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Posted on  

August 5, 2003

2 ethanol plants set for construction


DUMAS - Plans for a Louisiana-based company to build two $40 million ethanol plants in Dumas and Sunray, with a possible third location near Perryton, were announced Monday by the Dumas Economic Development Corporation.

The plants would be the first for ethanol in Texas, according to Robert Worley, Dumas EDC executive director.

Each plant will produce 40 million gallons of ethanol per year, with the capability to expand to 80 million gallons, Worley said, and each is expected to employ 36 people, with a $1.3 million payroll initially.

Duke Pylant of Panhandle Energies LLC, a Shreveport, La., corporation, said the family business is owned by his father, Jack, and himself, and he will move to the Texas Panhandle to serve as general manager.

The family has been in the ethanol business for about 17 years, Pylant said, running plants in Louisiana as well as in the Virgin Islands.

"One of the primary reasons we're going to Texas is the location of the feedlots. We have a byproduct, distillers dried grain (DDG), that is primarily fed to the dairy and beef herds. The less you truck it, the better off you are," he said.

Pylant said the company already has a buyer for all of the product and now officials are working out the final details to getting the plants built and online.

Part of the funding for each plant will possibly come from the Texas Capital Fund. The state subsidy offers $3 million per plant for 10 years, Worley said, adding local investors will have opportunities as well.

State Rep. David Swinford, R-Dumas, a major proponent of getting ethanol production located in Texas, said 72 ethanol plants are operating in the United States. Congress is working on a mandate to phase out the current additive to gasoline, methyl tertiary butyl ether (MTBE), in the next five years.

The replacement must comply with the renewable fuel standard and ethanol or bio-diesel are the safest, cleanest-burning, and most cost-effective of the replacement products, Swinford said.

"This means we will need approximately 70 more of these plants to make the amount of ethanol that will be required," he said, adding as much as 5 billion gallons of ethanol will be needed in six years.

Texas is the second largest agriculture state and the No. 1 biomass producing state, Swinford said. Ethanol can be made out of grains, wood products, grasses, fruits, vegetables, municipal waste or any cellulose or organic matter that can be distilled.

He said with the incentives in Texas, it is possible more plants will be located in the region, including possibly in Levelland, Plainview and Hereford.

The beauty of making ethanol in this region, Swinford said, is the ethanol sells for in excess of $1 per gallon, one-third of the feed stocks will be sold as a supplement feed for livestock, and the carbon dioxide captured from the process can be used to put the fizz in colas.

Additionally, Pylant said, "we're definitely looking at methane gas" to partially fuel the plant because of the close proximity of the feedyards.

"They are trying to get rid of the manure and we would definitely have a use for it. We would use the methane gas to supplement our gas usage, which makes it more attractive to the bottom line," he said.

Texas Agriculture Commissioner Susan Combs, in Dumas for the announcement, said every 1-percent increase in value added to an agriculture product adds $1 billion to the state's economy.

"This is not a flash in the pan," Combs said. "Getting rid of MTBE is the best thing."

The possibilities are exciting for the timber industry in east Texas, where it has pulp to get rid of, as well as for the rice and cotton industries with their hulls, she said.

Pylant said the Panhandle-based plants will use primarily grain sorghum and wheat. One bushel of grain will produce 2.6 gallons of ethanol. He estimated each plant will use about 11 million bushels per year at boiler-plate capacity.

Worley said details of economic incentives have yet to be worked out, but they are estimating any direct incentives will be paid back within a year.

An optimistic plan would have ground-breaking take place within the next six months on the first plant and it would be operational with a year from that, he said.

Pylant said he doesn't expect the plants to be built simultaneously, but they will be built about the same time. He said the company will try to fill the plant manager, lab workers, equipment supervisors, maintenance, general laborers, office personnel and grain handler positions from the local labor pool when possible.

The same goes for buying local grain, he said.

"Our whole focus is to try to be a good neighbor. We don't want to come in and buy from somewhere else. We want to do all we can right there. Then we'll go outside and get what we need."



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