79% in Sully County SD approve rezoning for ethanol plant

By Susanne Retka Schill | June 18, 2015

A proposed ethanol plant at Onida, South Dakota, is two steps closer to breaking ground. Walt Wendland, president and chairman of Ring-Neck Energy and Feed, said they got two good pieces of news on Wednesday, June 17. Voters overwhelmingly approved the project, with 79 percent supporting site’s rezoning which had been challenged after both the county commission and the zoning board approved it unanimously.

Secondly, the developers received a letter from the U.S. EPA saying the plant would qualify as an efficient producer, meeting the 20 percent greenhouse gas (GHG) reduction threshold required of any new ethanol plant. Wendland explained that EPA approval took a bit longer than expected as the petition involved both corn and sorghum and the EPA was still finalizing the formula to be used to calculate GHG emissions for mixed corn and sorghum feedstocks.

With the rezoning challenge settled, Wendland reported the conditional use permit hearing is set for July 14—the last hurdle at the county level. When that’s in place, the developers will file their construction permit and start dirtwork.  “We’re in the process of getting air permits now and we’re going to start our equity drive when the permitting is in place,” he said. “We’re doing everything we can to get the site prepared this summer.”

Since being announced last fall, Fagen Inc. has been signed on as the design-builder utilizing the ICM Inc. process. Current estimates put the cost of the 70 MMgy plant at between $135 million and $138 million, Wendland said. “Now that we have the site borings, it looks like a little extra cost to get the proper footings,” he explained.

As the permits and other details are put in place, Wendland said they hope to begin the equity drive by the end of July. “We’ll put on as many meetings as we can in South Dakota,” he said. “And we’ll be working in Iowa, Minnesota and North Dakota. You’ll even be able to go to our website and subscribe. All the material will be available there.” Wendland added that he is working with Home Federal Savings Bank, the same bank that he worked with when managing Golden Grain Energy LLC and Homeland Energy Solutions LLC in Iowa.  

The ethanol plant is being sited on the south side of Onida which is located about 30 miles northeast of Pierre, in the center of South Dakota. While it is considered to be at the western edge of the Corn Belt, Wendland said they are still east of the Missouri River and there is corn grown further west. “But that’s a big part of the reason we’re looking at sorghum along with corn,” he added. Farmers in the area stand to benefit from gaining a new market, as the basis at Oahe is generally 56 under Chicago, he explained, “and a lot of ethanol plants are at 20 or 25 cents under.”   

The basis impact would most likely be 12 to 14 cents per bushel in the 60 mile area around the plant, according to the page on the company’s website encouraging Sully County voters to support the project’s zoning permit. The plant will use approximately 25 million bushels of corn and milo and provide 40 jobs with an average compensation of $63,500. The ethanol plant will also produce about 200,000 tons of distillers grains. There are several feedlots and cow-calf operators in the area that are potential customers, Wendland said. “And there are several dairies looking at expanding and moving, and they’re watching what goes on here closely.”