Biofuel Company Close To $1 Billion Fed Loan
A cellulosic biofuels project, valued at more than $1 billion and consisting of two refineries in Mississippi and another each in Texas and Georgia, appears to be on its way to reality, thanks to a federal government loan guarantee program.
The developer, KiOR, said it had received a term sheet from the U.S. Department of Energy’s Loan Guarantee Program to help build the refineries, which will produce what the industry calls “drop in fuels” for gasoline and diesel. These are fuels that can be used as direct substitutes without having to change a gasoline or diesel engine. In a FAQ for the project, KiOR said it figured the plants could produce some 250 million gallons of the stuff annually from “wood supplies that are sustainably harvested and also used by each of the state’s pulp and paper industries.”
Those pulp and paper industries have been hit hard in recent years, leading to high unemployment in the region, so the biofuels plants are eagerly anticipated. KiOR envisions 14,000 jobs created during construction, then 4,000 permanent jobs when the plants are up and running. But there’s still work to be done before that comes to past.
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“While the term sheet is an important step in the process, we recognize that more work lies ahead to finalize the loan guarantee and there is no assurance it will be issued until the loan is closed,” said Fred Cannon, president and CEO of KiOR.
