Ethanol – its economic impact on Meade County By SANDRA STONE On Oct. 27, a letter of intent was signed between the Meade County-Brandenburg Industrial Authority and AgriFuels, putting into motion a plan for AgriFuels to purchase 106 acres +/- of the 551-acre parcel adjacent to Arch Chemicals which was purchased late last year for the purpose of developing an industrial park. On this parcel will be built a 55-million gallon ethanol plant. Ethanol is a plant-based fuel that can be used as a substitute for gasoline in most instances. AgriFuels plans to use corn in its production of ethanol and is hoping to purchase as much of its supply from local farmers (within a 50-mile radius of the plant) as possible. But before the first bushel of corn is purchased and processed, the county will already begin reaping the rewards of this new venture. Several articles about the proposed ethanol plant have appeared in the Messenger, but questions still arise. With this article, let’s look at the question of how the ethanol plant will affect Meade County in dollars and cents. The total project cost is estimated at $115 million. Of those costs, approximately $85 million will go toward the construction of the structures, buildings and equipment for the plant. Then another $3 million will be spent to upgrade the rail system. And let’s not forget the $1.25 million to purchase the property from the county. Then there will be smaller projects such as the drilling of water wells and pipelines for the water to be sent to the Brandenburg Water Treatment Center for processing and return to the plant. Then what happens after the plant is up and running? The 24/7 operation will create 45 jobs ($2.1 million in total salaries and benefits for the first year). The average annual salary will be $40,000; the lowest salary at the plant will be $8.50 for a secretary. “Anyone working at the plant who lives in Meade County will have a better income, more spendable income, simply because they won’t have to travel as far,” said Don Martin of AgriFuels. “With today’s gas prices, it’s not unreasonable to assume an employee could have $1,000 more per year with which to improve their quality of life.” Generally speaking, continued Martin, people with more spendable income will raise their housing standards, either buying a home or improving on the one they have, and that will result in an increase to the county’s property tax base. Salaries and benefits are just a part of the overall economic picture. The plant will purchase 20 million bushels of corn ($44.7 million) in its first year of production. With the USDA estimating 37 million bushels of corn being grown within a 50-mile radius, much of that corn will come from local producers receiving fair market value for their corn. Then there are utilities ($13.3 million for natural gas, $2.1 million to Meade County RECC for electricity and $270,000 for water and water treatment). Another $3.6 million will be spent on enzymes and chemicals and another $1.5 million will be spent for maintenance and repair. All told, annual production costs will be approximately $70.4 million with total gross sales estimated at $126.8 million for the first year. State and federal taxes are estimated at $11.4 million with approximately $185,000 in local taxes. Plans are in place to double the plant’s ethanol producing capacity to 110 million gallons in the third year of production. With that will come the purchase of 40 million bushels of corn each year, an additional 10 employees for the plant and six more employees for the in house rail capabilities for a total of 61 employees by the third year. A fuel blending facility, planned for the third or fourth year, will result in 10 more jobs. A distiller grain processing facility will require at least five additional employees. Within five years of day one of ethanol production, 76 new jobs will have been created in Meade County. Factor in the multiplier effect, and those jobs could translate into 150 or more jobs created countywide over the course of three or four years. With the letter of intent signed and the purchase agreement slated for signature in the next week or so, the ball is rolling quickly, and Martin anticipates beginning construction by the first quarter of 2007. If construction begins then, and barring any unforeseen delays, production at the ethanol plant could begin as early as mid 2008.
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