Marathon on trash-to-ethanol plant team, district board OKs extension
By Carrie Napoleon Post-Tribune correspondent July 19, 2012 12:08PM
Earl Powers holds a letter from represenative of Marathon Oil that confirms the company's intent to help finance Power's proposed trash to ethanol plant in Schneider during a Lake County Solid Waste Management District board meeting Thursday evening at the Lake County Government Center in Crown Point. | Jeffrey D. Nicholls~Sun-Times Media
Updated: July 23, 2012 8:17AM
CROWN POINT — Powers Energy of America has 30 days to bring a representative from Marathon Petroleum Corp. and Raymond James before the Lake County Solid Waste Management District Board.
Board members Thursday voted 16-8 with one abstention in favor of giving Earl Powers another 30 days to bring representatives behind the financing for the proposed trash-to-ethanol plant before the board to directly field questions concerning the timeline for just when the money to begin construction will be made available.
Earl Powers, president of Powers Energy, told board members he received a letter of intent Thursday morning from Marathon Petroleum Corp. (NYSE:MPC) to become an equity partner along with an off-take agreement to purchase the ethanol the plant would produce. The document has not been finalized and contains two potential levels of financial commitment from Marathon to be an equity partner at $45 million or $90 million. The final amount must be negotiated between the two companies.
After the meeting, Powers said the first commercially licensed plant by INEOS Bio in Vero Beach, Fla., is in the commissioning process. Because Powers has the same license for the proposed trash-to-ethanol facility here, Marathon has been waiting for its first shipment of ethanol from that plant to determine its commitment to the Schneider plant.
“Within a few weeks it should be up and running,” Powers said.
Ed Cleveland, Northwest Indiana representative for Powers, said Marathon is serious about its commitment, and David Blatnik, senior commercial development adviser in biofuels and emerging technology for Marathon, spoke to the district board administration and chairman Rick Niemeyer earlier this week to discuss the company’s intent.
When pressed by board members for a timeline on when the financing would be available, Cleveland said Marathon has committed to having a representative to whom board members could ask those questions directly come before the district by the next meeting.
“I truly believe this is the best way to get to the end date. If I gave you a date I would be guessing,” Cleveland said.
Merrillville Councilman Tom Goralczyk made the motion to allow the company more time. Goralczyk said it has been a long process for Powers and the district. For board members at this point to say the company did not meet the 90-day benchmark of money in the bank set by the board earlier this year and “drop the process would be foolish.”
Chairman Rick Niemeyer, who represents the Lake County Council on the board, voted against the extension along with representatives Rick Ryfa and George Jerome from Griffith, David Nellans and Joseph Simonetto from Munster, Harold Slager from Schererville, Michael Forbes from St. John and Paulette Skinner from Winfield. Christine Cid, the second Lake County Council representative on the board voted in favor of the extension.
Niemeyer said board members were specific in the terms of the extension when it was set and received guarantees from Powers the company would be able to meet those terms.
“We were very emphatic about what we would do if that didn’t happen. They’ve committed and committed. We’ve had false start after false start,” Niemeyer said.
After the vote Randy Palmateer, business manager for the Northwestern Indiana Building and Construction Trades Council, said he applauded board members who voted in favor of the extension.
“I don’t think the extensions are costing the taxpayers anything,” Palmateer said, adding once the work at the BP Whiting Refinery is complete a lot of tradespeople would be out of work.
“We need this,” Palmateer said.