October 17, 2011
Oklahoma

Energy plant construction stalled, not dead

By D.E. Smoot, Phoenix Staff Writer, muskogeephoenix.com 15 October 2011

Private investors put the brakes on plans to build a wind turbine tower manufacturing plant at the Port of Muskogee.

An Eagle Claw Fabrication executive said while construction of the $30 million plant has been put on hold, “the project is not dead.”

“I think we will see a shovel in the ground about the middle part of 2012,” Tom Word said about the construction project. “It may not be the wind tower plant, but we will have something there next year.”

Word, Eagle Claw president, said sluggish economic conditions and Washington gridlock contributed to private investors’ hesitation to fund the alternative-energy project. The political fallout from the federal investigation of Solyndra, a California company that makes solar panels, didn’t help either.

“There are a lot of issues being thrown in front of us as we try to get into the wind energy industry,” Word said. “There are certain things you just can’t compete with. … Until we get an overall energy policy that makes sense and levels the playing field … there will be a lot of jobs that won’t be created.”

Word said growth in the oil and natural gas industries, however, has opened up opportunities for steel fabricating companies. Those opportunities include plans to construct a plant at the Port of Muskogee adjacent to where the Eagle Claw plant eventually will be built.

Word Industries, another company Word oversees, is leasing space in Tulsa where the company is fabricating piping and metering equipment for the oil and natural gas industry. That work, Word said, could be moved to the Port of Muskogee once a facility is built there.

Word said that plant would be much less expensive to build because the equipment needed is not “as capital-intensive” as that needed to construct wind-turbine towers. The work, however, is more labor intensive and could produce more jobs than Eagle Claw could initially.

When Eagle Claw announced plans to build at the port, the company anticipated hiring up to 175 people at wages of up to $23 an hour. The wind turbine plant was expected to be built in three phases on a 44-acre tract being leased by Eagle Claw for 25 years.

The lease, which requires construction to begin by Dec. 31, will have to be modified in order to avoid default by Eagle Claw and a nullification of the contract.

Scott Robinson, director of the Muskogee City-County Port Authority, said he has been working with Word to avoid the default, which both men agreed is not the result they want to see.

“They are committed to this project,” Robinson said about Eagle Claw’s plans to build some type of fabrication plant at the port. “They want to build the tower plant, but those priorities may have changed due to conditions in the marketplace. It may be that plans for a traditional fabrication shop will be moved to the front burner until conditions in the wind-energy industry improve.”

Because of the probable construction delays, Robinson said Eagle Claw officials will have to request additional time to start building at the port. In every other way, Robinson said, Eagle Claw is in compliance with the 25-year lease.

It was unclear this week how the change in plans would affect a $650,000 grant promised to Eagle Claw by the Muskogee Community Foundation. The grant – $50,000 of which was allocated to the company earlier this – was awarded about a week before the company inked its deal with port authorities in July 2010.

Frank Merrick, president of Foundation Management, said grant allocations are triggered by certain events like signing the lease with the port and completing various phases of construction.

“When their money is in the deal, that’s the only way it’s going to work for us,” Merrick said about the foundation’s grant-funding policies.

Merrick said Eagle Claw’s change in direction from alternative energy to the oil and gas industry would not necessitate a change in the grant.

“It’s all about the number of jobs and what kind of job those are,” Merrick said. “If the terms change very much, we have a policy of bringing it back before the board. If it’s simple tweaking, then we can do that at the committee level.”

URL to article:  https://www.wind-watch.org/news/2011/10/17/energy-plant-construction-stalled-not-dead/