Two biofuel companies were approved Friday in Baton Rouge for state manufacturing incentives totaling a combined $750,000 for projects to be built at the Port of Alexandria and at Bastrop in northeastern Louisiana’s Morehouse Parish.
An economic development loan of $500,000 was approved by the board of the Louisiana Economic Development Corp. for Morehouse BioEnergy LLC in Bastrop.
A grant of $250,000 was awarded to Cool Planet Louisiana LLC to kick start a Red River refinery at Alexandria that will convert trees, forestry waste and natural gas into gasoline and jet fuel in a process that also produces biochar. Biochar is a high-tech charcoal that enables soil to retain greater water and nutrient volumes.
Cool Planet Louisiana can keep the $250,000 in state money only if it first invests $56 million in the venture. It then must begin plant operations by January 2015 and hire 24 employees with an annual payroll of $1.4 million.
The plant is expected to produce 27,000 gallons of fuel and 7.2 tons of biochar per day.
Identical state grants and Cool Planet Louisiana investment, production and employment numbers are expected for another plant planned on the Red River at the Natchitoches Parish Port and at a third site that has not yet been determined.
Each of those plants must be operated for a minimum of 10 years.
Cool Planet Louisiana is wholly owned by Cool Planet Energy Systems, headquartered in Greenwood Village, Colo.
Gov. Bobby Jindal announced in August that Cool Planets’ investors include BP, Google and Energy Technology Ventures, which is a consortium of GE, ConocoPhillips and NRG Energy.
Jindal also said Cool Planet is expected to use the state’s Quality Jobs and Industrial Tax Exemption programs.
In Bastrop, Morehouse BioEnergy’s $500,000 state loan is in addition to a $1.7 million state loan previously approved for the company’s planned plant for converting logs and wood chips into wood pellets for industrial fuel.
Morehouse BioEnergy is owned by Drax Biomas International Inc., which guaranteed repayment of both loans.
Drax Biomas International is a subsidiary of the United Kingdom’s Drax Group PLC.
Drax Group plans to use some of the wood pellets to fuel some of its industrial facilities and sell the rest to other companies in Europe that want to replace coal with renewable fuels.
Wood pellets from Bastrop and Mississippi will be stored at a $30 million Drax facility at the Port of Greater Baton Rouge before they are shipped to Europe.
Morehouse BioEnergy’s $2.2 million in state loans also are collateralized by a large crane and related equipment purchased for the company’s Bastrop plant.
In return for the loans, Morehouse BioEnergy must invest $120 million in the project by June and hire 58 workers with an annual payroll of $2 million by the end of this year.
In 2016, Morehouse BioEnergy must increase its annual payroll to $2.3 million. The payroll for 2018 must be at least $2.4 million.
The 58 workers and $2.4 million annual payroll then become minimum figures that must be met or exceeded through 2021.