Biodiesel Producer Creates Additive After Problems Arise

When folks at Alterra Bioenergy hit supply and distribution problems just as their new biodiesel business got off the ground, they re-examined their product and decided to make something entirely new.

The Macon, Ga.-based company with a refinery in Gordon developed the country's first diesel additive that is not petroleum-based. The product, called DieselMaxx, lubricates and improves diesel engine performance while reducing pollution emissions, said Alterra President Wayne Johnson.

"When I started this business, I expected to buy, process and sell traditional biodiesel locally as a basic fuel, and now it's taken on all these other dimensions," he said. "With a little ingenuity, we turned it into a value-added product."

Johnson said DieselMaxx has been distributed in Colorado and close to 200 locations in Georgia for the last 60 days. It's sold at truck stops and auto parts stores in gallon jugs that will treat about 400 gallons of fuel each, he said.

Johnson anticipates rolling out nationwide distribution early next year at a price that is cheaper than many products in the $5 billion American diesel additive market.

The University of Georgia tested DieselMaxx and found that it produced a 10 percent reduction in emissions of nitrogen oxide, a primary component of smog, said Ryan Adolphson, director of the UGA engineering outreach service. A two-week test in the campus bus fleet also found promising results for increases in fuel efficiency, he said.

"Buses idle about 50 percent of the time, so we expect in the same test in an over-the-road situation you'd see a much greater increase in fuel efficiency," he said. He said Alterra is seeking truck fleets to test the product, and UGA will administer the tests.

Alterra opened its first biodiesel plant in Gordon early last year and had planned another one to start production in Plains in late 2007. The plants were originally proposed to refine soybean oil into fuel. But soybean prices skyrocketed, and Johnson said the company had a tough time convincing distributors to replace traditional diesel pumps at gas stations with biodiesel - or add new biodiesel pumps.

The company erected buildings in Plains but used them for storage and distribution, which didn't provide the 25 local jobs promised when the company held a ground-breaking ceremony there with former President Jimmy Carter.

"When you develop a business, you think you have everything lined up and then you have to adapt to a change in circumstances," Johnson said. "We made a commitment to Carter and Plains that we would engage in meaningful activity there, and we will."

If DieselMaxx takes off as Johnson hopes, the Plains plant will become a bottling facility employing about 30 people, he said.

In Gordon, Alterra is putting in a railroad spur to its refinery and plans to expand parts of its building to handle other feedstocks - the oils used to make biodiesel or the additive - such as used cooking oil and grease-trap waste from restaurants, Johnson said. The refinery is set up so that it can switch feedstocks daily and can switch from DieselMaxx to traditional biodiesel production. It is now using chicken fat, beef tallow and soybean oil.

Traditional biodiesel is experiencing new demand in the face of fuel shortages caused by Hurricane Ike's impact on Texas, Johnson said.

"Now is a very good time to be in the refinery business," Johnson said. "People are more willing to pay the cost biodiesel deserves and requires. We're filling orders as fast as we can."

But the company still struggles with the stiff competition for feedstock, although those prices have dropped through the year.

Eventually, the Gordon refinery could switch to producing the DieselMaxx additive exclusively, Johnson said. Its future looks promising.

At a meeting to discuss the fuel crisis in Plains two weeks ago, Carter gathered business people representing 30 percent of the U.S. fuel sales network, and Johnson had an opportunity to pitch Alterra's additive.

Johnson said he is in talks with major trucking fleets as well as the Port of Oakland in California, which might require truckers to use DieselMaxx to reduce nitrogen oxide emissions.

Alterra continues to explore the possibility of using other feedstock oils now grown in South America or Africa. The company took officials from UGA to several South American countries to survey the biofuel landscape there and get ideas, and it has funded trials of some new oil seed crops that could be grown south of Macon, Adolphson said.

"We're playing a major role in research," Johnson said. "Our little efforts here in Macon, Georgia, are having big effects."