by Rick Mooney
Editor, eHay Weekly

Prairie Skies Biomass Co-op, a grower cooperative in south-central Minnesota, recently announced plans to build a third-generation biofuels plant. The plant, to be located in Madelia, will use native grasses, alfalfa, grass hay, wheat straw, corn stover and other biomass materials to produce gasoline, diesel fuel and ammonia.

Organized by a local non-profit group, Rural Advantage, the co-op plans to develop the project in three stages. In the first stage, biomass feedstocks will be used to make a bio-coal product that can provide energy. In phases two and three, the plant will begin producing ammonia and gasoline and diesel fuels.

"It started out as a water-quality project," says Linda Meschke, president and founder of Rural Advantage. "We were looking for a way to reduce the non-point source pollution that results from having a local landscape that's made up of about 90% corn and soybeans. This project will provide some market incentives for getting more perennial grasses out on the land at targeted locations."

It will be at least two years before first-stage construction on the project starts; up to five years before construction is completed, Meschke expects. The plant should utilize 300 tons of biomass material/day and produce 75,000 tons of torrified material annually.

Along with creating as many as 20 fulltime jobs at the Madelia plant, the project will generate other economic activity in the area, she says. "Among other things, we'll need people to grow the feedstock, store it, transport it and grind the larger packages of material into smaller sizes so that it can be used at the plant. It could also lead to more sales of haymaking equipment in our area. Right now there is some haying equipment here, of course. But it's limited because corn and soybeans are so dominant."

To finance the project, Prairie Skies intends to issue grower shares to producers based on the amount of feedstock material they provide to the plant. "We're not sure yet if the shares will be based on tonnage or Btus," says Meschke. The co-op also plans to sell "community shares" to local individuals and "supporter shares" to other investors.

"As much as possible, we want to keep majority of ownership local," she says, adding that the initial financing plan calls for limiting supporter shares to less than 50% of total project capitalization.

To learn more, contact Meschke at 507-238-5449 or linda@ruraladvantage.org.