The First of 11 Biodiesel Plants Opens in Pennsylvania

HARRISBURG, Pennsylvania, January 9, 2006 (ENS) - A plan to build and operate 11 biodiesel production plants in Pennsylvania over the next five years was announced Friday by Governor Edward Rendell and executives from AGRA Biofuels Inc.

Speaking at the state Farm Show, the state and company officials said the first biodiesel production facility in the state started operations January 1 at Middletown, south of Harrisburg, the capital.

The AGRA plant employs 20 permanent workers, and will produce two to three million gallons of biodiesel each year. The plant was built entirely through private equity and will serve as a prototype for the company’s next 10 facilities, each 10 times larger than the current plant.

"It is clear that we need a national policy to address America’s energy needs," said Governor Rendell, a Democrat. Nevertheless, working with the private sector, Pennsylvania is going to produce its own energy and keep the money it now spends on foreign energy to make investments here that will benefit our people, businesses and communities."

Pennsylvania Governor Ed Rendell is emphasizing the importance of renewable energy for his state and the nation. (Photo courtesy Office of the Governor)

The company’s 11 production facilities will produce more than 200 million gallons of biodiesel each year, and create as many as 3,000 new jobs in the next five years.

AGRA founder and CEO Don Coccia said, "We are pleased to support Governor Rendell’s energy initiatives. We want to work hand-in-hand with the Rendell administration to develop a viable biodiesel network in Pennsylvania."

Biodiesel is a clean burning alternative fuel. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in diesel engines with little or no modifications. Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.

Biodiesel is made through a chemical process called transesterification which separates the glycerin from the fat or vegetable oil. The process leaves behind two products - methyl esters, which is the chemical name for biodiesel, and glycerin, a valuable byproduct usually sold to be used in soaps and cosmetics.

"AGRA Biodiesel executives have set up shop here because they realize the tremendous potential the state holds," said the governor. "Our commitment to renewable energy, convenient access to an abundant crop of state grown soybeans, and a well trained workforce convinced investors that Pennsylvania is a great place to do business."

Each of the 11 facilities will use virgin soybean oil, primarily from Pennsylvania farmers, to create the renewable fuel. AGRA will also use feedstock from other states shipped to the facility via rail. Once all 11 plants are operational, the process will result in increased soybean demand for farmers, and higher prices per bushel.

Soybeans can be made into biodiesel to fuel any vehicle currently running diesel with little to no conversion of the vehicle. (Photo courtesy National Biodiesel Board)

Home heating costs are rising. Residential heating oil prices are selling for $2.43 cents per gallon this week, an increase of 48.1 cents from this time last year, according to the U.S. Department of Energy.

When blended with regular fuel oil, the AGRA biodiesel will help provide fuel to low-income families participating in the federal Low Income Home Energy Assistance Program, or LIHEAP, at a 10 percent discount.

Through Stay Warm PA, Governor Rendell and the General Assembly have earmarked $20 million in new funding and resources to protect the state’s most vulnerable residents from this winter’s cold temperatures and manage escalating heating bills.

"With the global demand for oil increasing rapidly, prices will continue to climb," said Rendell. "This poses a tremendous challenge to many families as they struggle to manage their heating bills. By adding new production facilities, such as the ones being developed by AGRA Biodiesel, we can supplement foreign oil imports, increasing supply and reducing costs. Developing renewable energy technologies is a positive situation for everyone in Pennsylvania."

Triple biofuels pump dispenses biodiesel through the green hose. The B20 indicates a 20 percent biodiesel (Photo courtesy )

A novelty just a few years ago, biodiesel is becoming part of America's mainstream fuel flow. The National Biodiesel Board lists 47 producers of biodiesel in all parts of the country. In 2004, the latest year for which figures are available, the Board estimates that 25 million gallons of biodiesel were sold in the United States.

With interest in renewable fuels growing across the country, Rendell has set up a $2.3 billion economic stimulus package to encourage renewable energy companies, and they are finding Pennsylvania a hospitable place to set up shop. The wind-energy company Gamesa located its U.S. headquarters and a manufacturing facility in the state, while the nation’s first waste-coal-to-diesel plant and biodiesel injection facility have also located here.

In December, Governor Rendell called on the federal government to pursue an ambitious agenda, similar to the strategies he has proposed for Pennsylvania, that would foster a pioneering spirit to propel America towards energy independence.

"If we as a nation were to pursue the renewable energy solutions advanced here in Pennsylvania, the United States could find itself largely independent of foreign energy interests," Rendell said.

"We must rally our best minds to develop large-scale production techniques that will yield convenient, affordable energy for everyone," said the governor, "and provide a substantial boost to the economy."