In the summer of 2002, back when wheat was selling for $2.80 a bushel, six Montana farmers formed a company to try to develop bio-lubricants for engines.
If their dreams for Peaks & Prairies LLC came true, they would build a plant near Malta, provide badly needed jobs for their neighbors and extra income for their families.
A week ago, they signed an agreement with an unidentified finance company to raise money for building up to six manufacturing plants.
"We never dreamt it could be this big," said Kent Wasson, Peaks & Prairies president and board chairman. "We're talking $20 million and probably 20 to 30 workers per plant."
The company's journey sprang from three desires: to stop the job and population loss in Eastern Montana, to help their family farms and to help the environment.
First, they set up a small bio-lubricant production facility in Malta to crush the canola seed grown on their farms while they developed products. The plant now employs four people, including a part-time office manager.
One of the first goals was to develop a biodegradable chain saw lubricant for loggers working for the U.S. Forest Service. Chain saw oil is expelled into the land, so having a product that decomposes, such as Montana Gold Bar & Chain Oil, was a priority of the Forest Service.
The company also makes AG-40, a WD-40-style lubricant, and Eco Dust Suppressant, which can be sprayed on riding arenas or other areas to cut down on dust.
Weyerhauser Co. already is using the Montana bio-oil in its California lumber mills to help cool giant saws. Using petroleum oil in the mills creates hazardous waste. The bio-oil, on the other hand, is 90 percent degradable.
But the company's most lucrative product, if it tests out, will be Eco Oil, a motor oil made out of canola.
Despite the record-high costs of crude oil these days, processing seed grains costs even more.
Wasson said area farmers would grow the canola, which eliminates one of the middlemen. There are now eight farmer-investors who would own the new plant. And profit margins on bio-lubricants are higher than bio-fuels, which is why the company focused on this product.
"One of our goals is to find a small replacement that's environmentally friendly and ease our problem of relying so heavily on foreign oils for domestic use," Wasson said.
Their planned 20 million gallons won't even dent the oil business, but there's still value in it.
Running a business on top of the other demands of farming makes for a busy day, Wasson said.
"We're in the middle of seeding and calving and everything else," he said.
Before Eco Oil can be sold in retail stores, it must pass an expensive test run by the American Petroleum Institute. The Institute buys engines and runs the product through them while analyzing all its chemical properties.
Before forking over $600,000 to the Petroleum Institute, Peaks & Prairies turned to the local university. Most of the partners have served on the Montana Agricultural Experiment Station board, and they decided to pre-test their oil there.
So far, the engines have been running for 300 hours. The oil is tested every 10 hours, and the results have been better than expected.
"We're probably running an average of 20 degrees cooler than petroleum," Wasson said.
That might surprise some people.
Wasson said that he and his partners are as handy as anyone in the U.S. with farm equipment, but this seed oil was developed by sophisticated organic chemists working for the U.S. Department of Agriculture.
"They said they built that molecule out of canola oil not to break down," Wasson said.
The engines will run for a while longer in Malta before the company sends the oil off for the big test in Texas, which can take up to six weeks.
And truth be told, the partners are a little nervous about their product's being tested by an organization built on petroleum.
"We're a little worried about sabotage, but we've been running under the radar screen so long, we're going for it," he said.
If Eco Oil does take off, the Peaks & Prairies founders aren't planning to sell out to ExxonMobil and retire to the Caribbean.
"We know their plant wouldn't be built in Montana," Wasson said. "It's our goal to put jobs in Eastern Montana ahead of anything else. That's been our mission statement from the beginning."
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