Local leaders skeptical of Biomass
Published 12:00 am Saturday, July 19, 2008
SOUTH POINT — Biomass Energy LLC started off with what seemed like a good business idea.
It would take wood waste products and burn it to create electricity.
In 1999, the company bought the defunct South Point Ethanol, and Biomass CEO Mark Harris said the Nicholasville, Ky.-based company would spend $100 million to renovate the seven coal-fired boilers and the facility in South Point adjacent to The Point industrial park.
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It was to become a facility able to generate 148 megawatts of electricity to sell to 150,000 to 200,000 households in Ohio and Pennsylvania. The anticipated start date was April 2006. It was supposed to be the biggest energy producing plant of its kind in the United States.
South Point Mayor Bill Gaskin said he was never too sure what the project was going to be.
“I wondered what they were going to do with it, I never did know,” said Gaskin. “I was hoping they were going to do something with it. It’s a large industrial spread.”
Lawrence County Commissioner Jason Stephens said it has been a rocky road with Biomass.
“At one time they owed (more than $100,000) in back taxes, which they paid after we put public pressure on them,” Stephens said. “And the place has caught on fire a couple of times. They made promises that they are going to do this or that and nothing has ever come of it.”
Stephens said it sounded promising when the company made its original announcements.
“But I don’t know of a promise they’ve kept,” he said.
For a company that seemed so promising, it all seemed to go downhill when it won a government contract to dispose of surplus tobacco.
The slippery slope
In December of 2002, the U.S. Department of Agriculture agreed to pay Biomass $2.33 million to destroy 121,448 tons of surplus tobacco. During the spring of 2003, more than 10,000 tons of tobaccos in cardboard boxes were shipped to the Biomass location before they were stopped.
Gaskin said he was none too happy to see the tobacco at the site.
“The community raised hell about that real quick,” he said. “So did I. It was going to be like second-hand smoke over the whole area. I called the EPA.”
Gaskin said as far as he knows, the site didn’t even have a working furnace at that time.
“And they were storing it in a big building in there and it was out in a field too,” he said.
The Ohio Environmental Protection Agency, concerned that the tobacco would contaminate groundwater, cited Biomass, saying the company hadn’t filed for the proper permits for storing tobacco. As of mid-2003, Biomass had a permit to burn wood and wood waste, but not the needed modification to burn the tobacco.
The Ohio EPA conducted an inspection of the property in March 2003 and besides the three tobacco piles there was approximately 35,000 tons of coal and coke waste in a concrete building. The coke waste was generated by Honeywell, which purchased the former Allied Signal Company. Honeywell had hired Biomass to process the waste materials as a fuel in its energy recovery operation.
In March 2003, Biomass was served with a violation notice from the EPA which stated Biomass “has disposed of the Tobacco Waste, Coke Waste and Wood Waste on the Property without a license or other authorization … in violation of the prohibition against open dumping of solid waste and it “has established an unlicensed and unpermitted solid waste disposal facility” in violation of state law. The EPA also said the company had not renovated the boilers.
Biomass was instructed to stop accepting and disposing of waste at the facility and to put leach-proof coverings over the tobacco piles. It was given 60 days to remove the tobacco and 75 days to get rid of the coke ash at a properly licensed facility.
And then the tobacco just sat there.
Biomass went delinquent on its taxes.
People started questioning whether Biomass had the ability or the equipment to deal with the tobacco and why the USDA awarded the contract to Biomass.
Tobacco caught on fire on June 10, 2003, the date for Biomass to begin the removal process. That same month, county officials noted that Biomass was delinquent on its taxes to the tune of more than $100,000.
Biomass CEO Mark Harris said at the time that the coal and coke waste was not a health hazard and the public had no need to worry. He also said he had simply not had the money to remove all the waste from the Biomass site.
The next three years saw Biomass in and out of court. It was ordered to clean up the site and when it didn’t do enough, Harris was held in contempt of court. The company was sued by the attorney general’s office in 2004 and forced to pay $26,000 for its improper storage and the slow removal of more than 10,000 tons of tobacco at its site.
In December 2006, the Ohio Attorney General’s office and Harris reached a resolution during a hearing in Lawrence County Common Pleas Court on the cleanup.
