Turning Fat into Fuel

US - It's a trickle that should build into a flood now that Tyson Foods and ConocoPhillips have started making beef fat into diesel fuel. The refiner's Borger plant started processing the tallow from Tyson's Amarillo plant on Dec. 18, making ultra-low sulfur, renewable diesel.
calendar icon 3 January 2008
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The project is one of several planned for the area, with Seaboard Food's High Plains Bioenergy looking to be the next operational project when it starts processing pork grease and lard from its Guymon, Okla., plant soon.

"We're down to the final piping and instrumentation work," said Gary Lewis, vice president of High Plains Bioenergy. "We expect to be producing in January and start commercial production in February."

Tyson is trucking its tallow in tanker trucks to Borger. That is the first move in a national plan for the meat processor and the oil refiner to make renewable diesel.

"Production will ramp up over time," said Bill Graham, ConocoPhillips spokesman. "The cost will be over $100 million over five years for the entire project."

Nationally, that will result in 175 million gallons of diesel, or 3 percent of ConocoPhillips' diesel production.

The venture is starting out slowly.

"A"pilot program is being"conducted to test the technical aspects and evaluate the economics of the project," according to a statement from Tyson spokesman Gary Mickelson. "The volumes will"gradually increase over the next few months as the testing and evaluation is"conducted."

Tyson declined to release its investment.

Renewable diesel is different from the biodiesel High Plains Bioenergy will be producing. The renewable version is so closely related to oil-based diesel it can be sent through existing pipelines with the standard version. Biodiesel must be trucked or sent by train to be mixed with the petroleum variety.

High Plains is planning to be up to full production in Guymon four to six months after the start of processing.

"That will be 30 million gallons a year," Lewis said. "We're going to try to bring production up as fast as possible."

The approximately 30 employees at the High Plains plant will also use vegetable oil in addition to the pig fat.

"We'll use anything that makes economic sense," Lewis said.

Beef producers, already hit by higher feed prices they blame on using corn to make ethanol, are waiting to see if diesel from fat will result in another blow from the biofuel industry.

Before Tyson's entry into the field, others have begun using fat, usually in the form of grease, to produce diesel.

"At this time, increased demand has not resulted in increased prices for beef cattle," said Ross Wilson, president and CEO of Texas Cattle Feeders Association. "It remains to be seen how that will balance out."

One problem for cattle feeders is they use a form of cattle fat in feed rations so they compete with biofuel producers for supply, running up the cost.

"The new demand for beef fat has already increased the cost of feed fat by 25 percent in the last three months," Wilson said.

But the equation may change.

"It's possible, if demand for beef tallow increases the price for it enough, packers may pay more for cattle," Wilson said.

At least one biodiesel plant never produced a drop of fuel.

Big Daddy's Biodiesel was to open just outside Hereford.

"I closed that in February," said Roy Messer, who was putting in the plant in the former Holly Sugar facility. "I'd love to put one in but the backing isn't there. I worked for two and a half years for free. Actually it cost me $300,000."

There are others in the region hoping to make biodiesel pay.

Clovis Biodiesel is planning a $16 million plant in Clovis, N.M., and American Renewable Fuels is planning an $80 million facility there. The parent company of American Renewable closed two biodiesel plants in Austrailia in November citing high tallow prices and lack of support. However, it hopes for better results in Clovis.

When announcing the plant, American Renewable CEO Ross Garrity said, "Clovis was chosen because of its proximity to feedstock (inputs such as fats and vegetable oils), location on the national rail grid, and most importantly the support of the state and local governments to encourage growth of alternate fuel production in the state of New Mexico."

Graham Towerton is in the early stages of putting a biodiesel plant together.

"We're trying to attract financing," he said. "By the end of 2008, we should have enough to begin."

Towerton is general manager of Excel Biofuels, which would build near Clarendon. It would use a variety of materials to make the fuel including peanut and cottonseed oils.

"Over the long term, we want to use oil derived from algae," he said.

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