In Vero Beach, the INEOS Bio New Planet Energy cellulosic project nears completion.
What’s in it for Vero, as it contemplates life as Florida’s little Arabia?
During the middle of April this year, across the United States, there will be observances of Tax Freedom Day. As many know, Americans will work well over three months of the year before they have earned enough money to pay their tax obligations at the federal, state and local levels – paying more in taxes in 2011 than they will spend on groceries, clothing and shelter combined.
In Vero Beach, Florida, they’ll be celebrating Tax Freedom Day, but also Energy Freedom Day. As of April 15th, the 8 million gallon INEOS Bio cellulosic ethanol plant is expected to be mechanically complete.
Now, eight million gallons may not sound like a lot to macroeconomists on Capitol Hill, but Vero Beach only consumes around 6.8 million gallons of gasoline per year.
Little Arabia, along the Florida coast
The sleepy resort and agricultural town will become something that no city in Florida has ever been before – a net exporter of transportation fuels. A little Saudi Arabia along the central Florida coast.
In the past, Vero Beach did what every other town in Florida did: shell out money for gasoline, $20 million a year or so. Those petrodollars might have gone to Canada, Mexico, the Gulf States, the Middle East or Venezuela, but they sure didn’t go to the Seacoast National Bank, creating economic opportunity for Vero residents through local lending.
Now, according to the Opportunity Finance Network (so I am informed via my local Starbucks, which is promoting $5 donations to www.CreateJobsforUSA.org), one new job will be created or retained for approximately every $21,000 in community lending.
Well, my math tells me that the aforementioned $20 million, generated through energy freedom, represents around 1,000 net jobs. Today, there are around 900 unemployed people in Vero Beach. Which would make Vero, by the numbers, something even more special in these job-scarce, nefarious times we live in.
A net jobs exporter.
The feedstock story
Now, you might ask, what vital substance will the folks down in Vero Beach utilize to make ethanol (and local power from process heat and steam, too, supplied to the grid), and thereby realize all these economic benefits?
Grrr, you say. Will they deforest the Amazon? Steal food from the mouths of hungry children in Mexico? Take land from the orangutans of Indonesia?
Um, actually, none of the above. They are using their municipal garbage and agricultural waste.
Gotcha!, you say. Are they not simply utilizing a resource that was previously incinerated to generate municipal power? Thereby forcing poor Vero to use more coal, venting its whoosh of soot and CO2 into the atmosphere until there are no icebergs left for polar bears to float on?
Well, no again. Vero doesn’t have an incinerator to generate power. They just bury it in the local landfill, which is out back on the far western corridor of Vero, far away from the white-sand beaches, the parking slots for Manatee viewing, and the graceful spanish moss hanging down from the live oaks.
The Vero landfill
It’s the highest point in Indian River County, the landfill. Just as the highest point in Miami-Dade County and Broward Counties are their own versions of Mount Trashmore. It’s been one thing that has kept on a-growing, right through the economic downturn of recent years.
The Vero landfill? It’s out there next to the maximum-security prison, and the famed Indian River grapefruit groves, long since devastated by NAFTA’s impact (and more seen now memorialized in real estate development names like Citrus Springs and The Grove, then actual grapefruit on the limbs).
Far away from the swell houses along the Intracoastal Waterway and the shores of Orchid Island, that’s where the real story of Indian River County’s decline and revival is being played out. Turns out, you can do things, for revival, besides convert grapefruit groves into condos or expand the local prison.
How much do you pay for the feedstock? Is this another boondoggle to beguile us away from the proper work of the United States, which the American petroleum Institute informs us is to foster the construction of pipelines to import $100 oil to keep our refineries at work?
This biorefinery pays, er, nothing, for the feedstock. It’s garbage. No pipeline needed, no shale-oil devastation zones to consider. No nefarious regime to have to buy oil from. No financing of Chavez, Al-Queda. No crazy. You get it from the Waste Management trucks, saving them a couple of extra blocks of driving over to the landfill.
In fact, there’s the avoided cost of the landfill to consider, and generally cellulosic ethanol firms (those using garbage) will, for some time to come, capture tipping fees for handling waste, the same way that landfills do. Only, no methane release, no crinkling of the nose from the odor of rotting biomass, no passing of the county tax hat when its time to build a new landfill.
Because there won’t be one in Vero, now, or possibly ever.
Turning refuse into opportunity
They’ve turned their garbage into jobs, and economic revival. Right now, you can hardly get a slot in the INEOS Bio New Planet Energy parking lot, because of the hum of interviewees, and new hires showing up for training. (No exaggeration, we had to park on a nearby grassy swale). In fact, the longest set of discussions the Digest had with the top management of INEOS Bio yesterday, when visiting the Vero Beach site, was the difficulty in finding enough talent to fill all the jobs.
They’re managing it, but as COO Mark Niederschulte put it, “It’s a good thing we are here in Florida. I mean, it’s 70 degrees today, in January. I’ve developed projects where, in January, you are knocking the icicles off. Here, people really want to come here to work, so we’ve been able to find the people we need, though it hasn’t been easy, with the fracking boys in Houston hiring everybody they can find.”
Nice problem to have, considering that President Obama’s State of the Union speech address next week is expected to tackle the unhappy subject of ‘the jobless recovery.’
The Vero project is mechanically complete as of April – not much doubt about the date, now, for the project is 99% complete on the engineering side, and construction is 60% complete, according to INEOS Bio’s Dan Cummings, with a frenzy of construction activity right now on site that reminds me of former Miami Commissioner Johnny Winton’s quip that Florida’s state bird should be changed to the crane. Commissioning and start-up will take place through-out the second and into the third quarter.
What next for INEOS Bio?
What next, after comissioning? INEOS Bio will turn to the process of working through a large number of licensing opportunities, which await the opening of what will be temporarily the largest cellulosic ethanol plant in the world.
INEOS Bio expected most potential licensees to be interested in executions of the design package at capacities much larger than the 8 million gallons they’ve constructed in Vero. Interesting factoid: they’re received the largest number of queries along the lines of “we want one this size.”
Turns out there are a lot of communities probably a lot like Vero, that have enough county landfill and agricultural waste available to make a small commercial plant feasible.
The focus for most of them? Good project economics – after all, INEOS may have picked up some government help for this, project #1, but in the long term, they are in the energy project business to make a profit, and their customers will be looking for payback, not just an expensive do-good opportunity.
But they also might be keeping an eye on those other two items: net transportation fuel exporter, net jobs exporter.
In any time, those are highly welcome outcomes – but no more so than now. That’s what energy freedom is all about.