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Kentucky biodiesel plant to be world's largest

Dargo

Like a bad penny...
GOLD Site Supporter
This plant will be only about 40 minutes from where I live. I've been burning biodiesel for a couple of years now and can't tell any difference. The local thought process is that as the prices of petroleum based fuels continue to rise and their supplies lower, the biodiesel option will be the answer for the future. Here is an article from my local news:

Owensboro Grain Co. on Thursday ceremonially broke ground for what it said will be the nation's largest biodiesel plant.

The multimillion-dollar plant will convert soybean oil into diesel fuel that advocates said will help decrease U.S. dependence on foreign oil.


"For years, American farmers have been feeding the world," Owensboro Grain Vice President John Wright told a crowd assembled at the company's 11-year-old soybean refinery on Ewing Road on Owensboro's West Side. "Now they'll be fueling the world."

The plant should also provide a new market for soybean farmers in Western Kentucky and Southern Indiana.

The company said the plant will consume at least 50 million bushels of soybeans per year to produce 50 million gallons of biodiesel.

Wright said most of those soybeans will be purchased from area farmers. Owensboro Grain has decided to use only virgin soybean oil, all of it produced at its crushing plant in downtown Owensboro, then piped one mile to its refinery and biodiesel plant, he said.

"Forty-five percent of the beans we process now come from Kentucky," Wright said. "The rest come from Indiana."

He expects those areas to also provide the soybeans for the biodiesel plant.

"Farmers in the eastern half of the county will have an opportunity to deliver to it," Henderson County Extension Agent Mike Smith said. "It should stabilize the (local soybean) market and maybe even improve it."

Owensboro Grain said it "projected (an) increase in soybean prices for the agricultural community" while also creating 10 to 15 jobs at the plant.

Construction will begin this spring. The plant is expected to be in full production by mid-2007.

The company didn't announce the total cost of the plant, although Wright has previously estimated the cost at $20 million.

The project is funded in part through a $5 million low-interest loan from the Kentucky Agricultural Finance Corp.; a $1 million forgiveable loan from the Kentucky Agricultural Development Board; and $260,000 from various counties' tobacco settlement funds, including $15,000 from the Henderson County Ag Development Board.

Owensboro Grain is a 100-year-old family-owned company. It processes soybeans to produce 75 million gallons of soybean oil annually, which represents 3 percent of the U.S. soybean crush.

Biodiesel is billed as a cleaner-burning alternative to petroleum-based diesel that, as a renewable fuel, can replace some oil imports. It is typically used as an additive to traditional diesel in percentages ranging from 2 percent to 20 percent, although some vehicles can burn 100 percent biodiesel

As to not be confused as a ethanol plant, a link to this was also given Ethanol info. The idea there is that ethanol will eventually be a viable alternative as fossil fuels continue to have their issues and their prices continue to rise.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
And 200 miles north and a little west, all the rage is Ethanol & E85 fuels. Personally I like diesel, so biodiesel makes a lot of sense to me. Ethanol has the problem of not being transportable by pipeline. But I think that between BioDiesel and Ethanol, the corn growers in the heartland of the country are going to be the big winners. For stock tips, ADM looks like it might be in good shape, Bunge is probably a top pick as they are in a position to capitalize on corn and sugar based fuel conversions.

Today Business Week published this article about Ethanol fuel.

http://www.businessweek.com/technology/content/may2006/tc20060519_225336.htm

MAY 19, 2006 News Analysis By Alex Halperin

Ethanol: Myths and Realities

Ten questions -- and answers -- about the fuel that's supposed to save the economy

With high gas prices making alternative fuels increasingly attractive, no alternative fuel has received as much attention as ethanol. Some hail the fuel, which can be derived from plants including corn, wheat, barley and sugarcane, as a savior of American energy policy, while others see it as a fad popularized by its heavily subsidized corporate backers. *


The reality is complex. Though still a tiny industry compared to gas, ethanol could become a more prominent part of the U.S. and world fuel supply in coming years.

Still, as ethanol's public profile rises, there's plenty of misinformation swirling around and a host of questions. What exactly is ethanol? How is it made and used? And is it really a viable alternative to gas? Here's what you need to know now.

What exactly is ethanol?
The fuel is derived from plants through a fairly straightforward process. In one common method Corn, is first ground into a fine powder, mixed with water, and then heated. An enzyme is then added to convert the mixture into sugars before yeast is added to ferment it. The resulting liquid, called "beer," is about 10% alcohol. A distillation process then separates the alcohol from the rest of the mixture before the remaining water is removed. The result is essentially pure alcohol. A small amount of gas is added to render the liquid undrinkable. Then the fuel can be used by itself or as a supplement to gasoline to power cars.

Ethanol has three advantages, at least in theory: It's renewable, it can be domestically produced, and it burns cleaner than gas. The world's largest producers of ethanol are the U.S., which makes it primarily from corn, and Brazil, which mashes the stuff out of sugarcane.

Beyond high gas prices, why is everyone talking about ethanol?
It's becoming an increasingly important part of the fuel supply, and has the potential to become still more crucial. President George W. Bush and members of Congress have expressed support for ethanol use. And this spring, refiners in parts of Texas and the Northeast have been replacing a gasoline additive called MTBE (for methyl tertiary-butyl ether) with ethanol. MTBE, a chemical used to oxygenate fuel, can contaminate drinking water. And Ethanol which does not present the same danger, can serve the same purpose in fuel.

