Ethanol plant boosters ready to devise plan

By Tim Vandenack, The Hutchinson News, July 10, 2005

LIBERAL - In the wake of a consultant's optimistic outlook on prospects for an ethanol plant in Seward County, boosters here are anxious to ratchet up their efforts to land a producer of the fuel additive.

"I am excited. I think the numbers speak for themselves," said Nick Hatcher, who heads up the Liberal Ethanol Steering Committee, a group that has been looking into the possibility of bringing in an ethanol plant since March.

Ed Stahl of BBI International, the consultant that carried out a feasibility study on the matter here, presented his group's findings Thursday, saying the area has "unique merit."

Specifically, he noted the large number of cattle in the area, which makes for a ready market for one of the byproducts in the ethanol production process, distillers grain, which serves as feed. And he forecast that a 50 million gallon per year ethanol plant could generate annual pretax earnings of $8.38 million, while a 100 million gallon plant could generate $18.03 million.

Hatcher said the steering committee - made of ranchers, farmers, bankers, businessmen and others from Seward County - now must meet again to determine the next course of action. But he envisions creation of a business plan and then a series of informational meetings to drum up interest and attract investors.

The specific timing of any project "depends on the equity drive we put together," he said.

The Seward County boosters aren't the only ones interested in ethanol. A St. Louis-based firm announced last month that it plans to build a 100 million gallon per year ethanol plant near Ulysses, perhaps starting this fall, and Kearny County officials are looking into the feasibility of building a plant there.

The flurry of interest prompted one spectator at Thursday's presentation to question whether the area can support so many ethanol plants.

"Practically speaking, BBI thinks the area, Garden City to Hereford, Texas, can easily sustain five, six, seven projects just based on the amount of cattle alone," said Stahl. Hereford is in the Texas Panhandle.

Ethanol, which makes gasoline burn cleaner and also extends the availability of the fuel, is made from corn or sorghum. Ready access to the crops makes the Midwest an ideal locale for ethanol plants. But Stahl said Seward County and the rest of this part of the country have the added benefit of being amid so many cattle on feed.

With so many cattle so close, the distillers grain that comes from the ethanol production process may be shipped to buyers wet, thus saving on the notable cost of drying the substance. When ethanol producers have to ship distillers grain long distances, they must dry it first so it won't spoil en route, incurring extra costs.

"The market for distillers grain is self-evident and should be exploited at every possible turn," Stahl said.

Specific to Seward County, Stahl looked at two sites - one seven miles northeast of Liberal along the Union Pacific railroad line that parallels U.S. 54 and another nine miles northeast of the city along the same track.

Plants could conceivably work at either locale, but Stahl said the site closest to Liberal is better because it is flatter and would require less preparatory work. Cost for a 50 million gallon per year plant would total $63.53 million, he estimated, while one double that size would have a price tag of $116.62 million, including construction, site preparation, fees and other costs.

Despite his bullish outlook, Stahl said the biggest hindrance to ethanol plant construction is typically lack of equity - that is, the cash investors must put up. Bankers will lend up to 60 percent of the money required to build a plant, with the rest coming from equity.

"There are a lot of projects that get started, and they just can't get the money to close," Stahl said.

Accordingly, he advised the Seward County group to make sure they have a "good, solid, defensible game plan." At the same time, though, he noted a pending federal energy bill that would mandate increased ethanol production and the profits he says there are to be had.

"Be deliberate, don't rush," Stahl said. "On the other hand, this industry is growing extremely fast."

City approves water usage request for ethanol plant

By Tina Bridenstine, The Southwest Daily Times, Liberal, Kansas, June 27, 2006

The city commission took the first steps to helping the proposedethanol plant obtain water when the commission met for a work session Monday afternoon.

Nick Hatcher, president of Conestoga Energy Partners LLC (the parent company for Arkalon Energy LLC), gave a short presentation in which he informed the commission of the benefits of an ethanol plant.

