Web exclusive posted June 13, 2008 at 9:54 a.m. CST

At a time when most biodiesel producers are sitting idle and reconsidering their business models, two Louisiana fishing buddies are confident they can operate a successful biodiesel business – and can't wait to prove it. David Groner and Michael Valls, co-owners of Sustainable Fuels LLC in New Iberia, La., have been working for the past two years to open their yellow grease-to-biodiesel facility in New Iberia, La.

Valls, who is an oil industry professional, had been experimenting making biodiesel in his backyard before the two friends decided to get into business and produce an environmentally-friendly fuel at the commercial level. Despite rising feedstock costs and lackluster industry support, they have been able to continue moving forward and are nearing the completion of financing for the plant.

"It's been an educational process," Groner said. "Let's face it - America is just now becoming aware of biodiesel as a truly alternative fuel. Louisiana is no different than any other place in the country. People are just not that familiar with it. They are familiar with ethanol and that has both good and bad benefits. We've had to explain why we're different and why biodiesel is not like ethanol."

Groner said the plant has been leased and the building has been built. They're now just waiting to close financing so they can finish the infrastructure and tanks, as well as firm up the technology that will be used to produce biodiesel from their chosen feedstock. Groner and Valls hope to begin producing 5 MMgy in January 2009 – and gradually increasing production up to 20 MMgy if demand allows for it.

Restaurants in southern Louisiana's major metropolitan areas, including New Orleans, Lafayette and Baton Rouge, will provide the yellow grease which will be collected and transported to the plant by local collection companies. The strategic location of the plant also allows access to feedstocks from the ports of New Orleans and Houston. "We'll be in a unique position because as feedstocks become available from South America, such as jatropha, palm oil or coconut oil…anything that becomes available that is cost-effective…because of our location on the Gulf of Mexico we'll have a good chance to have access to those feedstocks," Groner said.

The two businessmen don't appear to be queasy about an unstable biodiesel market. According to Groner, they can sell "every drop within 100 miles of the plant." He said south Louisiana has a lot of salt mines, many of which have contacted the company with interest in using B100 in their mining equipment "for obvious reasons. Their workers use diesel equipment in the salt mines and breathe the air and would like the benefit of breathing clean air," Groner said. "Combine that with the oil industry and that's an entirely untapped market that nobody's thought about. The oil industry operates thousands of drilling rigs in the Gulf of Mexico that all run on diesel engines or generators and fuel for boats to run the operations." He added that quite a few of those companies want to use biodiesel for its health and environmental benefits, in addition to the added lubricity that biodiesel can offer to equipment. "There's going to be a synergy of sorts down here between the good 'ole oil industry and the new biodiesel industry that will be positive for both of us," Groner said.