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Biofuel's far from flowing in Florida

Lawsuits, leases and loans are working against the industry, companies contend.

By ASJYLYN LODER
Published November 20, 2007

ADVERTISEMENT [Mike Pease | Times] Jeff Sims, general manager of Agri-Source Fuels in Dade City, walks past stainless steel storage tanks that will house biodiesel products once the plant's conversion is complete.

The owners say the biofuel industry in Florida faces several hurdles, including lawsuits, lease arrangements or loans. Gov. Charlie Crist cheers that the state will find "gold in green." First, though, the state needs to find out where the biofuel industry will fit into Florida's landscape.

"For the community, the regulatory people, investors - getting the first one done is the hardest, especially in Florida, where it's never been done before," said Bradley Krohn, president of U.S. EnviroFuels LLC.

Krohn should know. His firm announced Florida's first ethanol plant in 2005, and planned to start producing 50-million gallons a year this fall. Instead of making ethanol, he's mired in a year-old lawsuit.

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Krohn's isn't the only biofuel project punctuated with a question mark. Biomass Investment Group, which planned to build a power plant fueled by a reedy grass, is at least a year behind schedule. And it still hasn't even found a home for its project.

So when will it break ground?

"The answer is 'We don't know,'" said Robert "Schef" Wright, an attorney who represents Biomass Investment Group.

"We fully expected to have a site nailed down before now. We were really close a couple of times, and something went wrong and it just didn't work out."

The group's tantalizing technology roped in Progress Energy. In May 2006, the St. Petersburg utility reached an agreement to purchase power from the proposed 130-megawatt plant. The plant was supposed to turn on the lights in 2009. Progress Energy has extended the agreement to a start date of 2011, said spokeswoman Cherie Jacobs.

The plant has unusual and limiting real estate needs: roughly 20,000 acres, ideally former sugar or pasture land, preferably south of Orlando, and a 25-year lease. Biomass Investment Group plans to grow Arundo donax on site, and use the reedy grass, known as "e-grass," for fuel.

California banned the grass because it's an invasive species. Environmentalists worry the reed could get out of control here, too. Wright pooh-poohed those fears, claiming that Florida's climate won't encourage the grass to run rampant.

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About 40 miles north of Tampa, at Agri-Source Fuels in Dade City, Rick Higdon can sympathize with startup headaches. Higdon announced plans in February to turn a shuttered citrus- processing plant into the largest biodiesel plant in the country. He predicted that his plant would be up and running within weeks - a prediction he now admits was overly optimistic.

He faced none of the community or environmental resistance that dogged the other two projects. Still, getting the plant ready took months longer than expected.

Higdon predicted that Florida will have trouble building biofuel facilities for one simple reason: banks remain wary of lending money to unusual ventures.

"It's new," he said. "It hasn't been done 14 times a day, so they're not going to fund it."

Ultimately, if the state and federal governments wants to promote biofuels, they're going to need to fund it through grants or loans, Higdon said.

Agri-Source started producing fuel from animal fat this fall, and is churning out 40,000 gallons a day, he said.

It's well shy of his hoped-for peak, but there's good news: he's selling it as fast as he can make it.

Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

fast facts

Where they stand

- U.S. EnviroFuels LLC plans a 50-million gallon ethanol production plant on a 22-acre parcel in the Port of Tampa. Slated to start producing ethanol this fall, construction has yet to begin because a lawsuit filed in September 2006 has prevented the company from securing financing.

- Biomass Investment Group planned to turn on the lights at its reed-fueled 130-megawatt power plant in 2009. The firm hasn't been able to find a site for its project, and startup is delayed until 2011.

- Agri-Source in February announced plans to turn a shuttered Dade City citrus plant into a biodiesel facility that would produce 120-million gallons a year. Production started this fall, roughly six months later than expected.

[Last modified November 19, 2007, 22:53:09]