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Latest Plant Puts POET Annual Ethanol Production Over Billion Gallon Mark

7 May 2007

When POET opened its 20th ethanol production facility, a plant in Corning, Iowa, with an annual capacity of 60 million gallons, it became one of only two ethanol companies with an annual production capacity of more than one billion gallons. ADM is the other.

The POET (formerly known as Broin) plant in Corning will use more than 21 million bushels of corn from the area to produce the 60 million gallons of ethanol and 178,000 tons of distillers byproducts per year.

The facility is the 26th constructed by POET and the 20th under management since they were founded 20 years ago. The company also has seven under construction or in development in Indiana, Minnesota and Ohio. Corning is the seventh POET Biorefining plant in the state of Iowa, the first of which began operations near Coon Rapids in August, 2002.

May 7, 2007 in Brief | Permalink | Comments (5) | TrackBack (0)

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The announcement from POET also reveals to other issues of importance.

1) To quote “It includes advancements like our patent-pending BPX technology that eliminates the cooking process in ethanol production. This technology reduces our energy usage by as much as 15 percent in comparison with conventional plants."

2) To quote “$105 million facility has annual production capacity of 60 mgpy”.

I am surprised that costs to build such a facility are that low. Scale it up and you could build 6 billion gallons of annual capacity for $10,5 billion. That money is less than 25 days of US military expenses in Iraq. The US annual gasoline consumption is about 140 gallons.

140 billion gallons. Sorry.

I had to run the other numbers, and my guess was correct. It would take about another $105 million to buy the corn at $4.00 a bushel, and employee 200 people at $50 an hour.

Then take the 60 million gallons and wholesale it for $2.00 and you make a small profit. Sell it for $3.00 and you pay off the facility in two years.

All rough numbers, but it shows that the free market works!!

Yes the free market works. It appears, however, to be a little slow. I mean, it only takes petite money to make large expansions of ethanol production that appears to be profitable. There could be something that holds investors back from making far larger investments. A prime suspect would be fear of falling prices on crude oil. A large drop could destroy the profitability of the ethanol refineries. One thing that would blow away that fear would be solid confirmation of global peak oil. In that sense global peak oil could be very conductive for a rapid development of green transportation. I just hope that coal to liquid will prove more costly than bio fuels (to prevent GW). To ensure this it may be necessary to tax co2 emissions much more and we need to do it globally especially now that China has taken the lead on co2. So the free market works, but it may need a little regulation to make it work for the common good as well.

Mike,
There is no way 200 employees in IOWA are being paid anywhere near $50 per hour to make ethanol. I would be surprised if it came to $24 with benefits and taxes.

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