Hurricane Ike damages GreenHunter facility

Web exclusive posted Sept. 17, 2008 at 11:36 a.m. CST

GreenHunter Biofuels LLC, a subsidiary of Grapevine, Texas-based GreenHunter Energy Inc., announced its Renewable Fuels Campus in Houston will be shut down for six to eight weeks due to water damage caused by Hurricane Ike.

The company has released a preliminary damage assessment report. The facility, which includes the largest biodiesel plant in the United States, was shut down and evacuated 48 hours prior to the storm's arrival. It's currently without power and local utility companies estimate it could take six to eight weeks to restore power to the area.

Although GreenHunter anticipated the damage would be caused primarily from high winds, it reported that the majority of the damage sustained at the facility was caused by floodwaters. Losses included damage to offices, piping between reagent tanks, as well as some small and intermediate tank foundations. Additionally, two bulk storage tanks containing vegetable oil and methanol tanks were affected, and as a result, GreenHunter said just under 50 barrels of edible canola oil were released into the environment. The company said it notified all appropriate local, state and federal agencies besides the company's third-party oil spill response organization.

Bruce Baughman, senior vice president of technology and engineering for GreenHunter Biofuels, said that so far in assessing damage at the facility, the company has concluded that damage to major process equipment is minimal. "Given the sheer volume of water and the extreme flood levels that we faced, our initial assessment is that we sustained overall minor to moderate impact to the Renewable Fuels Campus from Hurricane Ike."

GreenHunter President and Chief Executive Officer Gary Evans said the company's property insurance carriers are in the process of sending response team adjusters to Houston. "We are dedicating all of our company resources deemed necessary to ensure this is accomplished as quick as possible for the benefits of our shareholders," he added.

In August, Biodiesel Magazine reported GreenHunter had achieved over 50 percent of its 105 MMgy nameplate production capacity.

On Sept. 11, just prior to Hurricane Ike, the company reported reaching 65 percent capacity. Operations were suspended the same day in preparation for the storm.

"This is a tough time for biodiesel producers as a whole," Baughman said. "But GreenHunter BioFuels is proving that we are an exception to the norm, and that we will be long-term players in this industry."