An Upper Peninsula facility that would convert wood into ethanol for fuel will not open in 2012 as expected because it has failed to secure adequate financing, Xconomy.com reports.
Research and development for the Kinross facility planned by Lebanon, New Hampshire-based Mascoma has been supported by tens of millions of dollars in state and federal grants.
To hear [Mascoma CEO Bill Brady] tell it, the financial meltdown bears much of the blame for slowing down plans for the Michigan plant. “There’s no doubt that the financial crisis in 2009 was a setback to all of the cleantech world, and so the financing that’s ever so important to this first plant has definitely been delayed,” the CEO says. “So that’s really been the big issue in terms of timing.”
In October 2008, Mascoma said that it had garnered grants of $26 million from the U.S. Department of Energy and $23.5 million in grants from the Michigan Economic Development Corporation to help build and support the facility in Kinross.
Brady, who joined the company as CEO in January, says that part of the state grant was to fund research and development of the firm’s technology, and that some of those funds have been spent. Yet the CEO declined to say how much of the state grant remained for building the production plant. The DOE grants also included funding for both research and plant construction.
Last year Michigan Messenger reported that though the state has invested heavily in the project with the understanding that it could create 50-75 jobs, some are worried that Mascoma could put other companies out of business by using up the available wood supplies.
Building-materials manufacturer Louisiana Pacific, which opened an oriented strand board (OSB) plant in Newberry in 1985, is worried that the Mascoma project in Chippewa County might prove its undoing.
Kurt Chamberlain, general manager of the Louisiana Pacific plant, said the facility he oversees is the smallest OSB plant in the country. But the plant, which uses aspen just as Mascoma would, is already having a hard time getting supplies.
“It’s costly, and we already have to go farther away to get supply,” he explained. The company uses about one-third the amount of wood that Mascoma would use, but employs two to three times more people.