South Dakota is becoming a Midwest ethanol hub

S.D. has five ethanol plants online, two under construction and others in the planning stages
By | March 01, 2002
In terms of legislative support for ethanol, perhaps no state has a stronger constituency than South Dakota with U.S. Senate majority leader Tom Daschle (D), Sen. Tim Johnson (D), and the headquarters of the American Coalition for Ethanol in Sioux Falls.

In addition to the probable inclusion of a renewable fuels standard in the pending U.S. Senate energy bill, South Dakota producers and future producers recently won big with in-state legislation that nearly triples South Dakota's total ethanol production payments from $2.5 million in 2003 to $7 million in 2006. The state's success has come in large part to the creation of its ethanol producer incentive fund which sustains ethanol development with a $.02 per gallon fuel tax exemption for ethanol blends. State legislators are calling the recent funding expansion a "win-win" situation for agriculture and industry in South Dakota.

"Historically, it is the first time we have had additional funds added to the ethanol producer incentive," said Darrin Ihnen president of the South Dakota Corn Growers Association. "This legislation will significantly impact ethanol's continued development in the state."

Five plants online
Including Broin Enterprises (Scotland), Dakota Ethanol (Wentworth), Heartland Grain Fuel (Aberdeen and Huron) and Tri-State Corn Processors (Rosholt), South Dakota now has five ethanol plants online, producing an estimated 90 mmgy. Two ethanol plants under construction - Northern Lights Ethanol (Earlville) and Glacial Lakes Energy (Watertown) will bring the state's total production to near 170 mmgy no later than this fall.

Projects on deckThe Dakota Value Capture Cooperative (DVCC) has completed its equity drive, raiseing over $24 million in private investments for an integrated $61 million project. The group is expected to break ground on the project in April. The cooperative was formed by a group of farmers and ranchers from South Dakota to build a unique "closed-loop" facility consisting of an efficient ethanol plant and a climate-controlled feedlot for cattle connected by a state-of-the art anaerobic digestion system. A 310-acre site for the agricultural complex has been chosen in a sparsely-populated region north of Pierre and east of the Missouri River, in Sully County.

A Mitchell, S.D.-based group is exploring the possibility of building an ethanol plant somewhere in that part of the state, and Brookings S.D. -based VeraSun is aggressively pursuing leads on a project that could eventually bring three large ethanol plants to the region as well. VeraSun recently named longtime Commercial Alcohols Inc., employee Matt Janes as its Chief Operating Officer.

All told, industry analysts predict that South Dakota will be producing in the neighborhood of 260 mmgy in the next two to four years.