Biodiesel Plants Promise Benefits to Soybean Growers in 2006
Biodiesel production is coming to Maryland in the new year, promising benefits for farmers and the environment.
Government incentives promoting alternative fuels have helped inspire plans for as many as three refineries in central Maryland and the Eastern Shore. All would refine relatively clean-burning biodiesel from soybean oil, which is produced when soybeans are crushed to make meal for livestock feed.
Biodiesel is fuel produced from domestic, renewable resources such as vegetable oil. It contains no petroleum, but can be blended with petroleum-based products and burned as motor fuel or home heating oil.
Homegrown diesel has been largely a Midwestern phenomenon, spurred by the grain industry and a new Minnesota law requiring that all diesel fuel sold in that state be mixed with at least 2 percent biodiesel.
But the trend is spreading to the East Coast, with refineries already operating in Virginia and New York, and one under construction in Delaware.
“We’re excited about it,” said Maryland Agriculture Secretary Lewis R. Riley. He said the Ehrlich administration encourages biodiesel production in the state to help increase fuel supplies and expand the market for agricultural products.
One of the proposed Maryland projects would do both by creating a soybean-crushing plant and a biodiesel refinery on the same site, somewhere along Interstate 70 between Frederick and Baltimore. Brothers Robert and Jeremy Butz, whose family owns Windridge Farm south of Frederick, said the plant would buy soybeans from central and southern Maryland and southern Pennsylvania, where prices paid to farmers have been depressed since Maryland’s only grain export elevator collapsed in Baltimore in 2001.
The Butzes said they aim to buy about 5 million bushels of soybeans annually, enough to produce 218 million pounds of soybean meal and 5 million gallons of soybean oil. They would sell the meal to area dairy farmers to feed cattle. Sales of biodiesel made from the oil would make the entire operation financially feasible, Robert Butz said.
“If you can’t find a good market for your oil, you can’t crush beans,” Butz said. “If we can take this oil and make biodiesel out of it, then it makes financial sense to crush.”
The Maryland Soybean Board, a grower-funded group that promotes soybean use, has approved a $15,000 expenditure to help fund a feasibility study for the Butz project. Board member Dave Burrier of Frederick County called it a winner for the area’s soybean growers.
“With a crushing facility here, it gives us another option for our marketing,” he said.
Columbia-based OffWorldWealth Inc. also plans a central Maryland biodiesel plant in 2006, either as part of the Butz project or as a stand-alone operation, said Sean Davidson, the firm’s chief operating officer.
On the Eastern Shore, James Warren, owner of Cropper Oil Co., plans to start producing at least 500,000 gallons of biodiesel this spring in Berlin, expanding to 3 million gallons in a year. Warren said he would buy soybean oil from nearby Perdue Farms Inc., which crushes more than 39 million bushels of soybeans annually for chicken feed.
Perdue spokeswoman Julie DeYoung said the company sells soybean oil to biodiesel plants in Virginia and New York, and would be happy to supply refineries closer to home.
She said Perdue isn’t concerned about competing with the Butzes for raw soybeans.
“Right now, there’s plenty of soybeans to go around,” DeYoung said. “We certainly support agriculture, and strong market outlets are good for agriculture.”
Maryland farmers were expected to harvest about 16 million bushels of soybeans in 2005, according to the U.S. Agriculture Department.