By Liz McMahan
Phoenix Staff Writer
October 18, 2006 12:59 am
—
Construction of a $50 million biodiesel plant here and the jobs it will create should be excellent for Muskogee’s economy, a Muskogee City-County Port Authority member said Tuesday.
The Authority voted Tuesday to authorize its chairman to sign a lease agreement with Nova Biosources Fuels Inc. for construction of a plant on 28 acres on the west side of the port property. The site is east of the Muskogee Turnpike, just south of the former Zapata plant.
The facility will turn animal and vegetable oils into biodiesel, a product that can be blended with diesel fuel for a cleaner-burning fuel that reduces petroleum consumption.
The plant is expected to have 15 to 25 employees who will be paid from $35,000 to $85,000 per year.
“It will be good for the economy of Muskogee,” said David Jones, an Authority member and a member of the City Council. “When we bring in higher-paying jobs, it’s always good for Muskogee.
“They’re going to spend the money in Muskogee, they’re going to live in Muskogee. It has a pyramid effect. It improves the economy and the quality of life in Muskogee.”
Company expanding throughout country
The plant here is one of several new plants Nova plans to build throughout the nation in the next few years. They have recently completed a plant in Clinton County, Iowa, for another processor and are scheduled to complete one in DeForest, Wis., by Jan. 7 and are building one in Greenville, Miss. Those also are for other biodiesel manufacturers.
Then, the company will build two to four refineries of their own and in joint ventures, according to Nova’s plan of operations listed in a form available on the Internet at http://biz.yahoo.com/e/060914/nvao.ob10qsb.html
In a media release issued in July by the Oklahoma Department of Commerce, the Houston-based company said it has an agreement with ConAgra Trade Group Inc. to provide animal and vegetable fats for the plant to be built in Oklahoma. ConAgra also has agreed to buy the biodiesel fuel produced.
The Muskogee plant will have the capacity to produce 60 million gallons of biodiesel per year, Robinson said.
Nova has the technology to process more than 25 different animal- and vegetable-based fats, oils and greases into biodiesel, Robinson said. The vegetable oils include those from soybeans, safflower and palm. The raw product — the oils and fats — will come to the plant by rail, by barge and by truck, and the processed products will leave by way of all three, as well.
Initially, Robinson expects the company to mainly use rail to move its goods, with about 40 percent to be moved on barges and 10 percent by truck. Over the long term, it could shift substantially to barge traffic.
The company’s lease agreement with the port is for $70,000 per year for 10 years, with three options to renew for 10 years. In addition, the company will pay for barge and rail tonnage, making the port’s total revenue from the operation about $100,000 per year, Robinson said.
The lease agreement gives Nova 120 days to secure the permits necessary to build the plant, he said.
The plant will take about one year to build, Robinson said.
Robinson said the energy market is seeing explosive growth with biodiesel and ethanol plant proposals, and at least four companies looked at locating at the Port of Muskogee.
Jones said he met with Nova representatives when they visited Muskogee and was very impressed with them.
“They are an aggressive company that’s already in existence, with plants in other places,” Jones said. “That was real important to us, because we didn’t just want to do a startup company, not knowing whether they are going to make it or not. This is a company that has a past and a history.”
Jones said he hopes the company will not just build here, but also will eventually expand its operation.
Similar plants in Iowa provide positive growth
Dennis Leuver, president of the Clinton, Iowa, Chamber of Commerce, said that is what’s happening with the biodiesel facilities in that community.
“Our experience has been very, very positive,” he said.
One plant opened a couple of months ago and is producing about seven million gallons of soy diesel fuel per year and already is headed toward increasing production to 20 million gallons per year. A second plant is organizing and is looking at building a 60 million gallon facility with a $75 million investment.
The plants have had a very positive impact on the area’s economy, Leuver said.
“You’ve got the dollar value of a lot of equipment that’s being purchased, consumed and used, and it just provides another source of income to help with the overall price of soybeans,” he said.
Clinton has a population of about 28,000 and has major railroad and highway access. It’s also located on the banks of the Mississippi River. The biodiesel plants have made the community much more aware of the potential development of a port facility and foreign trade zone designation has for them.
“Really, what the soy diesel plants did, is they got us all thinking and looking at the big picture,” Leuver said.
Muskogee already has its port and foreign trade zone designation.
Jones said the Port of Muskogee has been a hidden asset that’s going to very valuable to Muskogee’s future.
Reach Liz McMahan at 684-2926 or lmcmahan@muskogeephoenix.com.
Copyright © 1999-2008 cnhi, inc.