A troubled Clatskanie-area ethanol plant will at least temporarily ship light crude oil out of the Columbia River in an apparent effort to take advantage of a big boost in domestic oil production.
However, the owner has not abandoned hope it will one day manufacture ethanol, a gasoline additive.
The Columbia Pacific Bio-Refinery will import crude oil and ethanol from the Midwest by rail, then ship out it out of the Columbia River by ocean-going barges, said Mark Fleischauer, co-manager of the bio-refinery, in a prepared statement.
“These barges, like much of the traffic on the Columbia, are capable of serving both Asian markets and refineries on the U.S. West Coast,” Fleischauer added.
He declined further comment, citing confidentiality agreements with clients. The company is not revealing specifically where the products are going, where they’re coming from, the volume that will be shipped, how it will affect rail traffic or how it will affect employment. The plant once employed 72 workers but had reduced the work force to 20 workers this summer.
The plant is owned by Cascade Kelly Holding LLC, a subsidiary of Longview contractor JH Kelly, which built the $200 million plant and then purchased it out of bankruptcy. Kelly invested $20 million to fix troubles that arose during the six months the plant was operating under the ownership of Cascade Grain in 2008-09.
However, ethanol prices declined and the prices skyrocketed for corn, the basic ingredient used to manufacture ethanol. The combination left Cascade Grain and other ethanol makers in a lurch.
Marcia Danab, spokeswoman for Oregon’s Department of Environmental Quality, said it has amended Columbia Pacific’s state permit to allow it to store crude oil at the Port Westward site. In its application for a permit change, the company said its crude oil business will not require new equipment or create any new sources of pollution.
Danab added that the owners still intend to producre ethanol in the future.
Commissioners at the Port of St. Helens, which leases the Port Westward site to Columbia Pacific, agreed to change its lease in October to allow the company to move products other than ethanol over the dock. Patrick Trapp, executive director of the port, said no other changes in the lease agreement were made.
In his written statement, Fleischauer said using the site for exporting crude oil only recently became potentially profitable, and the company has always looked for options to diversify business at Port Westward.
The Energy Department Tuesday estimated that U.S. crude oil production in 2012 has risen by 760,000 barrels a day — to 6.4 million barrels daily. That’s the largest single year increase since the beginning of U.S. commercial crude oil production in 1859. Increased drilling in the shale formations in North Dakota, Montana and Texas are behind the boost in output, which will push total domestic production to its highest level since 1997, according to Energy.
“We are proud to play an important role in furthering U.S. renewable and domestic energy sources – while providing jobs and tax revenue for the community,” Fleischauer said.