Former VeraSun plants continue to come online

By Kris Bevill | October 06, 2009
Report posted Oct. 22, 2009, at 4:32 p.m. CST

Gears are set to finally begin turning at the Guardian Energy LLC ethanol plant in Janesville, Minn., nearly two years after its projected start-up date. VeraSun Energy Corp. broke ground for the 110 MMgy facility in January 2007; production was set to begin in December 2008. Unfortunately, the company filed for bankruptcy before the plant was put into operation. Fortunately, the plant's location in the heard of Minnesota corn country served as its savior.

Janesville is surrounded by small communities and several other ethanol production facilities. A group of those producers, including Al-Corn Clean Fuels, Central Minnesota Ethanol, Chippewa Valley Ethanol Co., and Heartland Corn Products, decided to chip in and purchase the facility. They believe the economic benefits of ethanol should stay in local communities. Al-Corn President Randall Doyal said the move to purchase the Janesville plant was also a defensive move for some of the more-closely located members of Guardian Energy. Owning the plant will ensure that they know who they're dealing with. "We'd like to have somebody here we can work with rather than somebody we can't," he said.

Other producer members of Guardian Energy include Mason City, Iowa-based Golden Grain Energy, and Minden, Neb.-based KAAPA Ethanol.

Doyal told EPM that the late corn harvest was delaying Guardian Energy's start-up, but that grinding was set to begin Oct. 26. Though not necessarily a factor in Guardian Energy's current need to call for corn, local corn farmers suffered last year when VeraSun signed contracts for $7 per bushel corn and folded before the corn was delivered. Doyal said they have been approached by some farmers who would like to see Guardian Energy honor those contracts, but that's not something the company can do. "Valero honored a certain percent of contracts, but farmers had to guarantee a certain amount at market price [in addition]," he pointed out. "They needed to do that to regain confidence. In Janesville, corn was never delivered. The people who got burned in this area were the elevators."

Nonetheless, the local community is welcoming the opening of the Janesville plant and the 45 new jobs it will provide to area residents.

In North Dakota, ethanol production has resumed at the 110 MMgy former VeraSun plant in Hankinson. Murphy Oil Corp. purchased the facility for $92 million in early October and wasted no time resuming operations. Murphy Oil plans to use the ethanol produced at Hankinson Renewable Energy LLC to supply its own petroleum blending operations and said it chose to purchase the facility due to its proximity to feedstock and rail service.