Montana company hopeful it will receive DOE loan guarantee

By Holly Jessen | February 08, 2011

After 20 years of unsuccessful attempts to build an ethanol plant in Great Falls, Mont., Montana Ethanol Holdings LLC is one step closer to making the proposed plant a reality. The company has applied for the U.S. DOE loan guarantee program, meeting the criteria for Part I as of Dec. 31 and hoping to hear in March if it met the criteria for part II, said Gary Hebener, president.

Montana Ethanol is the parent company to Montana Advanced Biofuels LLC. If the loan guarantee is approved, the company will build a $400 million barley and wheat ethanol plant that will produce 115 MMgy of ethanol, 460,000 tons of barley meal and 25 tons of vital wheat gluten, a baking additive. “The company is optimistic that financial closing could occur this summer, with construction to commence immediately thereafter,” Hebener said, adding that it will take about 18 months to construct the plant. ICM Inc. and Fagen Inc. are the design/build team.

If the DOE loan guarantee isn’t approved, however, it’s going to throw another wrench in the works for Montana Advanced Biofuels. “That would be extremely disappointing,” he said. “Because in today’s banking climate, unfortunately, we are pretty sure conventional financing is not available for a first-of-its-kind facility like we have.”

The plant’s main feedstock will be feed-grade barley and some low-protein wheat. The barley meal produced will have more than 40 percent protein. “We’re convinced that the barley and wheat feedstocks will allow us to have a diversified revenue stream, strengthening the economic viability of our project,” he said.

Great Falls is a good location for the project for a variety of reasons, Hebener said, the most important of which is the fact that a lot of barley and wheat is produced there. Great Falls, Shelby and Havre mark the corners of what is known as the Golden Triangle in northern Montana. The seven-county area produces about 45 percent of Montana’s wheat crop every year, according to the Montana Wheat and Barley Committee.

Montana currently exports most of the grain it produces out of state and out of the country. “This would provide an opportunity for Montanans to add value to their grain,” he said. “We’ll process it right there in Great Falls and turn it into finished products.”

The barley hulls and husks plus other grain milling residue will be gasified using proprietary ICM technology, providing more than 90 percent of the plant’s process energy. A benefit of gasifying biomass is that a significant portion of carbon will be captured, he said. The Biochar produced can be applied to agricultural land to sequester carbon and improve soil characteristics. By using biomass for energy and partial carbon capture the company can reduce its greenhouse gas footprint well below the 50 percent threshold required by the U.S. EPA

Financing is the last step before the company can move forward with construction. It has already applied for its air quality permit from the Montana Department of Environmental Quality and identified all its other permitting needs. “We are confident that we will be able to meet construction and operating permit requirements,” he said.