Pennsylvania's First Ethanol Production Plant to Locate in Clearfield County

CLEARFIELD, Pa., Aug. 17, 2006 -- Governor Edward G. Rendell today announced that Pennsylvania's first ethanol production facility will locate in Clearfield County and build on the state's commitment to helping consumers move away from high-cost fossil fuels to homegrown energy solutions.

"Today, Pennsylvania takes another gigantic step forward on the renewable energy front in a move that will lessen our dependence on foreign energy sources," said Governor Rendell. "With gas prices at or above $3 a gallon, Pennsylvania is sending approximately $30 billion overseas. It's time to take that money and invest it at home by supporting new technologies that will grow our economy and open the door to new opportunities.

"The plant that we're announcing today will help do just that. By producing approximately 108 million gallons of denatured, fuel-grade ethanol per year, we will not only break the grip of foreign oil cartels, we will create new markets for our corn growers and help foster a cleaner environment.

"Since I took office more than three-and-a-half years ago, we've aggressively worked to promote smart energy policies and viable renewable energy technologies. Today, we're regarded as a national leader in the drive to energy independence, and when this plant is completed it will serve as a catalyst for future growth."

Governor Rendell was joined today by top executives from BioEnergy International, LLC and Lukoil Americas, two important partners in the project. BioEnergy will build and operate the facility and Lukoil will serve as the exclusive distributor of the finished product.

The Governor presented BioEnergy with $17.4 million in state investments to support the $250 million project. The package includes a $400,000 grant through the Opportunity Grant Program, $500,000 in Job Creation Tax Credits ($300,000 for the ethanol plant and $200,000 for the pilot plant), loan and grants of up to $2.5 million ($1.25 million loan and $1.25 million grant) for the ethanol plant through the Infrastructure Development Program and $14 million ($11 million for the ethanol plant and $3 million for the pilot plant) through the Redevelopment Assistance Capital Program.

The majority of these funds, $180 million, will support the building of a 108-million-gallon corn-based ethanol production plant, with the remaining $70 million going towards the development of a pilot-scale cellulose demonstration plant. Plans call for at least 110 new jobs within the next five years, plus approximately 300 temporary construction jobs.

The plant will employ conventional corn-based technology and will be among the largest east of the Mississippi River, and one of the nation's top 10, based on output. The smaller pilot-cellulose plant will use BioEnergy's groundbreaking technology to produce fuels using locally available organic wastes, such as wood and agricultural residue.

"The growth potential for cellulosic ethanol is substantial," Governor Rendell added. "The commonwealth contains enough plant matter to produce in excess of 500 million gallons of cellulosic ethanol per year. In addition, Pennsylvania very well could be the nation's leading producer of soy biodiesel within the year, going from practically zero last year to a projected 40 million gallons of annual production as more than 20 proposed biodiesel projects are in various stages of development throughout the state.

"The return on this investment will be beyond measure. Ethanol production will provide a significant contribution to Pennsylvania's economy, impacting everyone from the farmers who grow the corn, the plant employees who manufacture the fuel, and the motorists who use it in their automobiles."

"BioEnergy is excited to be moving forward with the development of our company's second ethanol plant in the U.S. and our first in Clearfield County," said Stephen Gatto, chairman and CEO of BioEnergy International. "We expect this project to have a significant economic impact on the region, creating approximately 110 jobs overall. We credit Governor Rendell with helping us choose Clearfield County for our phased, $250 million investment.

"In addition, BioEnergy will be developing new technologies to produce renewable fuels and biodegradable chemicals that will reduce our reliance on foreign oil, while minimizing the negative impacts to our environment. BioEnergy is fortunate to be the first private enterprise that the commonwealth has selected to support, and we thank Governor Rendell and our partners at Lukoil Americas for their commitment," added Gatto.

Last May, Governor Rendell launched a major new initiative, PennSecurity Fuels, to make clean energy a cornerstone of the commonwealth's growing economy through innovative policies and targeted financial incentives. The initiative is aimed at protecting consumers and businesses from crippling price spikes and supply disruptions by replacing foreign oil with clean, alternative fuels made in Pennsylvania.

BioEnergy International, LLC, headquartered in Massachusetts, is a privately held biotechnology company focused on developing biorefineries and proprietary technologies to produce specialty chemicals and renewable fuels from both traditional feedstocks and cellulose.

For information on DCED programs, visit http://www.newpa.com/ or call 1-866-GONEWPA (1-866-466-3972). To learn more about BioEnergy International, visit http://www.bioenergyllc.com/. For more information about Lukoil Americas, visit http://www.lukoil.com/.

The Rendell Administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit his Web site at: http://www.governor.state.pa.us/.