$27 million dream project (and $300 million in overall investment) ends with decommissioning
Ottawa Construction News staff writer
Ottawa’s construction industry shared the ground-breaking excitement when Plasco Energy started work on a $27 million demonstration facility at the city’s Trail Road Landfill in 2006. While there have been many larger projects before and since, subtrades, suppliers and general contractor PCL purchased advertisements celebrating the project in an enthusiastic eight page-supplement in the dead of winter for Ottawa Construction News’ January 2007 issue.
In February, 2014, the story came to a grinding end when Plasco filed for creditor’s protection after raising more than $300 million over nearly a decade, as the City of Ottawa walked away from its contract to provide the waste and pay for what should have been a full-scale plant’s operating costs.
City officials say the contract with Plasco gives the company 18 months to decommission the site. The city has $300,00 in decommissioning security, which it can use to complete the process if Plasco fails to do so.
The 2007 OCN article described the Plasco initiative as an idea that “appears to be science fiction fantasy.”
Waste would go in the front and be vaporized into “synthetic natural gas” to power thousands of homes.
“There is no smog, no mess, and both the city and private business running the facility create valuable revenue from municipal waste,” OCN reported. “In fact, there is virtually no need for any landfill sites any more – and the garbage, once a nuisance, becomes a sustainable environmental and economic resource.”
Under the agreement with Plasco, the city would have paid $9.1 million a year to take up to 300 tonnes of garbage a day over 20 years. The city would have shared in licensing royalties as Plasco exported its technology around the world.
Plasco linked to the OCN article prominently on its website, and OCN followed up with another feature in July 2008, describing interest so great that “a steady stream of domestic and international visitors tour it daily.” The company envisaged similar facilities around the world.
With hindsight, it seems that indeed the project was “science fiction fantasy” – at least in terms of successful implementation, despite years of public attention, additional funding rounds and investments, and international market development initiatives.
Now, of course, the city has to deal with the problem of how to reduce its solid waste for its rapidly-filling landfill.
City manager Kent Kirkpatrick reported that the city had received 37 submissions from around the world to an RFP for residual waste management technologies. However, only four firms provided the city with documentation demonstrating the operation of a commercial-sized facility. Kirkpatrick’s report recommended that council not proceed with the procurement strategy for residual waste management until a green bin program review is completed later this year.
The capital cost alternatives to Plasco proposed range from $50 to $275 million, with annual costs from $3 to $75 million, Kirkpatrick reported.
Meanwhile, 80 of Plasco’s employees have been laid off, with a remaining 25, including president and CEO Ray Floyd remaining to help the company transition to its next phase.
Entrepreneur Rod Bryden started the business in 2005 with eight employees. He was replaced as CEO by Floyd in Nov. 2013 but remained as executive chairman.
The Ottawa Citizen quoted him as saying he was “sad and disappointed” on the company’s failure.
The dream from 2006/07 has turned into memories of what might have been.