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CLEARFIELD, PA-Gov. Ed Rendell has provided $17.4 million in incentives to Norwell, MA-based BioEnergy International LLC for development of a two-plant ethanol production facility. The total estimated construction cost is $250 million.

Sam McConnell, VP of development and project director for BioEnergy, tells GlobeSt.com, “we’re currently evaluating four sites in Clearfield County,” and says the complex will require approximately 50 acres. It will contain a $180-million facility with capacity for producing 108 million gallons of corn-based ethanol a year. The footprint for that plant, based on a similar one under construction by BioEnergy in Providence, LA, is about 900,000 sf, including space for both production and storage, according to McConnell.

In addition, the company plans a $70-million pilot-scale plant for demonstrating its technology for the production of fuels using locally available waste, such as wood and agricultural residue. McConnell says it will initially produce between one and two million gallons of ethanol a year and has the technical capability of moving to the production of ethanol-based specialty chemicals as an alternative to petroleum-based product.

BioEnergy expects to break ground here late in the first quarter of 2007 and be operational in late 2008, McConnell says. East Meadow, NY-based Lukoil Americas has agreed to buy and distribute the ethanol. It is the US affiliate of Moscow-based Lukoil, which is the second largest private oil company in the world and has a sales network across 17 countries.

The state incentives include a $400,000 opportunity grant, $500,000 in job creation tax credits, a $1.25-million loan and $1.25-million grant from the infrastructure development program and $14 million from the Redevelopment Assistance Capital Program. The RACP funds will be split $11 million for the larger ethanol plant and $3 million for the pilot facility.

“With gas prices at or above $3 a gallon, Pennsylvania is sending approximately $30 billion overseas,” says Rendell in a statement. “By producing 108 million gallons of denatured, fuel-grade ethanol per year, we will not only break the grip of foreign oil cartels, we will [also] create new markets for our corn growers and help foster a cleaner environment.” Of the pilot plant, he says, “the growth potential for cellulosic ethanol is substantial. The commonwealth contains enough plant matter to produce in excess of 500 million gallons of cellulosic ethanol per year.” This facility is expected to create 110 new jobs over the next five years.

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