ANNAWAN, Ill. — At a time when the federal Renewable Fuel Standard is being threatened, Patriot Holdings LLC is expanding its investment in renewable energy with the development of a 5-million-gallon biodiesel production facility here.

With the Patriot Renewable Fuels' existing ethanol plant in the background, company representatives were joined by a crowd of 30 people Thursday for the official groundbreaking of the $10 million biodiesel plant. It will be operated by the company's new subsidiary, Patriot Fuels, Biodiesel LLC. 

Gene Griffith, Patriot Holdings' chairman, said the new biodiesel plant would build on the successes that the ethanol plant has had in its first five years in operation. "We wanted to create a new market for corn," he said, adding the ethanol plant now produces 120 million gallons a year. "This is money the country doesn't have to send to the Middle East to buy foreign oil."

The new biodiesel plant would produce 5 million gallons a year which, he said "it's not big, but it's not small either."  

When the facility is operational in the third quarter of 2014, Griffith said Patriot will produce two fuels from the same amount of corn: ethanol for the automotive industry and biodiesel for agriculture and the trucking industry. Currently, he said the company extracts corn oil and sells it to other biodiesel producers or for inclusion into livestock feed. 

"Now we'll be able to make  the product ourselves and sell it to local retailers and distributors," he said. The company will continue to produce dried distillers grain and soluble (DDGS), the livestock feed it exports to China and other Pacific Rim countries for their growing livestock industry.

The event also doubled as a roundtable discussion for nearly three dozen  guests to share their concerns about the Environmental Protection Agency's recent proposal to lower the amount of renewable fuels to be blended into the gasoline supply. Rep. Cheri Bustos, D-Ill., was on hand to participate in the groundbreaking and discuss the proposal with the crowd, made up of local and state agricultural representatives, area farmers, Annawan and Henry County officials and state lawmakers. 

"We need to make sure we are doing everything we can for ethanol," said Bustos, who is a member of the House Agriculture Committee. 

The EPA decision proposes setting the renewable fuel volumes to 15.21 billion gallons for 2014, well below the 18.15 billion gallons now set out by law. A 60-day comment period begins Friday.

"The federal government has done a disservice to the family farmers because it hasn't passed a five-year Farm Bill and this (EPA proposal) is a disservice to Patriot," she said, adding such a rule change creates a "time of uncertainty" for the ethanol industry.

In an interview after the event, Griffith said "Patriot is strong enough, we'll probably survive even if (the Renewable Fuels Standard) gets cut. But there would be less market for corn and some ethanol plants will not be as efficient as Patriot." He added that reducing the amount of ethanol will put even more pressure on corn prices, which have dropped by $2 a bushel.

The impact, he added, is farmers won't have the additional income they have had to buy John Deere equipment, or Ford and Dodge Ram trucks. "It would have an impact, especially in small towns like this one,' Griffith said.

The guests, who included many local farmers and ag industry leaders, touted the positive economic development that has been driven by Patriot Fuels' presence in the rural Henry County town.

"The first thing I did this morning was bring a load of corn here today," said farmer Steve Nightingale, who is vice president of the Henry County Farm Bureau. Having a local source to sell their corn, reduces the miles farmers must drive their loads of corn to sell.

Annawan Mayor Kennard Franks said retail sales in his town have increased 123 percent between 2000 and 2012, vs. the state of Illinois' 24 percent increase. Meanwhile, the 48 businesses Annawan had in 2009 have grown to 66 and the city has made $1 million in infrastructure improvements. ''This is huge,"  he said.

Tom Mueller, a Rock Island County farmer and a member of Illinois Corn Growers, said Patriot's ethanol plant created a "year-round market for our corn." The new biodiesel plant, he said, "is just another way of efficiently extracting more value from our corn. We'll get more value from the same kernel."

The project is getting funding and assistance from the Illinois Department of Commerce and Economic Opportunity New Generation Biofuels Production Program.

Concrete and foundation work will begin in December. The plant will utilize the SUPER Process production system designed by Jatro Diesel, Miamisburg, Ohio. "Jatro has built more than 15 biodiesel plants and is excited that Patriot will use this new technology, Rahul Bobbili, Jatro's vice president, said.

The project will add nine jobs to the 55-person Patriot staff, Griffith said.

"The spinoff effect is having nine new jobs for the biodiesel plant translates into 15 to 20 jobs for the area," said Kathleen Repass, Henry County Partnership's economic development director. Since Patriot opened, she said Annawan has seen a new gas station open, more trucking into the region as well as the construction jobs the projects have created.

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