Red Trail Energy

Source: Energy Digital

Date :31/10/2007 11:17:00

Red Trail Energy Explores New Territory

Plant Manager Edward Thomas explains how the company’s Ethanol Plant turns corn into alternative fuel, exploiting rising demand across the US

Written by Hailey McKeefry and Produced by Nick Ledue

Red Trail Energy is blazing a new trail in the North Dakota energy market - just as explorers Lewis and Clark explored the old Red Trail that the company is named after and located near. The plant was the first of its kind in North Dakota when it opened its doors last January and, now at full capacity, it supplies 50 million gallons of ethanol annually.

A Growing Concern

Both in North Dakota and throughout the United States, ethanol production capacity is skyrocketing. Just a month after Red Trail Energy began operations, a second plant called Blue Flint was also launched. Demand, however, is growing just as fast. “You will see more demand for ethanol as more states blend in more ethanol in five or ten percent blends into gasoline,” predicts Edward Thomas, plant manager at Red Trail Energy. “If the new and improved Renewal Fuel Standard (RFS) passes, there will be demand for 15 billion gallons of ethanol by 2015 made form corn .”

Between 2001 and 2007, U.S. fuel ethanol production capacity grew 220 percent from 1.9 billion to 6.1 billion gallons, according to Ethanol Statistics, a market research firm in the Netherlands. “Much of this growth was made possible by government regulation and legislation that actively supports the ethanol industry by creating mandatory ethanol demand and financially attractive investment opportunities in ethanol production capacity,” according to a report which the company released in August.

Location

Clearly, demand for ethanol is growing and Red Trail Energy wanted to add its part to the growing ethanol output. In order to build the plant, the company garnered $36 million in support in two phases from 800 local North Dakota investors in March 2006. “This project attracted all types of investors—including some business owners and also a lot of local farming community,” said Thomas. “A group of people got together from Richardton, N.D. where the plant is located. This was their home and they were interested in getting into the industry. They wanted to bring this project to life and thought it was a good fit for the area.”

Before the company started construction in July 2005, it carefully considered the site for its new endeavor and conducted a comprehensive feasibility study. “We chose to build the plant here because, although we aren’t in the Corn Belt, we are logistically close to coal sources so there was a cheap energy supply,” said Thomas. “We are also close to the Burlington/Northern Santa Fe (BNSF) main railroad line and located by the I-94 highway, so we have good access via road and by rail.” Other considerations were access to good quality water and natural gas, he added.

One downside to the location is that the cost of corn was potentially higher. “We do have to pay more for corn that comes in from distant areas, but that is not always the case,” said Thomas. “Our grain marketer takes care of us, and helps us control some of those costs by working through local farms he’s contracted corn from.”

The company also chose to build a coal-burning plant, which would drastically reduce fuel costs but also takes longer to build. “Our energy cost is so low because we are a coal burning plant, which gives us a good advantage,” said Thomas. “Our fuel cost is half, or more than half, of what a natural gas fired plant would have to spend.”

Construction challenges

Once the planning stages were finished, Red Trail Energy began the heavy lifting involved in building a plant. First it applied to local agencies and the Environmental Protection Agency (EPA) to get air and construction permits that would allow it to begin construction. Next, the company entered into the building phase. “The local governing bodies give a yes or no about whether they feel the plan is acceptable,” explained Thomas. “Once you get approval, you can step forward and make plans for construction.”

Once it was ready to begin building, the company hired well-known and experienced contactors to make sure its plans were well executed. “Construction is always a challenge, but one of the things we did right was to go with a good reputable builder and a process design firm.”

Red Trail hired Fagan Construction as the general contractor and ICM as the process designer. “They were proven companies with proven technology,” said Thomas. “They have built many plants and are well respected companies.”

The complexity of building a coal-burning plant stretched out the building process. “We did run into a few snags,” said Thomas. A coal-fired plant is not as easy to build as a gas fired plant. We ran into a number of areas through the construction that took a little more time. There is more equipment involved with these plants.” Most gas fired plants can be built in as little as 12 to 16 months, while the Red Trail plant took approximately 17 months to build, he added.

An affordable option

Today, Red Trail Energy employs 39 full time employees and is working full steam ahead to create ethanol and its by-products. The Red Trail ethanol plant grinds approximately 50,000 bushels of corn a day or about 18 million bushels each year, the company said.

The company sources three quarters of its corn from North Dakota.

To create the ethanol, the corn is ground into a flour material and then sent to cookers and finally mixed with water and enzymes to break it down further. The process captures the starch from the whole kernel corn and breaks that down into sugar. In the next phase, the sugar is fermented for more than fifty hours and then distilled to separate the ethanol from its co-product, called dried distillers grain (DDGs). Finally, the ethanol is dried or purified and moved to a storage facility for shipping.

Renewal Products Marketing Group (RPMG) sells Red Trail’s ethanol to customers located primarily in the Pacific Northwest. “Not much of what we produce stays in North Dakota right at this time,” said Thomas. “One of the reasons that RPMG markets it outside of ND is because we have a rail facility which provides efficient transportation.

Now, grinding out ethanol is all in a normal day’s work for Red Trail Energy. The company is working full speed ahead to provide an affordable option for the rising demand for ethanol.