Document:

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September 12, 2001

Brian Minish
Western Plains Energy, LLC
800 Main, P.O. Box 567
Hoxie, Kansas 67740

Dear Mr. Minish:

The purpose of this letter is to set forth the understanding and agreement
between U.S. Energy Services, Inc. (U.S. Energy) and Western Plains Energy, LLC
(CUSTOMER) regarding the provision of energy management and engineering
services.

TERM - The initial term of this Agreement shall be from September 1, 2001
through August 31, 2002, and thereafter for successive one year terms unless and
until terminated by either party with thirty (30) days notice.

U.S. ENERGY SHALL:

1.       Provide a detailed economic comparison of receiving natural gas
         transportation service from a Local Distribution Company (LDC), or
         directly connecting with Alternative Pipeline (Pipeline) sources for
         facility sites under consideration. U.S. Energy will provide CUSTOMER
         with engineering cost estimates, route drawings, and a project timeline
         related to constructing pipeline facilities directly connecting
         CUSTOMER with PIPELINE.

         In the event that a direct connect pipeline option is selected, U.S.
         Energy will submit a tap request to PIPELINE. Engineering and
         construction management services related to constructing facilities
         that will interconnect with PIPELINE can be provided by U.S. Energy
         Services on a fee basis.

2.       Determine whether firm, interruptible, or a blend of transportation
         entitlement with PIPELINE will provide the lowest burnertip cost for
         CUSTOMER. Factors that will be considered include PIPELINE credits for
         the new interconnect, cost of an alternate fuel the system, and
         availability of specific receipt point capacity. Analysis of the costs
         and benefits will require U.S. Energy to negotiate as CUSTOMER'S agent
         with PIPELINE and other potential third party shippers.

3.       Provide natural gas supply information to minimize the cost of natural
         gas purchased by CUSTOMER. This will include acquiring multiple supply
         quotes and reporting to CUSTOMER the various supply index and fixed
         prices. U.S. Energy will not take title to CUSTOMER gas supplies, but
         will communicate supply prices and potential buying strategies.

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4.       Negotiate directly with PIPELINE, other shippers, and suppliers to
         provide transportation, balancing, and supply agreements that meet
         CUSTOMER'S performance criteria at the lowest possible cost.

5.       Provide daily nominations to PIPELINE and other applicable parties for
         CUSTOMER. This will include daily written confirmations to CUSTOMER of
         all nominations and actual daily usage. U.S. Energy will utilize
         telemetering to obtain actual usage on a real time basis.

6.       Provide advisory services to CUSTOMER regarding electric pricing and
         service agreements. Such services will include, but are not limited to,
         the following:

         a.       Evaluation of regulatory and legislative precedent regarding
                  electric supplier choice options.

         b.       Identification of qualified electric suppliers.

         c.       Evaluation of self-generation options.

         d.       Development and implementation of an electric sourcing
                  strategic plan. Such plan may include a competitive bid
                  process and/or installation of on- site generation.

         e.       Negotiation of electric service agreements that meet the
                  pricing and reliability requirements of CUSTOMER.

7.       Prepare detailed cost estimates for substation, transformation and
         distribution equipment required for service options proposed by service
         providers.

8.       Prepare, implement and modify, as required, an electric and natural gas
         price risk management plan. The objective of the plan is to achieve
         stable forward prices that are consistent with CUSTOMER's risk profile
         and pricing objectives.

9.       U.S. Energy will also evaluate on an ongoing basis other options that
         may reduce energy costs.

10.      Provide a monthly projection of energy cost (natural gas and
         electricity) and annual summaries.

11.      Provide a consolidated monthly invoice that reflects all applicable
         costs. U.S. Energy will be responsible for reconciling and paying all
         shipper and supplier invoices.

