Arizona project integrates dairy, biorefinery

By Ron Kotrba | June 05, 2007
Plans are in the works to build a $250 million integrated dairy operation and biorefinery complex on a 307-acre site in Vicksburg, Ariz., 100 miles west of Phoenix. XL Dairy Group Inc. anticipates $180 million in gross annual sales by fractionating more than 560,000 tons of corn transported from the Midwest via the Burlington Northern Santa Fe Railway to make 54 MMgy of ethanol, 5 MMgy of biodiesel, milk and high-protein feed in a process powered by cow manure and other waste streams.

According to Michael McCloud, project coordinator with XL Dairy Group, the first part of the project is currently underway, expanding the core dairy operation from 2,500 to 7,500 head of cattle. Cow manure will be a primary energy feedstock for biomethane production via anaerobic digestion, so adding cattle is the necessary first step that is expected to be completed by the end of the year. Construction of the biofuels production facilities will follow, including the "waste energy island," McCloud said. APS Energy Services, a sister company of the local utility company, is contracted to design and engineer the energy center. During peak use, the entire complex is expected to consume eight megawatts of power, leaving between 1.5 megawatts and three megawatts of renewable energy to sell back to the grid. Additional energy will come from the boiler-firing of waste from ethanol and biodiesel refining (e.g. corn bran, glycerin, etc.).

A fractionation technology provider has yet to be chosen, McCloud said. Katzen International is contracted for engineering services, and M.A. Mortenson will act as general contractor for the project. Harris Group is to provide integration engineering services.

McCloud told EPM that approximately one-third of the high-protein distillers grains produced will feed the 7,500 dairy cattle, with local feed markets targeted for the excess. Ethanol and biodiesel production is expected to begin in the first quarter of 2009. Plans for algae propagation and processing systems that would supplement corn as a feedstock for starch and oil, to be implemented by 2010, are expected to double ethanol capacity and increase biodiesel production six-fold, McCloud said.

XL Dairy Group has tapped Chicago-based Marathon Capital as its capital partner and is continuing to secure equity financing. "We're in the throes of fundraising right now," McCloud told EPM in late May.