DOE yanks funding for Miss. cellulosic project
Source: Amanda Peterka, E&E reporter • Posted: Monday, January 6, 2014
The department informed the company on Dec. 23, 2013, of its decision to halt the $88 million grant, according to a Securities and Exchange Commission filing Friday. BlueFire’s Fulton, Miss., project is one of the first proposed biorefineries in the country that is expected to produce cellulosic ethanol.
BlueFire received the bulk of cash provided under the 2009 American Recovery and Reinvestment Act. In its SEC filing, the company said it was challenging the decision to revoke the grant.
“The company is seeking to reestablish funding under the DOE grant and has initiated the appeals process with the DOE,” BlueFire said. “The company shall exhaust all options available to it in order to reverse the DOE’s decision.”
BlueFire was incorporated in 2006 with the aim of converting woody biomass, mill residue and other plant waste into ethanol. The proposed Fulton facility is expected to process approximately 700 million metric dry tons and yield 19 million gallons of ethanol annually.
DOE awarded BlueFire a $10 million grant in 2007 for the project, which was originally supposed to be built in Southern California. After the passage of the economic stimulus package, DOE increased the total award to $88 million.
As of Sept. 30, DOE had paid the company approximately $11.4 million under the awards.
DOE said it revoked the previously awarded grant money because BlueFire had failed to comply with certain deadlines to report future financing arrangements for the Fulton project.
According to BlueFire’s recent SEC filings, the company has been financially strained throughout the year and largely dependent on the funding from DOE to stay afloat. Although all site preparations for the proposed biorefinery are complete, the company has had trouble securing funding to complete the Fulton project.
Both DOE and the Department of Agriculture have rejected BlueFire’s applications for further assistance to complete the project. The total cost for the plant is expected to be $300 million. BlueFire is also aiming to build a second plant in Lancaster, Calif., that would cost up to $125 million.
In the first nine months of 2013, BlueFire reported total revenue of $221,422 and a net loss of $209,589.
BlueFire has painted a bleak picture of what would happen absent the DOE funding.
“We rely on access to this funding as a source of liquidity for capital requirements not satisfied by the cash flow from our operations,” BlueFire said in its third-quarter report. “If we are unable to access government funding our ability to finance our projects and/or operations and implement our strategy and business plan will be severely hampered.”