Golden Grain to supply corn oil

By Craig A. Johnson | June 02, 2008
Mason City, Iowa-based Golden Grain Energy LLC and Madison, Wis.-based Best Energies Inc. have received $200,000 from the Iowa Department of Economic Development Board to support their intent to extract corn oil to produce biodiesel.

According to Walter Wendland, president and chief executive officer of Golden Grain Energy, a letter of intent was signed between his plant and Best Energies in February to extract corn oil from Golden Grain Energy's distillers grains. He said the partnership is a "work in process" and will result in a separate company, Corn Oil Bio-Solutions LLC, which is slated to come on line in the first quarter of 2009.

Best Biodiesel in Cashton, Wis., a subsidiary of Best Energies, will use the corn oil as a feedstock in its biodiesel production. Its proprietary technology will convert the corn oil into ASTM-quality biodiesel. Best Biodiesel is designed specifically to use corn oil. Most biodiesel companies avoid using it because of its high free-fatty-acid content. The plant is unique, but as feedstock costs soar, many in the biodiesel industry are looking for alternatives to soy oil. "We want to partner with other biodiesel plants to include them as owners," Wendland said. He also intends to work with more than one ethanol plant in the deal. "We're actively recruiting other ethanol companies, so they can vertically integrate their corn-oil production and turn it into biodiesel. In the end, it won't just be Golden Grain and Best Energies. It'll be four or five ethanol plants and biodiesel plants that work together."

The first $100,000 from the board will be in the form of an industry loan, while the other half will be a grant used for project costs, Wendland said. The funding was provided under Iowa's Value-Added Agricultural Products and Processes Financial Assistance Program. Its mission is to fund and support research into value-added revenue streams for the state's agricultural industry.