Chemtex International’s selection Wednesday by USDA-Rural Development for a $99 million loan guarantee to develop a biofuels refinery production plant in Sampson County will not only benefit the local economies and farmers of Sampson and surrounding counties, but could blaze a trail in alternative fuels production on a national level, officials said.
Chemtex was selected for the loan under the USDA-Rural Development 9003 Biorefinery Program to construct a 20 million gallon cellulosic ethanol plant in Sampson. Under Secretary Dallas Tonsager announced the funding in Clinton Wednesday morning to a packed audience at Heritage Hall.
Before Tonsager made the announcement, Billy Lockamy, chairman of the Sampson County Board of Commissioners, greeted those in attendance and expressed his delight in the impending news.
“Today, we have received news that will be a long-term benefit not only to Sampson County economic development, but for the greater agricultural development also,” said Lockamy. “We welcome the opportunity to assist Chemtex and this project, and look forward to being a part of the tremendous benefit this facility will bring to our county, our state and our nation. This is a great day for Sampson County.”
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 indirect jobs are also anticipated in areas such as feedstock supply, maintenance and transportation.
Tonsager said the loan guarantee was part of a greater push to enhance U.S. energy security, reduce America’s reliance on imported oil and leverage the domestic energy supply, all while supporting rural economies.
“Investments like this biorefinery will help accelerate innovation across America’s growing biofuels industry,” said Tonsager. “This is a very exciting project and is the result of a lot of hard work by many people. I’ve seen the success that bioenergy can bring to a region, and the synergies I see at this one here make me strongly believe in the success of this project. You have a very strong agricultural community and industries that are mutually supportive of each other.”
With Chemtex’s “Project Alpha,” Sampson County and eastern North Carolina farmers will directly benefit through the sales of newly established energy grasses to the biorefinery. 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.
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. The project would utilize those “energy grasses” and other non-foods agriculture biomass resources — no corn — to produce ethanol biofuel. Those grasses would be grown on existing hog lagoon spray fields in Sampson and surrounding counties.
Last summer, the Sampson County Board of Commissioners voted to offer a performance-based incentives package for Chemtex, dependent on 65 jobs being created by 2014. Strides continued to be made in the year since, culminating with Wednesday’s announcement.
‘You can be an example’
The news was huge for Sampson County, but has a reach that extends further than Sampson’s borders, or even North Carolina’s for that matter.
“We are excited about this and it is so important that this project succeed so we can keep growing this biofuels industry across our country — and you can be an example,” said Tonsager. “If you’re successful, we can replicate this.”
Randy Gore, state director for USDA-Rural Development, said the announcement of the USDA funding for the biofuels plant in Sampson County, was “a big deal for eastern North Carolina.” Gore said he and his staff got wind of that USDA approval nearly a week ago, and kept it under wraps before a formal announcement could be made. He lauded many for their hard work, and thanked BB&T and Chemtex for making it possible.
“We thank you for your perseverance, for hanging in there with us,” said Gore. “We know it got tough some times, but we thank you for hanging in there with us and helping us get to this day.”
Rep. Mike McIntyre praised those involved, including Chemtex and USDA-Rural Development, and congratulated the N.C. Biofuels Center. He said the public and private partnerships, and people from various agencies working together, has laid a strong foundation for something groundbreaking.
“Today is about the future, and the future begins now,” said McIntyre. “This is the kind of vision for the future that we’re seeing coming to reality today. The future begins today.”
He recalled four years ago being in Colorado at the National Center for Renewable Energy, where there were discussions on weaning this country off dependency on fossil fuels and foreign oil. He and others talked about the possibility of finding the solution in rural areas, where there is a high concentration hard working people and the necessary natural resources.
McIntyre said when he left that place in 2008, he had eastern North Carolina in mind.
“We looked at ways of how can we have these economic development opportunities in rural areas like Sampson County,” McIntyre said. The Biorefinery Assistance Program was born out of that idea, he said, a way to not only reduce that dependency on foreign oil but to offer new development and jobs. “This is the way you step toward the future, where you create jobs and you create energy independence. Today those two come together in a special marriage of opportunity. We’re looking forward to the future and not dependent on the sources of the past.”
McIntyre said he was excited to share the moment with the people of Sampson County, and what it could mean years down the road.
“You now are blazing the path to set an example,” he said, “not only here at home but also as an example we can uphold nationally. This is the way to do it and you’ve done it the right way.”
‘A green revolution’
Dennis Leong, executive vice president of marketing and business development for Chemtex, said the plant was hoped to be the start of something big in the state, and across the country. Leong said a similar plant will be operational in northern Italy in the near future.
“Realizing a first commercial-scale, energy crop-based cellulosic ethanol plant here in America, and proving that it can produce cost-competitive and sustainable cellulosic ethanol, is an important step in the commercialization process of defense biofuels,” said Leong.
Unlike first-generation corn ethanol, the cellulosic fuel the Chemtex plant will produce will not impact food prices as Project Alpha is premised on growing feedstock that does not compete with food, Leong said. It is feedstock that is cultivated on sandy, low-yielding non-irrigated land that is abundantly available in the region.
“We believe that the fundamentals of Project Alpha will provide a sustainable model for biorefineries and substantial benefits for local farmers and landowners,” said Leong. “Local economies and U.S. energy security will benefit. We think Project Alpha can be a foundation or stepping stone. Perhaps we can think of it as a green revolution, one that brings to these areas the same economic benefits that corn ethanol brought to the Midwest.”
He pointed to the well-positioned status of North Carolina, including the state objective to produce 10 percent of its fuels from non-food-based feedstocks, a strong agricultural heritage, diversity of land, favorable growing conditions and the climate. With the North American headquarters for Chemtex also located in Wilmington, conditions seemed right for multiple Project Alphas, he noted.
“What an outstanding day,” said Jeff Etheridge, regional president for BB&T’s Southeast Region. “We’ve lost several opportunities in southeastern North Carolina recently, but this represents a fabulous future for us. Assuming this will be successful — and we have no reason not to believe it will — it offers significant opportunity for future development on the part of Chemtex in southeastern North Carolina. This is just the beginning of what may come over the next five, seven, 10 years. That is very exciting.”
Steven Burke, president and CEO of N.C. Biofuels Center, said the many working together to bring the project to fruition share the same goal.
“We’re all in the business of improving our place and enriching our future,” he said. “We do it in Washington, we do it in Raleigh, we do it in our fields and we do it here. As we change our landscape, I know of no better partner company than Chemtex International. The company has all the traits we like and all the attributes we admire.”
Among those, Burke said, was a firm commitment to North Carolina.
“Chemtex International will place on the landscape of North Carolina a nationally significant facility that verifies North Carolina’s commitment to renewable liquid transportation fuels,” he said.
Following Wednesday’s announcement, John Swope, executive director of the Sampson County Economic Development Commission, said an “important next step” had been taken toward the successful development of biofuels production in Sampson.
Like others who spoke Wednesday, Swope noted the benefits not only in the county, but throughout the region, state and nation. A sizable taxable investment locally would mean increased income for farmers, but also a reliable biofuels source for the state and nation.
“These and other benefits make this a great fit for Sampson County and North Carolina,” Swope said. “This Chemtex project has been a great example of how economic development works, with the many organizations working together on a great project. Chemtex is a great company to work with and we look forward to their becoming one of Sampson County’s industrial neighbors.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at email@example.com.