Grafton, N.D., ethanol plant could reopen by fall

Source: Kevin Bonham • Grand Forks Herald  • Posted: Wednesday, March 7, 2012

The former Alchem Ltd. Ethanol plant in Grafton, N.D., is expected to reopen this fall.

But instead of processing corn, it will turn sugar beets into the alternative fuel.

Energae LP, an energy investment group based in Clear Lake, Iowa, has signed a purchase agreement to buy the mothballed Grafton facility from Northeast Energy LLC, according to Jerry Krause, a general partner in Energae.

The company expects to launch a search for North Dakota investors within the next couple of weeks, he said. The money raised would be used to refurbish the plant, he said.

“If we can put it together, we plan to have it open by fall for the sugar beet harvest,” he said. “We’ve tested sugar beets and we know we can turn it into ethanol.”

“Oh, that’s great news,” Grafton Mayor Chris West said today when informed of the development.

New owners

Alchem, which employed about 30, closed in 2007.

When it originally opened in 1985, Alchem was one of the first two ethanol plants in North Dakota. The other, ADM Corn Processing in Walhalla, N.D., closed earlier this year.

Jamestown, N.D., businessman Harold Newman and his family owned Alchem until fall 2010 when it was sold at an auction to Borchart Steel, based in New Germany, Minn. The facility quickly was resold to Northeast Energy, with Rick Newman of Mayville, N.D., listed as the registered agent.

Energae and Northeast Energy have been talking with Grafton officials in recent weeks about the possibility of reopening the factory, according to the mayor.

Energae currently operates another plant, Permeate Refining, in Hopkinton, Iowa. It produces ethanol from a variety of sources, including corn syrup, corn starch, cheese byproduct whey and paper products, according to Krause. That plant is about half the size of the 10-million-gallon Grafton facility, and was designed by the same German company as the Alchem plant.

Grafton plans

Krause said the Grafton plant likely will operate under the Permeate name.

The Hopkinton plant employs about 27, according to its website.

He said it is too early to determine how many would be employed in Grafton, adding that he may have a better idea after the investment campaign.

Energae also operates BFC Gas and Electric, located in Cedar Rapids, Iowa, which produces renewable fuels in the form of low-BTU biogas from biomass-based materials for electrical power production. The biomass sources include discarded paper and wood products, as well as crop residues such as corn stalks, corncobs and out-of-date, unsold seed corn. It also uses energy crops such as switchgrass, sweet sorghum and poplar trees.

In Grafton, the residual material from the sugar beet ethanol process likely will be sold as livestock feed.