NEWS: Animal fat becomes key biodiesel ingredient - Associated Press01/03/07

[Guest guest]

A new level of perversity -- using fat from slaughtered animals so we

can speed down the highways in our SUV's. How appropriate that the big

meat packers like Tyson are planning to use it to power their fleets.

 

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hkdd

 

 

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Animal fat becomes key biodiesel ingredient

By Christopher Leonard

THE ASSOCIATED PRESS

01/03/2007

 

 

*DEXTER, Mo. --* Jerry Bagby is typical of the oilmen who are

prospecting for a fortune in the Midwestern biofuels boom. He's

convinced there's oil in these hills -- and he's found a well that no

one else is using.

 

Bagby and a longtime friend have cobbled together $5 million to build a

new biodiesel plant on the lonely croplands outside this southeast

Missouri town. They're betting they can hit paydirt by exploiting a

generally overlooked natural resource that's abundant in these parts --

chicken fat.

 

There's a virtual gusher of the stuff at a nearby Tyson Foods Inc.

poultry plant. Currently, the low-quality fat is shipped out of state to

be rendered and used as a cheap ingredient in pet food, soap and other

products.

 

Bagby and his partner, Harold Williams, plan to refine the gooey

substance, mix it with soybean oil and produce about 3 million gallons

of biodiesel annually.

 

 

Today, only a tiny fraction of U.S. biodiesel is made from chicken fat,

but that seems likely to change. The rising cost of soybean oil -- which

accounts for roughly 90 percent of all biodiesel fuel stock -- is

pushing the industry to exploit cheap and plentiful animal fats.

 

The nation's biggest meat corporations haven taken notice. Tyson Foods

announced in November that it has established a renewable energy

division that will be up and running this year. Competitors Perdue Farms

Inc. and Smithfield Foods Inc. are making similar moves.

 

As meatpackers enter the field, they bring massive amounts of fuel stock

that could make biodiesel cheaper and more plentiful.

 

The shift to animal fat as a fuel stock could be key to making the

budding biodiesel industry a reliable fuel source for U.S. trucking

fleets, said Vernon Eidman, a professor of economics at the University

of Minnesota who has extensively studied the biofuels industry.

 

Eidman estimates that within five years, the U.S. will produce 1 billion

gallons of biodiesel, and half of it will be made from animal fat. By

that time, soybean-based biodiesel will account for about 20 percent of

the total, he said.

 

For fuel refiners like Bagby, the allure of animal fat is clear. Soybean

oil costs 33 cents a pound, while chicken fat costs 19 cents. He plans

to include soybean oil in his blend only because it adds necessary

lubrication for engine parts.

 

"Soybean oil is more expensive than other products, so we just use

enough of it to make the system run clean," Bagby said, gesturing toward

a row of pipes and vats being installed in his new refinery.

 

For companies like Tyson, the attraction is simple. Being the nation's

biggest meat company, Tyson is also the biggest producer of leftover fat

from chicken, cattle and hogs.

 

Tyson is keeping the specifics of its renewable fuels division under

tight wraps. But Tyson Vice President Jeff Webster told a recent

investment conference the potential is clear. Tyson produces about 2.3

billion pounds of chicken fat annually from its poultry plants. That's

about 300 million gallons that could be converted to fuel.

 

The market for biodiesel and ethanol really started to boom in August

2005, after passage of the federal Energy Policy Act, experts say. The

bill set a new standard requiring the U.S. to use 7 billion gallons of

renewable fuels by 2012.

 

Increasing demand for soybean oil as a fuel and as a food is making the

price creep up for biodiesel. It now makes economic sense to invest in

new technology to process animal fat into usable form as a fuel stock.

 

Tyson and Perdue already are experimenting with biodiesel. Both

companies have started using biodiesel in their trucking fleets.

 

Perdue, of Salisbury, Md., also is selling soybean oil as a biodiesel

fuel stock through the company's Grain and Oilseed Division. The company

also said last summer that it's studying plans to build its own biofuels

plants or invest in others.

 

Having a massive new source of fuel stock is a welcome development for

the biodiesel industry, said Amber Thurlo Pearson, a spokeswoman for the

National Biodiesel Board.

 

"More biodiesel in the marketplace could help make biodiesel's cost even

more competitive with diesel fuel," Pearson said.

 

The board estimates that U.S. biodiesel production is tripling annually,

going to 75 million gallons in 2005 from 25 million gallons in 2004. The

final tally for 2006 should be between 150 and 225 million.

 

Biodiesel costs about $1 a gallon more to produce than conventional

diesel, but federal tax breaks for fuel distributors help hide that cost

from consumers.

 

Bagby said his plant will be running by the end of January. His

equipment can refine soybean oil, cotton seed oil and animal fat. That

gives him flexibility to use whatever's cheapest. His first batches will

be made from soybean oil because it's easiest to calibrate the equipment.