Two Conflicting Messages

By Ron Kotrba | August 19, 2009
Coverage in this month's issue illuminates an interesting phenomenon. On one hand, the banking collapse and recession have crippled lending to the point where many would-be successful biodiesel plant projects are "on hold." It doesn't help that uncertainty over the fuel standard implementation is ongoing, without indirect land use considerations, thanks to some of your hard work. But some key participants tell me they do not expect the final rule to come out until well into 2010, not in January, as hoped. Nevertheless, associate editor Nicholas Zeman writes a feature in this issue on proposed projects, called "Future Destinations," which looks at plant projects-some slowly moving forward while many others are on hold. And despite the message of a fringe environmental element spewing sentiment on the evils of first-generation biofuels, this should be a promising time for building out and maturing the biodiesel industry. Consumers and the government now seem to fully recognize that energy independence and climate change mitigation are necessary for the health of the nation and the planet. But the bankers are not lending like developers would like.

So there's an obvious and clear financing issue today. On the other hand, quite a few biodiesel plants just opened their doors for business. It's clearer than ever that there is no "normal" in this industry, which might partly explain why it appeals to me-some of my friends and colleagues say I'm not normal. But a couple of these new facilities aren't producing methyl esters. One is using thermal depolymerization to make a renewable diesel product. Another existing biodiesel refinery, Healy Biodiesel in Kansas, is retrofitting its plant in a partnership with tech provider Cetane Energy to hydroprocess multifeedstocks into green diesel. These newly opened plants range in size from a couple of million gallons, such as the Milligan Bio-Tech plant in Canada, to the large-scale Crimson Renewable Energy LP plant in California, a 30 MMgy biodiesel and glycerin refinery. Another facility, Ever Cat Fuels of Minnesota, is using the novel Mcgyan process to make biodiesel. Susanne Retka Schill writes a feature article, titled "New Systems and Strategies," in this issue, profiling several of these new biodiesel producers. The headline really says it all.

So how does one reconcile these two divergent situations, the finance freeze and a string of plant openings? I can speculate. Maybe some of these projects secured their finances well before things went completely bad. Maybe others are privately financed within a larger parent corporation. Others yet just may be more successful business people, financially more savvy than their competitors. Some plans, of course, are simply more sound than others. Then there are those who say it's not what you know, it's who you know, and sometimes that is true. Whatever the reasons-and quite possibly what's going on is survival of the fittest-it's certainly an interesting occurrence, and time, in this business.

Ron Kotrba
Biodiesel Magazine
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