EAST LIVERPOOL - The Columbiana County Port Authority received preliminary state approval to use state money once allocated for Baard Energy on a project to help two companies at its Wellsville river terminal, which is expected to create 20 new jobs.
The Ohio Department of Development's Financing Advisory Council this week recommended $3.5 million be loaned to the port authority for the Wellsville project, with the loan to be forgiven if certain goals are met. The State Controlling Board is expected to act on the recommendation sometime this spring.
Port Authority CEO Tracy Drake said the money will be used to fund a variety of improvements at its river terminal/industrial park, all related to a joint venture between CIMBAR Performance Minerals and Anchor Drilling Fluids USA to process lubricants used in oil and gas drilling.
"It's tied to job creation and investment that's already underway" at the 10-acre site, Drake said.
The property was purchased last August from the port authority for $2 million by CIMBAR, an international producer of various industrial minerals, which planned to open a mineral processing plant and related business. The company's website states some of the minerals are "used in a variety of drilling fluid and oil field applications."
Anchor Drilling is described on its website as the "largest independent drilling fluids company in the United States," with local offices in the Pittsburgh area.
The joint venture will result in the production of synthetic drilling fluid, which is also called drilling mud. The mud serves as a lubricant for drilling boreholes into the shale gas deposits, but it is not part of the hydraulic fracturing process used to extract the natural gas.
Drake said the money will be spent in a number of ways, such as on a separate conveyor system that will be part of the terminal's crane system used to load and unload cargo and material from barges, trucks and railroad car.
The $3.5 million is part of $4.5 million the state awarded the port authority several years ago to acquire 522 acres for Baard Energy's proposed Ohio River Clean Fuels plant. The money was no longer necessary after a private investment firm took over the project and agreed to purchase the property with its own money.
After this occurred, Drake received state permission in 2010 to spend the money on the Wellsville river terminal, specifically for construction of a conveyor system to transfer limestone onto barges for use by local power plants as part of their pollution-control systems.
Drake said this project fell apart due to a decline in demand for limestone resulting from a number of older coal-powered electric plants deciding to close rather than comply with costly new air-quality standards imposed by the U.S. Environmental Protection Agency.
Rather than lose the money, Drake began looking for another viable project that created jobs, and the joint venture between CIMBAR and Anchor Drilling met the requirements.
Although the money is being provided in the form of a loan, Drake said it will be forgiven by the state if and when certain goals are met, such as creation of the 20 jobs and other benchmarks.