|
|
|
|
|
By Lana Robinson
Field Editor
"Build it and they will come." Supporters of a $40 million ethanol plant to be constructed in the Texas Panhandle over the next year expect the project to produce a field of dreams that will lure the region's farmers to grow more corn and sorghum.
"An ethanol plant can use either milo or corn and receives almost no difference in performance," said State Rep. David Swinford of Dumas, a strong advocate of the burgeoning Texas ethanol industry. "The main thing about it is you have to have a constant supply. This plant and other plants we're looking at will have a relationship to a grain facility that has the capacity to unload a 110-unit train."
Corn will be the primary feedstock for the first ethanol plant in Texas, which Panhandle Energies of Dumas, LP, will build between Dumas and Sunray, in Moore County. Panhandle Energies has reached an agreement with Dumas Co-op to provide about 1 million bushels of corn per month.
"That will translate into about 13 million bushels of grain a year," said Swinford. "It's hard to get local supplies to that level, so we'll have to bring some corn in, also."
Swinford said he believes area producers will have additional marketing opportunities.
"I think they can do really well, if they do their marketing correctly—and anticipate that trains do not run on time and save some of their grain in order to sell to these ethanol plants when trains don't run. I think if they play their cards right, they can add 10 to 15 cents a bushel on some of their product," he suggested.
Swinford, who has announced his candidacy for Texas Agriculture Commissioner, spearheaded the effort to at long last bring ethanol production to Texas, and was an important part of the Dumas and Moore county effort.
"There are 80 ethanol plants in the U.S and zero in Texas. We are the No. 2 ag state, with a lot of commodities. We certainly have a lot of animals to eat up the by-products from an ethanol plant. It's time for us to step up and help our farmers and ranchers add value to some of these agricultural products, and ethanol will do that," said Swinford. "We're very blessed to have those folks come in and put a plant in our neighborhood."
Swinford explained that Texas is a latecomer because those states with a mandate to use ethanol, or that offered an incentive to help ethanol producers come in and build their plants, had an advantage.
"This last session, we had an amendment that went on the Governor's economic development bill that would give incentives to the Texas ethanol plants to make them equal with the states around us," said Swinford. "We need to concentrate on adding value to our crops. In the past, we have had a habit of saying the words, but not doing the deal. We have some opportunities now to do the deal."
The Dumas Economic Development Corporation (DEDC), with assistance from the Texas Corn Producers Board, started the effort to attract an ethanol plant in 2001. DEDC and the Texas Corn Producers funded an in-depth feasibility study by BBI of Cotopaxi, Colorado. BBI is an international ethanol and renewable fuels consulting company.
"We have been working on this project in some way for more than three years and we are very pleased to have reached this point in the development," said Duke L. Pylant, managing general partner of Panhandle Energies, who was present at the Nov. 18, 2004 groundbreaking, along with national, state and local elected officials, about 80 investors, and many more economic development officials.
Swinford said the plant, when in operation, will employ 36 people with an annual payroll of $1.3 million. As many as 100 workers will be needed during the construction phase. The plant will produce a minimum of 30 million gallons of ethanol annually.
Swinford said California was the biggest market for ethanol, with a state regulation that went into effect Jan. 1, 2004 banning the use of the fuel additive, MTBE (Methyl Tertiary Butyl Ether). Ethanol is a replacement for MTBE, which he said has a lot of water problems associated with it.
"Under the Clean Air Act and if they don't use MTBE, they must come back and use ethanol or something like that. So it is about a 700 million gallon a year market in California alone," he said.
Price projections in the early planning stages pegged ethanol at $1.20 per gallon.
"Last week (first week of November), it was over $2," said Swinford. "Energy prices have escalated. I believe because this is now an energy product instead of a food product, it's going to stay and have some relationships that will keep it where it's very profitable."
Referring to himself as "an ethanol nut," Swinford said he has been a strong proponent of the alternative fuel for at least five years.
"I think it is the way the nation should go and the way we should go. It helps us diminish our dependence on foreign oil at the same time it's helping our markets, and it makes our air cleaner. It's renewable and just a good deal all the way around. Environmentally, it's great. Financially, it's great for our communities, great economic development. I just couldn't say enough good things about ethanol," he said.
According to the Renewable Fuels Association, 81 ethanol plants are in operation and 14 additional plants are under construction, including the one in Texas.
Curtis Donaldson, of Georgetown, National Ethanol Vehicle Coalition (NEVC) vice chairman, said ethanol is not used straight, but is formulated as a blend of 15 percent gasoline and 85 percent ethanol known as E-85. Donaldson said General Motors, Ford, Daimler Chrysler, Mazda, Mercedes-Benz, and Mercury are producing more and more FFVs (Flexible Fuel Vehicles), capable of operating on either ethanol, gasoline, or a mixture of the two.
"Many people are already driving vehicles that are flexible fuel capable," said Donaldson. "There really is no difference under the hood of an FFV. You can open it up and wouldn't see any difference. If you're not sure, you can go to the NEVC website (www.E85fuel.com) and plug in your VIN (vehicle identification number), and it will be able to come back and tell you whether your vehicle is FFV compatible. That's important, because let's say we have the infrastructure for E-85 in Central Texas, but you go outside the area, to Louisiana where there is none, the vehicle would also be able to operate on gasoline."
Donaldson said in states like Kansas and Nebraska, and other Cornbelt states, where they not only have the feedstock production but also the ethanol facilities, a gallon of E-85 fuel is running 10 to 15 cents lower than a gallon of gasoline.
"I think E-85 might be more expensive in Texas, if we're bringing it in, but if we can produce it here, I think it will be competitive," he said.
Donaldson pointed out that some new technology in corn may improve yields and help with the economics of ethanol. Still, he says it's kind of a "chicken and egg" proposition until you get it up and running.
"It really comes down to supply and demand. You get the plant built and talk growers into growing the crops, so you have feedstock. That addresses the supply side. Then we have to get the demand side up by educating people on how it helps the local economy and supports the farm industry..."
Beyond grower participation, an operational facility, and a successful education campaign on what kind of vehicles to buy, the final component is the infrastructure.
"This is a very critical piece, getting the infrastructure or dispensers at these gasoline stations, so when you and I pull in at the same station, we can go inside and get our donut and our coffee while we're filling up with E-85 and not have to go out of the way," said Donaldson.
