Featured Stories

Clatskanie ethanol plant eyes early 2012 restart

Employees working to make plant production-ready
by: Archive photo SKY EYE – This 2008 aerial shot shows the soon-to-open Cascade Grain plant.

Columbia Pacific Biorefinery ethanol plant north of Clatskanie is expected to start receiving corn shipments via train in first quarter 2012 to restart fuel production, said Mark Fleischauer, project manager and vice president for plant owner, JH Kelly Holdings.

Seventy-one people are working full time at the plant to make it production-ready. Fleischauer said the workers are all employees of Columbia Pacific Biorefinery and are expected to remain employed beyond completion of the current technological upgrades.

The plant, formerly owned by Cascade Grain Products prior to JH Kelly taking possession of it in 2009, is expected to produce 108 million gallons of ethanol annually. Fleischauer said.

'We're hoping to exceed that with some of the things we're doing,' he said.

Corn is expected to arrive by rail from Midwest sources. The bulk of the ethanol would reach California and Oregon markets, though Fleischauer said the plant would have the capability to generate fuel with specifications compliant with Asian and European markets.

JH Kelly took ownership of the plant following Cascade Grain's bankruptcy filing only eight months after the plant became operational in 2008. JH Kelly Holdings built the Cascade Grain facility and successfully bid for ownership of it as part of the bankruptcy sell off. The Longview, Wash.-based company considered a range of options for the facility, including restart or sale to a third party, according to information on the company's website.

High iron-content water pulled from a Port of St. Helens-owned collector well and what several have said was the former plant owner's lack of knowledge concerning ethanol production led to the shutdown, which occurred during a sweep of ethanol plant closures across the nation as national renewable fuel targets were approached and profitability declined.

The plant upgrades, which Fleischauer characterized as 'technological enhancements,' included capital improvements between $10 and $20 million. Water is temporarily being sourced from a Portland General Electric-owned inlet that pulls directly from the Columbia River, he said.

Ethanol has been criticized as a stopgap fuel with a questionable ability to meet low-carbon standards considering the energy expended in the growing and transport of corn and the conversion of it into ethanol.

California Air Resources Board, for instance, is assessing whether the fuel meets the state's low-carbon standard. In June, the Senate voted to rescind government subsidies, called the Volumetric Ethanol Excise Tax Credit, for ethanol refineries and importers. The VEETC expires Dec. 31.

JH Kelly has an open case in Marion County Circuit Court regarding a dispute with the Oregon Department of Energy about whether $16 million worth of Oregon Business Energy Tax Credits granted to Cascade Grain are transferable to Columbia Pacific Biorefinery.

Cascade Grain also had enterprise zone agreements in place with Columbia County. Compliance requirements for the zone have been suspended by way of a legislative allowance, though county officials anticipate a request to reissue the enterprise zone designation once the plant is again operational.

'Once they're back up and operational, I'm assuming they're going to ask for that back,' said Columbia County Commissioner Tony Hyde.

Hyde said a majority of the employees at the plant are from Clatskanie.

Ethanol has been the go-to choice for fuel additives, however, which are federally mandated through the Renewable Fuel Standards. The RFS requires specific volumes of renewable fuels to be blended with traditional fuels. In Oregon and California, fuel at the pump contains 10 percent ethanol.

Fleischauer said demand in the Pacific Northwest alone exceeds the plant's production capacity, and said he sees no problem with the close out of ethanol subsidies.

Beyond ethanol, the plant would also produce wet distillers grains, or wet cake; corn oil; dried grain; and carbon dioxide, the last being processed by an independent plant.