant manager while standing on the weigh station with Miller’s car that runs on E85 ethanol. Photo by Sue Roesler
RICHARDTON, N.D. - The dawn of a new era in energy independence and value-added agriculture is about to break in Richardton, N.D. - and the entire western region of the state is celebrating.
A $100 million ethanol plant, Red Trail Energy, LLC, plans to start up operations Dec. 7. The plant will produce 150,000 gallons of ethanol every day, which translates to some 50 million gallons of ethanol produced by the end of 2007.
“It’s exciting,” said Mick Miller, president of Red Trail Energy. “I strongly believe renewable energy is the wave of the future. Plants like this one are growing so rapidly.”
As a “second generation” plant, Red Trail incorporates a state-of-the-art design utilizing high tech equipment and facilities, Miller said.
Red Trail is one of several ethanol plants in the state using corn as one of its grain sources that are either in operation or opening within the next year. Blue Flint Ethanol in Underwood is set to open in January 2007, and another plant is on the rise in Hankinson. Already in operation are plants in Grafton and Wallhala.
The state of North Dakota pitched in with a total of $3.2 million in loans and grant funds over time to help build Red Trail. In addition, a $3.1 million Ethanol Production Incentive was put in place by the state Legislature, considered a model for the nation in this new age of energy explosion.
Fagen, Inc., of Granite Falls, Minn., constructed the plant, a company that has a proven track record in building ethanol plants that are still in operation and growing every year. More than 400 employees from all over the country worked during the construction phase, 300 of them with Fagen, Miller said.
Many businesses in the region and state also subcontracted with Red Trail as the plant was built, and millions in wages helped pump up the economies of the rural towns in the region.
Dan Wogsland, executive director of the North Dakota Grain Growers Association, said he toured the plant and called it “fantastic.”
“I liked it. These ethanol plants are opening agriculture to more diversity,” he said. “Energy has changed the whole future of everything.” Corn prices will continue to rise as demand increases; more corn acres will be planted next year and ranchers will gain a high protein feed for their cattle.
Doug Landblom, livestock nutrition specialist at the Dickinson Research Extension Center, said the cost of feed is the largest factor impacting ranch profitability and ranchers will be able to cut some of their costs by feeding livestock a byproduct of ethanol, dried distillers grain plus solubles (DDGS).
Landblom calls DDGS an “excellent protein and energy” boost for livestock when used as part of a feeding program, particularly useful in drought years such as 2006 when hay quality was poor.
Miller said Red Trail will produce 160,000 tons of DDGS a year, enough to support 220,000 feeder cattle. With DDGS readily available, ranchers in North Dakota will also have increased opportunities to background calves.
The plant will use about 50,000 bushels of corn a day to produce the ethanol, and Red Trail has been accepting corn over the past few months from farmers with prices more than $3 per bushel. As producers haul in the grain, the trucks are weighed both full and empty, and checks for the corn are issued on a weekly basis, Miller said. Corn is stored in one of three silos at the plant which together hold 1.75 million bushels.
“We’re about a third full of corn right now,” Miller said.
Paul Q. Anderson, North Dakota Corn Growers District 7 director, said the state is expecting about a 30 percent increase in corn grown in 2007 because of the ethanol plants.
“I believe the opportunity for North Dakota farmers will be to move and sell their corn crop locally for a better price due to a narower basis,” Anderson said. “And the ethanol plants will also provide a local supply of excellent feedstuffs for livestock feeders. The North Dakota Corn Growers has already done much work in promoting these ethanol co-products to livestock producers.”
He added it was an “exciting time” for corn producers with corn demand and prices higher.
Bill Price, vice-president of the Red Trail Energy board, said he is a farmer in Price, N.D., who also grows corn.
“This is great for our producrs - a good farming opportunity. When corn prices are $1.80, and Red Trail is offering $3.22, it makes sense to raise corn,” Price said, adding the venture will also be great for ranchers who plan to use the DDGS.
Price added Red Trail has had to move back their opening date a couple of times, but it is looking good to coming on line the first week in December.
“We don’t want to start until we’re ready, because we want to make sure everything is running smoothly and will continue on a daily basis from the day of startup,” he said.
Price decided to join the Red Trail board in its early stages because he felt it was a good investment. “I’m absolutely sure all the investors will see a good return on their investment,” he said.
Red Trail’s board members have all invested in the plant, with an average investment of $195,000.
The plant is fired from 133,000 tons of North Dakota lignite coal a year, purchased from Center Coal Co. Coal is not only considerably less expensive than natural gas, it is also considered cleaner and better for the environment. Miller said the coal contracts are at a fixed rate for 10 years.
Approaching Richardton in the evening is stirring. The plant literally lights up the night sky next to Interstate 94 like dozens of dazzling stars. Red Trail be in operation 24 hours a day, said Miller.
There are 39 full-time employees hired - a youthful, energetic crew, many of whom were hired right out of Bismarck State College’s two-year power process plant degree.
“They do a good job with that program,” Miller said. “We have such a good group of people hired. We’re able to take advantage of their high tech skills and as many of their resources as we can.”
Miller was born in Mandan and graduated from the Bismarck program in 1999. At the time, his dream was to work in a refinery. All the positions, however, were filled with long-term employees, and he was given an opportunity to work for DENCO, a Minnesota ethanol plant under construction.
Red Trail is the first ethanol plant that Miller has managed from the ground up. Actually, he is still working for DENCO/Greenway Consulting under a long term management contract where the company can still support the ethanol plant in its beginning stages.
“I’m doing what I love to do in my own state,” Miller said, adding everyone has all pitched in to make this plant a reality. “It’s been a lot of long days, but it’s all coming together.”
They are still finishing up piping and electrical work as of Nov. 17, but by Dec. 7, should be ready to go. It won’t be a public or media event as Miller said the first days “will be very intense in the startup phase.” Sometime next spring, Red Trail will hold a grand opening for those interested in how the ethanol plant works.
On site at the plant are 11 structures, a total of 100,000 square feet of buildings, Miller said. They include administration, maintenance, process buildings, grain receiving, dried distillers grains storage, coal island, dryer, and pump house.
Grain and ethanol will move in and out of the facility by truck or railroad. R and R Contracting built four branches of railroad track, a total of 21,000 feet, for the ethanol plant, and the main line contract is with Burlington Northern Sante Fe Railroad.
Miller estimates that trucks transport products in and out of Red Trail about 100 times a day and train cars transport goods in and out about 20 times a month.
Most of the ethanol will be shipped to ports on the west coast. Red Trail’s ethanol marketer is Renewable Products Marketing Group of Winthrop, Minn., a company that markets ethanol for more than a dozen plants across the country.
Miller drives a flexible fuel Chevrolet van with E85 banners all over it. He believes in using E85, composed of 85 percent ethanol and only 15 percent petroleum gas, which is actually a few cents cheaper than petroleum at the pump.
Ethanol is a clean, renewable fuel, set to become a major player in the nation’s future - and the state of North Dakota is positioned right at the ground level of states utilizing value-added agriculture in a big way.
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