Quest to develop a local ethanol plant begins

By Ralph Pokorny

Nevada Daily Mail

For several years, there has been talk of an ethanol plant locating somewhere in this part of Missouri.

Now, a preliminary proposal has been presented and is to be reviewed by several permitting agencies and government entities. The proposed location for Ozark Ethanol's facility is in Vernon County, on 30 acres currently owned by Regar Todd, located about one mile south of U.S. Highway 54 on the east side of U.S. Highway 43.

However, before the 54-million-gallon-per-year plant begins construction, let alone start production, there are a lot of questions that will need to be answered, papers filed, environmental impact studies conducted, permits issued and public meetings held.

Tuesday afternoon, the Vernon County Commission started the ball rolling by holding a 90-minute public meeting with Ozark Ethanol LLC president Kerry Rose, Ozark Ethanol vice chairman Kyle Kirby, property owner and Ozark Ethanol board member Regar Todd and a number of area concerned citizens who had questions about the proposed plant.

This meeting gave residents their first opportunity to bring their concerns directly to the attention of the county commissioners and Ozark Ethanol management.

A barrage of questions were put to the group: Where is the plant to be located? How much ethanol will the plant produce? Where will the corn to be used come from? Where and how will the corn be stored? How much wastewater will be produced and what will be done with it? Are you planning on using the effluent from Nevada's sewage treatment plant for coolant for the plant? Will the four wells your prospectus says you will drill on the property for water impact the area water resources? Was the county commission paid $20,000 in hush money? If you do not get a permit to handle wastewater on site, will you send it to Nevada's wastewater treatment plant?

Some of these questions are addressed to some extent in the prospectus the company issued in April as part of their financing program for the $88 million project. Others cannot be answered because of Security and Exchange Commission rules that prohibit the company from putting out certain information until the SEC gives its approval for the company to move ahead and to sell shares in the company.

Kerry Ross said that they do know the answer to all of the questions at this time. In fact, they admit they will not have some of the answers until the engineering work begins and the permitting agencies make decisions.

"I promise that as soon as we can, we will have public meetings, We want this to be a community effort," Kyle Kirby said. "We hope this is a proposal joined by several people."

Bonnie McCord, Vernon County presiding commissioner, said that Vernon County was given a payment by Ozark Ethanol -- not to keep quiet as was rumored, but to cover the county's cost of setting up a Chapter 100 Revenue Bond program and other expenses the county will incur in the process.

Chapter 100 revenue bonds are a method established by the state to help companies finance large start-up costs by providing tax abatement incentives.

McCord showed the group a computer printout detailing how much money had been received and what it was earmarked for.

"This is a common practice for a company to be charged the up-front cost for these projects. This costs a lot of money and sometimes the companies do not finish the project," Molly McGovern, a consultant working with Ozark Ethanol, said.

"Vernon County is our second choice," Kirby said, "We wanted it in our (Barton) county. We started out wanting it in the Liberal School District. We looked all over Barton County and found several possible sites, but none of them had all of the infrastructure that is needed to make this project viable. I am not sure if there is a location in Barton County with all of the needed infrastructure," he said.

Kirby explained that to be successful, the project needs to have good highway and rail access, as well as available natural gas, electricity and adequate water supply.

The site along Highway 43 meets all of those requirements.

Wally Sloan said that he has concerns about the impact of this facility on the area's water.

"I pulled a drilling rig all over Vernon County for oil companies drilling wells. You have to go down 800 to 900 feet to hit the Roubideau Aquifer, which is water heavily infused with sulfur.

"It stinks to high heaven," he said.

Sloan said that Radio Springs used to have an artesian well; however, that well dried up in 1954 when Nevada drilled its second well.

"Deeper than 1,200 feet and you hit salt water that you cannot discharge into streams," Sloan said.

Shifting to another concern raised, Sloan asked, "What will you do with wastewater from the plant?"

"The newer designs do not seem to have any wastewater to discharge," was Todd's answer. He added that the ethanol plant in Garnett, Kan. has a pit with wastewater in it and the level of the wastewater does not seem to change.

"The DNR won't let us discharge anything harmful," Kirby added.

Using current technology it requires three to four gallons of water to produce one gallon of ethanol. That means to produce 50 million gallons of ethanol per year it will require about 200 million gallons of water for production, Jerry Janes calculated, asking, "The DNR regulations say that you cannot put cooling water back into the ground and to discharge it into a stream it must be reasonably pure, so what are you going to do with it?."

"Most of it evaporates," Kirby said; an answer that apparently left Janes skeptical.

"It's hard to believe that 200 million gallons is going to evaporate," Janes said.

"In a plant with a modern design you have the same reverse osmosis system that is in Nevada's water plant. From what I understand the output is too pure to use in an ethanol plant," Kirby said.

Before this plant can go into operation the Missouri Department of Natural Resources must issue a permit stating what they can discharge and how much they can discharge into the environment.

Sloan said that he found out from the manager of the Garnett, Kan., ethanol plant they had no railroad access there.

"He told me the biggest complaint he had heard was about all the traffic," Sloan said.

Todd said that the Garnett plant is in the process of getting a permit for rail access.

The plant in Garnett, Kan., is located inside the city limits with houses within two blocks of the facility.

The proposed location in Vernon County is adjacent to the Missouri-North Arkansas rail line that comes into Nevada from the west. Some concern has been expressed by area residents about the increase in rail traffic, due to at-grade crossings in the area.

Todd noted that Prairie Pride, a soybean processing and biodiesel production plant in the Eve area already has contracted use of the line, noting that the speed limit on that rail line is only 15 mph.

"They blow their whistle at each crossing," Sloan said.

Kerry Rose said after the meeting that if all aspects were come together to allow the plant to locate in the area, it would provide 30 to 40 jobs after production begins.