Nation’s First Barley-to-Ethanol Plant Provides New Market for Va. Farmers

HOPEWELL, Va. — A new ethanol refinery in central Virginia, on schedule to begin production this summer, could create a large new market for winter barley — providing farmers with new economic opportunity and incentive to grow a winter crop that fits nicely in the region’s cropping systems.

The ethanol plant, called Appomattox Bio Energy, will be the country’s first commercial refinery to use barley as a feedstock for ethanol production.

Regular operation is scheduled to begin late this summer; at full production, the facility in Hopewell will use 30 million bushels of barley to make 65 million gallons of fuel-grade ethanol.

At current average yields, it will take more than 400,000 acres of winter barley to supply the ethanol plant with 30 million bushels of grain — a drastic increase from the 67,000 acres planted for harvest in Virginia in 2009.

News of the Appomattox Bio Energy’s impending opening, however, has already caught the attention of Virginia farmers, who planted 105,000 acres of winter barley for harvest this year. David Coleman, a grain manager with the Virginia Farm Bureau Federation, attributed that total, the largest annual planting in the state since 1993, entirely to the ethanol plant in Hopewell.

Coleman added that some of the barley supply for the facility will have to come from neighboring states. Nevertheless, significant opportunity remains for increased production of winter barley, as plantings for 2010 harvest in Virginia, Maryland, Delaware and North Carolina totaled less than 200,000 acres.

Osage Bio Energy, the company developing the ethanol plant, has also touted the beneficial environmental impact it will have on the region. Using winter barley as a feedstock, proponents say, will provide a market incentive for farmers to plant winter crops, which is an effective and inexpensive way to absorb nutrients from crop fields. Excess nitrogen is the single biggest water quality impairment in the Chesapeake Bay.

The refinery is also expected to create around $100 million in new economic opportunity for agriculture in the region, several hundred new jobs in that sector and generate up to $2 million in tax revenue for the City of Hopewell.

“From an economic standpoint, an environmental standpoint, an agricultural standpoint, it’s a win-win-win across the board,” said Heather Scott, marketing director for Osage Bio Energy.

Keith Balderson, an agriculture and natural resources extension agent in Essex County, Va, said that the prospect of a large new market for winter barley has been met with enthusiasm by farmers he works with.

“I’m very hopeful, and the growers are very hopeful, that it works out, because [barley] is a crop that fits so well with our cropping system.”

Balderson said that because winter barley matures a little earlier than winter wheat, it allows farmers to plant soybeans earlier in the year and increase their yields.

The construction of the Hopewell plant may be the first step toward establishing a large biofuels industry in the Mid-Atlantic. A report released last winter by the Chesapeake Bay Commission identified the production of “second-generation” biofuels (those refined from agricultural and forestry products other than corn and soybeans, which directly compete with human and animal food supplies) as an effective way to benefit the regional energy supply, agricultural economy and environment. By 2022, the report projected that a mature biofuels industry in the Bay watershed could produce 500 million gallons of fuel each year —roughly equivalent to a six-week supply for the Washington, D.C. metro area — while reducing nutrient runoff into the Chesapeake Bay by millions of pounds per year.

The report also concluded that that level of biofuels production could be sustained without interfering with regional food production, by making use of double-cropping methods, fallow land and forests.

Tom Richard, director of the Penn State Institutes of Energy and the Environment, and one of the advisors for the biofuels report, said that by embracing the opportunity to grow barley for Appomattox Bio Energy, farmers would encourage the development of similar future projects throughout the region.

“That will be a pretty strong demonstration that the producers in the region are excited about new markets and ready to supply that industry,” Richard said.

source: lancasterfarming