Northern Lights Ethanol is full steam' ahead

12th U.S. Broin-built plant comes online six weeks ahead of schedule near Big Stone City, S.D.
By Tom Bryan | August 01, 2002
If Northern Lights Ethanol stood alone on the plains, the newly unveiled dry-mill would govern the prairie skyline north of U.S. Highway 12 in Grant County, South Dakota.

The situation being what it is, however, this precisely engineered 40 mmgy ethanol plant looks almost diminutive next to the Big Stone Power Plant, a 25-year-old coal-fired facility that towers in the near distance outside of Big Stone City.

This unique situation, of course, is a good thing.

The ethanol plant's overshadowed presence is compensated tenfold by the Big Stone Power Plant in the form of energy, infrastructure, and reliability of resources.

Beginning Oct. 1, the power plant will provide enough continuous steam for Northern Lights to fulfill two-thirds of its total energy needs.

"Our relationship with the power plant is one of the things that makes this ethanol project unique and instantly successful," said Blaine Gomer, general manager at Northern Lights. "If you look back at the ethanol industry, you'll see that ethanol plants strategically built near power plants have done very well. It's not uncommon for all kinds of industries to spring up around power plants such as this."

Gomer said the power plant will pipe 100,000 pounds of steam an hour to Northern Lights. The steam is purchased at a price cheaper than what could be produced by their own natural gas boilers, which are in use now but will be mothballed after the power plant steam becomes available. The boilers will be kept in place as back-up power, should the plant ever need them again.

The Big Stone Power Plant, jointly owned by Otter Tail Power Company, Northwestern Public Service and Montana-Dakota Utilities, produces 3.5 million pounds of steam an hour, meaning the 100,000 pounds
per hour piped to Northern Lights represents only 3 percent of the power plant's total output.

"It's a few extra scoops of coal for them," joked Northern Lights Ethanol, LLC Board President Del Strasser, one of the area farmers that helped get the project rolling three years ago.

Lowered operating costs
Strasser told Ethanol Producer Magazine the benefits of colocating with the Big Stone Power Plant are numerous. In addition to steam, the power plant brings to the table existing rail service, water, county roads, access to utilities and fire protection.

Additionally, the land where the ethanol plant is located is owned by the power plant and leased to Northern Lights at a favorable rate. All together, Strasser said, these benefits add up to lower capital and operating costs that result in a low risk, high return operation.

Broin operation
Northern Lights Ethanol was built, designed, and is managed by Broin & Associates, of Sioux Falls, S.D., a thoroughbred in U.S. dry-mill engineering and construction. Broin is involved in every aspect of the ethanol industry. They build and manage plants and also market ethanol and ethanol coproducts. They also operate their own plant.

Northern Lights is the 12th plant Broin & Associates has built, not including expansions of existing facilities. (Note: Tall Corn Ethanol, LLC, Broin & Associates' 13th plant, began production Aug. 9).

After just one year of construction, Northern Lights reached full production in mid-June, six weeks ahead of schedule. The plant was originally scheduled to begin producing ethanol Aug. 6, the very day Ethanol Producer Magazine visited the facility.

Like other Broin plants, Northern Lights is entirely "under roof." The whole production process is housed inside a large steel-sided building, making it "operator friendly" year round.

In addition to producing over 40 mmgy from approximately 14.4 million bushels of area corn, the ethanol plant will market about 250 million tons of DDGS, a vast majority of which is marketed as Dakota Gold, a trademarked "low moisture, high protein" cattle feed that has a "preferred light yellow color" considered palatable to cattle, Gomer said. The ethanol and DDGS produced at Northern Lights are marketed through Ethanol Products and Dakota Commodities respectively.

The ethanol plant is a testament to efficiency, from corn delivery to product load-out.

Truck drivers delivering corn to the plant (there about 70 such deliveries a day) can complete the drop-off in about six minutes. The plant can hold 960,000 bushels of corn on site, enough to last 15 to 20 days during peak production.

The plant uses a Broin-tailored operations system, with over 1,400 control points, precisely programmed for Broin's proprietary process technology.

