President Buzz Hoover says Gate Petroleum should be able to produce ethanol for between $1.15 and $1.50 a gallon.
Gate wants to build its plant on a 70- acre site about 80 miles west of Jacksonville near White Springs in Hamilton County and plans to open it by early 2008. Gate's proposed plant will turn tons of corn into ethanol and blend it into a 90% gasoline, 10% ethanol mix called E10. It expects to produce 30 million gallons of E10 annually and sell it at the company's 150 gas stations in seven Southeastern states. Buzz Hoover, president of Gate Ethanol, says the company can store E10 in the existing storage tanks at its stations "without making any major construction changes, and every car on the road can use E10 with no problem."
Hoover says producing ethanol at the plant will cost between $1.15 and $1.50 per gallon. At the pump, he says, E10 will reduce the price by as much as 10 cents once the supply of ethanol catches up with demand. Mixing ethanol with gasoline also will stretch the gasoline supply by about 10%.
Since early May, demand for ethanol has caused its price to jump to around $4.50 a gallon in U.S. markets, making it more expensive than gasoline, according to the Oil Price Information Service. Hoover says the price "will balance out as supplies increase."
Meanwhile, U.S. Envirofuels, a Tampa company founded by a former Monsanto chemist, Bradley Krohn, will begin construction on the state's first ethanol manufacturing facility at the port of Tampa this summer.