NICHE SYNERGIES:U.S. Energy Partners, LLC discovers unique opportunities in Russell, Kansas

By | May 01, 2002
The unparalleled synergy that has made U.S. Energy Partners, LLC a unique and immediately successful ethanol production facility can be described as half hard work and half coincidence. Some might even call it serendipity: good fortune discovered by chance.

Indeed, it was a catastrophic event that made one of the plant's most prominent synergies a reality. An explosion last year at the Russell, Kansas power plant - followed by a major fire downtown - left the city with little choice but to salvage what was left of the existing facility and build an additional power plant in a new industrial park on the edge of town, adjacent to U.S. Energy Partners - the nation's first pure milo-to-ethanol plant co-located with an existing wheat gluten plant. Coincidence? Not exactly, said ICM, Inc. President and CEO Dave Vander Griend.

"In fact, the city chose the site for its power plant because of our ethanol project," he said. "It's a fortunate arrangement born from an unfortunate occurrence."

"Fortunate" and "synergistic," Vander Griend explained, because both U.S. Energy Partners and the city of Russell benefit from the partnership. The city benefits by producing energy at a low rate and selling steam and stack gases to the ethanol and wheat gluten plants, as well as waste heat that would otherwise be vented. U.S. Energy Partners benefits from purchasing this energy at a very reasonable rate. It is a true cogeneration, cost-sharing endeavor. If the deal had not been made, the ethanol plant would have had to purchase its power from the utility provider and feed it into a typical boiler system.

The power plant
The energy center is powered by two 7.5 megawatt industrial gas turbines - each producing enough steam to meet about 25 percent of the ethanol plant's steam needs (50 percent when running simultaneously). The Taurus 70 model turbines, which are manufactured by San Diego-based Solar Turbines, a Caterpillar Company, are said to be twice as efficient as the standard reciprocating engines used in a some power plants. The turbines run on natural gas, but can also use diesel fuel, according to Adam Robinson, a Solar Turbines representative. Vander Griend simply refers to the turbines as "glorified jet engines."

Here's how the power plant works:

About one-third of the power generated from the natural gas is used to power the shaft turbines, the other two-thirds is essentially exhaust. However, U.S. Energy Partners captures 50 percent of the turbine exhaust (1/3 of the original natural gas energy) in the form of steam.

"Therefore, we capture 2/3 - not 1/3 - of the potential energy here," Vander Griend said. "And we utilize waste heat (using the Heat Recovery Steam Generator) from the turbines to dry (distillers grains). It represents about 25 percent of the heat required to dry the coproduct.

Wheat gluten plant
U.S. Energy Partners includes a pre-existing wheat gluten plant that delivers about 1/3 of the ethanol plant's feedstock in the form of emulsified slurry. Farmland and a group of local farmers constructed the wheat gluten plant approximately five years ago. Gluten is used largely in the baking industry to give dough its character, strength and resiliency. The product is sold to bakers coast to coast.

The wheat gluten plant was shutdown in June of last year and was subsequently purchased by U.S. Energy Partners after a partnership deal with Farmland fell through, Vander Griend explained. U.S. Energy restarted the gluten plant in early April and has begun shipments of gluten to various users throughout the Midwest. Interestingly, since all the starch products are sent to the ethanol plant, the wastewater treatment plant previously installed at the gluten facility is no longer required to be in use.

A majority of the employees at the wheat gluten plant under its previous ownership are now employed by U.S. Energy Partners, either at the wheat gluten plant or the ethanol plant, Vander Griend said.

Expansion
The expansion that is taking place at U.S. Energy Partners is largely due to the extra starch feedstock that is being streamed to the ethanol plant from the wheat gluten facility, Vander Griend explained. The rest of the feedstock is currently milo, which is in great abundance in the region (although the plant could switch to corn seamlessly, if needed).

"From the start, I anticipated that the plant would be 40 mmgy," Vander Griend said. "But the way things were when we began, 25 mmgy was where we needed to start."

The expansion - which is a fairly standard, albeit a major project - will lift the facility to 40-plus mmgy by the end of summer. Already producing about 30 mmgy, Vander Griend said, U.S. Energy Partners is one of the largest ethanol plants in Kansas.

Carbon dioxide recovery
Also soon to be in operation at U.S. Energy Partners is a carbon dioxide recovery plant, which will allow the facility to capture and market about 63,000 tons CO2 locally on an annual basis. It is highly likely that the CO2 will be used in area oil recovery projects. Tentatively, there is an arrangement to use the CO2 to recharge crude oil wells in the Hall Gurney field south of Russell. The CO2 is mixed with an injection fluid, then pumped into the ground to force crude oil out of the underground rock formations.

Distillers grain
The facility - which cost over $30 million to construct and employs approximately 30 people - will also generate 80,000 tons of dry distillers grains for livestock feed. The DDG produced at U.S. Energy Partners is a high protein feedstuff that will be sold to cattle feeding operations within a 50-mile radius of the site.

Fagen, Inc. contractor
The ethanol plant was built in just eight months and one day, Vander Griend said, possibly achieving a construction record for a major ethanol facility (most ethanol plants take 12-15 months to get online).

Granite Falls-based builder Fagen, Inc. was the contractor on the project. Fagen, Inc. and ICM have benefited from a strong working relationship for over seven years now, Vander Griend said. On this project, because ICM has an ownership stake in the facility, it held the role of general contractor and process design provider, while Fagen handled the construction.

"Fagen has always been extremely committed to the work they do," Vander Griend said. "They do excellent work and always complete the job on schedule."

Like other ICM-designed ethanol plants, U.S. Energy Partners utilizes low temperature vacuum distillation and vacuum evaporation. The plant is also designed in a way that allows it to keep operating during monthly cleanings.

The partnership
U.S. Energy Partners is a privately owned ethanol plant, primarily controlled by ICM, Inc., of Colwich, Kansas, and Nesnah Group, of La Crosse, Wisconsin. Nesnah Group's Larry Leis is president of U.S. Energy Partners.

"We were familiar with ICM and Fagen and were looking for opportunities in ethanol production after a project in Wisconsin failed to proceed," Leis told EMP. "Dave (Vander Griend) told us he was interested in forming a partnership for a project in Kansas and the relationship developed from there."

ICM offered all of its employees an opportunity to invest in U.S. Energy Partners, and over 25 did, Vander Griend said.

"This is a team effort for everybody," he said. "It's a true partnership."