Just days before Christmas, Coskata Inc., a young company based
near Chicago, filed its plan to sell stock to the public for the first
time.
Its goal is to raise $100
million in the stock sale and use some of that money and cash on hand,
plus a $87.9 million U.S. Department of Agriculture-backed loan, to
build its first commercial plant to make biofuel from wood wastes.
Listed in its proposed initial public offering, or IPO, is the site for
that proposed plant — Boligee, a town of several hundred people in
Greene County.
Coskata is
one of several bio-energy projects that have popped up in West Alabama
within the past few years in an industry that is heating up big time.
Biofuels
Digest, a daily that follows the industry, noted that Coskata is the
14th biofuel company nationally to propose an IPO since the latest
biofuels boom started two years ago.
No
date has been set for when Coskata’s stock will go on sale, and Coskata
spokesman Matthew Hargarten said the company could not discuss its
plans other than to refer to information in its 189-page IPO statement,
which details the project and the company’s history. Such no-comment
periods are common when a company is about to trade stock for the first
time.
But Coskata’s IPO statement outlines what could be happening during the next few years in Greene County.
“The
initial production capacity of this facility, which we refer to as
Flagship, will be 16 million gallons of ethanol per year,” its filing
said. It said it expects to have that first-phase portion of the plant
built by 2013 and operating shortly there-after.
A second phase of
construction will follow and be completed by 2015. That expansion will
add capacity to produce another 62 million gallons of ethanol. “We
expect to build out Flagship to achieve total production capacity of 78
million gallons of ethanol per year,” the IPO filing said, when the
plant is in full operation.
The
Warrenville, Ill., company made it clear why it picked Boligee: “The
feedstock for this facility, wood chips and wood waste, is in plentiful
supply in the region and allows us to capitalize on existing wood
gathering and processing infrastructure,” the filing said.
“When
fully built out, we expect Flagship to produce fuel-grade cellulosic
ethanol at an unsubsidized cash operating cost of less than $1.50 per
gallon.”
Ethanol is
blended with gasoline. Most of the ethanol used now comes from corn, but
biofuel companies are looking at other sources.
The
forestry industry and its wood and wood products have long been a major
part of Alabama’s economy. Renewable forests cover much of the state
and thousands of jobs are tied to that abundant natural resource. That
industry also is a major state exporter.
Alabama’s
Labor Market Report for April estimated 12,500 people work in wood
product manufacturing. Another 12,300 Alabamians work in paper
manufacturing, with 8,600 of those working in the state’s pulp, paper
and paperboard mills.
A
breakdown on how many people work in the state’s logging and forestry
jobs was less precise. The report indicated natural resources, which
includes logging, natural gas and oil production, has an estimated 6,400
workers.
Coskata’s IPO statement did not indicate how many employees it would have at the Boligee facility.
In
January 2011, when the state announced the plant would be built in
Boligee, state economic development officials estimated it could create
about 300 construction jobs and could generate up to 700 jobs at the
plant and in the harvesting and hauling of wood biomass once it is in
full operation.
Coskata’s IPO filing said the
company picked the Boligee site not only because of its proximity to a
plentiful supply of wood chips and wood waste in West Alabama, but
because it is close to large ethanol markets in what it described as
“the under-supplied Southeast ethanol market.”
With a 10-percent ethanol blend with gasoline, the Southeast needs almost 1 billion gallons per year, it said.
Coskata
also said it received strong support for the project from the state and
county governments and that it has received the key permits for the
plant, including air-operating and water-discharge permits.
Coskata is not the only company looking at West Alabama’s wood waste products as a source for fuel.
Tuscaloosa-based
Westervelt Co. is building a plant in Aliceville in Pickens County that
will make wood pellets that will be exported to Europe, where they will
be burned at electrical utility plants.
And
at Westervelt’s Moundville sawmill in Hale County, turbines were added
last year to produce electricity that is generated from the burning of
sawdust and waste wood used to heat the plant’s wood-drying kilns. The
turbines produce enough electricity to supply the power needs of 3,000
homes a year. Alabama Power Co. has teamed up with Westervelt on that
project.
One uncertainty facing the bio-energy industry is the costs and availability of the fuel sources.
Several
years ago, switchgrass was being hailed as a source of clean energy
that could be used to generate electricity, and Alabama Power blended it
with coal at its Gadsden generating plant.
New discoveries of natural gas, however, have made that cleaner-burning fuel a more economical energy source.
“At
this time, we are not using biomass at Plant Gadsden, which is
currently using natural gas as its primary fuel versus coal or coal
blended with biomass,” said Alabama Power spokesman Michael Sznajderman.
“The plant has the ability to switch pretty easily from one fuel to
another, so we could decide to utilize biomass again at the plant in the
future.”
Some biomass is being used at the utility’s Coosa Pines facility in Childersburg, he said.
Wood waste products are not the only source of biofuel in West Alabama.
In
Demopolis, Sweet Water Biofuels is converting fats from discarded
catfish wastes at catfish processing plants into an advanced biofuel
used in industrial generators. The company has about 50 employees in
Alabama, and has begun collecting used cooking oil and grease from
restaurants for conversion into its clean-burning biofuel, said Gene
Pugh, the company’s regional sales manager.
