The Stuttgart, Ark., facility, located in the heart of Arkansas’ Grand Prairie—a fertile rice- and soybean-growing region—melds new and old within a 31,000-square-foot building in an aging industrial district of town. The structure that houses the facility was built during the Great Depression by the Works Progress Administration, a federal relief agency established in 1935 by executive order to create jobs by spending money on a wide variety of programs, including highways and building construction, slum clearance, reforestation and rural rehabilitation.
Now, one area of that old building—located just feet from an operational rail line—is filled with state-of-the-art biodiesel production equipment; much of the structure remains unutilized. The plant came on line in late April with an annual production capacity of 3 MMgy. By today’s standards, that means Patriot BioFuels is a relatively small producer, but Foltz, president of the company, and his partners have much larger plans for this booming young business. If all goes as planned, the Stuttgart facility will soon be expanded to approximately 13 MMgy. There’s enough space in the building to go even larger—perhaps up to 25 MMgy—but the economies of scale for that particular market become less attractive beyond the 13 MMgy mark, Foltz estimates. That’s why Patriot BioFuels will likely put its money into a second plant in a different location after the Stuttgart facility undergoes its 10 MMgy expansion. In fact, Foltz says the company is aggressively evaluating sites for a second plant nearer to key metropolitan diesel markets.
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Right now, the company is selling as much biodiesel as it can produce—and doing it profitably—so Foltz and his partners are primarily focused on building a strong, sustainable company. “We’re working on all the nuts-and-bolts types of things right now,” he says. “We can have a 7,200-gallon tanker in and out of here in about 45 minutes. Being able to do this, by both truck and rail, will be critical to our opertions.”
While feedstock supply is not a problem for Patriot BioFuels at the moment, growing the supply and diversity of raw materials for production in the region is something the company actively supports. Arkansas Agriculture Secretary Richard Bell says one project in the works is a collaborative effort that includes Patriot BioFuels and larger players like Riceland Foods, a giant farmer-owned cooperative and grain processor. The aim is to build contracts with farmers to grow canola, a fall-seeded crop with a higher oil content than soybeans. Arkansas has only two major vegetable oil processing facilities. Riceland Foods’ soybean crushing facility in Stuttgart has an output of about 26 MMgy of virgin soybean oil. Not far away in Pine Bluff is the nation’s largest cottonseed crushing plant, Planter’s Cotton Oil Mill, which has a capacity of 11.5 MMgy of cottonseed oil. “It would be nice to bring canola into the region,” Foltz says.
Currently, Patriot BioFuels is using soybean oil, cottonseed oil and first-use poultry oil as production feedstocks, making it a true multi-feedstock facility. Arkansas is the nation’s second-largest chicken-producing state in the nation and home to Tyson Foods. Foltz says the poultry oil it gets from suppliers in the region is of a relatively high quality. That said, the company has no plans to use yellow grease or other second-use waste feedstocks that require intensive pretreatment.
Just a Different Kind of Diesel
Bell, a former Riceland Foods CEO, was among the dignitaries present for Patriot BioFuels’ April 20 grand opening. The one-time career official at the USDA’s Foreign Agricultural Service told the crowd, “I was a bit of a skeptic in terms of biofuels. My career was based on agricultural exports, and every time we looked at the arithmetic in earlier years, it didn’t work out [for] biofuels. … But I tell people, when the price went to $60 a barrel for petroleum, it changed my mind.”
Foltz echoed Bell’s sentiment. At more than $70-per-barrel oil, he said, “By the end of the work week, we’ll have transferred about $1.6 billion to the OPEC nations—and I don’t think most of those nations have our best interests at heart. … We believe what we’re doing here matters. We believe that our employees are doing something that’s heroic. We’re not just making diesel fuel out of soybeans; we’re making a more secure nation. We’re cleaning the air that our children breathe. We’re reducing greenhouse gases … and we’re playing a positive role in the economy of the state of Arkansas and of the mid-South region.”
Foltz says Patriot BioFuels’ slogan is, “We’re fueling America’s future today,” and he likens his company to a small, clean renewable petroleum producer. “We’re really not in the business of making alternative fuels,” he says. “What we do here is make diesel fuel. It’s just that we don’t make diesel fuel out of petroleum. We’re making it out of soybean oil and a number of other feedstocks.” Foltz got a laugh from the crowd at the grand opening when he said Patriot BioFuels was just like Exxon—except for the feedstock difference and the fact that the oil giant “posted the largest corporate profit ‘in the history of the world’ last year. … But other than that, we’re just like Exxon.”
Foltz is no stranger to the inner workings of Washington, D.C. During the Clinton Administration, he was deputy staff director of the U.S. DOE’s Federal Fleet Conversion Task Force. Later, he was director of the National Clean Cities Program, and he eventually became a lobbyist on behalf of clean fuel alternatives. He now says the idea for Patriot BioFuels came to him while he was promoting a blenders’ tax credit during the 2005 session of the Arkansas General Assembly. Back then, Foltz says, the closest biodiesel production facility to central Arkansas was 350 miles away. “It didn't seem like anyone was doing a whole lot to start a production facility in this area,” he says. “So Cal McCastlain (now Patriot BioFuels’ general counsel) and I started working on a business plan for a new facility.”
The next to collaborators come on board were Mike Shook and Steve Danforth, who had participated in a Winrock International feasibility study for locating a biodiesel plant in Arkansas. In all, Patriot BioFuels has a dozen co-investors, ranging from the president of a leading regional seed company to the director of governmental affairs for the world’s leading methanol producer. All but one of the investors are Arkansas natives. It took slightly less than a year—“from putting pen to paper to producing the first gallon of biodiesel”—to bring the company together, Foltz says, adding that the Stuttgart plant sold its first load of biodiesel on April 27. “We have Mike and Steve to thank for that,” Foltz says. “They are two guys who really know what they’re doing, and without them we wouldn’t be in production today.”
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