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Construction Begins On First Ethanol Plant

Ethanol To Be Added To Gasoline In April

POSTED: 5:03 pm HST March 6, 2006

Construction on Oahu's first ethanol plant could begin in three to four months. That means ethanol could soon be going into your car.

Over the next few weeks, Hawaii's gasoline industry will begin adding ethanol to everyone's gasoline. It's an effort to reduce the state's dependence on imported oil even though at first the ethanol is being imported, too.

That could change in a year or so after Hawaii's first ethanol plants get up and running.

"We expect that in the next three or four months we should be breaking ground and ready to go," said Dan KenKnight, of Oahu Ethanol Corp.

KenKnight said Oahu Ethanol would use a time-proven fermenting process to turn plant sugar into ethanol.

When the state requirement for 10 percent ethanol in gasoline kicks in April 2, it will create an instant demand for about $40 million of ethanol a year. Oahu Ethanol, with its single plant at Campbell Industrial Park, hopes to produce more than half of that.

The company hopes its first source of sugar will be molasses, shipped from either neighbor island sugar plantations or the mainland. However, after that he is hoping to convince the owners of Oahu's Fallow Farm Fields that they should grow a crop called sweet sorghum, a fast-growing cane, which is excellent for ethanol production.

"I am going to be spending over $15 million a year on feed stock. I would rather be spending that money here in Hawaii," KenKnight said.

The whole deal is possible because of hefty state and federal tax breaks. The gasoline companies will get 51 cents a gallon for blending the gasohol, gas retailers will be exempt from the 4 percent state excise tax and ethanol producers will get 30 cents in tax credit per gallon, but only after they are up and running.

"The state is not helping to fund white elephants. What they are doing is making sure that we deliver and I think that's the right way to do it," KenKnight said.

Ethanol is not new. It is required by law. The main fear is that Hawaii will prove too difficult or too expensive for the ethanol business.

For most people, it might mean slightly less mileage, but the ethanol adds octane.

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