"It is our understanding that tonight's work session is to answer any questions that you might have and to establish a goal for defining an agreement to access water rights," Hatcher said. "It is also our understanding that this water was intended for economic growth and development. We're not here tonight looking for concessions, but an opportunity to use an important resource in a responsible manner."

Hatcher listed some information for the commission about the jobs the plant will bring into the community, the money the plant will bring in, and the ways in which the plant will be environmentally friendly.

He said the company wanted to get started with the plant next month, with a finishing date in December of 2007. He then ended his presentation and asked for questions from commissioners.

When asked about the amount of water the plant would require, Hatcher said they would need at least 1,100 to 1,200 gallons per minute. In all, he said, that would be 1,770 acre feet of water per year, but they were asking for a 10 percent cushion, making the total amount 1,947 acre feet.

Public Works Director Joe Sealey said the city has 2,550 acre feet available there, and currently, only about 200 acre feet are used for Air Products. Therefore, he said, the city would be able to let Arkalon Energy LLC use the amount of water they are requesting and still have some left over.

Commissioner Charles Craig wanted to know what the company would be willing to pay for the water, then he estimated how much it would cost at the current rate for taxpayers.

City manager Toby Miller pointed out that tax payers pay for the maintenance of the water system, not necessarily the water. He also added that it was decided not to use the wells at Arkalon for water in the city, because it would be cost prohibitive to pump it into Liberal.

Hatcher explained that Arkalon Energy LLC would be "more than happy" to pay back the expenses the city has already incurred on the wells over a period of 10 to 20 years.

"We would also pay for the backup wells if they ever need to be redrilled, pay for any line that needs to be laid, pay for any electrical cost, whatever is necessary to make those wells work with our system and provide whatever water necessary for Air Products," Hatcher said.

He also added that the lines were being built with the assumption that they would be dedicated back to the city at no cost at some point.

The line that would need to be laid, they determined, was about six and a half miles approximately straight north to the plant, and all on city owned property.

Commissioner John T. Smith raised concerns about the wording of a working water supply agreement, which stated that the city would "guarantee" thewater to Arkalon Energy LLC, saying he was not comfortable with guaranteeing anything having to do with water.

Hatcher said they would have no problem changing the wording.

Craig also asked about depletion of the aquifer.

Hatcher said, with the discharge subtracted, the plant would use a similar amount of water to eight circles of corn. With the discharge figured back in, he said, it's probably closer to seven circles of corn.

Gary Baker, a water right consultant for GLB Services out of Hugoton, said the applications would not have been approved if the water had not been available.

"I've heard it said we didn't have the water for this," Baker added, "and if that's true, then there isn't any place in the state where one would fit, because we're in better shape with water here than any place in Kansas."

Dusty Turner, vice president of the board for Conestoga Energy Partners LLC, added they have many rules and regulations for environmental compliance that they must follow.

Hatcher also said, when Craig asked him about a possibility of recycling water to conserve the overall amount used, that if the technology came along to be able to do it, he believed it was their "responsibility and duty to look into matters like that."

Craig also brought up concerns about more corn being grown in the area for the plant, and this leading to more water being used for irrigation.

Roger Cline, board member, said some companies are looking into developing hybrid breeds of corn with drought tolerant genes. He also pointed out that farmers who currently farm wheat could actually farm a smaller field of corn, using the same amount of water that was used for the wheat, and make a better return on their money.

Mayor Ron Warren then asked for the commissioners thoughts.

Commissioner Joe Denoyer said they needed to "move forward."

"I've got the will, we'll find a way," vice mayor Doug LaFreniere said.

Smith and Craig both expressed some concerns about compensation for the use of the water.

Commissioners then voted unanimously to allocate the 1,947 acre feet ofwater to the Arkalon Ethanol Plant, subject to working out details with the water supply agreement.

