Investors to Build Biodiesel, Ethanol Plants in Kansas

GOODLAND -- A group of local investors on Tuesday announced plans to spend between $35 million and $45 million to build a coal-powered power plant and biodiesel and ethanol plants at one compound west of Goodland.

The Goodland Energy Center, as the compound has been coined, is backed by local investors who are simply doing "everything they can to make the area vital," said Ron Pickman, the chief operating officer of the project and former Goodland city manager.

The three plants will be built about four miles west of Goodland, right next to a sunflower processing plant.

"The reason it's so feasible is because the power plant is co-generational," said Jerry Fairbanks, vice president of First National Bank in Goodland, which is an investor in the project.

"There are a lot of products from each plant that can be recycled and used by the others."

That keeps costs lower and is better for the environment, he said.

He said he's not sure anything like it has been done in the same compound.

The 20 to 28 megawatt coal-fired power plant will produce electricity and steam. Steam is required to run the ethanol plant, which will produce a molasses-like substance needed to create fuel at the biodiesel plant.

"We eliminate waste, because we use it all," Pickman said.

Biodiesel is a clean-burning alternative fuel, produced from renewable resources; ethanol, another type of fuel, is a grain alcohol produced by fermenting the starch in corn or sorghum and then distilling it.

Each plant will be owned and operated individually, though there are some crossover investors. Each plant is backed by about 20 or fewer investors.

The coal-fired plant will be owned by Goodland Energy Resources, the ethanol plant by E. Caruso and the biodiesel plant by ReNewable Energy Resources, all Goodland-based companies that were formed for this project.

A real commitment "It's a real commitment on the part of the people that live in and around Goodland," Fairbanks said.

That's what makes the project so strong, Pickman said.

"This is local people trying to stimulate the local economy and help Goodland maintain a place on the map," he said. "I firmly believe everything involved in this project will be a tremendous benefit to northwest Kansas."

The plants are expected to create 60 to 100 new jobs and possibly another 100 to 200 ancillary jobs that will support the projects.

Construction is expected to begin on the compound within about 45 days and be producing by September 2006. ReNewable Energy Resources will handle project development and engineering. Investors are still in negotiations with several contractors to build the plants.

Selling electricity The coal-fired plant will be a wholesaler, meaning it will sell electricity to a city or company, which in turn will sell the power to residents and businesses.

There are currently no customers lined up for any of the plants, but Fairbanks said that shouldn't be a problem.

"I think all small towns struggle with energy and the cost of energy," he said.

Potential customers of the power plant could include the city of Goodland, though no deal has been reached, surrounding towns and other power providers.

No price structure has yet been determined, but Pickman said the goal will be for the power plant to be competitive with other wholesalers in the area.

Ethanol and biodiesel shouldn't be too hard to find buyers for either, he said.

"The investors are quite confident in everything about this project.

I don't think there are any worries," Pickman said.