Kanza Energy LLC starts construction
Initially, Kanza Energy will produce 10 MMgy. However, the company decided in late spring to increase production capacity to 22 MMgy, in part because it secured a long-term feedstock contract for the additional capacity, Justus said. The additional equipment should arrive from De Smet at the end of 2006. "We're confident that we'll be running the first phase [by January], and the second phase should come on five months after that," he told Biodiesel Magazine.
The plant will enlist a national company for feedstock procurement and biodiesel marketing; however, no official contracts had been signed at press time. Animal fat and vegetable oils will be used as the feedstock, either at once or interchangeably. The process is a hybrid of batch and continuous flow.
The plant will also sign a national marketing group, but it has received significant interest from local co-ops and fuel distributors for the fuel. "Within the 60-day period that the plant was announced, we had commitments to take away 5 MMgy," Justus said.
The biodiesel facility will be collocated with a coal-fired cogeneration electricity plant, which will supply steam, water and electricity to the biodiesel facility. The electricity plant will also service Ecaruso LLC, an adjacent 25 MMgy ethanol plant. Justus said construction for all three plants is underway. In addition, a soybean and canola seed crushing plant is being planned. RER expects to complete the engineering by the end of the year, Justus said.
Kanza Energy's precipitous timing avails itself to the new 30-cents-per-gallon biodiesel producer incentive, which was created by a senate bill that was signed by Gov. Kathleen Sebelius this spring. The incentive will be paid on a pro rata basis to qualified in-state facilities for every gallon of biodiesel sold. Producers will be able to file for the incentives July 1, 2007; the program will sunset July 1, 2016.