JACKSON — Columbus is first in line to receive one of three renewable biofuel production plants in Mississippi.
Governor Haley Barbour announced Thursday KiOR of Houston, Texas, has agreed to invest $500 million to build three facilities in Mississippi and create an estimated 1,000 jobs. The first, which will be located at the Port of Columbus on the southern tip of “the island,” will employ approximately 50 workers on its 22-acre site.
“But that doesn”t include truck drivers for more than 100 trucks a day, loggers and skid drivers,” said Joe Max Higgins, CEO of the Columbus-Lowndes Development Link.
Also, the plant”s “wood basket” — a 50-mile radius around the plant which touches Clay, Oktibbeha and Noxubee counties — will provide timber to be converted into renewable crude oil.
Columbus was chosen along with Franklin and Newton counties to receive a plant because of the wealth of timber available locally. The Columbus plant, the smallest of the three, will truck the timber in and ship the renewable crude out on barges.
In order to attract KiOR, Higgins orchestrated an agreement between the City of Columbus, Lowndes County, the Columbus Port Authority and Columbus Light and Water. Lowndes County District 1 Supervisor and Board President Harry Sanders said the deal couldn”t have happened without everyone being on board.
“The port authority is going to build a dock for the people and get a fee for everything they load out of the dock. They”re going to get reimbursed by shipping. Columbus Light and Water is going to get a piece after building a substation out there to furnish electricity. The county is working with the dock and will help with the road and will receive in-lieu tax from that. So will the city,” said Sanders.
Higgins estimated the total infrastructure cost incurred by the four local entities would be less than $1 million prior to the plant”s projected fall 2011 completion.
“From a monetary standpoint, it”s minimum to what we will get from the facility,” said Columbus Mayor Robert Smith.
Meanwhile, KiOR will pour an estimated $110 million into the Columbus plant.
Fred Cannon, CEO of KiOR, mentioned the April closing of the Domtar paper mill as another factor in the decision to locate in Columbus. Domtar”s closing left thousands of tons of timber unclaimed and 219 employees looking for work. Cannon told a meeting of the Legislature”s joint Finance Committee that employment at each of the KiOR sites would “directly reflect the diversity of that area.”
On behalf of the state, Barbour said KiOR asked only for $75 million in loans, not grants, for startup costs. In return for the freedom to use the $75 million as it saw fit, KiOR promised to spend $85 million per year in Mississippi on labor, wood and agricultural waste or other feedstock to produce the renewable crude, all while declining the Advantage Jobs Tax Credit which could save the company an estimated $2 million per year.
“KiOR traded (the tax credit) for the ability to spend the $75 million as best fits their gameplan,” said Barbour.
KiOR has also pledged to locate two of its next five facilities in Mississippi if it expands beyond the original three.
Barbour has called for a special session of the Legislature today to consider the incentive proposition. He says the session will call for a $50 million bond authorization. Only $45 million of that money will go to KiOR, since the state had $30 million remaining from a previous $100 million bond issued earlier in 2010. The remaining $5 million being requested today includes $4 million for workforce training and $1 million for biofuels research at Mississippi State University.
Fielding questions from the Finance Committee, Cannon explained KiOR would produce approximately 2.8 barrels of renewable crude for every ton of timber processed. He said the company was in the “final stages” of negotiations with two refineries which would process the crude and expected talks to wrap up within two weeks.
KiOR uses a decades-old process of converting wood into crude oil but has developed a catalyst to speed the process.
“It”s as if you take what mother nature takes millions of years to do to turn cellulose into crude oil and through this process do it in a matter of seconds,” explained Barbour.
He said the process produces “virtually no waste or emissions.”
Jason Browne was previously a reporter for The Dispatch.
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