BUFFALO, Iowa — A vacant industrial site in this small town along the Mississippi River will be home to a new $100 million ethanol plant project with a twist: The ethanol and its byproduct will be shipped on barges instead of by rail.
Quad-City-based River/Gulf Energy — associated with River/Gulf Grain Co. and Alter Barge Line in Bettendorf — announced plans Monday to produce an initial 50 million gallons of ethanol per year in a new facility at the 100-acre site of the former PCS fertilizer plant, which closed several years ago.
The plant, complete with a barge dock for shipping, will start out with 35-45 workers. The company eventually will add more staff and expand to produce 100 million gallons of ethanol per year, said Jeff Goldstein of Alter Barge.
Construction is expected to begin later this year with production getting under way 15 months later, he added.
“This is something new for us,” he said. “We think it’s a way to better utilize some of our business strengths.”
The Buffalo site’s riverfront proximity was key to the developer’s choice, he said. With Alter’s experience in barge transportation and “a good relationship with the agricultural community,” the site and the project seemed like a perfect fit, he said.
A byproduct of the ethanol-making process called dry distillers grain also will be shipped by river along with the ethanol.
“We chose the river location because waterborne transportation has always been the key to the efficient shipment of bulk products,” said Rich Goldstein, who will manage the new facility.
The plant will be built by Agra Industries of Merrill, Wis., and is expected to use state-of-the-art processing technology provided by Delta T Corp. of Williamsburg, Va.
The construction process alone is expected to create about 100 local jobs.
During the first phase of the plant’s operations, the company expects to process more than 18 million bushels of corn per year with the bulk of that supply coming from the Quad-City area, Jeff Goldstein said.
“That’s very good news,” said Tom Mueller, a Taylor Ridge, Ill., farmer and president of the Rock Island County Farm Bureau. “There will be that much more demand for corn right here to be used in the Quad-City area.”
Mueller guesses the addition of a local ethanol plant might increase demand so much that the price of corn could rise by 10-15 cents per bushel. Farmers currently are receiving about $2.20 per bushel, he said.
“If that helps us, why, it also helps the Quad-Cities,” he said.
It is definitely a big project for Buffalo, which has about 1,300 residents, Mayor John Carson said. The project will bring jobs, more housing and a much-needed boost to the city’s tax base, he added.
With the site’s location across from Camp Abe Lincoln, the mayor said he asked about the possibility of emissions. Carson and Jeff Goldstein both said that only some steam will be released in the ethanol-making process, thanks to the plant’s modern production equipment.
Rep. Steve Olson, R-DeWitt, said the ethanol project is a “big plus” that will boost the economy in the Quad-City region as well as the rest of the state.
“I think the people are ready for an alternative to wean ourselves from our dependency on foreign oil,” he added.
Others are not sold on the idea. Ted Woodruff, an economics professor at St. Ambrose University in Davenport, said ethanol is subsidized by the federal government and “cannot survive on its own.”
“That, of course, is never a good sign,” he said. “It’s one of those things, like a lot of these government-subsidized projects: They’re great for the people that benefit from them, but they’re not so good for the country as a whole.”
