State helps finance study on biodiesel plant
Efforts to build a $20 million biodiesel production plant in Douglas County are picking up state support.
The Kansas Department of Commerce has agreed to help finance a feasibility study for a proposed plant, said Lynn Parman, vice president for economic development at the Lawrence Chamber of Commerce.
The department is providing $40,000 through its value-added loan program.
Leaders of the chamber’s New Horizons Agriculture Alliance hope to build a plant that could employ more than three dozen people and pump out 20 million gallons of fuel each year.
Now the effort is looking for professional advice that could take the plan from vision to reality.
“We want it to give us the feasibility of the best place to locate it – economically – and then also whether it’s going to be a moneymaker,” said Bob Rhoton, a financial service officer for Frontier Farm Credit and chairman of the chamber’s Agribusiness Network. “We don’t want to go out and raise money for something that’s going to lose money. We want it to be a moneymaking project.”
Supporters say the plant would broaden outlets for area farmers by purchasing new and used soybean oil for conversion into biodiesel, which then would be sold for use in trucks, farm equipment, buses and other heavy machinery.
The market for such fuels continues to grow, Rhoton said, and a sure sign of that can be seen through increased corporate interest. Cargill is working on a $37.5 million biodiesel plant adjacent to one of its bean-crushing operations in Iowa.
“If the big corporations are starting to get involved, then it’s something that should be fairly profitable,” Rhoton said. “Hopefully we’re getting a jump on them.”
The United States now has 29 biodiesel plants, with another 25 in the works during the next 18 months, Parman said. The closest to Lawrence is in Ralston, Iowa.
The New Horizons Agriculture Alliance already has collected pledges for at least $12,000 to help finance the study. The group intends to hire a consultant during the next several weeks.
Rhoton said that the study likely would be finished by year’s end.