http://www.timesargus.com/article/20100 ... 003/NEWS02
Plant closes as soon as tax breaks and credits dry up. Big surprize.
By Louis Porter
Vermont Press Bureau - Published: August 21, 2010
MONTPELIER – A Swanton plant once promoted as the largest biodiesel production facility in New England is shuttered and unlikely to reopen, at least in the short-term, according to state and company officials.
The state’s economic development authority is now in the process of trying to recover more than a half-million dollars it provided to the facility in low-interest loans, according to officials. State tax credits were also awarded to the company that built the plant, Biocardel, a subsidiary of a Canadian company, although the credits were never used.
The expiration of a federal tax credit for the production of biofuels at the end of 2009 has hammered the industry nationally and the Biocardel facility in Vermont is one casualty. The company does not have plans to reopen the facility.
Jo Bradley of the Vermont Economic Development Authority said that the plant has closed.
“We are trying to negotiate some kind of settlement for the balance of our loan,” she said. “When the federal credits were not renewed it was a blow to the industry as a whole. It made it much more difficult for them to survive.”
Stephen Daigle, who was the general manager of the Vermont plant, said Friday it was frustrating to see the plant just get to the verge of ramping up production last December after nearly two years of preparing and research and development, only to have the tax credits expire and Congress fail to restore them in the months since.
“People tried to help us as much as possible,” Daigle said. “It’s sad because I think Vermont as a green state would have supported it very well.”
VEDA gave the company $645,000 in low-interest loans in 2006. The authority is now working to recover the money, which was secured with the assets of the company, Bradley said. How long that recovery will take is not clear.
“It is always hard to tell with these things,” Bradley said. “We will work with people as long as we can to get the maximum out of the collateral.”
The state also gave tax credits potentially worth $534,522 the company could have used to offset expenditures in payroll and capital investments between 2006 and 2010. However, since the firm never did all of the hiring and other requirements to receive those credits, nothing was collected in the end, said Fred Kenney, of the Vermont Economic Progress Council.
Nothing related to the company has been filed in bankruptcy court in Vermont.
The Biocardel facility, in a former Agway plant in Swanton, was slated to eventually produce as much as eight million gallons of biodiesel a year. The now-expired federal tax credit effectively gave companies $1 a gallon in tax breaks to make the production of the alternative fuel – made from soybean oil, waste cooking oil or other vegetable oils – economically viable.
The Biocardel facility began limited production last fall, made about seven trucks which each hold 6,000 gallons overall, Daigle said. For logistical reasons that fuel was apparently all sold outside Vermont. In December the firm, which employed three, began hiring to expand its operation.
However uncertainty about the fate of the tax credits prompted a delay, which proved prudent once the credits expired. The firm tried to wait out the problem – hoping for a return of the credits – but investors simply ran out of money and after working with Biocardel, VEDA began recalling the loans a few weeks ago, he said.
The timing of the end of the federal tax credits, effectively a third of the company’s revenue, “could not have been any worse,” Daigle said. “We have done everything we could to try and keep the plant alive.”
EROEI is all well and good but after the oil is gone or at least very scarce using solid bulky fuels or none portable energy sources such as wind and hydro power to produce a stable liquid fuel even a ratios of three or five to one will seem like a stroke of genius. All the coal in the world won't get a F22 in the air until you convert some of it to jet fuel. How much coal it takes to make a gallon will be the least of your problems.