FEES: U.S. Energy's fee for services described in items 1-11 during the initial
term of this agreement shall be $2,800 per month, plus pre-approved travel
expenses not to exceed $2,500 during the initial term of this agreement. $500 of
the monthly fee will be payable upon billing. The remaining $2,300 of the
monthly fee will be deferred and collected only when and if investor funds are
released from Escrow. In the event funds are not released from Escrow, this
Agreement shall

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become null and void and both parties will be relieved of professional and/or
financial obligations due the other party, including the accrued monthly
charges.

TERMINATION: CUSTOMER shall have the unilateral right to terminate this
Agreement, with or without cause, at any time during the initial term and any
subsequent term of the Agreement with thirty (30) days written notification if
not satisfied with U.S. Energy's service.

BILLING AND PAYMENT: On the first of the month, U.S. Energy shall invoice
CUSTOMER. CUSTOMER shall pay U.S. Energy within ten (10) days of receipt of
invoice.

INDEPENDENT CONTRACTOR: U.S. Energy shall be and remain an independent
contractor-consultant during the term of this Agreement, and U.S. Energy, its
directors, officers and employees, shall not act for, or bind CUSTOMER in any
manner, unless specifically directed by CUSTOMER.

CONFIDENTIALITY: U.S. Energy shall not divulge to any other person or party any
information developed by U.S. Energy hereunder or revealed to U.S. Energy
pursuant to this Agreement, unless such information is (a) already in U.S.
Energy's possession if such information is not known by U.S. Energy to be
subject to another Confidentiality Agreement, or (b) is or becomes generally
available to 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 source which
is not known to be prohibited from disclosing such information to U.S. Energy by
legal. contractual or fiduciary obligation to the supplier, or (d) is required
by U.S. Energy to be disclosed by court order, or (e) is permitted by CUSTOMER.
All such information shall be and remain the property of CUSTOMER unless such
information is subject to another Confidentiality Agreement, and upon the
termination of this Agreement, U.S. Energy shall return all such information
upon CUSTOMER's request.

CONFLICT OF INTEREST: U.S. Energy will not, directly or indirectly, engage in
any activities which would result in any conflict of interest with CUSTOMER, or
enable U.S. Energy to benefit from its relationship with CUSTOMER, except as
provided in this Agreement or approved by CUSTOMER.

NOTICES: Any formal notice, request or demand which a party hereto may desire to
give to the other respecting this Agreement shall be in writing and shall be
considered as duly delivered as of the postmark date when mailed by ordinary,
registered or certified mail by said party to the following addresses:

CUSTOMER:                  Western Plains Energy, LLC
                           800 Main, P.O. Box 567
                           Hoxie, Kansas 67740
U.S. Energy:
         (Payment)         U.S. Energy Services, Inc.
                           c/o US Bank SDS 12-1449
                           Account #: 173100561153
                           P.O. Box 86
                           Minneapolis, MN 55486

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         (Notices):        U.S. Energy Services, Inc.
                           1000 Superior Blvd. Suite 201
                           Wayzata, MN 55391
                           Attn: Casey Whelan

ASSIGNMENT OR AMENDMENT: The Agreement may not be assigned or amended without
the written consent of U.S. Energy and CUSTOMER.

APPLICABLE LAW: The Agreement shall be construed in accordance with the laws of
the State of Minnesota.

ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
Agreements and understanding pertaining hereto.

If the above correctly sets forth CUSTOMER'S understanding of the Agreement,
please so indicate in the spaces below and return one copy to U.S. Energy,
Attention: Casey Whelan.

U.S. ENERGY SERVICES, INC.

By:  /s/ Casey Whelan
Title: Vice President

ACCEPTED AND DATED THIS 12th
DAY OF September, 2001.

