LaPlante addresses city council at start of Monday meeting.
A Crookston property owner who said he's knowledgeable in biofuels via his business transportation models and "advanced biofuels" research he's conducting in North Dakota told the Crookston City Council Monday evening that they should at least slow down and possibly hit the brakes and "park" the Epitome Energy initiative in the works on 100 acres of land on Crookston's southern edge.
At the end of his remarks, Mayor Guy Martin and the council agreed to put the topic on the council's Sept. 23 Ways and Means Committee agenda for continued discussion.
Brian LaPlante, who owns the former Crookston American Legion building and is in the process of opening his sourdough bakery business known as Back When Foods in that location, told council members and city officials that there is already a glut of soy on the market both domestically and internationally and the surplus is only likely to grow, and that the biodiesel market is already struggling. He noted the closure of several biodiesel facilities recently, and said that even if Epitome Energy's soybean crush and biodiesel plant initially provides a boost to the local and area economy and helps growers as well, "there is a revolution underway" in the transportation industry, and biodiesel is not a part of that revolution. Huge vehicle manufacturers are moving away from diesel engines in favor of alternative fuels like hydrogen-based power and electric, LaPlante said, noting that transit bus manufacturers like New Flyer of America are fully engaged in alternative sources of power, not diesel. In five years, he said, 60% of transit buses will run on alternative sources of energy. Electric and hydrogen-powered buses are big in China right now, he said, and the United States is just starting to seriously explore the possibilities.
"There's a revolution coming in transportation models, and it should have been presented to you already," he said.
Assuming Epitome Energy has a business plan, LaPlante said, it should include the SWOT test, which stands for strengths, weaknesses, opportunities and threats. A large soybean crush and biodiesel facility in Crookston certainly presents opportunities, he said, "But the warnings are real, folks," LaPlante added. "The threats are huge."
"The threats that exist for this market, it's there for everyone to see," LaPlante continued. "The research should have been done; I don't know why it wasn't done." The things he was referring to are an unfortunate reality that no one wants to talk about, he added.
LaPlante made his remarks during the open forum that opens each council meeting. It was also the same meeting that the council approved a $250,000 one-year loan, a partnership between the City and CHEDA, to Epitome Energy to help with the permitting process for the plant, which would at some point have a 42-million bushel crush capacity, although Epitome founder Dennis Egan said previously that the capacity could be 21-million bushels early on. The Minnesota Department of Agriculture is matching the $250,000.
LaPlante said it made no sense on multiple levels for Epitome Energy to ask for a loan from government entities, which LaPlante said amounts to taxpayer dollars, just do cover permit-related costs. The equity to cover those costs should instead come from the Epitome equity drive, he said, which is currently underway.
"This is managerial finance 101," he said.
For a project of this size and scope, $250,00 is a "drop in the ocean," LaPlante noted, adding that if at least $10 to $15 million hasn't been raised yet, then stakeholders and proponents of the project should have serious concerns.
Asked by the council if he had any response to LaPlante's comments, CHEDA Executive Director Craig Hoiseth said it's his understanding that the equity drive needs to reach an escrow threshold. Once that threshold is reached, he said, the equity can be a potential source for other uses. He said he wasn't sure if details regarding the status of the equity drive were available to the public at this point.
If taxpayer dollars are involved in the form of a government loan to the project, LaPlante contended that Epitome Energy would or at least should lose some of its privacy protections and be compelled to publicly disclose the status of its equity drive.
LaPlante said he understands why there is such enthusiasm and apparent widespread support locally, region-wide and at the state level. Everyone wants to add jobs, grow the tax base and help farmers and other businesses prosper, he said. But there is no market for biodiesel beyond the requirements put forth by Renewable Fuel Standards (RFS), such as the RFS that's in place in Minnesota regarding biofuels.
If Crookston wanted to get it on something truly on the cutting edge, LaPlante said opportunities to derive a hydrogen product from ethanol is worth exploring. Such a venture could involve not only corn but sugbarbeets, he said.
The Times reached out to Hoiseth after the meeting to get his thoughts and/or reaction to LaPlante’s comments.
While saying anyone has a right to attend a council meeting and speak, Hoiseth said it’s his belief that the primary function of the open forum at the start of council meetings is for people to “address the council.” From his point of view in the council chamber chairs, LaPlante for the most part was directing his comments at him, which, Hoiseth said, “could have been perceived as rather disrespectful” to speak mostly to the CHEDA executive director and not the council.
The Epitome Energy project has been discussed openly and publicly at numerous meetings, sessions, open houses and forums since January, but Hoiseth said he hadn’t seen or heard LaPlante voice any concerns about the project until Monday.
The Sept. 5 Epitome Energy open house and question and answer session at Valley Technology Park, attended by around 80 people, “was just another example of further public engagement,” Hoiseth said. “Some choose to come participate and be informed, some do not. Our goal is to make certain everybody's questions are answered.
From the beginning, Hoiseth said, Epitome Energy has based their mission in Crookston on four primary, key tenants:
• Is this project financially feasible?
• Will this project benefit the growers?
• Will there be an economic benefit to the Crookston area and the region?
• Will this value added project impact where growers can take their crops for another marketing option?
The answer to all four questions remains yes, he noted.