[Photo: Getty]

Gate Petroleum Co. of Jacksonville recently announced plans to develop a 55-million-gallon bulk biofuels terminal on a 139-acre site off the St. Johns River. The $90-million facility would be the first terminal in Florida, and one of the first in the nation, designated primarily for biofuels. R.B. “Buzz” Hoover, president of Gate Biofuels, spoke with Florida Trend about Gate’s ethanol strategy, including why it backed out of plans to make its own ethanol.

Florida Trend: Gate’s original strategy for breaking into biofuels was as a manufacturer. Did the increasing materials costs change your mind about building an ethanol plant in White Springs?

Hoover [Photo: Kelly LaDuke]

Buzz Hoover: While we were considering that plant, not only did construction costs escalate, but the price of corn escalated, making the economics even more questionable. At the same time, there were a number of other ethanol plants under construction already. The end result of our strategy was always to have ethanol to blend into our retail network. So it appeared to us the best way to get it into our outlets was to become a buyer of ethanol rather than a maker.

FT: What’s your timeline?

BH: We hope to break ground in mid-October 2008 and that the facility would be complete in August 2010.

FT: Where will the ethanol come from?

BH: We’ll have the flexibility to bring it from domestic sources either by rail or by barge from the Midwest or Brazilian ethanol via water. My guess is that the majority will come via rail, but that will depend on economics.

FT: What about cellulosic ethanol that could be made here in Florida from trees and other wood waste?

BH: You can make ethanol from some of those sources right now; you just can’t do it cost effectively. That may be five years or so away.

FT: Does this mean come 2010, we’ll see E10 ethanol (10% ethanol and 90% gasoline) for sale in Gate stations all over Florida?

BH: This terminal will only apply to our metro Jacksonville stores, and that’s where we’ll begin offering E10 as soon as the facility is in operation. E85 (85% ethanol and 15% gasoline), which can be used by flex fuel vehicles, will also be available at some Gate stores.