The recent "Ethanol plant pie in the sky?" article highlighted independent consultant L. Scott Trainum's finding that Sealaska's proposed wood-to-ethanol plant is economically marginal.
The article quoted a written statement issued by Robert Loescher, Sealaska's president and CEO, which referenced a short clause from Mr. Trainum's report acknowledging the technical feasibility of the wood-to-ethanol process. Mr. Loescher used this statement to imply that the report also concluded the process was economically feasible. When Trainum's words are put in complete context, however, they show that Mr. Loescher's assertions lack any substance.
Mr. Trainum's statement reads: "Such a cellulose-based project is now technically possible and more importantly feasible. However, as a lender or investor, I would be concerned with the fact that this project, to be profitable, is totally dependent on a series of credit and incentives that might not extend until even the end of the payback period," requires a massive amount of capital for a small number of gallons, "and could very easily operate at a loss."
The report evaluated the plant's economic feasibility, and did not address whether the untested wood-to-ethanol production process would be viable in Southeast Alaska. Regardless of the way Mr. Loescher tries to spin the report, ethanol plant expert Trainum determined that "Unless major changes are made, I am doubtful that lenders or investors will find the project attractive under these risk conditions."
Rather than attacking Mr. Trainum's investment analysis or SEACC's motives, Sealaska should utilize this analysis to better serve the interests of all its shareholders. Careful consideration of the implications of this economic feasibility analysis will not only benefit Sealaska's shareholders, but all residents of Southeast Alaska who use Tongass resources for subsistence, recreational, and commercial purposes.
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