Cities in agricultural areas, like Emporia, are seeing an increased interest in biodiesel fuels, according to Kent Heermann, executive director of the Regional Development Association.
“I have lots of people knocking on the door; some have money, some don’t,” Heermann said recently.
Heerman said that most of the work on biodiesel fuels has resulted from companies approaching him, although he has generated overtures to a few businesses.
None of the queries has materialized into a full-blown effort to develop manufacturing in this area. Interest has been expressed, however, because of Emporia’s location and because its existing industries.
“We’re in that mix, primarily because of the two generators of (raw materials),” Heermann said. “Bunge does produce a product that’s sold as a commodity, that is sold as it is. They produce it themselves.”
On the other side of town, Tyson Fresh Meats’ byproducts include tallow, another potential component of biodiesel fuel.
“The biodiesel industry is kind of in its infancy, compared to the ethanol,” Heermann said. “Any time you have an industry that is in a growth mode — and it’s somewhat profitable now, even without the incentives — but when you have the tax credits on federal and state level ... there’s a lot of money following it now.”
Ethanol has developed rapidly in Illinois, Iowa, Minnesota, Nebraska, Missouri and even Kansas, he said.
“So that area’s getting saturated,” he said. “All of a sudden you have this capacity issue and there are rumors going around.”
With all of the plants now in operation and others under construction, some already are predicting raw-material shortages. Heermann laughed as he mentioned what he said must be a “Rural Legend” instead of an Urban Legend.
“Some day, Iowa’s going to have to import corn,” he said, repeating the “legend.”
Kansas is becoming more involved in the alternative energy effort.
An East Kansas Agri-Energy plant at Garnett began producing ethanol in 2005 and has distributed more than $12 million to its “membership unit holders,” according to information from the company.
An ethanol plant, Bonanza Bio-Energy, currently under construction in Garden City is expected to begin running its “water trials” to test the system in mid-July, according to an article in the Garden City Telegram today.
The plant is expected to employ 30 people full-time, with an average annual salary of $46,000, the Telegram reported.
In the Dodge City area, controversy is developing over a proposed ethanol plant. The Ford County Commission approved a conditional use permit for the plant, and opponents have said they may go to court over the issue. The permit allows development of industry in an area zoned for agriculture.
Residents in the area filed a petition with more than 200 signatures against the development, which required the commission’s approval to be unanimous.
The $185 million plant would produce 110 million gallons of ethanol per year, The Associated Press reported today. The plant is being developed by Boot Hill Biofuels, which plans to begin construction one mile east of Wright in July and be in production by September 2008.
The plant would be managed by Seward County’s Conestoga Energy Partners, which also will manage plants under construction in Seward and Finney counties.
Bunge North America, which has a soybean processing plant in Emporia, broke ground in October on a state-of-the-art ethanol plant at the Port of Vicksburg, in a cooperative venture with Ergon Ethanol. The plant is being built on a 27-acre site at Bunge’s grain storage facility and is expected to produce about 60 million gallons of ethanol per year, according to information from Bunge.
Its partner in the venture, Ergon, owns and operates three petroleum refineries in the South.
In Vicksburg, the companies anticipate needing about 21 million bushels of corn annually, which will create a new market for corn-growers in the region, as well as generate other corn-based products that can be used as feed ingredients for poultry and livestock producers.
A Bunge spokesman contacted earlier regarding rumors about a possible plant in Emporia said that the company does not respond to questions on rumors.
Tyson Fresh Meats, which also has a plant in Emporia, has created a new business unit called Tyson Renewable Energy. The unit was formed after a cross-functional team explored ways “to commercialize the company’s vast supply of animal fat into biofuels,” according to information provided by Gary Mickelson, Tyson spokesman.
Tyson Renewable Energy also is examining potential use of poultry litter to generate energy and other products.
Heermann said that a number of factors make rural areas attractive to biodiesel and ethanol developers. Ready access to raw materials like soya oil or tallow, water, the capacity of railroads and tanker cars, markets and other necessities make Emporia one of many sites that could be considered.
Western Kansas, for example, has numerous feed lots and packing houses. However, he said, the area lacks the water that is essential to the industry.
“There’s a lot of complications,” Heermann said. “There have been a lot of inquiries here and I’ve talked to my contemporaries in other communities. There’s been a flurry of activity, just because of the strong interest in alternative fuels.”
At this stage of development, producing some alternative fuels has become feasible. According to a study at Cornell University and the University of California-Berkeley, government spends more than $3 billion annually to subsidize ethanol production, with most of the money going to large ethanol-producing corporations.
“Four years ago, it was tough to make money and find investors,” Heermann said. “Today it’s very profitable and there are a lot of investors. It’s an interesting industry...
“As the consultants tell me, ‘It’s all about business, dummy.’” Eventually a business will see an opportunity. ... Whenever it makes a competitive advantage, that’s what you do to be profitable until the next person comes in with a technical innovation.”