Trash-to-ethanol saga marked by constant change, missed deadlines

2012-09-04T00:00:00Z 2012-09-04T11:29:04Z Trash-to-ethanol saga marked by constant change, missed deadlinesBy Marc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
September 04, 2012 12:00 am  • 

With new owners possibly on the horizon for the proposed Schneider trash-to-ethanol plant, some Lake County waste officials say it is the perpetuation of a four-year-old game of musical chairs.

The proposed purchase of the Powers Energy of America project by a consortium of region construction contractors has been hailed by some Lake County Solid Waste Management District board members as a sign of new life for the troubled project.

But some board members, including officials who previously supported the plan, see it as another in a long line of changes and inconsistencies that have plagued the proposal even before the district signed a contract with Powers Energy in November 2008.

The players, ownership and even the proposed technological process for converting the county's carbon-based trash into ethanol have changed in the past few years, sometimes suddenly and inexplicably.

Some names and faces listed in the original bids have either changed, been involuntarily cut from the process or claimed never to have been part of the project to begin with.

Some of the change has been seen as good by some waste district board members and municipal leaders -- including the removal of contract language that would have made taxpayers the owners of the commercially unproven facility.

Other changes have left some board members uneasy and unconvinced about the project's viability.

Later this month, the solid waste board will decide the contract's future. The Times looks at all the changes dating back nearly six years.

 

Jumping ship?

In late 2006, Lake County Commissioner and solid waste district board member Gerry Schueb said he met with associates of would-be trash-to-ethanol firm Indiana Ethanol. The proposed process promised to turn trash into the fuel commodity ethanol rather than dumping it in landfills.

At some point, Scheub reportedly met with Earl Powers, then allied with Indiana Ethanol, to discuss possibly building such a facility -- which then promised to be the first of its kind -- in Lake County.

In early 2007, Powers and business associate Don Bogner said they split from Indiana Ethanol and formed their own firm, Genahol-Powers 1. Both firms then began competing against each other in bids and presentations to the Lake County Solid Waste Management District, with Scheub leading the charge for one of the firms to receive a trash-consolidation contract.

 

Severing ties

In spring 2007, Powers, of Evansville, introduced his partner Bogner to the solid waste district as the man with the technology to revolutionize the county's trash disposal.

In their joint Genahol-Powers bid proposal, Bogner was overseeing the technology behind the trash-to-ethanol proposal while Powers purportedly was handling the financing.

By June 2007, Genahol-Powers 1 submitted its bid to the waste district, and over the next several months both Powers and Bogner traveled to the region, submitting and explaining plans to the district.

However, by June 2008, Powers changed the name of the company from Gehahol-Powers 1 to Powers Energy -- with Bogner no longer part of the team.

Powers later would tell The Times he severed ties with Bogner after learning Bogner's technological method for processing trash into ethanol -- the process touted in the bid proposal -- did not work.

Bogner, who continues to claim he has a stake in any proceeds earned from the project, has said he would consider legal action against Powers.

In their original 2008 bid proposal, Powers and Bogner listed eight firms with backgrounds in engineering and alternative fuels. The proposal claimed those firms were part of the project team that would help bring a trash-to-ethanol plant to Lake County.

But when The Times contacted those firms in May 2010, officials from four of the eight companies said they never were involved with the project, and two others said they parted ways with Powers before the final contract was inked with the solid waste district.

 

Switching processes

After realizing their original process wouldn't work, Powers told The Times, he searched for other trash-to-ethanol technologies.

Powers said he settled on technology being used at a Fayetteville, Ark., pilot plant that uses bacteria and a process known as gasification to transform waste into ethanol.

After Powers reportedly secured rights to that technology from its creator, James Gaddy, chemical company INEOS Bio bought the process.

Powers Energy of America was awarded the county's trash consolidation contract in November 2008, with stipulations he finance, construct and operate a trash-to-ethanol plant using the INEOS process.

 

Changing owners

In the original November 2008 contract, Powers was obligated to construct and operate the facility. But legal ownership of the facility was set to transfer to the solid waste district -- and thus Lake County taxpayers -- on completion of the construction phase.

However, concerns over taxpayer liability that could have been associated with a commercially unproven and largely unknown facility and process led to the eventual removal of taxpayer ownership from the contract in December 2010.

Under the amended and current contract, Powers Energy would own and operate the facility. But even that is now in doubt with the announcement that Powers is trying to sell his trash-to-ethanol interests to a consortium of three region contractors -- Superior Construction Co., Morrison Construction Co. and Continental Electric Co.

At the solid waste district board's Aug. 16 meeting, board members learned of a plan for a consortium of local contractors that had planned to build the facility for Powers to purchase Powers’ interest in the trash-to-ethanol project, namely whatever rights Powers holds to the INEOS Bio technology.

This is the latest in a succession of proposed changes in ownership for the facility, which still has no financing or permits.

Lowell Town Council President and solid waste board member Phil Kuiper, a longtime supporter of the Powers' plan, has hailed news of the possible consortium takeover as a "breath of fresh air" for the project's prospects.

However, longtime Powers Energy contract opponent, Griffith Councilman Rick Ryfa, said shortly after the Aug. 16 meeting the muddled history of the project, Powers' inability to perform and the recent announcement of a possible ownership change justify canceling the contract and re-bidding for countywide trash processing proposals.

"The district in now being asked to embrace this project with a new player taking charge," Ryfa said. "(The consortium) is certainly a qualified and credible group of contractors. However, with different ownership and/or name changes having taken place already -- combined with prior concerns raised by other board members involving an initially flawed bidding process -- I think it may be time to cancel all contracts and put out an open bid of solicitation before we consider this latest proposal.

"If (the consortium) then is chosen to move forward on a proposal, the project would be free of controversy and would not be tainted before it begins."

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