Construction Makes Headway Amid Sliding Diesel Prices

By Bryan Sims | March 09, 2009
Diesel prices continued their downward trend in February, hitting price levels that haven't been seen in several years. According to the U.S. DOE's Energy Information Administration, the price of No. 2 diesel averaged $2.19 per gallon between Feb. 1 and 23, approximately $1.20 per gallon lower than in February 2008. The New England region had the highest regional diesel price average at $2.56 per gallon, while the Midwest and the Gulf Coast regions saw prices in the $2.13-per-gallon range. According to the EIA, the national average retail sales price for No. 2 diesel stood at $2.13 on Feb. 23.

On-road diesel fuel prices, which averaged $3.79 per gallon in 2008, are projected to average $2.28 per gallon in 2009 and $2.55 in 2010. Despite the fuel price trends for diesel, biodiesel plants are still being built, and new projects are surfacing with the hope that biodiesel will eventually become cost-competitive with the petroleum-based market once again.

Two projects were added to this month's plant construction list of 17, which represent a combined production capacity of 297 MMgy. Chieftain BioFuels LLC broke ground on its 2 MMgy project in Logan, Ohio, in March 2008 and is expected to be complete by March 2009. In addition to using yellow grease as a feedstock, the plant will procure soy oil from its adjacent soybean-crushing facility, which has been in operation since September. The biodiesel plant will be expanded to 5 MMgy by the end of this year, according to President Doug Kitchen. He said the company received a substantial amount of funding from the state of Ohio for this project, which also works closely with area biodiesel producers and
Hocking Technical College's Alternative Energy and Fuel Cells program.

Meanwhile, all concrete work is complete, and most tanks are installed at Eco Energy Biodiesel Inc., a 10 MMgy plant in Adelanto, Calif. Project developers aim to start production in April, according to Chief Executive Officer Alex Mann. The plant will use yellow grease as a feedstock.

In other project news, Eastman Bio-Fuels Ltd. aims to complete construction of its 10 MMly (2 MMgy) multi-feedstock plant in Beausejour, Manitoba, in May, at which time commissioning will begin, according to President Robert Small. "We can actually see the light at the end of the tunnel now," he said. Subsequently, the company's canola crushing plant adjacent to the biodiesel facility will begin the commissioning phase in April. "We've crushed canola oil already," Small said. "We have the ability to crush about 40 tons per day of canola for oil."

Meanwhile, Terra Bioenergy LLC completed construction of its 30 MMgy plant in St. Joseph, Mo., in February. Once operational, the facility will use animal fats and soy oil as feedstocks. According to Chief Executive Officer Patrick Lappe, the plant will reach full nameplate capacity 30 to 45 days after commissioning is complete.
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