The only parts of North Dakota where you’ll find commercial sugarbeet fields are in the Red River Valley along the state’s eastern edge and in the Mon-Dak vicinity of northwestern North Dakota. The crop has never been grown commercially anywhere else in the Peace Garden State.
But there’s a good chance it will be, one day soon.
If and when that comes to pass, however, the “new” population of North Dakota sugarbeet growers will not be producing beets for sugar. Instead, they’ll be raising them for energy — specifically, for processing and use as biofuels.
For the past three years, an entity called Green Vision Group (GVG) has been investigating and promoting the development of an energy beet industry in the Northern Plains. The endeavor has had two primary goals: (1) to help lower society’s carbon footprint, and (2) to simultaneously feed rural economic development in the region. Current principals in GVG are three North Dakotans with a long history of entrepreneurship and community development: Maynard Helgaas of West Fargo, Lloyd Anderson of Fargo, and Rod Holth of Grand Forks. Helgaas, who owned a farm implement dealership in Jamestown for three decades, is GVG’s president. (The group’s website address is www.beetsallbiofuel.com.)
The stakes are potentially very high. Under the Energy Independence and Security Act (EISA) of 2007, fuel produced from sugarbeets qualifies as an “advanced” biofuel — and EISA mandates the national production of 15 billion gallons of advanced biofuels annually by 2022. Concurrently, the economic development impact in those areas where such biofuels end up being produced is obviously huge.
Key to the GVG vision has been its partnership with North Dakota State University and with Muscatine, Iowa-based Heartland Renewable Energy. To date, this partnership has produced a major economic feasibility study, conducted energy beet yield trials in several locations around North Dakota, and commercially tested a process (patented by Heartland) that uses a co-product of energy beets (“stillage”) to provide up to 70% of a biofuel plant’s thermal needs. They’ve also initiated juice storage research at NDSU to enable year-round processing and plant utilization, and are currently working to attain EPA’s formal approval of the beet-origin ethanol as an “advanced” biofuel.
While they don’t view energy beets as a competitor to ethanol made from corn, GVG does emphasize a primary advantage of fuel produced from this feedstock: “We can grow almost twice as much ethanol, per acre, as you can with corn,” says Helgaas. That obviously reduces the amount of land required to grow an equivalent amount of “energy fuel.”
Another advantage of sugarbeets is that the processing regimen is simpler. With corn, Helgaas notes, the feedstock’s starches must first be broken down into sugars before ethanol can be produced. With sugarbeets, that step is unnecessary.
So the bottom line is a reduced unit cost to convert the raw commodity into ethanol.
Released in July 2010, the energy beet economic feasibility study was conducted by NDSU biofuel economist Cole Gustafson and his colleague, Thein Maung. Gustafson, who has worked closely with Green Vision Group for the past three years, says the analysis showed the estimated breakeven ethanol price for a 20-million-gallon-per-year (MGY) energy beet/ethanol plant to be $1.52 per gallon; for a 10-million-gallon plant, it was $1.71 per gallon. “At an ethanol price of $1.84 per gallon, and assuming other factors remain unchanged, the estimated net present value of the 20 MGY plant is $41.54 million,” the NDSU economists reported.
Over the past year, of course, the energy cost picture has changed significantly. Market prices of feedstocks (sugarbeets and corn) are higher than they were when the report was being researched and written. So too is the cost of petroleum-based energy. But “the difference we’re interested in is the margin,” Gustafson points out. “And that remains about the same. I still see [beets as biofuel] as being a very profitable alternative. We should be able to compete quite well in the marketplace.”
To qualify as an “advanced” biofuel, the product must produce at least 50% fewer emissions than petroleum. (Corn produces 20% less.) Add to that the intent for energy beet plants to burn their own waste (the “stillage” produced during fermentation) for processing and heating, and that number could climb up toward 60%, Helgaas believes. Along with the stillage, other co-products will be a brewer’s yeast, pulp for livestock feed, and potash left over after the stillage is burned. The potash could be utilized as a fertilizer.
What major hurdles remain before North Dakota could have an operating beet-to-ethanol plant — and what timeline appears realistic, assuming those hurdles can be cleared?
Phase I of the GVG plan, now complete, was comprised of the 2010 economic feasibility study, the testing of the Heartland-patented process to create thermal energy from waste material, and the initiation of energy beet yield trials. All those components resulted in very encouraging findings.
Phase II, now underway, will likely take one and a half to two years, according to Gustafson. Hopefully to be bolstered by a $1 million potential grant from the North Dakota Renewable Energy Council, its major components include:
• Expanding the yield trials to additional locations this year to gain more agronomic data and to build crop insurance history so that when growers in a given area consider investing in beets-to-biofuel, they’ll have risk management tools available to them.
