Yesterday, I had the opportunity to address a large agribusiness conference in Williston, N.D. The venue for my outdoor presentation was the scenic confluence of the Missouri and Yellowstone rivers, where the famed explorers Lewis and Clark traipsed through 200 years ago this month on their return from the Pacific Ocean.

Much like rivers, the convergence of two powerful forces more often than not results in the creation of a single, more powerful force. I was reminded of this analogy because in the course of preparing for my talk, I learned that Headwaters (NYSE:HW) -- a Motley Fool Rule Breakers recommendation -- is partnering with Great Rivers Energy in a joint venture to construct a new ethanol facility. When the Blue Flint Ethanol plant is completed in the first quarter of 2007, it will be capable of producing 50 million gallons of the corn-based fuel per year.

In spite of the fact that ethanol has lost some of its recent sizzle, it is still running at historically high prices. As Archer Daniels Midland (NYSE:ADM) so ably demonstrated last week -- when it announced that its ethanol-related revenues had jumped from $25 million to $174 million -- the fuel can prove to be a tidy source of profits.

In addition to the up-front revenues the plant will likely produce, I am equally excited about the fact that Headwaters has strategically located the facility adjacent to the Coal Creek Power Station. This neat little trick will allow Blue Flint to use excess heat from the coal plant's coilers to run the ethanol plant.

So instead of relying on costly natural gas, the facility can instead use less expensive coal-powered energy. The cost savings should translate directly into higher margins for both Headwaters and Great Rivers Energy.

The venture could be especially profitable if Ford (NYSE:F) and General Motors (NYSE:GM) make good on their promise to produce 650,000 new automobiles capable of consuming E85 ethanol, and thus keep demand for the fuel growing strong.

Furthermore, should politicians in Washington tire of providing subsidies to the ethanol industry (which is not entirely beyond the realm of possibility, given how profitable the industry has become), ethanol producers may be squeezed into finding additional cost savings in order to maintain profitability. With this action, though, Headwaters is already one step ahead of its competitors.

Of course, many environmental advocates will cry foul at the move, claiming that the environmental benefits of ethanol (in the form of cleaner combusting automobiles) will be mitigated -- and perhaps even made worse -- by relying on coal to produce the stuff.

It is a fair point, but again, Headwaters is looking at the convergence of two other forces to address this problem. Specifically, it is aiming to apply proprietary nanotechnology to help clean coal by either using nanofilters to capture mercury atoms or employing nanocatalysts to reduce noxious emissions.

If it can crack the "clean coal" nut, the convergence of ethanol and an environmentally friendly energy source could prove to be a powerful combination. Not to mention one that would nicely compliment Headwaters' many other lines of business and keep the profits from ethanol flowing well into the future.

For related Headwaters' foolishness:

Fool contributor Jack Uldrich eats a lot of corn but doesn't yet put it in his car. He is the author of two books on nanotechnology, as well as Into the Unknown: Leadership Lessons from Lewis and Clark's Daring Westward Adventure. He owns stock in Headwaters. The Fool has a disclosure policy.