Calumet received its first drawdown of about $782 million on Feb. 18 from its $1.44 billion U.S. Department of Energy loan.

The loan is funding construction and expansion of the Montana Renewables facility, co-located with Calumet in Great Falls and a subsidiary of Calumet.

The expansion is expected to increased Montana Renewables’ annual production capacity of sustainable aviation fuel to about 300 million gallons and increase capacity to about 330 million gallons of combined sustainable aviation fuel and renewable diesel.

The company is adding a second renewable fuels reactor, which will allow about half of the 300 million gallon sustainable aviation fuel capacity to be online by 2026, according to Calumet.

Sen. Daines: $1.44 billion federal loan to Calumet back on

The loan closed in January, but was delayed by the Trump Administration for review and was back on a few weeks later after approval from the new administration.

“DOE’s mission includes technology and domestic energy security. MRL delivers both,” Bruce Fleming, CEO Montana Renewables, said in a release. “Over the past three years DOE’s Loan Program Office conducted a rigorous due diligence process supported by experts in technology, markets, law, underwriting, and risk and MRL qualified on the merits. The incoming administration took time to verify this and we appreciate the office’s thoroughness. Today we are pleased to continue leading Montana’s largest biofuels investment and look forward to our continued collaboration with the LPO on the success of this project.”

Todd Borgmann, Calumet CEO, said in a release, “MRL proved itself as an early mover in large scale SAF production, and now we are proud to be the first project to receive the support of our new administration. I thank the entire DOE team for its continued commitment to supporting this practical and rapidly growing form of aviation fuel and for taking the time to ensure our nation’s investments are prudent ones. The expansion of Montana Renewables into one of the world’s largest SAF producers is an exceptional opportunity for regional agriculture, Montana business development, our employees and our shareholders.”

Calumet requesting new tax abatement from Cascade County on $6.1 million of equipment

As part of the project, Montalban Oil and Gas Operations submitted an underground injection control permit application for the conversion of two existing wells to the U.S. Environmental Protection Agency.

The application is to convert two existing Class II underground injection control wells in Pondera County to Class 5 disposal wells.

The wells will be used for injection of industrial wastewater received from the Montana Renewables fuels refinery in Great Falls into the Madison Formation, according to the EPA.

In response to Calumet’s federal loan being back on, the Pondera County Commission issued the following statement:

“Montana Renewables’ plans to truck high strength industrial wastewater into Pondera County for injection into the Madison Aquifer poses unacceptable risks to clean drinking and agricultural water that is essential to the health and livelihoods of so many people in our county, as well as to fish and wildlife and county roads and bridges. With the federal loan guarantee in hand, Montana Renewables no longer has any excuses to not do the right thing and treat its wastewater on-site at its refinery in Great Falls rather than continuing to try to dump it on our community. 

Montana Renewables has repeatedly indicated that a wastewater treatment facility is feasible and desirable for its operations, they just needed to secure the capital to construct it. The environmental analysis supporting the loan repeatedly indicated that Montana Renewables planned to build such a facility and that in the interim, would not dispose of any of its wastewater in Pondera County or elsewhere in Montana.

Yet despite the guarantee of well over a billion dollars in federal funding, Montana Renewables has so far refused to take its plans to dump their wastewater in our county off the table because it might save them money until a wastewater treatment facility is constructed. This is unacceptable. 

The Pondera County Commission asks Montana Renewables, a company that says it is committed to environmental sustainability and civic responsibility, to be a good neighbor. Publicly abandon your plans to dump your waste on us. Prioritize investment in on-site wastewater treatment and recycling. You now have all the taxpayer-guaranteed money you need to do so.”

Calumet, BNSF proposing train track expansion; city concerned about public access to wastewater plant, West Bank Park

The Golden Triangle Resource Council is also asking Montana Renewables prioritize completing the design and beginning the construction for an on-site wastewater facility to handle the waste from the sustainable aviation fuel process.

