An ethanol plant will be built in Vicksburg, two of the companies with large operations on the Vicksburg harbor announced Monday.

The plant is to produce about 60 million gallons of ethanol a year using about 21 million bushels of corn, the announcement said.

Ergon Ethanol Inc. of Jackson and Bunge North America Inc. of St. Louis, Mo., made the announcement Monday.

&#8220A Mississippi-based energy company and one of the nation’s leading agribusiness firms are teaming up to build the largest ethanol plant in the Southeastern United States,” a joint press release announcing the agreement says.

Spokesmen for both companies said they did not know how soon construction or operation might begin but that details of the agreement remained to be worked out.

Ethanol is used mainly as a gasoline additive and the demand for it is growing rapidly.

One reason is the energy bill passed by Congress last summer. It mandates an increase in the amount of ethanol consumed by drivers by 2012 of nearly 50 percent, from about 5.2 billion gallons a year to 7.5 billion gallons a year.

Another reason is that ethanol is one of a kind of gasoline additive required in some areas of the country – mainly larger cities – by federal air-quality laws and its main competitor of that kind, methyl tertiary butyl ether, is being rapidly phased out. The use of MTBE is being banned or production of it discontinued because it has been found to contaminate groundwater.

About 97 ethanol plants are in operation in the United States and an additional 35 more are under construction to meet this growing demand, President Bush said in a speech last week.

Most ethanol plants in the United States are in or near the nation’s midwestern corn belt. The average ethanol plant produces about 53 million gallons of ethanol a year.

However, ethanol must be blended near where it is sold and it’s not feasible to move ethanol through pipelines. The increasing demand for ethanol as a replacement for MTBE, therefore, is increasing the importance of ethanol plants’ being located near major cities outside major corn-growing areas.

Among Ergon’s operations on the Vicksburg harbor is an oil refinery, but it produces mainly specialty oils and very little gasoline. Ergon’s nearest refinery that produces much gasoline is in El Dorado, Ark., in south-central Arkansas west of Greenville.

Bunge is a leading grain buyer in North America &#8220with a strong domestic network of (grain) elevators on the Mississippi River and its tributaries,” Bunge senior vice president Tim Gallagher said in the release. &#8220Our relationships with farmers and our experience in grain origination and merchandising will ensure that the new venture has a ready supply of corn.”

A by-product of ethanol production can also be used in some animal feeds and Gallagher added that production here &#8220will also bring new feed-ingredient opportunities for our poultry customers.”

Gov. Haley Barbour responded to Monday’s announcement with a brief press release.

&#8220I am excited Ergon and Bunge have agreed to build an ethanol plant in Mississippi,” Barbour’s release says. &#8220The state looks forward to working with them in this endeavor and we are very optimistic about its success.”

The plan for an ethanol plant in the Vicksburg area is one of two announced in the past month.

The other would be at the Madison Parish Port and would be part of a broader economic-development plan being developed by a division of Southern University in Baton Rouge.

Increased use of ethanol is among the ways the federal government has identified in attempts to make the country more self-sufficient in its sources of energy.

Ethanol may be made from materials besides corn – such as forestry residues, industrial waste, material in municipal solid waste, trees and grasses – and the plan for the Madison Parish plant calls for it to be capable of using some of those other materials, a university professor who is originally from Tallulah, Dr. Michael Stubblefield, has said.

Gasoline-powered vehicles sold in the United States can run without modification on a mixture of up to 10 percent ethanol.

Ethanol is one of two main kinds of biofuel being encouraged by Congress in the short-term. The other, biodiesel, is made from soybean oil or recycled restaurant grease.