A new biodiesel plant — R-3 Energy LLC — will open within the next two months in Cottonwood Falls.
Jerry McCalla of Lake Kahola said this week that the building, which sits on a seven-acre site near Swope Park and the school district’s football field, is complete and finishing work is being done on the inside.
McCalla owns Collision Body Carstar in Emporia and a second Carstar shop in Ottawa.
R-3 Energy was started as a family corporation named for Jerry and Kathy McCalla’s three sons. Rodney, a surgeon in Ottawa, is chief executive officer; Ryan, a podiatrist in Topeka, is treasurer; and Randy, an Olathe attorney, also is a stockholder. There are several other investors in the limited-liability corporation as well.
“I’m the vice president, but I’m not the major shareholder of the investors,” McCalla said, adding with a laugh, “I’m just the one here at home for everybody to jab.”
R-3 Energy LLC will be an affiliate of Xenerga Inc., which has headquarters in Florida.
“We will own the plant,” McCalla said; “they will receive a royalty from production.”
The senior McCalla has spearheaded the Chase County project on-the-ground, from finding a location to overseeing the building.
McCalla did not ask for any tax incentives to build the plant, though the company did receive a healthy financial boost when it was awarded a U.S. Department of Agriculture Rural Development Renewable Energy grant. The grant was submitted in July and the subsequent award, which was announced in recent weeks, reportedly is the largest one made in Kansas through the DRE grant program.
“We were allowed to apply for $340,000. We got $339,845,” he said.
It was money that owners had not counted on receiving when work on the plant was begun.
The plant primarily will run on “yellow grease,” a refined grease that comes through restaurants that use cooking oil.
“We’re taking nothing out of the food chain,” McCalla said. “It’s renewable energy. It’s been used once, then we’re going to make it usable again.”
R-3 Energy will buy the yellow grease from a company contracted to supply the product for Xenerga, he said.
He also expects R-3 to produce biodiesel from other sources, such as palm oil, coconut oil, and perhaps jatropha, a plant that grows in India and Africa.
The finished product manufactured in Cottonwood Falls will be certified as meeting the criteria mandated for biodiesel fuel.
“We’ll sell basically to whoever wants to buy it, but we’ve got a guaranteed sale to a commodities company,” McCalla said. “...When this plant is in full production, which will take a year or so, we’ll be about a 15-million-gallon-a-year plant.”
McCalla said that biodiesel production in the United States has not yet reached a level to satisfy demand. The government, therefore, has not mandated a percentage of biodiesel fuel that must be used nationally. At least one state, however, has enacted a law requiring minimum use of biodiesel.
“They blend it with diesel, so there is not enough made right now to take care of 1 percent of the diesel that’s being burned in the United States,” he explained. “But Minnesota has passed a law that they have to sell 5 percent biodiesel. And we know that the school district down here wished they could get 20 percent to run in their buses.”
The new company in Cottonwood Falls will add to the production when it opens on or before Nov. 24.
R-3 Energy LLC already has two full-time employees working at the building, and General Manager Mike Swartz is in charge of getting the plant into commission, McCalla said.
After completion, he estimated the company will employee about 12 people.
In the interim, the offices are being finished and the interior is being readied for the heavy-duty polypropylene tanks that will be needed for production.
Landscaping, drainage and other finishing touches outside also are being completed.
Kenco Construction of Emporia, owned by Ken Dreier of rural Americus, has been general contractor for the steel building, which measures 80-feet-by-200-feet.