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Texas company breaks ground on ethanol plant

Agriculture.com Staff 07/20/2006 @ 9:50am

Dallas, Texas-based White Energy Holding Company, LLC, broke ground Tuesday, July 18, on a new ethanol facility in Hereford, Texas.

The fully funded $117 million project is expected to be operational by the fourth quarter of 2007 and will have a production capacity of 100 million gallons per year (MGPY), placing White Energy among the top ten ethanol producers nationwide and the first operator in Texas. The company currently operates a 45 MGPY nameplate ethanol plant in Russell, Kan., that was recently acquired from U.S. Energy Partners, LLC.

"With this new construction, White Energy is taking a significant step toward our goal of owning and operating renewable fuel facilities with capacity of 500 to 700 MGPY within the next few years. We are dedicated to becoming an industry leader with a diversified portfolio of renewable energy resources established through acquisitions and Greenfield construction," said Kevin Kuykendall, chief executive officer of White Energy.

"The recent successful placement of $273 million in debt and equity funding, combined with our in-house expertise in plant operations, agricultural processing, financial management and marketing, gives us a significant advantage over competitors who are attempting to become industry players. We have aggressive goals and a very deep bench with which to execute," he added.

According to Kuykendall, Hereford was an ideal choice for new construction and fits well into the company's ethanol destination strategy, breaking from the mold of ethanol production concentration in predominately Midwestern states. Moving production capacity closer to market destinations allows for delivery reliability and flexibility via lower cost transportation alternatives.

In light of recent industry and legislative changes -- the phase out of MTBE (Methyl Tertiary Butyl Ether), record gasoline prices and the creation of a Renewable Fuel Standard (RFS) -- the demand for ethanol and other renewable fuels is significantly outpacing supply. White Energy is responding to this record growth with a strategic expansion plan that will result in the company acquiring and/or constructing three to five ethanol plants and two to three biodiesel plants during the next three years.

The Hereford plant will be adjacent to an existing 9.5 million bushel grain elevator and 2.5 mile rail loop track owned and operated by Archer Daniels Midland Company (ADM), where White Energy will store grain prior to processing. White Energy intends to utilize a mix of corn and milo as grain inputs for the ethanol facility. Up to 10 million bushels of milo per year will be purchased from the local Hereford Grain Co-op, and the corn will be secured from ADM. Additionally, distiller's wet grain (DWG), a high-protein feed supplement to the beef and dairy industries and the primary by-product of the ethanol production process, will be sold locally, capitalizing on the high numbers of dairies and cattle feedlots in the area.

Approximately 40 full-time jobs and more than 350 people will be on-site during the construction phase at Hereford, injecting an estimated $100 million into the area economy annually. Kuykendall said White Energy and its construction partners are committed to buying and utilizing as many local resources as possible.

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