Biodiesel Sneak Peek: Take a Tour of Lake Erie Biofuels

By Jim Carroll, Erie Times-News, Pa.

Apr. 8–Bright sunshine played off the large outdoor storage tanks Monday at Lake Erie Biofuels, while inside, a maze of pumps, pipes and tanks churned out the usual day’s production of 130,000 gallons of biodiesel fuel.

“I must have read a million things about this place, but until you see it, you don’t get a full understanding of it,” said Dennis Yablonsky, secretary of the Pennsylvania Department of Community and Economic Development.

Yablonsky led a delegation of local and state officials on a tour of the biodiesel plant, which has grown over the past two years at the East Lake Road site that once held the International Paper plant.

In November, state, federal and local government officials joined Erie Management Group to cut the ribbon on the $60 million facility that has the capacity to produce 45 million gallons of biodiesel a year.

Now, five months later, Erie Management Group founder Samuel P. “Pat” Black said he is happy with the progress of the $60 million plant. And government development officials said the $15 million that government programs pumped into the former IP site and its infrastructure is also paying off.

“Absolutely we are happy with it,” said Monica Brower, chief executive of the Economic Development Corp. of Erie County. “We have had almost $85 1/2 million of (private and public) investment in this site, and it has only been two years. To be able to do this in just two years … it’s amazing.”

Plant Manager Mike Noble said Lake Erie Biofuels has a work force of 35 people, many of them former International Paper or GAF workers. He said the plant is currently running at a rate that would produce 40 million gallons a year, and eventually, there might be some expansion.

“I think this place could go another half its size again and not have to do any major changes with boilers or rail lines — all the big cost items,” Noble said. Expansion might come first by adding more steps and operations to squeeze more value out of existing products or byproducts.

Black said the new plant has not yet reached full efficiency, and when it does, it should easily reach its capacity of 45 million gallons a year.

Biodiesel is a fuel made from animal fats or vegetable oil. It is mixed with petroleum-based diesel to make more environmentally friendly diesel fuel and home heating oil.

Lately there have been questions raised about biofuels. Some producers in Pennsylvania say they are threatened by competition from other states and might go out of business if Pennsylvania doesn’t match the production incentives that other states offer.

Also, the price of soybean oil — the preferred feed stock for biodiesel –has skyrocketed, and some are questioning the sustainability of using foodstuffs for fuel.

But Black told the touring officials that his plant is doing well.

Black and Noble told the visiting officials that Lake Erie Biofuels has advantages that have helped it thrive.

Volume is one big advantage. The capacity to produce 45 million gallons a day carries weight with suppliers and customers.

“They have the volume” to compete, Yablonsky said. “Some of the ones that are struggling have a million or 5 million gallons capacity. It’s the smaller producers that are struggling.”

Also, Erie Management Group upped its investment to add a complete laboratory, and also add the capacity to use animal fat as a feedstock. Those investments now allow the plant to contract for grease from fast-food restaurants, chicken fat and white grease to help control costs.

Black said most of Lake Erie Biofuels’ products so far have been shipped to Europe for use as home heating oil. The weak U.S. dollar makes the price right for exports and Europe has a bigger thirst for diesel fuel than for gasoline.

Lake Erie Biofuels officials said they are making small sales in Pennsylvania, northeastern Ohio and New York state, and said they hope those sales will grow as the fuel terminals develop the infrastructure for blending biofuels with petroleum-based diesel.

Yablonsky said his department helped the fledgling company with a $4.25 million grant from the state’s Business In Our Sites program, and said Gov. Ed Rendell is now pushing for another $100 million in that program as part of his stimulus program.

Meanwhile, even local government officials were impressed with the plant. “It’s awesome,” said Kim Green, Erie’s director of economic and community development.

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