TheBioenergySite Latest News
Biodiesel to Be Made A Huge Part of US Supply
US - One of largest biodiesel companies in the US opened its first Texas plant Wednesday in a continuing bid to make biodiesel a bigger part of the U.S. fuel supply. Renewable Energy Group's 35-million-gallon-per-year plant in Seabrook will give the Ames, Iowa-based company a strategic hub on the Gulf Coast for distributing the alternative fuel through the South, as well as to export markets overseas.
Initially, the firm will produce clean-burning biodiesel fuel from soybean oil, canola oil and animal fats. Within a few years, however, it hopes to use cheap and abundant algae oil through a proprietary process it hails as a breakthrough.
The grand opening of the Seabrook plant, however, finds Renewable Energy Group placing yet another bet on the future of an industry with an uncertain outlook.
U.S. biodiesel producers have been hammered in recent years by rising vegetable oil prices, cutting sharply into profits. Chron.com reports that the sluggish U.S. market for the alternative fuel also has pushed many domestic producers to curtail production or export biodiesel to Europe, where it commands a higher price. But Renewable Energy Group executives said if the industry is going to keep growing, it must convince customers that it is no longer an upstart business.
It also must make the case more forcefully that biodiesel can play a role in reducing U.S. oil consumption, cleaning the air and providing "green collar" jobs — work in environmentally friendly industries.
"We really believe that biodiesel and ethanol and wind and solar are going to change the way we look at the energy complex in the U.S.," said Jeffrey Stroburg, the firm's chairman and chief executive.
The Seabrook plant, known as REG Houston, is the ninth biodiesel production site owned or managed by Renewable Energy Group. Added up, the company either produces or markets more than 300 million gallons of biodiesel per year, about half of U.S. production of the fuel.
The plant is one of several biodiesel plants to set up along the Houston Ship Channel in recent years, following projects by Green Earth Fuels, GreenHunter Energy and others. Producers have chosen sites there for the area's vast rail and barge access and its proximity to major fuel distribution pipelines and storage terminals.
Getting biodiesel efficiently to its users is vital as the industry continues trying to make inroads into the nation's well-established fuel system, said John Urbanchuk, a Wayne, Pa.-based agricultural economist with consultant LECG.
"The biggest impediment to increasing biodiesel usage today is distribution," he said.
In the U.S., biodiesel is made chiefly from soybean oil and is blended at low levels with standard petroleum diesel to help reduce crude oil consumption and lower tailpipe emissions. Today, it is mostly sold directly to government and commercial truck fleets, though there are also a small number of pumps that sell biodiesel blends at fuel stations nationwide.
In 2007, U.S. biodiesel production first hit the 500 million gallon mark, 10 times what it was in 1999, according to the National Biodiesel Board, an industry trade group. Yet domestic producers have plant capacity to produce about 2 billion gallons annually in 171 plants in 40 states, the group said.
Energy legislation signed by President Bush in December gave the biodiesel industry a boost by mandating quantities of biodiesel that must be blended into the fuel supply and future targets. It requires 500 million gallons in 2009, growing to 1 billion gallons in 2012.
To accelerate adoption, companies that blend the fuel are eligible to receive a $1 per gallon federal tax credit.
Yet the industry continues to face "teething troubles" of integrating biofuels into the fuel supply chain, how blending should take place and how different grades should be accommodated, consulting firm Accenture said in a biofuels study released this week.
"The challenge for the biofuels industry is to carve out its place and to become as global and efficient as possible" before improved biofuel technologies arrive, the study concluded.
TheBioenergySite News Desk
Latest Bioenergy Industry News
Schafer Leads US Delegation to Brazil Conference
USDA Invites Applications for Biorefinery Loans- Biofuels Not to Blame for Food Price Rises
CAP Health Check Will Help Farmers- Energy Diversification and Climate Change
Immediate Reform of UN Body Urged- Project Breaks Solar Efficiency Record
- Ethanol Agreement Between China and Brazil
Ethanol from Sugar for Angola- Biodiesel Plant Opens in Danville
