Web exclusive posted March 18, 2008 at 2:26 p.m. CST

A North Carolina site that local economic developers had hoped would house Agri-Ethanol Products LLC is back on the market, according to Beaufort County Economic Development Director Tom Thompson. The North Carolina county had recruited AEP to the site near Aurora, N.C.

After several years of engineering, permitting, reengineering, re-permitting and financing, the company dropped the proposed plant this month, citing a lack of financing. "I think [it is] still actively searching for more financing," said Beaufort County Manager Paul Spruill.

Problems for AEP started when it was convinced by a wealthy investor to expand its proposed project from 54 MMgy to 108 MMgy, and to add 19 addition sites along the East Coast, Thompson explained. "[It] spent 18 months getting new permits and [being] reengineered," he said. "In 18 months, construction prices had escalated substantially. Contractors were wrapped up, so they were at the back of the queue. The project went from a reasonable number to triple the cost, even though the capacity just doubled. After that, the investor wasn't interested anymore. Now [AEP is] sitting there with a plant that's too expensive and no investor."

AEP still has the option on the land, but that option is set to expire May 31. Meanwhile, Spruill said the county continues to market the site to other ethanol companies. "This is a very unique ethanol site," Thompson said, adding that the site is permitted for a 108 MMgy plant. Spruill said the site is located near an ethanol-friendly community, a ready water supply, rail and barge access, and natural gas and electric services. A power plant is using wood chips nearby.

Though AEP was going to use corn as a feedstock, most of it trucked in from the Midwest, Thompson said the site could also be ideal for a cellulosic ethanol facility using wood chips. "The wood is already being used to generate power," he said. "If you take the sugar out of the wood, you can still use the residual wood to generate steam and electric power. As we say in the South, you get everything from the pig, including the squeal."

Thompson said North Carolina has unique qualities. "The East and West coasts are the largest markets for ethanol," he said. "We're in the middle of the Atlantic seaboard with some domestic corn, and a high-value market for distillers grains and carbon dioxide. You're better off shipping corn and making ethanol here." North Carolina is the top turkey producer in the United States, creating an ideal market for the distillers grains.