IMPERIAL VALLEY — The growth of the sugarcane plant which California Ethanol & Power, LLC have been working on getting up and running since 2013 in Imperial County, recently took a major step forward.
California Ethanol + Power (CE+P) announced an exclusive 15-year contract was awarded to CHS Inc. to market and sell the 68-million gallons of “Essential Ethanol” to be produced annually by the local Sugar Valley Energy campus, slated to be located at 136 E. Keystone Road between Highway 111 and Dogwood Road in Brawley, according to a December press release.
Sugar Valley Energy will be a 160-acre, multi-plant campus consisting of sugarcane-to-ethanol, sugarcane to low-carbon power plus biomethane, and wastewater treatment facilities, according to the release.
Minnesota-based CHS Inc. is a diversified global agribusiness cooperative owned by farmers and local cooperatives in the US with global reach, which gains approximately $30-to-$35-billion in revenue annually. CHS produces 260 million gallons of ethanol and markets 900 gallons annually, making CHS one of the US’s largest suppliers of ethanol enhanced gasoline and E85 ethanol retailers, according to the release.
President and CEO of CE+P Dave Rubenstein, owner and developer for the alternative fuel and energy campus, said CHS contracting with CE+P for the local future plant is a major milestone.
“A long-term relationship with CHS reinforces the value of sugarcane ethanol’s role in our State and Country’s fuel needs,” Rubenstein said. “We're knocking on the door of close to a billion dollars of the total cost to get this project financed right now. Raising close to a billion dollars is not an easy task.”
Rubenstein said the goal is to get the $1 billion financed for the project by February, “which will then allow us to truly break ground in that time and hopefully start mobilizing and building the facility before the end of 2021.”
Rubenstein also said the support of the County of Imperial by granting the permits for the facility, penning with CHS Inc. as an offtake partner for ethanol, and the support of local farmers as sugarcane growers, are all pieces paramount to the Sugar Valley Project, crediting the late Larry Gilbert with laying much of the groundwork locally.
“It was some of the local growers that decided to see if (they) could grow sugarcane in the region, and that was kind of the driving force (behind the project),” he said, “so once they figured that out, the pieces started falling into place to go that route.”
Rubenstein said the plant will need about 48,000 acres of local sugarcane to be grown locally to support the plant and “we don't think we're going to have any problems getting those acres.”
“As a matter of fact, we're reaching out to growers right now,” Rubenstein said, “and I have a feeling we'll be over-subscribed, so we're pretty excited about the opportunity it's bringing.”
Stephen Benson — partner-owner of local Benson Farms and president of Planters Hay, Inc. — agreed.
“The interest has been to develop a new crop and essentially the financing for the plant has been the hang up,” Benson said, “so now we're pretty hopeful that that's going to work, and there's going to be financing available to build the plant.”
“I think it's great that there's another crop that farmers have an option to grow,” he said. “The hay market has been really bad lately and between Bermuda and alfalfa and Kleingrass … sudan grass was not a good year as well,” he said. “So, we're just happy that there's something to put our acres towards.”
Since the passing of Gilbert, Benson has stepped in as the local lead for the Sugar Valley Energy project as the chief agricultural officer for CE+P.
Even after COVID-related holdups in 2020, with permits in place with the County, MasTec Power Corporation set to develop infrastructure, local A&R Construction doing some pre-land work and a federal Investment Tax Credit of $75-to-$80-million the benefit the project in 2021, Rubenstein and Benson said they feel confident things are going in the right direction, including future local job creation and positive economic impact resulting from the plant.
“Since we need (about) 50,000 acres — that's 10 percent of the whole Valley — so if every farmer does 1 out of 10 fields that's how we're going to get our acres,” Benson said. “So, we're just going out and getting people to get interested in it.”
“It’s a three-year ramp up to grow the crop,” he said. “We're going through a process where we're signing a non-disclosure agreement and a letter of intent, and then that gets them into the pool of growers.”
Benson said he has a grower list and is reaching out to local growers with updates as well as fielding their questions.
Benson said local farmers interested in growing sugarcane crops for the Sugar Valley Energy project can contact him by email at email@example.com or by telephone at (760) 996-1671.
According to an earlier analysis by third party Circle Analytics, the Sugar Valley Energy project is estimated to develop 15,122 total local jobs, and the facility itself should employ “more than 200,” Rubenstein said, calling the future plant the first of its kind in California.
“We look forward to collaborating with California Ethanol + Power and Imperial Valley sugarcane growers on this initiative,” said Brian Schouvieller, CHS Inc. senior vice president.
“It's just a good opportunity, so we're pretty excited to be part of that and bring that to the Valley and be part of the community,” Rubenstein said.