EXCHANGE: Pekin’s ‘Sugar House’ now large ethanol producer
PEKIN, Ill. (AP) — The old Sugar House has been through a lot of changes over the years.
That’s the name “old timers” like Larry Whitehouse still use to describe the ethanol plant operated by Aventine Renewable Energy in Pekin, the site of a sugar processing plant that first went into operation in 1899.
When sugar beets didn’t work out in central Illinois, the plant converted to corn. “The corn milling plant was started in 1904. Its name was changed to Corn Products Co. in 1960 after merging with Best Foods,” said Whitehouse, 75, who worked at the plant from 1957 until he retired in 1999.
In 1981, the plant went from producing corn starch and other corn products to ethanol, said Aventine CEO Mark Beemer. Aventine, which took over the facility in 2003, was the third ethanol producer at the site, following Pekin Energy and Williams Bio-Energy.
Changes continue. Sacramento-based Pacific Energy recently purchased Aventine to become the fifth largest ethanol producer in the country.
While Beemer isn’t sure of his future once the transaction is completed later this year, he’s confident that corn-based ethanol will continue to find a place in the marketplace.
“Ethanol remains the cheapest energy molecule out there. It’s the most economical source of octane available,” said Beemer, referring to ethanol’s place as an additive in most unleaded gasoline sold in this country.
Ethanol prices have declined along with gasoline in recent months. “Ethanol is now around $1.40 a gallon — the lowest it’s been since 2005. We’ve seen significant margin erosion,” he said.
As a result, Aventine is reducing the grind rate at its plant in Aurora, Nebraska by 30 percent, said Beemer, who adds that there’s a bright side to the drop in prices at the pump. “We’re looking at a 3 or 4 percent increase in gasoline use (by motorists). As more gas is burned, we’ll blend more ethanol,” he said.
Ethanol also remains a robust export for the United States with nearly 1 billion gallons expected to be sold overseas this year, said Beemer, noting that distillers grains, a byproduct of processing corn into ethanol, is prized as feed for livestock — and as an export.
“With China’s recent decision to buy distillers grains from the United States, the value of that product has gone up by 25 percent,” he said.
The future of ethanol may be best reflected in the capital expenditures made at the Pekin plant where $30 million in upgrades have been made over the past two years.
“We just put in two natural gas boilers, retiring 70-year-old coal boilers at a cost of $13.2 million. That will save 13,000 tons of sulfur dioxide from going into the air each year. That’s a big improvement in air quality for the Pekin area,” he said.
As the Pekin plant has evolved over the years, the number of employees has declined. Today 205 people work at the facility while Whitehouse recalled that 1,500 worked there when he started in 1957.
When the plant was turning out corn products, the work was more labor-intensive than producing ethanol, said Beemer.
Source: Peoria Journal-Star, http://bit.ly/1EE7Ipt
Information from: Journal Star, http://pjstar.com