Rumors fly as Pa ethanol plant goes into hot idle for summer

By Holly Jessen | July 14, 2011

As the only commercial-scale ethanol plant in Pennsylvania, Bionol Clearfield LLC attracted a lot of media attention when it went into hot idle in early June. After a television station ran a report Rob Carringer, interim CEO of Bionol, was “hounded” by reporters and rumors ran wild that the plant was shutting down for good. “We’re idling until the market improves,” Carringer told EPM. “We’re not shutting down and we’re trying to be very clear about that.”

 At first, Carringer, a managing partner with CRG Partners, which provides financial advisory and other services, didn’t see the point in talking to reporters. Bionol, which is located in Clearfield, Pa., informed its customers, partners and vendors that it wouldn’t be producing ethanol for a few months and that seemed like enough. But with rumors that the plant would be shut down persisting, he’s started granting interviews to get the facts straight.

The plant went into a hot idle on June 9, thanks to high corn prices and tight margins. The plan is to restart when the market improves, possibly this fall when the new corn crop is harvested. No employees have been laid off. They’re all there, cleaning, doing maintenance or other tasks. “We want to be in a position to restart,” Carringer said.

Bionol is far from the only ethanol plant in hot idle right now. Carringer estimated that between 10 to even 20 percent of ethanol plants have stopped grinding corn, waiting out the markets until they start up again. “There’s no secret of what the price of corn is and what the sale price of ethanol is and the crush spread that you get,” he said, adding that though things were tough in June, it’s likely going to get worse through July as more and more of last year’s corn supply is used up.

As he talks to the press in Pennsylvania Carringer has been trying to help them understand that it’s not an unusual situation for an ethanol plant to idle for a few weeks or months when prices aren’t good. “’This is no big deal,’ he tells them. “’If you guys were all in Iowa or Nebraska this wouldn’t be a big deal. It’s a big deal in Pennsylvania because it’s the only ethanol plant around there … so everybody is all up in arms about it.’”

The plant hasn’t been producing ethanol long. Construction wrapped up in November 2009 and the plant reached full production levels in February 2010. About four months later, in June 2010, Bionol began arbitration proceedings with Getty Petroleum Marketing Inc. The two companies are still in active arbitration to resolve a contract dispute over the price Getty must pay for the ethanol it gets from Bionol, Carringer said.