Building of ethanol plant could start this month

By Tim Vandenack, The Hutchinson News, July 6, 2006

LIBERAL - Seward County officials have rezoned a plot of agricultural land near the unincorporated town of Hayne, paving the way for construction of an ethanol plant there.

Many residents in the hamlet oppose the plans, fearful of the traffic and other changes they say the plant will bring. They didn't speak out during the public hearing portion of Wednesday's gathering, however, and proponents like County Commissioner Patsy Boles pointed to the jobs and economic growth the project will spur.

"I think we just have to realize that sometimes things change and it's for the betterment," Boles said.

Wednesday's action - county commissioners voted 4-0 - formalizes a recommendation last month by the Seward County Planning and Zoning Board to rezone the 400 or so acre tract in question from agricultural to industrial. Liberal-based Conestoga Energy Partners plans to build a 110 million gallon per year ethanol plant on the land, which would be Kansas' largest.

"Anytime we can reduce our dependence on foreign oil and add value back to a community, it's got to be a great thing," Nick Hatcher, the Conestoga president, said after Wednesday's meeting. Groundbreaking on the plant, to be called Arkalon Energy, could take place by the end of the month.

In voting for the zoning change, county commissioners made much of the expected economic impact the plant would have. The $160 million complex would create 50 to 55 new jobs and have an annual payroll of more than $2 million.

"It's going to be a win-win situation all the way around," Commissioner Joyce Hibler said.

They also expressed satisfaction that Conestoga has addressed potential noise, odor and other problems, noting the involvement of the Kansas Department of Health and Environment in the planning process.

"Things don't just get done at random," Commissioner Ike Eisenhauer said. "Things are studied out and done for the betterment of the community."

Still, Hayne residents said after Wednesday's action that their concerns remain, though they don't plan to pursue the matter. They spoke out when the zoning board considered the change last month, but kept silent during Wednesday's meeting because they said they considered approval by the full commission a foregone conclusion.

"We're all against it," Cheri Upham said. "I haven't heard one person who's for it."

The main concerns seem to be the increased truck traffic the plant will generate, the altered landscape brought about by the addition of the industrial complex and the water the plant will use. The 50 or 60 homes scattered around Hayne have their own water wells, and residents there fear the plant will lower the water table, requiring them to dig deeper for water.

"I'm all for an alternative energy source," Hayne resident Connie Gaut said. "But it'd sure be nice to find one that is drought tolerant."

Hatcher, meanwhile, said U.S. 54 at Hayne would be improved to accommodate the increased traffic and that the plant could spur new development in the hamlet, leading to higher land values.

Commission Chairman Shannon Francis recused himself from the discussion and vote Wednesday because he is an investor in Conestoga.

Some worry ethanol production will sap local aquifer sooner

By Tina Bridenstine, The Southwest Daily Times, Liberal, Kansas, July 11, 2006

Two weeks ago, Conestoga Energy representatives talked about the advantages of ethanol and bringing an ethanol plant to Hayne. So, what's the other side of the story?

Some articles maintain that ethanol may not be all that people think it will be.

In the July 10, 2006, edition of the High Plains Journal , one article, "Ethanol industry could face oversupply," suggested the supply for ethanol may be growing faster than the federal government has mandated.

"The industry's quick expansion likely will push capacity beyond base demand by 2008," it noted.

Another concern brought up in the article is a concern that because ofethanol being used to replace MTBE in gasoline, the high demand has kept ethanol supplies tight and raised the cost of it.

Another article in the July 2006 issue of Car and Driver Magazine, called "Ethanol Promises" by Patrick Bedard, explored the possibilities and suggested thatethanol may fall short of some of the advantages it boasts.

Bedard estimated that ethanol will have a minimal effect on both dependence on fossil fuel and on foreign oil.

"Even if we accept the most favorable assumption, that 26 percent of its energy is new," Bedard said, "That represents only about 0.16 quad. Of the 18 original petroleum quads that went into gasoline, that means ethanol would comprise less than one percent."

