October 6, 2010 12:09:00 PM
Mississippi is poised to become a nationwide leader in renewable energy production.
During an address to the Columbus Rotary Club, Dr. Sumesh Arora, director of the Mississippi Technology Alliance''s Strategic Biomass Solutions program, presented a laundry list of current and pending circumstances which position Mississippi to become a hub of biomass production and research.
Columbus will get a piece of the action in the next few years as KiOR constructs its first of three Mississippi plants locally. Arora stated the company, which produces a crude oil substitute from lumber, may set up shop in the former Domtar Paper facility on Old Macon Road to take advantage of an existing wood chipper. However, Brenda Lathan, vice president of economic development for the Columbus-Lowndes Development Link, stated KiOR will stick to plans to open on the southern tip of the Columbus Island to take advantage of the Tennessee-Tombigbee Waterway.
Either way, Arora predicts the environmental impact of KiOR will be comparable to Domtar''s, with an estimated 80 truckloads-per-day of lumber passing through Columbus.
In the case of KiOR and other renewable energy sources which are derived from lumber, Mississippi is ideal because 65 percent of its land is covered in forest, and 77 percent of the forest land is privately owned, eliminating federal red tape. And the state is unique from some other heavily forested states in that the infrastructure already exists to extract the lumber and quickly transport it around the state.
Arora said these factors, along with the "pro-business attitude" of the Mississippi Department of Environmental Quality, all converged to land Mississippi at No. 4 on Forbes Magazine''s 2008 list of "America''s Best Places for Alternative Energy."
But wood is only part of the story here. Mississippi doesn''t have wind farms like Texas or take advantage of solar power like California, but what we do have are chickens.
Poultry is the state''s second largest industry, combining with forestry to produce a $20 billion annual impact on the state. Arora says three projects are underway in the state at poultry farms to convert poultry manure to methane gas.
Various other methods, such as corn-based ethanol, are being carried out around the state; each with its own unique technology. The Mississippi Technology Alliance is a non-profit organization which works to pair that technology with a successful business model so the companies can continue making a positive impact on the environment and the economy.
Arora says a total $250 million is at work creating renewable energy today in Mississippi. Within the next three to five years he expects that investment to balloon to $1 billion.
Half or more of that investment will come directly from KiOR, which has signed on for three plants but has the option to build two more depending on the results from the first three.
When operating at capacity, Arora says the Columbus KiOR plant is expected to produce 800 barrels of crude a day, which must then be refined into gasoline. KiOR''s demonstration facility in Texas produces 15-20 barrels of crude a day, but greater output means more than simply making everything bigger.
"When you take a reactor that may be as big as this table and make a reactor as big as this room, the harder it is to make sure the stuff is going to turn out just right," he said.
Still, he says financial backers tend to invest in the management team, not the technology, and Mississippi has shown faith in KiOR by providing a $75 million start-up loan.
KiOR''s profit will depend on how many barrels of renewable crude it can squeeze out of each ton of dry wood. Arora''s figures show the cost to convert one ton of wood is approximately equal to the cost of one barrel of renewable crude. KiOR will turn a profit only if it can extract more than one barrel per ton. And even then it may take years for the company to see a profit depending on start-up expenditures.
But in the end, after a barrel of KiOR''s renewable crude is purchased by a refinery and the cost of the refining process and a mark-up for profit are added, Arora hopes to see gas made from renewable crude that costs $2 per gallon at the pump.
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