Delta Fuels of Ferriday buys former Ethyl petroleum plant

Published 12:00 am Wednesday, May 24, 2006

Natchez &8212; Five years after its closure, the former Ethyl Petroleum Additives plant has been sold to a Ferriday, company that plans to make biodiesel.

&8220;We&8217;re really, really excited about the project and excited for our area farmers,&8221; said Clint Vegas, president and owner of Delta Fuels Company Inc. &8220;We&8217;re just ecstatic.&8221;

Natchez-Adams economic development leaders are also thrilled by the sale of the plant.

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&8220;We&8217;re glad to have the plant such as the Ethyl plant that was a critical plant in our industrial park back in operation,&8221; said Woody Allen, chairman of the Natchez-Adams County Development Authority.

&8220;It&8217;s a wonderful shot in the arm for our community,&8221; said Jeff Rowell, executive director of the development authority. &8220;Things are looking up for Natchez and Adams County.&8221;

Conversion plans

Retrofitting the plant, which produced four different types of petroleum additives until Ethyl closed in 2001, will be relatively easy, Vegas said.

The first phase of work will bring the plant the capacity to produce 20 to 25 million gallons annually.

&8220;We hope to have that phase done within 90 to 120 days,&8221; Vegas said. &8220;It&8217;s not going to be that complicated because the Ethyl plant was so similar to what we needed.&8221;

A second phase of work could bring the plant&8217;s capacity up to 50 million gallons annually, Vegas said. A third phase could bring capacity up to 80 to 100 million gallons each year.

Vegas estimates the plant would employ between 20 and 30 full-time employees after the first phase, not counting economic impacts outside the plant.

Why build the plant?

Vegas said his company began handling biodiesel months and months ago, but began having problems with the quality of the products available.

&8220;Once we started handling biodiesel, all of our farm accounts &8212; we have more than 2,500 &8212; were just dying to use it,&8221; he said. &8220;We were having problems with quality.&8221;

At that point the company began looking for better options to supply their customers&8217; demands.

&8220;We came upon the Ethyl plant and realized it had everything we could ever dream of &8230; it&8217;s got rail, it&8217;s got barge access,&8221; Vegas said, adding that another benefit of creating the plant will be having better control on the availability and pricing of the products.

On only two days can Vegas remember not being able to purchase fuel for distribution to his customers &8212; shortly after Sept. 11 and after Hurricane Katrina.

On both occasions, when sales resumed, suppliers had greatly increased the prices, Vegas said. Neither one of those events raised the price of soybeans.

&8220;This will give us just a small control of our destiny,&8221; he said. &8220;And if we had been able to produce bio during Katrina last year, we&8217;d have been able to save our farmers a ton of money. The price of soybeans wasn&8217;t affected by Katrina.&8221;

&8220;We feel like the market is here,&8221; he said. &8220;Even moderate blends can cut emissions. It&8217;s a wonderful product and we just felt like it&8217;s what we needed to be using.

&8220;Between 60 and 70 percent of what I do is farm-related,&8221; Vegas said. &8220;If I can take their products and produce fuel, they&8217;re using their own soybean in their diesel equipment.

&8220;You look at Brazil,&8221; he said. &8220;They&8217;re energy independent. Why can they do it and not us?&8221;

The process

So how do you take a soybean and turn it into fuel?

First, you&8217;ve got to crush the beans and extract the soybean oil, which is 20 percent of the bean&8217;s content.

The oil is combined with alcohol and a catalyst. The result is an amount of biodiesel almost equal to the original weight of the oil.

The pure biodiesel is rated B100, meaning it is 100 percent pure. It is often mixed with petroleum diesel and referred to by the percentage of biodiesel in the mixture.

B20 &8212; 20 percent biodiesel and 80 percent diesel &8212; has become a standard government blend, one that the Environmental Protection Agency says reduce emissions while being cost-effective.

In the soybean formula, a bushel of soybeans makes roughly 1.4 gallons of soybean oil and 1 gallon of soybean oil makes 1 gallon of biodiesel.

Local interests

Vegas said as a local company, they intend to be good neighbors and hope to buy all of the oil that they can locally, including some already being manufactured in Ferriday.

But if the plant gets to full, phase one capacity it would require more than 55,000 gallons of oil a day to make 20 million gallons of biodiesel each year.

In addition to existing agricultural, commercial and government customers, Vegas said he hopes to have a neighbor across the street, too.

&8220;We are hoping Rentech comes to town,&8221; he said, referring to the company that hopes to bring a coal gasification plant to the former Belwood Country Club site, just across the street from the newly acquired Ethyl plant.

Rentech&8217;s $1B plant would use an advanced form of the Fischer-Tropsch process for turning coal into a clear diesel fuel.

&8220;Their diesel is so dry, they&8217;ve got to have a lubricating additive and our biodiesel would work great,&8221; Vegas said. &8220;We have talked to them a little already.&8221;

&8220;Rentech has been looking at that from the start,&8221; Allen said. &8220;They were excited about having a (biodiesel) plant that close. &8220;We&8217;re hoping that (Vegas) gets it kicked off and it grows.

&8220;It&8217;s good having someone from this area involved because he cares about the area and what&8217;s going on here,&8221; Allen said.

&8220;We&8217;re local and we feel like we&8217;re here to stay,&8221; Vegas said.

Delta Fuels Company operates fuel branches in Ferriday, Tallulah, St. Joseph, Sicily Island and Winnsboro. Vegas said the company currently employs approximately 35 full-time workers.

Vegas would not disclose terms of the plant&8217;s sale.