Gateway investors launch Orion

By Gale Rose of the Tribune Staff, The Pratt Tribune, June 21, 2006

Success is a great motivator. With the success of Gateway Ethanol and the construction of its ethanol plant just northeast of Pratt, Orion Ethanol -a new name for the same group of major investors that developed the Gateway plant - is in the final phases of putting together three more plants, one west of Hugoton and two in Oklahoma at Enid and Shattuck.

"We're in the process of getting air permits for each location," said Richard Jarboe, Orion CEO.

If all goes well, construction could start at Enid and Shattuck in the late fall, and Hugoton in early 2007, said principal investor Tim Barker.

Response to the three new plants has been positive. The investors haven't received one negative phone call or letter.

"It's been hugely positive," Jarboe said.

Orion is also in the process of developing a fourth new plant but the possible location has not been released.

The three new plants will be almost identical to the Pratt facility with a few changes at each location. The plants will each cost from $90 million to $100 million, they will produce 55 million gallons of ethanol a year and use 18 million bushel of grain which are the same numbers for the Pratt facility.

Orion sees itself as an energy company with a very positive future for Pratt being the hub for their business and bringing more people to Pratt to oversee the logistics of plant operations, Jarboe said.

Interest in ethanol continues to grow. If the demand for ethanol increases as Orion anticipates, they expect to double the size of all five plants to 110 million gallon capacity each for a total of 550 million gallons of ethanol per year for Orion Ethanol but that will all depend on supply and demand in the ethanol market, Jarboe said.

Orion is confident the plants will succeed as planned. They have spent a lot of time developing and executing the plans, Barker said.

Orion sees the ethanol market as a way to help reduce the dependency on foreign oil in America. By increasing the number of plants it will help provide economic growth for the communities with the plants and lower that dependency.

"We think ethanol is the way to get away from importing oil," Jarboe said. "Kansas could become the Saudi Arabia for liquid fuels."

One bushel of grain produces 2.8 gallons of ethanol. Seven bushels of grain produces the same amount of fuel as one barrel of oil, a barrel that doesn't have to be imported into the U.S., Barker said.

When that barrel of oil is gone, there is nothing to take its place but corn and grain sorghum are renewable every year.

"It's a renewable energy source. It will help us get off the import bandwagon," Jarboe said.

Oil is not the only energy product that is an import issue for the U.S. Ethanol and gasoline are also imported which is another reason to establish more ethanol plants.

"We (investors) feel ethanol is here to stay," Jarboe said.

If ethanol develops as anticipated, America will be spending energy dollars in the Mid West instead of the Middle East.

"We've got the resources," Barker said.

Construction on Gateway Ethanol is progressing. By the time it is finished, about 100 contractors will have built some portion of the plant. The plant is expected to produce it's first gallon of ethanol no later than August and if things go well that could be pushed up to as early as may.

Pratt to have state's largest plant

By Amy Bickel, The Hutchinson News, March 13, 2005

PRATT - As crews moved dirt near this south-central Kansas town at the site of Kansas' soon-to-be largest ethanol plant, the man who spearheaded the project says he is convinced ethanol production will be a boon for him and investors - helping the area's struggling farmers and the city of Pratt.

"We could be producing in 14 months," said the plant's president, Richard Jarboe, adding he and investors are hoping to schedule a groundbreaking in the next month. "You can't help but be excited."

Jarboe's plant, which would produce 50 million gallons of ethanol a year, is one of dozens across the Midwest that are either under construction or about to be - soon to add to the more than 80 ethanol plants in operation today, according to the Kansas Corn Commission. Those plants produce 3.4 billion gallons of product in 2004.

In Kansas, there already are six plants generating more than 130 million gallons of ethanol, said Robert White, director of value-added programs with the corn commission. A 35 million-gallon-a-year plant under construction at Garnett, and another proposed plant in Phillipsburg plus the Pratt plant would double the state's production.

But will the ethanol boom bust? Some say the industry is flooded with the fuel and there could be cutbacks if production grows faster than demand.

