A Bowling Green firm s plan to build an ethanol refinery on up to 30 acres at the Port of Toledo received preliminary approval yesterday from the Toledo-Lucas County Port Authority, which agreed to sub-lease land for the proposed plant.
If built as proposed, the Buckeye Biopower LLC facility would produce 108 million gallons of ethanol annually and employ about 50 people at average salaries of $45,000.
It would cost $220 million for construction and start-up.
Bob Spitler, a Bowling Green lawyer who is chairman of the start-up company, said after the port directors meeting that the port authority s consent for the sublease is an important first step, but there is much work to be done.
This is not an announcement. By the port approving the lease, we re not guaranteeing we re going forward until all of the other pieces are put together, Mr. Spitler said.
But we have every reason to believe we re going forward.
The port-owned site on the northeast edge of the general cargo docks complex is leased by Midwest Terminals of Toledo-International, which under the proposal would sublease the site to Buckeye.
According to a port authority staff report, devoting that land to the ethanol plant should not impair port operations, while the potential exists for the agency to receive more than $400,000 annually from the project.
The proposed site is now used for storage of stone and other bulk material.
The port board approved the sublease by a 10-0 vote, with Chairman Doni Miller and board members Daniel Smith and Margarita De Leon absent.
During the brief discussion, board members main concerns about the proposal were whether it would conflict with other activity at the general cargo docks they were assured it wouldn t and whether the port authority would be harmed if the refinery failed financially.
The rapid development of ethanol refining capacity has prompted some industry analysts to wonder aloud whether the boom soon will produce an ethanol glut.
Mr. Spitler acknowledged those forecasts, but said he expects his facility s location to give it a significant advantage over its competitors.
We re in the middle of a large corn-growing region, with a superlative transportation network, he said.
He said the plant will be designed with the most advanced technology available and capable of consuming feedstocks other than corn, such as cellulose.
Mr. Spitler said Buckeye Biopower chose the site because of its transportation access, including roads, rail lines, and the Toledo port, along with proximity to several petroleum distribution terminals.
Refinery construction could start as soon as year s end, is targeted for completion by Sept. 30, 2009, and would require about 150 construction workers.
Buckeye is backed by a financial partner whose identity was not disclosed during the meeting or in the port staff report, which describes the backer only as the nonregulated subsidiary of a public utility that will front up to $40 million for the project and assist in securing other financing.
The financial partner has successfully operated a significantly sized power plant on the East Coast for more than 60 years and enjoys equity interests in several additional alternative energy plants in the [United States], the report states.
The backer s identity has been withheld because of a confidentiality agreement between Buckeye Biopower and Midwest Terminals.
Buckeye Biopower s sub-lease payments to Midwest will vary depending on the plant s revenue.
The port authority s lease with Midwest pledges 6 percent of Midwest s first $6 million in annual gross revenue and 5 percent of gross revenue above $6 million.
Those percentages will apply to revenue Midwest receives from Buckeye for rent, grain handling, and storage.
Rent pass-throughs to the port authority have been estimated at $50,000 annually, while grain handling and storage could generate up to $363,000 more a year, according to the port staff report.
Midwest will remain obligated to pay the port authority basic rent on the refinery acreage, regardless of whether the ethanol plant is a success.
The Buckeye Biopower project is at least the seventh ethanol refinery proposed, under construction, or recently built in the Toledo area.
Those projects or proposals are part of a broader ethanol boom resulting from ethanol s growing use as an additive to or substitute for gasoline in motor fuel.
The most advanced local plant is Great Lakes Ethanol s 50-million-gallon refinery near Blissfield, Mich., which began production in February.
Two in Lima and Leipsic, Ohio are under construction, and others are proposed in Fostoria, Port Clinton, and Fremont.
The Andersons Inc., based in Maumee, has ethanol plants operating in Clymers, Ind., and Albion, Mich., and is building another in Greenville, Ohio.
Regulatory permit applications for the Buckeye project already have been filed, including one with the Ohio Environmental Protection Agency.
Contact David Patch at: email@example.com or 419-724-6094.
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