Local biodiesel producer promotes use of fuel in government vehicles

Local biodiesel producer promotes use of fuel in government vehicles

When North Side-based United Oil Co. noticed its sales of industrial lubricants to the steel and aluminum industries were slowing, it decided to expand its product base into an emerging market: biodiesel.

"Compared to 10 or 15 years ago, the steel industry has experienced a lot of consolidation and is downsizing overall output," president Charles Cross said. "...Meanwhile, biodiesel is a high-growth market."

Now, the small 100-year-old company is the only biodiesel producer in southwestern Pennsylvania and has an annual production capacity of about 2 million gallons. And with the support of state government, Cross hopes to convince local government officials to use the fuel.

If Cross is successful, United Oil could see its annual production double or triple from its current 1 million gallons and its number of employees rise from 6 to 11. Within the next 18 months, Cross hopes to modify his facilities so production can rise to 4 million gallons, and, further down the road, he hopes to add additional facilities.

Biodiesel, an alternative fuel made of vegetable oil and animal fats, can be mixed with petroleum diesel to help lower the emissions of diesel trucks, cut down on the amount of foreign-supplied petroleum diesel required and increase lubricity, which makes engines last longer.

The United States produced 75 million gallons of biodiesel last year. Other states and cities already have created initiatives to tap into the growing market, including the city of San Francisco, which plans to have all of its diesel trucks using a biodiesel blend by the end of 2007, according to the National Biodiesel Board.

Although United Oil is southwestern Pennsylvania's only biodiesel producer, there are two others in the commonwealth: Shiremanstown-based Keystone Biofuels and Middletown-based Agra Biofuels, which combined produce 3.2 million gallons of biodiesel annually, according to Kurt Knaus, a spokesman with the state Department of Environmental Protection. As much as 40 million gallons of biodiesel production is expected to come on line over the next year in Pennsylvania, as other small energy companies ramp up production.

"The market is tremendous for biofuels right now," Knaus said.

High gas prices and environmental concerns both have led to an increased interest in biodiesel blends. Currently, biodiesel sells for $3.68 a gallon, while petroleum diesel is about $3, according to Lee Herbermann, biofuels division manager for Export Fuel Co. in Export, Pa.

At the state level, Gov. Ed Rendell and legislators are working to encourage the development and use of biodiesel.

Earlier this month, Rendell announced plans to develop a fuels initiative that would encourage the production of alternative energy, including biodiesel, for transportation uses. A stakeholders group is being put together to create legislation by July 31. This legislation likely would offer incentives to farmers to grow the feedstock to produce biodiesel, require a certain percentage of transportation fuels sold at retail to contain alternative fuels, and replace 900 million gallons of the state's transportation fuels with alternative fuels over the next 10 years.

House bill 1964, which would provide tax incentives to businesses that produce alternative fuels, was passed on Feb. 14 and is in the Senate finance committee. Sen. John Pippy, a Republican representing Allegheny and Washington counties, also is considering introducing legislation that would encourage the use of biodiesel.

"Government can set the example for this," Pippy said.

Pippy has met with Cross and local government officials to discuss the possibilities of using biodiesel for government vehicles. Cross added that he also has spoken with both Guy Costa, director of public works for the City of Pittsburgh, and Jim Motznik, a city councilman, among others.

Both Bob Grove, spokesman for the Port Authority of Allegheny County, and Kevin Evanto, spokesman for county Chief Executive Dan Onorato, said they weren't aware of any meetings regarding biodiesel, but the Port Authority and the county would be interested in looking into the option.

A deal with the Port Authority alone, which uses 10 million gallons of petroleum diesel a year, could bring in $4 million for United Oil, which could supply up to 2 million gallons of biodiesel to distributors who sell fuel to the Port Authority, Cross said.