Update for March 26, 2015
Site plan approved for ethanol terminal
By William Hoover
Hondo City Council on Monday approved a site plan for construction of a new ethanol terminal, proposed by Hondo Railway owners Don Lee and Mark Holland.
Lee told council the new terminal, which would reduce the time it takes to transload ethanol from railcars onto trucks for delivery by around one week, would allow him to retain a five-year contract with Archer Daniels Midland and keep the business humming.
Code Compliance Supervisor Gilbert Rodriguez briefed council on the site plan for the terminal.
“The proposed terminal encompasses 9.2 acres on the far east end of Hondo Railway’s 119 acres,” he said. “The terminal will be adjacent to Martin Asphalt and will consist of pump stations for rail unloading and truck loading, a three-bay covered truck loading area, two 100-foot diameter by 48-foot tall tanks, and an office structure.”
Contreras noted that Hondo Railway has current ethanol storage and transloading services in place, but only has the capacity to load two trucks at a time.
“Ethanol is brought in by rail and transferred to trucks for delivery to San Antonio,” he said. “Using this process, it normally takes about eight days to unload the railcars. The proposed terminal will provided Hondo Railway customers with a faster turnaround—about 24 hours.
“It will also provide more storage capacity and a more efficient operation,” added Contreras.
“Our largest customer out there is Archer Daniels Midland,” said Lee, explaining the need for the terminal. “We currently transload ethanol for them. They approached last year with the concern that they needed to unload their product faster, in order to be competitive in the market in San Antonio.
“It would also allow us to return their railcars faster, which are very expensive, so they can have more deliveries per car,” he said. “They approached us saying if we would be willing to do that, they would give us an extended five-year contract on the ethanol.
“That is a great thing for us because it guarantees, not only will we have the business, but our employees will have jobs for the next five years,” he added.
Lee said Hondo Railway’s plan is basically to duplicate its current ethanol operations to the north with the addition of the new storage tanks to receive and hold the ethanol and then to transfer it to trucks, instead of transloading directly from railcar to truck.
“This will be more efficient and is highly compatible with their needs to have their cars returned,” he said of ADM. “When the trains come in, there are about 80 cars per train. With the new storage tanks, we will unload those trains in about 24 hours.
“Right now, we keep the train in Hondo about six to eight days depending on the volume and the time needed to unload,” he added. “This way the train will be released and goes back to Illinois. Then it is loaded and comes back here again. Being able to load three trucks at a time will also speed things up.”
Place 1 Councilman John McAnelly asked about possible air quality issues involved in transporting ethanol.
“To meet environmental requirements, we now take vapor that comes off the railcar and pipe it back into the railcar and it goes back to the factory,” said Lee. “With this new facility, we will put in a combustion unit that will actually burn that excess vapor. That is safer for us, safer for the rail and safer for the cars going back.
“Total emissions will be less than what we are permitted for now because of that one factor, the vapor will be combusted and not returned to cars,” he said.
“Will there be more trucks coming in and out?” asked Danner.
“No,” said Lee. “The truck traffic should not increase. If it does, it will be because (ADM’s) volume increases. This market has become highly competitive since ethanol was introduced in the gasoline in Texas. When we came out here in 2006, we were one of the first rail complexes to be built outside the San Antonio area.
“Since that time, there are about four yards that have come into play so the market is more competitive,” he added. “That is why, when (ADM) approached us to buy storage tanks to help them with their turnaround time, it was important to me to do this in order to hang on to this volume. I did not want it to go to one of our new competitors.”
Lee said the Hondo Railway’s current ethanol facility could be refitted in the future to transload biodiesel.
“We are looking at proposals from ADM and two other companies that are currently shipping biodiesel,” he told council. “That would be the perfect installation to unload biodiesel. We unloaded some in the past on a temporary contract with a company out of the midwest. We hope that will come back, and ADM also has a biodiesel division.”
“I think this is a great project for you,” said Danner before asking for a motion.
Place 4 Councilwoman Ann-Michelle Long offered the motion to approve the ethanol terminal site plan. The motion passed unanimously after a second from Place 5 Councilman John Villa.
In Other Business
• Council approved a request from Carolyn Heyen and Stephen and Ann-Michelle Long for a short-form subdivision plat for a .0861 acre lot and a 2.124 acre lot of land located at 1105 30th Street. Long, the Place 4 council member, recused herself from the discussion and vote.
• Council approved a budget amendment of $45,000 to replace the roof on the Community Center on 19th Street.
• At the request of Airport Manager Bob Lee, council approved a policy setting minimum standards for hangar construction for facilities at the South Texas Regional Airport.
“This way someone can’t come in and build a cardboard box and call it a hangar,” said Lee of the all metal construction requirements.
• The next Hondo City Council meeting will be Monday, April 13, at 6 p.m. in city hall. The meeting is open to the public.
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