Legislation Could Spell Bright Future for Volney Ethanol Plant

By Martino, Kristina

VOLNEY – Eric Will II has recent federal legislation on his side as he continues construction of an ethanol plant at the Riverview Business Park in Volney.

Will, principal of Northeast Biofuels LLC, says that President George W. Bush’s recent signing of the Energy Independence and Security Act of 2007 is boosting ethanol’s prices after they fell sharply earlier this year. Will still aims to produce more than 100 million gallons of ethanol annually once the plant is up and running – now expected in late spring, he says.

“That’s [ethanol price declines] old news,” Will says. “It’s been going up steadily. Especially with the passageof the new energy bill before the holidays.”

The national wholesale ethanol price increased to about $2.31, the DTN Ethanol Center reported Jan. 3. In June 2006, ethanol prices peaked at about $5 a gallon in some U.S. markets before tumbling into the low $2 range. DTN is based in Omaha, Neb., and is a national business-news service.

“The new energy bill is basically doubling the mandate for corn- based ethanol,” Will says.

The bill increases the supply of alternative-fuel sources by setting a mandatory Renewable Fuel Standard requiring production of a minimum of 9 million gallons of renewable fuel nationwide in 2008, 20.5 billion gallons by 2015, and at least 36 billion gallons in 2022. Thatincludes 15 billion gallons of ethanol, about double current production capacity.

As projected from the start of the project, Will says he still plans on the plant producing about 114 million gallons of ethanol annually.

Plant update

Northeast Biofuels (NEB) is constructing a 350,000-square-foot ethanol plant at the 420-acre Riverview Business Park campus located at 1850 County Route 57 in Volney – the former Miller Brewery. The entire campus has 1.3 million square feet of buildings. Will is co- owner of the park.

A strategic partnership with Canadian-based global biofuels company Permolex International L.P. resulted in the creation of NEB – the company that will run the plant.

Ethanol, an alternative fuel, is produced through the fermentation of corn. Will projects that the plant will consume 41 million bushels of corn annually. One bushel of corn produces 2.8 gallons of ethanol.

Will closed on the project’s financing June 30, 2006, and says the project is now in its 19th month of engineering and construction. The total project cost is $165 million.

The financing agreement features three debt facilities including a $60 million, fully funded letter of credit that guarantees the plant’s performance under the hedge agreement, says NEB. Labor unions in Oswego County have also loaned NEB $300 million for exchange of a project-labor agreement. NEB additionally receives $4 million from New York to assist with the installation of the plant’s thermal oxidizing/heat-recovery system. The system provides the plant pollution control.

Workers are currently assembling the plant.

“There are 400 construction workers on site now,” Will says. “We had to refurbish some of the existing buildings and remodify a lot of the equipment we are reusing.”

He says a majority of theplant’s equipment is now on site and that about 30,000 feet of piping needs to be assembled.

“We’re kind of in a big assembly stage,” Will says. “The biggest scope of work that needs to be completed now is all mechanical work and process piping.”

Will confirmed that the project is taking longer than expected and now plans for the plant to run at 75 percent capacity by late spring 2008 rather than November 2007 as he told The Central New York BusinessJournal last April.

“Once you get to 75 percent, to get to 100 percent is usually a few weeks,” Will says.

By the time the plant is 75 percent operating, Will also says about 100 people will work there from NEB, BOC Group, and Perdue Farms, a project partner.

BOC Group, a subsidiary of the The Linde Group, a global supplier of industrial gases, will purchase carbon dioxide produced by the ethanol plant. BOC Group is also building a $10 million to $15 million plant it the Riverview Business Park site to liquefy and sell the carbon dioxide.

In September 2007, 25 percent of the business park, which contains the ethanol plant, was subdivided leaving the remaining space a separate legal parcel.

“We’re spending our time now trying to figure out what to do with the balance of the site,” Will says. “A lot of it is underthat green label if you will.”

The park has the potential to house an anaerobic digester and food and beverage processing plants.

He says he has recently started receiving calls from people interested in the park’s remaining space.

Copyright Central New York Business Journal Jan 11, 2008

(c) 2008 Business Journal – Central New York, The. Provided by ProQuest Information and Learning. All rights Reserved.