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Why build
an Ethanol plant now?
Answer: The time is right. Ethanol prices are
increasing, the price and supply of corn are stable and MTBE is increasingly
being phased out. Also, the Federal Government and State Government are
offering incentives. Profitability is very good and demand is projected
to double in the next 4-5 years. There has never been a more opportune
or profitable time to construct an ethanol Plant in Oklahoma.
What is
Ethanol?
Answer: 200 proof grain alcohol with
a 5% denaturant (unleaded gasoline) added to prevent consumption and to
avoid an alcohol tax being levied.
What can you make Ethanol from?
Answer: Any starched based commodity, with corn and grain sorghum being
by far the most plentiful, practical, economical and available.
What is Ethanol used for?
Answer: 50% of all ethanol is used as an oxygenate for reformulated gasoline
consumed in areas of the country that require it. The other 50% is currently
being used in many areas that do not require its use because of ethanol's
octane enhancement (117 octane), fuel expansion characteristics and federal
tax incentives.
What will be the capital
investment?
Answer: The total capital investment required is approximately $90,000,000.
The sources of funds for the project will be :senior secured debt financing
in the amount of approximately $54,000,000 (60%) and equity in the amount
of approximately $36,000,000 (40%).
How many people will the Plant employ?
Answer: The Plant will employ 30-35 employees, operate at more than 96%
efficiency, 350 days a year.
How long will the Plant take to build?
Answer: Approximately 14 months from ground breaking to the start up of
ethanol production.
How much grain
is needed
and where will it come from?
Answer: The Plant will annually convert approximately 20 million bushels
of grain into approximately 55 million gallons of fuel grade ethanol,
approximately 200,000 tons of distillers grain and approximately 154,000
tons of raw carbon dioxide gas.
The grain will be delivered via conveyor from the ADM elevator, which
is located adjacent to the Plant.
Is there any odor
from the Plant?
Answer: There is a slight odor from the drying process, similar to that
of a brewery. You could compare it to existing elevators in the community
that dry corn at harvest time.
Where will the ethanol be sold?
Answer: Ethanol will be sold to regional and national blenders.
How is ethanol transported?
Answer: Most ethanol blended in Oklahoma will be transported by road tanker
trucks. The ethanol sold to other areas, such as the west coast, will
be shipped by rail.
What is MTBE?
Answer: Methyl Tertiary Butyl Ether (MTBE) C5 H12 O. It is made from petroleum
based fossil fuel. It has been used as an oxygenate to reduce air emissions,
particularly in large communities. MTBE is being phased out in many areas
of the United States because of concerns over groundwater contamination.
Do automobile
companies' warranties
permit the use of ethanol?
Answer: Yes. All domestic and foreign car manufacturers' merchandising
cars in the United States permit the use of a 10% ethanol blended fuel.
Many permit much higher percentages and a significant percentage are E-85
vehicles(85% ethanol, 15% gasoline).
What is the octane
rating
of ethanol?
Answer: 115-117
Does ethanol really help
keep the air clean?
Answer: Yes. By blending up to 10% ethanol with regular gasoline, harmful
tailpipe emissions are reduced by over 30%. The added 10% ethanol also
raises the octane rating 3.0 points and therefore increases the selling
price per gallon. Ethanol is 30+% oxygen and gasoline is 0% oxygen. Blending
raises the oxygen level in the finished product, resulting in more complete
burning and thus reducing emissions.
What is DDG?
Answer: Dried Distiller's Grain (DDG) is a high protein by-product of
the Ethanol production process commonly used to supplement animal feed.
There are approximately 19 pounds of DDG produced per bushel of processed
corn. Numerous large feed manufacturers currently import DDG .
Where will you sell the DDG?
Answer: Numerous large feed manufacturers
in Oklahoma currently import DDG. Feedyards, preconditioning yards, dairies
and the swine industry have expressed interest to purchase DDG or WDG
(wet distillers grain) from the plant.
The production of ethanol appears
to be a
simple process, is there anything that will make
this process more efficient?
Answer: Yes. There are new enzymes being developed which will extract
more gallons of ethanol from each bushel of corn. There are also several
seed companies working on developing high starch corn and high fermentable
varieties of grains that will produce more ethanol per bushel. Oklahoma
Ethanol LLC intends to use both of these techniques to enhance profitability.
Also, over the past decade the industry's processing efficiency has increased
from approximately 2.4 gallons per bushel to today's 2.8 gallons per bushel.
It is likely to reach 3.0 gallons per bushel in the next few years. 2.67
gallons per bushel is the average of the last ten years and will be guaranteed
by the design builder.
Will the Units I purchase
make distributions?
Answer: While cash distributions are not assured, we intend to promptly
distribute all cash distributions we receive from Oklahoma Ethanol, less
operating expenses and a working capital reserve, to our Members in proportion
to the number of Units held. However, we will not pay or declare any distributions
until after we receive distributions from Oklahoma Ethanol. Oklahoma Ethanol
will not make any distributions until it begins generating revenue. Oklahoma
Ethanol will not begin generating any revenue until it has begun operation
of the Plant, which is expected to be in early 2008. Distributions are
payable at the discretion of our Board of Managers, subject to the provisions
of the Oklahoma Limited Liability Company Act and our Operating Agreement.
The Board of Managers has no obligation to distribute profits, if any,
to Members. See “Summary of the Prospectus-Distributions”
and “Description of Units-Distributions” in the Prospectus.
Can I resell or transfer my Units and will
the value of my Units increase in value?
Answer: There are restrictions on transferability. See Article X of the
OSE Operating Agreement.
Can I deliver
Corn or Milo to the Plant?
Answer: No, not directly. You can sell it via your local cooperative or
grain handler who can merchandise it through ADM.
Who will run the Plant?
Answer: Oklahoma Ethanol LLC. Bio Renewable Group, the plant designer
and builder have indicated that as part of its services it will assist
in employing an experienced plant manager.
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