**Exhibit 10.8**

 
|   |                 | **1000 Superior Blvd., Suite 201**     |                       | **914 North Golden Prairie**                            |
|--------|----------------------|----------------------------------------|----------------------------|---------------------------------------------------------|
|   | ***U.S. ENERGY***    |                                   | **Wayzata, MN 55394-1873** |                                                    | **Burton,  Kansas** |
|   | ***SERVICES, INC.*** |                                   | **Office 952 745-4300**    |                                                    | **Office 316 835-2399** |
|   |                 | **Fax   952  473-1224** |                       | **Fax      315 535-8507** |

 

March 9,2004

 

BillPracht, President

EastKansas Agri-Energy, LLC

2101/2 East 4

Garnett,KS 66032

 

**RE: Agency Authorization Agreement**

 

DearMr. Pracht:

 

EastKansas Agri-Energy, LLC (EKAE) agrees to engage the services of U.S. EnergyServices, Inc. (U.S. Energy) to manage EKAE’s natural gas andelectric supply for its facilities.  TheEKAE facilities are in Garnett Kansas.

 

EKAEand U.S. Energy agree on the following terms and conditions:

 

1.     **APPOINTMENT OF U.S. ENERGYAS EKAE AGENT:**:****EKAE agrees to appoint U.S.**Energy as its agent, for purposes of managingEKAE’s natural gas and electric supply and usage for its facilities referred toabove. U.S. Energy accepts its appointment as EKAE’s agent for thosepurposes.

 

2.     **LIMITATIONS ON THE AUTHORITYOF U.S. ENERGY;******U.S.Energy has the authority to deal with third parties on behalf of EKAE inconnection with natural gas and electric matters in its capacity as EKAE’sagent. Execution of contracts on behalf of EKAE is limited to those specifiedin paragraph 6.

 

3.     **COMMUNICATIONS AND INFORMATIONSHARING:******U.S. Energy shallkeep EKAE fully informed on a regular basis with regard to U.S. Energy’sactivities, as the manager of EKAE’s natural gas and electric supply and usage,At the request of EKAE, U.S. Energy shall immediately provide EKAE with any andall information related to U.S. Energy’s activities as the manager of EKAE’snatural gas and electric supply and usage.

 

4.     **RELEASE OF ENERGYCONSUMPTION RECORDS AND BILLS:******ThisAgency Agreement serves as authorization for the release of EKAE’s energyconsumption records and invoices from utilities to U.S. Energy Services.

 

5.     **TERM OF THE AGREEMENT;TERMINATION:******ThisAgreement shall begin upon execution and shall continue month-to-monththereafter until it is terminated. Either party may terminate this Agreement atany time and for any reason, without recourse to the other party, by giving asixty-day (60) prior written notice to the other party.

 

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| EKAE  Agency Agreement |   | EKAE’s Initials  /s/        |
|------------------------|--------|---------------------------------------|
|                   |   | U.S. Energy’s Initials  /s/ |

 

6.**SERVICES:** U.S. Energy shallperform the following services for EKAE:

 

a)             Solicit bids for, negotiate, execute, andadminister NAESB and ISDA natural gas contracts and electric supplycontracts.  Administration of saidcontracts shall include:

•        Placing dailyand monthly nominations and transactions

•        Providingtimely notices

•        Review past andfuture invoices

 

b)            Solicit bids for, negotiate, execute, andadminister Commodity Account Agreements for natural gas and electricity.Administration of said contracts shall include:

•        Placing and executing orders for New YorkMercantile Exchange traded products.

•        Providing timely notices

•        Review past and future bills

 

c)             Negotiate, execute andadminister interstate natural gas and electric transportation contracts.Administration of said contracts shall include:

•        Providing dailyand monthly nominations

•        Receivingcurtailment notifications

•        Managing dailyand monthly imbalances

•        Requesting andnegotiating pipeline taps

•        Reviewing invoices for accuracy, approvingfor payment, and making payment

•        Providing timely notices

 

d)            Negotiate, execute, and administer utilitynatural gas and electric distribution contracts.  Administration of said contracts shall include:

•        Providing dailyand monthly nominations

•        Receivingcurtailment notifications

•        Managing dailyand monthly imbalances

•        Reviewing invoices for accuracy, approvingfor payment, and making payment

•        Negotiating and resolving all discrepanciesincluding imbalances

•        Providing timely notices

 

e)      Perform other related services requested by EKAE

 

7.**CONFIDENTIALITY:**

 

a)     **Nondisclosure:**U.S. Energy shall not divulge to any otherperson or party any information developed by U.S. Energy hereunder or revealedto U.S. Energy pursuant to this Agreement, unless such information is (a) alreadyin U.S. Energy’s possession if such information is not known by U.S. Energy tobe subject to another Confidentiality Agreement, or (b) is or becomes generally

 

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availableto the public other than as a result of an unauthorized disclosure by U.S.Energy, its officers, employees, directors, agents or its advisors, or (c)becomes available to U.S. Energy on a non-confidential basis from a sourcewhich is not known to be prohibited from disclosing such information to U.S.Energy**by legal, contractual orfiduciary obligation to the supplier, or (d) is required by U.S. Energy to bedisclosed by court order, or (e) is permitted by EKAE. All such informationshall be and remain the property of EKAE unless such information is subject toanother Confidentiality Agreement, and upon the termination of this Agreement,U.S. Energy shall return all such information upon EKAE request.

 

b) **Protection ofInformation About EKAE. **U.S.Energy agrees to inform its employees who work with EKAE of the requirements ofthis Section 7 U.S. Energy also agrees to protect information about EKAEwith the same degree of diligence that U.S. Energy uses to protect its ownconfidential information.

 

 
|   | Sincerely,                            |                    |
|--------|---------------------------------------|-------------------------|
|   |                                  |                    |
|   | **U.S. ENERGY SERVICES, INC.**        |                    |
|   |                                  |                    |
|   | By:                                   | */s/ Todd D.  Overgard* | (signature) |   |
|   |                                  |                    |
|   | By:                              | Todd D. Overgard        | (print) |   |
|   |                                  |                    |
|   | Title:  Chief Operating  Officer |                    |
|   |                                  |                    |
|   | Accepted and agreed to this 15th day  |                    |
|   | of March, 2004.                       |                    |
|   |                                  |                    |
|   |                                  |                    |
|   | **EAST KANSAS AGRI-ENERGY, LLC**      |                    |
|   |                                  |                    |
|   | By:                                   | */s/ William R. Pracht* | (signature) |   |
|   |                                  |                    |
|   | By:                                   | William R. Pracht       | (print) |   |
|   |                                  |                    |
|   | Title:  Chairman                 |                    |
|        |                                       |                         |  |  |  |  |

 

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