Between Corn and Coal

March 6, 2007

BY Dave Nilles

Mick Miller spent the first day of 2007 doing what the ethanol plant general manager at Red Trail Energy LLC should have been doing. The company produced its first gallon of ethanol in Richardton, N.D., on Jan. 1, 2007, marking the start-up for the nation's newest coal-powered ethanol plant. For Miller, counting down the seconds to plant start-up must have been much like watching the ball drop in New York City's Times Square.

Miller, formerly of DENCO LLC, is president and general manager of the facility. He's also a member of Greenway Consulting, which has a management contract with the facility. Miller joined Red Trail Energy shortly before it broke ground in July 2005. Fagen Inc. began pouring concrete in early August for the ICM Inc.-designed facility. "We had an excellent opportunity to see our plant grow," Miller says.

Energy was the key to siting Red Trail Energy's facility. The project is clearly outside the traditional Corn Belt, yet ideally located near one of North Dakota's lignite coal mines, which more than makes up for the lack of readily accessible corn. The state produced 30.3 million tons of lignite coal in 2006, making it the nation's No. 15 producer, according to the Lignite Energy Council. Red Trail will consume 12 to 15 truck-loads of coal per day and have on-site capacity for approximately one week's worth of operation. "We'll consume 133,000 tons of North Dakota lignite each year," Miller says. "It was that energy that made this plant a reality."

Red Trail expects to save at least $8 million per year compared with an equally sized natural-gas-fired facility. The facility has a 10-year, fixed-base-rate contract for the coal. Energy Products of Idaho installed the fluidized bed combustor.

The access to coal counteracts the plant's need to ship corn in, most of which arrives on-site via unit trains from eastern North Dakota, northwest Minnesota and northeast South Dakota. Miller says approximately 380 million bushels of corn travel by the plant each year along the Burlington Northern Santa Fe rail line. "We're capturing some of that grain," he says.

The plant site is ideally situated for bringing in both corn and coal. It's located between the main line railroad and Interstate 94. In fact, Miller said he can see both from his office windows.

In order for Red Trail Energy to be able to locate near the lignite coal supply, it had to overcome a significant obstacle—access to water. Southwest North Dakota is generally dry, receiving less than 17 inches of rainfall annually. To make matters worse, initial test wells drilled at the site showed poor-quality groundwater. The plant, however, was able to tap into Lake Sakakawea, the nation's third-largest man-made lake.

North Dakota's Southwest Water Authority oversees the Southwest Pipeline Project, which carries raw lake water through a 30-inch line from Lake Sakakawea to Dickinson, N.D., 25 miles west of Richardton. The water is treated in Dickinson and distributed throughout a 12-county region. Red Trail taps the incoming and outgoing Dickinson lines for process and potable water, Miller says. The facility will use up to 600 gallons of water per minute, making it the pipeline's second-largest user next to the city of Dickinson.

Miller says the ethanol plant is also taking advantage of another North Dakota resource; 25 of the plant's 30 workers have received training through Bismarck State College's Process Plant Technology program in Bismarck, N.D. Approximately half of the Red Trail staff has previous ethanol industry experience.

More industry experience will soon be required in the state. Red Trail will be facing some competition as Blue Flint Ethanol LLC nears completion on its 50 MMgy plant near Underwood, N.D. U.S. BioEnergy is also building a 100 MMgy plant in Hankinson, N.D., in the far southeast corner of the state. Additional plants have been proposed in Jamestown, Valley City and Casselton all along Interstate 94 in North Dakota. All the projects are essentially between Red Trail Energy and the corn-growing region farther east.

Meanwhile, Red Trail Energy is finishing its start-up. In mid-January, the facility was undergoing fine-tuning of its coal-handling equipment, Miller says. Thirty-one railcars of ethanol were shipped to the Seattle area Jan. 22. "We've been up and down with start-up," he says. "The process seems to be running great. It's a new system, and most of our team is adjusting to operating procedures."

More information on Red Trail Energy LLC is available at www.redtrailenergyllc.com.

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