Raeford, N.C. — Construction is about to begin on the first ethanol plant in the Southeast, and it's in Raeford in Hoke County.

Currently, 130 ethanol refineries operate in the U.S., with another 76 under construction. Several companies planning to build in North Carolina have dropped their plans, raising questions about the viability of the industry here.

Clean Burn Fuels, however, is staking its claim to make the alternative fuel in North Carolina.

Today, the company’s site is 500 acres of farmland. Clean Burn Fuels, however, is planning a refinery that will turn corn into 75 million gallons of ethanol per year.

"It's about three-quarters of North Carolina's total ethanol demand,” company project manager Greg Carlisle said. Nationally, 21 states have ethanol-production facilities.

The refinery will bring 300 construction jobs to Hoke County and 100 full-time positions. County officials hope other industries may follow.

"We have a bio-diesel plant looking here also that we're probably going to locate on-site," County Manager Mike Wood said.

The ethanol plant may boost the local economy, but three other companies proposing similar plants backed out of North Carolina plans. E-85 Inc. dropped plans for a Cumberland County plant in May. Ethanol sites in Aurora and Jamesville also fell by the wayside.

One reason may be cost.

"It's very difficult to raise the necessary equity," Carlisle said.

Clean burn is a $100 million investment that may not have happened without 10 years of county tax abatements, and a $35 million guaranteed loan from the U.S. Department of Agriculture. Capitol Broadcasting, the parent company of WRAL and WRAL.com, also is an investor in Clean Burn Fuels.

There's the issue of corn supply for making ethanol. The state already imports 400 million bushel of corn every year to feed livestock.

"We know it's putting pressure on our livestock producers," said Keith Walters of the North Carolina Cooperative Extension Service. "The price at market for corn didn't keep up with the price for fertilizer and equipment needed to produce corn."

Clean Burn will have to import corn, but Carlisle said the North Carolina location helps in the economics there. Ethanol can be trucked to customers in the East for 10 cents a gallon rather than having to pay $1 a gallon for rail shipment from a more distant refinery.

The refinery in Hoke County should be up and running by March 2009.

In neighboring Robeson County, a Georgia company is planning to build a small-scale plant.