As for the influence on foreign oil imports, Bedard estimated that, under the above assumption, imports would be reduced only 1.4 percent.

As for gas prices, Bedard said because ethanol contains 70 percent of the energy found in an equal amount of gasoline, it only displaces gasoline in energy content by 3.5 percent. This, combined with the price of ethanol, leads to little help as far as pricing is concerned.

The magazine also did a study on the fuel economy of E85 fuel, which is 85 percent ethanol and 15 percent gasoline. It was estimated that fuel economy declined by 28 percent when using the E85 fuel.

With his estimates and figures, Bedard paints a picture of a product which will have a very minimal effect.

Here in Liberal, however, most concerns seem to be for the location of the plant or the consumption of water it will require.

"People in Hayne have a legitimate complaint," said Star Craig of Liberal, adding that they are always having to drill their water wells deeper in Hayne.

Her concern, she said, was for the water. Not only the water that will be used for the plant, but the water that will be used to irrigate corn to supply to the plant.

"We are extremely pleased to get any kind of industry or business, especially that employs educated people," Craig said. "It's just the water situation."

Though people say there is plenty of water, Craig used the Hugoton oil field as an example of something people thought would never go dry and yet, it did.

People who want to use something, she said, always say there is a lot to use, while people who want to conserve it say, "We'll all be in the soup" if it is used.

"We're probably both wrong," she added, "But I'd rather err on the side of caution."

One Hayne resident, Neal Upham, said he also worries about the water which will be used.

"We're concerned about our wells going dry out there," Upham said. "When that's gone, there's no replacing it."

He said the plant itself will not necessarily use all of the water, but the combination of the irrigated corn which will be grown as a result of the plant, and the other ethanol plants planned to be built in Southwest Kansas, could use a great deal of water.

"I think they need to check into an alternative, like switch grass and wheat straw," Upham added. "Those don't take as much water."

Aside from water concerns, Upham said he was also disappointed in the way things were handled. He feels no one listened to their concerns.

"It was a done deal before we ever went to that first meeting, as far as I'm concerned," he said. "I'm sure there are other, non-residential places they could put this."

Several other Hayne residents contacted were unavailable for comment or did not wish to comment on the matter.

Ethanol plant slated to break ground Thursday

By News staff, The Hutchinson News, August 1, 2006

LIBERAL - Officials break ground Thursday on a 110-million-gallon-per-year ethanol plant near the unincorporated Seward County town of Hayne.

"We're full steam ahead now," said Dusty Turner, vice president of Conestoga Energy Partners, the Liberal-based company developing the project.

Plans call for construction of the $160 million complex, called Arkalon Energy, on the north side of U.S. 54, which is nearly eight miles northeast of Liberal. It would be Conestoga's second ethanol production complex, complementing a 55-million-gallon-per-year plant under construction just outside Garden City in Finney County.

Work on the Seward County plant should take 14 to 16 months, finishing by January 2008, Turner said. The Finney County complex should be completed by September 2007.

Gov. Kathleen Sebelius is scheduled to attend Thursday's groundbreaking, along with Kansas Agriculture Secretary Adrian Polansky.

Plans for the Seward County ethanol plant generated opposition from some Hayne residents.

Bonnie Atwell, who previously spoke out about the plans, still worries about the traffic the complex will generate and the water it will use, though she acknowledges the economic benefit as a "blessing."

Nonetheless, following the decision by Seward County officials to rezone the plot Conestoga plans to use for industrial use, Atwell just doesn't see any recourse.

"There's not anything anybody can do about it," she said.

Any concerns notwithstanding, many others see the plant as a boon to the local economy, and Turner said he thought information the company disbursed after questions emerged helped assuage many critics.

"It's just change," he said. "They understand it a lot more now."

The Seward County plant, when finished, is expected to employ 50 to 55 people, with an annual payroll around $2 million.

Plans are afoot across southwestern Kansas and the rest of the state to develop ethanol projects. Boosters tout the corn- and sorghum-based fuel additive as a way to reduce dependence on foreign oil.

