By Scott Fitzgerald Staff Writer

In August 2005, Enid leaders, local farmers and area lawmakers touted the news — Oklahoma’s first large-scale ethanol plant would be built in Enid.

It’s not going to happen.

Officials with Oklahoma Sustainable Energy (OSE) and Chaparral Energy, which formed a joint agreement under the name of Oklahoma Ethanol LLC, a limited liability company, announced Tues-day they have ac-cepted an offer to build their plant in Blackwell and will do so beginning with a fall groundbreaking on a 240-acre site between Blackwell’s downtown and city industrial park off Interstate 35.

“Our decision to locate the plant in Blackwell is strictly a business decision based on what’s best for our company and investors,” said Mark Fischer, a manager of Oklahoma Ethanol and Chaparral president.

The latest twist in the story

Tuesday’s news was the latest twist in an ongoing economic development story here that resembles a foot race with a host of false starts.

In late February, officials with the partnership announced postponement of their Enid plans for a $90 million to $100 million plant to be built on 40 acres adjacent to ADM at 16th and Willow because of increasing construction costs and the high price of corn, a main ingredient in the processing of ethanol.

Their announcement came on the heels of an announcement by officials with Orion Ethanol, of Pratt, Kan., saying they were postponing construction of an ethanol plant here until overall market conditions and commodity prices changed.

Despite the city of Enid’s commitment to help Oklahoma Ethanol build its plant here with establishment of a Tax Increment Finance district in March 2006 to help offset startup costs and $250,000 in upfront seed money, other communities — including Blackwell — didn’t give up trying to land the proposed plant.

“I was aware they were exploring other options. We had inked our deal more than a year ago,” said Jon Blankenship, executive director of Greater Enid Chamber of Commerce.

State Rep. Mike Jackson, R-Enid, who had worked on the state level to spark the plans for ethanol startups throughout Oklahoma with marketing and tax breaks once plants are in full production, said he had heard “there was a possibility of them (Oklahoma Ethanol) looking at other locations.”

A better offer

Shane Frye, executive director of Blackwell Area Chamber and Industrial Authority, confirmed Blackwell, along with other locations in the state, kept in the running for Oklahoma Ethanol’s proposed plant.

“We’ve been working with them. Our incentives were similar to Enid,” Frye said about what Blackwell was offering.

According to a key component list outlined by Oklahoma Ethanol officials, transportation incentives were vital. Blackwell had close proximity to I-35 and offered important rail access.

Blackwell Northern Gateway Railroad, a short-line rail between Blackwell and Wellington, Kan., the site of a rail yard that serves Burlington Northern Santa Fe and Union Pacific, offered to provide rail access at reduces costs to all major markets for purchasing grain and selling ethanol and distiller’s grains, a byproduct of the process often used as a livestock feed.

Plant manager Mike Frickenschmidt, of Oklahoma Ethanol, said the company will have a 240-acre tract of land to construct a double loop of rail tracks that will allow for the shuttling of grain on the outside loop and shuttling ethanol on the inside loop.

“This is a huge labor and transportation costs savings,” Frickenschmidt said.

Land area and rail service were big keys in how Blackwell won out, Frickenschmidt said.

According to the key components list, Blackwell already has the infrastructure to supply necessary water to the plant, and existing wastewater systems have the ability to handle plant wastewater.

City leaders in Enid began hearing presentations last month from interested contractors for a new wastewater treatment plant, that is expected to cost from $26 million to $42 million.

Ending the deal

On Tuesday, Oklahoma Ethanol officials returned the $250,000 in seed money to Enid City Manager Eric Benson’s office.

“The city respects their decision. I have a very high regard for the leadership of Oklahoma Ethanol and Chaparral Energy. Mike Maly (of Chaparral Energy) and Mike Frickenschmidt are distinct gentlemen. As a gesture of goodwill they returned the $250,000 the city advanced to them. They could have waited until 2009. That shows they are men of integrity,” Benson said.

Major players in the process remain hopeful ethanol development will become a reality here someday.

Blankenship said he understood the company “has left the door open for subsequent projects in Enid.”

Jackson said he believes Oklahoma Ethanol will have something down the road for Enid because of the initial courting here and the good impression it likely left with Oklahoma Ethanol.

“Enid is still an excellent site for an ethanol plant. We plan on hopefully building a second one,” Frickenschmidt said.