Aviation fuel maker, AI cloud hyperscaler bet big on small Midwest towns.
What do jet fuel and data centers have in common? They bring people together. In the U.S. Midwest these days, mega-projects in these sectors are bringing folks together in more ways than one.
In Moorhead, Minnesota, DG Fuels is investing $5 billion to build a sustainable aviation fuel (SAF) plant just across the state line from Fargo. In Johnstown, Ohio, not far from the exact geographic center of the Buckeye State, Cologix is investing $7 billion to construct an 800-megawatt data center campus. And in Holdrege, Nebraska, DG Fuels is committing an additional $4.2 billion to erect another SAF factory in rural Phelps County.
Throughout the heartland of the country, corporate investment deals like these are gravitating to small towns and farming communities, places that have long embraced the importance of human connection. I asked the CEO of DG Fuels and the CFO of Cologix to describe the factors behind the choice of these locations.
Fueling a New Kind of Flight
You can drive the 564 miles from Holdrege to Moorhead in a little over eight hours, but the company investing a combined $9.2 billion in these two communities would prefer that you fly.
That’s because their end product — sustainable aviation fuel (SAF) — is engineered to not just revolutionize air travel but also make it cleaner and greener.
Washington, D.C.–based DG Fuels LLC announced last August 7 that it would invest $4.2 billion to establish its first Midwest SAF plant in tiny Holdrege in Phelps County in south central Nebraska. With 5,549 people, Holdrege is known for growing crops and being home to The Speakeasy, a restaurant that many people regard as the best steakhouse in all of Nebraska.
Fittingly, the eatery is located in the middle of a remote cornfield.
The new SAF plant here will produce 193 million gallons of zero or low-CO2 lifecycle emissions SAF per year and meet all commercial jet fuel standards. Production is set to begin in 2030 on a facility that is expected to generate $55 billion in economic impact over 30 years. Upon operation, the factory will employ 640 full-time workers and reach $54 million in total annual payroll. Annually, DG Fuels will purchase 1.2 million tons of corn stover and pump $144 million into the pockets of farmers in south central Nebraska.
“The sheer volume of biomass makes the Midwest a great location for producing sustainable aviation fuel. Having a proactive state is always a good thing for a project. Minnesota on its own worked out a deal to have SAF refined there. We wish more states did that.”
— Michael Darcy, Chairman & CEO, DG Fuels
Ron Tillery, executive director of Phelps County Development Corp., says the project will require 1,280 megawatts of electrical power and is one of 11 SAF plants that DG Fuels plans to build around the country.
DG Fuels followed up the Nebraska announcement with an even bigger one in Moorhead a few months later. On November 1, the firm said it would commit $5 billion toward a 193-million-gallon-per-year SAF plant in this western Minnesota city of 45,422 residents, who are part of the larger Fargo-Moorhead MSA of 262,620 people.
This plant on 750 acres is expected to employ 650 people and generate a total economic impact of $50 billion. The end product will be delivered to Minneapolis-St. Paul International Airport, where the SAF will be mixed with regular commercial jet fuel and supplied to customers like Delta Air Lines, American Airlines, United Air Lines and others. The Minnesota SAF Hub is the nation’s first large-scale hub dedicated to scaling the production of SAF to replace conventional jet fuel.
Michael Darcy, chairman and CEO of DG Fuels, tells Site Selection that his company selected Holdrege and Moorhead because they can supply a steady stream of cellulosic biomass and natural gas.
“You need a site with a labor force, and it is hard to get manpower in North Dakota,” Darcy says. “It’s easier in Moorhead. You need logistics to get the product out. That is also true for the sites we selected in Nebraska and Louisiana.”
In addition to Holdrege and Moorhead, DG Fuels is pursuing plans to establish SAF factories in St. James Parish, Louisiana, and Limestone, Maine. Darcy confirmed that site selection for other locations is ongoing.
“All the facilities are cookie-cutter,” says Darcy. “One of the advantages of the Moorhead site is that the flare gas will be flared off; 90% is flare gas, and the remainder is RNG [renewable natural gas]. We can send CO2 out in sequestration and back into North Dakota. That is why Moorhead is an excellent site. We can rail aviation fuel to refineries in Minnesota to feed our customers at the airport. That is a barrier in the rest of the country. Minnesota helped us with the logistics.”
