SOUTH SHORE — A new facility under development in Greenup County holds the potential to provide a clean, renewable energy source for power plants, to provide hundreds of jobs and to boost the region’s farm economy.

Midwestern Biofuels LLC will produce fuel intended to use in coal-fired electricity generating plants from switchgrass and from a plant known as miscanthus.

The plants will be grown and processed on the former Hooker Chemical property at South Shore. Additionally, Midwestern Biofuels principals Jeff Lowe and Brandon Minix said they will try to persuade farmers within a 50-mile radius of the operation to grow miscanthus.

Both men said they believed miscanthus — a perennial grass that is native to certain regions of Africa and Asia — could become a new cash crop for farmers who used to grow burley tobacco. And, it can planted with the same equipment that’s used to plant tobacco, said Minix, who’s vice president of the company.

Growing miscanthus has other advantages, Lowe said. For one, it comes back every year for 20 years after it’s planted once. For another, it requires virtually no fertilization because of the amount of carbon dioxide it draws in from the atmosphere.

Lowe said the company plans to pay farmers a per-acre rate for growing miscanthus and buy all of their yields at harvest time. Miscanthus’ growing season runs from approximately May to February, he said.

The region’s soil and climate both are ideally suited for growing miscanthus, Lowe said.

One of the reasons miscanthus is a popular choice for a biofuel is that a single acre of the plant stores 15 tons of CO2. The resulting CO2 emissions from burning miscanthus are equal to the amount of CO2 the plant used up from the atmosphere during its growing phase, meaning the process is carbon-neutral, he said.

Additionally, emissions from burning biofuel are very low in both sulfur and ash content, Minix said.

According to Lowe, Midwestern Biofuels’ president, the demand for biofuel is expected to increase sharply in the coming years as power plants look for ways to comply with government mandates aimed at reducing CO2 emissions, which are thought to be a leading cause of climate change.

Midwestern Biofuels’ plan is to produce fuel that can be used in coal-burning power plants without any modifications to those facilities, Lowe said. The plant material will be mixed with a resin that is a waste byproduct of the paper-making process and formed into pellets. At the power plant, those pellets are pulverized into powder form and fed into the boilers.

Biofuel made from miscanthus has a heat yield of 8,000 BTUs per pound, which is comparable with that of Powder River Basin coal, Minix said.

“It doesn’t quite have the heating value of Appalachian coal,” he said, but, plants can compensate for that by simply burning more of it.

Biofuel also is competitive with coal price-wise, Minix said. The pellets will sell for $60 to $70 a ton, compared with $40 to $90 a ton for coal, he said.

Lowe said plans call for Midwestern Biofuels to reach capacity by 2011. At that time, he said, it’s anticipated the facility will employ 200 to 300.

Lowe, whose background is in materials handling, and Minix, a chemist by trade, are both former employees of Appalachian Fuels. They said their new company had been in the planning stages for about six months.

The venture will be funded through a mixture of public and private investment, Lowe said. It’s also expected that the company will qualify for numerous state and federal tax credits for producing cleaner-burning fuel, he said.

Lowe said he and partner had been working closely with state Reps. Tanya Pullin, D-South Shore, and Rocky Adkins, D-Sandy Hook, and both had provided invaluable assistance.

Gov. Steve Beshear is scheduled to attend a ribbon-cutting ceremony at the facility on May 13, during which the governor will plant the first miscanthus seedling, Lowe said.

KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.