Alternative-fuel
industry gives boost to rural Georgia
State is cashing in on energy crunch By DAN CHAPMAN The renewable energy revolution rolls into Plains today with the celebration of yet another alternative-fuel factory intended to help America kick its oil addiction, clean its air and boost rural Georgia's economy. Alterra Bioenergy Corp.'s
selection of Plains — the hometown of former President Jimmy Carter
— for its 30-million-gallon biodiesel plant pushes Georgia to the forefront
of the Southeast's still-young renewable energy industry. As president, Carter labeled the United States' struggle for independence from Middle Eastern oil "the moral equivalent of war." The nation's most famous peanut farmer also touted, personally and legislatively, alternative fuels like biodiesel and ethanol long before gas prices topped $3 a gallon. Carter, who helped recruit Alterra to Plains yet holds no financial interest in the venture, will be on hand this morning to welcome company Chief Executive A. Wayne Johnson. By November, Johnson should be able to blend diesel with oil from canola, cotton and sunflower seeds for sale to the South's truckers and tractor drivers. There's only one problem with this energy-from-nature idyll. Plains rests in the heart of peanut country, holds a peanut festival each September and takes pride in its 13-foot-tall "Smiling Peanut" statue, but Alterra won't be using the goober to make the alternative fuel — at least in the short run. Instead, the company will use soybean oil from food-processing conglomerates in Valdosta and Gainesville to produce its biodiesel. Georgia peanut growers, who earned $368 million in 2005 for their crop, will be out of luck. "Peanut oil is very expensive compared to [soybean oil], which is immediately and readily available," said Johnson, a former Visa executive turned entrepreneur who hopes to eventually be able to use peanut oil when price allows. "But we concluded that central and South Georgia are ideal locations because of rail access and the utilization of fuels in these areas. And Plains just happens to be in the epicenter of oilseed production in the United States." 105 biodiesel plants It didn't take rising gas prices — Monday's average for regular gas was $2.10 a gallon in Atlanta — or President Bush's mention of biodiesel and ethanol in last month's State of the Union speech for alternative-fuel production to explode. Nationwide, 105 biodiesel plants are running, according to the National Biodiesel Board, with another 77 being built and eight others expanding. Roughly 225 million gallons of biodiesel were blended in 2006, triple the previous year's production. If biodiesel is the blue-collar fuel alternative, ethanol is its more sexy (and common) gasoline equivalent used in cars and light trucks. One-hundred and thirteen plants operate nationwide with another 78 under construction, according to the Renewable Fuels Association. They produced 3.9 billion gallons of ethanol in 2005, up 15 percent from the year before. By comparison, the United States imported 571 million gallons of petroleum daily in 2005. Ethanol is made from feedstocks like corn, sorghum, switchgrass, yeast and pine trees. Biodiesel comes from the distillation of vegetable oil, animal fats and recycled cooking oil. Both alternative fuels are touted as nontoxic energy palliatives that reduce the amount of noxious gases that cause asthma, air pollution and climate change. "Biodiesel is grown on American soil by American farmers," said Joe Jobe, the Biodiesel Board CEO, who'll also visit Plains today. "Plus, we spend about $1 billion a day financing our addiction to imported petroleum and that money goes overseas, much of it directly to nations who use it to support terrorism." New hot spot Rural Georgia has become a bioenergy production hot spot in recent months. Two weeks ago, dot-com billionaire Vinod Khosla announced construction of a $225 million plant in Soperton to turn pine trees into ethanol. His company, Range Fuels Inc., may build other plants across South Georgia's pine-tree belt. Investors in southwest Georgia broke ground in January on a $175 million factory in Camilla that should produce 100 million gallons of ethanol from corn. The First United Ethanol plant is expected to employ 70 people upon opening in mid-2008. In December, Alterra announced construction of a 10-million-gallon biodiesel plant in Gordon that will employ 15 people. Biofuel should start flowing from the Wilkinson County factory in September, Johnson said. 20 jobs created The $25 million Plains plant, and its 20 jobs, is expected online by November. Johnson, a Macon native, chose Plains and Gordon over sites in South Carolina, Tennessee and Alabama. Like Carolina Biofuels, which opened last March in Greenville, S.C., and also plans to produce 30 million gallons annually, Alterra will rely on soybean processors for its raw material. Eventually, Johnson said, Alterra hopes to buy the feedstock — soybeans, rapeseed (canola), cotton seed, peanuts, sunflowers — from Southern growers, crush the seeds, distill the oil and blend it with diesel on-site. Diesel vehicles can use biodiesel without any modification. Local fuel distributors, like Perry Brothers Oil Co. in Americus, will be his first customers. Trucking companies could follow, Johnson said, adding that heavy equipment used by the kaolin, timber and mining industries offer likely targets. Eventually, Johnson hopes freight trains, school districts, military bases and municipalities across the South including Macon, which already uses biodiesel in its firetrucks and dump trucks, will buy his fuel. Georgia's booming ports, though, tantalize Johnson. The 55-year-old entrepreneur plans to open a half-dozen biodiesel service stations along Interstates 16 and 75 to capture 18-wheeler traffic heading to and from Savannah and Brunswick. 'An immediate need' "There's an immediate need for biodiesel fuel in this country," said Johnson, adding that Georgia distributors sold 2 billion gallons of diesel last year. "When we looked at the operating space, we found quite a few significant players pursuing ethanol, but there's not nearly the same level of intensity for biodiesel." Like ethanol, though, supply, price, infrastructure and market questions cloud biodiesel's future. A drop in oil and gas prices, for example, could limit biodiesel investment and availability. Soybean and peanut prices could rise if, as expected, food processors, poultry and beef farmers, and biodiesel makers compete for raw materials. A proposed $12 million biodiesel refinery in Washington state was scuttled last month once owners realized they couldn't line up enough canola. Unlike Europe, where government mandates alternative fuel usage and diesel fuels half of all vehicles, the United States doesn't yet produce enough raw material for a biodiesel flood, said the University of Georgia's Tom Adams. "Most of the oilseeds are used for food here, so that puts biodiesel in an immediate disadvantage, price-wise," said Adams, the school's director of the Faculty of Engineering Outreach Service. "But it's an excellent fuel and burns very cleanly. And diesel engines are inherently more efficient than gas engines. It's good for our country and our farmers." Those sentiments were expressed a generation ago by Carter, who ran the family peanut farm before being elected Georgia's governor in 1970. "If our country had followed the [policies] he laid out then we'd be far more advanced today in terms of energy independence," said Johnson. "President Carter gets to see part of his vision advanced by way of a biodiesel plant in Plains, Ga." Did you know ... IN THE UNITED STATES • 105 biodiesel plants are in operation • 77 are being built • 225 million gallons were blended in 2006 • Its market is 18-wheelers, fire engines, tractors and other heavy equipment. • Biodiesel comes from the distillation of vegetable oil, animal fats and recycled cooking oil. • In Plains, Alterra hopes to buy soybeans, canola, cotton seed, peanuts and sunflowers from farmers, crush and distill them, and blend them with diesel. |