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March 14, 2003

Ethanol plant to be studied

By Richard Volesky, The Dickinson Press

Richardton, ND - Buoyed by donations and the support of the community, those who hope an ethanol plant will be built in the region have hired a consulting firm to evaluate the proposal.

A contract for a feasibility study has been signed with BBI International of Golden, Colo., Richardton Mayor Frank Kirschenheiter announced at a Wednesday informational meeting.

“We’re very excited about it because of what it can do for southwestern North Dakota,” said Kirschenheiter. He also serves on the board of the Richardton Development Company, which signed the contract with BBI.

BBI representatives were in Richardton yesterday to begin developing the study, said Ambrose Hoff, an owner of Stone Mill Farms, a local business that deals in specialty crops. Hoff said the study could be completed in about 45 to 60 days.

The idea for the ethanol plant, which would use corn to make fuel, was born last year in discussions that included Hoff, his son, Jody Hoff, and Mark Erickson of Scranton. The younger Hoff is the co-owner of Amber Waves Inc., a local company that manufactures grain hoppers. Erickson is the district sales manager for Rea Hybrids, a seed company.

The feasibility study will cost about $30,000, said Ambrose Hoff.

The board for the federally funded Southwest Rural Economic Area Partnership has pledged $40,000 to the project. The money is to be provided in $20,000 installments and has to be matched by the Richardton developers.

The developers have so far collected $20,000 in matching funds. The contributors were West Plains Electric Cooperative, Montana-Dakota Utilities, the Richardton Development Company, Rea Hybrids, Stark Development Corporation and the Richardton Business Association.

BBI specializes in ethanol and biodiesel projects. “They are one of the top consulting firms for doing these types of plants,” said Gaylon Baker, the director of development for Stark Development.

BBI is to review the construction and operational costs of the plant and determine the facility’s return for investors.

Richardton isn’t alone in its quest for an ethanol plant. Communities in other states are evaluating the idea also, Baker indicated. “We’re hoping this one pencils out well and attracts the investment,” said Baker.

The proposal doesn’t involve setting up a cooperative, which would include an equity fund drive and take a considerable amount of time. Ambrose Hoff said the idea instead is to build the plant with funds that are contributed to a limited liability corporation.

The plant’s estimated construction cost is $54 million.

Jody Hoff, a mechanical engineer, has had a role in designing ethanol plants for a Minnesota company. He said a Richardton plant, without significant financial incentives from the state, could be financially successful if it was capable of producing 40 million gallons of ethanol each year. Such a plant would annually use about 15 million bushels of corn.

A potential site is near the railroad tracks east of Richardton, said Ambrose Hoff.

Although the region isn’t a major corn producer, the project’s supporters believe that construction of the plant would prompt more farmers to grow corn. Grain could meanwhile be brought by rail, said Jody Hoff.

Other than creating a new outlet for corn growers, the proposal’s supporters again reviewed another major benefit of the project Wednesday. After the starch portion of the corn is converted into ethanol, the remaining components – such as proteins, fiber and vitamins – are concentrated to produce dried distiller’s grains, which is a livestock feed.

Warm water from an ethanol plant sometimes is used to heat a greenhouse or support a fish farm, said Ambrose Hoff.

Source: The Dickinson Press