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Green Circle Bio Energy Looks to Build Second Wood Pellet Facility

May 24, 2013
Author: LeAndra Spicer

Green Circle Bio Energy took its first steps towards a second wood pellet plant this week. In a letter of intent, Green Circle communicated its interest in both leasing a site for a new pellet plant and entering into a wood fiber supply agreement with The St. Joe Company. All plans are contingent upon the ability of the Port Authority to secure funds necessary to dredge the natural deep water port at Port St. Joe and return it to operation.

A commitment from Green Circle provides the Port Authority the green light to move forward with grant proposals for funding the ship channel dredging. “We are excited about the possibility of leveraging our strong presence in Northwest Florida, further job and economic development in the region, and look forward to the successful dredging improvements of the shipping channel," said Green Circle CEO Morten Neraas.

Green Circle currently operates the world's second-largest wood pellet plant in Cottondale, Florida. Opened for production in April 2008, the plant produces 560,000 tons of wood pellets per year and adds more than $70 million to the local economy. Green Circle ships pellets manufactured at its Cottondale site from the port at Panama City.

Pellets produced at the new facility would be routed to the Port of Port St. Joe via truck or the Genesee & Wyoming railway and then shipped to European markets. In addition to dredging, the development of bulk cargo port facilities to accommodate Green Circle’s shipping needs is under consideration.

However, the project and the economic benefits it would bring to the area are far from certain. The port has struggled to overcome the economic downturn that resulted in the loss of its remaining industrial base and was last dredged in 1986. The St. Joe Company, which owns a port site that once belonged to the now bankrupt Florida Coast Paper Company mill (formerly the St. Joe Paper Company), has been instrumental in redevelopment efforts at the Port.  The company and Genesse & Wyoming contributed $1.25 million as part of a $5 million project to restore rail service at the port. Apalachicola Northern railway discontinued service after its remaining rail traffic generator - Premier Chemicals - closed in 2010.

Just days after the Green Circle and Port St. Joe announcement, Florida Governor Rick Scott vetoed a $2 million appropriation that would have allowed the Port Authority to bring its $4 million mortgage current. The governor explained his rationale for the decision as, “…projects funded with state dollars should be able to demonstrate a benefit to Florida’s taxpayers. In addition, this issue is a matter of pending litigation.”

Capital City Bank holds the mortgage in question on a barge terminal parcel at the port. Earlier this month, Capital City funded a Protect Our Port campaign to encourage citizens to contact Governor Scott to express their support of keeping the Port under public ownership. The effort to buy the Port Authority time to find secure business revenues did not have the intended effect on the governor, and a message on the website now reads:

“Over the last two weeks, concerned citizens like you have responded overwhelmingly to our efforts to save public ownership of the Port of Port St. Joe. Several hundred of you went to our website and submitted email letters to the Governor urging him to approve the funding provided by the Legislature. Unfortunately, the funding did not survive veto review and will not be available to help return our port to solid financial footing. Nonetheless, we want to thank you for your dedicated support for this effort and your continuing commitment to the future of Port St. Joe and the surrounding community.”

Without the funds available to pay the mortgage, the case heads to Circuit Court. Both Capital City and the Port Authority seek summary judgments in their favor. A court date is not yet known.

In an attempt to help with mortgage payments and dredging costs, the Port Authority previously submitted two, $5 million pre-proposals to receive funds under the RESTORE Act. Those funds are yet to be distributed. In the meantime, a $750,000 grant from the Florida Depart of Transportation is available for the initial engineering work and permitting that dredging requires. The grant requires a $250,000 match which is likely to come from St. Joe.

"The relationship between Green Circle and St. Joe is a step toward creating jobs and revitalizing the Port of Port St. Joe. A viable business is ready to use the port, and rail access to the port site is being improved. The missing link to an operational port is the necessary dredging improvements to the shipping channel,” said St. Joe CEO Park Brady. Let’s hope it comes to fruition.

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