With a name like Corn LP and a location in northwest Iowa, one would expect this ethanol plant to have little problem obtaining feedstock. That's certainly the case in Goldfield, Iowa, where Corn LP is using a feedstock supply business plan that capitalizes on the state's ample corn production.

Built under the Fagen Inc. and ICM Inc. team and adjacent to Gold Eagle Cooperative's existing grain-handling facility, Corn LP was designed to add value to local farmers' crops. Since the project reached full-scale production in early 2006, that goal has been accomplished.

Gold Eagle's nine grain facilities have been a steady source of feedstock for Corn LP. The grain facilities have more than 16 million bushels of permanent corn storage and an additional 10 million bushels of temporary storage. Gold Eagle is part-owner of the Corn LP plant, and the two parties have witnessed symbiotic benefits.

While access to corn has been a major factor behind the plant's success, perhaps the most unique aspect of Corn LP is its energy source. "We were the first to use the clean-coal technology," says Corn LP and Gold Eagle General Manager Brad Davis.

The plant obtains low-sulfur coal via rail from Wyoming, which was already en route to Iowa through an Alliant Energy Corporation facility. Alliant Energy is a regional public utility holding company. "We've piggybacked on the leverage of the buying power of Alliant Energy," Davis says.

The decision to use coal was so clear that the initial investment group never even considered natural gas, Davis says. "In fact, as we received bids for the plant, we told them if they couldn't bid a coal-fired plant there was no reason to bid," he says.

However, coal doesn't carry the same ease-of-use benefits as natural gas. Davis admits there have been challenges, including the need for more equipment and maintenance and a monitoring system to prevent downtime. However, with coal costs running at approximately $2.25 per MMBtu and natural gas near $7 per MMBtu, the savings add up quickly, especially when it comes to drying distillers grains.

Corn LP utilizes steam tube dryers that allow for lower drying temperatures to produce a consistent distillers grains product. "The only way for us to totally utilize the economics of coal was to use steam from the coal to dry the distillers grains," Davis says.

Ag Processing Inc. markets the distillers dried grainsand ships the product primarily to destinations in Oklahoma, Texas and California, and has also been shipped to the export markets, according to Davis.

Eco-Energy Inc. markets the plant's ethanol, which along with the distillers grains gets shipped from the plant via 100-car unit trains along the Union Pacific Railroad main line that runs between Corn LP and Gold Eagle Cooperative.

The business plan—pairing the ethanol plant and grain facility—is being used to develop a second ethanol project close to the first facility. Davis says the group is pursuing another Fagen/ICM project near Wesley, Iowa, 30 miles north of Goldfield. The 100 MMgy project has been under development for a year, and initial site work is expected to begin this spring, he says.

While the Wesley plant won't be physically tied to an existing grain elevator, its infrastructure will operate much like one. Davis says the plant will be "built more like a terminal elevator with a huge amount of storage and very high receiving capacity for grain." The corn supply capacity will mainly be filled through a partnership Gold Eagle has forged with a Clarion, Iowa-based grain cooperative. North Central Cooperative's Web site lists six grain-handling locations within 15 miles of Goldfield and Wesley. The territory covered by the elevators is roughly 25 to 30 miles from east to west and 60 to 70 miles from north to south. "We cover a tremendous amount of area," Davis says.

Having a feedstock source is important in northwest Iowa, where ethanol plants seemingly pop out of every cornfield. Goldfield's closest neighboring plant is less than 30 miles southwest in Fort Dodge, home to VeraSun Energy Corporation's 110 MMgy plant that started producing ethanol in September 2005. With rising corn prices and an expected acreage boost in 2007 "you can't have enough origination points, especially with the bigger yields and production," Davis says.

Unlike Goldfield, the Wesley plant will use natural gas as its energy source. Davis attributes rising coal-fired equipment costs as the reason for the switch. He's also seeing a rise in overall plant construction costs since Corn LP started up. "Sticker shock is really a pretty big deal now," he says.

Davis hopes to begin full-scale construction this fall. He looks forward to the management and operations synergies offered by having two plants located in close proximity.

"We had to do a tremendous amount of investigation into the ethanol industry," Davis says. "It was the most opportunistic type of challenge that could have hit us. Once we received a taste of it, we're pretty excited."

More information on Corn LP and Gold Eagle Cooperative is available at www.cornlp.com and www.goldeaglecoop.com.