BOARDMAN, Ore. — The U.S. Department of Agriculture gave ZeaChem its conditional commitment Thursday for a $232.5 million loan guarantee to build a full-scale biorefinery in Boardman.
ZeaChem just opened the core facility of a demonstration biorefinery this month in Boardman to prove its technology performance and generate data for the operation of the full-scale biorefinery, a condition of the loan guarantee.
"This commitment allows us to move forward with securing financing, beginning construction, creating jobs in the community and producing economical and sustainable products for the fuel and chemical industries," said Jim Imbler, president of ZeaChem.
Building the plant will create 188 construction jobs, and 65 full-time employees will be hired to operate the plant, according to ZeaChem, a Colorado-based developer of biorefineries. The plant also would support 38 jobs with the parent company.
The company expects to close financing and start construction of the plant in 2013 and begin operating at the end of 2014.
The plant is estimated to cost $390 million.
The plant will use a mix of 70 percent biomass from hybrid poplars grown at the nearby GreenWood tree farm and 30 percent local agricultural residue, such as wheat straw and corn stalks. It is planned to produce 25 million or more gallons per year of cellulosic ethanol or other biofuels and biobased chemicals.
The loan guarantee of 60 percent is the USDA's largest one to date through its Biorefinery Assistance Program.
USDA has been reassured by ZeaChem's process to prove the biorefinery will produce as expected by starting with a demonstration plant, said Dallas Tonsager, the USDA undersecretary for rural development, who toured the demonstration plant Thursday.
The demonstration plant, which will employ 25 full-time operational staff, initially is producing the chemicals acetic acid and ethyl acetate, which can be cost-competitive alternatives to petroleum-sourced chemicals used in paints, lacquers and solvents.
A second phase of the demonstration project will add the capability of using cellulosic biomass at the demonstration plant and the capability of converting the ethyl acetate into ethanol. Once fully operational, it will produce up to 250,000 gallons per year of cellulosic ethanol.
The full-scale plant will be built nearby at the same site on the Columbia River, with access to barge traffic, plus access to rail and Interstate 84.
It will use a proprietary process of ZeaChem that combines the best of biochemical and thermochemical processing to produce high yield and efficiency, according to ZeaChem.
It will produce a product that can be used interchangeably with corn- and soy-based ethanols, Imbler said. But by using wood and inedible ag residues, it skirts the "food vs. fuel" debate.
"In his State of the Union address, President Obama outlined his vision for a new era for American energy -- an economy fueled by homegrown and alternative energy sources that will be designed and produced by American workers," said Agriculture Secretary Tom Vilsack in an announcement of the provisional loan guarantee in Washington, D.C., on Thursday.
"This project, and others like it, will help to establish a domestic advanced biofuels industry that will create jobs here at home and open new markets in the Pacific Northwest and across America," he said.