Saturday, May 8, 2010
A couple of years ago, a lot of alternative fuels projects were announced for sites along the Ohio River and elsewhere. At the time, I was a bit skeptical, as in my days as a newspaper reporter I had seen several such projects go nowhere. I particularly remembered a tire recycling project for Portsmouth, Ohio, and I covered the opening and eventual closing of the South Point Ethanol plant. Not that South Point Ethanol had gone nowhere, but economics and market conditions were difficult from the beginning.
So when I came across this little piece about a biomass project at Wellsville, Ohio, being cancelled, I was not surprised. But the reason was different from the one I expected. First, an explanation of the project, lifted from the Baard Energy website.
Baard Energy has commenced the development process to build a 53,000 barrel per day Coal and Biomass to Liquids (CBTL) facility at Wellsville, Ohio. Located on the Ohio River, the Wellsville site has certain characteristics that give it an extremely high probability of long term success, including access to coal and biomass supply, and proximity to liquid fuel markets. The facility's unique design and operation will allow it to capture and ultimately sequester at least 85% of all carbon dioxide produced. The plant will be capable of producing synthetic jet fuel, diesel fuel and other valued chemical feedstocks.
Now, this from a paragraph posted by Ohio Citizen Action. It's from correspondence between Baard Energy and the U.S. Department of Energy in February 2009.
Debt markets in chaos: In today’s environment, there is no debt available to projects like Ohio River Clean Fuels [the coal refinery]. Debt markets are essentially closed to all large-scale project finance companies, even without considering the technology integration risk. Until debt markets markedly improve, the prospects for raising commercial debt for Ohio River Clean Fuels are dim. It is unclear when conditions will improve.
I'll let the readers of this blog draw their own conclusions. I'm not willing to do so until I do more research.