News From My Backyard: Pacific Ethanol Building Oregon Ethanol Facility

This spring, Pacific Ethanol Inc. began construction of what I believe will be the first ethanol refinery in Oregon, according to an article in Sustainable Industries Journal (SIJ).

The facility, located at the Port of Morrow, on the Columbia River, near Boardman, Oregon, is expected to be operational by summer 2007 and pump out about 35 million gallons a year of corn-based ethanol, company officials said.

The Port of Morrow facility, which will be modeled after the company’s new Madera, California plant, is expected to provide ethanol for Pacific Northwest transportation markets. Pacific Ethanol plans to sell the Port of Morrow plant’s distiller grains to dairy and feed markets throughout Oregon and Washington.

The Boardman and Madera refineries are two of five ethanol plants Pacific Ethanol (Nasdaq: PEIX) plans to construct along the West Coast by the end of 2008. Locations of the other three plants will be announced pending permit approval, a company spokesman said.

All told, the Fresno, Calif.-based company aims to increase its total nameplate production capacity to 420 million gallons annually by the end of 2010, SIJ reports.

Pacific Ethanol said it will pay for its ambitious expansion plans with roughly $138 million in net proceeds from a May sale of almost 5.5 million shares of its stock to institutional investors, according to SIJ. A portion of the money is also earmarked for investment in promising corn and cellulosic ethanol technologies, a company spokesman said.

As I said above, I believe this will be the first ethanol refinery located in Oregon, and certainly the first refinery on a large scale. The Northwest market for ethanol is growing, driven by Renewable Fuels Standards recently enacted in Washington and Portland, OR.

However, with the Northwest not really being corn growing country, I imagine most of the feedstock for these facilities will have to be shipped in from the Midwest. So, while ethanol in the Northwest is at least a domestic - in the since of not being imported from another country - it certianly isn't local. The shipping costs to transport the ethanol by rail to the Northwest will also slightly decrease the already marginal improvement in petrloleum and fossil energy use per mile travelled on ethanol relative to gasoline.

If Oregon, and the Northwest, truly wants a domestic - as in local - and renewable fuel source, we should be looking to build a cellulosic ethanol industry using waste from the large Northwest forestry and agriculture sectors to produce our liquid fuels (and a bit of electricity) as well as additional electricity from the Northwest's diverse and abundant renewable energy sources to power the electric component of a plug-in hybrid flex fuel fleet. Obviously that's a bit longer term vision - 10-15 years out at least - but something Oregon and Washington should be striving towards.