Ethanol plant builder teams with Wells Fargo.

Hearst -- Convergence Ethanol Inc., the future builder of a Hearst biomass-to-ethanol refinery, is teaming with financial giant Wells Fargo to place $300,000 in securities for the $150 million US project.

Formerly known as MEMS USA, the California energy-engineering company states in a June 6 news release these funds are earmarked for Hearst Ethanol One, the first of three bio-refinery facilities planned for Northern Ontario.

The refinery is being built on a 720-acre site owned by Convergence with a minority ownership interest by Hearst contractors, Villeneuve Construction Company Ltd.

Villeneuve is part of the project team and is providing the parcel of land, a certified wood waste disposal site, for the gasification conversion facility that will use both leftover forest slash and sawdust from harvest sites and mills.

The refinery will produce 120,000 gallons per year of 110 octane number, fuel-grade alcohol. The biorefinery's construction is targeted for completion within 30 months and will employ 230 people.

Neither company CEO Dr. Latty nor the Hearst Economic Development Corp. returned calls to Northern Ontario Business prior to deadline, but the release states Convergence and Wells Fargo "will continue to pursue Canadian provincial and government-backed loan guarantees to support private sector equity and debt for this clean-energy project."

The California-based engineering systems company is billing itself as an emerging ethanol producer.

Latty said in a statement made last April the name change from MEMS to Convergence is consistent with the company's future business goals.

"The reality of reducing U.S. dependence on foreign oil while simultaneously protecting the environment by supplying a bio-renewable fuel additive will be clear when the (company's) Northern Ontario biomass-to-ethanol plant comes online within three years."

The company broke the news of their plans to build a biomass conversion plant in Hearst last January, a deal they had been working on with Villeneuve and the Town of Hearst since their first meeting last November in Toronto.

The company considers Ontario one of the best places to start an ethanol plant since Queen's Park has mandated that all gasoline sold in Ontario must contain five per cent ethanol by 2007 and is offering tax incentives equal to 85 cents US per gallon.

The Hearst project has been championed by Natural Resources minister David Ramsay, who views the plant as part of Ontario's emerging value-added forest economy.

The province is conducting a resource calculation on the millions of cubic metres of unused forest wood in Northern Ontario that remains behind on the forest floor after harvesting and is buried in landfills.

Ramsay told Northern Ontario Business last winter the Hearst ethanol project should have "no problem" sourcing wood waste supply. The province is claiming ownership of wood waste at Crown harvest sites and was in the midst of establishing a pertinent regulation.

Dave Scott, manager of the Ministry of Natural Resources' Hearst district office, acknowledges that process is still continuing.

"There (are) policies being written and ultimately if it's Crown (land), the Minister has the authority."

Since the forest industry traditionally doesn't use branches and tree tops, Scott says there are some allocation issues to be sorted out with Tembec and Lecours Timber, the two Sustainable Forest Licence holders in the area.

"We're still hopeful (Convergence) is going to have a successful project," says Scott. "We're looking at allocations and what volume they need and will work with the licensees in Hearst."

In a letter, Scott advised Convergence Ethanol they will have access to sawmill sites on Crown land, subject to an approved plan to clean them up.

"We don't want to open up piles of essentially rotting sawdust buried under clay for years and have them leach into the ground."

Scott says there are many old sawmills dating back many decades when these operations moved from site to site. "It would be great to have them cleaned up."

While the project partners develop their business case, Scott says this new development will require plenty of permit approvals.

A government inter-ministerial team involving Natural Resources, Environment, Northern Development and Mines, and likely the Ministry of Transportation are working with Hearst town officials to determine where the company can source biomass, plant emission standards, possible water consumption for the factory and local planning issues.

www.memsusa.com

By IAN ROSS 

Northern Ontario Business