TimesLeader.com

November 8, 2008

Biodiesel maker not moving here

Alternative Fuels Inc. notified DEP it will not use the grant and to give funds to someone else.

By Jerry Lynott jlynott@timesleader.com
Business Writer

A Binghamton, N.Y. company that planned to move to Luzerne County to produce biodiesel fuel with the aid of $1 million state grant has backed away from the project.

Alternative Fuels Inc. notified the Pennsylvania Department of Environmental Protection last month it “will not be using the grant and to make the funds available for someone else,” said Charlie Young, a department spokesman.

The company’s chief executive officer, Richard Smith, could not be reached for comment Friday.

The grant served as an incentive for the company to produce 20,000 gallons of the fuel daily from algae feedstock during the lifetime of the grant period that ended Dec. 31, according to the proposal submitted to the department last year.

But because there was no fuel produced, no funds were given to the company.

In his proposal, Smith said he would use companies based in Pennsylvania to provide items and labor for the project. He had secured $40 million in funding from another source but needed the state money to purchase equipment for the plant to produce the fuel that would be sold for local use, he said.

If those unallocated state funds now are available, James Abrams, co-founder and director of EthosGen, an alternative fuel company based in Dallas, said he would be interested in inquiring about them.

Abrams said proposals submitted to the state on behalf of EthosGen were rejected for the past three years. But in that time, the company has set up a pilot plant to produce ethanol from switchgrass. It recently received $1.2 million in funding from the U.S. Department of Defense.

If EthosGen had access to the state money, it would “probably invest in workforce development for ourselves,” Abrams said.

It could not be determined if Smith was able to find a site for the plant. Earlier this year he said he was having a tough time finding the right location.

In October 2007, his company was one of the recipients of $10 million in Alternative Fuels Incentive Grants announced by Gov. Ed Rendell, who was eager to reduce the state’s dependence on fossil fuels, especially from politically unstable or hostile nations.

At that time, the price of oil came close to $90 a barrel. On Friday it was trading at around $60 a barrel.