Re-emerging Growth

Evolving industry translates into added efficiencies, market drivers
By Bryan Sims | October 25, 2011

While operational economics may be difficult for some in the biodiesel industry, others, such as Keystone Biofuels LLC, a 20 MMgy multifeedstock facility in Lower Allen Township, Pa., are finding that favorable market conditions, spurred on by state and federally mandated biodiesel volume requirements coupled with the $1 per-gallon federal biodiesel blender tax credit and sustained Renewable Identification Number prices, are creating ideal opportunities to reinvest in their facilities by expanding staff or making significant plant upgrades.


Keystone President and owner Ben Wooten tells Biodiesel Magazine that plant upgrades were always a focus since the company moved its production facility from Shiremanstown to Lower Allen Township in January. The efficiency upgrades made at the plant, according to Wooten, include a methanol recovery system for recapture of methanol in biodiesel and glycerin for reuse, in addition to switching from water-wash to dry-wash finishing. He adds that the installation of demetholizer equipment will increase production capacity from 20 MMgy to 60 MMgy. While the plant is operating on the new upgraded equipment, Wooten adds that he intends to have the plant operate at half-speed through December to monitor performance before adding 14 new employees in a second shift that will monitor the increase of production volume by early next year.


“When you go through the experience of a new industry, you learn a lot very quickly,” Wooten says, adding that he’s already sold out of product through the end of the year. “With a new plant, we were able to do the things we wanted to have that we couldn’t have in the old plant.”


Wooten says the plant size increased  from 15,000 square feet at its old Shiremanstown site to 60,000 square feet in Lower Allen Township. The new plant also features a 26-car rail spur for improved load-in and load-out of product, built-in containment with steam for use during the winter and an additional 1.2 million gallons of biodiesel storage, adding that he managed to finance the upgrades without bank financing.


“That was the biggest challenge,” he says. “Most of the money came through equipment leases and then we sold a small stake in the company to some private investors to raise some capital to finish off what we were doing.”


In Nevada, Biodiesel of Las Vegas has resurrected its 4 MMgy production facility outside of Las Vegas. The plant, which operated from 2004 through 2008, had closed due to the economic downturn. Today, BLV, a subsidiary of parent company New-Com Inc., has reinvested $65 million in equipment and infrastructure upgrades in order to operate more efficiently and economically heading into 2012, according to Ryan Geurts, marketing specialist for BLV.


The plant has its own rail yard for efficient delivery of inbound and outbound product and the company plans to incrementally increase production capacity to 15 MMgy by the end of next year, Geurts says, adding that the company has already taken pre-sell orders for biodiesel and negotiations with high-profile strategic partners are also in the works.


“We’re getting a lot of inquiries and there’s a lot of excitement even with local consumers,” Geurts says, adding the plant is expected to be in full production by end of the fourth quarter. “We’re not open to the public in that sense, but to see that people are jumping onboard excited about an alternative fuel like that makes us feel good about the market.”

 
 
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