CUSTOMER
By:  /s/ Jeff Torluemke
Title: Chairman of Managers<Page>
                                                                    Exhibit 10.8
                        AGREEMENT FOR OPTION TO PURCHASE

         NOW on this 15th day of September, 2001, comes LAURIE BAALMAN, JOANNE
BAALMAN HOLLINGER, hereinafter referred to as Seller, along with the consent of
MICHAEL BAALMAN and DONALD BAALMAN, all being the heirs of Harold Baalman,
deceased, and hereby state and agree as follows:

         WHEREAS, Laurie Baalman and JoAnne Baalman Hollinger inherited the
following described real estate from the Estate of Harold Baalman, to-wit:

                  North Half of that part of Section Three (3), Township Eleven
                  (11), Range Thirty-one (31), lying 200 feet South of a line
                  parallel to the Union Pacific Railroad, Gove County, Kansas;
                  and

         WHEREAS, the above parties agree to sell and convey to HEARTLAND
ETHANOL, L.L.C., hereinafter referred to as Purchaser, the above described real
estate under the following terms and conditions, to-wit:

                               OPTION TO PURCHASE

1.       TERM

         Sellers hereby grant to Purchaser an exclusive option to purchase the
above noted real estate said option to begin September 15, 2001 and terminate on
March 1, 2003.

2.       CONSIDERATION OF OPTION TO PURCHASE

         Purchaser agrees to pay to Seller a nonrefundable sum of $1,000.00 at
the time of the signing of this agreement in consideration of granting to
Purchaser the exclusive option to purchase the above said real estate during the
time above specified. Said $1,000.00 will be paid 1/2 to Laurie Baalman and 1/2
to JoAnne Baalman Hollinger.

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                         EXERCISE OF OPTION TO PURCHASE

         In the event Purchaser chooses to exercise its option to purchase
hereunder, the following terms and conditions shall apply, to-wit:

3.       LEASE OF NON-UTILIZED ACREAGE

         Any portion of said real estate not utilized by Purchaser in the course
of running the business of Heartland Ethanol, L.L.C. shall be leased exclusively
to Donald Baalman by Heartland Ethanol, L.L.C. under normal lease terms and
conditions practiced in the area.

4.       NOTICE OF LEASE TERMINATION

         Purchaser shall give written notice of intent to exercise their option
to purchase, thereby giving notice of farm termination to Donald Baalman, by
mailing said notice and termination to Michael. H. Haas, Attorney at Law, with
mailing address of P.O. Box 407, Hoxie, Kansas 67740, on or before the 1st day
of March, 2003. Michael H. Haas shall then notify Donald Baalman of Purchaser's
intent to purchase and of the farm lease termination. This notice will take
precedent over any Kansas termination of farm lease laws. If said notice is not
given as stated herein, this option to purchase shall be null and void.

5.       PURCHASE PRICE

         Purchaser shall pay to Seller a minimum sum of $100,000.00, or
$1,000.00 per acre, whichever is the larger amount.

6.       SURVEY

         Purchaser, at purchaser's expense, shall have the above noted real
estate appropriately surveyed to determine the exact acreage being sold.

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7.       CONTRACT

         A standard. contract will be drawn and entered into by the parties
hereto and upon the showing of marketable title in Seller, the purchase price as
hereinbefore stated shall be paid by Purchaser to Seller in the manner and form
set forth in said contract.
         IT IS SO AGREED,

SELLER                                           PURCHASER

                                                 Heartland Ethanol, L.L.C.

 /s/ JoAnne Baalman Hollinger                     /s/ Jeff Torluemke, Chairman
---------------------------------------          -------------------------------
JoAnne Baalman Hollinger                         Jeff Torluemke

 /s/ Laurie Baalman
---------------------------------------
Laurie Baalman

 /s/ Michael Baalman
---------------------------------------
Michael Baalman

 /s/ Donald Baalman
---------------------------------------
Donald Baalman

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                                     AMENDED
                        AGREEMENT FOR OPTION TO PURCHASE

         NOW on this ____ day of December, 2001, comes LAURIE BAALMAN, JOANNE
BAALMAN HOLLINGER, MICHAEL BAALMAN and DONALD BAALMAN, heirs of Harold Baalman,
deceased, and do hereby supplement this AMENDED agreement for the original
AGREEMENT FOR OPTION TO PURCHASE dated September 15, 2001 previously entered
into by said parties in order to make necessary and appropriate changes and
additions.

