BUFFALO, Iowa — The Buffalo riverfront ethanol plant project is on hold — and could remain delayed for at least a year — so developers can study alternative technologies to produce bio-fuel and look for financial partners.
When the price of corn climbed to $4.50 per bushel and ethanol dropped to less than $2 per gallon in the winter months, Larry Daily said he and his partners at River/Gulf Energy — associated with River/Gulf Grain and Alter Barge Line — decided the project was “a little too risky” as initially planned.
“It made the company realize we didn’t want to be the sole owner and operator of this,” Daily said Thursday.
Instead, the company is looking for partners to help develop the original $100 million corn-to-ethanol plant project, and wants to add a second alternative-fuels project on that site that’s not related to corn.
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“They thought all the ethanol plants were going to make corn too expensive, but corn prices were down below $3 at one point this week,” Daily said. “And gas prices are back up again.”
“But with the barge line so involved in the agricultural economy, we thought maybe we didn’t need to add another capital-intensive industry involved in what corn is going to do,” he said.
Instead, the group is researching cellulosic technologies, which can break down organic biomass into fuel. They also are looking into ways to turn coal into ethanol and other fuels, Daily said.
The delay definitely does not mean the developers are giving up on the alternative-fuel plant, even though the only activity seen there has been the clearing of the site, he said.
“We’re definitely spending a lot of management hours on that,” he said.
The project was announced in May 2006 as unique by making plans to ship the ethanol and its byproduct on barges, instead of by rail. The plant initially was expected to hire 35-45 workers.
The opening was expected in early 2008 at the site of the former PCS fertilizer plant, which closed several years ago.
Buffalo City Clerk Bill Bowers said he is confident the project still will happen in Buffalo, which he described as being open to riverfront industry.
“We’re obviously disappointed,” he said. “We would prefer to have this built as soon as possible.”
A related business, River/Gulf Grain, received a two-year extension on its Davenport riverfront lease in November because of financing and permitting delays on the ethanol plant project in Buffalo, where it plans to move.
Erol Melik, president of River/Gulf Grain, could not be reached for comment. Daily said the move is still anticipated, and River/Gulf Grain will become the grain supplier for the corn-to-ethanol plant there.
“Things are a little fuzzy on when that move will be,” Daily said. “We intend to comply with whatever we need to.”
Kay Luna can be contacted at (563) 383-2323 or kluna@qctimes.com.
Other Q-C area ethanol projects
* Geneseo, Ill.-based Patriot Resources LLC is building a $130 million ethanol plant in Annawan, Ill., about 40 miles east of the Quad-Cities in Henry County. The 100-million-gallon-per-year plant is expected to open by late 2007 or early 2008, hiring about 45 people.
* A West Burlington, Iowa, company, Big River Resources LLC, plans to build a 100-million-gallon-per-year ethanol plant at a grain shipping rail facility in Galva, Ill., about 50 miles southeast of the Quad-Cities. Construction could begin in 2007, and the plant would open about 18 months later with about 45 employees.
* Ethanol Production Company LLC, or EPC, announced plans in March to build a $200 million ethanol plant in Kewanee, Ill., and company partner Jeff Eirinberg of Rock Island said at the time that this would be just the beginning of plans for EPC’s ethanol growth in the area. He said EPC also planned to create a 40-million-gallon ethanol distribution terminal and five other ethanol plants in the Quad-City region.
When the project was announced, construction on the Kewanee plant was expected this year, with production set to start in 2008, according to EPC’s Web site at www.ethanolproductioncompany.com. The plant was expected to hire 40-50 full-time employees.