Buffalo Lake Plant to Begin Shipping Ethanol 04 Sep 12

This is the day (Tuesday) that trucks are expected to rumble out of the gate carrying the first ethanol produced at the former Minnesota Energy plant in Buffalo Lake since early 2010.

The West Central Tribune reports business partners Steve Walker and Patrick Riggs created Purified Renewable Energy LLC and raised the capital to acquire and upgrade the 1997-vintage facility that some feared might be scrapped. They started production in early July, just as a Midwestern drought began pushing the price of corn to historic highs and squeezed already tight margins in the industry.

Riggs, Vice president and CFO, says he anticipates that ethanol will remain primarily a corn-based biofuel. But increasingly, other feedstocks — primarily agricultural waste materials — will be used to produce a portion of it.

The next half-step will also involve a greater diversity in products. While he anticipates that ethanol for fuel and distillers grains as animal feed will continue to represent the largest volume of production, Riggs believes biorefineries will also begin to produce isobutanol and other chemicals, such as industrial solvents, that are made today from petroleum.

Ethanol companies like Gevo and Rentech are using smaller ethanol plants to produce these products for niche markets. According to Riggs, Purified Renewable Energy intends to exploit those opportunities as well.

These are among the reasons that the Buffalo Lake facility — although small by industry standards — interested the partners. It is currently permitted to produce 25 million gallons of ethanol per year, and could be expanded to a 35 million-gallon capacity in the future.

The Buffalo Lake plant uses a dry milling process that is based on a design by a company known as Katzen. With the right modifications, it could produce a biobased chemical while also producing ethanol and distillers grains.