Air quality rules force $64.8 million upgrade for Evergreen Packaging

The quest for natural gas

By Vicki Hyatt | Jan 13, 2014

As Evergreen Packaging Inc., in Canton eyes a $64.8 million-plus environmental upgrade project, integrating the use of natural gas is being eyed as the best hope.

The problem is finding a reliable gas supply.

Local leaders have been working to grow natural gas availability in the county for years. While doable, the process is costly. Building a larger TransCon natural gas pipeline from Greenville, S.C., to Canton and beyond was projected to cost $80 million to $100 million several years ago, said Mark Clasby, the county’s economic development director.

The most recent idea is to install powerful turbines that will force more gas through the lines, but even with that, the total cost of the upgrades required to meet the newest U.S. Environmental Protection Agency rules is still high, he said.

“The mill cannot afford to have an interruption in service,” Clasby said of the contemplated move that would switch two of its five boilers from coal to natural gas. “In layman’s terms, they need capacity and commitment. They can’t shutdown.”

With the EPA emission changes, natural gas is increasingly being viewed as the answer, and with the fracking process, it has become more widely available.

“Retaining jobs at the mill is highly important since they are the largest employer in the county, they provide good-paying jobs and they’ve been here more than 100 years. This is a high priority for us,” Clasby said.

In a December meeting with area legislators and local leaders, Evergreen officials outlined new requirements. The company expressed a willingness to put up $50 million for the upgrade, but was seeking other funding to help with the remainder of the cost. The possibility of state and even federal funding was discussed.

Rep. Michele Presnell, R-Burnsville, spoke of the possibility of a $2.8 million grant from the N.C. Department of Commerce and a $12 million grant from a program called JMAC, the state’s job maintenance and capital development fund.

The problem is, as the law stands now, only very low-income counties (Tier 1) qualify for the program, and Haywood is a notch higher. Secondly, the only funds set aside for the program in the last legislature covered three ongoing projects. No new funding was authorized.

The county’s entire legislative delegation is working diligently to find funds to partially defray the cost of the upgrade — a quest they view as crucial in helping protect local jobs in the region.

“They have a $90 million payroll and a $250 million community impact,” said N.C. Sen. Jim Davis, R-Franklin. “The EPA is giving them a hard time with the coal they are burning so we’re working on getting them a cleaner source of energy. We’re trying to determine exactly what the remedy is for their problem and that will dictate where we get potential funds. There are different pots of money at different state departments to help with cases like this.”

The challenge will be not just getting other legislators to agree putting up to $15 million in Evergreen is a good investment, but meeting a tight time frame for the upgrade.

It takes 18 months from the time the turbines to increase the natural gas flow are ordered until they arrive, Presnell said, and that doesn’t even count installation. The deadline for the new requirements is 2016.

The N.C General Assembly won’t reconvene until May, so that will be the earliest possible chance to make a pitch for state funding.

Rep. Joe Sam Queen, D-Waynesville, said he has been working on the natural gas supply issue for five or six years. While state help would be ideal, he fears the state tax cuts enacted by the Republican majority have depleted the state coffers of funds that could help economic development.

“I can read a budget,” said Queen, “and the regional partnerships that ensured funding was spread across the state were dismantled. The governor is supposed to be pooling whatever resources we had to be used for deserving projects, but if there are funds for economic development in the budget, they are completely untrackable.”

The communications director for the N.C. Department of Commerce, Beth Gargan, said she wasn’t aware of current funding or grant programs that would apply to the Evergreen situation.

Davis fears federal regulations could drive some businesses out of the country, and cited the closure of an IP paper plant in Arkansas.

“It costs a lot of money to get the last little bit of environmental benefit,” Davis said. “When we’re dealing with worldwide business, money will go where they can make an investment. If we continue to implement regulations that make it not practical to invest in North Carolina and the U.S., these business people will go somewhere else. We need to be careful the requirements we put on people are worth the cost.”

The EPA estimates the new standards will prevent 8,100 premature deaths, 5,100 heart attacks and 52,000 asthma attacks nationwide.

Because the government is imposing the requirements, Davis believes it is only fair to help Evergreen cover the costs.

“I’ve been working with leadership to do everything we can to help Evergreen. There are a lot of things going on in the background,” he said. “We have some high ranking people in the leadership helping and we are casting a wide net.”

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