Elite Octane to break ground on corn ethanol plant in Iowa
Construction on a new corn ethanol plant in Cass County, Iowa, could begin as soon as this month, with commissioning expected to kick off 18 months later. The facility, located northwest of Atlantic, Iowa, will be one of only a handful of first generation ethanol plants to be built in the U.S. since 2008.
The project is under development by Elite Octane, a company formerly known as Farmers Energy Cardinal LLC. Nick Bowdish, president and CEO of N Bowdish Co. LLC, will serve as CEO of Elite Octane following the project’s development.
According to Bowdish, the nameplate capacity of the plant will be 120 MMgy. The air permit obtained from the Iowa Department of Natural Resources, however, allows for production of up to 150 MMgy. Bowdish also confirmed that financing for the project is already complete and that Fagen Inc. will be the design-builder of the facility.
Ron Fagen has been involved in the development of the project for several years. Bowdish said that Fagen purchased the site in 2012 and has been an active proponent of the project. Ethanol Producer Magazine previously reported that the project itself has been under development for nearly a decade.
According to information provided by the Iowa Economic Development Board in early 2016, efforts to develop the ethanol plant first began in 2006 when a group of farmer investors formed Amazing Energy Atlantic LLC. They invested millions of dollars in site preparation, concrete piers and an office building. However, the group was unable to complete fundraising for the project, and left the site mid-construction. Ron Fagen bought the site in early 2012.
Rex American Resources possessed an option for the project in 2014 and 2015, Bowdish said, noting that the company ultimately decided not to exercise that option. Ron Fagen has continually owned the site since 2012, Bowdish continued.
In January 2015, the EPA approved a fuel pathway for the plant. That pathway application was filed by Rex. According to Bowdish, the pathway is still in force. “The last step in order to utilize the pathway to generate D6 RINs is to register the facility for the pathway,” he said. “That involves supplying EPA a compliance monitoring plan and a process flow diagram, both of which require items as specific as serial numbers off of certain pieces of equipment. Once that equipment has been designated for this project and the information is available to Elite Octane, Elite Octane intends to register the facility to use the pathway that was approved by EPA in 2015.”
A development agreement for the project was recently approved by the Cass County Board of Supervisors. Bowdish said that agreement provides for a minimum assessment of $32 million on the improved property. “That assessment will generate approximately $911,500 of annual property tax payments from Elite Octane to Cass County,” Bowdish continued. “The agreement calls for Cass County to refund 50 percent of those payments back to Elite Octane for a period of 15 years. Cass County will keep the other 50 percent, or $455,750 per year, and use that money to pay back the debt they intend to use to pave approximately 2.5 miles of road that is gravel today and also install a water pipe from the City of Atlantic’s wastewater treatment plant out to the ethanol plant project site. For more than 75 years, the city of Atlantic has been dumping water into the river that will soon be used to support the ethanol plant and the 49-plus jobs that come with it, not to mention the boost to the local economy.”
The project is also being supported by tax incentives awarded by the IEDB. In January 2016, the IEDB awarded the project a sales tax refund to create 49 jobs, of which 45 of incented at a qualifying wage of $18.87. The project is expected to result in a capital investment of $189.9 million. The contract was contingent upon the project securing financing within one year of the day of approval.
“Elite Octane appreciates the support of the Cass County Board of Supervisors, the county auditor, assessor, and engineer, the Atlantic City Council, the mayor of Atlantic, officials at CADCO, the local economic development corporation, and numerous third parties that have all made concessions to make this project viable.,” Bowdish said. “The project has a small number of hurdles yet to overcome to be moving forward with certainty, and Elite Octane looks forward to making an announcement if/when that day arrives.”