Copyright (c) 2005, The Hutchinson Publishing Co.

Ethanol plant would bring 35 jobs to Pratt Co.

By Amy Bickel, The Hutchinson News, October 20, 2004

PRATT - He spent part of his career opening plants overseas, then closing them in communities like those in the Midwest.

Richard Jarboe decided he needed to do something different.

So the man who was raised on a Pratt County farm has been trying to bring something back to where he grew up -- something to help the region's farmers as well as rural communities like Pratt prosper.

His plan? An $80 million ethanol plant that will bring 35 jobs to this south-central Kansas county.

Once realized, the 50-million-gallon-a-year plant would be Kansas' largest, using 56,000 bushels of grain a day for ethanol production -- or more than 18 million bushels a year.

"I want this to be a win-win for the local farmers," said Jarboe, who is retired from the hydrologic industry and lives in Chicago. "I just hope for the best."

Jarboe and other private investors are hoping to break ground for Southwest Ethanol LLC in November -- shooting for a December 2005 opening, said Gordon Stull, a Pratt attorney and local investor.

Final elements are still being worked out, Stull said. But once built, farmers can start bringing their corn and milo to the plant to be turned to ethanol. Local cattle producers and feedlots can buy distiller's grain, a byproduct, for livestock feed.

Farmers could see an increase in their crop basis by 10 to 15 cents a bushel, Stull said.

The majority of both corn and grain sorghum grown in Kansas goes into livestock feed, although both also are finding new markets in ethanol production.

Kansas has six ethanol plants producing nearly 130 million gallons of ethanol a year, said Robert White, director of value-added programs for the Kansas Corn Growers Association. Another dozen communities are talking about building plants.

Construction began this fall on a 37-million-gallon Garnett plant.

"There is definitely more demand than supply," White said. "Not only in the United States, but demand is picking up worldwide."

About 2.8 billion gallons of ethanol are produced nationally, he said. With a ban on MTBE gasoline additive, California uses a billion gallons.

The plant would be a possible boon for Pratt County, but there still is concern from some.

A few cattle producers are concerned an ethanol plant will drive up their feed costs. And some elevator operators worry it will mean less grain for their bins.

Also at issue is paving a 2.5-mile stretch of Northwest 30th, which connects K-61 and U.S. 281, said Jeanette Siemens, Pratt Area Chamber of Commerce director.

She said the county has received a $1 million grant from the Kansas Department of Transportation to fund the $2.5 million road project, as well as a $200,000 loan from a state partnership fund. The county is asking residents to pay the remaining 20-year bond payment.

Pratt County residents voted down paving the roadway during a special election in June. County commissioners put the issue back on the Nov. 2 general election ballot.

Southwest Ethanol hasn't asked for any tax abatements, Siemens said, only the pavement of the road.

Siemens said the chamber and others are trying to educate residents on the issue, and that the plant will be built regardless of the vote.

"It will mean 35 well-paying jobs and over $1 million payroll," she said. "We do view it as a definite benefit for the community."

Cunningham-area farmer Dean Fitzsimmons said he was in favor of the plant -- a farmer who uses as much clean-burning fuel in his vehicles and farm equipment as possible.

However, he didn't know if a plant really would better his bottom line.

The 38-year-old, fourth-generation farmer is preparing to harvest his milo crop, a crop that he would consider hauling to an ethanol plant if the price was right.

Fitzsimmons said he was concerned investors would get their grain elsewhere cheaper, shipping it in via a 100-unit railcar from bigger corn-producing states.

"I don't think it is going to make me rich," he said, adding that, "I would like the grain, as much as possible, to be used locally."

Byers-area corn farmer Kent Moore said he has heard the talk but felt the plant would be something positive for area farmers.

"I do think anytime you do have demand for product, in an area like ours, it is going to help you," he said.

"I think that anything that is done that is going to increase demand for bio-based fuels, in the long run, is good for agriculture. You hear a lot of talk on how dependent we are on foreign oil, but we aren't dependent on foreign corn."

Copyright (c) 2004, The Hutchinson Publishing Co.