Molasses eyed as alternative to corn for ethanol plant

Amid growing concerns about the environmental and economic impact of corn-based ethanol, Albany Rene
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Amid growing concerns about the environmental and economic impact of corn-based ethanol, Albany Renewable Energy LLC has been engaged in discussions about another possible ingredient for the ethanol plant it wants to build at the Port of Albany: molasses.

Albany Renewable Energy President Ed Stahl said his company has begun preliminary discussions with molasses importer Westway Trading Corp. about attempting to convert molasses, a by-product of sugar production, into ethanol, an alcohol fuel.

“We’re simply exploring at this stage whether the use of molasses as a source of sugar enhances the production of ethanol,” Stahl. “The discussions are to identify whether technically a corn-based plant can accept this liquid stream of high sugar content material as an additional source of fermentable sugars, and does the cost of that product make economic sense.”

In March, Albany Renewable Energy gained the rights to lease 18 acres at the port for the purpose of building a plant capable of producing 55 million to 110 million gallons of corn-based ethanol a year.

Westway Trading Corp., a subsidiary of European holding company ED&F Man Holdings Ltd., operates a cattle feed liquid supplement plant on a parcel adjacent to where Albany Renewable Energy’s plant would be built.

“If he wants to buy molasses we’d be glad to sell him molasses,” Westway Eastern Region Operations Manager Mark Morris said. “We could [import] a whole lot more [molasses] than we are. Today we probably bring in 45,000 tons of molasses a year.”

Stahl said his company is still negotiating a lease agreement with the Albany Port District Commission. He said Albany Renewable Energy won’t begin to raise the $240 million needed to build its ethanol plant until a lease is in place.

The plant’s production capacity will depend on how much investment money Albany Renewable Energy can convince investors to provide.

The venture comes at a time when support appears to be eroding for the federal government’s corn-based ethanol subsidies and mandates.

In December, Congress passed an energy bill that mandated a fivefold increase in ethanol production by 2022, to decrease the nation’s dependence on petroleum. Ethanol production is on the rise in other nations, as well.

At the same time — many say because of this diversion of grain from food to fuel production — food prices have spiked, causing shortages and riots around the world. The U.S. Department of Agriculture blames 20 percent of food cost inflation on the ethanol industry. International aid groups, including the World Bank, say ethanol accounts for a much larger chunk of the price surge. Ethanol advocates put ethanol’s role at only 4 percent.

Rep. Jeff Flake, R-Arizona, on Wednesday called for a repeal of government incentives designed to boost ethanol production, calling them “a classic case of the law of unintended consequences.”

“Congress surely did not intend to raise food prices by incentivizing ethanol, but that’s precisely what’s happened,” Flake said in a statement. Earlier in the week Sen. Kay Bailey Hutchison, R-Texas, proposed freezing the ethanol production mandate at current levels.

Senate Democrats are expected to call for similar measures today at a hearing on food prices before Congress’ Joint Economic Committee.

Stahl said Albany Renewable Energy is preparing to answer investors’ concerns about a possible rollback of federal support for corn-based ethanol. He said it remains to be seen how a loss of subsidies would affect the planned plant’s business model.

“Could we survive? Well, what’s the price of corn? What’s the price of oil? What’s the price of gas at the pump? Those are the scenarios we need know to answer that simple question,” Stahl said. “There have been times in the near past when we absolutely could not have made it. The market forces would have crushed the industry and there have been times when we could have survived.”

When the Albany ethanol proposal was announced in March, public officials said the company would follow up with an adjacent plant that would boost total production at the port to 160 million gallons per year. That remains a long-term goal, Stahl said, but won’t happen in the near future.

Albany Renewable will not seek a lease for the second parcel at the port at least until the first plant is built and operational, and possibly not until it generates a profit.

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