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Northeast Biofuels Experiencing Production Delays; Addressing Performance

VOLNEY, NY – Ethanol production is at a temporary standstill at Northeast Biofuels (NEB) as the company works out performance-related issues at the plant with its contractor, Lurgi PSI, Inc.

In August, the first shipment of NEB ethanol was loaded into a Fastrac tanker. Still in its testing phase, however, the plant has experienced several production outages since the initial start, according to plant manager Brian Roach. The most recent outage started Thursday.

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Brian Roach, Northeast Biofuels plant manager

Roach attributed the outages to a variety of reasons, though he declined to discuss details.

“Those are the things we are working with Lurgi to resolve,” he said. “It is our sincere intent to be operating at full design capacity as soon as possible.”

Roach also confirmed that the plant missed its Halloween deadline for “substantial completion” with Lurgi. A new deadline has been set for Jan. 31, 2009. The substantial completion deadline represents the time that Lurgi will turn control of the plant over to NEB.

“Right now, Lurgi is in control of the plant until we reach substantial completion,” Roach explained.

“We are working with (Lurgi) to address issues with the plant,” Roach said. “We are putting in place improvements that are needed in the short term to start back up at the end of the week. But there are additional long-term issues we feel we need to resolve.”

Roach said that NEB is working with Lurgi to outline the scope of enhancements that are needed to address all issues related to plant performance.

“Our intent is to have all appropriate and adequate enhancements in place and all issues addressed so we can get back into production,” he said.

At this time, NEB maintains 65 employees who are “actively engaged in the operation of the plant,” Roach said. He cited efforts in maintenance, lab work and technical areas as examples.

Despite the delays in production, Roach said the plant continues to deliver ethanol.

“We’ve produced approximately 5 million gallons so far,” Roach said. “We have trucks in here everyday to pick it up.”

Roach said the majority of NEB ethanol is sold to Fastrac Markets, which is purchasing the ethanol for blending as “E-10,” which will be sold at Fastrac locations throughout Central New York. Fastrac could open its new Fulton store as early as Friday; complete with an E-85 pump.

Jeff Szkolnik, director or real estate and media spokesperson for Fastrac, said a grand opening is in the works for the Fulton facility, which is located on the corner of Routes 3 and 481.

“This station will have the first E-85 pump in this county,” Szkolnik said. “It is our second store to have E-85.”

Szkolnik said Fastrac launched operation of its first E-85 pump in the Rochester area in July.

Roach said he is looking forward to the start up for the new Fulton facility.

“I am hoping that I will be the first to fill my flex fuel vehicle at the new pump,” Roach said.

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