By Tina Caparella
A subsidiary of Nova Energy Holding, Inc., has finalized a location and feedstock supplier for its first wholly owned biodiesel facility, which will be located in Seneca, IL, and is expected to come online in summer 2007.
The feedstock supply agreement with Lipid Logistics, LLC, an affiliate of Kaluzny Bros., Inc., a rendering company based in Joliet, IL, will provide for all the feedstock requirements of the proposed 60 million gallon per year, multi-feedstock facility. In addition, KBI Energy, another Kaluzny Bros. affiliate, has provided equity financing for the proposed Seneca plant. The investment was closed in mid-July.
“We have partnered with Nova Energy because their proprietary technology offers a competitive advantage in the marketplace,” said David Kaluzny II, Kaluzny Bros.’ vice president. “After careful study of the different technologies available in refining biodiesel fuel, we believe Nova Energy is the only company that can meet and exceed the biodiesel quality standards necessary to instill confidence in fuel distributors and OEMs [original equipment manufacturers].”
Nova Energy has purchased 54 acres in the Shipyard Industrial Park in Seneca, near Chicago, for the biodiesel facility.
“The site for our first biorefinery makes perfect sense because it has excellent truck, barge, and rail access,” said Kenneth Hern, Nova’s chairman and chief executive officer. “We are extremely pleased to have land and feedstock contracts on the table for Nova’s first biodiesel plant. We are also honored to have the opportunity to partner with Kaluzny Bros., who are showing tremendous confidence in our proprietary, multi-feedstock technology.”
Nova Energy has also signed a biodiesel sales agreement with ConAgra Trade Group, Inc., who will provide selling and outbound logistics services for the Seneca facility.
A second agreement Nova signed with ConAgra Trade Group will have ConAgra procure the vegetable oil and animal-based feedstock requirements for a Nova-owned biodiesel facility to be located in Oklahoma at a site to be determined. The agreement also has ConAgra selling the biodiesel fuel and managing the logistics for the facility. Engineering and procurement for the Oklahoma facility has already been initiated by Nova with respect to long lead-time items, such as processing equipment. The company expects to have the biodiesel plant completed in 2007.
Shortly after these agreements were put in place, Nova changed its name to Nova Biosource Fuels, Inc., to better reflect the core of the business.
“The board wanted the name of our company to emphasize that we produce renewable fuel products from animal and vegetable-based fats, oils, and greases,” said Hern. Nova uses a patented, proprietary technology that was developed by engineers at Biosource Fuels, LLC, which was acquired by Biosource America shortly before the launch of the reorganized Nova.
Millions in Federal Grants Awarded…to Soy Users
The U.S. Department of Agriculture (USDA) doled out $17.5 million in Renewable Energy and Energy Efficiency Program grants to 375 recipients in 36 states in late August. Nearly $3 million of those grants will be used toward biodiesel produced from soybeans.
Five recipients received the maximum grants allowed, $500,000 toward the construction of biodiesel facilities. Alabama Bioenergy, LLC, in Alabama will use the funds to purchase, install, and construct a 47,000 gallon per day biodiesel facility. Newly opened Integrity Biofuels, LLC, in Morristown, IN, will spend its grant on a “renewable energy system” using soybean oil produced by neighbor Bungee. The facility, which opened August 1, 2006, can produce up to five million gallons per year with plans to increase that capacity in the near future.
Global Fuels, LLC, in Missouri, will use its grant to construct a three million gallon per year biodiesel plant, while Northwood Mills, LLC, in North Dakota has earmarked its $500,000 grant toward the $3 million construction cost of a three million gallon per year biodiesel plant. The Northwood facility will use oil from the company’s adjacent soybean crushing plant that is currently under construction and slated to open early next year.
Northeast Nebraska Biodiesel, LLC, is spending its endowment on a biodiesel facility in Scribner, NE, capable of initially producing two million gallons of fuel per year with the infrastructure in place to increase that production to five million gallons per year. The plant is being built adjacent to the Nebraska Soybean Processing facility and will partner with additional Nebraska-based soybean crush facilities for their feedstock.
