Rentech Inc. will mothball a research- and-development facility in Commerce City and eliminate 65 positions after struggling to bring its alternative fuels into commercial production, the Los Angeles company said Thursday.
"We believe the technology has value and we have demonstrated that it works," said company spokeswoman Julie Dawoodjee.
Rentech doesn't have the $1 billion or more it would take to ramp up its technology on a mass scale, and potential fuel buyers haven't been willing to lock into long-term contracts that would make it easier to raise capital, she said.
A licensing deal to bring Rentech's technology to market fell apart, Dawoodjee said, and low natural-gas prices are working against alternative fuels in general.
Rentech, which was based in Denver until 2006, initially focused on coal gasification but in recent years has developed or acquired technologies that can convert natural gas and biomass, such as wood chips, into diesel, jet fuel and other products.
One of the most closely watched products the Commerce City facility developed was a synthetic jet fuel produced from natural gas. U nited Airlines successfully flew an A319 Airbus out of Denver International Airport on the fuel, raising hopes Rentech had found a viable and safe alternative.
Rentech said it will look for a buyer to take over the Commerce City facility, which opened in 2008 at a cost of $85 million. It will also sell 450 acres of land acquired in Natchez, Miss., for an alternative- fuel facility.
"We are disappointed," said Michelle Halstead, a spokeswoman for Commerce City. "They have done some innovative things."
Rentech represented the kind of advanced manufacturing firm the city wants to attract, she said. It also built on the city's historic refinery industry.
Rentech plans to take an impairment charge of $16 million tied to the closure and layoffs but will keep a core group of employees and protect its patents for the day when market conditions turn favorable.
Until then, the company plans to focus more on its more profitable nitrogen-fertilizer business, which is benefiting from low natural-gas prices.
"While our elimination of these positions is a difficult decision, today's actions will further position Rentech to drive value for shareholders by cutting R&D spending and focusing on businesses that generate strong returns, with ready markets and certainty of revenue," Hunt Ramsbottom, Rentech chief executive, said in the statement.
Aldo Svaldi: 303-954-1410, email@example.com or twitter.com/aldosvaldi