I wrote this article and the following one for the Harrison News-Herald in Cadiz, OH for the Aug. 11, 2008 edition. If you wish to use any part of these articles, you must contact me at the newspaper for permission, because they are copyrighted.
Main Story:
Throughout the United States, plans to construct ethanol plants have crashed one-by-one after falling victim to spiraling corn prices and a suddenly hostile economic environment.
That isn't happening with Harrison Ethanol LLC, company officials maintain.
A great deal of construction work has not been going on at the Dickinson Church Road facility in recent months. However, behind-the-scenes financial wrangling is continuing for the unique facility that will combine beef and dairy cattle production with an ethanol facility that will create millions of gallons of the biodiesel fuel per year, said Marion Gilliland, corporate communications director and managing member for Harrison Ethanol.
"Because we are using private funding, we must continue to observe the required 'quiet period,'" Gilliland said. "The progress has been far slower than we or anyone else hoped for or expected, but we do continue to move forward."
Gilliland said that the company has not sought local funding for the massive project, but is seeking most of its financing from the private sector -- and that takes time and education to achieve.
Meanwhile, Gilliland said that Harrison County officials have been hugely supportive of the plans to open the ethanol plant. The company, in return, wants to build a facility that will be in the business for many years.
"There have been other ethanol plants that have started and closed down," she said. "When we get up and start building, we don't want to be in that category."
In May, Gilliland said, a meeting was held with OMEGA (the Ohio Mid-Eastern Governments Association) and several Harrison County officials, including Mayor Ken Zitko, County Engineer Rob Sterling and the county commissioners were all there, and all voiced their support for the project.
While the project isn't a building phase, that by no means indicates that Harrison Ethanol and its plans are in limbo, she insisted.
"We want to make sure it's exactly right," Gilliland said.
The local area has been burned by companies coming into town with large promises in the past. For example, huge loans were granted to Pastamatic International Inc., which had promised to bring several jobs into the area -- which never happened.
Gilliland said Harrison Ethanol has never asked the area for local funds.
"We're developing them on our own," she said, noting that the company understands that there are lingering trust issues concerning outside companies that say they want to locate in the county.
Seeking the outside funding is a slow process, and she knows there are some in the area who are disappointed.
Harrison Ethanol is being built on reclaimed strip mine territory once owned by Consolidation Coal. As such, site preparation has brought about its own set of challenges, Gilliland said.
"When we started cleaning it up, it is all reclaimed coal ground," she said. "We found all kinds of things when we started to dig down. We found a large concrete bunker and a railroad trestle 18 feet down."
The work is all necessary -- albeit slow -- Gilliland said, because "we have to make something people will be proud to have."
She said that Harrison Ethanol will be a facility that is around for many years to come, and will bring a huge, much-needed cash flow into the county.
"This will be really amazing for the area," Gilliland said.
Farmer's Ethanol has plans for three plants, with Harrison County's to be the first of its kind.
The facility will include raising beef and dairy cattle as part of the overall project. Gilliland said there is one other facility in Saskatchewan, Canada, that has beef cattle with its ethanol plant, and one in Kansas that combines ethanol and dairy production, but no plants that have all three factors.
According to plans for Harrison Ethanol, the cattle at the facility will be fed about half of the distillers grain that is produced as a byproduct of making ethanol, selling the rest of the distillers grain.
The cattle will be housed in a 294,440 square-foot cattle barn and a 77,700 square-foot dairy barn.
Manure from the cattle will be processed through an anaerobic digester to produce methane, which will in turn be used to produce "green electricity" that will be sold or used to run the plant.
The plant also plans to sell carbon dioxide, another byproduct of ethanol production and liquid fertilizer from the digester.
Gilliland noted that there are no other ethanol facilities that include the anaerobic digester.
"When you put the three together, we are a very green (facility)," Gilliland said.
Over all, she concluded, owners and operators of the Harrison Ethanol plant are still working very hard to bring the operation to the county.
