Will Ethanol Really Be The Toast Of Buffalo?
Monday, July 31st, 2006
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A reuse for aging Buffalo grain elevators was detailed on page one of yesterday’s Sunday Buffalo News.
http://www.buffalonews.com/editorial/20060730/1048952.asp
This is exciting news indeed. The Buffalo Bloviator has been investigating the feasibility of utilizing the idled capacity of our inner harbor for ethanol production ever since we learned that a plant was announced earlier this year for the Town of Shelby. Observing that General Mills uses huge lake freighters to deliver their grain and provide Buffalo with the wonderful aroma of roasting Cheerios, we reasoned that it must be more cost effective than rail or truck. We knew that our elevators could be upgraded because other cities still use theirs. Our elevators did not become obsolete, rather they became irrelevant when the St. Lawrence Seaway opened and took Buffalo out of the commercial shipping corridor.
We are not reinventing the wheel with ethanol. Brazil has already done it. Brazil began their ethanol program in 1973 during the oil embargo. It took them 30 years but they have made themselves energy independent. They have equipped their national fleet with ethanol burning vehicles and have developed the necessary fuel delivery infrastructure. Brazil is so efficient at producing ethanol that the USA can actually import it cheaper than we can ever produce it domestically. Brazil’s climate allows them to use sugar cane instead of corn or grass. Sugar cane requires fewer energy units to produce a given amount of ethanol than does corn. The USA may never be able to get over that production cost disparity. Our government has demonstrated a commitment to restrict ethanol imports from Brazil in order to foster our agricultural industry. The markets have interpreted the government’s commitment to protectionism as reliable enough to rationalize investment in the domestic ethanol industry. That is why we believe there is tremendous growth potential for our nascent ethanol industry.
The Buffalo Bloviator predicts (and hopes) that there will in fact be ethanol production in Buffalo taking advantage of our harbor and grain elevator capacity. The question is, will the Buffalo ethanol industry really be kicked-off by RiverWright Energy, LLC?
Here are some hints that the public records have thus far provided:
1) The New York State Department Of State has no record of a domestic entity or a foreign entity doing business in New York State called RiverWright Energy, LLC. There is no record of an entity name reservation for RiverWright Energy, LLC.
2) The Erie County records do not show any change of ownership activity on the parcels on Childs Street where the plant location was announced. It is still owned by Conagra Maple Leaf of Omaha, NE. The property is currently occupied by “RiverWright, LLC”, a processor of wood chips. RiverWright has been advertising for help wanted so they appear to be a going concern.
3) “Ethanol industry veteran” KL Process Design Group was named to manage the project’s design, completion, and operations. We found information that KL typically takes an ownership share. As a major part of KL’s service, they manage the formation of capital. In this case the capital requirements were announced to be around 80 million dollars.
Ground breaking is scheduled for September 2006. Production is scheduled to begin September 2007.
Now either these amazing fellas can raise money and construct an 80 million dollar ethanol factory faster than Mark Croce can say, “I’m building a new restaurant”, or there are some missing pieces to this puzzle. Â
Either way, I salute them for having the rare vision, which is sometimes required to see the obvious.
Good luck guys, and let us take a look at your prospectus. We will certainly consider investing. Â
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