JACKSONVILLE -- Expect an increased growth of the biofuels industry in Jacksonville and a continued push by local governments to fuel their fleets with biofuel, experts say.
The biofuels industry is zeroing in on Florida because it is the largest untapped market, Gate Biofuels Inc. President Buzz Hoover said.
His company, a subsidiary of Gate Petroleum Co., is planning to build a 55 million-gallon liquid biofuels terminal in Jacksonville. The $90 million terminal on Heckscher Drive will blend 10 percent ethanol and 90 percent gasoline, known as E10, and distribute it to its 44 Jacksonville-area stores.
Florida is in the early stage of developing the biofuels industry with its future resting on factors that include state support, having feed stock supplies and having its own production facilities, said John Kellogg, spokesman for World Energy Alternatives Inc.
The majority of the 1.5 million to 2 million gallons of biodiesel shipped by Boston-based World Energy through the port of Jacksonville comes from the company's plant in Lakeland.
Kellogg said government incentives are needed because biodiesel is more expensive than diesel. Biodiesel is made from several sources of natural oils, including soybeans, rapeseed, palm and algae.
The state has two incentive programs available to biofuel companies. Up to $2.5 million is available in matching grants to each company through the Florida Renewable Energy Technologies Grants, said Michael Ohlsen, Florida Energy Office manager of biomass programs.
The Florida Farm to Fuel initiative offers up to $7 million in matching grants to each company. Gate plans to apply for incentives, but isn't relying on them for its project, Hoover said.
Other than the biodiesel plant in Lakeland, the only commercial facility is in Dade City. There are no ethanol plants.
Gate planned to build a $160 million ethanol manufacturing plant in White Springs, but scrapped the project because of rising building costs.
"Everyone and their dog was deciding to build an ethanol plant," Hoover said. "There were only so many people who can build that type of equipment."
No biofuel supply contracts have been made, but Hoover expects the Gate terminal to buy U.S. ethanol once it is online by late summer 2010. The company also has been talking with Brazilian ethanol producers, who use sugar cane, which has a higher yield than corn.
Gate won't begin blending B20, a combination of 20 percent biodiesel and the rest diesel fuel, unless soybean costs drop.
Jacksonville's public sector continues to pursue biofuels on a small scale.
For instance, St. Johns County has been working for about three years to build a biodiesel plant to process waste vegetable oil. The plant has the potential to produce up to 70,000 gallons per year when it goes fully online this month.
The county is looking to save up to $70,000 per year on fuel. The materials to build the plant cost $50,000, which is a fourth of the cost to buy a prefabricated plant.
In a partnership with JEA, the city built the first E85 fueling station, which provides a mixture of 85 percent ethanol alcohol and 15 percent gasoline. The city of Jacksonville and JEA use ethanol and biodiesel to fuel their fleets.
Most vehicles run on the B20 mixture, but the city has been running several trucks exclusively on 100 percent biodiesel, said Sam Houston Jr., who heads the city's fleet. So far there hasn't been a problem.
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