Another USDA grant recipient was Northern Biodiesel, Inc., in New York, who received $259,245 towards the construction and operation of a scalable five million gallons per year batch biodiesel facility that will use a variety of feedstocks, including waste vegetable oil. Smaller awards were given to users of biodiesel, including Red Lodge Ales Brewing Company in Montana, who will use their $26,390 award to install a radiant water heating system that utilizes both biodiesel and solar energy.
The 2002 Farm Bill authorized the Renewable Energy Systems and Energy Efficiency Improvements program. Recipients of the funding include agricultural producers or rural small businesses, U.S. citizens, or legal residents who have demonstrated financial need. Awards are made on a competitive basis for the purchase of renewable energy systems and to make energy improvements, with the funds going to pay up to 25 percent of the eligible project costs.
Several large state grants were also recently awarded to soy-based biodiesel producers in Illinois. Biofuels Company of America, LLC, received approximately $4.8 million in Opportunity Returns grants to construct a new $30 million biodiesel production facility near Danville that will use soybean oil to produce 45 million gallons of biodiesel per year. Stepan Company was awarded a $3 million grant for a nearly $24 million expansion of its existing biodiesel production facility near Elwood that will more than quadruple production from its current 10 million gallons per year to 49 million gallons per year. The new plant will use about 35 million bushels of soybeans annually.
Central California Chosen for New Plant
The Port of Stockton in California’s central valley has been selected as the location for Community Fuels’ new five million gallons per year biodiesel plant. The Stockton Port Commission approved the lease of a multi-acre site adjacent to a 40,000-square-foot warehouse space that has multiple rail spurs. Target date for plant completion is second quarter 2007.
Community Fuels will initially import soy and canola oil from the Midwest for use as feedstock in production, but the company hopes to partner with local agricultural and food manufacturing industries to develop a regionally appropriate feedstock supply. The plant is designed as multi-feedstock, and Community Fuels’ Chief Executive Officer Mortenson said they welcome renderers to contact the company about supplying their products.
BDI Going Public
BioDiesel International AG (BDI), one of the world’s leading manufacturers of biodiesel production plants, was scheduled to go public September 25, 2006. The company commissioned Sal. Oppenheim Jr. and Cie. KgaA to be global coordinator and sole bookrunner.
BDI shares are being offered to investors in the context of a public offer in Germany and Austria as well as via private placements in other European countries. The objective of the IPO is to strengthen the company’s equity base and to fund the planned international growth.
Sales in fiscal year 2005 were 14.6 million Euro, up from 5.6 million Euro the previous year. BDI currently has about 80 employees.
Eastman to Sell Arkansas Operations
Eastman Chemical Company has entered into a definitive agreement with Viceroy Acquisition Corporation for the sale of Eastman’s Arkansas-based wholly owned subsidiary, Eastman SE, Inc., which includes the company’s Batesville, AR, manufacturing facility. The Arkansas facility has been a part of Eastman since the late 1970s.
Besides specialty organic chemical products, Eastman SE also manufactures and markets biodiesel fuels.
Damaged Plant Opens
After suffering an explosion that killed one worker in early July, a New Plymouth, ID, biodiesel facility has begun production.
In early July, Blue Sky Biodiesel was just finishing up converting an old fruit warehouse into a biodiesel facility when fumes from a 25,000 gallon steel storage tank containing about 30 to 40 gallons of glycerin and methanol ignited after employee Blaise Black lit his cutting torch. Black died in the explosion. In mid-September, the company held a news conference announcing the start of production and where Idaho’s governor signed a proclamation naming September “Renewable Fuels Awareness Month.”
“I am excited to see this plant in operation again,” said Idaho Governor Jim Risch. “The perseverance that has been shown after such a terrible tragedy is inspiring. Renewable fuels are our future, here in Idaho as well as the rest of the world. We must ensure that we coordinate state efforts with private industry, such as Blue Sky, to explore our renewable resource options for a future of energy dependence.”
Blue Sky will market its own biodiesel and has overseen all aspects of construction and process engineering for the New Plymouth facility. Reports are that initial production will be around two to four million gallons per year, with the potential to produce up to 24 million gallons per year.
