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Posted on  

October 4, 2001

Ethanol Project has Financing, Seeking Air-Quality Permit

GREAT FALLS, MT - Planned financing of a proposed $300 million ethanol plant hinges on Agri-Technology Corporation getting a requested air-quality permit from the Department of Environmental Quality, the company president said last week.

A public meeting on the permit application was held Wednesday in Great Falls with comments accepted until Oct. 9.

Gary Hebener has been pitching the project for 10 years but financing problems have derailed past efforts. "We've not been this close before," Hebener said.

Hebener declined to detail the financing plan, except to say the money is coming from private sources and agreements won't be signed until the permit has been obtained.

A tax break established by the 2001 Legislature that allows taxes on equipment used by new ethanol to be deferred for 10 years allowed him to secure financing, Hebener said.

Plans call for a $300 million facility capable of making 100 million gallons of ethanol a year.

Ethanol, which would be made locally from wheat and barley, can be used as a fuel by itself or added to gasoline to reduce carbon dioxide emissions.

The plant also will produce 500,000 tons of wheat and barley meal for animal feed and "vital wheat gluten," a baking additive, Hebener said.

The ethanol plant has to pass tougher air-quality requirements than other projects because the Environmental Protection Agency considers it a chemical processing plant, said Dave Klemp, the state agency's air-permitting supervisor.

"They've had to go through additional analyses, but those demonstrate this project has a low impact to the environment and human health," Klemp said.

The plant will use a natural gas-powered boiler to mill and cook grain and convert it to ethanol, and based on other ethanol plants, noise and odor aren't expected to be a problem, Klemp said.

If the permit is approved this fall, siting work on the plant could begin before the end of the year with construction starting next spring, Hebener said.

The plant would employ 140 permanent workers, with 400 to 500 workers needed during construction, said Tim Babcock, Agri-Tech vice president and a former Montana governor.

It will use 25 million to 30 million bushels of barley and 10 million bushels of high protein wheat a year, Hebener said.

Montana Grain Growers Association Executive Vice President Richard Owen said the ethanol plant's demand for grain will increase competition and that might boost grain prices.

However, Owen said it's hard to predict how production will adjust to an increase in demand.

"We haven't had a lot of ethanol plants that have used wheat and barley in the West," he said. "There are lots of studies using corn, but not a lot of studies on wheat and barley."

If built, Agri-Technology's ethanol plant will the only one in Montana. Past ethanol productions have gone out of business.



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