Fueling Future Hopes
By Jim Carroll, Erie Times-News, Pa.
Oct. 10–A new industry stirred to life on Erie’s east side Tuesday — one that could make northwestern Pennsylvania a player again in heating homes and powering engines.
But this time, the fuel will not come from refined crude oil.
It will be biodiesel, a cleaner-burning fuel made from soybean oils.
When the 45-million-gallon-a-year Lake Erie Biofuels plant reaches full production — which is expected sometime in December or January — this plant will be among the nation’s five largest.
And there’s room to grow.
“We built the plant with the flexibility to allow us to double the size and capacity when that is called for in the future,” said Samuel P. “Pat” Black, as he cut a ceremonial ribbon Tuesday to mark the opening of the $60 million facility.
About 100 people — elected officials, community leaders and plant contractors and employees — watched Black cut the ribbon on Lake Erie Biofuels, the centerpiece of a collection of new businesses started by his Erie Management Group.
“We look forward to sustaining long-term jobs and creating renewable energy for generations to come,” Black said.
Others said they expect the biodiesel plant to revitalize the brownfield site that International Paper Co. left behind at 1540 East Lake Road and to boost Erie’s economy and Pennsylvania’s ability to produce alternative energy.
“This is perhaps the most important breakthrough for northwestern Pennsylvania and its energy future since the drilling of Drake Well,” said U.S. Rep. Phil English, of Erie, R-3rd Dist., referring to the drilling of the world’s first commercial oil well near Titusville in 1859.
English told the crowd the plant will help the state diversify its energy sources and improve energy security — “two huge challenges the local economy is facing.”
Erie Mayor Joe Sinnott credited Black with helping reinvent Erie’s industrial base during tough times for traditional manufacturing.
“It’s the start of something new,” Sinnott said. “Alternative energy is one of the waves of the future … and we are trying to become one of the areas that is a leader in that.”
The ribbon-cutting came at a time when the state’s biodiesel industry is feeling growing pains.
Other Pennsylvania biodiesel producers over the summer voiced concerns about the availability and cost of soybean oil, which has been the most common prime ingredient in biodiesel production, and also said they need more financial incentives and tax breaks to compete with other regions.
EMG President and CEO John Brigham said he isn’t worried because Lake Erie Biofuels’ size puts it in a different league from other state producers.
“Our scale attracts suppliers and customers,” he said.
Brigham said the company has orders to fill and has at least one potential customer in Europe, where the demand for biodiesel is strong.
Seventeen shining, newly painted black railroad tanker cars sit on the tracks near the huge tanks and miles of pipes that make up the biodiesel plant. Brigham said they have brought the soybean oil feedstock that the plant will soon use to get operations under way.
Black said Erie’s location is “perfect” for the biodiesel plant. The region’s location and transportation infrastructure make it easy to import soybean oil feedstock from the Midwest and to send biodiesel to the Northeast.
Biodiesel is blended with petroleum distillates not only to make cleaner-burning diesel fuel, but also to make home heating oil, and Black said demand for home heating oil in the Northeast makes that a prime market for the plant.
As if to illustrate his point, the federal Energy Information Administration on Tuesday became the latest agency to forecast higher home heating oil prices this winter. Agency analysts estimated that home heating oil — which is used by 7 percent of American households — will average $2.88 a gallon this winter, about 16.1 percent higher than a year ago.
Lake Erie Biofuels was originally projected to cost about $54 million, but Brigham said the cost rose to $60 million as the company added equipment to gain greater flexibility to use other feedstock, and because it added a full lab on site.
“We have an on-site lab, which puts us at a significant competitive advantage,” Brigham said.
That lab is now busy with the “proving stage” of the plant’s operations — the period when the company demonstrates that its product will consistently meet industry specifications.
“Our sales will become stronger as we build our reputation, but it is very important to do things right,” Brigham said. “If we introduce a questionable … product, that would hurt our reputation in the long term.”
Brigham said he envisions the plant hitting full production sometime in December or early January.
“We are phasing it in over a period of time,” Brigham said. “No one can take one of these plants from no production to 100 percent utilization overnight. You have to be very careful to bring the equipment up and make sure the quality you put in the market is 100 percent.”
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