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A new ethanol plant planned for the Oklahoma panhandle town of Guymon will produce the green fuel… and also help the oil industry.

This story in the Hays (Kansas) Daily News says it’s designed to be a more efficient model:

The plant, to be built by Mainline Fuels LLC and its partner, ICM Inc. of Colwich, Kan., would produce 40 million gallons of ethanol annually, would be operational by spring 2009 and at peak capacity would employ 35 people. It’s the sixth ethanol facility proposed for Oklahoma, but it could be the second to become operational.

“Our advantage is in being a smaller-scale plant and on focusing on wet distillers grain that will be used by cattle in the market,” Sanders said. “Our location to the southern ethanol market is a naturally good fit.”

Mainline Fuels will also sell 135,000 tons of carbon dioxide each year generated by the plant to an Oklahoma oil company that will use the gas in its oil fields to help increase oil production.

Change is on the way for the ethanol industry… and it could be quite dramatic. That word comes from a leading biofuels venture capitalist, and this story in the Des Moines Register says it could lead to more plants being owned by fewer and bigger investors:

Sano Shimoda of BioScience Securities Inc. in Venice, Calif., said at the first Renewable on Parade conference that investors who put their money into ethanol five years ago are smiling now because they profited from a surge in ethanol demand that led to skyrocketing high prices.

“Bioethanol will be sustainable only if costs are driven to levels that support market-driven demand without the need for long-term subsidies,” Shimoda said. “All I’m saying is that you have to get costs down. If not, you’re not viable.”

Shimoda predicts squeezed profit margins will lead to a market consolidation, and most single plants won’t survive except for the ones that are low-cost producers. He adds the ethanol production costs must be targeted to compete if oil prices drop to $25 a barrell… that way, when they stay higher, the plants will still be profitable.

A paper critical of world ethanol production, written by the chair of the Round Table on Sustainable Development at the Organization for Economic Cooperation and Development (OECD)… but not officially the view of the OECD… has been blasted by the leaders of the European Bioethanol Fuel Association (eBio) and the Renewable Fuels Association (RFA). Those biofuels leaders are asking the OECD to disavow the paper issued last week. Part of the criticism centers on the media’s portrayal of the paper as the official position of the OECD.

In a letter to OECD Secretary-General Angel Gurria, eBio Secretary General Rob Vierhout and RFA President Bob [Dinneen] wrote:

The paper released last week by a third-party, anti-ethanol website runs counter to statements made in official OECD publications. Two years ago, the OECD Observer published an article stating, “increasing the use of biofuels can improve energy security, greatly reduce greenhouse gases and many pollutant emissions, and improve vehicle performance. Their production can also enhance rural economic development.”

The groups go on to blast the document’s scare scenario of “food shortages”… without recognizing the significant increases in productivity per acre. For example, U.S. corn yields per acre have doubled over the last 30 years with lower inputs per acre.

One of the big knocks against ethanol is that it uses too much water. But an ethanol plant in North Dakota is finding a way to limit its use of freshwater.

This AP story on the KXMC-TV (Minot, ND) web site says what could have been a one-million-gallon-a-day drain on the local freshwater source has been significantly reduced:

Duaine Espegard is the lead director for the Newman Group. He says taking water from the Spiritwood aquifer would hurt others that use the aquifer.

Espegard says the Spiritwood Ethanol plant needs only about 140,000 gallons of fresh water a day to make ethanol. He says the plant could get that from other sources and the rest of the water can come from Cargill after it’s been used in the malting process.

Officials expect to break ground and start construction of the plant next spring.

Cellulosic ethanol leader Verenium will present at two upcoming conferences… one on biofuels and one on life sciences… next week in New York City.

This article on CNNMoney.com has more details:

John A. McCarthy, Jr., Executive Vice President and Chief Financial Officer of Verenium, will be presenting at the ISI Biofuels Conference. The presentation is scheduled to begin at 10:00 a.m. ET on Wednesday, September 26, 2007 and will take place at the University Club in New York City.

Carlos A. Riva, President and Chief Executive Officer of Verenium, will be presenting at the UBS Global Life Sciences Conference. The presentation is scheduled to begin at 11:00 a.m. ET on Thursday, September 27, 2007 and will take place at the Grand Hyatt in New York City.

More information is available at Verenium web site, www.celunol.com.