Archive for Thursday, September 28, 2006

Local firm hopes for success with ethanol

September 28, 2006

The corporate office of the company that is working toward becoming the low-cost producer of ethanol is right here in the city of Basehor.

Ethanex Energy, Inc., is an ethanol development company, which also has two other offices located in Charleston, S.C. and Santa Rosa, Calif. President and Chief Executive Officer Al Knapp said that ethanol is a step towards energy independence for America.

"We have a terrible problem in this country in that we are so dependent on foreign oil," Knapp said. "Ethanol is a renewable fuel made from corn. It's good for America. It's not the answer, but it's a good first step."

The company plans to break ground on three ethanol-producing plants -- one in Cape Girardeau, Mo., another in Franklin County, Ill., and one in northeast Kansas -- throughout next year. Each plant will use 45 million bushels of corn and produce 132 million gallons of ethanol per year. Knapp said the biggest input in ethanol production is corn and the second is energy. While natural gas is often used for energy, it is expensive. These plants will use lower-priced fuels and reduce the amount of energy required to produce ethanol.

"We believe we can produce ethanol 25 percent lower than the industry average," Knapp said.

The federal government has mandated that the renewable fuel standard be at 7.5 billion gallons per year by 2012, Knapp said, meaning that 7.5 billion gallons of ethanol must be used per year. But, pending legislation may raise that standard to 15 billion gallons per year.

"The National Corn Growers Association has commissioned several studies performed by universities that show that we can produce 15 billion gallons without adversely affecting the price of corn," Knapp said. "Fifteen billion gallons of ethanol is equal to about 10 percent of the gasoline we use."

Ethanol production is a commodity business, Knapp said. The price of oil, corn and ethanol are always fluctuating and they have to work together to make this a market-driven industry.

"We could very well be generating somewhere in the neighborhood of a billion dollars in revenue," he said.

A Basehor native, Knapp said he chose to set up the corporate office of this potential billion-dollar business in Basehor because of his ties to and love of the area.

"We could have settled in Kansas City or anywhere in the country for that matter, but Basehor is home," he said. "We want to be in the community and I think Basehor needs business."

The company's current facility at 14500A Parallel will be sufficient for perhaps 18 months, Knapp said. Company officials ultimately would like to build an office building because they expect to grow rapidly from about seven employees right now to 20 or 30. Knapp said the transfer of employees from other parts of the country to Basehor will bring new faces, consumers and recognition to the area.

"It will bring some notoriety to Basehor," he said. "I think Basehor is a well-kept secret."

Commenting has been disabled for this item.