BNSF Adds Ethanol Trains to Parade of Oil Trains

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BNSF Railway’s oil trains have been in the news almost every day these past few years, as they move oil from the Bakken formation to refineries both east and west. Now, BNSF is adding ethanol trains to the mix.

Aventine Renewable Energy Inc., a leading producer, marketer and supplier of ethanol, has started using BNSF’s100-car unit trains to ship ethanol to its facilities.

Dedicated unit trains move single-bulk commodities such as coal, grain, minerals, liquids, special project cargo and oversized commodities non-stop between a single origin and destination.

Aventine announced its first BNSF unit-train shipment of ethanol produced at its two ethanol facilities in Aurora, Nebraska, pulled out of Aurora on April 19, heading to Birmingham, Alabama. The ethanol will be blended in gasoline to enhance octane, and will also help reduce America’s dependence on foreign oil.

“It’s a major milestone in executing unit trains out of Aurora, eliminating obsolete single-car switching and moving Aventine assets into the highly efficient unit-train supply chain mode,” said Mark Beemer, Aventine’s president and CEO.

“Through a solid partnership with the BNSF, Aventine now has direct access from the BNSF mainline to our inner-loop unit-train track, using a newly installed mainline switch, track and a rail crossover built on Aventine’s land,” Beemer stated. “With our ability to produce 155-million gallons of ethanol, additional economics will be driven by quicker and more efficient moves of ethanol trains into large unit-train consumptive end markets.”

Two years ago, Beemer and the Aventine management team devised a strategic plan to logistically derisk the facility from adverse local conditions. Tactics deployed beyond the rail upgrades include installing four new truck scales, two new grain-grading labs and additional corn storage.

With unit-train capacity, Beemer noted, “Aventine is excited about opening new 100-car unit train markets.” In addition to Birmingham these include Watson, California; Chicago and East St. Louis, Illinois; and Dallas, Houston, Deer Park, Fort Worth, Beaumont and Texas City, Texas.

In Aurora Aventine operates the Aurora West 110-million-gallon Delta T facility and the Nebraska Energy LLC Vogelbusch 45-million-gallon dry mill plant. “By restarting both plants and making $20 million in efficiency upgrades, Aventine has been able to create local jobs in Aurora and contribute to the Nebraska economy while also providing local Aurora farmers with higher values for their corn and supplying local cattle feeders with competitively priced dried and wet distillers grain,” Beemer added. The company has hired 83 employees to date for an annualized payroll of $5.4 million.

In Pekin, Illinois, the company’s headquarters, Aventine operates two plants: a 60-million-gallon dry mill and a 100-million-gallon wet mill.

For more on BNSF, read a Special Report on BNSF’s little-known passenger service.

© 2015 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.