Page last updated at 23:26 GMT, Tuesday, 23 June 2009 00:26 UK

How Texas manure ethanol plan fell flat

By Jamie Coomarasamy
BBC News, Washington

Panda ethanol plant
President Bush's White House championed ethanol production

There are some things that don't change in Hereford, Texas. The country music that's played on the local radio station and the brown plastic bull, which welcomes you to town, above the slogan "Hereford, Beef Capital of the World".

But one thing has appeared on the skyline since I was last in the panhandle three-and-a-half years ago - the gleaming, silver silos of the Panda ethanol plant.

It was the promise of ethanol that first brought me to Hereford.

With President Bush extolling the virtues of biofuels as a cure for what he called America's "addiction to foreign oil", I'd been invited to the town by Panda Energy.

The company, which has a series of successful plants across the United States, wanted to use the town's plentiful supply of manure - courtesy of the hundreds of thousands of cattle that use its massive feed yards - to power the process of extracting ethanol from corn.

It was - in theory - a perfect, symbiotic relationship. Hereford's feed yards would lose their excess waste; the town's economy would become a renewable energy centre.

Cattle in Hereford, Texas
The town's manure was intended to power ethanol production

The muck would be turned into brass.

So, has there been a happy ending? Not exactly.

As you get closer to the ethanol plant, you notice that the lorries transporting manure are taking it away from the facility, not towards it.

In fact, the plant is only 95% built and it's never produced a drop of ethanol. Almost all of the employees who were working on the ethanol trials have been laid off.

"We wanted to be the renewable energy capital of Texas," says Sheila Quirk, executive director of the Hereford Development Corporation.

"It was a breath of fresh air to drive by it at night, but now - it's just a sad disappointment."

When she took over her post, at the end of 2006, the ground had just been broken at the site of the plant.

Now, after a series of problems, the $200m facility is in the bankruptcy courts and is reportedly worth around a tenth of the amount it cost to build.

There's been no public accountability, never really a suitable explanation for that failure
Chip Formby
General manager, K-PAN

Panda Energy has told the BBC that, because of the legal situation, it is unable to comment on what went wrong, but it's clear there've been a number of issues with the plant's construction.

They range from structural problems with the foundations, to the health problems of the construction workers who contracted a virus - q-fever - which, it's alleged, may have originated in local cattle.

Add to that the fact that corn-based ethanol's economic and environmental credentials have been increasingly called into question in recent years, and the general economic downturn, and it is clear that the company has been battling against the odds.

The twists and turns of the project have all been monitored by Chip Formby, the general manager of the local radio station, K-PAN.

His commitment to renewable energy can be seen in the wind turbine that stands in K-PAN's car park, providing the station with around a fifth of its electricity.

He has quite a few questions: "Panda was provided a site of nearly 400 acres absolutely free, federal ethanol incentives, huge property tax reduction over the next 10 years and a $2m road improvement scheme ... and there's been no public accountability, never really a suitable explanation for that failure."

Plastic bull statue
The town remains hopeful that a buyer will come forward for its new plant

It doesn't come as much of a surprise to Johnny Trotter. The owner of Bar-G feed yard, one of the biggest in Hereford, says he was the first person approached about supplying the key raw materials for the ethanol plant.

History has placed the whiff of scepticism in his nostrils.

"Over the last 20, 30 years, there've been lots of people with new ideas - pie in the sky ideas - about how we were going to use manure but, at the end of the day, the best thing we use it for is fertiliser."

So, for the time being at least, the plant is a huge white elephant; a sign that the path to renewable energy is not always paved with gold.

The people of Hereford hope that it's temporary hiccup, but in the meantime they are not giving up on alternative fuels.

As they wait for a buyer to be found for the ethanol plant, they're diverting their energy to wind power - harnessing the hot winds that blow through the panhandle.

Prospecting the brown gold that lies on the fields may have to wait.

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