Active Energy Renewable Power would bring a handful of jobs but at what environmental cost to Robeson County?T he picnic tables at Alamac Community Park are ideal for watching log trucks yaw into the entrance of an old textile factory in Lumberton. The swings, slide and basketball court command a view of the grim and monolithic building, flanked by a dilapidated guard shack and in back, a smoke stack that pokes a hole in the sky.
This factory used to house Alamac American Knits, an erstwhile leading manufacturer of woven fabrics. But it closed in 2017, in part due to market pressures, but also because of damage inflicted by Hurricane Matthew, which the previous year dumped 10 inches of rain on the town, flooding the Lumber River until it burst its banks.
Now the 150-acre site is the home of Active Energy Renewable Power. A subsidiary of Active Energy Group, it is a publicly traded British company with a spotty project history. Aided by a half-million dollars in state taxpayer money, it is the latest entrant into the state’s wood pellet business.
To make its pellets, Active Energy would use a commercially untested technology called CoalSwitch. While these pellets burn cleaner than coal in power plants, air emissions from their manufacturing process are only estimates, their true amounts yet unknown.
Although marketed as “clean energy,” wood pellets are a dirty industry. A single pellet plant can emit tons of hazardous air pollutants and greenhouse gases each year. And because the plants consume not just “waste wood,” but also whole trees, they contribute to deforestation. Even replanting trees can’t keep pace with the destruction of wildlife habitats, releases of carbon stored in the wood, and more severe flooding in low-lying areas — areas like Robeson County.
The pellets are then are shipped across the ocean to Europe, Great Britain and even Asia. There, utilities use the pellets in lieu of coal to generate electricity, further releasing greenhouse gases into the air. Active Energy plans to ship its CoalSwitch pellets overseas for burning, but it could also sell them to a power plant in Robeson County.
The residents of Robeson County can little afford more pollution. The predominantly Native American community is already besieged by contamination, natural disasters and high rates of heart and lung disease. Within just a two-mile radius of Active Energy live 8,000 people, who would be involuntary subjects of the company’s grand experiment.F our years ago, Active Energy held a “reveal” event at its research and development facility in Centerville, Utah, just north of Salt Lake City. The company unveiled its CoalSwitch technology, which many in the energy industry viewed as a game changer, tantalizing investors who began buying stock in the company.
Testing at the University of Utah, at the Institute for Clean and Secure Energy, showed that CoalSwitch wood pellets could be burned alongside coal or as a standalone fuel in traditional power plants with no loss of heat. Utilities that chose to use CoalSwitch pellets wouldn’t have to spend millions of dollars to retrofit their facilities. And because the patented technology uses steam to explode the pellets, which resemble black kibble, to remove some contaminants, they burn cleaner than coal.
“The results of the CoalSwitch testing prove that the group’s faith in the technology and our investment in it over the past 12 months were fully justified,” Richard Spinks, then the CEO of Active Energy Group, was quoted in Biomass magazine at the time. “… [F]or the first time to our knowledge, the glass wall between coal and biomass usage within existing power generation plants has been shattered.”
However, the Institute — funded in part by the Departments of Defense and Energy, as well as the fossil fuel industry — did not test the stack emissions from a wood pellet plant itself. The tests catered only to the utility, which would buy the pellets, generating energy for itself and profits for Active Energy.
Active Energy’s air permit application to the NC Department of Environmental Quality acknowledges that the proposed process has no precedent “to calculate air emissions from the proposed sources.”
Even absent any test data, Active Energy boldly proposed that its emissions would be so insignificant that the state should exempt it from an air permit altogether. The Division of Air Quality disagreed, writing in a series of internal emails, “they have provided no empirical test data to substantiate this assertion.”
In fact, the facility is projected to emit about 25 tons of volatile organic compounds each year, well above the threshold of 5 tons to qualify for an permit exemption. Based on modeling of emissions data from two Enviva wood pellet plants in North Carolina, Active Energy would also emit nearly 2.5 tons of hazardous air pollutants annually, as well as smaller amounts of nitrogen oxides, carbon monoxide, sulfur dioxide and particulate matter, according to the state’s draft permit review.
Enviva uses a different technology than Active Energy, so the figures are only estimates. DAQ said stack testing will be required within six months after plant begins operating.
