A gasoline additives plant that would use 800,000 tonnes of barley a year is on hold for now and may never materialize, according to the president of BioClean Fuels.
“It’s a real disappointment to us but we’ve just got to take it as it comes. It’s too early to say we’ve given up,” said David Hallberg.
The $650 million plant that would produce gasoline additives from butane and barley for California was supposed to be located near Fort Saskatchewan on the outskirts of Edmonton. But since it was announced in 1996, the Omaha, Nebraska, company has faced a litany of problems.
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One of the additives the plant would make is now under fire in California. The governor is expected to decide in the next few months whether the substance, called MTBE, will remain legal in the state, which is the world’s largest market for the clean-burning gasoline additives.
The MTBE additive, which helps to reduce air emissions, got into the state’s water system after leaking through underground storage tanks from oil company terminals.
Banks are leery of financing the project until the governor’s decision, said Hallberg. If MTBE is deemed illegal, BioClean’s plant won’t likely proceed.
“We are in suspended animation until that decision comes through,” said Hallberg, who is optimistic the governor will allow MTBE.
“My sense is that it’s very unlikely that he can unilaterally from a legal perspective ban this product because it is still part of the federal minimum standard mix.”
BioClean Fuels also needs another partner after two initial companies, Kiewit Energy Group and CalEnergy, pulled out of the deal. Hallberg has alternatives in mind but won’t cement commitments before the governor’s decision.
As well, funding from multi-
national giant ConAgra, another partner in the deal, would have to be re-affirmed if the project proceeds.
Still, he feels the Fort Saskatchewan area is the best place for him to set up shop, if the loose ends can be tied. The area has good supplies of butane and barley and pipelines can economically deliver the additives to the coast.
About 200 people would be employed at the plant that is to produce 20,000 barrels of gasoline additives a day, said Hallberg.
The best case scenario now sees construction starting in spring 2000.
