Kentucky took a giant step toward becoming a major player in the United States biodiesel industry when ground was broken in May, 2006 for a production facility in Owensboro that will generate up to 50 million gallons of fuel a year.  The plant will employ 10-15 people when it is fully operational. It is expected to be completed in the middle of 2007. It will take in 50 million bushels of soybeans a year from area growers.

From left, Agriculture Commissioner Richie Farmer; Bobby Hicks and John Wright of Owensboro Grain; LaJuana Wilcher, former secretary of the Kentucky Environmental and Public Protection Cabinet, and Keith Rogers, executive director of the Kentucky Agricultural Development Board, participate in a check presentation to Owensboro Grain for construction of a biodiesel plant.  (Ted Sloan photo)

“The opening of this new plant is good news for Kentucky farmers,” Agriculture Commissioner Richie Farmer said. “It will provide a new market for Kentucky soybean producers and increase farm income. The increase in farm sales will ripple through our rural communities.”

“This is a great thing for Kentucky agriculture and soybean farmers,” said Darren Luttrell, an Ohio County grower and a member of the Kentucky Soybean Association board. “It’s something we really hoped and pushed for. We have great hopes for its success.”  Luttrell said that, while the plant might nudge the price of soybeans up, it will serve the more important purpose of providing stability to the soybean market.  “They may not by themselves raise the price, but in the long run they’re going to hold the price,” Luttrell said. “I can make decisions better if I know that we’re going to hold prices at $3 [per bushel] for corn and $7 for soybeans, which we all wish for.”

The plant is being built in part with a $5 million loan from the Kentucky Agricultural Finance Corp. and grants and loans totaling $1,151,250 from the Kentucky Agricultural Development Board.  A ceremonial check presentation was held prior to the groundbreaking. Commissioner Farmer is chairman of the Kentucky Agricultural Finance Corp. and vice chairman of the Kentucky Agricultural Development Board.

A few days earlier, state officials delivered a check for $500,000 for construction of a 3.2 million-gallon biodiesel plant in Irvine. The Griffin Industries plant in northern Kentucky produces 2 million gallons of biodiesel a year. A smaller operation in Union County processes biodiesel for area distributors that blend it with diesel and sell the fuel to retail outlets in Kentucky and four surrounding states.

The increasing cost of conventional diesel fuel, plus tax benefits for biodiesel blenders, are making biodiesel an economically viable option for consumers.

Several businesses, state and local government agencies, universities and school systems use biodiesel in their fleets. The Kentucky Transportation Cabinet ramped up its monthly biodiesel use to nearly 50,000 gallons in October 2005 and continues to utilize “thousands of gallons per month,” according to a Cabinet spokesperson. 

Biodiesel is touted for its environmental benefits. Biodiesel contains no sulfur or aromatics, and use of biodiesel in a conventional diesel engine results in substantial reduction of unburned hydrocarbons, carbon monoxide and particulate matter, according to the National Biodiesel Board. The U.S. Department of Energy Web site says 100 percent biodiesel reduces carbon dioxide emissions by 75 percent compared with petroleum diesel.

Biodiesel can be used in any diesel engine with few, if any, modifications. The National Biodiesel Board said 65 biodiesel production plants were in operation in the U.S. and another 50 were under construction as of June 2006. An estimated 150 million gallons of biodiesel are projected to be sold in the U.S. this year compared with 75 million gallons in 2005, according to the NBB. The board estimated that new biodiesel plants and planned expansions of existing plants will raise production capacity in the U.S. by 713.7 million gallons a year.

The United States imported 58 percent of its petroleum from foreign countries in 2004. Biofuels such as biodiesel and ethanol are seen as alternatives to foreign sources of energy.

“This plant is good news for all of America because it is part of a genuine 21st century energy policy, something that we’re all thinking more about as gas prices continue to shoot skyward,” Commissioner Farmer told the crowd at the Owensboro Grain groundbreaking. “Alternative fuels such as biodiesel will help us move closer to energy independence.”

For more information on biodiesel, visit the following links:

National Biodiesel Board

Kentucky Soybean Association

Kentucky Clean Fuels Coalition Biodiesel page

US Department of Energy biodiesel page

Documents from the University of Kentucky:  

Biodiesel Basics (PDF)
       How is biodiesel made? Why use biodiesel? 

       Biodiesel FAQs (PDF)
       Frequently Asked Questions about biodiesel fuel.

Griffin Industries

Owensboro Grain Biodiesel

Green Earth Bio Fuels