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Posted on  

April 28, 2003

AGRICULTURE: Valley City gets ethanol plant

Dorgan hopes latest addition is the first of many

By Mikkel Pates
Herald Staff Writer

FARGO -Dakota Renewable Fuels L.L.C. has picked Valley City, N.D., over Wahpeton, N.D., as the site for its planned 30 million-gallon ethanol plant.

The group plans a statewide equity drive June 16-27 and July 7-18. To make the project a reality, the group must raise at least $18 million, or 40 percent, in equity.

Nonfarmers will be able to invest in the plant. A minimum investment will be in the $10,000 range, with a variety of classes of stock. Groundbreaking could be this fall or next spring, depending on the success and speed of the equity drive.

Duane Dows, chairman of the group's board, announced the location at a Friday news conference in Fargo, flanked by Sen. Byron Dorgan, D-N.D., who has supported ethanol-friendly legislation in Congress.

Third N.D. plant

DRF will be the third ethanol plant built in North Dakota. Plants in Walhalla and Grafton were built more than 20 years ago. Mike Clemens, vice chairman of DRF, said the plant will be "state-of-the-art" and produce 2.8 gallons of ethanol per bushel of corn.

He said it will raise corn prices in the trade area by "probably 5 to 10 cents" a bushel. Marketing contracts for the sale of ethanol and distillers' dried grains are in place but won't be disclosed until equity meetings.

Two 20-acre sites just off Interstate 29 exits - one east and one west of Valley City - still are being weighed.

Dows said the final decision was made after reviewing data on the cost of water, natural gas and electricity, in relation to financial projections. He declined to quantify how much difference there was between the two sites.

Clemens acknowledged that the Cargill corn fructose plant in Wahpeton already is a "heavy draw" for corn in that area while Valley City is "kind of a void area" that has "probably the lowest basis for corn" in the state, meaning the value is lowest compared with the market.

Dows declined to say how much the community had offered in terms of tax and other incentives. Clemens said the plant would employ 37 to 40 people directly, with a $1.5 million payroll, and that it would create 415 secondary jobs and $45 million in gross business volume in sales in the state.

Corn production increased 45 percent in the state in recent years. Last year, farmers produced a record 113 million bushels. About half of the state's production is "within trucking distance" of Valley City, Clemens said.

"Currently, about 65 percent of our corn is shipped out of the state of North Dakota, where someone else captures the value and benefit of that corn," he said.

The value of corn goes from $200 an acre as a raw commodity to about $600 an acre by making it into ethanol and distillers grains, a nutrient-rich feed product.

No one from the state of North Dakota was at the announcement, even though legislative passage of a producer incentive was a key component for reducing risk in the project. Dorgan, a member of the Senate Energy Committee, said the committee likely will complete work on an energy bill in the next two weeks. He predicted an energy bill will be signed by President Bush by the end of the year.

He said the bill "changes the future for the prospect of plants like this plant."

He expects the fuel additive and pollutant MTBE eventually will be phased out and banned nationally. As that happens, Congress will create a "consistent, robust demand" for ethanol, he said.
 

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