Risk and reward
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ANR
A massive conglomeration of steel on the west edge of Aurora has been making headlines for the past 17 years in our community, not all of it positive, though the latest development is a signal of meaningful perseverance.
KAAPA Ethanol’s new partnership with the Aurora Cooperative is indeed positive news for the ag community, insuring continued operation of an ethanol plant that very directly impacts the bottom line of producers throughout the region. It’s been reported that having local access to an end user for such massive amounts of corn translates to an estimated 40-cent-per-bushel premium. That’s a very, very big shot in the arm for the ag sector, which as we all know drives our local economy.
Investing in the ethanol industry is a risky venture, to be sure, with so many variables impacting prices and profitability. We’ve had a front row seat to that volatility dating back to 2006, when ground was broken on an Aurora West complex first sketched out on the back of a napkin. It’s been a high-dollar roller-coaster ride from Day 1.
Scanning back through the archives, ANR documented Kiewit crews beginning construction on Aventine Renewable Energy’s initial $200 million complex in the fall of 2006. Construction was suspended in 2008 and Aventine filed for bankruptcy in 2009, raising a cloud of uncertainty which hovered over the site for seven years. Aventine eventually emerged from bankruptcy, completed construction and briefly operated the new plant in 2012, before shutting it down again amidst a quagmire of litigation.
California-based Pacific Ethanol arrived on the scene in 2015, immediately dismissing all related lawsuits and bringing the plant back up to full capacity. Five years later the Aurora Cooperative bought out Pacific’s majority interest to become the sole owner, a $52 million decision which some no doubt questioned at the time.
Three years later it’s become clear that the Aurora Coop’s motive was somewhat defensive in nature, with a goal of simply keeping the plant operational. That bold strategy worked as planned. KAAPA now comes into the picture with a reputation and history of knowing how to run ethanol plants profitably, and this one seems an ideal fit as the Kearney-based partner better understands the Nebraska ag culture and is here for the long haul.
Ethanol remains a volatile industry, with so many factors impacting the bottom line, but the bottom line for Aurora, Hamilton County and area producers is that this plant is an invaluable asset.
-- Kurt Johnson
