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Plant power

Sixty-five acres of farmland in Lancaster County could become the home of a $130 million ethanol plant.

Sixty-five acres of farmland in Lancaster County could become the home of a $130 million ethanol plant.

A group of investors, known as Lancaster Biofuels, received conditional approval for the project from Conoy Township officials earlier this month.

The plant would create roughly 50 full-time onsite jobs, as well as a couple dozen supplementary jobs to transport materials to and from the plant, said Herb Flosdorf, general manager of Lancaster Biofuels.

“It will be a substantial employer for that local area,” Flosdorf said. “I believe strongly in the concept of ethanol as a viable fuel for the future.”

Available jobs would include chemists, scientists, equipment operators and other positions similar to what is required in any agricultural-production facility, said Seth Obetz, president of Lancaster Biofuels.

“They’re not minimum-wage jobs. That’s for sure,” Obetz said. Obetz is also vice chairman of Manheim Borough-based Worley & Obetz Inc.

Lancaster Biofuels is made up of a number of investors, including Worley & Obetz, Lititz-based HWF Inc., California-based Cilion Inc. and a group of midstate investors operating under the name Zymoletec. The group was formed in fall 2006. In August 2007, the group submitted the plant proposal to the township.

The proposed facility would convert corn into ethanol. Ethanol is an alcohol that can be obtained from fermenting sugars and starches found in corn. It is the intoxicating ingredient of alcoholic beverages, but it also is used as an additive to or replacement for gasoline.

The demand for ethanol is growing, Obetz said. About two years ago Worley & Obetz was selling roughly 5,000 gallons of ethanol a month. The company is now selling nearly 500,000 gallons of ethanol each month, he said.

Lancaster Biofuels officials hope to begin construction next year. The facility would occupy about 30 of the 65 acres and would take about a year and a half to build, Flosdorf said.

The project would create about 150 construction-related jobs. While the company has yet to put the project out to bid, hiring local companies would be a priority, he said.

The site of the proposed plant is owned by the Lancaster County Solid Waste Management Authority and is adjacent to the authority’s waste-energy facility. In the past, the land has been used for agricultural purposes. The authority would sell the land to Lancaster Biofuels for $2.7 million, said Jim Warner, executive director of the authority.

“We saw their proposed project as an opportunity for the waste authority to sell our renewable energy, in the form of steam that we make from burning waste, to a group who wants to make a renewable fuel,” Warner said. “We really like that synergy of making renewable fuel from renewable energy.”

The authority also would increase its annual revenue by hundreds of thousands of dollars by selling steam to the plant, Warner said.

The authority would consider investing in local projects with the extra money that would be brought in if the ethanol plant receives approval, he said.

“I think it’ll be a significant boost certainly to the local economy just with the fees they’ll pay,” Warner said.

In lieu of paying property taxes to Conoy Township, Lancaster Biofuels would be required to pay an annual fee based on the number of gallons of ethanol produced each year, Flosdorf said. The plant will have the capability to make 60 million gallons of ethanol a year, which would result in a fee of nearly $500,000, he said.

The fee is one of 77 conditions Lancaster Biofuels must abide by, Obetz said. Those conditions include a variety of permits from a number of state agencies and other requirements aimed at protecting the health and welfare of the community.

“I think we can live with all of them,” he said.

The plant would sell ethanol primarily in the southcentral and southeastern regions of Pennsylvania, he said.

More time is needed to see how the ethanol plant’s products will fit into the marketplace, said David Nikoloff, president of the Economic Development Company of Lancaster County.

Individuals may complain that ethanol production is driving up the price of commodities, including corn, but the same people used to be concerned about a lack of income for farmers, he said.

“It’s a two-edged sword,” Nikoloff said. “It will produce a real boon for the local economy in the way of more taxes. People have to understand that this is not just a one-way calculation.”

The region’s agricultural community would benefit from the plant’s operations, Flosdorf said. The plant also would produce animal feed for cattle, poultry and swine. About 200,000 tons of feed is expected to be produced each year, he said.

“An ethanol plant does tend to support the long-term economic viability of a local agricultural community,” Flosdorf said. “There’s a broad impact.”

The plant’s feed would cost less than what local farmers are paying now, Obetz said. The feed also would be marketed and sold by a company other than Lancaster Biofuels, creating more jobs in the community, he said.

“Ethanol is coming. We have mandated increases in ethanol production by the federal government,” Obetz said. “The agricultural communities that will be most hurt if feed prices are increased because of that are those that don’t have ethanol distilleries to offset the price increases.”

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