North Country Ethanol resumes operations

By Erin Voegele | October 06, 2009
Report posted Nov. 9, 2009, at 11:44 p.m. CST

Tenaska BioFuels LLC and Tri-State Financial LLC have entered into a two-year tolling arrangement which will allow ethanol production to resume at Tri-State's Rosholt, S.D.-based North Country Ethanol plant. The 26 MMgy facility began production in 2005 but has been idle since October 2008 when the company entered bankruptcy proceedings. With the establishment of this new tolling agreement, the facility is expected to resume operations in mid-November.

Tenaska BioFuels, an affiliate of Tenaska, provides procurement and marketing, supply chain management and financial services to customers in the agriculture and energy markets.

Under the tolling agreement with Tri-State, Tenaska BioFuels will purchase corn and natural gas, which Tri-State will use to produce ethanol and distillers grains at the Rosholt ethanol plant. Tenaska BioFuels will own all materials processed at the facility and will market the plant's ethanol and distillers grains products.

Once production resumes, the ethanol plant will employ approximately 28 workers. According to Dave Neubauer, Tenaska BioFuels' vice president and general manager, a number of the plant's original workers have been rehired. "These new jobs, along with the purchases of corn and other materials for ethanol production from local farmers and vendors, will provide a significant boost to the local economy," Glenn Peterson, North Country Ethanol's local operations manager, said. "We believe our business will benefit greatly from Tenaska BioFuels' agri-marketing and risk management expertise."

Neubauer said it is possible the tolling agreement could be extended in the future. However, future agreements will be dependent on the market and whether ethanol margins continue to support tolling arrangements.

Although the North Country Ethanol plant has been idle for more than a year, Neubauer said there has been little trouble resuming production. "The plant is actually scheduled to come online [by Nov. 13], so we'll find out whether everything was taken care of as it needed to be, but there weren't any major repairs or upgrades that needed to bring the facility back online," he said.

The tolling agreement with Tri-State is Tenaska BioFuels' second tolling agreement with a biofuel plant. The company recently entered a similar relationship with Missouri-based Prairie Pride Inc., which is a biodiesel and soybean crushing facility. According to Neubauer, it is possible his company will form similar relationships with additional biofuel facilities in the future.

Overall, Neubauer said the agreement with Tri-State is cause for excitement. "Ethanol producers have had such a hard time in the past 24 months," he said. "This type of agreement can give others confidence that the market is allowing positive returns. For Tenaska to participate in this way shows our confidence in the industry."