Hawaii expertise
to help build biodiesel
fuel plant in Oregon

Pacific Biodiesel Inc., a nationally recognized, Maui-based producer of diesel fuel made from cooking oil, is partnering with SeQuential Biofuels LLC of Portland to build Oregon's first biodiesel manufacturing plant.

The SeQuential-Pacific Biodiesel facility in Portland will have the capacity to make 1 million to 4 million gallons of fuel a year, said Tomas Endicott, managing partner of SeQuential. Endicott declined to reveal the facility's cost but said plants normally cost $1 per gallon of capacity, which would put the facility's price tag at $1 million to $4 million.

Developers expect the project to start making fuel in November.

Minority investors include Willie Nelson, the musician and biodiesel advocate who has a home on Maui; Cameron Healy, founder of Kettle Foods, a maker of gourmet potato chips; John Miller, an Oregon businessman; and Ron Tyree, owner of Tyree Oil, a petroleum distributor based in Eugene, Ore.

The project is being financed by Wells Fargo Bank and the Oregon Department of Energy. Kettle Foods will supply used cooking oil that can be processed into fuel. Pacific Biodiesel will provide technical expertise and equipment. SeQuential will operate the facility and sell the fuel through its retail outlets in Oregon.

SeQuential has 12 biodiesel fuel pumps at gas stations in Oregon and plans to open its first branded station this year, Endicott said.

Touted as a renewable, cleaner-burning alternative to standard petroleum diesel, biodiesel has captured headlines as a fuel that can be made from old french fry grease. While makers often recycle old grease to make the fuel, biodiesel is made primarily from soybean oil and almost always is blended with petroleum diesel fuel for economic reasons. Cars and trucks that use standard diesel fuel do not need to be modified to use biodiesel.

In Portland, biodiesel fuel sells for $3.10 a gallon for a blend of 99 percent biodiesel and 1 percent petroleum diesel fuel, and $2.50 a gallon for a blend of 20 percent biodiesel and 80 percent petroleum diesel, Endicott said.

Petroleum diesel fuel retails for approximately $2.35 per gallon, he said.

Buoyed by biodiesel's competitive price and allure as a product friendly to the environment, SeQuential has enjoyed steady sales growth since it plunged into the biodiesel business in 2002. Last year, the company sold 250,000 gallons of biodiesel fuel, which it transports into Oregon by rail. SeQuential expects sales to double this year, Endicott said.

Founded in 1996 by Robert King, a former diesel mechanic, Pacific Biodiesel is considered a leader in the industry. The company operates manufacturing facilities on Maui and Oahu and in Japan, and has helped develop a plant in Virginia. Earlier this year, President Bush, on a visit to the Virginia facility, called biodiesel "one of our nation's most promising alternative energy sources."

"They really are considered a pioneer in the industry," Endicott said of Pacific Biodiesel. "They've been at it longer than most companies in the U.S."

Calls to Pacific Biodiesel were referred to Kelly King, the company's marketing director, who was not available.

There are 32 biodiesel manufacturing plants in the United States and 24 more in the planning stage, said Amber Thurlow-Pearson of the National Biodiesel Board. She said about 30 million gallons of biodiesel were produced in the country last year, a small fraction of the 55 billion to 60 billion gallons of traditional diesel fuel used in the country in 2004.