Northern Lights Ethanol is a zero effluent facility - the plant utilizes a reverse osmosis system that allows them to recycle and reuse water. A thermal oxidizer has been installed that burns off 99.9 percent of the particulate emissions emitted from the plant's drier. All in all, Northern Lights has an environmentally sound presence and emits virtually no odor.

"The facility is truly innovative in terms of overall air quality and production efficiency," said Larry Ward, director of marketing and development for Broin Companies.

The plant's ethanol is stored in two 500,000 gallon tanks (1 million gallons total storage capacity), 85 percent of which is shipped to market via rail cars. The remaining product is trucked out.

39 employees, most local
Typical of Broin-managed plants, most of the employees at Northern Lights are area residents (from the Big Stone City-Milbank area) and many had little or no ethanol production experience before working at the plant.

"It's true that (Broin Companies) does tend to hire top performers from parallel industries," Ward said. "It makes sense to us because we have over a dozen engineers and numerous support personnel available to train new employees in our own production approach."

Interestingly, Gomer, Maintenance Manager Lance Ishen, and Lab Manager Gwen Biersbach each came to Northern Lights from cheese/dairy processing industries.

"There are many similarities between the cheese and the ethanol industries (in terms of plant operations)," Gomer told EPM.

Technical Manager Blaine Olson had been in the mining industry for 17 years, Commodities Manager Gregory Nelson was previously a grain buyer, and Commodities Supervisor Doug Strei worked at a farmer cooperative for over a decade. The company's comptroller, Jennifer Block, had worked for a plastic manufacturing plant before joining Northern Lights.

There are exceptions, such as Operations Manager Garth Whiddon, who was a lead operator at the Broin-managed Dakota Ethanol plant in Wentworth, S.D., before transferring to the new plant a few months ago.

In total, the plant employs 39 people who work varying shifts, depending on their job at the facility. All but Gomer, who works directly for Broin Management, are employed by Northern Lights Ethanol, LLC.

Each employee received two weeks of extensive training and Broin's startup team worked with the staff at the plant for an additional three weeks after startup, Gomer said.

Seven member board
A seven member board of directors oversees the operations of Northern Lights Ethanol, LLC. The board is comprised of five directors from the 658 member Northern Growers Cooperative and two directors from Broin & Associates.

The Northern Growers Cooperative owns 78 percent of the plant. They have their own 15-member board that handles the cooperative's affairs. From that group of 15, five serve on the Northern Lights Ethanol board.

Representing Broin on the Northern Lights, LLC board is Jeff Broin, CEO of Broin Companies, and Ward. Broin & Associates owns 22 percent of the plant.

Adding value

The project took flight in the fall of 1999, when discussions began concerning the need for some type of value-added project in region.

"We were open to anything - we talked about soybean processing," Strasser said. "But ethanol kept coming to the top of the list."

Due to an abundance of corn grown in the area, ethanol was a natural fit. Planning meetings were held and various sites were explored. A steering committee was formed and the group toured various ethanol plants in early 2000. In August of that year, the Otter Tail Power Company made a proposal to the Northern Growers Cooperative, which offered use of the power plant's land for the ethanol plant.

That offer helped solidify the group's plan.

Several organizations contributed funds that helped finance startup costs, including a $50,000 donation from the South Dakota Corn Utilization Council.

Beginning in late 2000 and ending in early 2001, investor meetings were held in the South Dakota communities of Milbank, Sisseton, Clinton, Madison, Groton, White, Watertown, and in the Minnesota towns of Clear Lake and Wheaton. The equity drive raised nearly $12.7 million. Each cooperative member invested a minimum of $10,000 (5,000 shares at $2 each). However, the average investment was just under $20,000.

Broin Companies invested over $3 million and the balance of the $50 million needed to build the plant was borrowed. Broin & Associates broke ground on the plant in June 2001 and the grand opening was held less than a year later.

Today, three short years after it all began, Northern Lights is filling rail cars with ethanol and shipping a value-added, environmentally friendly fuel all over the United States.

"It's a realization of a dream for many of us," Strasser said. "What is most meaningful to me is that we are adding value to the crops we grow in South Dakota and Minnesota. . . It's a success story.