City Administrator Tom Haglund said local officials know one
thing for sure about a $300 million biofuel plant that could be
headed to Gilroy: They don’t know much.
City Administrator Tom Haglund said local officials know one thing for sure about a $300 million biofuel plant that could be headed to Gilroy: They don’t know much.
A hoard of airlines recently announced its commitment to use renewable jet fuel created at the plant, which would be operated by East Coast company Solena Fuels, LLC. The plant could start churning out the fuel early as 2015 to the tune of roughly 200 permanent jobs, those close to the project said.
News of the agreement elicited praise from local economic and business leaders.
But Haglund has offered positive but guarded reactions, saying the prospect of having the country’s first commercial-scale renewable jet fuel plant in Gilroy was exciting, though not yet concrete. He said contact between the City of Gilroy and Solena had been virtually nonexistent, and the company had filed no plans for such a project at City Hall.
“We’ve sort of let our imaginations run away. We don’t yet know enough about this project,” Haglund said. “There’s never been a substantial proposal. We don’t know about their processes.”
Rocio Velez, Solena’s vice president of business development and in-house counsel, said the company expects to submit a planning application within the next year. Tammy Brownlow, president of the Gilroy Economic Development Corporation, said Solena has its eyes on land at the McCarthy Business Park east of U.S. Highway 101 and south of Gilroy’s outlet stores.
After submitting preliminary plans, the company would need to jump through environmental loops such as drafting an environmental impact report, as well as answer questions that will come with a project which Gilroy has never seen before, Haglund said.
“Is there going to be odor? What about some sort of upset, in environmental terms? How would they handle an earthquake, how would they handle a fire or handle a terrorist attack?” Haglund said. “We’ve asked for more information that’s never been forthcoming. Assuming all that would work out, we’d love to be the site of a company like that.”
Solena hasn’t had detailed talks with the city about the project because the company still has a ways to go before it’s ready to ask permission to put a shovel in the ground, Velez said.
The company also wants to hear from residents – and potential employees – before moving forward, she said.
“Before we present any plans or permits to the appropriate authorities, additional development work needs to be completed that will allow us to present a comprehensive planning application and corresponding permits for the overall benefit of the community and the project,” Velez wrote in an email. “Solena must consult with the local community comprehensively in the months before we finalize our planning application.”
According to Velez’s email, Brownlow has told the Washington D.C. based company the Gilroy area already possessed a trained manufacturing workforce.
Velez wrote, “We hope that many local people will join us as employees in the creation and operation of the plant.”
The total cost of the plant will be between $300 to 350 million, and will be funded through private project financing, Velez said.
The plant would produce approximately 1,800 barrels of the fuel a day, Velez said, the equivalent of more than 75,000 gallons.
The airlines will purchase 16 million gallons from the plant each year once it’s built, said Jean Medina, vice president of communications for the Air Transport Association of America.
“Renewable fuel will enhance the security of our supply and will give us competitive options to supply major airports,” Medina said.
To comply with standards set by the American Society for Testing and Materials, the renewable jet fuel will be blended with an equal amount of standard, petroleum-based jet fuel, Medina said. At that rate, the airlines would use 32 million gallons of the 50/50 fuel each year.
The letters of intent are not contracts as they only indicate the airlines’ commitment to purchase the fuel for airports in San Jose, San Francisco and Oakland, Medina said.
The renewable jet fuel is expected to be competitively priced when compared with standard jet fuel retrieved from the U.S. Gulf Coast, which averages about $3.01 per gallon, Medina said.
“We’re hoping by the year 2015 they will be able to produce biomass to fuel liquid for an aircraft,” American Airlines spokeswoman Andrea Huguely said. “It’s something that would lower emissions of greenhouse gasses pollutants that petroleum-based fuels have.”
But American Airlines, one of the agreement’s leading members, still has some questions of its own, Huguely said.
She said American Airlines isn’t yet sure exactly how much of that 16 million gallons will be theirs, though some airlines will get receive less than others.
“It’s going to depend on how much can be produced. There’s still things that need to be done,” she said. “As far as a target of what we would use, we don’t know yet. We’re working that out.”
Gilroy City Councilman Perry Woodward said he wants to know more about the project, but was ready to lend his excitement to the prospect of it coming to the Garlic Capital.
“It is exactly what I’ve been hoping Gilroy can attract,” Councilman Perry Woodward said. “If we can capture our share of clean tech industry, it could be a radical transformation for our local economy.”
So far, Woodward said he hasn’t heard any reason why Gilroy wouldn’t want a project such as the Solena plant.
“Nobody has brought to my attention any potential downside with this project,” he said.
