» Download/View a PDF of this News Article

BioButanol Tax Credit=$1.10, Xenerga: Biodiesel seeds-to-fuel diversity

By Stafford 'Doc' Williamson
July 8, 2007

Biobutanol will get a federal tax credit of $1.10 per gallon. So says, Jim Ostroff in “The Kiplinger Letter” dated July 5 on the Kiplinger web site. Now, that is more even than “renewable diesel” has been granted, so somebody is pushing hard on this one. Mind you, that is Ostroff says that will be specifically for biobutanol from cellulosic sources. It also is speculation on his part, since no actual legislation has been passed carrying that provision. Mr. Ostroff merely claims that there will be such a law passed before the end of the year.

The Kiplinger report has the whole bioenergy industry dancing and shouting “hosannas” from the treatment they can expect from legislators in Washington in the near term. I have no information to back him up, but I certainly hope he is correct. I am always pleased to see high minded individuals succeed in worthwhile enterprises.

Speaking of such persons, some folks who have been into the recycle and re-use segment of business for a long time, “Xenerga, Inc.” Xenerga is currently based in Orlando, Florida. When I spoke to Dave Jarrett, their “Chief Communications Officer” this week, he said that initial response to their solicitations for “qualified investors” as partners brought in more applications than they could possibly handle. It has taken them over 6 months just to get a reasonable handle on the original group. Indeed when they received my email inquiry, it triggered an automated response that said, in effect, “hold your horses, we can’t even think about you until this fall.” Now that’s a nice position to be in.

Xenerga’s current efforts in the short term are mainly focused on Waste Vegetable Oil (WVO) type conversions to biodiesel (methyl ester biodiesel), although their process can actually handle most types of organic and renewable oil, including tallow and lard. Their partnership opportunities are for “qualified investors”, which is to say, people financially capable of making significant investments such that the SEC doesn’t feel that they need SEC protection. This is no fly-by-night operation. They have merged with a European company who have sold biodiesel equipment into Sweden, Romania, South America, and the UK, to name just a few of the dozen or more countries where their equipment are now operating.

Xenerga have existing contracts for the supply of WVO as well as contracts from multiple buyers for the biodiesel that will be produced by “partnership” facilities. They plan to build a lot of these around the country, and eventually in several of the other countries.

But these are some more smart people (I LIKE smart people!!). They are also developing jatropha plantations and have their own jatropha breeding and hybridizing/cloning development program. They have planted in Africa and have at least one deal in place to plant in South America too. They have been so busy that they admitted that their plans in another area have run into administrative delays.

Xenerga’s web site talks about an algae farm in Africa and says that they plan to have, “The first farm will be built in the US by June 2007. Details will be announced then.” Mr. Jarrett says that is behind schedule as of now, being distracted by success in other areas and permits and permissions red tape. It won’t be the first in the US, as I said in a prior column, there is an algae farm that has been operational for many years in Hawaii, but, in fact, it was Xenerga’s graphic of the projected algae farm that I used in an earlier column.