He says efforts are constantly underway to best position initiative for a successful long-term future.
As stakeholders, officials and community leaders scramble to best prepare for a possible visit to Crookston next week by the Minnesota Senate Capital Investment Committee to see for themselves what the proposed Epitome Energy soybean crush/biodiesel facility here is all about, Epitome’s founder and CEO is doing his best to refute claims that the estimated $160 million project is being invested in an industry that has few if any long-term prospects for success, much less survival.
Dennis Egan attended the latest meeting of an advisory committee that has been meeting frequently over the past few months with the task of putting as many ducks in a row as possible related to the Epitome Energy initiative. Near the end of the latest session at Valley Technology Park - at which a pending state bonding request of the 2020 Minnesota Legislature was discussed along with numerous other topics, such as establishing a tax-increment-financing (TIF) district - Ward 4 City Council Member Don Cavalier said he thought it was important for Egan to address the many questions raised by Brian LaPlante, who, for the past two weeks has been very public and very vocal in voicing his concerns about the long-term viability of the biofuels industry and, thus, Epitome Energy in Crookston.
(After an enthusiastic debate, the city council Monday night voted 5-2 to delay LaPlante’s presentation, which approaches 40 pages in length, after, at the beginning of the meeting, Mayor Guy Martin resigned and walked out due in large part to his shared concerns about the Epitome Energy project.)
“I’m concerned about (LaPlante’s) report. How can we counteract it? There’s a lot of stuff in there that people are concerned about,” Cavalier said. “We’d better be ready to answer these questions.”
Egan said the project wouldn’t have been able to advance as far as it has without various feasibility studies and risk analyses that all look at the future in both the short and long term of soybeans, biofuels and green energy. “We did a significant deep dive,” Egan said. “If you’re going to go to equity investors and banks and get support, you need to be solid for 30 years, 50 years.”
While there currently is a “federal hiccup” in relation to the biofuels market and ethanol specifically in regard to Renewable Fuel Standards (RFS), Egan said the market for another byproduct of soybean crushing, the soybean meal, is strong. “The protein side is not going away,” he said.
Massive companies like ADM and CHS continue to make investments in their current infrastructure on soybean crush and biodiesel operations, Egan continued, adding that he engaged early on one of the most connected people to the biofuel scene, and they communicate constantly on biofuel policy and long-term prospects. The examination and research continues to this day, he explained. “These are living documents; it’s not static,” Egan said. “We’re evaluating new risks and new opportunities.”
One of the primary reasons, he noted, that Epitome is seeking in the permitting process double the crush capacity of the initial vision - 42 million bushels versus 21 million - is to be strategically positioned for opportunities that may present themselves in the future, and stave off current and future competition.
“Geographically, northwest Minnesota for a number of reasons…it’s a facility that would be at a competitive advantage (when it comes to moving soybean meal to customers from Minnesota to Canada to California and globally)” Egan continued.
He feels the initiative is in a strong position.
“We analyzed risks, we have the best people in the country doing the financials,” Egan explained. “From that perspective we feel very comfortable.”
And although LaPlante has said there is little to no market for soybeans beyond the RFS, Egan said that doesn’t change the fact that there’s a 20% RFS mandate in place. “There are no legislators we have talked to that are moving away from that; it’s the opposite of that,” Egan said. “And (Minnesota Gov. Tim Walz) is playing a national role in this, and he’s formed a local task force to look at the industry and new opportunities.”
With infrastructure costs alone for the facility that would be built on just under 100 acres on Crookston’s southern edge estimated to be at least $20 million, the City of Crookston is preparing a state bonding request for the 2020 legislature in the $5 to $7 million range.
District 1 State Sen. Mark Johnson, the East Grand Forks Republican who would carry the bill in the Senate, attended the VTP advisory committee meeting to lend his support, and offer advice on how to increase the chances of, first, impressing senators on the Capital Investment Committee and, later, putting in the necessary effort in St. Paul to get the money included in the 2020 bonding bill.
But first, the committee has to come. There’s competition for their time next week, Johnson said, so it’s not a slam dunk at this point that they’ll get here. Members of the Minnesota House version of the same committee toured various project sites earlier this month in the region, but Crookston and Epitome Energy at that time were not positioned to host a visit.
Local officials are tapping the expertise of officials in Thief River Falls, which secured bonding dollars previously for the massive DigiKey expansion. But while legislators looked at the immediate, massive return on investment on that project and in the process considered it a no-brainer to approve the investment of state dollars, Johnson said the Epitome project, while generating a lot of interest in St. Paul, faces more of an “uphill battle.”
“You really need to explain the financial impact, the sales tax numbers, the property tax numbers, jobs and income,” he said. “This is not as sure of a sell.”
Johnson and Thief River Falls Mayor Brian Holmer suggested - and Crookston and Epitome officials will take the advice - establishing a small group of up to five people maximum who carry the Crookston bonding request flag, so to speak, here, in the region, and, most important, in the halls of the State Capitol in St. Paul. Johnson said the Thief River DigiKey request gained a lot of traction among legislative leaders when the small group from Thief River made numerous visits to St. Paul and was provided an opportunity to meet with key decision-makers and share the DigiKey story.
“To be successful in St. Paul, we have to demonstrate need, show we’ll match some dollars, and show the ROI (return on investment),” CHEDA Executive Director Craig Hoiseth said. “…This project is on the radar in St. Paul.”