While the groundbreaking ceremony for the proposed multi-billion-dollar Nacero natural gas to gasoline project continues to be delayed, the recently posted agenda for the Thursday Odessa Development Corporation (ODC) meeting shows Nacero asking for its first two-million-dollar grant payment from Odessa taxpayers.
Listed as agenda item number five is an item to award Nacero its first payment under an economic development grant inked between Nacero and ODC in June of 2021. Under terms of the agreement, Nacero must complete at least $100 million dollars of investment in the Penwell facility during year one of the agreement with subsequent awards in years two through five requiring $1 billion per year investment in the Penwell project.
Groundbreaking on the Penwell plant was originally planned for fall of 2021 and was later pushed to January or February of 2022 and then again to spring of 2022 reportedly due to difficulties in scheduling Texas Governor Gregg Abbott to participate. Later reports indicated that the groundbreaking was further delayed due to the difficulties being experienced by Nacero in obtaining all of the financing commitments required to proceed with the project. Nacero has still not broken ground on the proposed facility.
A review of the Nacero compliance audit completed for ODC by the Weaver accounting firm indicates that in order to meet the $100 million grant threshold it would be necessary to allow Nacero to include all costs related to their proposed plant since its inception in 2018 although the ODC agreement wasn’t inked until June of 2021. Even including all costs incurred since 2018, the investment falls short and is listed as $99,578,400.
“There are a number of aspects of the current grant request that I find troubling” stated ODC Board Member Kris Crow. “First is that this grant request was not vetted by the ODC Compliance Committee which would be normal operating procedure. While I have often been a critic of the Compliance Committee, current protocol is that all grant requests must be reviewed by the Compliance Committee before being presented to the ODC Board and I am unaware of any project that hasn’t been required to take this step through Compliance before being listed on our agenda for approval.” The ODC Compliance Committee is a review and audit group that verifies and certifies the information presented by grant recipients.
“Second, in order to meet the grant requirements of a $100 million dollar investment it appears that Nacero was allowed to go back to day one of their project design instead of the contract requirement of year one – June 2021 to June 2022 – investment in the Odessa facility. I have never been aware of allowing a company to essentially backdate their investment requirement and it is unclear to me how much of these expenses are attributable to the Penwell facility.” further stated Crow.
A search of news articles shows that Nacero originally proposed to build a $3 billion dollar natural gas to gasoline plant in Casa Grande, Arizona in March 0f 2020. This plant which was promised to create 2,000 construction jobs and 265 high paying permanent jobs was permanently halted in November of 2020 as Nucero “reprioritized its projects”.
In June of 2021 Nacero announced the Penwell project which was originally promised to provide a six to seven billion dollar construction cost infusion into the local economy and create hundreds of high paying permanent jobs.
Also reported was an effort by the Mohave Arizona County Board of Supervisors in June 0f 2021 to increase the incentives for Nacero to build a plant in the Kingman area of Mohave County which was also promised to create 2,500 construction jobs and 400 permanent high paying jobs.
In January, 2022 the Bay Journal reported that Nacero was seeking $6.7 million per year in incentives to build a 3,000 acre plant in Luzerne County, PA on the site of an abandoned coal plant. According to local news reports a coalition of 16 local and statewide environmental groups opposed the project saying there was no evidence to back up Nacero’s claims of large carbon-footprint reductions with the use of Nacero’s gasoline.
“In light of the various projects announced by Nacero across the United States, I am concerned that Odessa taxpayers are being asked to subsidize the work being done on proposed plant locations outside of Ector County. This would be totally contrary to ODC’s mandate to fund only projects in Ector County.” stated Crow. “As it stands right now I will be asking for a breakdown on the investment made by Nacero in the Penwell project since ODC signed our agreement in June of 2021 as these are the only expenses that would be eligible under the terms of our agreement.”
In a closing footnote, The Weaver compliance review report notes that “the majority of the investment reported for year one of the EDA (Economic Development Agreement) was incurred prior to the start of the EDA agreement period.”
Previous reports made by Nacero to ODC Members and members of the Odessa City Council have indicated that Nacero has been unable to arrange all of the financing required to start construction and that the project has been hampered by the uncertain construction costs due to the currently high US inflation rate.
Odessa Headlines reached out to ODC Chairperson David Boutin for comment but as of press time Boutin had not responded.