“When we selected Glenville … we believed that we would be holding its grand opening sometime around today,” said Larry Ward, Poet’s vice president for project development, in a written statement. “However, permitting has delayed the project by more than a year and has caused a significant amount of additional costs making it less attractive than other potential projects in the Eastern Corn Belt.”
The Sioux Falls, S.D.-based company already has one ethanol facility in Glenville, and Ward said authorities hadn’t expected any “unusual permitting concerns” because the second plant was so close to the first.
But the project bogged down when Poet tried to get the required state air and water permits.
“It’s a little surprising considering we’ve built eight plants in that state and have four in operation,” said Nathan Schock, director of public relations at Poet. “It really wasn’t any one thing. It was everything together and it was just delay after delay, and finally, when [we] took it all into account, we just decided that our company would be better off focusing our development efforts in [other areas].”
Obtaining permits in other states has been speedier, with two plants in Ohio and one plant in Indiana winning approvals in four to six months, and Poet decided to cut its losses after a year of permitting hassles on the Minnesota plant, he said.
Poet still doesn’t have the permits in place for the Glenville plant, but already has two-thirds of the construction completed on those other three plants (and expects them to begin operations in the fourth quarter of this year), even though the company started applying for permits for those plants three to four months later than it began in Minnesota, he said.
While the company wasted time that could have been spent on other projects, it plans to sell the land and to route the pre-purchased construction equipment, which had long order times and had to be purchased well in advance, to other projects, Schock said. “Ultimately, we hope there’s not going to be too much cost.”
Rick Kment, a biofuels analyst with DTN Research, said permits are becoming a bigger issue as public perception about biofuels has changed.
“There’s not necessarily the public support any more for a lot of these plants that maybe, if they had gotten permitted three to four years ago, would have been rubber stamped through,” he said. “Now you have a lot more publicity about these plants and about the [environmental and economic] concerns, so in some cases, getting the appropriate permits companies need to build these plants has become a huge hassle.”
In many cases, the permits require public hearings and are influenced by public opinion, which Kment characterized as both good and bad.
“Two or three years ago, you might not have had many people, if any, show up for these public meetings,” he said. “But now everybody’s [airing their concerns], not only of building that plant, but about the whole industry, which isn’t bad but really slows down the process. That’s where I think the permitting is starting to get held up.”
While few plant cancellations have been blamed on permitting problems so far, the difficulty of getting permits is becoming a bigger issue, Kment said.
“The whole thing is slower and there’s a lot more scrutiny for these plants than for the plants that were built two or three years ago,” he said.
And cellulosic-ethanol companies -- which hope to address the concerns about corn-based ethanol because they use nonfood materials and potentially use less energy overall -- could end up bearing the brunt of the permitting delays, he said.
While most of the corn-based ethanol facilities under construction already have permits, many of the future plants that companies are planning involve a cellulosic component, Kment said. And because those involve new technologies, companies might have a harder time pinning down their environmental impacts, he added.
“One of the challenges of cellulosic technology right now is that it’s still young enough that they really don’t know what kind of water usage or waste issues [companies will have] from cellulosic processes versus corn-based processes,” he said. “I think it’s really going to be a big challenge for next-generation ethanol processes more than for the corn- or grain-based ethanol.”