Northeast's 1st ethanol plant starts up

Northeast's 1st ethanol plant starts up

	Published : Fri, 30 Nov 2007 21:02 By : Agencies Print this Story

BUFFALO, N.Y. (AP) - The Northeast's first ethanol plant has begun production of what has been strictly a Midwestern commodity.

Western New York Energy began grinding corn this week at a new $90 million complex in Orleans County that is expected to produce 50 million gallons of the gasoline additive annually.

The plant's operators believe their location will give them an opening into an industry built on public demand for renewable fuels. Ethanol is blended with gasoline to increase octane and reduce emissions.

'We are closer to the ultimate ethanol markets,' said Michael Sawyer, executive vice president of Western New York Energy. 'Ethanol's being consumed here on the East Coast and the economics of moving ethanol are challenging. We do not have to move our ethanol as far to the ultimate market as the typical Midwestern plant.'

Sawyer and his father, John Sawyer Jr., both from Geneseo in Livingston County, will employ about 50 people at the facility, which state leaders view as part of a strategy to reduce dependence on foreign energy. New York was the first Northeastern state to join the Governors Ethanol Coalition, when then-Gov. George Pataki enlisted in 2005.

Michael Sawyer said the company has not been deterred by recent drops in ethanol prices and oversupply fears that have led to a slowdown in new plant construction elsewhere.

'We think the current supply-demand imbalance is really a short-term phenomena and we are very bullish on the industry for long term,' he said.

The facility will buy as much of the 20 million bushels of corn it will need annually from state farmers, Sawyer said, and ship the rest in by train from the Midwest.

'It's another market for our corn and when you have more markets, you tend to have a better price,' said Steven Van Voorhis, president of the New York Corn Growers Association. He said New York farmers have already begun devoting more acres to corn.

Corn growers were paid about $2.50 a bushel at this time last year as low prices lingered from a record crop in 2004. New York farmers now can get close to $3.80 a bushel due largely to the ethanol demand.

One other plant is under construction in New York, inside a former Miller Brewing Co. plant in Fulton, Oswego County, while other states outside the traditional Corn Belt, like Arizona and Texas, have also broken ground on facilities, according to the Renewable Fuels Association, the ethanol industry's trade association.

The U.S. ethanol industry produced 4.9 billion gallons in 2006 at 110 biorefineries in 19 states, according to the association. Since 2000, the country's ethanol production has increased more than 300 percent.

The Western New York Energy plant also will produce 95,000 tons of carbon dioxide annually, which will be processed for beverage carbonation by a separate company to be constructed on site. A second byproduct is distiller's grains, a high-protein livestock feed.

The plant will use a process that grinds the entire corn kernel into flour and converts the starch into ethanol via fermentation.