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April 11, 2003

Ethanol plant plans back on track

Penn-Mar Ethanol has selected York, Adams and Lancaster counties as possible sites for the plant.

By SEAN ADKINS
Daily Record staff
Friday, April 11, 2003

HARRISBURG — A southcentral Pennsylvania ethanol plant that has languished on the drawing board for more than a year is now slated to be built in fall 2003 or early 2004.

On Thursday, representatives from Penn-Mar Ethanol in York and state and local officials met at the Farm Show Complex to provide further details concerning an $80 million ethanol plant that will create 30 to 35 skilled jobs.

Penn-Mar Ethanol has selected York, Adams and Lancaster counties as possible sites for the plant which would produce more than 50 million gallons of ethanol per year, said Scott Welsh, company project manager.

Since March 2002, the company has worked to whittle down the number of potential plant sites from a list that included Adams, Berks, Cumberland, Franklin, Lancaster, Lebanon and York counties.

While Penn-Mar does not plan to pick a site before May, the company has hired firms to develop and design the 30-acre lot.

In March, Penn-Mar hired Buchart-Horn in York to complete the permit and land development process for the plant. Spartanburg, S.C.-based Lockwood Greene will design and build the property.

But Penn-Mar must decide on a site before Buchart-Horn can start investigating the environmental and zoning permits needed for the project to proceed, said Brian S. Funkhouser, regional vice president of Buchart-Horn/Basco Associates.

The firm will examine the land for historical and archaeological issues and plans to work with the Pennsylvania Department of Environmental Protection during the permitting process, he said.

Within the next few months, Lockwood Greene will begin drafting plans for the ethanol plant — a facility that will rank among the largest ethanol plants in the country — which may include two large buildings, a storage structure and conveyors for corn, said Rob Smith, group director for the company.

The plant will be built within relative proximity of railroad tracks, water, natural gas lines and sources of electricity, he said.

After the permitting process is complete, Lockwood Greene will take about a year to build the plant, said Brian Utz, a co-founder of Penn-Mar.

The life expectancy of the plant ranges from 25 to 35 years, said Dan Wolf, presidnet of Penn-Mar Ethanol.

Once the project is operational, the plant will convert 20 million bushels of corn into more than 50 million gallons of ethanol per year.

Roughly 7 million bushels of corn will come from farmers in Pennsylvania and Maryland.

The plant will buy the remainder of the corn, which will arrive at the site by rail, Wolf said.

The ethanol produced by the plant will be sold to petroleum companies as a 10 percent environmentally friendly additive to gasoline.

Ethanol is a renewable fuel that increases octane and can be used to meet clean air regulations by helping to reduce automobile emissions.

Besides the production of ethanol, the plant will manufacture dried distillers grain — a high-protein food ingredient that farmers commonly feed to cattle.

Carbon dioxide used for food processing and by the soft drink industry will flow from the plant, Welsh said.

The plant will produce goods that can be sold on the open market as well as provide farmers with an alternative venue to sell their corn while reducing the country’s dependence on foreign oil.

James Eisenhour, a farmer from Wellsville and Penn-Mar Ethanol investor, said he plans to funnel half his corn crop to the new plant while using the remainder to feed his livestock.

“I just thought we should have another market to sell our corn and get rid of our need for foreign oil,” he said.

For more than a year, Penn-Mar has worked to secure about 45 plant investors with strong ties to Pennsylvania, Maryland and Delaware.

Primary funding for the plant will come from private investors and bank loans, Welsh said. New Hope-based JJR Partners developed a business plan and will secure investors, he said.

A previous feasibility study and business plan has demonstrated that project costs would hover around $80 million instead of the $40 million formerly projected, said Russ Montgomery, president of the Regional Economic Development District Initiatives in Harrisburg.

State grants and the 13 farmers from Pennsylvania and Maryland that comprise Penn-Mar Ethanol paid the bills on the business plan and early studies.

While Penn-Mar is not dependent on state funding for the project, a chance does exist that the company could be eligible for business tax credits related to the clean air act, said Sen. Mike Waugh, R-Shrewsbury.

Those tax incentives are ideas that are still in the works, he said.

Regardless of the funding source, the project will produce $85 million per year of direct economic activity for the state, Welsh said.

“Pennsylvania is a natural fit for this project,” said Dennis Wolf, Pennsylvania Secretary of Agriculture.

 

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