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Work Begins On Biodiesel Plant

DES MOINES, IA (AP) – A massive biodiesel plant to be built in northern Iowa is just the kind of project the new energy bill will help foster, said Sen. Charles Grassley, R-Iowa.

Cargill Inc. was to break ground in Iowa Falls on the world’s largest biodiesel plant, expected to churn out 37.5 million gallons of fuel a year. It will use soybeans, all bought from area farmers, said Bill Brady, spokesman for the Minnesota company.

Grassley said tax incentives included in the energy bill signed by President Bush will spur the growth of the biodiesel industry and benefit the economy.

“ This is good for the ag industry. It’s good for economic development,” Grassley said. “It’s good for good-paying jobs in our small communities in the Midwest.

“ It’s good for our national security, not to be so tied to foreign sources of oil. Everything about it is good, good, good,” Grassley said.

Brady said construction of the plant was announced before the energy bill passed. “But, with that said, some of the elements that were in the bill were important to this project and, for that matter, to the biodiesel industry in general,” he said.

Brady said the company’s overall strategy includes more participation in the biodiesel and ethanol industries, as well as continued research and development on expanding the use of ag-based fuels.

Included in the bill is a tax break when biodiesel is blended with regular diesel fuel to produce agri-diesel, intended to lower the cost of the fuel mixture at the pump and boost sales.

Iowa Energy Center spokesman Norm Olson said the tax break will help level the playing field between petroleum and biodiesel.

The cost of biodiesel is still higher than regular diesel. In almost every area, biodiesel outperforms regular diesel. So, it’s been strictly a cost issue,” Olson said.

Iowa’s biodiesel output, about 25 million gallons a year, will leap to more than 50 million gallons when a fourth plant in Wall Lake begins production later this year, said Iowa Soybean Association spokeswoman Karen Anderson.

However, she said, demand has been growing faster than the supply, and Cargill’s new plant is needed.

The Heart of Iowa Co-op in Nevada, one of about 15 stations in Iowa selling biodiesel, has seen the growing demand for alternative fuels and plans to add two more biodiesel and ethanol fueling stations by the end of the year.

“ I think unleaded is going to be a thing of the past,” said Harlan Borton, the co-op’s energy manager. “Consumers are quickly catching on to the benefits of biodiesel and other renewable fuels.

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