BOOTHEEL STUDIES ETHANOL PLANT POSSIBILITY

CHARLESTON -- A $35,750 grant through the Missouri Department of Agriculture's Value-Added Grant Program has been approved to determine the feasibility of an ethanol plant in Southeast Missouri.

"The next step is to get the feasibility study going," said Tim Schnakenberg, agronomy specialist and program director for the Mississippi County University Outreach and Extension Center.

A committee formed from area corn producers will meet again at noon Thursday at the Russell Cafe to discuss the imminent study and the proposed ethanol plant.

The study will research if the investment needed to fund the plant's construction, estimated to be between $20 million and $25 million, would bring an adequate return, according to Van Ayers, agriculture engineering specialist at the Stoddard County University Outreach and Extension, who was instrumental in assembling the committee after being approached by Southern Illinois Farm Enterprises Inc.

The farmer investment corporation had researched an ethanol plant for Illinois before determining that tax credits and grants would make Missouri a more attractive location for the plant.

"We organized some farmers to visit with one another and talked about applying for a grant that would fund a feasibility study," explained Schnakenberg.

Committee members include members of the Missouri Corn Growers Association, the Farm Bureau and the National Farmers Union.

Schnakenberg said state representatives Lanie Black and Peter Myers have also "been supportive of this idea." With the Mississippi County and Stoddard County University Outreach and Extensions serving in an advisory role, the committee wrote the grant, sent representatives to Jefferson City to go through the review process and quickly received approval.

The study is expected to be completed later this year by Bill Adcock, an ethanol plant expert subcontracted through SIFE, after which area farmers will need to make their decision.

Adcock's experience includes the completion of the Heartland Corn Products ethanol plant in Winthrop, Minn., in 1995 a farmer owned facility which operates as a cooperative.

According to Ayers, Adcock said major ethanol producers have no incentive to build new plants in the area.

If built, the ethanol plant may be the southernmost plant of its type with the nearest being ethanol plants under construction in Macon and the St. Joseph area, according to Schnakenberg.

"This will have to be a farmer-investor facility," explained Ayers. "A farmer-owned, farmer-built and farmer-operated facility." The feasibility study will research an ethanol plant with a 15 million-gallon annual production capacity that will require around 6 million bushels of corn or grain sorghum each year.

Schnakenberg estimated around 52,000 acres of corn, or about 13 percent of Southeast Missouri production acres for corn, would be needed to supply the plant.

"Farmers would purchase delivery rights to the facility," said Ayers, who explained it will "most likely be a closed-cooperative" in which only investors will be able to supply grain for the plant.

Among the incentives making Missouri an attractive location for the plant are the New Generation Cooperative tax credit enacted by the state legislature as well as an ethanol tax incentive credit.

In addition to production earnings, the plant would have benefits to cooperative members such as providing "a good place for a farmer to take his low-grade corn," said Schnakenberg, including corn with unacceptable levels of aflatoxin, a fungus which makes corn unfit for consumption.

The plant would produce ethanol, an alcohol fuel additive that raises gasoline's octane and brings emissions in compliance with federal clean-air legislation, from corn or grain sorghum.

The organic fuel additive competes with the chemical additive methyl tertiary butyl ether (MTBE) which has raised concerns recently and is possibly facing a ban in California due to its propensity to enter ground water after fuel containing the chemical is spilled.

According to Schnakenberg, 1.5 billion gallons of ethanol are produced annually as compared with 4.5 billion gallons of MTBE.