Looking Back at 12 Months of Change

By Craig A. Johnson | August 08, 2008
Included in this issue of Biodiesel Magazine is our annual Proposed Plant List (see page 38). It includes 27 plants-a low for this third annual compilation-but the number correlates with the current state of the industry and the plant construction list, as well.

The connection between plants that are proposed and plants under construction isn't concrete. Some projects may be proposed for years as investors and builders figure out the details and consider all the options. Once under construction, however, it usually takes approximately a year to build a production facility. Still, the number of plants under construction over the past 12 months has dropped, along with the number of proposed plants. In July 2007, 51 plants were under construction, representing 1.42 billion gallons of annual production capacity. Currently, 13 plants representing 219 MMgy of production capacity are under construction. That's a 75 percent drop. The number of proposed plants dropped from 94 in 2007 to 27 in 2008. That's a 70 percent decrease in the same 12-month period. Ultimately, these numbers quantify the challenges that the industry has faced over the past year. Although these numbers aren't meant to represent the exact scale and scope of the industry, it does reflect a statistically significant trend.

Chris Hill, vice president of process concepts for Producer's Choice in Moberly, Mo., pointed to the crush facility that the company is building in addition to its biodiesel plant as the reason for its progress. "The crush plant and the biodiesel plant are going to operate separately," he said. "The way the current economic state is, the crush plant might have to carry some more of the weight now and then. Six months down the road, it might be flip-flopped." The company is also installing technology that handles oils with high free-fatty-acid contents in order to increase feedstock flexibility, which is key to the Producer's Choice business model and figures highly into its ability to continue construction. "The crush plant is definitely the determining force keeping this thing rolling. If we were a standalone biodiesel plant, I think we might have a different opinion on [continuing to build]," he said.
 
 
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