Decarbonizing flight is the end goal, he says. “Ninety-seven percent of the biomass carbon goes out as jet fuel,” he says of his firm’s process. “It is a carbon-neutral process. We are not feedstock limited. There is enough biomass out there to meet America’s demand for jet fuel.”
Asked why his company is bullish on the Midwest, Darcy says, “The sheer volume of biomass makes the Midwest a great location for producing sustainable aviation fuel. Having a proactive state is always a good thing for a project. Minnesota on its own worked out a deal to have SAF refined there. We wish more states did that.”
DG Fuels is investing $9.2 billion to build 2 sustainable aviation fuel plants in the Midwest: one in Moorhead, Minnesota, and one in Holdrege, Nebraska. The firm has also announced SAF facilities in Louisiana and Maine and plans to select seven other sites across the country.
Source: DG Fuels
According to Markets and Markets, the global SAF market was US$1 billion in 2023. It is forecast to rise to US$16.8 billion by 2030, increasing at a CAGR of 47.7% during that time.
Cologix Brings Billions to Buckeyes
Denver-based Cologix is a data center colocation services and interconnection company that operates a dozen cloud hubs across North America. Toronto, Montreal and Vancouver house the firm’s Canadian operations, while its U.S. hubs are in Lakeland and Jacksonville, Florida; Ashburn, Virginia; Silicon Valley, California; Dallas; Des Moines; Minneapolis; New Jersey; and Columbus, Ohio.
It is in the Columbus region of Central Ohio where Cologix is making its biggest bet: a recently announced $7 billion data center campus in Johnstown in Licking County. Located just 10 miles south of the exact geographic center of Ohio (a town appropriately named Centerburg), Johnstown is home to 5,350 people. Upon buildout, this small town will be home to 2 million sq. ft. of AI hyperscaling data centers spread out over 154 acres occupied by Cologix and its 800 megawatts of capacity.
Cologix operates four data centers in Columbus. The new site in Johnstown will be home to eight, says Scott Schneider, chief financial officer of the company.
“The most important factor for us is proximity to our existing data center campus in Columbus,” he says. “The first thing we look at is the radius around our data centers. Second is line of sight to power. Third is proximity to fiber. A data center doesn’t do much good if you can’t move data to and from it. There are dozens of other location factors, but those are the biggest.”
While Licking County has become home to other massive data centers and what will soon be Intel’s largest semiconductor manufacturing complex, Johnstown is a newbie to this field.
Proximity to other data centers played a role, Schneider said.
“Being close to New Albany and to Google, Amazon and Intel was instrumental in our decision,” he noted. “A lot of tech activity is there already, and we like that. Being close to these other AI hyperscalers was a factor that ultimately sealed the deal in favor of Johnstown.”
Around 25 to 35 highly trained technicians and engineers will be employed full-time at each of the eight new data centers for Cologix in Johnstown, says Schneider.
Grow Licking County, One Columbus, JobsOhio and American Electric Power all played pivotal roles in helping to seal the deal. Alexis Fitzsimmons, executive director of Grow Licking County, says, “Licking County is now a hot spot for data centers, as is the state of Ohio in general. Data center operators are looking to reduce their risk as much as possible. They have found that Ohio is a great fit for that.”
She adds that “we have a very collaborative environment, supportive elected officials and an ability to provide the necessary infrastructure to support their growth. She noted that while Johnstown is providing a tax abatement to the project, “there are no county incentives involved.”
Microsoft recently purchased several hundred acres to build $3 billion worth of data center campuses in Heath, Hebron and New Albany. Meta is expanding in Licking County as well.
A high concentration of utilities including electric power, water and sewer makes Central Ohio extremely attractive to big tech companies, says Fitzsimmons. “Since 2018, we have added more than $40 billion in private capital investment, more than $800 million in annual payroll, and more than 10,000 new jobs.”
For a county of 183,000 people, those are gigantic numbers and evidence that global firms building the connected world of the future love the Midwest.
