Environ-Pac

Variance

INNOVATION

7/21/20235 min read

My

To: USDA Rural Development

From: Enviro-Pac, Inc.

Re: Justification for Variance - Enviro-Pac Renewable Energy Project.

Enviro-Pac is requesting a rural area variance for a proposed renewable energy and waste conversion project to be located just outside the boundary of a designated rural zone in Newhall, CA. We believe a variance is warranted for the following reasons:

Project Location and Characteristics

The project location, while technically in a non-rural area, is directly adjacent to a qualifying rural property, namely Beal’s Cut, which is a 27 Acre parcel within our 119 Acre site with a Lat of 34.34129 and Lon of -118.508.

This property is located within the USDA eligibility area for rural properties, with a overall population of 30,727 people.

The LA County Tax Assessors Parcel Number is AIN 2827-032-002. Additional property identification is also as follows and as depicted on the map.

Land Size

County Assessors #

5.27 Acres

2827-009-008

1.93 Acres

2827-010-007

1.07 Acres

2827-010-008

5.27 Acres

2827-010-009

31.43 Acres

2827-010-012

25.62 Acres

2827-010-013

5.68 Acres

2827-030-001

13.8 Acres

2827-032-001

5.68 Acres

2827-032-002

Total Acres 118.04


.

  • The project has a functional relationship to

the surrounding rural community.

  • The project will promote rural economic development by creating construction jobs long-term employment by operating and renewable energy facilities that are aligned

with USDA Rural Development goals.

  • The project will convert 700,000 tons of solid waste pe year, from within the County of Los Angeles, into renewable energy and products. This provides environmental benefits through sustainable waste management.

  • The project will generate 72MW of renewable electricity from syngas combustion. Expanding energy infrastructure supports the rural economy.

  • No prime farmland will be impacted. The project repurposes a brownfield site replacing outdated infrastructure.

  • The project has strong community support and will not alter the historic character of Newhall. It is compatible with the surrounding rural area.

  • The State Director has indicated support for the project's variance request given its benefits.

In summary, while just outside technical rural boundaries, this project will provide significant economic and environmental gains for the adjacent rural communities in a manner consistent with USDA Rural Development programs. We believe the circumstances justify granting a rural area variance:

Justification for Variance - Enviro-Pac Renewable Energy Project

Enviro-Pac is requesting a rural area variance for a proposed renewable energy and waste conversion project located just outside the boundary of a designated rural zone in Newhall, CA. We believe a variance is warranted for the following reasons:

Project Location and Characteristics

  • The 119-acre project site is located adjacent to qualifying rural property in the Newhall area of Santa Clarita, CA. It is bounded by the rural areas of Sierra Highway to the north and San Fernando Road to the east, (Elsmere Canyon Preserve to the South).

  • Though technically located in a non-rural area, the site was previously used for industrial purposes as an oil refinery that closed in 1994. It is compatible with the surrounding rural uses.

  • The project is a brownfield redevelopment that will repurpose outdated infrastructure. No prime farmland will be converted.

Economic Benefits

  • The project will process 700,000 tons with expansions to 1,000,000 tons per year of solid waste from within the County of Los Angeles, converting it into 72MW of renewable electricity from syngas combustion.

  • 1,500 indirect jobs will be created during construction and over 500 direct jobs will be created during site operation. This provides significant rural economic development through job creation and renewable energy infrastructure.

  • The project complex includes several technologies. A $76 million tire recycling facility will produce recycled thermoplastic elastomer pellets from waste tires and plastics. There is an existing $1.2 billion, 15-year off-take agreement for this material. Additionally, facilities include a $524 million anaerobic digestion facility to process recycled green and food waste, a gasification facility to process railroad ties and telephone poles, and a pyrolysis facility to process plastics from the MSW. There is, 15-year off-take agreement that can be made available for all the fuel sources, electrical power, and pipeline grade natural gas. Additional revenue streams include tipping fees, fertilizer production, recycled metals/glass, and more. These products would generate 4.68 billion dollars over the 15-year period which would provide diverse economic stimulus for the area.

Environmental Benefits

  • The project sustainably manages solid waste from providers within the LA County Communities, with a 95% waste conversion that reduces landfill disposal and associated impacts.

  • The process results in renewable energy generation that offsets fossil fuel use. This reduces greenhouse gas emissions and supports climate change mitigation goals.

  • Anaerobic digestion will convert waste organics into useful products like fertilizer, and polished methane gas into Polished Natural Gas for pipeline injection, avoiding methane generation from landfills and offsetting fossil fuels.

Community Support

  • The project converts waste into products and energy locally, improving community sustainability. It has broad local support.

  • The site's historical industrial use makes it compatible for renewed industrial energy activities associated with the project.

  • State leadership has indicated support for the project's variance request given the significant benefits to the adjacent rural community.

  • The California ISO has reviewed the information you sent to the California ISO on May 21, 2002, regarding installation of new generation in the Newhall/Sylmar area. The project proponents propose installing up to three GE LM6000 gas turbines as simple cycle peaking units in phases. Each generating unit would have a nominal capacity of about 50 MW.


  • The information requested an ISO letter indicating the benefits of the additional MW’s available locally. We have reviewed the potential reliability benefits associated with the proposed plant and have determined that the plant would certainly benefit the State of California as a whole, for the additional MW output and there would be no reliability problems associated with the specific location.

  • Recommendations about the site in Newhall for a MRF (Material Recovery Facility) was presented to the Local City Council for Burrtec Waste Industries, Inc. The Newhall Hondo site seems to be the most preferred, receiving the highest score. The City Council approved the recommendation action of directing Burrtec to secure the site and or contract agreement for the disposal and diversion of its now exclusive collection of Residential and Commercial waste and initiate its Green/Food waste program to satisfy the new California S.B 1382 requirements. Enviro-Pac, Inc. and Forum Engineering created a joint group to work with Burrtec and other LA County collectors to divert its waste from landfills and as of January 1, 2023, the State of California under the new law California S.B. 1383 requires.

households and businesses to compost all food scraps and other organic materials, instead of throwing them into the mixed waste trash bins and subsequent ending up in the local landfills creating methane gasses. The law took effect on January 1, 2022, but from that point be phased in gradually for different locations. The goal is to reduce methane emissions from landfills and turn the organics waste into compost, mulch, or natural gas. Fines if up to $500 daily can be imposed on non-compliance in the future years.

  • Another benefit for the LA County communities is being able to comply with new laws and mitigating carbon introduction into the atmosphere, while producing the following:

    • Natural Gas - 2,573,000 MMBTU at $31/MMBTU

    • Scrap Metal – 16,425 T/Y at $140 Per Ton

    • Co2 - 64,962 T/Y at $100 Per Ton

    • Carbon Credits - 200,057 T/Y at $100 Per Ton

    • Tipping Fee MSW/ Green-Food Waste - 547,500 T/Y at $83 Per Ton

    • Electrical Energy - 72MW P Hour at $0.16 Per kWh

    • Tipping Fee Railroad Ties - 547,500 T/Y at $115 Per Ton

    • Providing an aggregate of $312,402,700.00 Annually Cash on Cash @ IRR 48% and job stability while supporting a sustainable waste management program.

In summary, while just beyond technical rural boundaries, the location, economic stimulus, environmental gains, and community benefits of this project make it highly compatible with the intent of USDA Rural Development programs. We believe these unique circumstances warrant granting a rural area variance. Please contact me with any additional questions.

Regards

Lloyd J. Prevost,

Business Development Mgr.

Date: July 17, 2023