Image via Wikipedia
Gov. Bobby Jindal and Sundrop Fuels Inc. CEO Wayne Simmons recently announced that Sundrop Fuels will build a $450 million biofuels refinery that will bring 150 new direct jobs averaging about $58,000, plus benefits, to Central Louisiana and result in an estimated 1,150 indirect jobs in the region.
Gov. Jindal said, "When I ran for Governor, I told you that it was for one main reason -- I was tired of seeing friends and family move away from Louisiana to pursue their dreams in other states because they couldn't find opportunities here at home. Four years later, and a big reason that we are here today with you, is that our state's economy is not just growing: We are competing and winning in the national and global economy.
"Louisiana's innovation in the energy industry has always been part of our state's economy and our heritage. Today, I am proud to announce that we are here to again build on our state's legacy in the energy industry, while also continuing our winning streak of job creation projects. I'm proud to announce that Sundrop Fuels will invest $450 million in a new biofuels refinery that will take wood waste from the forests here in Central Louisiana and turn that biomass into gasoline. The project will also result in a total of more than 1,300 new jobs in the Central Louisiana region. We are turning our economy around and making Louisiana the best place in the world to pursue a rewarding career."
The biofuels plant will salvage wood waste from renewable forests in Central Louisiana and adjacent regions and use that biomass as a feedstock. Sundrop Fuels also will extract hydrogen from abundant supplies of Louisiana natural gas, combining the hydrogen in a proprietary reactor with carbon extracted from wood waste. The result -- up to 50 million gallons of fuel a year -- will represent the world's first renewable green gasoline that's immediately adaptable to existing pumps, pipelines, engines and transportation infrastructure. By 2020, Sundrop Fuels expects to produce more than 1 billion gallons of renewable fuel annually through its process (including but not limited to its Louisiana facility), meeting nearly 10 percent of the federal government's stated goal for renewable fuels refined from cellulosic material and other alternatives to crude oil.
Colorado-based Sundrop Fuels will create 130 manufacturing jobs and 20 research and development jobs in Louisiana, with construction of the facility beginning in 2012, hiring beginning in 2013 and full commercial operation starting in 2014. Pay at the biofuels facility will average more than $58,000 a year, plus benefits. Because of the refinery's broad use of suppliers and support industries, Louisiana Economic Development estimates nearly eight indirect jobs will be created by the project for every direct Sundrop Fuels job.
LED's Lead Development Group identified and began actively cultivating Sundrop Fuels in early 2011, and the Alexandria area emerged as a promising location because of its access to major electrical and natural gas supplies and because of the abundance of wood byproducts the region boasts. The state's targeted incentives for workforce training and research and development helped Louisiana win the project over several other states in the South and Southwest.
"Sundrop Fuels' first facility will provide America with millions of gallons of renewable gasoline and establish our transformative gasification technology while supporting Louisiana's natural gas and sustainable forestry industries," said Simmons, the Sundrop Fuels CEO. "Our decision to locate in Rapides Parish underscores Louisiana's commitment to the advanced biofuels industry, and we look forward to our partnership in helping meet the nation's growing energy needs."
Oklahoma City-based Chesapeake Energy Corp., which holds the leading position for natural gas reserves in the Haynesville Shale in Louisiana, has provided major investment backing for Sundrop Fuels. Other investors include a pair of major venture capital firms, Oak Investment Partners and Kleiner Perkins Caufield & Byers.
To secure the project, LED offered Sundrop Fuels performance-based grants for building and financing costs ($14 million over 10 years), as well as $4.5 million to reimburse relocation costs of research and development operations and key employees. Sundrop Fuels also will receive assistance from Louisiana FastStart™, ranked by Business Facilities magazine as the nation's No. 1 workforce development program. And the company is expected to utilize Louisiana's Quality Jobs, Industrial Tax Exemption and Research & Development Tax Credit programs. Sundrop Fuels also will apply for a private activity bond allocation of $330 million or greater, which will help the State utilize capacity that otherwise would have gone unused; the private activity bond allocation will enable the company to reduce its project financing costs.
"This project is a terrific win for Louisiana in terms of traditional measures of jobs and capital investment, and it also will help position our state as a leader in developing alternative fuels," said LED Secretary Stephen Moret. "Sundrop Fuels will employ a technology that produces green fuels, without subsidies, that can successfully compete with conventional gasoline refined from crude oil."
The Central Louisiana Economic Development Alliance played a key role in helping Sundrop Fuels locate and acquire the proposed refinery site eight miles northwest of Alexandria at the junction of Rapides Station Road and Interstate 49, where the company will build on approximately 1,200 acres and have space available for future expansion.
"CLEDA is committed to creating more jobs, wealth and opportunity for Central Louisiana," said Jim Clinton, CLEDA's president and CEO. "The decision that Sundrop Fuels has made to locate here is a big step in beginning to fulfill that commitment. Sundrop Fuels' presence here will create more than 1,000 direct and indirect jobs, increase employment and average wage rates, and help build a more technologically competitive workforce and economy for the region. We are honored by Sundrop Fuels' decision, and are deeply appreciative of all of our local and state partners for the commitments they have made to make this announcement possible."
About Sundrop Fuels
Sundrop Fuels Inc. is a gasification-based, drop-in, advanced biofuels company based in Longmont, Colo. Backing for Sundrop Fuels comes from its strategic partner, Chesapeake Energy Corp., and from two of the world's premier venture capital firms, Oak Investment Partners and Kleiner Perkins Caufield & Byers. Sundrop Fuels plans to build and operate large-scale biorefineries, with each generating more than 200 million gallons of drop-in, transportation biofuels annually. For more information, visit www.sundropfuels.com.
