The U.S. Biodiesel Industry in 2010

Jan. 4, 2010 - PRLog -- As biodiesel consultants, we are often asked where we see the industry headed.  Obviously, 2009 was not a good year for the biodiesel industry (or the economy as a whole).  Despite the fact that politicians from coast to coast used alternative fuels as major campaign issues, and continue to appear to support the industry, some of the support seems to be “lip service” in lieu of real results.  Biofuel producers waited for the US Environmental Protection Agency to roll out the updated renewable fuels standards (RFS2), which require biodiesel to be blended into our national fuel supply.  The EPA said it intended to have them done in 2009.  As 2010 begins, they are still are not implemented.   And, despite valiant work by the U.S. House, the Senate could not seem to muster enough time to renew the $1/gallon tax credit before the holidays, so it expired on Dec. 31, 2009.  The reality was that the Senate had too much on their plate and politics dictated that health care was to be decided before the holidays.   While virtually everyone in the biodiesel industry expects the credit to be reinstated shortly and made retroactive, its expiration provides another example of a political system out of kilter.  As oil goes to $81 per barrel today (its highest in over two months), we enter 2010 with no renewable fuel standard and no biodiesel tax credit.  

With this apparently gloomy back drop, what are the experts telling their clients?   Wayne Lee, CEO of nationally renowned biodiesel consulting group says his advice is that now is the time to build or buy.  Why?  “Because oil is a limited commodity and it is my feeling that big oil sees the ‘handwriting on the wall’” says Lee.  “They know that alternative fuels are here to stay” adds Mike Shook, partner in Agri Process Innovations.  Shook adds that “just as government inaction made the smaller producers nervous, I look back at 2009 and note the massive investments that big oil has made in this industry”.   Both Lee and Shook agree that the biodiesel industry is headed up in a big way.  “This industry will continue to adjust to problems, and it will continue to grow” says Lee, “and just like many industries before it, the inefficient players will shake out and the efficient players will make money”.  Lee, who also owns altenative fuels brokerage company, National Business Brokerage, does not think the events are all by chance.  “It seems just a bit odd to me that while the industry had several obstacles in 2009, big oil appears to have taken the downturn as an opportunity to enter a depressed industry very cost effectively”, said Lee.  “It almost makes one wonder if there was some design to the way things happened.”

About Lee Enterprises. Lee Enterprises is a biodiesel consulting firm specializing in project management, feasibility studies, business plans, and assistance with planning, market analysis, site evaluation, feedstock selection and procurement, process technology, evaluation, offtake distribution, financing, capital budgeting, personnel, and contract negotiations (for feedstock, off-take, transportation, construction, site purchase/lease, and plant management). They also own National Business Brokerage, Inc., a full service business brokerage firm specializing in the buying and selling of biodiesel plants. Lee Enterprises, 1503 East Kiehl Ave., Sherwood, AR 72120. (501) 833-8511. www.lee-enterprises.com

About APInnovations. AP Innovations is a full service design and engineering company owned by engineers, Mike Shook and Steve Danforth. AP Innovations has clients on six continents and are recognized experts in both the biodiesel and oilseed processing industries. APInnovations, Inc., 1012 East 22nd Street, Stuttgart, AR 72160. (870.673.3030) www.apinnovations.com

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Lee Enterprises is a biodiesel consulting firm specializing in project management, feasibility studies/business plans, planning, market analysis, site eval, feedstock, technology, offtake, financing & budgeting, and contract negotiations. (501) 833-8511