Griffin Industries Receives Accreditation
Griffin Industries, a renderer and biodiesel producer headquartered in Cold Spring, KY, recently achieved BQ-9000 accreditation, a voluntary fuel quality assurance program administered by the National Biodiesel Board. The program includes procedures for fuel storage, handling, and management aimed at ensuring biodiesel fuel quality throughout a producer’s distribution system. The program also creates a comprehensive quality assurance policy whereby fuel is consistently produced in accordance with ASTM International specifications.
Griffin has been producing biodiesel since the late 1990s.
Jeep to Fuel Grand Cherokee with B5
The Chrysler Group will ship its diesel-powered 2007 Jeep Grand Cherokee with a blend of five percent biodiesel from the factory. The move builds on a similar program implemented with the company’s Jeep Liberty common rail diesel (CRD).
The new Grand Cherokee features a 3.0-liter CRD engine built by Mercedes-Benz. The clean diesel technology improves fuel economy by an average of 30 percent and reduces carbon dioxide emissions by up to 20 percent. The Grand Cherokee CRD will be manufactured at the Jefferson North Assembly Plant in Detroit, MI, and will arrive at Jeep dealerships in the first quarter of 2007. Peter Cremer North American of Cincinnati, OH, will supply the biodiesel.
More Celebrities Tout Biodiesel
The biodiesel industry has benefited from the support and publicity by celebrities such as actress Darryl Hannah and country singer Willie Nelson. Now two more well-known faces are joining the act.
Actress Julia Roberts and NASCAR driver Rusty Wallace have joined a new advisory board of Earth Biofuels, Inc. Roberts will chair the newly formed board that will provide guidance to the company’s senior management on key issues and serve to broaden awareness of biofuels on a national scale.
Both join Earth Biofuels Board of Directors members Nelson and Oscar-winning actor Morgan Freeman in promoting the use of renewable fuels and the Dallas, TX-based biodiesel producer.
“It is very important that we expand our use of clean energy and make a long-term commitment to it,” Robert stated. “Biodiesel and ethanol are better for the environment and for the air we breathe.”
“As someone who has spent his life racing cars, I understand the importance of cleaner burning fuels that provide improved efficiency, while also helping to reduce the nation’s dependence on foreign sources,” Wallace said. Both celebrities accepted Earth Biofuels’ invitation to become spokespersons for the company and serve on the board.
New Use for Glycerine in Feed?
Glycerine, a by-product of biodiesel production, may be used as a dietary supplement for growing broiler chickens, according to research by University of Arkansas Division of Agriculture poultry scientists. Finding new uses for glycerine is becoming increasingly important as biodiesel production increases, said Park Waldroup, poultry nutritionist for the university’s Center of Excellence for Poultry Science.
The growing production of biodiesel will soon overwhelm traditional uses for glycerine in cosmetics and other products, Waldroup added. So he and his research group are exploring the value of glycerine as an energy source in typical U.S. broiler diets.
“Glycerine is recognized as a safe feed additive,” Waldroup said. “It is a pure calorie source that can provide energy to a body for maintenance and growth.”
In a short-term preliminary study, Waldroup and his research group found that they could feed up to 10 percent glycerine to chicks up to 16 days of age without impairing performance. This was followed by a full-term feeding study with chicks grown to market age to evaluate the effects not only on live performance but also on meat quality.
“Results of the study showed that diets with five percent glycerine supported good performance, but when 10 percent was added to the diets the flow rate of the feed was slightly reduced, hampering feed intake,” Waldroup said. “Neither level of glycerine had any adverse effects on meat quality.”
Results of these studies indicate that glycerine could be used as an energy source for broiler diets, Waldroup said, but additional research is needed to evaluate quality issues associated with its use and the effects on such features as feed texture and pellet quality.
Piedmont to Open in North Carolina
Piedmont Biofuels Industrial, LLC, was scheduled to open North Carolina’s first biodiesel production plant in late September.
Although considered on the small size at just one million gallon capacity per year, the commercial-scale facility is capable of using multi-feedstocks and plans to initially use local rendered chicken fat from the state’s plentiful supply. The project was funded in part by the state energy office and the North Carolina Department of Administration.
Biodiesel Bulletin - October 2006 Render