Published Thursday, August 31, 2006

Plant hunting for more water

Company has efficiency measures in place

By Michael Hooper
The Capital-Journal

An ethanol plant in Russell wants to double capacity but may not find the water to grow.

The US Energy Partners ethanol plant and wheat gluten plant in Russell have been using about 500,000 gallons of water per day but would like 1 million gallons per day, said John Neufeld, chief operating officer for White Energy Holding Co., of Dallas, which purchased the plant in the spring from ICM Inc. of Colwich and Nesnah, of La Crosse, Wis. The cost to double capacity would be $40 million to $60 million.

"We're doing everything we can to find additional water resources," Neufeld said. "We would like to have 1 million gallons per day, but that has to be taken in context that there has to be sufficient water for the community. Our families all live here."

Ethanol plants are popping up across the country, but a shortage of water is limiting growth in some places.

The Russell plant started production in November 2001. US Energy Partners acquired the adjacent wheat gluten plant that was formerly owned by Farmland Industries. Today, US Energy Partners has about 75 employees at the site, Neufeld said.

JULY 2006 FILE PHOTO/HAYS DAILY NEWS

Workers from Clarke Well and Equipment, of Great Bend, drill test wells at the US Energy Partners ethanol plant just northeast of Russell as part of US Energy's search for water.

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In recent years, management has sought ways to reduce its water usage by 250,000 gallons per day. The company replaced its primary cooling mechanism in its water tower. Workers also recycle water as much as possible.

In addition to using water from the city of Russell, the ethanol plant also gets about 100,000 gallons per day from the Post Rock Rural Water District, which gets water from the Kanopolis Reservoir.

Water in Russell's municipal wells had declined in the summer, but levels were recharged 6 to 8 feet recently as a result of rains and a release upstream from Cedar Bluff Reservoir, said Gary Hobbie, Russell city manager.

There are eight ethanol plants in operation in Kansas with a capacity of more than 215 million gallons per year, according to www.ksgrains.com/ethanol. Current Kansas production creates a market for 65 million bushels of sorghum and corn, according to the Web site.

ICM Inc. announced this summer it would design an ethanol plant in Rice County, about 25 miles northwest of Hutchinson, capable of producing 55 million gallons per year. The design is for a group led by former Kansas Senate President Dave Kerr, the Wichita Business Journal reported July 25.

Kansas Ethanol LLC officials say they will build the plant between Lyons and Sterling on Avenue Q, about a half-mile from K-96 highway. The plant should bring between 35 and 40 jobs to Rice County and about 150 "indirect jobs."

National production of ethanol reached 318,000 barrels per day in June, up 25,000 barrels per day from May.

"The remarkable increase in ethanol production is good for our economy and our national security," U.S. Sen. Sam Brownback said Wednesday in a news release.

Michael Hooper can be reached at (785) 295-1293 or michael.hooper@cjonline.com.