Advanced BioEnergy shutters 1 of its 2 Aberdeen ethanol plants

Farm Forum

Until last week, Advanced BioEnergy had been operating what it refers to as the AB1 and AB2 ethanol plants west of Aberdeen.

Last week, the decision was made to shut down the smaller plant, AB1.

“The larger plant is operating and will continue to operate as it has since it opened in January 2008,” CEO Rich Peterson said on May 2.

The smaller plant, which began operating in the mid-1990s, was one of the first to be built in the United States. Now, the costs to maintain that plant outweigh the return possibility, he said.

“A plant that size should have been shut down two years ago,” Peterson said. Financially, “It’s like running a business and agreeing to burn money every month.”

The smaller plant only produced 8.5 gallons of ethanol while the larger, newer plant is now capable of producing 47.5 to 48.5 million gallons.

Advanced BioEnergy has increased AB2’s production by 4-5 million gallons just in the last 18 months or so, Peterson said.

“That’s where our focus has been,” he said. “We’ve invested nearly $7 million in the last three years in Huron and Aberdeen.”

Advanced BioEnergy has headquarters in Bloomington, Minn.

The decision had nothing to do with economics or health of the business, Peterson said. The decision was based on having the option to put significant capital into AB1 or shut it down, as well as the plant’s outdated technology, “which couldn’t keep pace,” Peterson said. “It’s an old asset that has lived its day. It’s time to put her out to pasture.”

The company is looking at ways to reuse that part of its Aberdeen facility.

While the closure will have “zero effect” on customers and vendors, Peterson said, a handful of employees did lose their jobs.

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