Chevron Enters Biodiesel Market

[RustyJC]

Here's an interesting article from this morning's Houston Chronicle:

May 12, 2006, 7:08AM

Chevron buys into biodiesel

Oil company acquires stake in Galveston plant



By PURVA PATEL

Copyright 2006 Houston Chronicle



Big Oil gave a boost to the emerging biodiesel industry Thursday.



Chevron Corp. said it has taken a 22 percent stake in Texas-based Galveston Bay Biodiesel, which is building a large-scale plant on the north side of Galveston Island, across from Pelican Island.



Biodiesel is a clean-burning fuel derived from fats such as vegetable oil.



The $15 million production and distribution facility is scheduled for completion by year-end and would have an annual capacity of 100 million gallons of biodiesel, although it will start with initial production of 20 million gallons. It will employ 12 people, Chevron officials said.



Chevron made the $3. 5 million investment, its first in biodiesel, through a subsidiary, Chevron Technology Ventures.



"This is the beginning," said Don Paul, vice president and chief technology officer for Chevron Corp. "Our interest is in understanding the issues associated with such production so you know where to go in the future in terms of how to scale up and all the things you need to learn when you're adding new types of processes like this. "



The Galveston Bay Biodiesel plant will use soybean oil and other renewable feedstocks to make biodiesel that can be used pure or blended.



The company doesn't have any signed contracts but is talking to municipalities and school districts, as well as marine, commercial, trucking and construction businesses around Galveston and Houston, said Jennifer Ligums, vice president of Galveston Bay Biodiesel.



It's still unclear where the company will get its soybeans because there's a shortage of facilities in Texas that can process soybeans into oil in preparation for fuel making, she added.



Of 65 biodiesel plants nationwide, 12 are in Texas, according to the National Biodiesel Board, an industry trade group.



The Houston area is already home to plants owned by Dow Chemical, Safe Fuels, Organic Fuels and Huish Detergents.



"Being in the renewable world, we're excited to see people like Chevron getting into it because it means they've accepted biodiesel as a component of the fuel makeup. That is a positive thing for the industry," said Peter Loggenberg, president of Organic Fuels, which started its 30 million gallon capacity plant in Galena Park in January.



Houston-based TexaCom Resources also has plans to break ground on a 35-million-gallon capacity plant in Seabrook this year. Earth BioFuels, Green Diesel and Natural Fuel and Energy also have plants in preconstruction mode in Houston, according to the National Biodiesel Board.



Biodiesel can be used in any diesel engine with no or minor modifications, according to the board. But because biodiesel can work as a strong solvent, it can loosen up sludge and clog up filters in older cars upon initial use. It can sell at comparable prices to regular diesel, depending on location and demand.

Rusty

 

[Gary - K7GLD]

Chevron Corp. said it has taken a 22 percent stake in Texas-based Galveston Bay Biodiesel, which is building a large-scale plant on the north side of Galveston Island, across from Pelican Island.

JEEZE, WHY build a biodiesel facility so FAR from any (seemingly) available source of raw material?



Seems like transportation of raw materials and disposal of waste byproducts would seriously impact the cost effectiveness...





AND, just watch, when the big guys get into the biodiesel business, they will be REALLY protecting their turf against the smaller guys and lone individuals - count on it, the "Bio-police" are on their way...

 

[RustyJC]

Gary,



I'm just guessing, but their thinking may be that you either have to ship the raw materials or ship the finished product. Perhaps the raw materials are coming into the Port of Houston and/or the Port of Galveston by ship or rail. Once the biodiesel is produced, there are all kinds of refineries in the Houston area where it can be blended with #2 diesel and put into existing transportation channels - pipelines, railcars, tanker ships, etc.



I'm sure these companies that are building facilities around the Houston/Galveston area have run economic models before selecting these sites. If it didn't make economic sense to them, they wouldn't invest the money to build them.



Rusty

 

[Gary - K7GLD]

^^^^^^^

Yeah - I thought about some of that after posting - probably a pretty good flow of grain products coming into that area...

 

[Hohn]

^^^^^^^
Yeah - I thought about some of that after posting -.

Gee, it's not often you see someone admit his faults

Just yankin yer chain, Gary. You know I like ya!


It's reasonable to assume, imo, that at lest SOME kind of cost/benefit analysis was done by a company this size before $3. 5M is spent, don't you think?

I'm feeling a little spunky, a poor Gary was in the wrong place at the wrong time

Justin

 

[Gary - K7GLD]

Gee, it's not often you see someone admit his faults



Just yankin yer chain, Gary. You know I like ya!





It's reasonable to assume, imo, that at lest SOME kind of cost/benefit analysis was done by a company this size before $3. 5M is spent, don't you think?



I'm feeling a little spunky, a poor Gary was in the wrong place at the wrong time



Justin

That's it - kick a poor 'ol senior citizen while he'down... :-laf :-laf