SD landowners propose new first generation ethanol plant

By Holly Jessen | September 24, 2014

Walt Wendland and Chris Schwarck are proposing to build a corn and milo ethanol plant in central South Dakota, years past the ethanol boom of the mid-2000s. Wendland pointed to favorable corn prices in the area, pointing out that as of Sept. 18 corn prices were $1.25 a bushel less than prices in Northeast Iowa.

“That’s a very deserving area,” he told Ethanol Producer Magazine. “It seems like it shows a lot of potential components for what it takes to have a good project. We just need to make sure all the pieces fit together the way we think they will, raise the equity and get financing. We’re a long way from the finish line but we’re definitely excited about giving it all we’ve got.”

If the project becomes a reality it would join Dakota Spirit AgEnergy LLC, a 65 MMgy corn ethanol plant under construction in Spiritwood, North Dakota. The two projects are unique, as the last first-generation plants broke ground in 2008, according to EPM archives.

The group has options on two pieces of property near Onida, South Dakota, and is currently evaluating which is the best fit, Wendland said. Feasibility and grain origination studies are currently under way, with final reports expected within 30 days. Preliminary studies suggest the plant could cost between $100 million to $120 million to build. That’s really just an educated guess, he said, adding that the final estimate is expected by the end of the month. If built, the plant could process about 25 million bushels of corn a year and produce about 70 MMgy of ethanol. “It could shrink, but it probably won’t grow,” he said.

The hope is that the ethanol plant could be producing as early as April 2016. “ICM said they could build the plant in a year if things go well getting our permits, all of our agreements in place and our money raised,” he said. “That’s a lot of ifs.”

Although the South Dakota project is separate from Wendland and Schwarck’s work in the ethanol industry, Wendland is the CEO and president of Homeland Energy Solutions LLC and the former CEO of Golden Grain Energy LLC, two Iowa plants. He stepped down from his position at Golden Grain in May, in order to make more time to work on the South Dakota project, he said. Schwarck is a founder and director in Absolute Energy LLC and a director of two Big River Resources plants.

Both men have land in that area of South Dakota. “Building an ethanol plant near our land in Iowa sure worked well so I don’t know why it should be any different there,” Wendland said.