by Dr. Kent Moors , OilandEnergyInvestor.com.
An otherwise overlooked announcement last week may hold the key to a very promising direction in biofuels.
National Clean Fuels (OTC:NACF) confirmed that they have completed an agreement with privately-owned D.C. BioFuels LLC. The two companies have been talking for several months, but recent developments have accelerated the process.
At issue is a niche energy production sector, one that investors better watch with interest. Because when the combination of technology and new market opportunities hits, there will be some rather quick appreciation in stock prices... of some rather small companies. At least they will be small initially.
The upside potential here is significant.
As we wrestle with the broad implications of crude oil supply, natural gas availability, and oncoming carbon capture regulations, new technologies to generate energy from bio-sources are filling some important gaps.
If it also succeeds in mitigating rising environmental problems, so much the better...
The Key to Profitable Biofuel
D.C. BioFuels is in the process of building a biodiesel fuel plant to supply the D.C. and Mid-Atlantic areas. This facility will process millions of gallons of waste oil per year from a number of sources, including restaurants, animal waste fat, industrial locations, institutions, and even residences.
The plant is likely to demonstrate that the approach is both financially and environmentally successful (always a nice combination).
NACF has been developing a position in the remedial energy business and looking for a way to expand into waste oil. Last week's agreement seems to be the ticket.
Originally intended to produce five million gallons of B100 fuel per year, the plant capacity doubled once NACF came on board. (B100 is 100% pure biodiesel, rather than the product often found on the market, comprising a mixture of biodiesel and petroleum diesel. B50 is 50% biodiesel... B25 is 25%... and so on.)
The new plant would also be able to cut the biodiesel to form similar mixtures, of course. But unlike other commercial facilities, its ability to be competitive would not be dependent upon the use of conventional petroleum-based diesel to produce what is marketed as a bio product.
That's the key, both for the positive impact on the environment and usage as a fuel.
Biodiesel is renewable; it burns cleaner than petroleum and it allows us to remove the cooking and animal-based oil from the waste cycle. B100 takes the glycerin out of the vegetable or animal source oil and puts alcohol in. The modification reduces the viscosity of the oil (making it flow easier) and removes the problems to diesel injection systems resulting from earlier attempts.
Now, a plant producing 10 million gallons of biodiesel a year may mean little when the U.S. consumes almost 160 million gallons of diesel every day. However, NACF is regarding the D.C. location as a model for similar facilities in other cities throughout the country. Capturing even a small percentage of the current diesel market would prove very profitable. With sourcing continuous, and with concerns mounting over proper disposal of the cooking and animal fats-based oils, this is emerging as a win-win solution.
