Baard's Five Year Plan and Beyond

At the Chamber dinner this past Thursday evening Baard's V.P. of Business Development, Steve Dopuch, was one of the guest speakers in addition to Congressman Wilson. During his speech Mr. Dopuch gave us a "rough" idea of what's ahead with the proposed Ohio River Clean Fuels plant now that they have attained approval on all of the required permits. It turned out to be roughly a five year plan for the engineering, construction, and testing leading up to the actual operation of the plant. A lot of this has been well covered in our local papers this past Friday and Saturday. Before the dinner there was a press conference with Dopuch and CEO & President John Baardson via a conference call from Washington, D.C. at the Port Authority facilities.

Now that the permitting process is completed the next step is engineering the plant "down to the nuts and bolts". Dopuch reported that they have budgeted 200,000 man hours using as many as 100 engineers for this. They will using the services of engineers from such places as Houston, Pittsburgh and right here in Columbiana County. The engineering will not only include the lay out of the plant. They will also be working on the ordering of the necessary equipment and materials needed. Mr. Baardson related that some of the equipment will take about a year for it to arrive.

By early spring of next year they expect to be clearing some scrub and possibly doing some technical engineering on the land. Much of that engineering was accomplished during the permitting process. By May or June they expect the land preparation to begin in earnest bringing in the heavy equipment.

The design for the land that the plant will sit on is a bi-level table top plateau. They are estimating that they will be moving some 20 million cubic feet of dirt and rock which will be kept on site. They have over 600 acres up there and the plant will be using up about 300 acres. The cooling towers and the gasifiers will sit on the higher level with the raw material handling facilities on the lower level. They expect to have the land preparation completed by the end of the 2009 summer. The bi-level design is part of Baard's commitment to make this plant mostly "green".

By 2010 they expect the construction to be fully underway using some 3000 - 4000 trades people not counting the thousands of others that will be working behind the scenes in the designing and other administrative activities required for such a project. Dopuch said they will be employing American labor and they are currently in the process of negotiating agreements with these organizations.

They will be using six gasifiers when the plant if fully constructed. In the initial phase they will be building two gasifiers with the rest to follow two at a time in 12 - 18 month increments. They expect the construction phase for the initial start up to take up to two years. By 2012 they expect the plant to be operational with the first two gasifiers and ready for the testing phase. This final testing phase is expected to take most of the year. By 2013 they expect to be fully operational and ready to market the end product which as we all know is coal-to-liquid diesel fuel. That's where I got my notion of a five year plan - 2008 to 2013.

Mr. Dopuch went on to express that there is a "fair amount of organized resistance" out there and most of these people don't care much about the facts. He emphasized that Baard deals only in facts and following the law. He apologized to us present for the confusion of facts that this resistance likes to use in their arguments. He stated that this plant will be 40 - 45% cleaner than present day petroleum producing plants and that this plant will be capturing up to 80% of the green house gases that could be emitted into the atmosphere during production of C-T-L fuel. This is territory that we covered before but they will be piping CO2 some 30 miles away to the old Canton oil fields. Testing on this aspect has been very successful.

Mr. Dopuch smiled and stated that planning for the ORCF plant started three years ago when the price of oil was in the $40 - $50 range and it is currently selling back in that range. However, it was around $150/barrel just this year. In the futures market oil is expected to be in the $85/barrel area five years from now in 2013 when this plant goes fully operational. Although it is expected the demand for gasoline will be declining there is no foreseen slack in the demand for diesel fuel. The market for C-T-L fuel will be very viable and rational. Fully operational they estimate this plant will only supply 10 - 15 % of the demand for diesel fuel in just a 100 mile radius of this area. There will be a definite demand for this product and this plant will only be the beginning to lessening American dependence on foreign oil. Dopuch stated they are right where they wanted to be three years ago when they set out.

On the money side Dopuch related that there is not much confidence in the financial markets right now. That is expected to start turning around in the first quarter of next year well before they will be at the stage to interest investors and finance the construction and start-up of this plant. If you follow financial markets you know that it historically goes in cycles. We are presently at the bottom of the down part of that cycle but it will improve. They do not expect financing will be a problem in spite of all the doom and gloom you hear today.

By the time the plant is fully operational in 2015 or 2016 they expect to be employing somewhere in the neighborhood of 300 - 450 people not counting the construction crews. That's jobs just for the ORCF plant. There will be uncountable others in the area for businesses to supply the goods and services that this plant, the building crews and employees will bring with them. There will be more jobs created around here then just at the new plant. Buckeye Water alone has committed to supplying 15 - 20 million gallons of water per day for the plant. There seems to indeed be some sunshine on the horizon for the ville and the surrounding area.

I started this piece two days ago but it got too confusing to finish it up. Then yesterday was devoted to the Steelers and football. Sorry 'bout the delay...

ole nib