JACKSON – A Canadian company is seeking a $200 million federal loan to build its first U.S. biofuel plant in northeast Mississippi while working to complete a deal with a regional landfill to supply feedstock to the facility.
Montreal-based Enerkem Inc. announced plans in March to build a $250 million plant in Pontotoc to turn solid waste, wood chips and other feedstock into biofuel.
Vincent Chornet, president and CEO of Enerkem, said the company applied for a Department of Energy loan and the application process should be completed by the fall. The Mississippi project is expected to create 150 direct jobs and 300 jobs during the construction and startup phase, he added.
“We are having some discussion with them (the DOE) and we hope that we can gain clarity on where this is going before advancing on all of the other fronts,” Chornet told The Associated Press in a recent interview.
Enerkem has signed a letter of intent with the Three Rivers Regional Solid Waste Management Authority, which owns and operates a regional landfill that serves Calhoun, Itawamba, Lafayette, Lee, Monroe, Pontotoc and Union counties. Three Rivers has agreed to supply Enerkem with about 189,000 tons or 60 percent of its solid waste annually as feedstock.
One module at the plant will produce about 10 million gallons of ethanol from solid waste. Another one will be supplied by wood chips from another contractor, Chornet said.
The ethanol will be sold as a fuel additive to Gulf Coast refineries.
“We’re getting prepared organizationally and structurally for when we have the green light,” he said.
Enerkem has operated a pilot plant in Sherbrooke, Quebec, since 2003. Its first commercial plant was in Westbury, Quebec, and the company on Wednesday successfully completed the environmental regulatory process to start on a third plant in Edmonton, Alberta.
Enerkem has signed a 25-year agreement with the city of Edmonton to operate a waste-to-biofuels facility on municipal land and Edmonton will supply the plant with 100,000 tons of sorted municipal solid waste per year.
“We are developing all of the necessary agreements in Mississippi at this stage. We are not waiting for the loan guarantee to get all of the contractual arrangements done,” Chornet said. “We are advancing the feedstock agreement with Three Rivers. I can’t go into specifics on years, but I can tell you it’s long term.”
Chornet said the Three Rivers’ agreement should be done sometime in the summer or early fall, but Enerkem will wait for the Department of Energy’s decision before pursuing regulatory approval in Mississippi.
The state is focusing on developing the biomass industry — using such things as wood chips and bark to make energy rather than coal or petroleum. There are over 40 biomass-related renewable energy projects in the state, according to the Mississippi Technology Alliance.
Officials say the projects can bring jobs to Mississippi and help the environment.
Randy Kelley, executive director of Three Rivers Planning and Development District, said while he is excited about the Enerkem project he is still “cautiously optimistic.”
“Is it a done deal? No,” said Kelley. He noted that Enerkem must secure financing before negotiations can take place on the price of the solid waste used to supply the plant.
Scientists from Mississippi State University and engineers representing Three Rivers traveled to Canada in November to visit Enerkem’s plants.
“The process works from a chemical standpoint as well as from an engineering standpoint,” Kelley said. “So we have done the due diligence in that area.”
Chornet said his company selected Mississippi as the location for its first U.S. plant because of its proximity to Gulf Coast refineries.
“We not only produce ethanol. We also produce methanol,” Chornet said. “Mississippi is also an area that’s very rich and abundant in wood supplies.”
Timothy R. Brown/The Associated Press