Conestoga Energy president looks to County, city commission for growth incentives

By Robert Pierce, The Southwest Daily Times, Liberal, Kansas, August 27, 2006

A locally-based energy company and its management company recently broke ground on an ethanol plant in eastern Seward County, and now they are looking for some incentives to help with the growth of the plant.

Conestoga Energy President Nick Hatcher outlined some of the incentives the company is requesting from the City of Liberal and Seward County for the Arkalon Energy plant at Wednesday's joint meeting of the Seward County and Liberal City commissions.

"This is based on a seven-year tax abatement step down over 10 years," he said. "We were under the impression we were going to have a 10-year step down. We are in the process of asking the county for a 10-year tax abatement. We're also in the process of negotiating a water agreement with the city. I'm not sure where that's at. The attorney still has it. Until we get that agreement, it's hard for us to sit down and actually talk with the staff and commission and negotiate where this ought to be."

Conestoga Vice President Dusty Turner said the tax abatement and other incentives will not only go far in terms of sustaining the plant but will also be of particular importance to many entities, including the city, the county, Seward County Community College and USD No. 483 in Kismet and Plains.

"It wasn't until this last week that we were really able to fortify these numbers and understand the magnitude," Turner said of a cost benefit analysis summary presented to county and city commissioners. "We want to look at all options. Basically, the purpose of these tax abatements and incentives is to get a project like this started initially so we can sustain it for a long time, not to improve the bottom line."

At the moment, the plant near Hayne is leading the way for the ethanol industry in Kansas, according to Hatcher.

"The size of this project will be the largest project in Kansas as far as an ethanol project," he said. "This plant is a 110 million-gallon plant. There's not another one in Kansas until we build our third project, which we are in the process of doing in Ford County."

Hatcher added the pieces of the puzzle are connected for an ethanol plant in Seward County.

"This is the best place for an ethanol plant," he said. "We've got cattle. We've got water. We've got property."

Hatcher said the agriculture industry in Southwest Kansas helps with the growth of an ethanol plant.

"The grain that's grown in this part of the world is better than any other part of the United States," he said. "Gains on locally-grown corn are much better than what gains are on grains grown in other parts of the United States."

Turner agreed with Hatcher's findings, and he added the Hayne plant is making significant strides in its progress.

"My bids were consistently two to five cents more a bushel for local grain than what was coming out of a truck out of Nebraska or Iowa," Turner said. "Obviously, you're doing a different process with the corn at the feedyard than you are here, but we're about to get through this development stage and get into the exciting things of developing structure and management teams."

Much of the planning centers around how much local grain Conestoga can own and use, according to Turner.

"Typically, what grain does not get into users' hands at harvest shifts 120 miles south," he said. "Then the grain we need will shift from Scott City to Garden City. Our goal today is to figure exactly how we can maintain that corn and get our hands on it day one and develop those channels right into the ethanol plant. It just makes your risk management structure and everything so much easier. Logistics. Freight. I very much want this project to be successful from day one with as much help as we can get from local and state authorities as well."

Commissioner C.J. Wettstein asked Turner and Hatcher why Conestoga had increased its requested price for road improvements, another incentive the company was asking for, from an original quote of $250,000 to Tuesday's $500,000 number, saying the company would ask for more at a later time.

"It was my decision," Hatcher said. "We were basing $250,000 on a grant through the state. That's a matching fund grant. We're willing to match that fund."

As the sponsor of the grant, the county would be responsible for $250,000, and Conestoga would be responsible for another $250,000 under the new plan for $500,000, according to Hatcher.

"That's initially what we thought would be the best number," he said referring to the $250,000 request.

Turner said the additional money would be used to pay for items such as building permits.

"We're putting in infrastructure, we've got revenue coming back, and we can look at some of those things," he said. "We've got some ideas we'd be willing to look at and consider. The main goal is to look at the first three years of this project being supported up front, and then once it's established and sustained, you know what happens in the commodity business. You catch it good for the first three years, and it's set for a good, long time."

