Taste of success: Imperium Renewables chief executive Martin Tobias samples first production from the Gray's Harbour biodiesel plant as Washington State Senators Maria Cantwell (centre) and Patty Murray (right) look on
Imperium opens giant biodiesel plant
Seattle start-up Imperium Renewables today opened the US’s largest biodiesel production facility at Grays Harbor, on Washington State’s Pacific coast.
The $75 million plant is expected to hit its rated production capacity of 100 million gallons by the end of the year, officials of the company said today, to supply booming demand for the fuel in the western US.
US consumption of biodiesel, made from canola, soy or palm oils, is expected to hit 300 million gallons this year as high oil prices boost the popularity of diesel fuel and consumers seek cleaner-burning alternatives to gasoline.
Imperium picked the site for its strong rail and road links to canola-growing regions in eastern Washington and to potential markets up and down the West Coast, as well as its deep-water access, allowing stocks to be brought in by ship.
The facility has dedicated loading and unloading facilities for Panamax-sized ships and ocean-going barges, and is capable of unloading feedstock cargoes of up to 15,000 tonnes, Syd Watts, the general manager of the plant, said.
“The reason we picked this location is for the tri-modal access, and shipping is part of that,” Watts told reporters at today’s opening ceremony.
Watts said the plant was running initially entirely on Canadian canola oil, which was being brought in by ship from Vancouver, British Columbia.
“The market conditions are good for canola right now,” Watts said.
The plant has been built on land provided by the Port of Grays Harbor. The project is expected to create about 50 permanent jobs directly, and up to 350 indirectly in the area, bringing badly needed employment opportunities to the nearby towns of Aberdeen and Hoquiam, which have suffered with the decline of the region’s timber-based economy since the 1980s.
Imperium was founded only three years ago by John Plaza, now the company’s president, with its pilot project producing its first biodiesel in tanks once used to make beer at a brewery in Seattle.
That operation now forms the company’s Seattle Biodiesel subsidiary, which produces about 5 million gallons of the fuel per year inthe city.
Imperium broke ground on the 12-acre Grays Harbour site just 10 months ago after securing initial backing from venture capitalists including San Francisco-based Nth Power, Technology Partners and Microsoft billionaire Paul Allen.
The company subsequently obtained funding from several Wall Street finance groups, including a $100 million loan from Societe Generale, Imperium chief executive Martin Tobias said today.
Imperium supplies pure biodiesel to several distributors in Washington State, who blend the fuel with conventional diesel to provide the 10% and 20% biodiesel mixes commonly used in transport fuels.
Blenders earn a $1 federal subsidy for every gallon of biodiesel they produce as part of US government efforts to boost the fuel’s use. Biodiesel usually sells for just over $3, making it competitive with conventional diesel prices.
The development of Washington State’s biofuels industry has also been backed by Washington State senators Maria Cantwell and Patty Murray and Representative Norm Dicks, all Democrats. Cantwell and Murray have driven initiatives designed to boost the use of the cleaner-burning fuel in the state’s fast-growing west while providing a market for canola grown by farmers in the state’s east, with a number of state and local government agencies and mass-transit systems converting their vehicles to run on biodiesel.
The state is also only the second to embrace a biofuels mandate, with 2% of all diesel used in the state by 2008 required to be biodiesel
“Instead of hearing about record oil prices we are going to hear about American ingenuity in developing alternative fuels,” Cantwell said in a speech at today’s opening ceremony. “Many businesses in Washington will now have an alternative to conventional fuels,” she said.
Cantwell said she was seeking to pass a national fuel mandate as part of the Senate Farm Bill, requiring a certain percentage of fuels used in the US to be biodiesel.
However, critics of the plant will rely on palm oil from east Asian countries such as Malaysia, encouraging unsustainable farming practices and deforestation in the region.
Imperium chief executive Tobias said the company was committed to ensuring its feedstocks were produced responsibly. “We have a corporate sustainability policy,” he said. “We hold our vendors to a high standard of accountability.”
Tobias said the company had no immediate plans to import palm oil as a feedstock as canola prices remained cheaper and produced higher-quality biodiesel.
“Right now our customers are demanding the higher performance of canola,” he said.
The company also recently said it would build a similar-sized facility for $90 million on the Hawaiian island of Oahu, while plants are also planned on the US East Coast and in Argentina.
Last week Imperium also announced plans for a $345 million initial public offering.