Monday, February 26, 2007

Big-Time Biodiesel

I was fretting a few days back about corporate interest in alternative energy technology and what implications it may have for the wise development of sustainable alternatives to fossil fuels. I have to admit being virtually ignorant of the serious capital that is being channeled into these new business ventures. Tyson and Microsoft are two corporate giants prominently mentioned in recent articles in financial and business journals.

Imperium Renewables, a start up in the Seattle area, is currently completing a new refinery in Grays Harbor, Washington. According to an article in last Thursday's Seattle Times1, $113 million in equity and $101 million in debt financing have been raised for their new refinery and for three more in Hawaii, Argentina and an undisclosed East Coast location. According to Jim Carlton of the Wall Street Journal2, former Microsoft executive Martin Tobias has played a lead role in securing the capital for these ventures and will also play a role in future management of this bioenergy corporation.

For Tyson Corporation, alternative technology looks to be an attempt to find a profitable sector to expand into during a period of overall financial decline. Although chicken fat can be rendered to biodiesel, as planned by the new Tyson Renewables division, the product is known to have certain "technical drawbacks." According to University of Minnesota economics professor Vernon Eidman3, biodiesel produced from animal fat clouds up at higher temperatures than soy-based biodiesel. That means that it might thicken when used in colder climates and the market distribution might have to be limited to areas where temperatures do not often drop below about 40 degrees Fahrenheit, or 4 degrees Celsius.

1Allison, Melissa, 2007, "Investors pump up biodiesel's prospects," Seattle Times, February 22.
2Carlton, Jim, 2007, "Biodiesel powers up on venture financing," Wall Street Journal, February 22.

3Leonard, Christopher, 2007, "Entrepreneurs tap reserves of chicken fat for biofuels," International Herald Tribune, January 4.

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