New Biodiesel Plant Opens in Missouri
biz.yahoo.com
Wednesday October 25, 1:11 pm ET
By Christopher Leonard, Associated Press Writer
Archer Daniels Midland, Partners Launch $30 Million Biodiesel Plant in Missouri
MEXICO, Mo. (AP) -- Missouri's largest biodiesel plant opened, with farmers and politicians calling it a boon to the rural economy and a small step toward the goal of reducing oil imports.
The $30 million plant will produce about 30 million gallons annually of biodiesel, a fuel made from vegetable oil and other additives.
Like corn-based ethanol, investment in biodiesel has grown rapidly this year because of rising gas prices and support from the 2005 Energy Policy Act.
While developing new sources of energy has become a national issue, the impact hits close to home for soybean farmer Craig Nelson. He devotes about half of his 300-acre farm in northeast Missouri to growing soybeans, and said the new plant could drive up demand and the price for soy oil.
"For years they had to pretty much give (soy oil) away to get people to take it," Nelson said.
For that reason, Nelson joined 399 other Missouri soybean farmers who formed a co-op to help build the plant, which opened Tuesday.
The group raised $9 million and launched Mid-America Biofuels, a joint venture with Decatur, Ill.-based Archer Daniels Midland Co.
ADM spokesman Gregory Webb wouldn't say how much the company invested in the Mexico plant, which is the first of its kind the company helped build in the U.S. He said ADM owns less than half the new plant.
Other investment was raised by local sources like the farmer co-op MFA Inc.
Republican Senators Jim Talent and Kit Bond said at an opening ceremony for the plant that new crop-based fuel refineries will help breathe life into towns like Mexico.
Bond said developing crop-based fuel refineries in the Midwest will bolster national security by reducing dependence on oil imported from the Middle East, or countries like Venezuela.
"Gas prices are falling right now, but there's no reason to be lulled into a false sense of security," Bond said.
Dale Ludwig, executive director of the Missouri Soybean Association, said the biodiesel industry won't likely grow as large as the ethanol industry.
That's partly because ethanol can be made from far more crops than biodiesel, but also because diesel fuel is used less than gasoline, he said.
He estimated that between one and two billion gallons of biodiesel would be used annually within a decade in the United States, compared to 10 to 15 billion gallons of ethanol. Use of the fuels is being driven by the Energy Policy Act. The bill set a new standard requiring the U.S. to use 7 billion gallons of renewable fuels by 2012.
National Biodiesel Board chief executive officer Joseph Jobe said earlier this month at a renewable fuels conference in St. Louis that the industry is doubling or tripling production every day. |
