Virginia ethanol facility to shut down
HOPEWELL, Va. — Green Plains announced last month it’s closing and dismantling its Hopewell ethanol facility.
It ends an eight-year quest to establish a profitable biofuels facility in southeastern Virginia as a glut of ethanol, rising freight costs and a trade war with China have pressured ethanol producers nationwide.
Thirty-one jobs will be cut, the company said in a press release. The operation will be broken down, and equipment will be shipped to other Green Plains facilities across the country, a process that could take up to 18 months.
Though farmers who sold to the facility are expected to find new outlets for their corn, some may have to adjust to higher freight costs and a lowered basis as the marketplace reacts to the loss of a significant Virginia corn buyer, said Robert Harper, a grain merchandiser with the Virginia Farm Bureau in Richmond.
“They bought a lot of corn from everybody,” he said. “They were a go-to destination. Very farmer-friendly. … It’s within 75 miles of a whole lot of corn.”
The facility was built to produce up to 60 million gallons of ethanol per year, though it often idled intermittently in poor markets after Green Plains purchased the facility in 2016, Harper said.
At full capacity, it would have been the largest ethanol plant on the East Coast, uniquely placed as the vast majority of ethanol plants are in the Midwest around the nation’s grain corridor.
Green Plains, an Omaha, Neb., company and the country’s fourth-largest ethanol producer, paid more than $18 million for the plant and planned to invest millions more in renovations. It was sought for its semi-coastal location, and the company had hoped to use the site to gather distillers grains produced at Hopewell and other plants across the country and move them by rail to ports for export.
Virginia-based Osage Bio Energy built the facility in 2010, hoping to turn barley into ethanol while relying on subsidies, but it closed before opening. It was sold to Vireol Bio Energy, a British firm, in 2013 and produced 4 million gallons of ethanol per month before it closed in August 2015. Green Plains bought the facility in 2016.
“We knew if anybody could make it work, it would be them, and if they couldn’t make it work, nobody could,” Harper said.
Most of the plant’s ethanol was shipped to Richmond-area mixers in the production of gasoline.
The company recently sold three ethanol plants to Valero Energy Corp., part of an effort to reduce debt and decrease production.
Green Plains has also idled several plants across the Midwest, Reuters reported last month.
Jim Stark, a vice president and spokesman at Green Plains, could not be reached for comment.
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