Experts say region has pluses to draw ethanol plant here

MEADVILLE, Pa. – State bans on MTBE and proximity to the East Coast can help Crawford County, Pa., in its bid to bring an ethanol production facility to western Pennsylvania.

That’s the opinion of experts who addressed a committee of farmers and regional developers April 21 in Meadville, Pa.

That committee is trying to get the go-ahead for a plant in the area.

Demand. “The use of MTBE (methyl tertiary butyl ether) or ethanol as oxygenates [in gasoline] is tremendous,” said Todd Sneller, administrator for the Nebraska Ethanol Board.

“Bans on MTBE have created huge ethanol demands and given rise to ethanol production as we see it today,” he added.

Federal and state production incentives hit hard in the 1990s. Nebraska and other Corn Belt states built ethanol plants and developed markets.

But ethanol production can’t remain a Midwestern phenomenon, Sneller said.

Northwestern Pennsylvania – within a day’s drive to the population-rich East Coast yet close enough to supplies in the Corn Belt – has a decent shot at getting its own ethanol production plant.

Keystone State needs. Earlier this month, Pennsylvania’s Environmental Protection Secretary Kathleen McGinty testified before the House Environmental Resources and Energy Committee the state should consider a three-year phase-out of MTBE.

McGinty said the “potential health effects and nuisances associated with MTBE” warrant a ban.

She recommended giving the industry at least three years to develop the infrastructure necessary to meet federal oxygenate requirements, including improving transportation methods or bringing ethanol production to the state.

The Philadelphia area alone would demand 62 million gallons of ethanol each year for MTBE replacement if the state pushed for a ban, according to David Bingaman, Pennsylvania Department of Agriculture chief of agricultural technology.

That ban would add to the 1.3 billion gallons of ethanol already consumed each year in the Northeastern states.

Those demands would support approximately 50 15-million gallon ethanol production plants, Bingaman said.

Supply. Sneller said ethanol production interest has picked up outside the Corn Belt because of consumption potential in the Northeastern states – including New York and Connecticut, which both have MTBE bans on the books.

“The only way to supply the area is to have plants in this area,” Sneller said.

“We’ve been able to find a home for every gallon we make. But it makes sense to produce closer to the end user.”

Transportation. Inefficient rail transportation nationwide offers a Keystone site pull in producing closer to the market.

According to Sneller, even if the corn basis is higher here than further west in the Corn Belt, there’s still a 17- to 20-cent cost advantage here.

“You can really recover [higher prices] with less transportation costs,” he said.

An answer to the supply challenge is what gives Pennsylvania dreamers a shot at bringing ethanol production – and a variety of valuable byproducts – here.

Adding value. Byproduct value shouldn’t be overlooked, David Bingaman said.

Distillers grain selling in Pennsylvania brings $130 a ton, which includes the cost of shipping the grain from the Midwest.

And while he doesn’t see the feasibility of a producer with 15-25 cows getting truckloads of the grain shipped that distance, the byproduct produced locally could be a cheaper high-protein feed alternative, he said.

Distillers grains have applications in beef and dairy rations, and potential uses for poultry, hogs and aquaculture.

Other byproducts, including carbon dioxide, would add more value to the project.

Still pushing forward. “In the 25 years I’ve done this, it’s always fascinating to see continued interest in ethanol production,” Sneller said to the room of more than 40 attendees.

But Sneller cautioned project organizers to go easy as the plan moves forward.

“You need to make preliminary decisions and ask if it makes sense to go through with this,” he said.

“Take small steps and don’t spend a whole lot of money” on feasibility studies, he urged, telling stories of Nebraska counties “spending $100,000 and getting hosed.”

In evaluating feasibility, planners will learn if an ethanol plant can be well-designed, well-built and well-run here, Sneller said.

The bottom line is if it can make money here, he said.

He said a feasibility study will cost $5,000-$125,000.

More advice. Sneller also urged planners to be open-minded and not to focus on a single site.

Besides energy requirements, corn availability and transportation, water quantity and quality are “real deal breakers” in picking a site, Sneller said.

Grant money. Local committee member Sherman Allen said the group is pursuing grant money for feasibility studies.

Grant writer Lynn Rough is waiting for grant guidelines, expected to be released in August. She said an application will be submitted this fall.

“Then, if we find it’s feasible, we’ll get serious about finding investors and partners,” said Doug Gilbert, president of the Crawford County Farm Bureau.

“We’ve got the supply to the west and the market to the east. We’re right where we need to be,” he said.

(Reporter Andrea Myers welcomes reader feedback by phone at 1-800-837-3419, ext. 22, or by e-mail at amyers@farmanddairy.com.)