Not a Tiger, but Maybe a Chicken in Your Tank
Wednesday, January 3, 2007
DEXTER, Mo. -- Jerry Bagby is typical of the oil men who are prospecting for a fortune in the Midwestern biofuels boom: He's convinced there's oil in these hills. And he's found a well that few others are pumping.
Bagby and a longtime friend have cobbled together $5 million to build a new biodiesel plant on the lonely croplands outside this southeast Missouri town. They're betting that their company, Global Fuels, can hit paydirt by exploiting a generally overlooked natural resource that's abundant in these parts -- chicken fat.
There's a virtual gusher of the stuff at a nearby Tyson Foods poultry plant. The low-quality fat is shipped out of state to be rendered and used as a cheap ingredient in pet food, soap and other products.
Bagby and his partner, Harold Williams, plan to refine the gooey substance, mix it with soybean oil and produce about 3 million gallons of biodiesel annually.
Today, only a tiny fraction of U.S. biodiesel is made from chicken fat, but that seems likely to change. The rising cost of soybean oil -- which accounts for roughly 90 percent of all biodiesel fuel stock -- is pushing the industry to exploit cheap and plentiful animal fats.
The nation's biggest meat corporations have taken notice. Tyson Foods announced in November that it had established a renewable-energy division that will be up and running this year. Perdue Farms and Smithfield Foods, Tyson's competitors, are making similar moves.
As meatpackers enter the field, they bring massive amounts of fuel stock, which could make biodiesel cheaper and more plentiful.
The shift to animal fat as a fuel stock could be key to making the budding biodiesel industry a reliable fuel source for U.S. trucking fleets, said Vernon Eidman, a professor of economics at the University of Minnesota who has studied the biofuels industry extensively.
Eidman estimates that within five years the United States will produce 1 billion gallons of biodiesel and that half of it will be made from animal fat. By that time, soybean-based biodiesel will account for about 20 percent of the total, he said.
For fuel refiners like Bagby, the allure of animal fat is clear. Soybean oil costs 33 cents a pound, while chicken fat costs 19 cents. He plans to include soybean oil in his blend only because it adds necessary lubrication for engine parts.
"Soybean oil is more expensive than other products, so we just use enough of it to make the system run clean," Bagby said, gesturing toward a row of pipes and vats being installed in his new refinery.
For companies such as Tyson, the attraction is simple. The nation's biggest meat company, Tyson is also the biggest producer of leftover fat from chicken, cattle and hogs.