South 8 Energy, LLC produces, markets, and sells fuel grade ethanol, distillers grains and corn oil primarily within the continental United States.
The company is constructing, owning, and operating a fuel-grade ethanol plant near Richardton, North Dakota, in western North Dakota.
Principal Products
Ethanol
The company’s primary product is ethanol, which it manufactures from corn. Ethanol is ethyl alcohol, a fuel component made primarily from corn, and various other grains, which can be used...
South 8 Energy, LLC produces, markets, and sells fuel grade ethanol, distillers grains and corn oil primarily within the continental United States.
The company is constructing, owning, and operating a fuel-grade ethanol plant near Richardton, North Dakota, in western North Dakota.
Principal Products
Ethanol
The company’s primary product is ethanol, which it manufactures from corn. Ethanol is ethyl alcohol, a fuel component made primarily from corn, and various other grains, which can be used as: an octane enhancer in fuels; an oxygenated fuel additive for the purpose of reducing ozone and carbon monoxide vehicle emissions; and a non-petroleum-based gasoline substitute.
Distillers Grains
The principal co-product of the ethanol production process is distillers grains, a high-protein, high-energy animal feed supplement primarily marketed to the dairy, beef, poultry, and swine industries. The company produces two forms of distillers grains: distillers dried grains and modified distillers grains. Modified distillers grains is processed corn mash that has been dried to approximately 50% moisture, which has a shelf life of approximately seven days, and is often sold to nearby markets. Distillers dried grains is processed corn mash that has been dried to approximately 10% moisture. It has an almost indefinite shelf life and may be sold and shipped to any market, regardless of its vicinity to its ethanol plant.
Corn Oil
In March 2012, the company commenced operating its corn oil extraction equipment to separate corn oil contained in its distillers grains for sale. The corn oil that it is capable of producing is not food-grade corn oil, and it cannot be used for human consumption. The primary uses of the corn oil that the company produces are for animal feed, industrial uses, and biodiesel production.
Principal Product Markets
The company markets nearly all of its products through a professional third-party marketer, RPMG, Inc. (‘RPMG’). The only products it sells which are not marketed by RPMG are E85 and E30, and certain modified distillers grains, which it markets internally to local customers. RPMG is a subsidiary of Renewable Products Marketing Group, LLC (‘RPMG, LLC’). The company is a part owner of RPMG, LLC, which allows it to realize favorable marketing fees for its products and enables it to share in the profits generated by RPMG, LLC. Except for the modified distillers grains and E85/E30 that the company markets locally, RPMG decides where its products are marketed and sold.
The company’s products are primarily sold in the domestic market; however, as domestic production of ethanol, distillers grains, and corn oil continues to expand, it anticipates increased international sales of its products.
Distribution Methods
The company’s ethanol plant is located near Richardton, North Dakota, in Stark County, in the western half of North Dakota. It selected the Richardton site because of its proximity to existing coal supplies, the initial fuel source for its ethanol plant, and accessibility to road and rail transportation. The company’s plant is served by the Burlington Northern and Santa Fe Railway Company.
The company sells and markets the ethanol, distillers grains, and corn oil produced at the plant through normal and established markets, including local, regional, and national markets. Its products are primarily shipped by rail and by truck in its local market. The company has separate marketing agreements with RPMG for its ethanol, industrial ethanol, distillers grains, and corn oil. Whether or not its products are sold in local markets will depend on decisions made by RPMG, except for the E85/E30 and the modified distillers grains, which the company internally markets locally. Local markets are evaluated on a case-by-case basis.
Ethanol
The company has an exclusive marketing agreement with RPMG for the purposes of marketing and distributing all of the ethanol it produces at the ethanol plant. Because it is an owner of RPMG, LLC, the company’s marketing fees are based on RPMG's actual cost to market its ethanol. The company’s ethanol marketing agreement provides that it can sell its ethanol either through an index arrangement or at a fixed price agreed to between it and RPMG. The term of the company’s ethanol marketing agreement is perpetual, until it is terminated according to the terms of the agreement. The primary reasons the ethanol marketing agreement would terminate are if the company ceases to be an owner of RPMG, LLC, if there is a breach of the agreement that is not cured, or if it gives advance notice to RPMG that it would like to terminate the agreement. Notwithstanding the company’s right to terminate the ethanol marketing agreement, it may be obligated to continue to market its ethanol through RPMG for a period of time after the termination. Further, if the agreement is terminated, following the termination, the company has agreed to accept an assignment of certain railcar leases that RPMG has secured to service it. If the ethanol marketing agreement is terminated, it would automatically trigger a redemption of its ownership interest in RPMG, LLC.
Distillers Grains
On August 29, 2013, the company executed a distillers grain marketing agreement with RPMG, which started on October 1, 2013. Pursuant to the marketing agreement, RPMG markets all of the dried distillers grains the company produces, and it continues to internally market its modified distillers grains. Due to the fact that the company is a part owner of RPMG, LLC, RPMG will only charge its actual cost of marketing its distillers grains to its customers. The initial term of the marketing agreement was one year, and thereafter the agreement renews for additional one-year periods unless the company elects not to renew the agreement. The agreement may be terminated by either party based on certain events described in the agreement or based on the bankruptcy or insolvency of either party.
The company markets and sells its modified distillers grains internally. Substantially all of its sales of modified distillers grains are to local farmers and feedlots.
Corn Oil
In March 2012, the company executed a corn oil marketing agreement with RPMG to sell all of the corn oil that it produces. It pays RPMG a commission based on each pound of corn oil that RPMG sells on its behalf. The initial term of the corn oil marketing agreement was one year, and the agreement automatically renews for additional one-year terms unless either party gives notice that it will not extend the agreement past the current term.
Patents, Trademarks, Licenses, Franchises, and Concessions
The company was granted a perpetual and royalty-free license by ICM, Inc. (‘ICM’) to use certain ethanol production technology necessary to operate its ethanol plant. The cost of the license granted by ICM was included in the amount the company paid to Fagen, Inc. to design and build the plant.
Seasonality
The company experiences some seasonality of demand for its ethanol, distillers grains, and corn oil. Since ethanol is predominantly blended with gasoline for use in automobiles, ethanol demand tends to shift in relation to gasoline demand. As a result, the company experiences some seasonality of demand for ethanol in the summer months related to increased driving, and, as a result, increased gasoline demand. In addition, it experiences some increased ethanol demand during holiday seasons related to increased gasoline demand. The company also experiences decreased distillers grains demand during the summer months due to natural depletion in the number of animals at feedlots and during times when cattle are turned out to pasture.
Major Customers
The company relies on RPMG for the sale and distribution of all of its ethanol, dried distillers grains, and corn oil. Accordingly, it is highly dependent on RPMG for the successful marketing of most of its products.
History
The company was founded in 2003. The company was incorporated in 2003. The company was formerly known as Red Trail Energy, LLC and changed its name to South 8 Energy, LLC in February 2025.
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