But in July 2007, Judge Frank McCown warned the company if it did not clean up the site it would face a $109,000 penalty and forfeiture of a $522,000 performance bond. He also said he was not against imposing jail time for those associated with Biomass.
The late judge was a sharp critic of the company and had referred to it as “Bio-mess.”
He said the company posed an environmental threat and put the community at a health risk.
Clint Shuff, an inspector for the Ohio EPA, said Harris has not paid the fines from the court case yet and Biomass is still not in compliance with court orders.
“We’ve had issues with Mr. Harris for years now,” he said. “We’ve been back and forth and it’s been turned out over to the Ohio Attorney General’s Office and we are just waiting for them to re-file in Lawrence County Common Pleas Court.”
David Chenault, a manager with the Division of Solid and Infectious Waste Management, Southeast District Office, said his office continues to look into what is going on at the Biomass site.
“We know they haven’t done what they have been requested to do. That’s obvious, you can ask anyone down there,” he said. He added the agency was trying to figure out whether the 138-kilovolt line was for electricity to be generated at the site or whether it was to power something at Biomass.
“We can say that no permits have been submitted to this office at this point in time for any type of new operations that the Biomass folks would be doing,” Chenault said. “I haven’t heard anything about it.”
Getting rid of the coke waste from Honeywell presented some problems for Biomass.
In 2006, Ashland, Ky.-based River Cities Disposal agreed to take the industrial byproducts — if the company stayed at least one week ahead on payments.
Ben Millard, a sales rep with River Cities Disposal’s Big Run Landfill in Ashland, dealt with Biomass and said they agreed to a price.
“Because it was such a huge amount of money — it was in the $250,000-$400,000 range for as much as there was — that I said what they would have to do is to give us $50,000 up front,” Millard said.
That would pay for about one week of disposal fees and then the company would have to keep one week ahead on payments.
“The next thing I knew, we weren’t getting any of it,” Millard said. “So I called Harris and asked him what was going on and he said he found a place that would give him a better price.”
So the coke waste went to the Maysville-Mason County Landfill in Maysville, Ky.
James L. Gallenstein, the judge/executive of the Mason County Fiscal Court, which oversees the landfill, said it agreed to take the coal waste and received a first payment for a “sizable amount.”
He said when the payments didn’t come in and the bill started to hit around $90,000, he talked to Harris.
“I said if you don’t pay this I will take you to court. He said he was getting the money together,” Gallenstein said. “To make a long story short, before we went to court, we entered into an agreement to give him some time to get his finances together. And he did.”
Gallenstein said Harris now only owes about $4,000 after a $20,000 payment last week.
“I think his finances were tied up on one end with other deals and he needed time to take care of it,” he said. “I couldn’t wait so we had the agree-order. He lived up to what he said he would do. I can’t knock that.”
At the beginning of July, the company sent a letter to the Lawrence County Commissioners asking permission to place a 138-kilovolt overhead electric line across U.S. 52 from Sand Road into the Biomass property and they need county property to do that.
It was a measure the commissioners tabled after it found out Biomass owed $19,683 in delinquent taxes. The property is on a list of delinquent properties set for auction at the county’s next tax sale.
Stephens said he didn’t know what was going on with the company.
“My position is that if they don’t pay the taxes, they shouldn’t have the privilege of using county property,” he said. “It’s frustrating. A lot of other companies in Lawrence County pay their taxes and I think they should too.”
With demand and prices for energy increasing worldwide, companies are looking for alternatives to burning fossil fuels to create electricity. But will Biomass ever get itself in the game?
Stephens said in his opinion, Biomass will never reach the lofty goals that were established when it was created.
“I think under the current ownership, I don’t think it will go anywhere,” he said. “It’s been seven years and nothing has happened yet. I would like to see it under the ownership of somebody who is willing to do something that will contribute to the community, not take advantage of the community.”
Gaskin also has his doubts.
“It’s been this long, I don’t see how it is going to amount to a thing,” he said. “If it was going to, it surely would have before now, that would be my opinion. But I could be wrong.”
Harris did not return a phone messages left at his office.