By PETER HUSSMANN
Jasper County's biodiesel plant could soon begin producing oils for uses that go far beyond its traditional use in diesel engines if state funding for a demonstration project is approved.
On Tuesday, the Jasper County Board of Supervisors will be asked to sign off on an application to the Iowa Department of Economic Development for funding assistance to Elevance Renewable Service of Bolingbrook, Ill.
The firm is seeking $800,000 in financial assistance from the IDED and another $2.67 million from the Iowa Power Fund to build a 2.6 million gallon per year demonstration scale integrated biorefinery at the Newton plant. The total cost of the development is $8.68 million. Elevance is contributing $5.2 million of its own financing to the project. No Jasper County or City of Newton funding is being sought.
Working in conjunction with Renewable Energy Group, the firm in the process of an asset purchase of Central Iowa Energy, the biorefinery will convert renewable raw materials largely sourced from Iowa into petroleum replacement fuels for use in such products as cosmetics, candles, solvents, adhesives, disinfectants and high performance auto motor oil.
"Elevance uses annually renewable ingredients given to us by nature and converts them into specialty chemicals using patented, Nobel Prize winning metathesis technology developed by Materia, Inc. and Nobel Laureate Dr. Robert H. Grubbs of the California Institute of Technology," the company's Web site explains.
"The resulting products outperform traditional petrochemicals. For example, lotions protect and moisturize the skin without feeling greasy; candles have lasting fragrance; antibacterial agents are more effective and less toxic. And because the cutting-edge technology we use to create our products uses less energy than the process used too shape petrochemicals, we are leaving a smaller carbon footprint."
Elevance has received more than $40 million in private equity funding from TPG Growth and TPG Biotechnology Partners to institutionalize work started by Cargill, Inc., and Materia, Inc., in 2004. It expects to generate $1 billion in revenues in the next decade.
"This project will demonstrate the ability to produce a wide range of high value products including enhanced biodiesel and specialty chemicals, all of which is made possible with metathesis technology," Elevance writes in its application for funding. "Success here will demonstrate an economic path to a fully diversified biorefinery that can be retrofitted to existing biodiesel facilities. In Iowa there are seven existing biodiesel refineries with capacity greater than 30 million gallons per year, employing 175-200 people."
If successful, the demonstration project would replace the need for approximately 42,000 barrels of foreign-based petroleum crude. At full operating capacity, expected in 2012, the biorefinery is expected to use between 15 and 16 million pounds of feedstock oil sourced from producers throughout central Iowa.
In its application to the IDED, Elevance hopes to begin process design on the project next month with engineering, construction, installation and start up completed by the fall of 2010. That work is expected to employ between 40 to 60 people in a variety positions including engineers, welders, pipe fitters, machinists and skilled and unskilled laborers with wages ranging from $12 to $80 an hour.
Upon completion, Elevance expects to employ five biodiesel support operations specialists at a starting wage of $19.16 per hour and two lab technicians with a starting wage of $38.38 per hour.
REG Chief Operating Officer Daniel J. Oh, in a letter of support for the project, notes that REG will provide the joint venture with multiple areas of support for the project at the facility in Newton.
"REG is excited to participate in this demonstration biorefinery and demonstrates commitment to the technology, Elevance, the Iowa Power Fund and the Iowa Department of Economic Development via the multiple facets of support we are willing to provide," Oh writes in his letter of support.
In late October, Newton Mayor Chaz Allen also provided a letter of support for Elevance's application to the state.
"I am writing this letter to express the City of Newton's support for Elevance and Renewable Energy Group, Inc. (REG) plans to build a demonstration scale integrated biorefinery in Newton, Iowa," the mayor wrote. "I have met with officials from both Elevance and REG to discuss this project and am familiar with REG through their operations of the existing plant in Newton. The city of Newton is excited to participate and support this project."
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