Ethanol plant may receive competition

By Tony Parra

Construction on a new ethanol plant in Levelland will begin in October or November according to Dave Quinn, director of economic development for Levelland, Texas.
Levelland is located 20 miles west of Lubbock and within 90 miles of Portales. Quinn and Chris Standlee, Executive Vice President for Abengoa Bioenergy Corporation, both feel the two ethanol plants can co-exist in harmony.
“There would be some competition for a couple of things,” Standlee said. “They could compete for our people (Portales ethanol workers) because of the experience they have. They could compete for our feed business.”
Standlee said the ethanol plant in Portales uses milo to produce ethanol. He said one-third of it is used for ethanol, one-third turns into carbon dioxide and another one-third turns into protein fat fiber, or dry-distiller grain, a feed for farm animals. The dry-distiller grain is a by-product.
“We sell much of it to customers within 100 miles,” Standlee said. “Once the plant is open, the areas would overlap. We have a real good local market. Many of the local dairies are good customers.”
Proponents of the new ethanol plant and officials for the Abengoa Bioenergy Corporation of Portales, which changed its name from High Plains Ethanol in April, said it shouldn’t have a big impact on the business brought in to the Abengoa plant in Portales.
Both groups believe it is the effect of a growing demand for ethanol energy in the market.
“I don’t think the new plant will hurt the one in Portales,” Quinn said. “There is a huge demand for ethanol. The cost of milo will see an increase. More farmers will begin to grow corn and milo. I don’t think both plants will fight over the supply.”
Standlee said it can be a luxury for milo farmers in Hockley County, where Levelland is located, because of the expense of transporting the milo.
“The freight issue will benefit the farmers in the area,” Quinn said. “There is a growing demand. We will need to purchase 12 million bushels of grain. There are more proposals for more plants.”
Quinn said the Portales ethanol plant will need to purchase more grain because it is expanding.
A government proposal for a larger energy bill would change how refiners blend gasoline and how they meet federal clean air requirements. It would require a doubling of ethanol use to at least 5 billion gallons a year by 1012, according to a June 15 PNT article.
Quinn said they’re hopeful the 40-million gallon plant will be operational by the fall of 2005. The Abengoa Corporation ethanol plant in Portales is the only ethanol plant in New Mexico and there are none in Texas, until the fall of 2005 when the Levelland ethanol plant is in operation.
“We’re pretty excited about the new plant,” Quinn said. “More than anything it will help the local farmers in Hockley County. They won’t have to spend as much money on transporting their grain. The co-op (Farmers Co-op Elevator) will add more jobs.”
Central Texas Ag Development President Kit Worley said the ethanol plant in Portales is 100 percent milo, according to the Texas Agriculture Web site, which means the Levelland plant will have an advantage.
“The plant will be able to process both milo and corn,” Quinn said. “We’ll have the technology to be able to do that. It will have a one-time economic impact of $153 million. It’s hard to judge if the money will be spent here. It will also help out the Lubbock economy and the surrounding areas.”
Standlee said the Portales ethanol plant could also use corn to create ethanol, but he said they choose to do it with milo.
“There’s not a lot of corn in the area,” Standlee said. “We got used to using milo for the Portales plant.”
Quinn said the plant will bring in 35 full-time positions with a payroll of about $1.3 million. He said there was a $63 million investment in the project. Quinn said the Levelland ethanol plant will be owned by the Hockley County Limited Liability Co-op.
Standlee said the ethanol plant in Portales will be expanding. He said the goal is to produce 30 to 40 million gallons of ethanol each year. Currently the plant is producing 15 million gallons.