NEXT updates timeline, budget for fuel plant
After signing a lease with the Port of Columbia County in 2019, a biofuel company now says it won't open a production facility near Clatskanie until 2024.
At the time the lease was approved, NEXT Renewable Fuels Inc.'s then-president, Lou Soumas, said the facility would be up and running by late 2021 or early 2022.
That start date has now been delayed by years, and the project cost has nearly doubled as well.
Executive Chairman Chris Efird said that the delayed opening is due in part to the pandemic, which slowed down work in every aspect of the project.
But the delay, pushing the expected start date out three years from the original plan, is far longer than the pandemic.
Efird served on the company's board of directors while Soumas was president, but he has taken on a more active role in recent months. The board fired Soumas after he was arrested on child sex abuse charges in Texas in late 2020.
Soumas' legal troubles "threw us for a little bit of a loop, but we dealt with it, and we moved on," Efird said.
"The good news is nobody wants this thing to happen fast more than me or our investors," Efird said.
Efird said that some of the initial timelines may have been "a bit overly optimistic."
"I think there was a certain amount of not knowing what you don't know," he said.
"It's a big project, being permitted in a part of the country where frankly, the reputation is energy projects go there to die," Efird said.
Efird said that since getting more involved in the day-to-day operations of the project and the local community, he's seen "a lot of expectation and hope around the project."
Efird said that although the project is taking years to come to fruition, there is constant work being done behind the scenes.
The project is moving forward, "not necessarily as fast as we would have liked for it to, but the reality is, it is moving forward," he added. "It didn't die. We kept it going, and now I think we've got some real wind behind us."
Two years ago, the project was estimated to cost $1.1 billion. The latest estimates are nearing $2 billion.
Efird said the original plans were to build three production units, each able to produce 12,500 barrels of fuel each day, and leave room to build a fourth unit later on, to eventually reach a total 50,000 barrels per day.
But through the engineering process, the team realized they could reach 50,000 barrels per day with the initial three units, if those units were improved.
The project budget also includes a larger contingency, Efird said, in part because of the rising costs of building materials.
NEXT has also said they won't take any tax breaks on the project. Typically, new business projects can apply for temporary property tax exemptions if they'll be bringing jobs and boosting the local economy. NEXT estimated annual state and local taxes will add up to more than $45 million.
Originally, Soumas estimated that NEXT would employ about 200 full-time workers at the Port Westward plant. Latest estimates have the facility employing closer to 240 people, once it finally opens.
The company has submitted major permit applications with state and federal regulatory agencies and expects those agencies will open up public comment periods this fall, for permit approval in early 2022.
Efird told port commissioners last month that because of soil conditions at Port Westward, wetland mitigation will be the biggest permitting challenge for the project. NEXT is under contract to purchase 400 to 450 acres to use as wetland mitigation, near the roughly 120 acres used for the facility.
NEXT also plans to host public forums over the summer and this fall, but details haven't been announced.
Efird said NEXT is continuing with their initial plans to host a training program on-site prior to beginning operations. NEXT is working with firms that specialize in developing training programs for similar industrial operations, primarily in the Gulf Coast.
"It is still our intention to hire from the local community; to recruit, train and hire in the greater Clatskanie/Columbia County area," Efird said.
Efird was hesitant to define how much education or experience would be required for the majority of the jobs.
"We're not planning on having necessarily a big experience threshold. The simple reality is there aren't any other refineries in Oregon," Efird noted.
UFCW Local 555, a union representing more than 25,000 workers in manufacturing, grocery stores, healthcare and other fields in Oregon and SW Washington, has a "card check" agreement with NEXT, meaning that NEXT will maintain neutrality in any union organizing efforts and allow UFCW to hold meetings on site outside of work hours, and UFCW will not disparage NEXT or picket on site.
NEXT also has an agreement with the Columbia Pacific Building Trades Council and Pacific Northwest Regional Council of Carpenters for construction of the facility.
The fuel that NEXT will produce is a drop-in replacement for traditional diesel fuel, made from used cooking oil, animal fat, and vegetable and seed oils.
More biofuel production projects have been announced around the country in recent months, increasing the demand for the feedstock that NEXT needs.
"One of the reasons that we got into this business was we felt that renewable diesel was going to become kind of the biofuel of choice," for heavy transport, Efird said. "So we have been predicting for a while, that as more and more people started to see the value of a drop-in replacement fuel and adopt that fuel, that there would be more plants that would need to come online to meet the demand."
The vegetable and seed oils have a higher carbon intensity, meaning more emissions. That's because those oils are from plants that are grown just to be used for fuel production, whereas the used cooking oils and animal fats are waste products.
NEXT signed a feedstock supply agreement with BP early in the planning stages.
To avoid overusing the rail line that runs along U.S. Highway 30 — a constant concern for environmental activists and many residents — Efird said the company will try to transport more feedstock via ship or barge. Initially, Efird told commissioners, the plan is to have 60% of feedstock come via water, and 40% via rail. The heavier feedstocks, like used cooking oils and animal fats, would mostly come by rail from U.S. locations, while the less dense materials will come on ships from international sources.
"What we're planning for is that — at startup, at least — a larger portion of the feedstock than perhaps we figured will be coming domestically from the U.S., and then a smaller portion additionally internationally," Efird said, adding that he expects that to balance out in the coming years as more feedstocks become available.
"I'd be very happy on startup if most of the feedstock was coming in over the dock from international sources or other places. That'd be great. I think realistically, a significant portion of the feedstock will be domestic, and so we want to plan accordingly for that," he added.
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