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Ethanol pays big dividends

By Sara QuamThe Agri-Energy ethanol plant in Luverne is a mystery to many who know little more than the fact that it uses corn to make car fuel. For the 220 members of the limited liability corporation, however, it’s been as close to a gold mine as they’d find in Rock County.Agri-Energy Business Development Director David Kolsrud wouldn’t say exactly how much investors have been paid in the eight years that the plant has been up and running. He did say that the stock has increased in value "several times."Kolsrud also specified that Agri-Energy has paid more than $5 million in employee salaries, dividends and locally purchased goods since it opened. The main point people should remember about Agri-Energy, Kolsrud said, is, "Our farmers are benefiting all the while we are lessening our dependence on foreign oil."Eyes on the roadEthanol has gotten a lot of attention lately. Gas prices are high as the summer travel season is starting, and ethanol blends are slightly cheaper per gallon than standard fuel. Minnesota has the largest number of ethanol pumps, but more plants are starting production so the blend will probably be more frequently used than ever.The price of ethanol is based more on the price of crude oil than it is on corn, so it isn’t much cheaper than regular gas. Demand for the 10 percent blends is almost exceeding the supply now. Ethanol gets slightly lower mileage than regular gas, so consumers benefit most when it’s at least 30 percent cheaper than regular gas.Most vehicles can use 10 percent ethanol blended gasoline. It’s the 85 percent blend that is specific to only certain vehicles.Kolsrud said, "E-85 blends are being held low now because we want to increase demand."Golden opportunitiesAgri-Energy has invested in other plants, which Kolsrud said isn’t the most popular thing to come out of the business.Expanding in Luverne hasn’t proven feasible, but the limited liability corporation (LLC) is at least partial owner of three other plants — one in Nebraska and two in Kansas.Still, Agri-Energy is by far the highest taxpayer in the county, with $157,394 payable in 2006.Agri-Energy’s plant was started with help from being designated as a tax increment financing project."This community has been good to us," Kolsrud said. Next year, when the TIF expires, tax collecting governments will see even more of the taxes generated from Agri-Energy. (For 2006, $94,536 of the tax bill will go to pay off the TIF.)Just as the community has been good to the ethanol plant, Kolsrud says the business is equally good for the community.It has 28 employees, most of whom live and shop in Luverne, too.Plant Manager Jay Sommers lives in Luverne with his wife and three children. He came here from Idaho when the plant opened but is originally from Gaylord."It’s a nice city with a good school system," Sommers said. "We like the community, even though we don’t like that there’s no lake here."Sommers says it is important to remember that plant odors were eliminated during production as technology was developed.Each year, the Luverne plant produces 21 million gallons of ethanol. That’s enough to travel 4.2 trillion miles on a 10 percent blend. Five days a week, the plant takes in 30 semi-trucks of corn. The ethanol plant has been a supporter of the local railroad, as its biggest customer.Kolsrud said the relationship is mutually beneficial.He said, "Minnesota Southern Railway has been very significant in our success because it allows us to move to two major rail lines, which allows us to market to both coasts." In fact, almost all of Agri-Enery’s product ends up in New Jersey.In the end, Sommers and Kolsrud said they hope the support and interest in ethanol continues for the good of the community, Agri-Energy investors and to decrease the national dependence on fossil fuels.

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