The controversial ethanol plant planned for next to tiny Eyota, near Rochester in southeastern Minnesota, has been put on indefinite hold with developers of the proposed 55-million gallon plant citing low investor interest and high startup costs.
“Uncertain economic times and dramatic fluctuations in commodity prices have dampened the public’s investing appetite,” said MinnErgy President Ron Scherbring in a press release filed Tuesday with the Securities and Exchange Commission. MinnErgy has been working since last May to raise $133 million to advance plant construction.
MinnErgy apparently is feeling the same economic effects as other ethanol producers, due in part to falling ethanol demand and fluctuating corn prices. VerSun Energy, a large producer based in Sioux Falls, S.D., announced last month that it was filing for bankruptcy protection, and several other Midwest producers have said they were in financial trouble.
Last May another large Sioux Falls producer, Poet Biorefining dropped plans for a 65 million-gallon plant expansion at Glenville, Minn., near Albert Lea. However, POET has been able to remain strong enough through the period and is said to be in acquisition talks with VeraSun.
The MinnErgy plant near Eyota has also been plagued by swelling opposition in the city and nearby residents. In permit hearings this fall before the Citizens Board of the Minnesota Pollution Control Agency (MPCA), standing-room crowds of angry Eyota residents complained that the plant would bring unwanted noise, odors, and air and water pollution. The City of Eyota and the Olmsted County Board asked the MPCA to order a full Environmental Impact Statement (EIS) for the facility, but that request was unanimously rejected by the 12-member board on advice from the agency staff.
Even though MinnErgy has pulled the plug, at least temporarily, on the proposed plant, it said that it would maintain its offices in Eyota.
Also yesterday, two groups announced that they would file a lawsuit against MinnErgy and the MPCA to force preparation of a full EIS. The company had worked with the MPCA and the Minnesota Department of Natural Resources to prepare an environmental worksheet.
Jeff Broberg, president of the Minnesota Trout Association and an area environmental activist against the MinnErgy plant, said he “welcomed the news” that the company was suspending development plans, calling the plan a “high risk investment and an unsustainable venture.”
The other group involved in the lawsuit is the Olmsted County Concerned Citizens.