NextDiesel turning corn oil to biodiesel 2008.08.20

By DAVID GREEN

The 2008 Agriculture and Land Use Tour made four stops in Lenawee County earlier this month. In addition, two speakers presented information during the lunch period at the Tecumseh Community Center.

First on the tour was the NextDiesel biofuels plant in Adrian.

NextDiesel

When a group of investors formed Biofuel Industries and started talking about construction of a biofuels plant, they were not quick to take action.nextdiesel.jpg

Everyone involved was new to the field, said Jason Eisenberg, director of business marketing at the plant, and three years of study went into biofuel processing before ground was broken in December 2006.

Operating under the name NextDiesel, the facility went into production a year ago this month, choosing soybeans as the source of feedstock to create fuel.

“At first we used soybeans,” Eisenberg said. “It’s the easiest to run and there’s no fat involved.”

Then came the striking rise in crop prices that adversely affected numerous industries.

A year ago, NextDiesel was buying soy for 39 cents a pound. The price stood at 67 cents a pound in early July of this year.

“Very quickly we got out of the soybean business,” Eisenberg said. “We changed to choice white grease.”

Once again, the price doubled in a year’s time, rising from 23 cents a pound last August to 49 cents on July 9.

It was soon time for another change—this time a tie-in with the existing ethanol market.

“Now we’re using 100 percent inedible corn oil from ethanol processing,” Eisenberg said.

NextDiesel has installed equipment in several ethanol plants to extract the oil distillers dried grain (DDG)—a byproduct of the corn ethanol industry. The oil is shipped to Adrian and the DDG is used  as animal feed, as before, but in a healthier form for the animals.

Oil is currently obtained from ethanol plants in New York, Indiana and Wisconsin, and the plant in nearby Riga will soon join the pool of suppliers.

“We’re the only biodiesel plant that has a contract to get all that oil, for 10 years,” Eisenberg said.

Federal incentives for the production of alternative fuels keep the biodiesel market viable. A federal excise tax of one dollar a gallon is received when biodiesel made from virgin oils, such as corn oil, is blended with petro diesel.

For example, a B20 blend—20 percent biodiesel—would lower the price of a gallon of fuel by 20 cents. Blends vary by the time of year. A winter blend might be sold as B5; in the summer, the biodiesel component could reach as high as B75 for use in a diesel engine.

For recycled feedstock, such as restaurant grease or used oil, the federal subsidy dips to 50 cents a gallon.

“Most biodiesel produced today is sold to Illinois and Europe. Our biggest customer has fueling stations along the highway through Michigan and Ohio,” Eisenberg said.

The majority of European cars are fueled with diesel, he explained, and the state of Illinois offers residents a large incentive to use biodiesel fuel.

Eisenberg expects more of his fuel will stay in Michigan if the state offers an incentive to use it.

NextDiesel is creating about 10 million gallons of biodiesel a year—running three shifts around the clock with 26 employees—and production is expected to reach the 20 million level by the end of this year.

Only about a fourth of the company’s 25-acre parcel is developed, leaving plenty of space for expansion or for construction of another alternative fuel process. The property is the first in Michigan to be designated a Renewable Energy Renaissance Zone. This gives developers a 15-year tax abatement on property and personal property.

Eisenberg is delighted to be part of an effort to reduce America’s dependence on imported fuel and he believes biodiesel is an important step. The fuel also comes with environmental benefits. Burning biodiesel results in a substantial reduction in unburned hydrocarbons, carbon monoxide and particulate matter, compared to petroleum-based diesel. Carbon dioxide emissions are also substantially reduced.

Biodiesel is said to provide an energy yield three times greater than corn ethanol, and it could get even better.

“The technology is constantly improving and becoming more efficient,” Eisenberg said.

That goes for feedstocks, as well. Research continues for the use of algae, an energy source that reproduces in 24 hours and is nearly 60 percent oil.

In this rapidly changing field, Eisenberg said, he was advised against bolting equipment to the floor. Instead, many pieces of the processing plant are mounted on skids—waiting for the next advance in the future of biodiesel.

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