Panda Energy has withdrawn its offer to build a 100 million gallon ethanol plant near Wallace.

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Darrel Smith, chairman of the Lincoln County Development Corporation (DevCo), said Panda notified DevCo that the company was cutting costs and had a relatively small amount of cash invested in the Wallace project.

The situation is the same near Gothenburg, where construction of a $120 million ethanol plant will not happen.

Gothenburg Improvement Company president Mike Bacon announced Dec. 5 that RAE won’t build southeast of town, but Bacon said other companies are actively being recruited, the Gothenburg Times reported.

High costs are discouraging ethanol investors, analysts say.

“The costs of building and transportation are going up significantly in addition to the price of corn,” Smith said.

Panda is working on a new ethanol plant in Hereford, Texas and the company wants to build revenue before building elsewhere, said Lincoln County Commissioner Joe Hewgley. The Herford plant is expected to begin operating during the first quarter of 2008. It will utilize gas from up to a billion pounds of cattle manure per year from an adjoining feedlot.

Panda remains patient for more favorable market conditions, the company said.

The Wallace plant was to have been built on a 400-acre site three miles east of the village. It would have been fueled by natural gas, and employed about 50 workers.

Panda planned to build five new 100-million gallon plants through the south central states.

The Gothenburg plant was to be the first of three plants for RAE, Inc.

An international agricultural company had planned to invest in the Gothenburg project, Bacon told the Times, but the board of directors failed to give it the required unanimous approval.

Bacon said the Gothenburg Improvement Corporation ends up with a 355-acre site east of town, as well as engineering and other data with which to entice another ethanol plant.

Smith said DevCo had no financial obligations in the Wallace project.

"They assured us they liked everything in Lincoln County," Smith said.

To read more about the Gothenburg project, click HERE.

Greenhouse closed too

A year ago, an innovative greenhouse a few miles south of Gothenburg was closed. The 10 acres under glass now stands empty after the company’s marketing plan failed.

The building was recently purchased by a Colorado company.