Company plans to buy 200 acres for ethanol plant
Published 3:34 am Saturday, February 2, 2008
Financing needed to pay for projectremains big question
By PETER WILLIAMS
A company with plans to build an ethanol plant in Beaufort County expects to buy 200 acres near Aurora by May although the money to build the facility has not been secured, Beaufort County’s top economic developer said Friday.
Tom Thompson wouldn’t disclose the name of the company nor the estimated cost of the property investment. The original cost to build the first plant proposed for a site near Aurora was estimated at $100 million, but proposals have been floated that would double that plant’s production capability and raise the cost to build the plant to $200 million.
Talk of constructing an ethanol plant in Beaufort County has been ongoing since at least 2005, but financing such a project has been an issue since that talk began. The plant would convert corn or other products into a liquid that could be blended with gasoline, with the goals of decreasing pollution and reducing the amount of oil the United States imports.
Asked for a more specific date, Thompson said, “May.”
If the 200 acres are sold and not developed, there are other sites in the same area — and some on the north side of the Pamlico River — that could support an ethanol plant. The original plan for an ethanol plant in the county involved the creation of 65 jobs.
So far, the only thing Beaufort County has invested in the ethanol plant is “my time,” Thompson said.
There was a proposal that would have provided the company some of the needed money up front, and those moneys would have been recouped within four or five years from the additional taxes the plant would generate. Because the plant was never built, the county never advanced the money. The state also had offered to help pay for a rail spur, but since the project never moved forward, the money was never used, Department of Commerce officials confirmed this week.
A number of plants has been proposed, but so far only one, in Hoke County, has broken ground.
When the first ethanol plant was considered, banks were willing to finance 60 percent to 70 percent of its construction cost, Thompson said. Now, investors will have to put up half of the money.
Thompson is convinced that an ethanol plant is needed and Aurora would be a perfect site for it because it has barge access to the Pamlico River and a rail line nearby.
Thompson believes that ethanol’s biggest advantage is not that it will eliminate the need for foreign oil imports, but that it can be used to replace MTBE, a gasoline additive used to replace lead.
Financing for the original 54-million gallon a year plan was in place, Thompson said.
In the months that followed, costs soared and banks became less inclined to invest in the industry, and the new investor backed out.