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NEBRASKA ETHANOL PLANT RE-OPENS, USES GOVERNMENT SURPLUS SUGAR AS ITS FEEDSTOCK
Omaha World Herald reports:

Aventine Renewable Energy Inc. said Thursday it has restarted ethanol production in Aurora, Nebraska, using government surplus sugar in what is probably a first for the Cornhusker State.

The ethanol producer, based in Pekin, Illinois, said it has shipped the Aurora plant's first batches of sugar-based ethanol from the production complex that has been shuttered for various periods over the past few years.

Ethanol from sugar in Iowa and Nebraska, the largest and second-largest U.S. ethanol producers, is almost an oxymoron, as the states also rank one and three in production of corn, the main feedstock of the motor fuel.

But government-surplus sugar occasionally becomes available after the U.S. Department of Agriculture buys excess production to support prices desired by producers. (Nebraska ranks sixth in the U.S. in sugar beet production, with the crop concentrated in western Nebraska.)

"We went out and bought some, and it has been a cost-effective pathway for us to reopen the Aurora plant," said Mark Beemer, chief executive of privately held Aventine Renewable, which also has two production complexes in Illinois.

Todd Sneller, administrator of the Nebraska Ethanol Board, said this is probably the first commercial use of sugar for fuel ethanol in Nebraska. Sneller said the USDA doesn't often have to resort to government buying to support sugar producers, and that such opportunities to buy federal sugar are temporary.

"The liquidation of sugar stocks by the commodity program at USDA provides a means of diverting the U.S. sugar inventory into a market where it will disappear without distorting or competing with the conventional table sugar markets," Sneller said.

Sugar-based ethanol is common elsewhere; Brazil makes almost all of its ethanol from sugar cane. The U.S. programs use sugar from sugar beets.

Aventine's Aurora plant, about halfway between York and Grand Island, has been shut for various periods since the publicly traded parent company filed for bankruptcy protection in 2009. Aventine has since reorganized and is now owned by private investment partnerships.

CEO Beemer said 52 people are now working on sugar-based ethanol production in Aurora, and that 25 more soon will be on the job. Beemer said the Aurora complex, which has two production plants, will transition to corn-based ethanol in August.

The wild card in the ethanol industry is expected to be played next month, when the Environmental Protection Agency is expected to rule on how much of the motor fuel will be required to be blended into the nation's gasoline supply. The agency last year proposed cutting the mandate by about 9 percent to about 13 billion gallons, citing lower gasoline consumption that makes it impossible to blend more ethanol without resorting to higher mixtures, such as 15 percent ethanol.

Beemer, who testified on the matter at the EPA in February, said he doesn't know what the EPA will decide.

"Whatever the outcome, it will be litigated," he said, referring to past years during which either the ethanol or petroleum industry has objected to the blending requirement by filing federal lawsuits.


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