Monday, April 13, 2009

Ethanol pipeline project still in works in area

PRIMGHAR-Despite a change in partnerships, O'Brien County is still being looked at as a possible key source of ethanol for consumers on the East Coast.

The proposed Independence Pipeline Project would gather ethanol from production facilities throughout the Midwest and run 1,700 miles to the Northeast to supply motorists with more than 10 million gallons of ethanol per day.

Preliminary estimated costs for the project, which would take several years to complete, remain in excess of $3.5 billion.

On Monday, March 16, Magellan Midstream Partners and POET announced they would continue to assess the feasibility of constructing a dedicated ethanol pipeline. Magellan is a publicly-traded company based in Tulsa, OK, that focuses on the transportation, storage and distribution of refined petroleum products. POET is a Sioux Falls, SD-based leader in the biorefining industry and is the largest ethanol producer in the world.

Bruce Heine, Magellan's director of government and media affairs, and Bob Berens, POET's director of site development, addressed their intentions for the project as a press conference Thursday in the O'Brien County Courthouse in Primghar.

"Sometimes companies form partnerships for good reasons," Heine said. "This is one of them."

The plan originally was announced in February 2008 by Magellan and Buckeye Partners of Breinigsville, PA. Although Buckeye continues to believe pipelines are the most effective way to transport large volumes of liquid energy, the company recently decided to focus on other priorities and has discontinued its role in the project.

Magellan and POET have formed a tentative map of the pipeline, but Heine said it could change. The farthest west the pipeline is proposed to extend is Iowa. Three locations in Iowa - O'Brien County, Mason City and Fort Dodge - have been identified as aggregation points, basically loading places for the pipeline. The pipeline would carry ethanol through Iowa, Illinois, Indiana, Ohio, Pennsylvania and New Jersey, with its endpoint being at the New York Harbor in New York City.

"The origin of the land could change," Heine said. "We could eventually expand to neighboring South Dakota."

He said northwest Iowa is the "honey pot" of ethanol production.

"The opportunity to transport large volumes of ethanol in a safe and cost-effective and reliable manner will benefit the ethanol industry in the future," Heine said. "It provides diversification of transportation modes in a very safe, reliable and cost-effective manner."

In some places, the pipeline will connect directly to ethanol plants. Since the location in O'Brien County would be an aggregation point, ethanol producers would truck the product into the terminals.

"It is a positive development for the ethanol industry and for consumers that will ultimately depend upon the reliability of delivering large volumes of ethanol from where it is produced to where it is consumed," Heine said.

He said federal financing is a necessity for the project.

"The best way to move forward is federal financing int he form of a loan guarantee," Heine said.

While Heine and Berens said the proposed pipeline still is four to six years from reality, they said the job creation will be well worth the wait.

"Leading economists estimated the pipeline would create as many as 25,000 jobs within the first year," Heine said.

This article was published in the April 11, 2009 edition of The N'West Iowa REVIEW.

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