Pennsylvania plant nears completion

By Kris Bevill | August 10, 2009
Report posted Aug. 11, 2009, at 1:42 p.m. CST

The hiring process has commenced at the 110 MMgy Bionol Clearfield LLC corn-based ethanol facility near Clearfield, Penn., and company officials said the plant is on-track to begin producing ethanol in January 2010. The plant will be the first commercial-scale plant to be located in Pennsylvania and will provide the local community with stable jobs as well as allow the company easy access to East Coast blending terminals, according to the company's capital projects senior director, Tom Hoole. "[Pennsylvania] is kind of a gateway to blending terminals in New York," he said. "From a strategic standpoint, it makes a lot of sense."

According to Hoole, other companies have tried to develop commercial-scale ethanol production facilities in Pennsylvania - one project was just 8 miles from the Bionol plant - but plans failed to be realized. Hoole said financial difficulties can probably be blamed for the failed projects and he credits Bionol's success to having financial backers in place before breaking ground on the facility. He said that while financing may have recently started to loosen up, the past year and half proved nearly impossible for projects to succeed. "We got through before those doors slammed shut," he said, adding that having a firm offtake agreement in place helped to remove some of the risk for Bionol investors. He declined to name the entity involved in the offtake agreement.

The fact that Pennsylvania is not a major corn-producing state was a factor in Bionol's decision to build in the state, but company leaders viewed it as a positive factor. Hoole said that most U.S. production facilities, which are clustered around the Corn Belt, may be surrounded by feedstock but they also have steep competition and must ship much of their end product over long distances. "We're more of a destination facility," he explained. "We'll be importing the corn, but producing the ethanol much closer to the blending terminals that will use it." Hoole said the company has an agreement with Lansing Trade Group in Maumee, Ohio, to supply its corn.

Another factor that affected Bionol's decision to locate its facility in Pennsylvania was local and state government support. Hoole said Gov. Edward Rendell has been a staunch supporter of Bionol's project and that he seeks to make Pennsylvania "the Silicon Valley of renewables." State Rep. Camille "Bud" George, who represents the Clearfield district, was also been very supportive of the project, Hoole said. Between state and local programs, Bionol has received approximately $20 million in grants and loans to complete its project.

The local community has so far been very supportive of its new employment source, according to Hoole. He said the coal industry has been the area's main industry and local communities are currently fairly economically depressed due to a down-cycle in coal. "They're kind of anxious to pin their futures to something that can provide family-sustaining wages for a number of people," he said.