Biodiesel plant in Keokuk, Iowa, scheduled to restart operations
Enervation Advisors LLC, an Axis Group Company, has partnered with the former owner of an idle biodiesel plant to bring it back online. The Keokuk, Iowa-based 5 MMgy plant was originally owned by John Rothgeb and operated under the name Tri-City Energy. According to Paul Tantillo, Enervation’s director of operations and managing member, the facility has been idle for nearly three years.
Enervation is currently working to retrofit and staff the plant. The facility features a glycerin refining process that can process 4 MMgy. The glycerin capacity will be brought online first, and is set to begin producing by March. Work on the system is being completed now, Tantillo said, noting that little was required to bring the refining system back online. Starting glycerin refining capacity first will help the plant establish some cash flow in the short-term.
Work is also being completed in the biodiesel plant. The front end of the plant is being upgraded to accept a wider range of feedstocks. Once the retrofit is complete, Tantillo said the plant will be able to process feedstocks containing up to 15 percent free fatty acids. Fats, oils and grease will be the primary feedstocks converted by the plant. Tantillo estimates the biodiesel capacity of the plant will be brought online in approximately 60 days. However, he also notes that it is important to his company the upgrades be completed correctly. “We want to be making sure that we do everything exactly right,” he said. “We don’t have a timeline we have to stick to. We’re not burdened by debt. This is all cash, so we’re going to make sure that we do this exactly the right way.”
The project is being supported by several consultants with expertise in the biodiesel industry, including Renewable BioSystems’ Peter Behrle and Virtuoso Biofuel’s Tony Prehm. According to Tantillo, Prehm is facilitating the process to bring the plant back to life while Behrle has been invaluable as an engineer, an advisor and a tutor.
Although the Keokuk plant marks Enervation’s first venture into the biodiesel industry, the company plans to replicate this project with additional plants. However, Tantillo stresses that his organization has a rather unique business plan. “We’re an organization that focuses on rescue and recovery rather than absorption and removal of the original owner,” he said. It is also important for plants that Enervation becomes involved in to be sustainable without government support, Tantillo said. “It was the false sense of security that pervaded the industry just a few years back that caused hundreds of millions of dollars in bank loans to ultimately fail and plants to close as a result of depending on soybean oil and the dollar per gallon tax credit,” he said. “We choose to be able to operate clear of that dependence.”
According to Tantillo, Enervation currently has several bids pending on bankrupt and idle biodiesel plants. “We’re going to take a very hard crack at this [industry],” he said, noting that the group of investors his company has put together is expecting to spend upwards of $60 or $70 million in the biofuels industry over the next 18 months. In addition to the biodiesel plant, Enervation has also begun the build-out for an ethanol plant in Keokuk. That facility is expected to be complete by September.