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Company wants to start making biodiesel in 2009

January 27, 2008|By ANDREW SCHOTZ

WASHINGTON COUNTY - Investors who plan to build a biodiesel plant in Washington County estimate it will crush 21 million bushels of soybeans a year to produce 30 million gallons of clean fuel.

To do that, Chesapeake Biodiesel must reach well beyond the region.

The total 2006 soybean production in Maryland was 16 million bushels, Maryland Department of Agriculture spokeswoman Sue duPont said.

A large percentage - possibly more than half - goes to the poultry industry, she said. Perdue Farms in Salisbury, Md., has its own soybean crushing operation.

The preliminary estimate for production in 2007, when the state suffered through a drought, is 10.3 million bushels, the lowest output since 1987, duPont said.

In Annapolis last week, company officials updated Washington County's General Assembly delegation about the ambitious plan.

The company figures to fill a "huge need" for soymeal on the East Coast, Chief Operating Officer Adam Plattner said.

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Soybean oil will be extracted and turned into biodiesel fuel; the byproduct will be soymeal, which is used for livestock.

In an interview after the briefing, Chief Executive Officer George Robinson said the company expects to break ground this summer and start its operation around the fall of 2009.

The operation would create an estimated 45 full-time jobs.

The company hasn't picked a home yet. Robinson said three county sites are being considered, ranging from 80 to 200 acres.

Financial projections

Certified public accountant Matt Hitt told lawmakers that Chesapeake Biodiesel has raised about $40 million of the roughly $115 million it will need.

Del. LeRoy E. Myers Jr., R-Washington/Allegany, said a letter of support from Western Maryland legislators might boost the company's chances for state financing.

Through its demand, Chesapeake Biodiesel expects to raise local soybean prices by 70 cents per bushel, Plattner said.

Maryland crop reports show that Western Maryland soybean prices rose from about $5.50 per bushel in January 2006 to about $11.50 per bushel this month.

Sharpsburg-area farmer Dale Price said Friday he will remain skeptical about the predictions, particularly the price-per-bushel increase, until they come true.

"Is it realistic?" Price said. "I don't know. They're probably trying to sell their idea to the local community."

But if prices go up as pledged, Price said, "I don't care who's buying, as long as they're paying more than the next guy."

Jeff Semler, an agriculture and natural resources agent for the Maryland Cooperative Extension in Washington County, agreed that such a sharp increase to an already high soybean price might be unlikely.

Price and Price Farms, near Antietam National Battlefield, produces about 32,000 bushels of soybeans a year, as well as corn and wheat.

Washington County's total soybean production in 2006, the last documented year, was "slightly less than 300,000 bushels," Semler said.

A 'huge' market

Chesapeake Biodiesel officials told the delegation they expect to get 98 percent of their soybeans from within a 250-mile radius.

The Washington County Commissioners agreed in 2006 to contribute up to $18,000 for a study of the feasibility of a local biodiesel plant, with another $42,000 coming from the state.

"The conclusions of that analysis were encouraging," said Pat McMillan, an assistant secretary for marketing, animal industries and consumer services for the state Department of Agriculture.

In Annapolis, Plattner also described the market for biodiesel fuel, which is made from renewable resources, as "huge."

The National Biodiesel Board's Web site (www.biodiesel.org) says U.S. biodiesel sales increased from 500,000 gallons in 1999 to 250 million gallons in 2006.

A company called Maryland Biodiesel opened what it billed as the state's first biodiesel production facility in Berlin, near Ocean City, in June 2006.

A blend of 20 percent biodiesel and 80 percent petroleum diesel "has demonstrated significant environmental benefits with a minimum increase in cost for fleet operations and other consumers," the National Biodiesel Board's Web site says.

U.S. Rep. Roscoe Bartlett, R-Md., said alternative fuels might be moderately helpful, but can't be produced at significant enough levels to replace fossil fuels.

He said surging interest, particularly in ethanol, has caused the price of corn and soybeans to rise "with no offsetting benefit."

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