Louisiana Green Fuels still working to start syrup mill, plant

By Holly Jessen | January 04, 2011

Once Louisiana Green Fuels LLC has the needed financing in place it won’t take long to get the 25 MMgy ethanol plant up and running. The equipment is on site, the contractors ready to work and the needed permits have been secured, said Alex Santacoloma, commercial and business development chief officer for Louisiana Green Fuels.  “We want to take this to a happy ending,” he told EPM.

The company has applied with the U.S. DOE Loan Guarantee Program and is working on other financial options. Once needed funding is in hand, Santacaloma estimated the plant would start producing ethanol in only 13 months. Construction had started in 2009 but was halted when an important investor backed out during the economic crisis, he said.

Admittedly, the project to build a sugarcane/sweet sorghum ethanol plant in Lacassine, La., has hit several major snags along the way. The ethanol plant is located next to a now idle syrup mill where developers plan to process the sugarcane and sweet sorghum that will be converted to ethanol. That syrup mill was built by the state of Louisiana and is in the process of being purchased by Louisiana Green Fuels. The agreement to purchase the mill was brokered in 2006, with the last of four $100,000 payments due on Dec. 31. At the end of 2011 Louisiana Green Fuels is scheduled to make its first payment on the principal of $60 million, or about $2 million.

The mill produced syrup for a while but was shut down in 2009 because there just wasn’t enough sugarcane acres planted locally to operate it efficiently and economically, said Mike Strain, Louisiana’s agriculture commissioner. That and the economic conditions have hampered the company’s progress in getting the syrup mill restarted and completing construction on the ethanol plant. It’s in everybody’s best interest—the state and Louisiana Green Fuels—to get there someday. “The Santacaloma family is working very hard to make this successful, and we are working with them,” he told EPM.

The sugarcane industry in Louisiana has been struggling. In 2004, there were about 12,000 to 14,000 acres of sugarcane planted in the Lacassine area. By 2006, the acres were cut in half, in part due to a hard freeze that impacted the crop, Santacaloma said. Louisiana Green Fuels has been working with a sugarcane cooperative with the goal of increasing sugarcane acreage in the area, even spending millions financing sugarcane farmers.

The company also wants to increase the amount of sweet sorghum planted in the area. In 2007, sweet sorghum was successfully processed at the syrup mill, with a small amount converted into ethanol in the lab, Santacaloma said. The rest was sold as cattle feed, although not at a profit.

The ethanol plant is feedstock flexible, with the ability to process sweet sorghum syrup, sugarcane syrup and molasses. The plan is to process each feedstock for 100 days in a yearly cycle, allowing the syrup mill to process sugarcane and sweet sorghum during their harvest seasons, he said. The sweet sorghum harvest typically lasts from August to October. That’s followed by the sugarcane harvest starting in October through late December or early January, although that season could be lengthened with different varieties, Santacaloma said. Molasses will be processed the remainder of the year.

The ethanol plant, which utilizes Brazilian technology, will produce several coproducts, for which Lousiana Green Fuels already has already obtained offtake agreements. The fiber, or bagasse, will be used to produce electricity for the plant, with a surplus to sell to the grid, he said. The plant will also produce CO2 and an organic fertilizer.

Despite the difficulties facing Louisiana Green Fuels, Santacaloma still has hope that the mill and the ethanol plant will be operating one day. “We are trying everything possible to make it happen,” he said.