Return to Nicholas Johnson's Main Web Site

Return to Nicholas Johnson's Coralville Rain Forest Web Site

Biodiesel Fuel Plant Planned for Wall Lake

Jerry Perkins

Des Moines Register

March 1, 2005

[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

A group planning to build a biodiesel plant in Wall Lake will seek $20 million from investors starting next week.

Western Iowa Energy LLC says the plant will use soybean oil, vegetable oil and animal fat to produce 30 million gallons of biodiesel a year.

Biodiesel is promoted as a more environmentally benign way to run diesel engines - and a way to fuel Iowa's rural economy. The fuel is also sold as a home heating oil in the Northeast.

The Wall Lake biodiesel plant will be the only one in Iowa that uses animal fat to make biodiesel.

The cost of the plant will be $40 million, said Jim Venner, Western Iowa Energy project manager. Western Iowa Energy will borrow the other half of the money to build the plant, he said.

Because animal fat usually costs less than soy or vegetable oils, Western Iowa Energy will have an advantage over other biodiesel plants, Venner said.

The Wall Lake area has abundant sources of animal fat and soy and vegetable oil, he said.

Because the venture is structured as a limited liability company, it can recruit investors who are not farmers.

If it had been established as a farmer-owned, value-added cooperative, the number of non-farmers allowed to invest in the plant would have been restricted.

John Geake, board president, said ethanol plants organized as farmer-owned co-ops have a requirement to deliver corn that is tied to the initial investment. No commodity delivery obligation will be tied to Western Iowa Energy, he said.

Renewable Energy Group - a joint venture of West Central Cooperative and Todd and Sargent Co. of Ames, an engineering and construction company - will be involved in designing and building the plant.

West Central, which has a 12-million gallon soy biodiesel plant in Ralston, also will market the biodiesel produced in Wall Lake, Venner said.

Renewable Energy Group is building a 30-million-gallon biodiesel plant near Albert Lea, Minn., similar to the Wall Lake plant, said Jeffrey Stroburg , president and chief executive officer of West Central.

In addition to West Central's biodiesel plant, there are two other biodiesel plants in Iowa, said Grant Kimberley , market development manager for the Iowa Soybean Association.

One is owned by AGP, a soybean processing cooperative, in Sergeant Bluff and the other is Soy Solutions in Milford.

"There are nearly a dozen groups around Iowa who are in various stages of evaluating the feasibility of building a biodiesel plant," Kimberley said.