Red Rock Gets Flagship Venture Funding for Oregon Biofuels PlantJustin Doom
The Cambridge, Massachusetts-based private-equity firm will also advise it on acquiring additional capital needed to begin construction on the $200 million plant by midyear, Red Rock Co-Founder and Chief Financial Officer Jeff Manternach said in a telephone interview Monday. The amount of Flagship’s investment wasn’t disclosed.
Southwest Airlines agreed to buy 3 million gallons of fuel from Fort Collins, Colorado-based Red Rock, according to the statement. Red Rock was awarded a $70 million federal grant for the plant in Lakeview, Oregon, which will take about 18 months to build and use timber waste to make fuel. Declining oil and jet-fuel prices haven’t reduced the need for direct biofuel alternatives, known as drop-ins, Manternach said.
“We see the drop-in jet and diesel markets as being relatively untouched and demand for those fuels quite high from airlines and the U.S. military,” he said.
Timber waste will be used to make 12 million to 15 million gallons of the fuel annually from technology developed by Velocys Plc, Manternach said. The plant will be funded with a mix of equity and debt, he said.
“There’s still a lot of abundant forests in the area and not many competing uses for the wasted woody biomass,” Manternach said. It will be the first renewable-energy plant operated by Red Rock, which has built 10 facilities for other companies.