BUSINESS: Falls eyed for ethanol plant

Business

December 20, 2007

Canadian company proposing $200 million investment

By Rick Forgione and Mark Scheer The Lockport Union-Sun %26 Journal Thu Dec 20, 2007, 10:31 PM EST

A Toronto-based company claims it will invest more than $200 million to turn a Niagara Falls brownfield site into an ethanol production facility.

Natalie Horrell, director of corporate relations for Northern Ethanol, LLC, confirmed Thursday that her company has agreed to purchase a parcel on 47th Street from Praxair, Inc. as part of a proposal that could bring more than 100 jobs to the area by 2010.

“We have signed an agreement to purchase 77 acres on the Praxair site,” Horrell said.

Made from corn or other grains, ethanol (ethyl alcohol) has been used since the early part of the 20th century as a motor fuel, and more recently as a clean-burning fuel oxygenate. Its origins as a transportation fuel date back to 1908, before the widespread use of petroleum. Ethanol cuts the emissions of unburned hydrocarbons and carbon monoxide.

According to its Web site, Northern Ethanol Inc. intends on developing ethanol producing plants to service Ontario and the northeastern and midwestern United States and Europe.

The proposed Niagara Falls project is subject to the company obtaining the necessary permits and approvals. The company hopes to begin construction next year. Once completed, Horrell said the facility would produce 108 million gallons of ethanol per year. She said the company will spend in excess of $60 million per year in Niagara Falls, primarily on the purchase of corn for ethanol production.

“We would like to purchase as much as we can from local farmers,” she said.

Niagara Falls NFC Executive Director Ralph Aversa confirmed Northern Ethanol has approached the city’s Empire Zone board with plans to open a plant here. Receiving designation from the board would make the project eligible for a multitude of tax breaks, state grants and benefits. Because the project is located on a brownfield, the company is also eligible for additional incentives through New York’s brownfield redevelopment program.

Aversa said a decision won’t be made by the Empire Zone board until Northern Ethanol addresses questions about hiring policies and submits a formal application. The board meets again next month. However, the project has the blessing of city officials, Aversa said.

“Certainly we’re all very excited about the possibility,” he said. “This is the type of industry we’re looking for.”

Horrell was confident the company would acquire all of the needed approvals.

“We’ve been looking at Niagara Falls and upstate New York for a long time,” she said. “We’ve done our homework in the area. We are dedicated to this application.”

The Niagara Falls site was attractive to the company because it offers access to rail, highways and water routes. Horrell said all three will make it easier for Northern Ethanol to bring corn in, ship ethanol out and distribute grain — a by-product of ethanol production — to various distillers.

Another benefit of doing business in Niagara County is the availability of skilled labor, she said.

Horrell credited the local development community for helping the company move the project forward.

The company currently does not have an operational ethanol plant. It is in the process of developing two plants similar to the one proposed for Niagara Falls in Sarnia and Barrie, Ontario. Horrell said the company hopes to open the Sarnia plant next year. The Barrie plant, she said, is still in the permitting stages.

Not only must Northern Ethanol secure the needed zoning and permits to open a plant in Niagara Falls, the company may also face opposition from community members. The project in Barrie has attracted heavy criticism from a group known as Citizens Against Refining Ethanol (CARE).

“This would blight our city as far as we’re concerned,” said Barrie CARE member Carl Rabinowitz, adding the plant would create numerous public safety, health and environmental concerns.

Despite the criticism, Horrell said the company’s management team has extensive experience in the power industry and views ethanol as not only a potentially profitable business of the future, but also as a key component in the effort to halt global warming.

She noted that President Bush just signed a bill that mandates cutting gasoline consumption by 20 percent over the next decade. The plan would require the production of 35 billion gallons of renewable and alternative fuels, mostly corn ethanol, by 2017.

“There is certainly a huge demand for an alternative fuel source,” she said.

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