MA Company to Build State’s First Biofuel Terminal

Bay State Biofuels CEO Jesse Reich (image: ayerrotary.com)

Sleepy North Andover, MA dates back to the earliest days of American history. But today, it stands at the forefront of the “going green” movement, as it will soon be the new home of a biodiesel fuel terminal, Biodiesel magazine reports.

Biodiesel is a renewable energy source growing in popularity. Animal or vegetable oils are mixed with methanol and then blended in with petroleum-based fuels like heating oil. Proponents of biofuel say the mixture produces fewer greenhouse gas emissions than regular heating oil.

Bay State Biofuels, LLC is constructing the state’s fist biodiesel terminal, with a full capacity of 350,000 gallons. The start-up company is hoping to capitalize on a piece of legislation the Massachusetts legislature passed last year which requires petroleum used to make home heating oil to be blended with biodiesel fuel. In 2010, home heating oil sold in Massachusetts will be required to have a 2% biodiesel blend, referred to in the trade as B2. That number will eventually rise to 5%, or B5.

The Massachusetts law, however, has faced some stumbling blocks. Biodiesel supply has been limited; several proposed processing plants have not been able to obtain the financing needed for their construction. And, as supply has not matched demand, the prices of biodiesel blended fuel have risen.

However, Bay State Biofuels CEO Jesse Reich says that his firm will sell a product that is within pennies of the cost of petroleum. Reich also says that he hopes his company will sell 10 million gallons of biodiesel fuel within two years, hoping to reach over 50 million gallons in five years.

In addition to storing biodiesel fuel, the terminal will also have production capabilities. Reich says that his company will transform used vegetable oil and animal fats into its end product. Reich, and others, have argued that used waste is the way to go in producing biofuel; using “virgin” crops to do so makes no sense due to the energy used in harvesting, fertilizing and transporting phases.

While biodiesel appears to be taking off in Massachusetts, it has faced opposition in other areas. The City of New York considered legislation that would require biodiesel to be included in heating oil used for residential purposes. However, it was met with opposition by several community groups, including a Staten Island advisory panel.

Biofuel-related legislation is something to keep an eye on. Home heating oil prices could rise by requiring biofuel blends. But, in return, home heating oil may become a lot friendlier to the environment.

Watch this news report on Bay State’s plans from necn.com: