Biodiesel Plant Won’t Be Built Near Evansville

By Marv Balousek, The Wisconsin State Journal

Jun. 11–North Prairie Productions has abandoned plans to build a $42 million biodiesel plant near Evansville due to continuing high soybean oil prices.

John Sheehy, of Sun Prairie, the company’s board chairman, said a letter announcing the decision was sent Monday to investors. The announcement also was posted on the company’s Web site at npnrg.com.

“We’ve investigated every single option we could come up with including merging with others,” he said. “The commodity prices continue to make it impossible to make biodiesel out of soybean oil.”

The plant would have been the largest in the state, producing an estimated 45 million gallons of biodiesel a year. Biodiesel is a substitute for diesel fuel used by farm tractors and some trucks and cars.

Investors will receive about half of their equity back, Sheehy said, which is a better outcome than where other plants have closed. He said North Prairie is negotiating with Landmark Services Cooperative of Cottage Grove, which plans to build a soybean crushing plant next door, to take over the land, footings and other initial construction and an untouched $2 million in tax incremental financing.

When construction was halted temporarily on the plant last fall due to high soybean prices and a lender’s withdrawal, the cost of a gallon of soybean oil was about 20 cents more than the diesel fuel pump price. Even though diesel fuel prices have risen, Sheehy said soybean oil prices also have continued to rise. A gallon of soybean oil produces a gallon of biodiesel.

Sheehy said the nation’s biodiesel plants had capacity last year to produce 2 billion gallons, but only 400 million gallons was produced due to the high prices.

The decision to abandon the biodiesel plant doesn’t affect plans for the soybean crushing plant, said John Blaska, Landmark’s board chairman.

He said the plant, which would be the only soybean crushing plant in Wisconsin, could open in about two years.

Blaska said about 90 percent of the crushing plant’s output would go to produce food-grade vegetable oil. He said the plant would process about 2,400 tons of soybeans daily and would mean many farmers wouldn’t have to ship their soybeans out of state.

“As the price of fuel gets higher, it makes a plant like this more attractive,” he said.

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