A news report of an Ag-breakfast meeting forwarded to me by reader Rob B. indicates that production at Nova Biosource Fuels is proceeding apace.  The second of three lines is apparently functioning well and the third one is scheduled to begin shortly. 

Running three lines simulataneously is a piece of cake in theory but in practice it could be very tricky.  So this progress is very good news but there is significantly more good news required before the companies (fast dwindling) fans breath easy.

Another issue, as highlighted in my last comment on NBF, is the company’s financial staying power.  The recent resignation of NBF’s Treasurer was a not-so-good sign and the stock is trading at a pre-bankruptcy level.  Let us hope the company can hang on until its production storm clouds have passed. 

NBF is a stock that always offered a potential of outsized upside appreciation if things worked out.  That is even more the case now.  Here is the news report:

Nova Biodiesel refinery already producing biodiesel

By Jo Ann Hustis
Herald Writer
Thursday, May 29, 2008 5:50 AM CDT

It’s good technology, plant manager Ben Van Veckhoven says of the Nova Biodiesel refinery in Seneca, the largest of its kind in the nation.
“It’s a business that is certainly good for the country,” he said Wednesday of the refinery, which utilizes restaurant grease and oil waste for feedstock and uses very little water in the processing operation.
Guest speaker at the quarterly Ag Breakfast by the Grundy County Soil and Water Conservation District, Van Veckhoven noted the new plant started production on March 1 - earlier than expected - with about 40 employees.
“We have two units up and running, and the third unit will be in production shortly,” he said. “Things are looking good.”
When in full operation, the refinery is to produce 60 million gallons of biodiesel fuel annually.

Biodiesel is a clean-burning alternative fuel produced from renewable resources. Biodiesel can be mixed with petroleum to produce a biodiesel blend that can be used in a variety of vehicles. Pure biodiesel can only be used in diesel engines.
Seneca Nova is the first refinery to be owned by its parent company, Nova Biosource Fuels Inc., of Houston, Texas.
The refinery operates on low-cost feedstocks, which include rendered animal fats and oils, and recycled vegetable and animal-based greases. The feedstocks are not acceptable for human consumption.
The plant processes pre-fatty acids, such as corn oil, poultry and catfish oil, and yellow and brown grease.

“Yellow grease is french fryer grease, which is washed and dried,” said Van Veckhoven. “Brown grease is animal and vegetable grease, and has usually been exposed to water in some form or other.”
Other feedstocks include white grease, which is melted and hardened pork fat, and tallow, which is beef fat and slightly harder.
The fuel is manufactured through the transesterfication process, which removes the glycerin from the feedstock. There are no sulfur or aromatics in biodiesel, as in traditional fuels.
Glycerin is a by-product of biodiesel processing. This, and other byproducts, are used otherwise.

“There’s a home for everything,” Van Veckhoven noted.
There are at least three major benefits gleaned from the use of biodiesel, including reducing the nation’s dependence on foreign oil.
Also, biodiesel is a renewable fuel, and it burns much cleaner that regular fuel.
“It’s taken off,” he added.
About 31 states nationwide have mandates on the amount of biodiesel blend with other fuels. The standard in Illinois is 11 percent.
He noted drivers of vehicles that use a biodiesel blend save about 25 cents per gallon in sales tax in Illinois only.
Many of the larger gasoline stations have their own blending facilities for biodiesel fuel. Others purchase theirs in bulk from distribution points.
The call for used animal fats as feedstocks has increased the cost. Still, however, the cost of animal fats is not as expensive as soybean oil, which is used in production of biofuels.
Feedstock for Seneca Nova is supplied under contract with Lipid Logistics Llc., an affiliate of Kaluzny Brothers Inc., of Joliet.
Company spokesman David Kaluzny II, a guest at the breakfast, said the biodiesel refining industry is much more developed in Europe than the United States.
“Given the price of fuel in Europe, though, we can still make money exporting diesel and biodiesel fuel to Europe,” he said.
Because of the rising price of feedstocks, Kaluzny said some thievery is taking place. He said thieves will take the company’s barrels of feedstock from outside restaurants and sell them to other refineries.
“Then when our trucks show up on their regular pickup rounds, there’s no barrels - a wasted trip,” he said.
Some people try to make biodiesel fuel in home-built refineries in their garages.
“That’s not a good idea,” said Kaluzny. “They dump the byproducts down the drain, where it goes into the municipal treatment plants. Also, they can blow up their garage in the process.”
Van Veckhoven was introduced by SWCD Director Natalie Mahler.
About 30 people attended the event at R-Place in Morris. The next breakfast is Aug. 27 at the Grundy County Farm Bureau on North Illinois 47.

Tags: peak oil energy investments

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