That's not all. The 2005 energy bill requires that the U.S. boost its ethanol production to 7.5 billion gallons by 2012, up from about 4 billion in 2005. This sounds like a whole lot of ethanol, but bear in mind, last year the U.S. slurped up almost 140 billion gallons of gas.

Are there any problems with ethanol?
Oh, yes. Ethanol can't travel in pipelines along with gasoline, because it picks up excess water and impurities. As a result, ethanol needs to be transported by trucks, trains, or barges, which is more expensive and complicated than sending it down a pipeline. As refiners switched to ethanol this spring, the change in transport needs has likely contributed to the rise in gas prices. Some experts argue that the U. S. doesn't have adequate infrastructure for wide ethanol use.

Also, ethanol contains less energy than gas. That means drivers have to make more frequent trips to the pump.

Doesn't producing ethanol on a large scale use a great deal of energy?
Yes. Some ethanol skeptics have even argued that the process involved in growing grain and then transforming it into ethanol requires more energy from fossil fuels than ethanol generates. In other words, they say the whole movement is a farce.

There's no absolute consensus in the scientific community, but that argument is losing strength. Michael Wang, a scientist at the Energy Dept.-funded Argonne National Laboratory for Transportation Research, says "The energy used for each unit of ethanol produced has been reduced by about half [since 1980]." Now, Wang says, the delivery of 1 million British thermal units (BTUs) of ethanol uses 0.74 million BTUs of fossil fuels. (That does not include the solar energy -- the sun shining -- used in growing corn.) By contrast, he finds that the delivery of 1 million BTUs of gasoline requires 1.23 million BTU of fossil fuels.

Producing ethanol could get more efficient soon as new technologies help farmers get more corn per acre of land and allow ethanol producers to get more of the fuel from the same amount of corn. The companies developing new corn technologies include chemical giant Dupont (DD) and Monsanto (MON), which sells genetically modified seeds as well as chemicals for protecting crops.

So where can I find ethanol?
There's a good chance you're using it already. It's mixed into gas in many regions of the country including the corn-belt Midwest, and states like California and New York which had already banned MTBE. The regions making the transition this spring are the Northeast and parts of Texas.

Cars in the U.S. can normally drive on E10, a mixture of 10% ethanol and 90% gasoline, that is sometimes called gasohol. It's how Americans usually take their ethanol. Relatively few cars available here are "flex-fuel," meaning that they can run on much higher concentrations of ethanol. The fuel E85, which is 85% ethanol, is sold at some gas stations concentrated in the Midwest.

Is ethanol cheaper than gas?
Surprise, surprise, it isn't. The move this spring by more regions to use ethanol means that demand has spiked, driving up prices. On Monday, the New York harbor price was around $3 per gallon compared with about $2.28 for gasoline (before being mixed with ethanol). In other words, for now ethanol is helping to increase prices at the pump, not to push them down.

So ethanol production and distribution are also controlled by market forces, right?
Only to a certain degree. In addition to heavily subsidizing the ethanol produced domestically, the U.S. government levies a 54 cent per gallon tariff on imports from other countries, such as Brazil, a lower-cost producer. This, of course, discourages the U.S. from importing cheaper ethanol.

Why not eliminate the tariffs?
Well, the idea behind the tariffs is to foster domestic production of ethanol. But amid the ongoing furor over high gas prices the idea of repealing the levy has gained momentum in Washington. Though it would probably annoy ethanol producers like agricultural giant Archer Daniels Midland (ADM), removing the tariffs could have some benefits. It would help ease price pressures and would likely encourage Brazil to boost its ethanol production. However, it's probably not a short-term solution.

Brazil is undergoing an ethanol revolution far more drastic than that in the U.S. Flex-fuel cars which can run solely on ethanol are widely available and the ethanol supply is short enough that the government recently reduced the mandatory ethanol content in gasoline from 25% to 20%.

"Brazil is the model" for how ethanol can be brought into use, wrote Citigroup (C) analyst P. J. Juvekar in a recent report. But while buying ethanol from Brazil could be useful in the future, it's not going to reduce the pain of a road trip this summer.

What companies stand to benefit from increased ethanol use?
There is a crop of American ethanol producers. ADM is by far the largest, pumping out about one-quarter of the U.S. total. MGP Ingredients (MGPI) is one of the many smaller companies involved. Verasun Energy and Aventine Renewable Energy, two other producers of note, have recently filed to go public.

What can we expect to change in the future?
At present commercial corn-based ethanol comes from corn kernels. One of the more exciting ethanol prospects on the horizon is cellulosic ethanol, which can be made from a number of plant by-products, including cornstalks. Although it's unlikely to be commercially available for at least a few years, cellulosic ethanol eventually could help substantially reduce costs. In other words, your car in the future could run on the refuse of farms across the U.S.


 

XeVfTEUtaAqJHTqq

Master of Distraction
Staff member
SUPER Site Supporter
B99 is now cheaper than regular Diesel in Oregon area. A local supplier can't keep up with the demand.

Sounds like good news for the U.S. and Canada. Canada's prairies are really laughing now. They can crank out Canola in the summer and fossil fuels in the winter.

It would be nice to see a solid recycling effort for all the fried food grease used in the US too.

PB
 

Cityboy

Banned
Good old American ingenuity is at work. The bright side to the high oil prices is that it accelerates the search for alternative fuels and lubricants.
 
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