Construction begins on Abengoa's Hugoton, Kansas, US$$350M commercial-scale ethanol plant, which will convert crop residue, switchgrass into 23 million gallons of fuel per year; full operation to begin by mid-2013

HUGOTON, Kansas , October 25, 2011 () – While many western Kansas towns are struggling with declining populations and difficult economies, a building boom is bringing construction workers and hope for a bright future to a small town in the far southwest corner of the state.

Construction has begun on a new multi-million ethanol plant and a new nursing home in Hugoton, which also has made improvements to its schools. And Stevens County also is celebrating the last year's opening of a new jail, The Hutchinson News reported Monday (http://bit.ly/n11JjR ).

This community, about 70 miles southwest of Garden City, is welcoming Abengoa Bioenergy Biomass of Kansas, which recently received a $132.4 million loan guarantee to develop a commercial-scale ethanol plant that will convert crop residue and switchgrass into 23 million gallons of ethanol per year.

Crews are grading for roads on land about two miles west of town before starting on construction of the plant.

"We think it's a home run," said Neil Gillespie, director of Stevens County Economic Development. "For a community our size, this is an enormously good thing."

About 20 people are currently working on the site. But Chris Standlee, executive vice president of Abengoa Bioenergy U.S. Holdings Inc., said 50 to 100 contract employees will be on site by the end of 2011 and eventually about 300 employees will be building the $350 million plant. Standlee estimates full operation will begin by the middle of 2013.

The Hugoton plant will be used to perfect the technology to handle corn residue, crop residue, corn stover, wheat straw, grain sorghum stalks and prairie grass.

The Abengoa project is likely to lure more residents to the town and diversify the economy, said Gillespie, who added that the town has formed a committee to address a housing shortage.

The plant will also be good news for area farmers. Standlee says the company will pay $17 million a year to farmers in a 50-mile radius for the biomass from their fields, in order to have the 1,000 tons a day needed for ethanol production.

While the plant is being built outside of town, another project is being constructed on Hugoton's Main Street.

Pioneer Manor will offer its residents four households made up of 20 private rooms and a communal living area and kitchen. It also will include a coffee shop, cafe, beauty shop, post office and special events area.

Rachel Crane, Pioneer Manor administrator, said staff will be trained so that everyone can handle all levels of resident care when the home opens sometime next year.

The $18 million facility will be completely paid for in five years, Stevens County Commissioner Gary Baker said. The 56 residents in the current Pioneer Manor will be moved to the new home; the other 24 rooms have been reserved and a waiting list is growing.

Hugoton sits atop one of the largest, though declining, natural gas fields in the nation. While oil and gas valuations have declined, the county's 2012 valuation increased 10 percent because of the construction, compared with a 34 percent decrease the year before, Baker said.

Meanwhile, a $21 million bond issue for the recent improvements to the schools will be paid off in 15 years. The town now boasts a new Early Childhood Development Center, a new academic wing for the middle school, a new cafeteria and kitchen and a new academic complex.

And Stevens County Sheriff Ted E. Heaton also brags about a new state-of-the art jail, which was finished in 2009.

Among other things, the jail boasts a live scan fingerprinting computer, plenty of holding cells for adults and a separate one for juveniles. There is room to house prisoners from other counties in the 25-inmate jail. It also provides excellent security for staff and inmates, Heaton said.

Stevens County was one of only four counties in western Kansas where population didn't decrease in the 2012 census. The population in Stevens County has increased 4.8 percent, reaching 5,724 people, with about 3,900 of those living in Hugoton. The other counties were Ford, Seward and Ellis, which include the cities of Dodge City, Liberal and Hays.

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Information from: The Hutchinson News, http://www.hutchnews.com

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