A Fishers, Ind., firm is proceeding with plans for an ethanol plant near San Pierre in Starke County despite hurdles.

"We still plan to move forward with it," Robert Swain, of Bioenergy Development Inc., said.

The company in November was granted a conditional permit by the Starke County Board of Zoning Appeals for a $62 million plant with capacity to produce 27 million gallons of ethanol.

Company officials were buoyed by the December passage of a new U.S. energy bill, which calls for expanded production of renewable fuels, Swain said.

"It ratchets up the fuel standard," Swain said. "That gives us some positive incentive."

The bill sets higher fuel economy standards for cars and light trucks and requires the production of 36 billion gallons of renewable fuels by 2022, nearly five times current ethanol production levels.

Swain said the proposal for the ethanol plant is making its way through a list of conditions imposed by the BZA, including proof the plant would comply with environmental and other regulations.

The company also would be required to mitigate any loss of well water in the area.

"There was nothing onerous placed on us," Swain said of the conditions in the permit. "The hoops are things we would normally do anyway."

Neighbors opposed to the plant joined in a lawsuit filed last month in Starke County Circuit Court.

The lawsuit calls on the court to review the legal basis of the county zoning board's decision, said Kim Ferraro, the attorney representing members of the Kankakee Valley Stop the Ethanol Plant group.

The lawsuit contends the plant would not fall within the agricultural processing use permissible under the zoning designation, Ferraro said.

A judicial review is expected within three to five months, Ferraro said.

Bioenergy Development believes the Starke County site near San Pierre is "a very favorable one," surrounded by Indiana counties with capacity for producing nearly 65 million bushels of corn annually. However, the company is not committed totally to the site, Swain said.

The plant would be the second to open in the Northwest Indiana region. Iroquois Bio-Energy opened in early 2007 in Rensselaer.

Plans are to power the Starke County plant using wood waste, which reduces operating costs in the face of rising corn prices, Swain said.

If an ethanol plant is built at the site, Bioenergy Development hopes to have it up and running in the first quarter of 2009.