Wyoming Ethanol announces end to local industry

Source: By SANDRA HANSEN. Scottsbluff Star Herald • Posted: Wednesday, August 26, 2015

TORRINGTON, Wyoming — A Goshen County industry that opened its doors in 1995 is now set to close them, 20 years later. Wyoming Ethanol LLC arrived with the aid of a 40-cent per gallon tax credit from the state of Wyoming, and now the end of that credit is leading to the end of the local operation. Company sources said current corn prices and the falling gasoline prices make it impossible to be profitable, noting it takes $2.50 gallon wholesale to be profitable, while the price is now $1.80-$1.90 per gallon.

The impact of the lost industry reaches from seed dealers to rates of electricity supplied by the City of Torrington.

Torrington Mayor Mike Varney said Tuesday morning that he and his staff will meet Wednesday to do some figuring.

“It’s so early, we don’t know what the reaction of the businesses and residents will be,” Varney said. “We will try everything we can to minimize the effects. It’s the second-largest industry in the county, and it worries me what the overall repercussions will be.”

While employees will take an immediate hit, corn suppliers and distillers grain users are wondering what their futures hold. Farmers with contracts to deliver corn, and those who planted corn this year intending to sell to the plant, are left in limbo, and feedlots that have relied on distillers grains as part of their feed source, are scrambling for new options.

The large industries use a large portion of the power purchased by the city, and carry a large part of the financial costs. Varney is worried what the lack of those demands will do to the cost charged by the major suppliers because, like most things, larger amounts usually mean reduced costs. If the local demand is less, that could mean the cost of power will increase.

Wyoming Ethanol is the second industry in a matter of months to announce ensuing closure. Western Sugar Cooperative had already announced that 2015 will be the factory’s last processing campaign.

Todd Peterson, president of Pinnacle Bank in Torrington, and a member of the Goshen County Economic Development Corporation, said there is no doubt that the closure will have a detrimental impact on the community, and GCEDC has worked with Wyoming Ethanol to find other markets, or a buyer.

“Its been a tough decision, and we hate to see things like this happen,” Peterson said. “There are a lot of unknowns, and a lot of the ramifications are yet to be seen, but Torrington has always survived, and there will be other opportunities.”

It was in 1994 that the unfamiliar industrial operation began taking shape south of the Holly Sugar factory in Torrington. A forward-looking mother company, Brehm Energy, brought pieces of an idle sugar cane processing facility to Goshen County where they were assembled and modified to produce ethanol, a new industry for the rural county in southeastern Wyoming.

In January 1995, the doors opened with about 24 employees. Steam began to roll and passersby were enthralled by the tall evaporation tower. Union Pacific Railroad shuttled in empty tanker cars to replace those filled with ethanol, headed for markets in other regions. Semi trucks arrived by the dozens, loaded with corn to be processed into distillers wet grains, a co-product fed to cattle in area feedlots.

The new 2 million gallon per year enterprise had the support of a 5-year tax credit passed by the Wyoming Legislature. It allowed for a 40-cent per gallon credit for a limited number of years. Extensions and increased capacity to 5 million gallons continued. Eventually, Wyoming Ethanol LLC, was purchased by Renova Energy, an international company. In 2006, the new owners met with legislators about extending the tax credit to 2022, with the intent of expanding the operation. The legislature compromised at 2020, and the expansion to 12 million gallons a year was agreed to, at a cost of $17 million.

However, when in 2012, Wyoming Ethanol again approached the legislature about a long-term tax credit extension, the legislature instead set a cut-off date for 2013. After discussion and compromise, the cut-off date was set for July 1, 2015.

That time has arrived and the Torrington facility is preparing to end operations, at least temporarily. Corn suppliers and distillers grain users have received notices that contracts will not be honored, and that corn deliveries will end this week, and production will end next week when the corn on hand runs out.

The Wyoming Ethanol representative also said a sustained increase in the price of gasoline could lead to a resumption of operations at Torrington.