Texas distributor investing in biodiesel

By Dave Nilles | October 13, 2006
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A long-time central Texas fuel distributor is planning on making biodiesel a much larger part of its portfolio. Gonzales, Texas-based Johnson Oil Co. is now marketing its biodiesel-blended diesel fuel under the name TexAg BioDiesel.

The company, which has distributed fuels since 1958, already markets a variety of biodiesel blends, including 2, 5, 10, 15 and 20 percent. However, a new local biodiesel producer may help the company more aggressively market the fuel. GeoGreen Fuels, a 3 MMgy biodiesel plant, held its ribbon cutting ceremony last week in the Gonzales industrial park. Johnson Oil has an off-take agreement for a majority of the plant's biodiesel.

Brad Julian, Johnson Oil's commercial business manager, said the company is in the process of upgrading its infrastructure to handle a larger volume of biodiesel. Splash blending tanks are being installed at several Johnson Oil distribution locations. The company's corporate office and main warehouse is located in Gonzales. Distribution plants are located in New Braunfels, Pflugerville, Temple and Abilene, Texas.

Most of Johnson Oil's biodiesel customers are comprised of fleets, such as aggregate haulers, and bus and concrete companies. The company also offers B5 at a one-island truck stop in Pflugerville, which is near Austin. Julian said the company plans to begin selling B20 at that location in the future. The company is also considering a larger truck stop, although details on a specific location or construction timeframe weren't available.

Julian said biodiesel availability and quality concerns have limited Johnson Oil's offerings. The GeoGreen plant is expected to alleviate both concerns. He said GeoGreen's location should help reduce freight costs for shipping the fuel. The company currently obtains its biodiesel from in-state producers.

Johnson Oil is considering becoming a BQ-9000 certified marketer, according to Julian. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program. "Integrity of the product is what we're really concerned with," Julian said.

Currently Peter Cremer North America and Sprague Energy Group are the nation's only certified marketers under the BQ-9000 program.

Julian said consumer demand was one of the reason's Johnson Oil began carrying biodiesel. He also said customers have told him biodiesel-blended fuel creates less vibration in vehicles using ultra low sulfur diesel.

Johnson Oil is an authorized branded distributor of Exxon, Mobil and Chevron Lubricants.

Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

Posted: 2:56 p.m. CDT Wednesday, October 18, 2006
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