Florida Biodiesel Plant Puts Production on Hold, Switches to Refining Glycerine
Ledger, The (Lakeland, FL) (KRT): May 11--LAKELAND--Purada Processing is one of just two biodiesel plants in Florida, a cutting-edge facility that can run nonstop and produce 18 million gallons of the clean-burning alternative fuel each year.
"The increase in the price of materials that it takes to produce biodiesel has made it economically unviable to produce biodiesel at a profit," said John Kellogg, spokesman for Boston-based World Energy Alternatives, which owns Purada. "Folks are waiting for the market to change."
Prices for soybean oil -- the most common feedstock used in biodiesel production -- have more than doubled in the past two years and prices for canola and palm oil also have been rising, Kellogg said.
Industry officials attribute the high cooking oil prices to demand from India and China, where consumer incomes -- and diets -- are improving with the countries' economic fortunes. Speculators also have been accused of manipulating the market.
Nevertheless, Kellogg said Purada halted all biodiesel production by the end of last year and has switched to refining high-grade glycerine, a byproduct of biodiesel used in making cosmetics, soap, shampoo and other products.
Purada's case is hardly unique.
Cooking oil prices "are affecting other producers, unfortunately," said National Biodiesel Board spokeswoman Amber Thurlo Pearson, who estimates about two dozen U.S. plants have halted production.
Last month, the Wall Street Journal reported that ingredients costs had stalled plans for new biodiesel plants in Southeast Asia; similar to Purada, Australian firm Natural Fuel Limited has switched from biodiesel to glycerine production.
Kellogg said Purada was fortunate to already have the capacity to refine glycerine and is able to handle 10 million pounds of the substance per year. Still, World Energy had invested millions in the plant in recent years to ramp up biodiesel production and had to make staff cuts (Kellogg declined to cite specifics) to suit its current role.
While keeping an eye on soybean oil prices, Kellogg said officials are considering a switch to cooking grease, which also can be used to make biodiesel. Both he and Pearson are confident that biodiesel production will rebound in the U.S., especially because federal energy standards call for the nation to use 500 million gallons of the fuel in 2009 and ramp up to 1 billion gallons in 2012.
Domestic production of biodiesel was already at 500 million gallons last year, double the amount from 2006, according to the Biodiesel Board.
"Our plants are ready to go," Kellogg said. "If the markets line up right, we'll be ready to produce immediately."
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Author: Kyle Kennedy, The Ledger, Lakeland, Fla.
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