Construction to begin on new ethanol plant

HOPEWELL, Oct 01, 2008 (The Progress-Index - McClatchy-Tribune Information Services via COMTEX) -- DD | Quote | Chart | News | PowerRating -- An ethanol plant that whipped up controversy in the community will produce a huge impact on local farmers and energy production, company officials say. Appomattox Bio Energy, the state's first ethanol production facility, is holding a groundbreaking Friday.

"We are very excited," said Joel Stone, chief operating officer of parent company Osage Bio Energy. "It's an outstanding opportunity for what this plant is going to bring to agribusiness in this area."

Inside of the national energy policy debate, Stone said the plant's impact will be profoundly local, starting with $100 million dollars worth of barley needed each year.

"The key thing for barley is that barley in this region is a winter crop. It's double-cropped with soybeans," he said. That can cut down on soil erosion and runoff into the Chesapeake Bay. The demand -- Osage expects to buy more than 28 million bushels per year -- should be met by farmers within a 75-100 mile radius of Hopewell, Stone expects.

"There's quite a bit of barley grown" in Virginia and Maryland, he said. The end product will be equivalent to corn-based ethanol that is mostly produced in the Great Plains.

"We think a lot of the ethanol that's produced in Hopewell will stay in a fairly close radius," Stone said, including being blended in consumer gasoline to the state-mandated 10 percent ethanol content.

The long-empty property between Sixth Avenue, Winston Churchill Drive and La Prade Avenue, known for years as the Exeter site, is showing signs of life. The plans are for barley grains to enter the site and 68.2 million gallons per year of ethanol to leave.

Mayor Brenda Pelham, an early advocate of the plant, says activity there will boost small business in the area.

"We realize that future energy for our children and grandchildren has to be from more than one source," she said.

Stone added that demand will increase for local truck drivers and farmers. About 50 people will be employed directly by the plant.

Opponents worried about the safety factor, considering the plant is near the Community Center, fire station, Municipal Building and Carter G. Woodson Middle School. Dozens spoke during City Council hearings on the matter last year and a Department of Environmental Quality public hearing this spring.

The Rev. Curtis Harris, Ward 2 councilman, led the fight. In an open letter sent April 16, Harris wrote of his "grave concern for the African-American community in Hopewell." It would threaten not only Twin Rivers Apartments, Thomas Rolfe Court and Davisville but the downtown itself, he said. Court actions by Harris were ultimately rejected by the Supreme Court of Virginia.

The land is a former home to heavy industry by DuPont, Tubize and later Firestone. Two major development proposals, one for an outlet mall in the 1980s and another in 2002 for a shopping center and townhomes, fell through.

The site was once an Environmental Protection Agency Superfund site, a designation reserved for the most-polluted tracts of land in the country. It was cleaned up during the 1990s.

Osage brought forward a proposal last fall, leading to a 4-3 vote by City Council in December. City Councilman Curtis Harris filed suit, driving appeals all the way until a final rejection by the Supreme Court of Virginia in the spring.

Osage bought land from the city and HDC LLC in late June, which settled a court squabble between the two about a failed 2002 project.

Due to public interest, the DEQ decided to hold a public hearing, even though that's typically not done for "minor" sources expected to output less than 100 tons a year of pollutants. About 300 contacted the agency regarding the plant. The permit was approved and issued Aug. 12, the final stepping stone for the company.

Osage Bio Energy pins Hopewell as the first of four facilities in the Southeast. A second is under way in Mecklenberg County and another in Union County, S.C. A major backer, First Reserve Corporation, said the use of barley rather than corn and the geographic location made it a smart investment.

First Reserve has fronted $300 million for the plants.

The company has until November 2008 to begin construction under the contract with the city. But the first shovels are likely to turn Friday during the invitation-only groundbreaking.

--Patrick Kane may be reached at 722-5155 or pkane@progress-index.com.

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