OTTUMWA — The prospects of building a $300 million ethanol plant in Wapello County is on hold thanks in part to woes on Wall Street and a shaky U.S. economy.

“ ... It’s the credit crisis. The banks are holding onto the money and they are not releasing it,” said Unity Ethanol Project Manager Joy Fullenkamp. “After the buyouts were taken care of, the banks are saying ‘We’ve loaned out too much money already’ and they are going to sit on it for a while.”

A lack of credit coupled with dropping oil prices as well as a smaller gap between regular gasoline and the ethanol blend has meant lower demand for the product.

“Ethanol is still cheaper and it always will be, but right now with the difference being minimal, people are not buying as much ethanol blend,” Fullenkamp said.

Despite everything, she said the organization will continue to press forward with the project.

Unity Ethanol Chief Operating Officer Jason Egli said the organization is seeking $600 million for two plants ($300 million for each) — one in Wapello County, the other in Louisa County. He and Fullenkamp said the group continues to seek out investors.

Egli said the project already has several backers, but more funding is needed.

“We expect things to start shifting and changing once the Wall Street movement starts running again,” Fullenkamp said.

Should the organization receive the necessary money needed, officials said the Wapello County plant will be located just north of the old county home location.

If built, Unity Ethanol officials expect the ethanol facility will mean the creation of 40-50 jobs and production will hover around 110 million gallons per year.

“We have no plans to discontinue anything with Unity Ethanol in Wapello County. We still have employees and we are still pursuing the projects,” Fullenkamp said.

Scott Niles can be reached at (641) 683-5360 or via e-mail at sjniles@mchsi.com.