Short-haul Ethanol Model

Why is Short-haul Better?

Most gasoline blending terminals do not have rail access nor space available to store unit train loads of ethanol and PREFER to have the fuel come in by truck on a just-in-time basis.
Rail-loads of ethanol need to be transferred to trucks at a specially designed transload facility for delivery to the local terminals. This adds an additional 12 cpg in cost to the ethanol buyer.
Immediate availability of ethanol is preferable since it allows the buyer to blend efficiently into the octane markets when blending economics warrant. Just in time ethanol allows the buyer to take advantage of immediate octane market conditions.
Solving this critical logistic problem exclusively for the regional buyers of ethanol produces significantly higher ethanol margins for LQM-Lamar versus the large Midwest producers.
Proximity to Premium Fuel Markets by way of Truck Access (+15 cpg)

Short-haul Ethanol

An Energy Market Transformation

LQM is a development and operations company specializing in 10 million gallon per year grain-based ethanol facilities in the Rocky Mountain and Southwestern region of the US.

Our model benefits the customer by making available a dependable source of ethanol and distillers grains for the local markets, which are not serviced by rail.

By co-locating our plants on large feedlots, LQM adds the benefit of additional margin from the resale of 100% of our WDG to our site host, and a cross grain agreement which limits our exposure to rising corn prices. Our model carries less risk than traditional Midwest plants and enjoys more stable and predictable returns by comparison.

Our ethanol facilities will be constructed on fully operating cattle feedyards. The significant benefit of co-location on a feedyard is to maximize the gross margin of Wet Distiller Grain (WDG), which is a byproduct of ethanol production.

WDG will be sold back directly to the feedlot operator, as opposed to drying it and shipping it to third party buyers. The volume of WDG produced does not exceed the demand from the on-site cattle feed operator. The feedyard benefits from receiving a superior feed product at a significant discount resulting in fatter cows faster with cheaper feed.

Our ethanol is sold on a “just-in-time” basis to local gasoline terminals which do not have the infrastructure or storage capacity to manage large unit-train rail shipments of ethanol from the Midwest. LQM believes its “Short Haul” business model offers higher returns with lower risk compared to “large volume” ethanol producers.

Our plants will adopt locally available feedstocks, renewable energy resources, and can integrate cellulosic ethanol technologies easier and faster than larger plants, all with the goal of giving back to the community and the environment.

By 2012, our goal is to develop and operate a portfolio of short-haul biofuel facilities throughout the Southern and Western U.S.