[Biodiesel News] Port of WW risks little in biodiesel plan

Port of WW risks little in biodiesel plan

Walla Walla Union-Bulletin - Walla-Walla,WA,USA

... Whether or not financing comes together for the proposed biodiesel project by February, Port of Walla Walla officials say they have little to lose financially ...

 

Whether or not financing comes together for the proposed biodiesel project by February, Port of Walla Walla officials say they have little to lose financially by working with Chemical Consortium Holdings Inc.

 

Though several Port-funded upgrades are needed at the roughly 15-acre site in Burbank, Port Executive Director Jim Kuntz said only one would be made specifically for ChemCon. With little capital upfront, the Port can afford to see if ChemCon can make the project happen.

 

Kuntz said a rail improvement needed for the business is the only investment the Port would have to make to accommodate the development. A water system upgrade had been planned for the Burbank Industrial Park before ChemCon pitched the idea for the biodiesel plant. And while work on an industrial access road would come earlier than Port officials had initially planned, it would benefit the Port even if the biodiesel plant is not constructed, Kuntz said.

 

"Quite frankly, we need a good access road through the industrial park," he said.

 

Estimated costs of those improvements exceed $1 million, but would not be made without assurance that ChemCon could finance its part of the project. Kuntz said the railway improvements are estimated at $400,000, while the road infrastructure would cost an estimated $800,000. The Port would likely seek state grants to help with funding, Kuntz said.

 

In August, ChemCon paid $4,500 to the Port to exercise the intial extension of its option agreement. In November, if ChemCon wants to exercise its final extension of the option agreement, the company will have to pay $25,000 to the Port.

 

A lease agreement with the Port would include an initial term of five years with five additional five-year options. For the first five years the land lease rate would be $4,000 per acre per year, plus a state leasehold tax of 12.84

percent. At the end of that term and the end of each five-year period after that, the rate would be adjusted by the same percentage increase as the Consumer Price Index.

 

Also, the lessee would pay the Port $50,000 annually for use of the barge slip and rail line, plus $1.25 per metric ton of cargo at the barge slip or rail line.

 

ChemCon has also entered into a agreements to reimburse the appropriate public agencies for any consulting, engineering or other services needed during the due diligence phase of the project.

 

"If the project doesn't get financed the only person out money is (ChemCon)," Greig said.

 

He said the company will be responsible for the cost of permitting the project, which requires applications to multiple agencies.

 

The majority of the permits will likely come from Walla Walla County, said Scott Revell, director of the county's Community Development Department.

 

Revell said the county has a contract with Stalzer and Associates to perform environmental review. Through an additional contract, ChemCon will reimburse the county for costs associated with the environmental review and site plan review. Cost of services from Stalzer and Associates so far is around $7,500, Revell said.

 

ChemCon has submitted its site plan application and State Environmental Policy Act checklist to the county. Processing could take 45 to 90 days from the Aug. 29 submission, said Revell.

 

Proponents of the biodiesel refinery will also need a critical areas permit, floodplain permit, grading permit, building permit, driveway permit and septic permit from various county agencies, including the Building Division, Engineer's Office and county Health Department.

 

A shoreline permit is also required and would be subject to a public hearing in front of the county hearings examiner, Revell said.

 

The state Department of Ecology will take the lead on air and water permits, Revell said. An environmental review required by the Washington State Environmental Policy Act is also a factor.

 

According to information from the Regulatory Assistance office, the permits required for a biodiesel refinery depend on the location.

 

Along with permits typical of any other development, such as electrical, plumbing and mechanical permits, they could include permits for solid waste handling, wastewater discharge, road approaches, boiler/pressure vessel installation, archaeological, working in navigable waters and a host of others that may vary from refinery to refinery.

 

Revell has said the permitting process for the biodiesel refinery should be fairly smooth given that the location is already zoned industrial and meets the needs of the proposal. ChemCon can submit applications for multiple permits at once to speed up the process.

 

Costs associated with those processes will be paid by ChemCon. Should the project not move forward, county and Port officials say they stand to lose little, if anything, financially.

 

"The Port just sees this as a process," Kuntz said. "From the Port's perspective, it appears this company continues to spend a lot of money (on the project)."

 

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Posted by Vince to Biodiesel News at 9/18/2006 11:07:00 AM