Biodiesel's Female Factor

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There's no practical reason for Diane Mulloy to be involved in the biodiesel business. She didn't grow up exposed to renewable fuels. She's not a soybean farmer or a fuel retailer.

In fact, she became aware of biodiesel only a few years ago. No, her only reason to plunge into the volatile biodiesel industry was personal-she wanted to make the world better for her children. "I literally saw [country music star] Willy Nelson talking about biodiesel one day and I said 'That's what I want to do. I want to open a biodiesel company,'" she says.

Mulloy, a former lobbyist and trade association executive director from Nashville, Tenn., was ready to get back into the workforce after staying at home for several years to raise her children. She had been following environmental matters and was interested in getting involved when she just happened to see Nelson speak. That was enough for her to take action. Mulloy's plan was to own a business that would not only make money, but would help reduce the world's dependence on petroleum. "The economics of it didn't make a lot of sense in the beginning, but after the Energy Act of 2005 passed, I decided to get serious about it," she says.

Before she could get started, Mulloy needed some financial assistance. She consulted her husband, who owns a chemical company in Nashville, and he agreed to provide financial support for her project. Barbara and Gary Meloni, who own the building that houses the production facility in Memphis, Tenn., and Lehman-Roberts Co., a Memphis-based asphalt and mining company, signed on to contribute the rest of the financing.

Milagro Biofuels of Memphis was born.

Mulloy says her lack of experience in the industry was balanced by her investors' knowledge of chemical manufacturing. "I wouldn't advise people who don't have any chemical or manufacturing experience to open a biodiesel company," she says. "If it had not been for one of my partners also owning a chemical company and my husband � they were instrumental in assisting me in the technology end of it."

Milagro Biofuels, the first major biodiesel company in Tennessee, opened in 2006 and was quickly operating at its goal capacity of 5 MMgy. Mulloy says, so far, the experience has been emotionally rewarding and that the company has been a "perfect fit" for her skills and ambitions.

The Inspiration
If it weren't for her three children, Mulloy says she may never have gotten into biodiesel. "We tell people regularly that we're doing it because of the kids and for their future," she says. "Our kids are our biggest cheerleaders. They've helped us market it, they talk to people about it at their schools and it's been really fun." Unfortunately, the decision to get back out into the workforce puts the same burden on women who are doing it to "save the world" as it does for those who make the same decision for less noble reasons. Mulloy still worries about being at work when her children need her, and feels guilty when she has to travel. She takes some comfort, however, in knowing that her children understand the bigger picture and why she's doing it.

"There were probably several jobs I could have taken and made more money � and been easier," she says. "But I'm sort of an issue-oriented person. I really believe in making a difference where you can. Luckily, we had the ability to put money into a biodiesel company. Not everybody has that opportunity."

The opportunity has yet to fully prove to be a wise investment, however. While 2007 was a "slightly profitable" year for Milagro, the outlook for this year is not as good. "We did this to make some extra money," she says. "Now we just have to make sure the industry does well enough that we're not going to spend [our children's] college tuitions in the process."

Women in the IndustryMulloy tells Biodiesel Magazine she's shocked at how few women share her place in the industry. "When you go to conferences you see some women in sales, but hardly any in executive positions," she says.

Despite her minority status, she hasn't noticed any gender-based discriminatory practices toward her or the company since opening Milagro, and she thinks some distributors probably enjoy hearing a female voice on the other end of the line for a change. "I may be na�ve, but I think what people see is that I genuinely believe in the product and that I'm not just trying to make money-that's not my only intention," she says. "My customers trust me and my customer service is highly important." "Whether you're male or female, as long as you believe in your product and have integrity and a good product, the industry is pretty accepting," she says.

The only gender-based discrimination she happily endures is that because women are a minority when it comes to owning businesses, female business owners have the opportunity to apply for small business grants that aren't available to men. Mulloy declined to apply for any federal assistance while generating start-up funding for Milagro because the process took so long. However, she's open to the possibility of pursuing one of the government contracts that gives preferential treatment to minority business owners. She hasn't applied yet because she doesn't need it. "[But] it's a nice safety net if I ever need that outlet," she says.

Mulloy believes her sales background has helped her gain, and keep, customers in the difficult biodiesel market. "I think one of the things that I'm doing that men aren't doing is speaking to people and organizations," she says. Her view is that educating communities about the benefits of biodiesel provides long-term benefits to the industry. She spends a lot of time traveling to schools and communities to further the public's knowledge about biodiesel in an effort to secure a market for her fuel. "I think we still have a hurdle in the Southeast because a lot of people don't understand biodiesel yet," she says. "They don't understand the need for it, or even how to use it."

Part of Mulloy's motive in speaking out to communities is to promote her company's goal of creating entirely sustainable communities. "The mission of our company is to define the future with biodiesel one community at a time," she says. "Our goal is to build several biodiesel communities across the state and the Southeast. We really believe in the local, regional model. I think that's the more sustainable model-better for the environment and better for the customers."

Feedstocks Don't Discriminate
Although there may be preferential funding opportunities for female business owners, the biodiesel feedstock market doesn't differentiate among anyone. Mulloy is sure the industry has been equally difficult lately for producers across the board-regardless of gender. She recently decided to close her plant for two months to construct another processing line so Milagro could begin using animal fats in addition to virgin soy oil as a feedstock. At press time, Mulloy was hoping the plant would be operational again by the end of May.

Many in the industry have, and continue to be, hit hard by feedstock costs. "That has been really difficult," she says. "It's not a profitable industry right now and I'm not quite sure when it is going to be. So, I'm out saving the world but I don't know if I'm ever going to make any money."

Last year, Mulloy decided to take the bull by the horns and fought to alleviate local producers' high-production costs by forming the Tennessee Biodiesel Producers Coalition. As president of the coalition she led a successful campaign to convince Tennessee legislators to mandate a 3-cent per gallon subsidy for state producers. That subsidy allowed some Tennessee producers to continue to operate, and they have Mulloy to thank.

Think Positive
Mulloy's views on the future of the biodiesel industry are shaped by her positive, go-for-it attitude. It is her opinion that EISA will be the saving grace of her adopted profession. "I think that 2009 is going to be a great year for biodiesel," she says. Mulloy told Biodiesel Magazine that 2008 is tough because of unrealistically high commodity prices, but prices will settle down by the middle of the year, setting the stage for a successful comeback next year.

Growing acceptance of biodiesel, attributable in part to Mulloy's educational efforts, should help to spur the industry. As it stands, she could sell more product than she's producing, even at the high prices currently being charged for biodiesel. She is frequently solicited to export her product overseas, but has no plans to do so. It's production costs, not demand, that are causing the industry's current problems, and Mulloy says she didn't go into business to supply fuel to other countries. "We went into business to sell it in the state of Tennessee and in the Southeast," she says. "At some point that may be our only option, but I'm still pretty hopeful."

Two years ago, when she was thinking of a name for her business, Mulloy was inspired by the nickname for soybeans-miracle beans-to use the Spanish word for miracle, "milagro," as the name of her company. As the reality of the current state of the industry takes hold, the company's name serves as a kind of irony for her. "Now, we frequently say that it's going to take a 'miracle' for the industry to pull itself out of this tough time," she says.

Kris Bevill is a Biodiesel Magazine staff writer. Reach her at [email protected] or (701) 746-4962.