Plants come online despite tough times

By Bryan Sims | September 20, 2010
In an industry where declining diesel prices, increasing inventories and a lapse of a major tax credit continue to crimp operating profits, it would seem that the storm clouds have converged, causing many in the industry to ponder shuttering operations. Several biodiesel plants have either declared success or have successfully come online in this uncertain time.

Among those in recent months is the opening of small-scale facilities able to serve local communities. In Alabama, a 70,000-gallon-per-year biodiesel facility opened at the Enterprise Public Works Facility where it will use waste cooking oil supplied by local businesses and a high school. The plant received a $300,000 grant from Alabama Department of Economic and Community Affairs, which looked to partner with surrounding communities for feedstock access and fuel supply agreements.

In Groton, Conn., Constitution Biofuels started up operations and held a grand opening recently. The company produced its first batch of fuel, about 250 gallons, in late August, and hoped to increase production for local commercial sales by late September, according to founder and CEO Doug Dickey. The plant will use waste cooking oil collected from area restaurants and Dickey estimated approximately 3,500 gallons of waste product would be converted into biodiesel.

Large-scale plants also found new life when Renewable Energy Group Inc. reopened a 60 MMgy plant in Seneca, Ill. REG acquired the idled facility in April when its original owner, Nova Biosource Fuels Inc., went bankrupt. The multifeedstock plant features three side-by-side 20 MMgy biodiesel processing units, a technical-grade glycerin refining facility, raw material and finished product storage, and railcar and truck loading.

Evansville, Ind.-based Imperial Petroleum Inc. said that its wholly-owned subsidiary e-Biofuels LLC, which operates a 15 MMgy plant in Middletown, Ind., using animal fats and waste vegetable oils as feedstock, generated approximately $3.5 million in July alone on fuel sales of about 1.2 million gallons and, as a result, expected "to be highly profitable going forward," the company said. Fuel sales for August were approximately 1.4 million gallons with revenues of more than $4 million, according to the company.

"E-Biofuels LLC has been in a unique position to take advantage of its certification as an advanced biofuels producer to rapidly increase its market presence," said Imperial Petroleum CEO Jeff Wilson, adding that his company intends to increase the plant's maximum installed nameplate capacity to 25 MMgy and add more efficient process technology to include bio jet fuel capabilities.

Plants that suffered a different fate by closing operations include Biocardel Vermont LLC's 4 MMgy multifeedstock plant in Swanton, Vt. Best BioDiesel Cashton LLC, a subsidiary of Madison, Wis.-based Best Energies Inc., shut down operations at its 8 MMgy facility in Cashton, Wis. Both plants cited the lapse of the biodiesel tax credit being the primary cause behind the decisions to close their respective facilities.
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