"We are still working hard and we are still moving along," she said. "It's going to be a good plant. We are using high quality materials, and we are making it right. We are doing it very carefully and we're doing it the right way."
Sidebar:
Opening and construction dates for the Harrison Ethanol facility have been pushed back -- and as a result, so have key grants and agreements concerning the company.
The Ohio Rail Commission has amended grant and loan agreements totaling $700,000 to allow an extension until June 2009. The Ohio Department of Agriculture has also renewed its permit to install for Harrison Ethanol until June 2009.
Both items were to have expired this past June, but were extended because it has taken longer than expected to construct the rural plant and cattle operation.
Bill Schwaderer, public information officer for the Ohio Department of Agriculture's livestock environmental permitting program, said companies can request extensions if they can show where plans are continuing for construction.
However, the extensions might not continue to come from the Department of Agriculture, Schwaderer said.
"This may be the last time we extend it," he said.
The original request for a permit extension went into effect on June 7, 2007, and was to have expired this June 12. The new expiration date is June 15, 2009.
The decision was made following discussion with the "lead engineer" at Harrison Ethanol, said Schwaderer. The Department of Agriculture only deals with the cattle section of Harrison Ethanol, not the ethanol production facility.
Once online, Harrison Ethanol's cattle operations will have 2,000 dairy cattle and 10,000 head of beef cattle at the site. The cattle will be fed byproduct from the ethanol production.
Meanwhile, Schwaderer said, other ethanol facilities across the state are coming along, and the state's farmers are ready to sell their corn.
Corn prices are at about $6 per bushel.
"When corn's that high, they hate to feed it to the livestock," he said. "If they've got grain, they think it's better to sell it."
The Ohio Rail Commission money would be used for rehabilitation of railroad ties, line rails and to reactivate crossings in connection with the construction project, said Stu Nicholson, public information officer for the ORC.
The finance package was requested in 2006 to help offset an "estimated $1 million in off-site rail costs," according to a project briefing description supplied by the ORC to the News-Herald.
The money would finance the "rehabilitation for the southern 7.2 miles of the Georgetown Branch on the state of Ohio-owned Panhandle Rail Line."
The ORC's executive director at that time was authorized to finalize the terms and conditions for the loan, provided that it not exceed seven years in duration.
It was noted that the facility will need rail service for inbound corn shipments and animal feed, and to send out outbound ethanol and other products.
"Harrison Ethanol estimates that about 2,800 carloads of inbound traffic and 1,000 carloads of outbound traffic will be generated annually," the project briefing description said.
The on-site infrastructure would require a new 6,400 lineal foot lead track, 1,500 lineal foot side track and the rehabilitation and realignment of 1,000 feet of existing track left over from coal mining operations.
The last 7.2 miles of the Georgetown Branch have been out of service for several years, since before 1992, the ORC reported.
Total grants and loans so far on the project include a $500,000 United States Department of Agriculture grant, $600,000 in Appalachian Regional Commission grants, $40,000 in training funds from the Ohio Department of Development, $400,000 in 629 Roadwork Development funds from ODOD, $7 million in Ohio Water Development Authority loans, a $600,000 Rural Pioneer loan and $36,261,024 in Ohio Air Quality Development Authority Revenue Bonds, the report revealed.
Beyond the grant extensions, the Harrison Ethanol property was last week released from a mechanic's lien filed by one of the contractors.
Jeffrey Sidwell, owner of Sidwell Materials Inc. of White Cottage, Ohio, put a hold on the entire site following work that was done there.
Between Sept. 12, and Dec. 29, 2006, the concrete company performed work at the facility for a sum totaling $372,898.63.
Mechanics' liens are often filed by contractor in order to collect money from a company. In this case, Sidwell filed the lien in March and it was released in July.
Marion Gilliland of Harrison Ethanol said that the lien and it's discharge were a routine business matter.
"We got into a slow spot, and he didn't know us well enough yet," said Gilliland. However, she said, the matter has been settled and Sidwell will continue as a contractor on the project.
"We are on good terms with him," Gilliland said.
