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Ag industry fuels biodeisel business

June 27, 2006

SHIREMANSTOWN, Pa. - Race Miner is not afraid to take risks. Three years ago, he learned that cars could possibly run on vegetable oil.

Intrigued, he put everything on the line to start up a business based on this idea.

The product is biodiesel, a diesel replacement fuel made from vegetable oils, recycled cooking greases or animal fats. Recognizing there might be a market for this product in their native Pennsylvania, Miner and his wife Allison returned to Cumberland County from Colorado to further investigate.

"Biodiesel was essentially non-existent here," Miner said. "I knew it would never happen unless someone put some money behind it, so we launched Keystone BioFuels."

Keystone BioFuels is the first company of its kind in Pennsylvania to manufacture and ship soy diesel, a form of biodiesel.

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According to the Pennsylvania Department of Agriculture, the advantages of biodiesel are that it is renewable, energy-efficient and can replace petroleum-derived diesel fuel, at a comparative price. It said most diesel equipment can use biodiesel with little or no modifications.

"Biodiesel is environmentally-friendly because it is nontoxic, biodegradable and can reduce global warming gas emissions, as well as tailpipe emissions, including air toxins," the department said.

Another benefit is that is made in the United States from domestic recycled or agricultural resources.

Miner said that was a key factor in his decision to manufacture soy diesel, knowing he could contribute to Pennsylvania's agricultural industry.

Soy diesel uses the oil produced from crushing soybeans. After removing the glycerin from the oil and further refining, B20 Blend-a mix of 20 percent soy-based diesel and 80 percent standard diesel fuel-is produced.

Keystone BioFuels sources 50 percent of its oil from Boyd Station, a crushing station operated by Cotner Farms in Northumberland County. The Cotners grow their own soybeans and also crush beans from other Pennsylvania growers.

Because there is not enough oil to sustain their needs, Keystone BioFuels also purchases oil from Wenger Feeds in Lancaster County, as well as Perdue Farms in Salisbury, Md.

"It's an exciting business to be in," Miner said. "We are hoping to help bring agriculture back into the mainstream and give producers another way to become profitable by contributing to the industry."

Keystone BioFuels has been operating since March. It can produce up to one million gallons per year by operating the equipment five days a week and producing nearly 3,000 gallons per day.

A $6 million expansion is planned with the help of the First Industries Fund Loan Guarantee through the Pennsylvania Department of Agriculture's PA grows program.

If all goes accordingly, the new facilities will be operating by December with the capacity to produce and store 5 to 7 million gallons of soy diesel.

"Originally, our two-year plan was to be at five million gallons," Miner said. "But with the help of the First Industries Fund and because the market is so dynamic and diverse, we're going to be there within the first year."

Currently, Keystone BioFuels is selling to local businesses operating diesel equipment. It recently signed an agreement with Cumberland County to use the soy diesel in county buses.

Another big market is the production of home heating oil, but because it is seasonal, it presents more of a challenge for income and storage, Miner said.

"We also want to make a fuel that we can sell back to the farmer," he said. "Our goal is to create a cycle by purchasing the products from the farmer to make the fuel that they can then use to operate their businesses."

Miner mainly uses direct marketing to pitch the sale of Keystone BioFuels to consumers. Through word-of-mouth contact, combined with an informative Web site, he is establishing a base of clients in the area.

Always searching for creative marketing alternatives, he also signed on with PA Preferred, the Department of Agriculture's program that ensures consumers that they are getting Pennsylvania-produced products.

"We thought it was a good idea to market in agriculture on the supply side of the business, while sharing the benefits of the department's promotional efforts," he said.

"We have learned that this has become an educational effort, not a sales effort," he said. "Fuel is not a luxury item, it's a necessity."

For more information about biodiesel and Keystone BioFuels, visit www.keystonebiofuels.com

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