Hurricane Ike Shuts Largest U.S. Biodiesel Refinery

The publicly traded owner-operator GreenHunter Energy says damages at its Renewable Fuels Campus were mainly due to floodwater, which crested the 100-year flood plain level, rather than wind damage from Hurricane Ike.

Completed in March, the refinery is capable of producing 105 million gallons of biodiesel a year.

Bruce Baughman, senior vice president of technology and engineering for the GreenHunter BioFuels division of the company, said, “So far in our assessment of this disaster, we have concluded that fortunately, damage to major process equipment is minimal. We have discovered damage to smaller reagent tanks, intermediate tanks and their interconnecting piping and pumps, as well as damage to the foundations of smaller tanks."

The GreenHunter biodiesel refinery on the Houston Ship Channel before Hurricane Ike. (Photo courtesy GreenHunter Energy)

"Given the sheer volume of water and the extreme flood levels that we faced, our initial assessment is that we sustained overall minor to moderate impact to the Renewable Fuels Campus from Hurricane Ike,” he said.

Two bulk storage tanks - one vegetable oil feedstock tank and one methanol tank - were damaged by the storm. The vegetable oil tank contained edible canola oil and about 50 barrels of the oil was released into the environment. Baughman says all appropriate local, state, and federal agencies, as well as the company's third-party oil spill response organization were notified of the spill.

The six to eight week shutdown estimate includes the expected timeframe in which the company's local utility in Houston, Center Point Energy, is able to restore electricity and natural gas service to the location.

The facility had been completely shut down in the 48 hours prior to the hurricane strike early Saturday morning, and all personnel had been evacuated.

Gary Evans, chairman, president, and chief executive GreenHunter Energy said, “Our first concern has been the lives and well-being of our employees and their family members who are located in Houston."

Evans says the company's insurance carriers are sending response team adjusters to view the damages and he expresses confidence in the company's ability to quickly restore the facility's operations.

There are more than 150 biodiesel producers in the United States, but most are small. Large production facilities include one in Grays Harbor, Washington opened in 2007 by Imperium Renewables that can produce 100 million gallons of biodiesel per year, nearly as much as GreenHunter's Houston refinery.

Biodiesel is a clean burning alternative fuel produced from plants such as soy or waste vegetable oil that can be blended at any level with petroleum diesel to create a biodiesel blend. Standard diesel engines need little or no modification to burn the blend.

Biodiesel is safe and biodegradable, and its use reduces greenhouse gas emissions and serious toxic air pollutants, according to the U.S. Energy Department.

The use of biodiesel in a conventional diesel engine reduces unburned hydrocarbons, carbon monoxide, and soot compared to emissions from diesel fuel. The exhaust emissions of sulfur oxides and sulfates - major components of acid rain - from biodiesel are essentially eliminated compared to diesel, the National Biodiesel Board says.

Burning biodiesel produces 78 percent fewer carbon dioxide emissions than petroleum diesel, a 1998 study sponsored by the federal government showed. The reduction is due to biodiesel's closed carbon cycle - the CO2 released into the atmosphere when biodiesel is burned is recycled by growing plants, which are later processed into fuel.

In 2006, the National Biodiesel Board estimates that more than 250 million gallons of biodiesel were consumed in the United States, up from 75 million in 2005.

A 2007 federal government study found that for every unit of fossil energy it takes to make biodiesel, 3.5 units of energy are gained when the biodiesel is burned.

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