Louisiana officials tout $800M taxpayer-supported biofuels project

By Victor Skinner | The Center Square contributor

Gov. John Bel Edwards is touting plans for a new $800 million biofuels facility in West Baton Rouge Parish, though a very similar effort in Mississippi floundered despite state support less than a decade ago.

Arbor Renewable Gas LLC, a Houston-based company, is evaluating West Baton Rouge Parish for a planned $800 million manufacturing and distribution facility to produce renewable gasoline and green hydrogen from wood paste and forest residue, Edwards announced Tuesday.

The plant would operate as Magnolia Renewable Fuels LLC to use wood waste biomass from Louisiana and Mississippi timber operations to produce renewable gasoline at the new facility, a project that’s expected to create 32 jobs with average annual salaries of $99,000, plus benefits.

The project, which is expected to generate up to 880 construction jobs during peak construction, will also involve carbon capture and sequestration emissions-reduction technology, Edwards said.

“Arbor Gas’ planned renewable gasoline production facility in West Baton Rouge Parish is further evidence that our all-of-the-above approach to energy is attracting the right kind of investment to Louisiana,” Edwards said. “The company’s commitment to a lower-carbon future aligns with Louisiana’s commitment to Net Zero emissions by 2050. Incorporating Louisiana agribusiness byproducts into its energy production process broadens this project’s potential economic impact to a number of rural communities. We welcome this forward-thinking energy company to Louisiana and look forward to seeing the project progress.”

The company is expected to locate its greenfield facility at the Port Allen Rail Terminal and to source southern yellow pine pre-commercial thinning, a byproduct of forest management, to produce gasoline.

“The level of support and engagement we’ve received from the folks at the Baton Rouge Area Chamber, West Baton Rouge Chamber, the local community and officials, and the state has been incredible,” Arbor Gas CEO Timothy Vail said. “At full capacity, this plant will have a production capacity of 2,000 barrels per day of renewable gasoline with the potential for further expansion. The product would be blended with conventional gasoline to achieve renewable fuel standards in the U.S. and Europe.”

Arbor Gas is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs, though the details on the public investments are unclear.

The announcement comes less than a decade after a similar Texas-based biofuels company known as KiOR ran into serious issues when it attempted to convert biomass to gasoline, diesel and fuel oil in Mississippi. The situation ultimately resulted in KiOR filing for bankruptcy in 2014, despite a $69.275 million no-interest loan from Mississippi taxpayers.

KiOR expected to produce a capacity of 13 million gallons per year from its multi-million dollar facility in Columbus, Mississippi, but ultimately sold just 99,000 gallons of gasoline, diesel and fuel oil through the first six months of 2014 before shutting down operations. The plant was later scrapped.

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