Following last week’s announcement by the U.S. Department of Agriculture that it approved a loan guarantee worth $99 million for Chemtex International Inc. to build an ethanol plant near Clinton in Sampson County, inquiries on a production process that will convert high-energy grass varieties into 20 million gallons of ethanol a year spiked locally.
According to Sampson County Farm Service Agency officials, there was an increase in calls to the office about possible production — and the first application has now been received.
The $167 million plant, slated to open in 2014, will be the first commercial-scale facility of its kind in North America and will employ approximately 65 people with estimated average salaries of more than $48,000 per year. An additional 250 jobs are anticipated for people who supply and deliver the feedstock grasses and maintain equipment.
About 30,000 acres will be required to supply the facility with 600,000 tons of energy grasses annually, and the increased net revenue to local growers was expected to be about $4.5 million a year. Brenda Stancil, with the local FSA, said there has been some interest.
“They need to have a contract if they want our assistance, but you can have a contract with Chemtex without having one with us,” Stancil said. However, farmers and landowners with contracts through FSA can receive assistance that will help offset start-up costs of planting new energy crops.
In June, Chemtex was awarded $3.9 million under the USDA Biomass Crop Assistance Program (BCAP) to grow energy crops, including switchgrass and miscanthus, on land in 11 counties in the state, including Sampson, Bladen, Cumberland, Duplin, Greene, Johnston, Jones, Lenoir, Onslow, Pender and Wayne. The project, deemed “Project Alpha,” plans to use dedicated non-food “energy grass” feedstock crops, which can be grown on low-value and marginal land such as hog lagoon sprayfields.
“We help with the cost while it gets started,” Stancil noted.
BCAP can pay up to 75 percent of the start-up costs involved in planting the giant miscanthus or switchgrass on their land, they must have a signed contract from Chemtex and approval from the USDA-Natural Resources Conservation Service. BCAP also assists the farmer in recouping costs for up to five years when the crops should be producing a self-supporting income.
According to FSA director Kettrell Strickland, only land classified as cropland by the agency is eligible to be enrolled in BCAP. It must be surveyed and approved by the USDA-NRCS for the production of giant miscanthus or switchgrass, the only two biomass crops eligible to be grown currently.
“They go to Chemtex first and then they can come talk to us,” said Stancil. “Last week, we had several people talk with us, and one actual application. It’s not like every day (they’re calling). I hope we don’t get bombarded on the last day of sign-up.”
The deadline to sign up for assistance through the BCAP program is Sept. 14.
Chemtex officials said they and the company’s other North Carolina based partners — the Biofuels Center of North Carolina, Novozymes, BB&T and the pork industry — will work closely with USDA and the state to move the project forward. A start-up date for production is is expected in 2014.
“That’s still a work in progress,” said John Swope, executive director for the Sampson County Economic Development Commission. “It is a contingency loan guarantee, so it would have to meet all contingencies. It’s just part of the process. The net biggest step would be financial closing. That would not be before 2014.”
That plant is expected to be in Clinton, but that is not necessarily a foregone conclusion.
While the announcement was held in Clinton last week, there was talk of the “area” and “region” and the benefit to North Carolina as a whole. Chemtex vice president Dennis Leong said during the announcement, “Project Alpha is a 20 million gallon per year cellulosic ethanol facility that we hope to build here in Sampson County.” Chemtex recently also pointed to “discussions with the state to locate Project Alpha in the Sampson County area.”
Chemtex officials have long identified a site at Clinton Industrial Rail Park off Turkey Highway in Clinton as the location for the plant, and Swope said this week nothing has changed.
County commissioners voted unanimously last July to offer a performance-based incentives package for Chemtex dependent on 65 jobs being created by 2014, with the annual average wage of $48,415, and a total taxable investment of $90 million, including a $15 million facility and $75 million in equipment. In addition to the $4.5 million benefit to local farmers, the venture is anticipated to generate more than $8 million in tax revenue over the first 20 years.
That would be a massive boon to Sampson County’s economy. Swope said it is his understanding the plant will bring that to Clinton and Sampson County.
“From everything we understand, yes, that is what will happen,” Swope said. “That’s the plan.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at sicrime@heartlandpublications.com.
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