Gypsum, CO Biomass Plant Update: Fires, ‘fraudulent transfers’ & ‘civil conspiracy’…Oh my!

Over the past few years this blog has covered a few articles related to the Gypsum biomass plant in Colorado.

In fact, back in August 2013 this blog shared an article in which “U.S. Sen. Mark Udall said the Gypsum biomass power plant is a “win-win-win” project when he and state Sen. Gail Schwartz toured the plant’s construction site on Friday afternoon.”

So what’s happened since that August 2013 proclamation of a “win-win-win?”

Well, according to an article written by Josh Schlossberg with the Biomass Monitor:

Eagle Valley Clean Energy, an 11.5-megawatt biomass power facility in Gypsum, Colorado started operating in December 2013, only to have its conveyor belt catch fire in December 2014. Spokespersons said the facility would be back online shortly, yet as of October, it’s still offline. There have been no further media reports investigating why the facility still isn’t operating, and multiple calls and emails to the facility from The Biomass Monitor were not returned.

Another thorn in Eagle Valley’s claw is a lawsuit filed against the company in U.S. District Court in June 2015 by Wellons, Inc., an Oregon-based corporation that designed and built the biomass facility.

Wellons is suing Eagle Valley Clean Energy for $11,799,864 for breach of contract, accusing the company of “fraudulent transfers” and “civil conspiracy,” involving the transferring of $18.5 million of federal subsidies to “insider” parties in an alleged effort to hide the money. The money was issued to the facility from the federal government under Section of 1603 of the American Recovery and Reinvestment Act (ARRA), also known as the Stimulus, involving payments to reimburse companies building renewable energy facilities.

Wellons claims that, on top of the nearly twelve million dollars Eagle Valley must pay them, they are owed past due interest of $1,185,433.56, with debt accruing at $3254.90 per day.

Another bump in the road for Eagle Valley involves the Chapter 11 bankcruptcy of the logging contractor that provides them the trees to fuel the facility, West Range Reclamation. West Range has provided nearly all of the wood to the facility since it opened, mostly from beetle-killed lodgepole pine from the White River National Forest.

Ouch, eh? So essentially every single thing celebrated before the Gypsum Biomass Plant was built turned out – in reality (and in only a short 2 year timeframe) – to be a tremendous disaster. Hopefully the media in Colorado will do a follow up investigation, because as Schlossberg pointed out above, “There have been no further media reports investigating why the facility still isn’t operating, and multiple calls and emails to the facility from The Biomass Monitor were not returned.”

Make sure to check out the rest of Schlossberg’s article to read about more recent growing pains with other wood-burning biomass plants in Florida, Wisconsin, Texas and Hawaii.

17 Comments

  1. Another example of a supposedly free lunch gone bad. And the biggest nightmare has yet to unfold… what happens when huge investments in biomass using ‘logging by-products’ of slash and unmerchantable wood get started and then the lumber market collapses, as it is doing. Guess what? Then somebody will (with crocodile tears) suggest we need to log to feed the biomass plant. It’s bad enough that many can’t see the forest for the lumber; wait til they can’t see the forest for the biomass. We will see the FS and forest industry hoovering up everything made of C on public lands (except the cows), ‘paid for’ by reducing old growth ancient forest to chips. They will throw in big trees to sweeten the pot because hoovering up brush and small trees just isn’t efficient or profitable.

  2. I’d bet that, industry-wide, cheap natural gas is the biggest reason that some biomass energy plants have faltered. But Energy Justice Network, the publisher of Biomass Monitor, must be delighted, since its position is that “Biomass Incineration is DIRTY Energy! Join the national Anti-Biomass Incineration Campaign!” It’s number-one goal is “To enable community activists to defeat polluting industries.” The group has worthy aims: “we advocate a clean energy, zero-emission, zero-waste future for all.” I’m all for clean energy, as close to zero-emission, zero-waste as possible, but literally zero-emission, zero-waste energy is a fantasy. http://www.energyjustice.net.

  3. Yes, things often go wrong with subsidized projects. I know nothing about the biomass plant in Colorado.
    I know here in Oregon some of them are not operating because there is no need for the electricity.
    I also know Seneca Sawmill’s biomass mill in Eugene and Rough and Readys in Cave Junction seem to working well. I think biomass is a better use of low grade dead timber than just letting forests burn into the atmosphere during very expensive wildfires. It could be an excellent use of low grade fiber from thinnings.
    I know we don’t have to worry about turning trees that can be made into lumber in to fuel.
    Believe it or not the timber industry always strives to produce the most valuable product from what they have to work with. It’s call survival.

  4. But this is politically correct sustainable energy — the ARRRA money like Solyndra! Just another rip-off by the politically connected looking for more ham. Or rinds. Or bacon.
    And Steve has a good point. Biomass Monitor? Never heard of them. Energy Justice? “Energy Justice is the first national organization to advocate a complete phase-out of nuclear power, fossil fuels, large hydroelectric dams and “biomass” / incineration within the next 20 years. ”
    You have got to be shiffing me. Take those off the table and it’s gonna be nasty, brutish and short.

  5. I got the following message from a forest activist based in Colorado. Figured I’d post the email here, because it contains some good information.

    Thanks for this info. The company running the biomass plant received a $40 million loan guarantee from the USDA in Oct., 2012, according to an AP wire story at the time. But they have still not reopened.

    And the bankruptcy of West Range Reclamation? That is also strange. That company had at least one fat 10-year contract under the Collaborative Forest Landscape Reclamation Program.

    Even with all the subsidies and a Forest Service willing to make lots of beetle-killed trees available (probably very inexpensively) to industry, the biomass industry still somehow cannot operate.

    • There is a whole lot behind this story that is not being told…..Especially concerning the ethics of the contractor who was supplying this plant with its fuel to burn….Hi grading clearing sites, Numerous breach of contract complaints and the crushing of their competition by forming working agreements with them and then starving them out til they sell for pennies on the dollar or flat out go bankrupt and lose everything…Yes I guess a contractor with the poor reputation that Westrange has would be the perfect company in the governments eyes for a ten year stewardship…..Dig deeper…Much deeper..What you find just might scare the hell out of you, I guarantee it will be the opposite of the image portrayed.

  6. Those who know watershed and forest management know that clearcutting is a valuable tool to managing healthy forests. It is much like dynamite: valuable in the right hands, not so much in uneducated hands. People need to start understanding this distinction.

    On our own property we made a couple mistakes of cutting too small of areas that now hamper regrowth of the forest due to lack of sun. Too little light is nearly as bad as HISTORIC cuts that were too large. Scientific minds evolve; uneducated emotions do not.

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