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Blue Flint Ethanol's unique co-location

UNDERWOOD, N.D. - Jeff Zueger hasn't ever had anything to do with an ethanol plant, but he's now the general manager of Blue Flint Ethanol L.L.C. Zueger, 39, originally from Mandan, N.D., starts his work after having worked as power generation le...

UNDERWOOD, N.D. - Jeff Zueger hasn't ever had anything to do with an ethanol plant, but he's now the general manager of Blue Flint Ethanol L.L.C.

Zueger, 39, originally from Mandan, N.D., starts his work after having worked as power generation leader at Great River Energy's Coal Creek Station, which is from where the steam energy from the project comes. He graduated from North Dakota State University in Fargo in 1993 with a degree in mechanical engineering.

"It's an exciting project - an awesome opportunity," Zueger says.

Headwaters Inc. of South Jordan, Utah, and Great River Energy of Elk River, Minn., announced the start-up of the ethanol plant Feb. 21. The plant is tied to a 1,100 megawatt Coal Creek Station electrical generation facility. The owners think it is the first plant in the world to be so-integrated.

Headwaters is the majority owner, and a Headwaters subsidiary will act as Blue Flint's operator, while Great River Energy provides energy and related services.

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"Start-up is a long process - one step, then the next," Zueger says. After one process is started, the other might have to be adjusted. "It's a multiweek event."

Beginning operations

The plant started mash and "beer" Feb. 13 and started making alcohol the week of Feb. 21. Wet cake was started immediately, but dried distiller's grains were added that weekend, Feb. 24. Full ethanol production was reached about Feb. 26. That's equivalent to a rate of

50 million gallons per year.

The plant is permitted to go to 65 million gallons. The site is laid out so that expansion is possible beyond that.

There will be two distiller's grains products - "modified," which is wet with about 50 percent moisture. And then there's a distiller's dried grains with solubles, which will be about 11 percent moisture.

Corn is being sourced through Blue Flint's merchandising company, Falkirk Merchandising - working with local producers throughout the state. Bids are posted on blueflintethanol.com through 2009. The company works through elevators along the Dakota Missouri Valley & Western railroad. Part of the team is the local Falkirk Elevator.

About two-thirds of the corn will come by rail, likely from places such as Oakes, Fullerton and Fredonia in south-central and southeast North Dakota.

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The facility brings in 50-car unit trains and will go to 75-car trains in July, when the track is upgraded.

About 60 percent of the energy used in the Blue Flint process is "waste" energy from the electrical generation plant next-door. The other 40 percent is an additional load, the plant will need to burn more coal to achieve.

Unique aspectsOne of Blue Flint's unique aspects is touted to be its low production costs. "Using the waste energy should keep our production costs down," Zueger says.

There will be a general industry evolution toward lower production costs. "Our goal is to be the lowest-cost producer of ethanol in the nation," Zueger says. "Time will tell" whether that is accomplished.

Zueger acknowledges it's hard to know when that the low-cost goal is actually achieved. "It's tough to get benchmark data from other ethanol producers. Maybe it (low-cost) is just a perpetual goal that's out in front of you."

Some 75 percent of the cost for an ethanol plant is in its primary feedstock - corn.

That means every $1 in corn price translates into about 33 cent per gallon in production costs.

"You look at what this has done for new employees, and bringing back people in the industry who wanted to move home," Zueger says. "The best part of it is to watch the impact on employees."

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Many of the employees initially were trained at Bismarck (N.D.) State College with its "Power and Process" programs. Some had gone to jobs in refining, some to power production and others to the ethanol industry. Most of the ones Blue Flint has hired had previous ethanol experience, particularly from Minnesota and South Dakota.

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