The Great Biodiesel Shutdown  

The New York Times has a post on the sagging biofuel market in the US - The Great Biodiesel Shutdown.

The sufferings of the American biodiesel industry continue.

Last month I wrote about the industry’s problems in the wake of a European tariff on American biodiesel producers. Imperium Renewables, once one of the country’s largest refiners of biodiesel, had also just laid off 24 employees.

It turns out that Imperium is not in fact producing any biodiesel. (A reader informed me of this, and I subsequently confirmed it with an Imperium representative, John Williams, who said by e-mail that “Imperium has produced fuel in 2009, but is not currently producing fuel.”) The suspension of production is the latest bad news for the company, which last year lost a big contract with Royal Caribbean cruise lines, and also canceled an initial public offering in early 2008.

Other states are weighing in with tales of woe. (The problem is not only the European tariff, but also the fact that diesel prices in this country have fallen below biodiesel prices, reducing incentive to buy the alternative fuel.)

Michigan’s largest biodiesel maker, NextDiesel, is not making any of the fuel in the state at the moment, and the second-largest Michigan producer is down to one-tenth of its capacity, according to Michigan Live. Texas, a large biodiesel producer, has been badly hit, and Europe’s tariff on American exports will particularly affect the port of Houston, according to The Houston Chronicle.

In Salem, Ore., a large biodiesel plant is struggling to sell the fuel, which is sitting in tanks and rented storage containers, according to The Statesman Journal, an Oregon paper. (This has not stopped talk of a biodiesel research institute in Salem.) Oregon has a law requiring that all diesel in the state be sold with a 2 percent biodiesel blend. But in a cruel catch, that requirement only applies if a certain amount of biodiesel is produced every month. The hard-hit biodiesel makers are not currently producing at that that level, The Statesman Journal reported.