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Published January 27, 2014, 09:20 AM

Gas rationing affects American Crystal, ag processors

MOORHEAD - American Crystal Sugar Co. and other key agricultural processors in the region are affected by the rationing of natural gas due to a Saturday morning pipeline explosion in Manitoba.

MOORHEAD - American Crystal Sugar Co. and other key agricultural processors in the region are affected by the rationing of natural gas due to a Saturday morning pipeline explosion in Manitoba.

David Berg, president and chief executive officer of Crystal, said the carrier turned off service mid-day Saturday for industrial users in the Red River Valley, to conserve fuel for residential users.

"The impact on us is that the gas-fired pulp dryers at the Moorhead and Crookston factories are turned off, and East Grand Forks is partially restricted," Berg said on Sunday afternoon. The company is slicing at or near standard volume at all of its five factories, and it is unclear whether it can continue doing so.

Unlike Minnesota, the company's North Dakota factories use coal for their pulp drying operations, and are so far unaffected.

"I don't know how long until the pipeline is repaired or how long we can sustain the hauling operation," Berg said. Normally, all pulp is dried and made into pellets, and sold as livestock feed. Japan, North Africa and Europe are major markets.

At J.R. Simplot Co.'s potato processing plant in Grand Forks, unit director Erik Brandenburg said his company was contacted Sunday by the natural gas company to cut back on usage. "We aren't as reliant on natural gas as we used o be because we have an anaerobic digester and the ability to burn methane gas in our boilers," he said. The company uses natural gas to heat some of its water and fryers in processing potatoes.

Brandenburg added that Simplot also has a regular, 24-hour maintenance for clean-up that is scheduled to start at 4 a.m. Monday. "We lucked out on that."

$67K per day?

American Crystal typically squeezes as much water out of the pulp mechanically before it goes to the dryers. The raw stage is 88 percent moisture and comes out of the plant at about 140 degrees. It is pressed to 70 to 72 percent moisture and then dried with the natural gas to the 10 percent moisture level.

Typically, about 4 to 5 percent of the total beet tonnage sliced is produced as dry pulp, Berg said. Moorhead and Crookston factories are rated at a slice of about 6,000 tons per day, which works out to 480 tons of pulp. At $140 per ton, that's $67,000 per day of lost potential revenue.

At Moorhead, shift supervisor Brent Haugen said the company was drying a little pulp using methane produced from the company's wastewater treatment facility, making about 35,000 cubic feet of the biogas per hour. "That's only about a third to a quarter of what we normally would use to dry everything from the natural gas."

It isn't clear how many feedlots have been lined up to take the pressed pulp, or how much they can take.

"What can get fed to cattle will go to feed operations, but we can overwhelm them in a hurry," Berg said. "I would guess if this goes on for several days, we will wind up land-applying a sizable amount."

Similarly, Kurt Wickstrom, president and chief executive officer of Minn-Dak Farmers Cooperative in Wahpeton, N.D., said his company is slowing down its beet slice by about 10 percent. "Our gas provider is Great Plains, which is also supplied by the company that had the pipeline issue," he said.

Minn-Dak will not be able to dry all of the pulp it normally would, he said.

Ryan Thorpe, chief operating officer of Tharaldson Ethanol, Casselton, N.D., said he's been watching the situation but so far hasn't been affected. Tharaldson uses "an enormous amount of gas every day" but gets it from the west, from WBI of Williston. The ethanol maker pays for about 12,000 decatherms per day on a "firm transportation" basis, meaning they pay the fee 365 days a year whether they use it or not.

"We're watching the situation every minute," Thorpe said.

Officials of the Cargill corn processing plant in Wahpeton were not immediately available for comment.

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