Kevin Wilson: PNT managing editor
Portales citizens, state politicians and Washington lobbyists came together Tuesday afternoon under a large canopy to celebrate not only the expansion of the city’s Abengoa ethanol plant, but a recently passed energy bill that made such an expansion so relevant in the coming years.
The expansion will doubled the plant’s ethanol production to 30 million gallons per year, plant officials said.
The bill calls for 7.5 billion gallons of annual ethanol production by the year 2012.
That amount is nearly double what the country’s current ethanol plants produce. Abengoa Vice President Chris Standlee said that doesn’t translate into many jobs created at plants (only six of the plant’s 45 jobs were created by the Portales expansion), but there is a ripple effect because a stable market will exist for farmers and more truck drivers will be needed locally to transport sorghum to the plant.
“This is a good bill, particularly for the ethanol industry,” Standlee said. “The ethanol industry was supporting the bill, as were sorghum growers across the country. That’s a large lobby.”
Ethanol is derived primarily from the starch in grains such as corn and grain sorghum through a fermentation and distillation process that converts sugars to alcohol. The fuel is blended with gasoline to reduce the amount of crude oil used, which supporters say will decrease American dependence on other countries’ oil supplies.
U.S. Sen. Pete Domenici, R-N.M., said he was glad to help bring a national energy bill to completion, especially one that helps out farmers.
Every time we have discussions about our agriculture, you always wonder about the market,” Domenici said. “The energy bill is not just an energy bill. It’s a rebirth of agriculture for America.”
Chester Harth, a Roosevelt County farmer who grows sorghum around Rogers and Causey, said the energy bill will help out farmers.
“I think it will benefit us and our market,” Harth said. “There’s more demand for sorghum.”
The demand is more than New Mexico can currently handle, according to Tim Lust, executive director of National Grain Sorghum Producers.
County farmer Randy Lieb wasn’t so optimistic. He said those who run smaller farms have no place to store sorghum, meaning they have no choice but to take it to a local processing plant like Garvey Processing in Portales of Peavey Processing in Clovis.
“The only way it will help us is if the FSA (Farm Service Agency) starts a loan program for farmers to store their sorghum,” Lieb said.
On a state level, Gov. Bill Richardson said he wanted to put the state’s buying power behind ethanol. He announced an executive order that would require all state agencies buy 15 percent of their fuel from ethanol and biomass sources by 2010. His hope is that those purchases are made from the Portales plant.
“It’s going to make New Mexico’s air clean.” Richardson said. “It’s going to help us meet greenhouse gas standards. It’s going to provide good jobs for New Mexicans.”
The plant has been in Portales since 1985 and was acquired by High Plains Corporation in 1997. High Plains was purchased in 2002 by Abengoa, which also has plants in Kansas and Nebraska.
“There have been many challenges this plant has survived,” Abengoa President Javier Salgado said, “and we are happy to provide the Portales team with an expanded and modernized plant.”
Standlee did not release specific figures on the cost of the plant expansion, but said that the average cost is $1 to $1.50 per gallon in production increase — translating into a cost between $15 million and $22.5 million for the 15-million gallon expansion.