LONGVIEW, Wash. — The proponent of a $1 billion renewable diesel fuel project near Clatskanie has announced it has signed an agreement with petroleum giant Shell to buy renewable diesel, another step in what still is a long road to construction of the plant.
NEXT Renewable Fuels also announced last week that it wants the plant, which would produce 13.3 million barrels of biodiesel annually, operating by 2021.
Biodiesel is made from cooking oils, animal tallow and seed and vegetable oils.
Lou Soumas, CEO of Waterside Energy, which owns NEXT, said Shell asked not to reveal the time length of the agreement.
The plant would be located on Port of St. Helens-owned property at Port Westward, but NEXT still is negotiating a lease with the port. Three other energy companies have signed similar purchase agreements, said the port’s executive director, Doug Hayes, but he declined to name them because the companies are expected to make their own announcements later this week.
Soumas said the renewable diesel produced at the site can be used in existing fuel stations, making the product attractive to nationwide companies such as Shell.
“(The fuel) can run in the same vehicles as petroleum,” Soumas said. “It allows them not to have to worry about changing stations.”
Soumas said NEXT would produce 37,500 barrels of biodiesel a day, mainly transporting it on ships. Railroad use would be minimal, Soumas said, and most of the rail traffic to the site would involve carrying construction supplies. He also said there won’t be use of any long unit trains, meaning the rail cars would be attached to existing trains instead of increasing the number of trains to Port Westward.
Next hasn’t signed a lease with the port, but it already is paying the port $15,000 a month until a lease is signed, Hayes said. Hayes said he expects the lease to be signed within a year.
In addition to the lease, the project depends on the Port of St. Helens rezoning the land from agriculture to industrial use. The Oregon Land Use Board of Appeals is hearing an appeal from Columbia Riverkeeper about rezoning the land; the rezoning has attracted opposition from the area and area conservationists.
In December, the appeals board turned the rezoning decision back to Columbia County, citing a lack of clear planning from the port and failed arguments from Riverkeeper. Riverkeeper again appealed that action, and Hayes said the port will get its chance to better define the purpose of rezoning after the board makes a decision with the new appeal.
“They have to submit their oral arguments by this week,” Hayes said. “Once we hear the results of that ... we would anticipate a lease within the next year.”
Hayes said the project could mean up to $11 million in extra revenue for the port annually. Hayes also said the NEXT project would employ 200 full-time workers and create 1,000 jobs to build it.