Hatcher said he had not yet studied what the cost and benefits the plant brought to Seward County when Conestoga initially proposed the amount of money he wanted to ask for.

"It's big," he said. "A lot bigger than I anticipated. Because of the size and nature of the project, we probably need some consideration of what the county and city can do."

Liberal Mayor Ron Warren said the city, as well as the county, will have to do some additional research before making a decision on the incentives.

"I still think that we express our willingness to help you guys, but whatever direction you thought we were headed in to start with, I think we've indicated that was positive that we wanted to help you," he said. "But without knowing the numbers, we didn't know how we could help at that time."

County discusses various tax exemption incentives for ethanol plant

By Robert Pierce, The Southwest Daily Times, Liberal, Kansas, September 12, 2006

A debate between Seward County Commissioners at a Monday work session turned into what seemed like a simulation of a game of ping pong as they discussed two plans for providing a tax exemption to a local energy company.

Commissioners Patsy Boles and Joyce Hibler initially wanted to give Conestoga Energy a simple flat rate of 10 percent for the first 10 years for its Hayne ethanol plant, while commissioner C.J. Wettstein had another suggestion.

Wettstein suggested giving the company a tax exemption for the first three years of the facility's existence with increasing rates of 10 percent increments in the following four years for a 100 percent payment.

Following Wettstein's suggestion, Boles also said it would be good to have a tax exemption for the plant's first three years.

Conestoga Vice President Dusty Turner said there would be some cost accrued outside of the tax exemption, such as housing.

"There are some costs that come along with this project coming in," he said. "It just so happens that the benefits grossly overweigh what the costs are, so that's what you start looking at. It's a two-year payback on the tax incentives that are proposed. That says they're going to get back the tax incentives plus any cost accrued for housing."

Conestoga President Nick Hatcher said the exemption is also a necessity if the Seward County plant is going to contend with similar facilities in this part of the country.

"There seems to be quite a bit of community support for some of those plants," Hatcher said of plants across the Midwest. "Some of those plants get 100 percent tax abated for 10 years. Part of that equation is the input costs are somewhat cheaper in those Midwest towns than what they are here."

Hatcher added Conestoga would like to have assistance from the commission similar to that found in other Midwest communities.

"In order for us to compete economically with our competition, we have to become a least-cost operator," he said to the commission. "With the help that you're going to provide, it will help ensure our ability to at least compete with some of those other plants that do have these additional benefits. That would be fantastic."

Joint Economic Development Director Colleen Towns said she would like to put to rest some of the criticism the Seward County plant has received about road conditions near the facility.

"There's been a lot of work that has gone into getting to this point with this project," she said. "Every piece of that picture the highway, the road, the environmental all those things have been addressed before we even decided that this was a great project, and we could do it."

Hatcher said other entities and companies have been a great help in ensuring the plant location is a safe one.

"Projects like this couldn't get accomplished without meeting the regulations the state has set forth through KDHE," he said. "ICM was able to design, and it's able to build, a facility that meets those regulations."

Boles said the commission needs to keep one thing in mind when making a decision on a tax exemption.

"I think our only problem is the general public and the fact that we're using their money," she said. "A project of that scope is going to have to have help, and I think, we as commissioners have to weigh that. It's not only good for Seward County, but it's good for the whole southwest (Kansas) all of these three plants. It's such a new venture and something that's going to help long-term."

Boles said a four-year exemption would be a win-win situation for all involved.

"I think that we ought to go ahead with this four-year tax exemption, because I don't think that hurts the taxpayer at all," she said. "It's money we've not had."

County Clerk Stacia Long pointed to an exception to that principal, however.

"There is cost to the schools in the event that people are going to move in," she said. "The money that we collect in tax is also distributed to the schools and anyone in the district."

Those costs would be outweighed by another benefit, nevertheless, according to Boles.

