Would-be ethanol producers begin to home in on locations

Ethanol.
It’s become an economic development buzzword in nine short months.
In Northern Colorado it used to simply be a word found on gas tank signs, proclaiming the additive was found in fuel during the winter months.
Now, the word brings images of employment, higher commodity prices and controversy over neighbors not wanting an ethanol plant in their respective backyards.
In a sequence of announcements beginning in March, Northern Colorado became the center of attention for ethanol production in Colorado:
? Great Western Ethanol, ethanol plant developers and financiers announced plans in March to build a facility “southwest of LaSalle.”
? In June, Front Range Ethanol filed plans with the Weld County planning department to build a plant in “undisclosed location in Weld County.”
? In August, Johnstown officials resisted Front Range Energy’s proposal to utilize the current Colorado Sweet Gold location for a 40-million-gallon-per-year dry mill ethanol plant.
? In November, Dan Sanders, president of Front Range Energy, said the company narrowed its search to three locations, with a site in eastern Windsor being the company’s main focus.
Front Range Energy has since disclosed two other potential sites – one near Kersey and another near the Weld County-Logan County border – as fallback locations. Construction of the plant is expected to cost $54 million.
? In October Great Western Ethanol released the location of its 56-million-gallon-per-year plant – a 200-acre site just east of Weld County Road 33 and north of Weld County Road 46 in Evans. The plant is expected to employ 50 people and construction costs are expected to be $84 million.
And waiting and watching from the sidelines is Colorado Agri Products, which has announced plans to build a 42-million-gallon-per-year plant in Sterling. Construction of the plant is expected to cost $50 million.
The three plants are expected to produce 138 million gallons of ethanol per year and will require 49.2 million bushels of corn.
According to a study performed by Resource Analysis Inc. of Denver, “Colorado’s average corn crop of 144 million bushels per year (1998-2002) would yield 375 million gallons if all of it were available for ethanol production. However, Colorado is at a comparative disadvantage among corn-producing states for ethanol. First, we are a corn-deficit state: Supply falls slightly short of demand for livestock feed. Second, corn-surplus states such as Minnesota and Nebraska have created substantial financial incentives to promote the in-state production and use of ethanol fuel.”
Three ethanol plants appear to be an extraordinary number for a corn-deficit state. But, the financiers of the plants agree Northern Colorado is a premier location for these facilities because it has the people and the infrastructure to support them.
“We decided to think outside of the box,´ said Dan Sanders, president of Front Range Energy. “Most plants are built in the middle of the corn, but we decided to rail in or truck in our corn and build closer to the marketplace.”
Sanders said he anticipates the plant will initially employ 32 and the total payroll will be $1.8 million. The company chose the land in Windsor because Great Western Railway owns it and the corn would be shipped in from Nebraska and Iowa using Great Western as a carrier.
Sanders said he would like to finalize and sign papers on the Windsor location as soon as possible because he wants to be up and running next fall under the best scenario.
“We really need a decision by the end of the year so we can get moving at a pretty fast clip,” he said.
Great Western Ethanol, which is financed by Lynn McKee of Highlands Ranch, Mike Konkel of Kersey, Kenny Ulrich of Platteville and David Walker of Benchmark Designs of Florida, hopes to break ground within 60 days. Construction on the plant is expected to take 12 months and Jim Geist, consultant with Great Western, said the group wants the operation open in January 2006.
The group initially expected to pay average wages in the range of $50,000 to $55,000 per year, but admits competition in the marketplace may force them to increase pay.
Great Western Ethanol chose to locate its plant along the Union Pacific rail line because the company gave them the best rates for its 100-car shuttle trains.
“We can’t speak for our competition, but we feel Colorado is a good location to open a plant because of the incredible number of livestock in the area,” Geist said.
Livestock, transportation corridors and people seem to be the right combination for ethanol producers to want to break from convention and open plants in a corn-deficit state. Hopefully they have the right idea and Northern Colorado won’t be left with three empty plants that were priced out of the market.

Kim Lock is the agriculture reporter for the Northern Colorado Business Report. To suggest column ideas contact her at (970) 221-5400 ext. 222 or at klock@ncbr.com.

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