Sioux Falls, SD - VeraSun Energy Corp., one the nation's largest ethanol producers, is expanding its regional reach by choosing Reynolds, Ind., as the site for its sixth biorefinery, the company announced Wednesday.
The Reynolds facility, to be built on 280 acres just outside the northern Indiana community dubbed Biotown USA by Indiana state officials, will provide transportation routes in multiple directions through the CSX and TPW rail lines, said Don Endres, VeraSun's chairman and chief executive officer.
"This is a unique location in that it gives us great logistics to both the Northeast and the Southeast," Endres said by telephone Wednesday.
The plant, which will employ about 60 full-time workers, will be nearly identical to VeraSun's three existing plants and two under construction. It will have the annual capacity to produce 110 million gallons of ethanol using more than 39 million bushels of corn, Endres said.
Site preparation will begin in early May with completion scheduled for the fourth quarter of 2008.
Study: Ethanol will raise ozone levels
Meanwhile, a new study says switching from gasoline to ethanol may have its drawbacks. The report in Environmental Science and Technology online edition says ethanol would raise ozone levels, particularly in Los Angeles and in the Northeast.
It finds that more smog would be created if all vehicles in the US ran on a mostly-ethanol fuel blend by 2020. But the study's author acknowledges that a monumental shift to ethanol in such a short period is next to impossible.
VeraSun
VeraSun operates ethanol plants in Aurora, just a few miles from the company's Brookings headquarters, and in the Iowa communities of Fort Dodge and Charles City. The Charles City plant recently opened months ahead of schedule and should reach full production within a month, company officials said.
The Reynolds plant, about 85 miles northwest of Indianapolis, and two others under construction in Hartley, Iowa, and Welcome, Minn., will increase VeraSun's annual capacity to about 670 million gallons.
The Biotown USA project, launched in September 2005 by Indiana Gov. Mitch Daniels, is an effort to have Reynolds meet all of its energy needs through biorenewable resources.
"VeraSun is making a commitment to Reynolds and the Biotown project that continues our state's focus on renewable energy sources," Daniels said in a release.
Each of VeraSun's plants yield 350,000 tons of dried distillers grains, a byproduct of the ethanol process used as an animal feed ingredient. The company eventually plans to extract oil from the grains to also produce biodiesel, which will give VeraSun an additional product to sell while improving the value of its distillers grain by removing fat, Endres said.
VeraSun's biodiesel side venture will fit in well with the Biotown USA vision, Endres said.
"Obviously it's located in an abundant corn area, and the fact that it's connected to Biotown makes it a unique opportunity for VeraSun," Endres said.
The nation's 116 ethanol plants can produce nearly 5.9 billion gallons of the fuel per year, and another 78 plants under construction and seven under expansion are getting ready to boost annual capacity to 12 billion gallons, according to the Renewable Fuels Association.
To help meet that increasing demand, U.S. farmers are expected to plant 90.5 million acres of corn in 2007, a 15 percent increase from last year and the most corn planted since 1944, according to the U.S. Department of Agriculture.
Shares of VeraSun were down 82 cents, about 4 percent, trading at $19.18 on the New York Stock Exchange Wednesday morning.
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