Bond crisis stops region’s biodiesel project

An Iowa company says work on a $92 million biodesel plant has fallen victim – at least for now – to the national bond market crisis and delays in a federal program to attract businesses to the area hit by hurricanes Katrina and Rita.

The Renewable Energy Group of Ames, Iowa, hopes to resume construction later on a 60-million-gallon-a-year plant at the International-Matex Tank Terminals site in St. Rose.

But the company couldn’t get suitable financing for the remainder because it took so long for the federally backed Gulf Opportunity Zone bonds to go through, chairman and chief executive officer Jeff Stroberg said in a statement Thursday.

The partnership was approved for $100 million in bonds last May, but former Gov. Kathleen Blanco didn’t sign for them until September, according to REG.

St. Charles Parish Economic Development Director Corey Faucheux said, “We’re committed to working with them to ensure that this is a temporary delay,” he said.

The plan would have created 25 permanent jobs and 100 construction jobs.

“We’re still committed to this project,” Daniel Oh, the company’s chief operating officer, said in a statement. “We’ve already invested $47 million and we hope as the debt market improves, the opportunity to utilize GO Zone bonds will still be there.”

Storage tanks are complete, structural steel for the process and pretreatment building nearly so, and tanks and vessels for making biodiesel are at the site, REG spokeswoman Sara Taylor wrote in an e-mail to The Times-Picayune.

The plant was to use oilseed and other materials to produce biodiesel, which is used as an automotive additive to petroleum diesel fuel.

Much of feedstock for the plant would have come from Bunge North America, an investor in REG that owns a grain elevator and oilseed processing plant less than three miles away by rail, company officials said last year.

Construction began in June, but company officials said the timing of the GO Zone financing.