Closed-loop facilities aim to 'build bridge' between industries

July 20, 2007

BY Nicholas Zeman

The relationship between the beef and ethanol industries hasn't always been superb, with cattlemen facing higher corn feed prices partly caused by ethanol demand. However, anaerobic digesters that produce energy from manure are behind efforts to integrate cattle feedlots with ethanol facilities. E3 BioFuels LLC recently began ethanol production at its facility in Mead, Neb., and others are currently being developed.

David Hallberg, CEO of Prime BioSolutions in Omaha, Neb., recently announced plans to bring several closed-loop ethanol plants on line now that the company has completed its design of E3 BioFuels. In these "closed-loop" systems, cattle produce the manure needed to fuel the anaerobic digesters, and subsequently the energy needed to power the ethanol production plant. Then distillers wet grains are fed to the animals on-site. These facilities are referred to as "closed-loop" because energy doesn't need to be purchased from any outside source, nor do distillers grains need to be marketed or shipped. A 1,400-acre site in Dakota County, Neb., was the first to be selected for implementation of the company's integrated feedlot model. This site, between Dakota City and Hubbard, Neb., is in the permitting stages of development, Hallberg said, adding that he expected to break ground on the facility by early fall. All of the manure from 30,000 head of cattle is expected to be used to power the 23 MMgy ethanol distillation process. This entire project is estimated to cost $85 million and will be free from any reliance on fossil fuels.

Hallberg has been involved in an ongoing dialogue with the cattle industry regarding how to improve relations with the ethanol industry, he told EPM, adding that integrated facilities might actually be the best diplomat for those purposes. "We are literally building a bridge between these industries as more and more integrated plants come on line," he said. The fact that former Tyson Fresh Meats Inc. executive Gene Leman is serving as an advisor to Prime BioSolutions is another positive sign that relations between the ethanol and cattle industries are on the path to cooperation.

Former U.S. Sen. Tom Daschle, a major advocate of the ethanol industry, has also been serving as an advisor to Prime BioSolutions. "He's been a long-time supporter and a personal friend for over 25 years," Hallberg said. "We're honored to have him."

Prime BioSolutions partnered with Kansas City, Mo.-based E3 BioFuels in 2005 to build the Mead facility. While Prime BioSolutions has retained a 20 percent stake in that plant, future sites won't be developed with E3, Hallberg said.

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