Rural Energy Marketing plans biodiesel plant
LUVERNE -- The owners of Luverne-based Rural Energy Marketing (REM) will go before the Vermillion, S.D., City Council later this month to tout their proposal to construct an estimated $80 million biodiesel plant about a mile west of town.
Loren Forrest said he has had an option on a 290-acre site, located adjacent to the Burlington-Northern Rail line, for nearly two years.
"It's a nice, flat piece of ground that you can run an oval track on real easily," said Forrest. "There's all kinds of water under the ground there and the Lewis and Clark Pipeline runs right through the property."
Approximately 6 gallons of water would be used to produce each gallon of green, renewable fuel. While water needs are greater -- ethanol plants require three to five gallons of water for each gallon of ethanol produced, Forrest said the diesel they would produce contains 140,000 BTUs, compared to 76,000 BTUs for ethanol.
The site is also located about two miles from the Missouri River, which Forrest said provides them with an option for discharge from the operation.
The biodiesel plant would utilize Fischer-Tropsch technology, which takes the carbonous material -- in this case corn stalks -- and gasifies it into hydrogen and carbon dioxide. From there, the liquid form can be made into the desired product, whether it's natural gas, ethanol or diesel.
REM proposes a plant that would produce 15 to 17 million gallons of biodiesel per year.
REM has hosted public meetings in Vermillion, Yankton and North Sioux City, S.D., simply to explain the proposal at this point.
While those meetings were poorly attended, Forrest said there were several professors in attendance at the meeting in Vermillion, and they expressed their interest and support for the project. Vermillion is home to the University of South Dakota.
Forrest said the planned meeting with the Vermillion City Council is to explain the project. He plans a second trip to meet with the City Council to request rezoning the parcel from agricultural to industrial. Because the parcel is located within two miles of the city, Forrest said both city and county leaders have a say in the rezoning request.
In addition to its access to rail, Forrest said he likes the site because of its highway access that goes around Vermillion.
"The (corn) stover could come from the north, east, west or south without really going through town," Forrest said.
It was more than a year ago that Forrest and his son, Russell, proposed a $44 million refinery in central Rock County, utilizing the Fischer-Tropsch process to produce methanol, a colorless gas that can be used to make biodiesel, from corn stover and miscanthus, a hardy, ornamental grass.
After harvesting their miscanthus last fall, Forrest said they lost approximately three-fourths of their crop over the winter. As a result of the study, he said the crop wouldn't be suitable for this area, and that it might be a better renewable crop in southern states such as Louisiana.
The proposed plant for South Dakota would operate solely on corn stover, and would be acquired from about a 30-mile radius of Vermillion.
"That's probably going to be our biggest hurdle," said Forrest. "The farmers aren't too interested in doing more work with $6 corn."
With voters approving the $10 billion Hyperion Energy Center project, which is proposed on a 3,800-acre site east of Vermillion, Forrest said that could bode well for his project.
"With green credits, they could be our largest customer," Forrest said.
While still in the beginning stages of the process, Forrest said if and when they get the financing and the feedstuffs in place, the plant would take an estimated 2½ years to build.
"Our vision as a company is to go to the local farmers and raise as much capital as possible, and then get venture capital when we need that," Forrest said.
In addition to the work they are doing in Vermillion, Forrest said he is also pursuing an opportunity for a plant in Montana. He plans to visit the site next week at the Absaloka Mine near Hardin, Mont.
"That is the mine that the Westmoreland (Mine Co.) mines with," said Forrest, adding that the mineral rights are owned by a Crow Indian tribe.
"We want to do a coal to liquid project up there and make Fischer-Tropsch diesel," he said. "We already have a source for the coal, but the water is an issue up there.
"We (will be) using clean coal technology -- the same as the biomass technology," Forrest said, adding that he has a patent pending on the process that would be used.
"Our country needs to have fuel generated from inside its borders," he said.