11/19/02
By MARK POWELL
New Jersey farmers’ hopes for building an ethanol plant are on hold for now as negotiators tackle issues relating to the two sites picked for the plant.
Garden State Ethanol consultant Hank Capro said leaders of the project are waiting to clear up some unresolved issues with a site at Carney’s Point, just over the Delaware Memorial Bridge from Delaware.
That property is owned by DuPont Co.
The second possible location for an ethanol plant just off Interstate 295 near West Deptford is owned by Huntsman Chemical Co. That site includes 300 acres and a variety of buildings, rail tracks and facilities that could be used to “accessorize” the ethanol venture with fish production and greenhouses. Capro said the Huntsman site could generate income for Garden State Ethanol before the plant is built and is bringing in ethanol dollars.
But, Huntsman has about $3 billion in cross-collaterilized debt. A DuetscheBank subsidiary holds the property as part of a big piece of collateral and is unwilling to release it.
Capro — a former General Motors Corp. executive — said that once a decision is made on a site for the ethanol plant, it appears there is a ready market. A gasoline firm in Brooklyn has notified Garden State Ethanol that it will need 90 million gallons of the corn-based fuel in 2004, more than twice as much as the New Jersey plant would produce.
The leftover grain byproducts have a waiting marketing in Easton, Pa., where firms are trucking in similar product from Canada.
The carbon dioxide that is also produced in the ethanol production also has ready markets, he said. Capro said the plant will need about 14 million bushels of corn. That corn could come from New Jersey, Pennsylvania and the Delmarva Peninsula.
Garden State Ethanol will be surveying farmers by mail on Delmarva and other surrounding areas about the corn they might have available for the plant.
The project has received investment from New Jersey Farm Bureau and recently a USDA grant for more than $200,000.
Jim Etsch, a Salem County farmer who is a leader in the ethanol project, said a equity drive in the project would come after meeting requirements of the federal Securities Exchange Commission.
The SEC requires that after filing, Garden State Ethanol must not approach potential investors for about 90 days. But, while the SEC filing is in process, business plans, environmental permits and other details can be worked on. It’s expected it will take six months to get New Jersey state permits.
With SEC approval in hand, an equity drive will begin. The plant will cost about $60 million to build and get up and running. Of that, from $10 million to $15 million must come from farmers. How that investment will be made is not decided yet. Ethanol cooperatives and companies in Midwest often ask farmers to commit bushels of corn and money in return for shares. It’s not clear yet, as well, that Garden State Ethanol will be a cooperative. It may be an limited liability corporation (LLC).
Other investors could be the projected builder, LURGI-PSI of Memphis, Tenn., local banks, U.S. Bank in the Midwest (a key financier of a new ethanol plant in Illinois).
Ed Stahl of Garden State Ethanol said that after groundbreaking, it’s anticipated it would be 12 to 15 months to completion of construction.
Groundbreaking could be this summer, which would mean Mid-Atlantic corn would be turned into ethanol after the harvest of 2004.