“Montana Renewables is in the process of ramping up production of Sustainable Aviation Fuel and needs a viable permanent solution to the waste-water side that protects our water and other local resources,” Steve Grout, a council member, said in a release. “An on-site treatment facility is the obvious answer, but it takes time to build. While we believe MRL is actively considering building this facility, we want them to make its construction a top priority. We also ask Montana Renewables to refrain from dumping waste-water in Pondera County wells in the meantime.”

The EPA hasn’t yet issued a decision on the permits and the refinery is shipping it’s sustainable aviation fuel to a permitted site in Idaho, according to the Pondera County Commissioners and the Golden Triangle Resource Council.

Calumet’s federal loan for the expansion is structured in two tranches with the first tranche of about $782 million released to fund eligible expenses previously incurred by Montana Renewables. Simultaneous with the first tranche funding, Calumet made an additional $150 million equity investment with cash on hand, according to a Calumet release.

Smelter Avenue closed as precaution due to Calumet incident

The balance of the guaranteed loan proceeds of up to about $658 million is expected to be disbursed through a delayed draw construction facility, and Montana Renewables expects this during construction beginning in 2025 through the anticipated completion of the project in 2028.

Disbursements under the guaranteed loan facility are subject to the satisfaction of certain commercial, technical, and legal conditions precedent. During construction, retained earnings from Montana Renewables are expected to supplement DOE funds to maintain debt at 55 percent of capitalization during the construction sequence. The loan has a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus 0.375 percent. Servicing of principal and interest will be deferred until the project is commissioned, according to Calumet.

Calumet closes on $1.44 billion federal loan; tax appeal cases pending at state board

The Montana Renewables expansion is expected to create 450 construction jobs and up to 40 operations jobs, according to the company.

In December, Calumet applied to Cascade County for a tax abatement on $6.1 million worth of equipment installed or put into service in 2024.

County approves Calumet tax abatement [2022]

It’s a new tax abatement allowed under a section of state law that was amended by the 2023 Legislature that includes renewable fuels as an eligible abatement.

GFPS board approves request to access protested Calumet taxes [2024]

The city and county approved tax abatements for Calumet in 2022.

Under the law changes, only the county has the authority to make the decision though it will impact city and state tax revenues; the abatement cannot be denied and county commissioners are only able to determine whether the abatement is 80, 90 or 100 percent.

Cascade County Commissioners have set a public hearing on the abatement request for 11 a.m. March 11.

County board upholds state’s revised tax valuation for Calumet [2024]

Calumet currently have several pending tax appeals at the Montana Tax Appeal Board.

Last fall, county property tax bills were delayed due to changes in Calumet’s tax valuation for 2024 that lowered the taxable values of the city, county and school district jurisdictions by about $4 million.

Calumet has two pending appeals before the Montana Tax Appeal Board for 2022 and 2023 taxes and said in Oct. 18 filings that it was still considering whether to protest its 2024 taxes.

Calumet considers appeal of 2024 taxes

Rina Sanderson, administration/legal assistant for the board, told The Electric on Jan. 14 that the board hasn’t yet scheduled a hearing as Calumet and the Montana Department of Revenue are in discussion on the cases, but was expecting an update in a few weeks.

Calumet announces $1.4 billion federal loan for expansion as regional officials question wastewater, taxes [2024]

Montana Renewables, Calumet’s subsidiary, has a pending appeal before the board of a Montana Department of Environmental Quality in which it refutes DEQ’s decision to certify eight percent of the facility as pollution control equipment, and thereby tax exempt under state law, as opposed to its request to have the entire facility certified as tax exempt.

Under state law, air and water pollution and carbon capture equipment certified as such by DEQ is tax exempt.

Sanderson told The Electric on Feb. 10 that Montana Renewables had requested, and the board granted, to vacate the hearing scheduled for May.

A conference call was held Feb. 13 to set a new hearing date and it has been rescheduled for Aug. 5-7.