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Capital Press 1/19/07 by John Schmitz

A $150 million ethanol plant under evaluation in Klamath Falls, Ore., would do wonders for the ag community in the Klamath Basin in more ways than one, one feedlot operator said.

In addition to providing high-nutrient cattle feed in the form of distillers' corn mash, the plant could very well prompt the area to grow its own ethanol feedstocks - most probably field corn - instead of trucking it from the Midwest.

"It would be tremendous for the agribusiness community in this basin if they were to put that plant here," said second-generation feedlot operator and alfalfa grower Andy Hickey.

The plant, which would consume around one million of tons of field corn a year, would produce as a byproduct about 300,000 tons of wet corn mash, Hickey said.

This feature of the plant alone makes it very attractive to basin feedlots because operators no longer have a good source of cull potatoes to feed their animals due to the water wars that drove a lot of spuds out of the area, Hickey said.

"The fresh market for potatoes has pretty much evaporated from this part (of the state)," he said.

Should the plant become a reality, Hickey said that he and the other feedlot operators in the basin would no doubt expand their operations. "I'd go from two to three thousand head to five or six thousand."

As it stands now, Hickey has had to ship cattle to Nebraska for finishing.

While field corn is virtually a non-crop in the basin, it could become a major one if the plant is built, Hickey said.

"You look at the thousands and thousands of acres here and say you can't grow corn. Well, one dairy here already is growing corn, but mostly for silage. Don't tell me they can't develop a corn variety that'll adapt to this growing season," he said.

The wet corn mash left over after the distillation process is concluded is loaded with nutrients ideal for cattle feed, said Trey Senn, executive director of the Klamath County Development Association.

Not only that, the mash would either be free or "very reasonable" because it would cost the company to dry it and dispose of it, Senn said.

Senn has been working with an ethanol plant operator, Seattle-based E85, on a feasibility study for the plant, a study that includes collecting feedback from the community. "Thus far it's had amazing acceptance," Senn said. "We're real pleased with the response we're getting so far."

Yet another beneficial byproduct of the plant would be 300,000 to 400,000 gallons a day of distilled water that could be made available to local farmers via the Klamath Lake irrigation canal. All the water used in the plant would come from below-ground aquifers and not Upper Klamath Lake, which provides irrigation water to farmers and has been the subject of water wars, Senn said.

One of the features of the proposed site that attracted E85 is an in-place rail line that with some additions would be able to handle mile-long trains loaded with corn from the Midwest. The same track would be used to ship equally long trains loaded with ethanol to West Coast markets, primarily California.

The rail track addition required is a 1,700-foot loop that will circle the plant and connect with the existing track.

No trucks will be used to bring corn in or take ethanol out, Senn said.

In addition to the rail line, the site appears able to provide all the water, natural gas and electricity needed to run the plant, Senn said.

The chief reason E85 is locating ethanol plants outside the Midwest is because that part of the country is already overpopulated with them, Senn said.

Hickey agrees: "They're coming on line with an ethanol plant a week in Nebraska."

Also, E85 wants a plant closer to California to save on ethanol shipping costs.

The proposed plant, which would employ around 50 people fulltime, is expected to produce 100 million gallons of ethanol a year.

There's no telling when E85 will make its decision on whether to build the plant, Senn said. The company has taken an option on the land but that's as far as it's gone.

E85, which is believed to be headquartered in India, is a mysterious entity of sorts. While the company has nine other ethanol plants planned for various parts of the United States, its corporate headquarters could not be found on the Internet, though there are several news accounts of their proposed operations in the U.S.

There is also no Internet site or phone listing for E85's U.S. headquarters in Seattle.

"They're pretty good at not being found," Senn said. He added that the association lawyers in Portland have given him assurance that "they are real."