by Chris Fleisher (Trib Total Media) Last fall, Ed Vescovi planned to restart a dormant biodiesel plant in Beaver County. The market for biofuel was shaky. But a new owner, Weavertown Environmental, pledged to get the plant going after purchasing it in 2013. Vescovi was hoping to begin production before the end of last year.
Then, oil prices plummeted, pushing down the price of regular diesel.
“You wouldn’t get anybody to really buy (biodiesel) if you’re still selling it for $4 a gallon,” said Ed Vescovi, who Weavertown hired to run the plant. “You can buy diesel fuel for $3 a gallon. How do you compete?”
Weavertown put the project on hold rather than suffer along with other producers who have seen their profits plummet in a challenging environment for biofuels, …
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“When consumers are pinched by $145 crude oil, they’re looking around for any relief they can find,” he (Scott Irwin, an agricultural economist at University of Illinois) said. “And biofuels generally look a lot better in that environment.”
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The fortunes of biodiesel manufacturers have been bad, too. Two years ago, there was a brisk business in turning used cooking oil into diesel fuel. HeroBX, an Erie-based biodiesel company, had its best year in 2013 and produced 50 million gallons of fuel.
But uncertainty over federal production mandates and the collapse in crude oil prices have changed matters.
“Our business is off significantly,” said Chris Peterson, vice president of HeroBX.
HeroBX is privately held, and Peterson declined to give profit or revenue figures. Iowa-based Renewable Energy Group, a large biodiesel company, had a 16.2 percent decrease in revenue in the third quarter and 94 percent drop in profit.
Margins have been squeezed because the price for vegetable oil didn’t drop as much as crude. Biodiesel makers were pressured to compete with regular diesel on price, without concurrently lower costs. READ MORE and MORE (25 x ”25, et al.)