Story courtesy of The Town Talk Written by Mike Hasten
BATON ROUGE -- The Louisiana Bond Commission on Thursday gave preliminary approval to the funding plan for biofuels firm Sundrop Fuels Inc. to build facilities at Rapides Station to produce "green gasoline."
And while construction of the major facility there will start this year and full production is expected at the beginning of 2015, a company official said Thursday that a smaller "pilot plant" will be built first and be up and running in 2013.
The Bond Commission's preliminary approval is for the proposal to sell $450 million worth of Solid Waste Disposal Revenue Bonds to finance construction of the pilot-project plant and the full-production facility on La. Highway 1 at Rapides Station, north of Alexandria.
Average salaries for the expected 150 plant employees would be $55,000 to $60,000 a year, said Wayne Simmons, CEO of the Colorado-based company.
The pilot plant will be "a smaller version to do testing of feedstock" and will be online by 2013, Simmons said. Employees at the testing facility would be paid about $85,000 a year, he said.
Although Sundrop will use revenues to pay off the $450 million in bonds, it has to get Bond Commission approval to sell the bonds. When every detail is worked out, the company will come back to the Bond Commission for final approval.
The England Authority, which operates England Airpark in Rapides Parish, worked with Sundrop on the arrangements allowing for the bond sale.
The state paid $4.5 million to help with the costs of moving Sundrop's research and development department to Louisiana and has pledged performance-based grants totaling $14 million over 10 years based on employment figures.
The company also is eligible for tax breaks under the state's Quality Jobs Program.
"It will be the first bio-based gasoline produced nationally," Simmons said of the plant's product.
Pall for using the leftovers of Louisiana's large timber, pulp and paper industries -- primarily tree tops and small branches.
A Sundrop process of using extreme heat to gasify wood products was promising enough to attract a $155 million investment from Chesapeake NG Venture Corp, a subsidiary of Chesapeake Energy Corp., and a $20 million investment from Oak Investment Partners. Chesapeake is a major player in the Haynesville Shale natural gas production in the northwestern section of Louisiana.
Sundrop's plan is to produce more than 40 million gallons of fuel a year for cars, trucks and aircraft utilizing its RP Reactor technology with Exxon Mobil's methanol-to-gasoline process.
Simmons said the process heats a mixture of natural gas and the biomass material to 1,300 degrees which "rips it apart into carbon monoxide and hydrogen." The gasification process produces methane, which is converted to 87-octane gasoline.
Louisiana Economic Development Secretary Stephen Moret said his office started meeting with Sundrop Fuels about 10 months ago, and the project coming to fruition is "really exciting."
Moret said his office is "cultivating companies that we feel would be a good fit for Louisiana."
Prospective employees from the Alexandria area will be offered training for plant employment under the state's FastStart Program.
Construction of the facilities could employ about 600 temporary workers.
State Sen. John Smith of Leesville said that after the Sundrop bonds got preliminary approval, he received a call from a Texas businessman who is interested in a similar project "using timber or waste products to develop energy" in the region.
Smith said the businessman came to his office several months ago, but he never heard anything else until Thursday's Bond Commission meeting.
Bringing in another industry would be helpful, he said, because "the market for some of the wood products is not good right now."
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