Federal economic recovery funds to the tune of $160 million may be in the mix for Auburn Biodiesel Corp. in Montezuma together with the Port of Oswego.

On Wednesday, U.S. Sen. Kirsten Gillibrand pushed for funds to add new biodiesel capabilities at both locations, to potentially deliver $550 million of annual economic stimulus to the region and create up to 300 long-term jobs.

The U.S. Department of Transportation (DOT) would allocate the money through the American Recovery and Reinvestment Act of 2009. The DOT is expected to announce the recipients of stimulus money by the end of January 2010.

“It's important that it be understood that this is the Port of Oswego's application to expand at Oswego,” Auburn Biodiesel president David Colegrove said, “and secondarily at Montezuma, in so doing incorporating almost all of our project.”

The Port of Oswego would disperse and manage the money as a public-private partnership.

Colegrove said the partnership follows a model that Johnathan Daniels of the Port of Oswego worked with in Louisiana where vessels offloading barges at New Orleans would transport bulk materials up river to inland ports.

The collaboration between the Port of Oswego and the start-up port and soy processing business planned for the Archer Daniels Midland property in Montezuma would allow the inland canal port at Montezuma to expand the space and services of Oswego's deep-water port.

“If this is real, if Sen. Gillibrand can help deliver a brand-new business in Cayuga County, it will be a noteworthy business,” vice president of Auburn Biodiesel, George Farenthold, said.

The corporation has been conferring with the Port of Oswego for about two years, offering loading and storage space in Montezuma that Oswego lacked.

The Auburn BioDiesel Corp. first presented its plan to produce biodiesel fuel from soybeans to the Cayuga County Industrial Development Agency in April 2008.

Steve Lynch, deputy director of planning for Cayuga County, said the application had been accepted and that funding was the issue. He said the IDA would be pleased to work with the biodiesel project.

While the corporation continues to look for private funding, stimulus money would jump start the project.

“It would not be much of a stretch to put the plant back online,” Farenthold said, with work available to local carpenters and electricians to bring it to life.

The proposed three-phase reconstruction project includes 570 acres of the former Clinton Corn/Archer Daniels Midland corn syrup processing plant in Montezuma.

Phase I, a $70 million project, establishes a 30-million bushel soybean crushing operation to produce 30 million gallons of biodiesel fuel.

“We have a half-mile of waterfront with a beautiful dock ready for use tomorrow,” Farenthold said.

Product would move up and down the canal with only a couple of hours of barge time to Oswego.

Auburn Biodiesel Corp.'s proposal would add biodiesel fueling stations using the nanotech innovation of Cerion Energy, Inc.'s “Nanoburn” for distribution, using alternative energy technologies for transportation improvements.

The Montezuma Port would enable offloading of international shipments at Oswego directly to canal barges, transferred to either rail or truck at Montezuma.

Auburn BioDiesel would produce a “green” fuel for shipping and large pleasure boats that frequent the port. The distribution of large-volume biodiesel would benefit the shipping industry that relies almost entirely on diesel engines.

“The huge part goes to the farm community,” Colegrove said. “They need some good news with the prices of commodities wavering.”

Staff writer Kathleen Barran can be reached at 253-5311 ext. 238 or kathleen.barran@lee.net