WURTLAND — Wide grins are never far from the faces of Jeff Lowe and Brandon Minix as they walk a visitor through their Midwestern Biofuels plant in Wurtland.

The tour takes them past roof-high stacks of baled switchgrass destined for processing, a machine that pulverizes the grass, conveyors to move the grass particles across the plant, and another machine the size of a truck that turns the particles into pellets for burning.

The pellet-making machine in particular they are proud of; it was made there in the plant to their specifications and is the only one of its kind anywhere.

The reason for the smiles, however, is that Lowe and Minix believe they will be ready by early next year to go into full production making the fuel pellets, which are designed for burning in power plants and other large commercial applications.

Lowe is president and Minix vice president of Midwestern, a startup they created in anticipation of a burgeoning trade in biofuels. Lowe’s business background is in materials handling and Minix is a chemist, so they teamed up to develop a product that can be transported, handled and burned just like coal.

What they came up with is a pellet made of pulverized, compressed material. They’ve used wood chips before and now, with an influx of switchgrass from test plots in Northeast Kentucky, they’re making the pellets from that.

When most people think of pellets, they envision the nugget-sized ones sold for use in home wood stoves. Midwestern’s pellets are quite different.

A stack of them in a holding area at the plant looks a little bit like a pile of light brown tin cans. Pick one up and it is light and dense. Squeeze it with your fingers and it keeps its shape.

In that form, the pellets are more valuable to the power companies that are the anticipated market than grass in bales.

That’s because the power companies can use the pellets just as they are in coal-burning power plants. “We needed a product they can burn without upgrades and changes,” Minix said.

Also, the compressed pellets are cheaper to transport than bales — 25 tons per load instead of seven, Lowe said.

That translates into major savings in fuel and handling for moving the pellets.

The pellets also can be transported further — 100 miles is their target — than bales, and can be shipped by barge.

Right now, Midwestern has 200 tons of switchgrass and other grasses in bales. Once final adjustments are made on their equipment, they’ll start making the pellets in production quantities.

The process starts with a grinder and then the pulverized material goes by conveyor to the heart of their operation — the pellet-making machine they designed and built on site, mostly employing local craftsmen.

The insides of the giant machine are proprietary technology and thus top secret but a diagram on a control panel depicts a mechanism that somewhat resembles a car engine. The cylinders fill up with pulverized product and pistons mash the powder down into pellets.

The entire thing is a one-off piece of machinery, but Minix and Lowe have hopes that it will become an industry standard. Their machine can spit out 20 tons per hour, compared to two tons per hour for machines that make the smaller pellets.

Their patents are pending.

They hope to expand their workforce of about 30 to more than 200 by the end of 2011, working the plant 20 hours a day.

All that depends on finding a market for pellets, of course. They are in talks with power companies from as far away as Dayton.

They believe the demand will increase in the near future as state legislatures enact requirements for use of renewable energy sources. Biomass is less costly than solar and wind, they said.

Biomass won’t replace coal for power generation, they said. Coal-fired plants typically can use 8-15 percent pellets.

The more pellets they use, the better for the environment, because Midwestern’s product emits 0.15 percent sulfur, compared to 1 percent for coal, Minix said. The burned pellets leave virtually no ash, he said.

Their studies show supplies are capable of keeping up with their production capabilities — there’s enough raw material from a 100-mile radius to provide 500,000 tons per year, Minix said.

If the Wurtland plant works out, Lowe and Minix foresee developing more plants in other areas.

MIKE JAMES can be reached at mjames@dailyindependent.com or at (606) 326-2652.