Sunoco purchased the former Northeast Biofuels plant, a $200 million project in Volney, NY, for just $8.5 million in 2009 and plans to invest an additional $15 to $20 million to restart production in the first half of 2010. With an expected production of 100 million gallons of ethanol per year, it will supply approximately 20% of Sunoco's annual ethanol requirements. "This was a low cost opportunity to enter the growing biofuels market," said Sexton, who noted that the company is also exploring the feasibility of developing a cellulosic refinery at the site.
"Sunoco has a four prong-strategy," he said. "Improve our competitive cost position, maximize our operational performance, optimize our asset portfolio, and maintain financial flexibility and discipline." The Central Upstate New York ethanol plant moves the company in that direction, as the company looks to diversify its mix. According to Sexton, oil demand peaked in 2007 at 135 billion gallons of gas per year, and the company is seeking alternatives as part of a cost strategy to meet government mandates to develop new kinds of fuels.