• Looking at additional juice storage technology. Though the results of Phase I juice storage research were positive, “we want to take it a step further,” Gustafson says. “Our goal is to be able to process the beets in the fall, develop ‘thick juice’ and then store that through the winter months so our plants can operate year-round.”
• Front-end processing technology. Whereas the traditional beet sugar industry slices beets entering the factory and then heats the resulting cossettes in a diffuser to extract the sucrose, the energy beet model takes a different approach. “We don’t need the degree of refinement (i.e., removal of impurities) that beet sugar factories do,” Gustaf-son explains. “So we’re looking at extrusion and grinding methods” as a way of separating the sugar from the pulp.
• Pursuing EPA designation of sugarbeet-origin ethanol as an “advanced” biofuel. While there are no up-front guarantees, “we’re very confident” of attaining that status, Gustafson says. “That’s going to be a real key to our project,” he emphasizes. “That’s the driver in all this.”
Phase III would be the actual construction of the first commercial beet-to-ethanol plant in North Dakota. Maynard Helgaas expects it to be a 20-MGY facility, given the positive economics compared to a smaller plant. He also expects it to be located next to an existing corn ethanol facility or electricity generating plant. “Co-locating reduces our investment significantly,” he points out. “We can use the same railroad tracks or spurs, we can buy their steam — and they can buy our waste product (stillage) and burn it with their coal.” If co-located with a corn ethanol plant, there also could be sharing opportunities with respect to distillation, marketing services and environmental permitting processes, Gustafson adds.
Right now, $50 million — including $10 million in operating capital — is the ballpark number Green Vision Group projects will be needed to get a 20-MGY plant up and operating. Assuming that flagship plant gets off to a good start and the biofuels sector as a whole is healthy and growing, Helgaas envisions several similar facilities one day dotting the North Dakota landscape. “We’re looking at having plants where [the grower] won’t have to haul the beets over 20 miles,” he says. The idea is to have 30,000 acres of beets per year within that 40-mile-diameter circle to feed the plant. “To maintain reduced carbon emissions and qualify as an ‘advanced biofuel,’ we need to maintain production within that 20-mile perimeter of the refinery,” Helgaas states.
No energy beet production and processing operations are planned within the Red River Valley, GVG’s president adds, so as to not infringe upon the existing sugarbeet industry’s need for sufficient acreage, including any future expansion. GVG is also emphasizing the need for energy beet growers to follow four- to five-year crop rotations to reduce the risk of disease buildup.
As positive as the research and development efforts have been to date, there’s still plenty of uncertainty surrounding the young energy beet sector. Cole Gustafson uses the word “mixed” when asked for adjectives to describe the economic and political climate for energy beet biofuels as of Summer 2011.
“There’s a lot of momentum in the project, a lot of optimism on several fronts,” the NDSU economist affirms. “Last year’s yield trials were very positive, and they’re looking good again this year. The research we’ve done on economic feasibility, on juice storage and on the patented technology are all more positive than we’d expected.
“On the other side, though, there’s the national recession and the difficulty of getting financing. All projects are facing that right now.
“Another difficulty is the current national discussion about ethanol and tax credits. That has cast a cloud — even though we don’t include any of those kinds of subsidies in our financial analyses. We’re often ‘lumped’ into it, though we’re a very different biofuel with a different market opportunity.”
Today’s high prices for corn, soybeans, wheat and other ag commodities also factor into the equation. Gustafson says there are geographic pockets in North Dakota where farmer interest in energy beets is very high. “In fact, we had more requests from producers to have yield trials on their property this year than we can manage,” he notes. But current crop prices have muted the interest from other potential energy beet producers who don’t see the need to add another crop when the ones they’re already growing are so profitable — and familiar.
Adequate grower participation is key not only from the feedstock production standpoint, but in the ownership arena as well. “We call ourselves ‘architects for rural development,’ ” Maynard Helgaas emphasizes. “We would like to see farmer ownership [of beets-to-biofuel] plants to some level — at least 40%.”
So as always, “time will tell” when it comes to whether a commercial energy beet enterprise takes root in the Northern Plains and grows into a healthy, vibrant industry. There’s a lot going on, with many positive signs. There also are clouds of uncertainty, both economic and political. Green Vision Group and its partners continue to forge ahead, with the hope and the expectation that their efforts will pay off handsomely for both the region’s rural economy and the nation’s renewable energy needs. — Don Lilleboe
Editor & General Manager of The Sugarbeet Grower