A growing market for alternative fuels is convincing a handful of Douglas County farmers to dream about building a new place to unload their soybeans.

The farmers want to investigate the feasibility of building a $20 million biodiesel plant in the county, big enough to employ more than three dozen people and pump out some 20 million gallons of fuel each year.

“Our feeling is that biodiesel is the up-and-coming alternative energy source,” said Mark Wulfkuhle, who farms 1,500 acres between Clinton Lake and Stull. “We want to be in the biodiesel-making business. We’d be using our products. Anytime you’re using bean oil you’re using beans. We feel like it’s going to benefit agriculture.

“We figure this just might work. You’ve got to start somewhere.”

The New Horizons Agriculture Alliance, a subcommittee of the Lawrence Chamber of Commerce’s Agribusiness Network, is asking the Kansas Department of Commerce for $40,000 to help finance a feasibility study.

The study would begin late this summer and assess the market potential for a new plant in the county, which would be the first in Kansas and the largest in the region outside central Iowa.

Bill Wood, agriculture extension agent for K-State Research and Extension — Douglas County, said that the goal would be to produce fuel that would be marketable to over-the-road truckers, municipal transit fleets, school bus systems and other transportation modes that now rely on diesel fuel.

Injecting biodiesel into the mix — by using soybean oil, or possibly even animal fat, french fry grease or other so-called “bio” sources — would help lessen the public’s reliance on petroleum products while boosting the market for agricultural crops.

Soybeans are the No. 2 crop for Douglas County farmers, Wood said, and producers throughout northeast Kansas and elsewhere in the state could use another outlet for their beans.

“And for the community that we live in in Lawrence, a very environmentally friendly community, a biodiesel plant should fly pretty easily,” Wood said.

Financing for such a plant would come from investors, likely from the agricultural community. Wood, Wulfkuhle and others figure that they could borrow half of the plant’s cost, leaving them to come up with about $10 million to get the job done.

Wulfkuhle and two dozen others already have committed to spend $12,000 to help conduct the feasibility study. Wulfkuhle figures coming up with 2,000 producers willing to invest $5,000 to build a plant would not be overly difficult.

Stephen Kalb isn’t so sure.

The plant would use soybean oil, not raw soybeans, to create biodiesel, leaving another link in the production chain outside of the county, said Kalb, who farms more than 1,000 acres of soybeans near Baldwin with his father.

The way Kalb sees it, the plant might expand the market for beans, but it wouldn’t necessarily generate a direct outlet for his beans.

Kalb initially supported the efforts to build a plant in the county, but the lack of a direct connection to county beans left him less enthusiastic. The market already has three times as much capacity as demand, he said, even if the market is picking up.

‘A little skeptical’

The bring-a-plant-to-the-county effort may be “forward-thinking,” Kalb said, “but perhaps I’m not the biggest forward thinker.”

“I still support biodiesel,” Kalb said. “I’m just a little skeptical. It’s like taking out money and putting it in the stock market. Stocks aren’t worth as much as they used to be. The way I figure it, for anybody that owns their own business, why not keep it in your own business and not invest it in another one?”

Lynn Parman, vice president for economic development at the Lawrence Chamber of Commerce, said that such optimism and doubts offered all the more justification for conducting a feasibility study.

There currently are 29 biodiesel plants in the United States, with another 25 expected to be up and running within 18 months, she said. More than 1,500 distributors are selling biodiesel fuel in the country, up from one 12 years ago.

The National Biodiesel Board estimates that while only 30 million gallons of biodiesel fuel currently is being used annually, the market soon could expand to 170 million gallons a year, she said.

With the closest biodiesel plant now being in Ralston, Iowa, she said, the market in Kansas alone might be able to justify a plant in the state. And farmers always are looking for new outlets for their crops.

After more than a year of winnowing potential options, members of the New Horizons Agriculture Alliance soon embraced the concept of pursuing establishment of a biodiesel plant in the county.

Now it’s simply a matter of seeing whether such an project would make sense.

“This would be a way for them to sell their soybeans,” Parman said. “It’s an investment. It’s a way to go from commodity-based agriculture to value-added based agriculture.”