By Eric Besson, Beaumont Enterprise
Having cleared a significant hurdle, Natgasoline is set to begin “full-blown” construction of its $1 billion-plus methanol plant on Nov. 1, a company executive said.
The company has received from the Environmental Protection Agency its greenhouse gas permit, the final stamp ahead of a massive Beaumont project expected to require thousands of construction workers and carry a more than $20 million annual payroll once it begins producing methanol at the end of 2016, company Vice President Bashir Lebada said.
Natgasoline is a subsidiary of the Netherlands-based company OCI N.V. The parent company, specializing in the production of natural-gas based chemicals like fertilizer and methanol, employs more than 72,000 people in 35 countries.
The Natgasoline plant, a two-phased project at 5470 N. Twin City Highway, could cost up to $1.8 billion before it is complete, Lebada said.
The first segment will use natural gas as a source to produce methanol, a foundational product in household materials and wood adhesive used in home construction.
Natgasoline’s second phase, which Lebada said is not scheduled to begin until years afterward, would use methanol to produce fuel. This segment would make the site one of the first natural gas-to-gasoline plants in the United States.
Booming shale gas plays across the United States have driven the cost down for methanol’s primary raw source. A rebounding U.S. home construction market, coupled with high international demand, is driving up the value of the end product, Lebada said.
“Since we’ve announced this project, the shale gas economy has only grown stronger,” Lebada said. “It’s only reaffirmed our faith in these gas prices staying low.”
The EPA gave license to Natgasoline to emit up to 1.2 million tons of carbon-dioxide equivalent into the atmosphere each year, according to the company’s permit application. Carbon-dioxide equivalent is a standard measure to gauge the anticipated global-warming impact of all greenhouse gas emissions.
Compared to the 656 million tons of carbon Texas emitted in 2011, the plant’s output represents one-tenth of 1 percent. But Texas by far has the largest output of greenhouse gases: In about 30 other states, the Natgasoline discharge would exceed 1 percent of the carbon output share, according to U.S. Energy Information Administration data.
“We need to be aggressively moving toward reducing emissions, certainly not increasing them,” said Luke Metzger, director of the advocacy group Environment Texas. “Even though it is a small fraction overall, it is still a significant increase and is worrisome.”
Industrial sources of carbon emissions are not targeted in the proposed rule the EPA announced earlier this year. The proposal instead seeks to limit emissions of power plants, which contribute 40 percent of the nation’s carbon discharge, Metzger said.
Greenhouse gas permits are required for emitters of more than 100,000 tons of carbon per year.
“The Texas economy continues to grow and add jobs, and energy projects like Natgasoline’s are an important part of that growth,” EPA Regional Administrator Ron Curry said in a prepared statement. “EPA will continue to work with businesses to ensure they have to (SIC) permits they need to operate.”
Work to clear the site and set up temporary offices and electricity has already begun, Lebada said. The EPA permit allows the company to begin constructing its process equipment.
The Beaumont project will require between 1,600 and 3,000 construction workers and once complete will create 240 permanent jobs, Lebada said.
Construction alone will generate $3.7 billion in economic activity, according to a study conducted by the Austin-based research and consulting firm Impact DataSource.
To capture the economic benefits, state and local governments offered OCI incentives to purchase and develop the 514-acre tract of property.
OCI will receive $2.1 million from the governor-controlled Texas Enterprise Fund.
Local taxing agencies agreed to waive 100 percent of taxes attributable to property improvements for a 10-year period. In return for the local abatement, the company must make efforts to hire local contractors for construction.
“With the small amount of work so far, about 90 percent has been done by Beaumont companies,” Lebada said.
Impact DataSource projected the company’s land improvements will total $25 million.
Eastman Chemical Co. had originally planned to use the property for a $1 billion-plus project but balked as the national recession took root.
Natgasoline’s methanol production should reach 1.75 million tons per year. Two similarly sized plants are planned for construction in Louisiana by separate companies.
Should the current U.S. need for 6 million tons per year be met, Natgasoline will export its product. China, which allows fuel producers to blend gasoline with methanol, is a major player in the international market, Lebada said.
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