         WHEREAS, Laurie Baalman and JoAnne Baalman Hollinger inherited the
following described real estate from the Estate of Harold Baalman, to-wit:

                  North Half of that part of Section Three (3), Township Eleven
                  (11), Range Thirty-one (31), lying 200 feet South of a line
                  parallel to the Union Pacific Railroad, Gove County, Kansas;
                  and

         WHEREAS, said Laurie Baalman and JoAnne Baalman Hollinger, hereinafter
referred to as Seller, agrees to sell and Western Plains Energy, L.L.C.,
hereinafter referred to as Purchaser, agrees to purchase the above described
real estate under the following terms and conditions, to-wit:

                               OPTION TO PURCHASE

1.       TERM.

         Seller hereby grants to Purchaser an exclusive option to purchase the
above noted real estate said option to begin ____________, 2001 and terminate on
March 1, 2003.

2.       CONSIDERATION OF OPTION TO PURCHASE.
         Purchaser agrees to pay to Seller a non-refundable sum of $1,000.00
upon signing of this agreement in consideration of granting to Purchaser the
exclusive option to purchase said real estate during the time above specified.
Said $1,000.00 will be paid $500.00 to Laurie Baalman and $500.00 to JoAnne
Baalman Hollinger.

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         The parties agree that the sum of $1,000.00 previously paid by
Purchaser will be returned to Purchaser and checks reissued as noted above.

                         EXERCISE OF OPTION TO PURCHASE

         In the event Purchaser chooses to exercise said option to purchase
hereunder, the following terms and conditions shall apply, to-wit:

1.       PRESENT TENANT FARMER.

         Don Baalman is the present tenant farmer on the above noted real
estate. At the time said Option to Purchase is exercised, Purchaser, Western
Plains Energy, L.L.C., agrees to pay Don Baalman a lump sum payment of
$30,000.00 cash.

2.       CROPS.

         All parties acknowledge that Don Baalman has planted wheat on the above
noted real estate and that he will be entitled to harvest said wheat crop in
year 2002 for his benefit.

3.       RELEASE AND RELINQUISHMENT

         Upon completion of the wheat harvest in 2002 and upon complete payment
of the $30,000.00, Don Baalman agrees to release and relinquish any and all
interest that he may have in and to said real estate, either as the tenant
farmer or as an heir of the Estate of Harold Baalman.

4.       PURCHASE PRICE.

         Purchaser agrees to pay Seller the sum of $100,000.00 for said real
estate, the purchase same to be payable $50,000.00 to Laurie Baalman and
$50,000.00 to JoAnne Baalman Hollinger.

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5.       SURVEY.

         Purchaser, at purchaser's expense, shall have the above noted real
estate appropriately surveyed to determine the exact acreage being sold.

6.       WRITTEN NOTICE.

         If Purchaser chooses to exercise their option to purchase, Purchaser
shall give written notice to their intent to exercise their option to purchase
to Michael H. Haas, Attorney at Law, P.O. Box 407, Hoxie, KS 67740, on or before
March 1, 2003. Said attorney will then notify the Baalman heirs that Purchaser
has chosen to exercise their option to purchase.

7.       CONTRACT.

         A standard contract will be drawn, at Seller's expense, and the same
entered into by the parties hereto. Seller shall provide marketable title either
by an abstract of title or title insurance, at Seller's expense. Said contract
shall contain standard clauses therein and shall be drawn to the satisfaction of
all parties.

         IT IS SO AGREED.

SELLER                                            PURCHASER

                                                  Western Plains Energy, L.L.C.

---------------------------------------          -------------------------------
JoAnne Baalman Hollinger                         Jeff Torluemke, CEO

---------------------------------------
Laurie Baalman

---------------------------------------
Michael Baalman

---------------------------------------
Donald Baalman

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