"There's also going to be more income coming in from people coming and staying," she said.

Boles said the exemption is also important to enable the project to begin with as much help from the county as possible.

The commissioners will put the two plans on paper and will visit the exemption issue at next Monday's regular meeting.

County approves 4-point tax exemption package for ethanol plant

By Robert Pierce, The Southwest Daily Times, Liberal, Kansas, September 19, 2006

After weeks of discussion and debate, Seward County Commissioners voted 3-1 Monday to approve an incentive plan for Conestoga Energy Partners and its Liberal plant.

Discussions for the incentive plan began in August at a joint meeting between the county and Liberal City commissions when Conestoga officials approached the boards about plans which included a temporary tax exemption for the Arkalon Energy plant.

Commissioner C.J. Wettstein made an initial motion Monday which failed due to a lack of a second. The motion included the following items:

* A 10-year tiered tax exemption, beginning with 10 percent;

* Waiver of the building permit fees in the amount of approximately $110,000; and

* Conestoga shall continue to pay taxes that are currently assessed on the land at agriculture value or commercial value, as appropriate, until the plant is completed.

After that motion failed, commissioner Steve Eisenhauer made a motion which included those items plus a one-time grant, not to exceed $150,000, to be used toward costs to construct the roadway, culverts and dirt work, which would meet the standards of Seward County roadways.

After the motion was seconded, the commission voted 3-1 to approve the four-point plan with Wettstein voting against the motion and chairman Shannon Francis abstaining.

Wettstein explained his reason for voting against the motion.

"I just think we're setting a precedent here for the county to come up with the funding on other projects that come along," he said. "In the past, we have not given all of this."

Commissioner Patsy Boles said the county and other entities would see much in the way of positive aspects for the incentive plan.

"As the tiers of taxation increase, the benefit to the county is going to be tremendous," she said. "That's why I feel like we should support this in any way we can."

Eisenhauer said he believed the plan the commission approved is a necessity for everyone involved.

"I think it's the duty of the county to provide roads and access," he said. "I think this thing will be a benefit to everyone in the county."

In other business, the commission:

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Conestoga continues plans with new road to ethanol plant

By Robert Pierce, The Southwest Daily Times, Liberal, Kansas, September 19, 2006

In December, due partly to constant safety issues with traffic and a large volume of traffic entering the area daily, Conestoga Energy requested assistance for a new county road proposed to be built near the ethanol plant the company is building near Hayne.

The road would be approximately one mile east of the road currently running next to the plant and would be perpendicular to U.S. Highway 54. The road would also feature a bridge overpass above the railroad running in the area.

"There's a desire to put in a new road at a different location that will include an overpass that will allow access to the ethanol plant," said county counsel Dan Diepenbrock at Monday's Seward County Commission meeting. "This would involve a grant from (the Kansas Department of Transportation) in the amount of $2 million."

The commission had previously decided that the cost of constructing such a road, over and above the $2 million KDOT grant and $150,000 previously allowed by Seward County, would be borne by Conestoga, according to Diepenbrock.

"This board has told Conestoga/Arkalon Energy previously that if the road goes in there, this board's not going to fund it any more than the $150,000 that you've already funded it," he said to the commission. "You authorized the viewing process just to follow statutory procedures so that the road can get laid out. The viewers made their viewing. By statute, the affected landowners were to submit any claim for damages at or before the viewing. Now, we have landowners making their claim for damages. We have a road that's laid out. A recommendation from the viewers has been submitted. Ordinarily, if the county were going to go forward or plan to go forward with this construction, you would approve the report of the viewers and, in the process, would go forward. Because we're not going to be paying for this road, you need to not take any action at this point."

Diepenbrock added no action should be taken on the item until Conestoga/Arkalon has advised the commission that it has negotiated with the landowners near the proposed road area regarding the necessary right-of-way for the road.

"Then we can go forward with accepting the grant," he said.

In other business, the commission: