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Published January 27, 2014, 09:38 AM

Gas rationing affects American Crystal, ag processers

American Crystal Sugar Co. and other key agricultural processors in the region are affected by the rationing of natural gas prompted by a Saturday morning pipeline explosion in Manitoba.

By: Mikkel Pates, Agweek

MOORHEAD, Minn. — American Crystal Sugar Co. and other key agricultural processors in the region are affected by the rationing of natural gas prompted by a Saturday morning pipeline explosion in Manitoba.

David Berg, president and CEO of American Crystal, said the carrier turned off service mid-day Jan. 25 for industrial users in the Red River Valley, to conserve fuel for residential users.

“The impact on us is that the gas-fired pulp dryers at the Moorhead and Crookston factories are turned off, and East Grand Forks is partially restricted,” Berg said of the Minnesota factories on the afternoon of Jan. 26. The company is slicing at or near standard volume at all of its five factories, and it’s unclear whether it can continue doing so.

Unlike Minnesota, the company’s North Dakota factories use coal for their pulp drying operations, so are thus far unaffected.

“I don’t know how long until the pipeline is repaired or how long we can sustain the hauling operation,” Berg said. Normally, all pulp is dried and made into pellets, and sold as livestock feed. But the bulk goes to four continents. Japan, north Africa and Europe are major markets.

American Crystal typically squeezes as much water out of the pulp mechanically before it goes to the dryers. The raw stage is 88 percent moisture and comes out of the plant at about 140 degrees Fahrenheit. It is pressed to 70 to 72 percent moisture and then dried with the natural gas to the necessary 10 percent moisture level.

$67,000 per day

Typically, about 4 to 5 percent of the total beet tonnage sliced is produced as dry pulp, Berg said. Moorhead and Crookston factories are rated at a slice of about 6,000 tons per day so that means 480 tons of pulp between the two factories is $140 per ton, or $67,000 per day of lost potential revenue.

In Moorhead, shift supervisor Brent Haugen said the company was drying a little pulp using methane produced from the company’s wastewater treatment facility, making about 35,000 cubic feet of the biogas per hour.

“That’s only about a third to a quarter of what we normally would use to dry everything from the natural gas,” Haugen said.

It isn’t clear how many feedlots have been lined up to take the pressed pulp, or how much they can take.

“What can get fed to cattle will go to feed operations, but we can overwhelm them in a hurry,” Berg said. “I would guess if this goes on for several days, we will wind up land-applying a sizable amount.”

Similarly, Kurt Wickstrom, president and CEO of Minn-Dak Farmers Cooperative in Wahpeton, N.D., said his company is slowing down its beet slice by about 10 percent.

“Our gas provider is Great Plains, which is also supplied by the company that had the pipeline issue,” he said. He said the company will not be able to dry all of the pulp it normally would.

Ryan Thorpe, chief operating officer of Tharaldson Ethanol in Casselton, N.D., said he’s been watching the situation but so far hasn’t been affected. Tharaldson uses “an enormous amount of gas every day,” but gets it from WBI of Williston, N.D. The ethanol maker pays for about 12,000 decatherms per day on a “firm transportation” basis, meaning it pays the fee 365 days a year whether it uses it or not.

“We’re watching the situation every minute,” Thorpe said.

Erik Brandenburg, unit direct for J.R. Simplot Co.’s potato processing plant in Grand Forks, N.D., said his company was contacted Sunday by the natural gas company and asked to cut back on usage.

“We aren’t as reliant on natural gas as we used to be because we have an anaerobic digester and the ability to burn methane gas in our boilers,” Brandenburg said. The company uses natural gas to heat some of its water and fryers in processing potatoes.

Brandenburg added that Simplot also has a regular, 24-hour maintenance for clean-up that was scheduled to start at 4 a.m. Jan. 27.

“We lucked out on that,” Brandenburg said.

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