Local biodiesel companies clash over access to pumps

A biodiesel battle is on the horizon and two Northern Colorado companies are meeting at local pumps for the showdown.

Blue Sun Biodiesel entered the scene in late 2003 by selling its branded biodiesel at local pumps. The company drummed up media attention with each pump opening and currently has 15 pumps in operation in Colorado and New Mexico and hopes to add another 10 by the end of the year.

Blue Sun also opened a blending plant near Alamosa and is planning a 3 million gallon production plant nearby. Until the plant is operational and using Blue Sun’s mustard seed-like crop, the company is using soy oil.

Rocky Mountain Biodiesel Industries opened quietly in October 2004 with a production plant in Berthoud. The company uses a large variety of virgin plant oils to produce its biodiesel. The local plant is expected to produce close to 1 million gallons of biodiesel in 2005 and has a total capacity of 3 million gallons.

The battle for the consumer biodiesel market is brewing and the first pump of contention appears to be at Poudre Valley Co-op in Fort Collins. Blue Sun started supplying the co-op with biodiesel in June 2004. The pump is owned by Poudre Valley, but labeled and marketed by Blue Sun.

This spring, Poudre Valley started selling pure biodiesel produced by Rocky Mountain Biodiesel, as well as the B-20 – or 20 percent biodiesel blend – produced by Blue Sun.

“It’s an economic issue – they both supply biodiesel and we are looking for the best product at the most competitive price for our members,´ said Ed Race, operations manager for Poudre Valley Co-op. “I call the distributor and which ever has the lower price is the one I buy. The winner is the consumer.”

Officials with Blue Sun feel differently because many of the Fort Collins companies that advertise they use Blue Sun Biodiesel purchase the product at the Poudre Valley Co-op.

“We have to have real quality control and if a retailer says they are selling the Blue Sun product we need to protect the brand as a quality fuel,´ said John Long, director of business development for Blue Sun.

Odell Brewing Co. of Fort Collins uses biodiesel in its vehicles, and purchases the fuel at Poudre Valley Co-op.

“We use biodiesel because it is better for the environment and because we are supporting a local company,´ said Corkie Odell, vice president of Odell Brewing Co. “We think Berthoud is local too. Now, this might be an issue for us if the fuel was coming from Texas.”

Poudre Valley’s Race said his co-op does not have an exclusivity contract with Blue Sun, allowing him to find the lowest cost biodiesel for the pump. Race said Rocky Mountain Biodiesel’s product tends to run 15 cents cheaper per gallon on average.

“There is definitely competition between the two and Blue Sun is really working on the marketing side while Rocky Mountain is just coming on-line,” Race said. “The market is open and unfortunately most of the supply is created with soybeans and this controlling entity is keeping the prices high because it is traded on the open market.”

One of the ways biodiesel is currently produced is by separating the glycerin from the methyl esters in soybean oil. The methyl esters are compressed in the diesel engine until they combust, providing the energy for motion of the automobile. What results is a cleaner burning, more environmentally friendly fuel that is grown in the field rather than drilled from the earth.

Berthoud’s Rocky Mountain Biodiesel uses a variety of crops of less expensive crops to produce its biodiesel. The company seeks farmers who have grown less than desirable sunflowers, canola and other crops to contribute to their biodiesel.

“There are a dozen crops or more that we are looking at in Colorado, Texas and elsewhere,´ said Greg Weeks, operating manager, Rocky Mountain Biodiesel Industries. “These are crops that either are raised or could be raised that don’t tie the farmer to a specific usage for a crop … This way if the prices are depressed, the farmer has another outlet, that is what we are trying to do with this feed stock program.”

Poudre Valley’s Race said he has not noticed a quality difference between the biodiesels, and both claim to exceed the ASTM requirements and standards.

“I have looked at the print outs on both fuels and they read about the same,” Race said. “There is not a whole lot of difference.”

Kim Lock is the agriculture reporter for the Northern Colorado Business Report. To suggest column ideas contact her at (970) 221-5400 ext. 222 or at klock@ncbr.com.

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