Panda Ethanol Inc. announced that its Hereford subsidiary has successfully completed $188 million of debt financing on its 100 million gallon ethanol plant in Hereford, Texas, a cattle town in the Texas panhandle. The company will immediately begin facility construction on the 380-acre site and anticipates ethanol production to commence in the second half of 2007.
The first-of-its-kind facility (?? I have heard of others) will generate the steam used to manufacture ethanol by gasifying more than 1 billion pounds of cattle manure a year making it one of the most fuel efficient ethanol refineries in the nation. Once completed, it will be the largest biomass-fueled ethanol plant in the United States.
Panda Energy previously announced that they had reached an agreement for Lurgi PSI to build the Hereford plant. In October Panda announced it had received an air permit for the facility from the Texas Commission on Environmental Quality.
This is the first of three plants to start construction that Panda has announced, the other two 100 million gallon plants being in Yuma, Colorado and Haskell, Kansas. The combined production of the three announced Panda fuel ethanol plants will replace 300 million gallons of imported gasoline annually. By utilizing bio-gas produced from manure instead of natural gas, each facility will save the equivalent of 1,000 barrels of oil per day.
Each 100 million gallon per year Panda Ethanol Facility will:
- Create annual spending for goods and services of approximately $90 million
- Have an economic impact on the community including corn of approximately $400 million annually
- Create approximately 1600 construction jobs
- Employee approximately 60 permanent jobs
- Increase household income in local community by more than $50 million annually
The use of biomass instead of natural gas, to power ethanol plants, eliminates one of the biggest criticisms of ethanol production, the use of large amounts of fossil fuels.
According to the Renewable Fuels Association the total current capacity of 101 operating U.S. ethanol biorefineries is 4,830 million gallons per year (MGY), the total number of plants under construction is (36) and expansions is (7) for an additional capacity of 2431 MGY for a total Capacity of 7260 MGY. These totals do not include the three Panda plants.
If these projections come true we will have met the DOE goal of 7.5 billion gallons a year for 2012 by 2008 and by 2010 we should reach the point where further use of corn for ethanol will effect our ability to produce our necessary food supplies. Cellulosic ethanol will be required to achieve further production if we are to proceed responsibly. Technology should be proven by then, but will the ethanol industry be ready to adapt in order to keep production growing at its historic rate? It is said that existing plants will be able to be modified with relative ease, but that still has to be shown. Is government oversight required to insure food supplies? I believe there are over 1000 large cattle feeding operations in the U.S., which could provide enough manure for ethanol plants for some time. They all may not be located close to corn ethanol plants, but biomass for cellosic ethanol is much more widely dispersed.
Panda Ethanol Completes $188 Million Financing For Hereford Facility, Panda news release, August 1, 2006
Panda Energy International, Inc., Dallas, Texas USA