Never-Opened $300 Million-Plus Biofuels Refinery Facing Foreclosure in Southern Oregon
by Ted Sickinger (The Oregonian/OregonLive) A much-hyped but yet-to-be-completed aviation biofuels refinery in southern Oregon appears to be headed for foreclosure after backers failed to make principal and interest payments on some $300 million in debt.
Red Rock Biofuels launched efforts nearly a decade ago to build the cutting-edge facility in Lakeview but repeatedly ran into obstacles, even as project skeptics questioned its feasibility.
The project has now accrued an additional $56 million in interest owed to private investors who bought bonds to fund the project, according to a four-page notice of sale first published Dec. 21 in the Lake County Examiner newspaper. The notice said the property would be auctioned to the highest bidder on Feb. 9 if the project’s owner didn’t pay the entire amount due to date and cure any other default by five days before that date. It’s not clear how far behind backers are in making payments.
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It’s not clear if a buyer would seek to complete the facility, repurpose it or deconstruct the equipment and use it elsewhere.
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The project was originally slated to come online in 2017, converting woody biomass such as slash from logging and forest thinning projects in the area into jet-grade liquid fuel that could be used as a substitute for the fossil-based fuel currently used to power the nation’s aviation fleet.
But backers didn’t break ground until 2018, and more than four years later, the refinery remains incomplete and construction has been halted for more than a year.
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The town has about $2 million in debt related to the projects, and another $146,000 grant that will convert to a loan if the project doesn’t create 31 full-time-equivalent jobs by July, Buehler said.
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The project has been delayed numerous times due to cost overruns, re-engineering of its production technology, the bankruptcy of a supplier, COVID-related delays, and a lack of financing.
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Chris Zinda, a former Lakeview resident and longtime critic of the project, said federal regulations prohibit the project from sourcing wood waste off federal land, and a feasibility study was never conducted to determine if there was an adequate supply of woody biomass in the region to feed the plant.
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Wyden (U.S. Sen. Ron Wyden (D-OR)) and U.S. Sen. Jeff Merkley introduced legislation in 2019 to allow the use of biomass from federal lands in the production of renewable fuels, saying it would lead to healthier forests, more carbon sequestration and cleaner transportation fuels. Many environmental advocates fundamentally disagree with that premise, but Stern said Wyden intends to introduce an updated version of the bill in the new Congress. Recent megafires such as the Bootleg fire, meanwhile, have consumed big swaths of the forestland the legislation might provide access to. READ MORE
