Yuma Sun
BY JOYCE LOBECK
March 11, 2009

Backers of a planned oil refinery in eastern Yuma County are now holding out hopes to break ground on the project by 2010, a date by which they had originally expected to be operational.

But plans for the refinery are still moving forward, Glenn McGinnis, chief executive officer of Arizona Clean Fuels, told The Sun this week. And he remains upbeat about the project despite the many delays and current state of the economy.

"We're still pursuing financing," he said. That's no small matter considering that the project now has an estimated price tag of nearly $4 billion and given the credit issues facing the entire world.

"It's been a challenge," McGinnis said, one he said he hopes is nearly behind him.

He said he's been negotiating final agreements with two "serious investors," and that "both are capable and willing to finance the entire project with some borrowing."

The preference of the potential investors, he said, is to provide enough financing to see the refinery through to completion in order to protect their investment.

He declined to name them, but said both are international organizations.

McGinnis said the federal stimulus package does not address oil refineries, but he's considering a biodiesel plant in association with the refinery that would be eligible as a renewable resource project.

However, for now he's focusing on obtaining the refinery financing from private sources. Once that is secured, he said, work can begin on the engineering for the refinery. A process, he added, that he expects will take about 12 months.

The engineering will provide the information needed to seek rezoning of the property, located between Avenues 48E and 49E north of Interstate 8 and the railroad tracks, McGinnis said.

"Once we start the engineering work, we can verify the layout of the site, the road and rail access and conceptual plan," he said. With that information, the company can apply to Yuma County for rezoning.

The company already has been granted a major amendment to the county's land use plan to permit heavy industrial use at the site. The amendment was needed before rezoning could be sought.

On another front, McGinnis said, his consultants are still working with the Arizona Department of Environmental Quality to obtain a new air quality permit for the refinery. A new permit is needed because the refinery was moved to an alternative site after Arizona Clean Fuels obtained its original permit.

The new location was settled on a year ago to avoid further delays to the project caused by a legal challenge by the Quechan Tribe to the original site. The tribe, in its lawsuit, alleged that the environmental impact of the refinery on the site was inadequately addressed before the federal government transferred the land to the Wellton-Mohawk Irrigation and Drainage District, which then sold the property to Arizona Clean Fuels.

While the lawsuit was dismissed by a federal judge, Arizona Clean Fuels stuck with its decision to relocate to avoid any other legal challenges, McGinnis said. The new site, a combination of private and state land, is beyond the property contested in the lawsuit.

In the meantime, he said, requirements for the air quality permit have become tighter as a result of new technology that may be applicable to the refinery.

He's hopeful to have the air quality permit by summer, be able to apply for rezoning by fall and break ground by mid- to late 2010. Construction is expected to take about three years.