(It’s questionable whether Enviva’s data is a prudent benchmark. The company has sharply underestimated its emissions at several of its North Carolina plants. Environmental groups sued DAQ under the Clean Air Act, resulting in a 2019 settlement agreement with the state and Enviva that requires the company to install more stringent pollution controls.)
Active Energy’s emissions projections are based on a production rate of 40,000 tons of wood pellets per year. But the company has told shareholders that it expects to ramp up production to 400,000 tons annually by 2021.
“That’s a massive increase,” said Emily Zucchino, director of community engagement for the Dogwood Alliance, a forest conservation group.
Antonio Esposito, chief operating officer of Active Energy Renewable Power, told Policy Watch, without evidence, that emissions rates “will not be greatly affected by the scale of the plant.”
“In any case, all the necessary emission control systems and design will be adopted to operate the plant below any threshold required for a small permit,” he added.
“A facility of this size would represent an enormous health risk to the community and have a much higher contribution to regional environmental health concerns in the region,” Clean Air Carolina wrote in its comments to DEQ. “Active Energy Group’s permit should not be thought of as a small emitter, but as a major source, with an increasing burden on the community and ecosystem services in the area.”T he wisteria is in full flower, infusing the air with the scent of grape bubblegum. About 50 yards off Hestertown Road in Lumberton a mound of fresh dirt garnished with flowers lies in repose at the Floyd Temple No. 1 Church Cemetery. In a vast lot across the road loom piles of logs and waste, some two stories high.
In addition to its proposed wood pellet plant, Active Energy operates a sawmill here. Through its forest management affiliate, Timberlands International, and it partnership with NC Renewable Energy, which is next door, the company can control the entire supply chain, from sapling to saw log to pellet.
Like its competitor Enviva, which operates four plants in North Carolina, Active Energy has located in a rural low-income community. These industries ostensibly choose their spots based on their proximity to timber and transportation routes. But they also settle in areas where jobs are desperately needed, and where residents have less social, economic and political power to fight the environmental harm that comes with the deal.
Until Active Energy bought the old Alamac American Knits property for $3.25 million last year, the plant lay fallow. The sale was sweetened by a $500,000 state building reuse grant that the company received to improve the facility, which was constructed in 1962.
The agreement stipulates that the company has to invest $2 in permanent capital improvements to get $1 in grant money, said Channing Jones, the county’s economic development director. “Our hopes are tied to the capital investment and the jobs,” Jones said. “And that they’ll be a good partner with our community.”
It’s understandable that Robeson County leaders are searching for industries willing to relocate here. It is the second-most economically distressed county in North Carolina. When Alamac American Knits closed in 2017, 154 people were out of work. Most of those jobs aren’t returning to Active Energy. Esposito told Policy Watch that the company will create up to 50 jobs that pay $35,000 to $45,000 annually.
Nonetheless, locating this particular plant in Robeson County is yet another environmental affront to its residents. They suffer higher rates of heart disease, cancer, diabetes, asthma hospitalizations, and infant and child mortality compared with the state average.
The disproportionate environmental health burden is even heavier in the census block that includes the Active Energy plant. Ninety percent of the 1,700 residents are persons of color; two-thirds are low-income, according to the state’s Community Mapping System.
In DEQ’s environmental justice snapshot, which is neither comprehensive nor final, the state acknowledges the plant is within two miles of three schools, multiple public housing complexes, a senior citizen community, 21 houses of worship and the Robeson County Library. But it stops short of any recommendations other than “additional consultation” with the people who could be affected.
“The environmental justice analysis is too little, too late,” Zucchino said. “It doesn’t seem to impact the decision.”
In Robeson County. Lumbee tribal areas are culturally invaluable and historically significant. But polluting industries have sullied them. Within a two-mile radius of the wood pellet plant, there are 133 pollution permits and contamination incident reports, according to state records. These include landfills, concrete plants, a stone mine, old coal ash basins, hazardous waste sites and underground fuel tanks. The county is also home to industrialized livestock farms, liquefied natural gas plants, compressor stations and the proposed Atlantic Coast Pipeline.
The soil and groundwater are also contaminated in some areas, including the Active Energy property. Because a former dry cleaners failed to clean up high levels of chlorinated solvents, the Active Energy property is a Brownfields site. Deed restrictions allow only manufacturing and commercial uses there.
Similarly, groundwater at the former Cogentrix coal-fired power plant — now NC Renewable Power — contains elevated levels of cadmium, nickel, zinc, and sulfate, leftover from the unlined coal pits.
