 FUELING
ETHANOL UP NORTH: Farmers near Fergus
Falls hope to build the region's first ethanol plant
BY E.M. MORRISON
Fergus Falls, Minn. — The ethanol boom may be heading north.
Otter Tail Ag Enterprises, LLC hopes to build a 40- or
50-million-gallon ethanol plant near Fergus Falls. “This is
a growing industry, and there is a geographic opportunity
here,” says Elbow Lake farmer Jerry Larson, chairman of
Otter Tail Ag Enterprises. “We think we can duplicate the
success of ethanol plants in the southern half of the
state.”
The effort to bring ethanol processing to the region began
earlier this year, led by “a group of agricultural and Main
Street visionaries” from Otter Tail County and the
surrounding areas, says Larson, a founding director of
Morris and Benson ethanol companies.
The group just completed a feasibility study and is now
putting together a business plan. Funds for the planning
phase were provided by AURI’s Center for Producer Owned
Energy and the Minnesota Corn Growers Research and Promotion
Council, which wants to extend ethanol processing to the
northern corn belt.
The proposed dry-grind plant requires a $50-million-plus
investment, according to the industry’s average
new-construction cost estimates. The facility would process
about 17 million bushels of corn a year, which should
benefit all area corn farmers, Larson says. “History tells
us that an ethanol plant adds 4 to 9 cents to the price of
every bushel of corn harvested in the region.” The facility
would also produce 145,000 tons per year of low-cost,
high-protein animal feed, benefiting the local livestock
industry.
It makes sense to process more corn locally, Larson says.
About one-sixth of Minnesota’s one billion-
bushel corn crop is made into ethanol. Still, half the crop
leaves the state, and with it, Larson says, go manufacturing
opportunities and jobs.
Otter Tail Ag’s venture would create two dozen skilled jobs
and would also generate substantial related business
activity, says Tom Melin, assistant director of AURI’s
Energy Center. According to one industry estimate, 80
percent of revenue generated by an ethanol plant is spent
within 50 miles of the facility.
Minnesota’s
13 ethanol plants generate $1.3 billion in economic activity
and provide 5,300 ethanol-related jobs, according to a
January 2005 report from the Minnesota Department of
Agriculture. Three more ethanol plants now under
construction will bring the state’s ethanol production
capacity to 550 million gallons by year end.
Minnesota manufactures nearly 15 percent of the nation’s
ethanol, which will top 3.8 billion gallons this year — up
from just 175 million gallons in 1980. Larson,
vice-president of the Minnesota corn council and a past
member of the National Corn Growers Business Development
Team, expects the ethanol market to continue growing. This
year Minnesota lawmakers set ambitious renewable energy
goals — doubling the ethanol required in gasoline to 20
percent by 2012. “Minnesota is a leader in setting renewable
energy standards.
We’re an example for the rest of the states,” Larson says.
The national Energy Policy Act of 2005 mandates the annual
use of 7.5 billion gallons of ethanol by 2012. And state and
federal governments continue to offer ethanol subsidies.
These policies are encouraging new ethanol ventures, Larson
says: “We’ve had major support for ethanol — from our
governor and legislature, from our national political
leaders, from consumers and taxpayers, and from
agriculture.” ■
|