These environmental hazards are exacerbated because Active Energy’s plant lies within a 100-year flood zone, meaning there is a 1% chance of the area flooding in any given year. Hurricane Matthew and Florence inundated the neighborhood, including part of what is now Active Energy land.
Esposito said the company is “taking necessary measures to prevent flooding of the wood storage.”
Likewise, the company proposes discharging “non-contact” process water containing unlisted contaminants into the Lumber River, part of the federally designated Wild and Scenic River System. According to state records, the discharge permit expired in July 2019.
“I’m worried about the water,” said Lumber River Keeper Jeff Currie. “So many pollutants are dumped in the same river. We want our health and the river to be safe.”T he drama that unfolds on Active Energy’s online chat, where investors kvetch about the company’s stock prices and leadership, is nothing short of Shakespearean.
A small company, Active Energy is traded on the London Stock Exchange. But its financial performance has been unimpressive at best. Shareholders, most using pseudonyms, frequently squabble online over whether Active Energy can fulfill its financial promises.
The company had told investors that it would start the CoalSwitch plant in Lumberton in October 2018. But there have been delays in shipping the CoalSwitch equipment from Utah to Lumberton, as well as several failed timber deals in Canada that resulted in a large stock sell off. Company officials had also assured investors that all of the environmental permits had been obtained; the air permit has yet to be issued and the stormwater and discharge permits are still listed under textile classification, not wood products.
These events prompted one investor to call Active Energy “the greatest incompetent bunch of humans on the planet.”
Others sound more sanguine. “Yes AEG has made big mistakes & taken bad decisions but as can be seen the management team is being changed. They’ve signed some very exciting joint ventures. They’ve purchased their own massive site right in the middle of the USA biomass breadbasket.”
Active Energy company officials have said the Lumberton plant would use “waste wood,” such as tree tops and on debris on the forest floor as feedstock. But they also have touted to shareholders the plant’s proximity to hundreds and hundreds of acres of forest.
The other wild card is the joint venture between Active Energy and NC Renewable Power, which occupies the old Cogentrix coal-fired power plant next door. Active Energy could sell pellets to NCRP, which could burn them for electricity. NCRP already burns poultry waste and construction debris to generate up to 25 megawatts of electricity that it sells to Duke Energy.
Esposito, the COO of Active Energy Renewable Power, could not comment on potential wood pellet deal with the power producer, citing investment regulations. “Your request includes commercially sensitive information that cannot be divulged to the public at the moment at the risk of manipulating the share price with the obvious consequences,” Esposito told Policy Watch. “This said, as expressed in many occasions, AEG is talking and negotiating with several market operators, including domestic utilities in order to achieve commercial agreements for the CoalSwitch pellets.”
But NCRP is a major polluter with a dicey environmental history. In 2018, according to state records, the plant emitted 68 types of pollutants, including 49,789 tons of methane, 20 tons of ammonia, 57 tons of volatile organic compounds and 14 tons of very-fine particulate matter, known as PM2.5, which has been linked to heart and lung disease.
Since 2015, the Division of Air Quality has issued a dozen notices of deficiency or violation to the company for exceeding its emissions limits of several pollutants and has fined the company at least $43,000 in connection with these breaches. DAQ entered into a Special Consent Order with the company in 2017, which included the possibility of additional fines for future exceedances.
The combined emissions from Active Energy and NCRP could create a hotspot for pollution in the heart of an environmental justice community. Yet the Division of Air Quality has declined to reschedule a public meeting for the air permit. Last week, the Robeson County Commission voted to send a letter to the state urging officials to hold the meeting when it is safe to do so.
Elizabeth Haddix and Mark Dorosin, attorneys with the Lawyers’ Committee for Civil Rights Under Law, told DAQ in writing that they believe Active Energy’s draft air permit allow the company to “evade Clean Air Act and Title V permitting requirements.”
Haddix and Dorosin represent the NC Environmental Justice Network, the Robeson County Branch of the NAACP and other citizens’ groups in its comments to DAQ. “For Robeson County residents, the camel’s back may already be broken,” Haddix and Dorosin wrote. “But they remain resilient in their commitment to environmental justice and equitable treatment, and demand that DEQ and DAQ fulfill their obligations under [federal] and state anti-discrimination law.”
That includes hearing from residents who live closest to the proposed site, and who unlike Active Energy’s shareholders, have the most to lose and little to gain.