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Xenerga Fuels Growth with BioDiesel Plant in Kissimmee

By Bob Mervine
Orlando Business Journal - November 24, 2006

KISSIMMEE -- Xenerga Inc. is breaking ground Dec. 12 in the city of Kissimmee's Enterprise Zone on the first of several planned BioDiesel production plants capable of churning out 12,000 gallons a day of high-grade fuel from leftover restaurant oil.

The privately held, Orlando-based firm plans to create business arrangements with companies and individuals willing to put up nearly $2 million for each plant, plus a half-acre of land cost. The company projects each facility can produce $2.5 million in net profit a year, working three shifts, at today's prices.

Xenerga (www.xenerga.com) is using existing German technology that provides its partners with a guaranteed source of raw ingredients, a 5 million-gallons-a-year plant and customers eager to buy the finished product, says CEO Jason Sayers.

Ten to 15 Florida cities are ripe for development, he says. His company also is targeting 40 markets around the country where the supply of used oil is high.

Growing niche
The market for BioDiesel is, in fact, growing.

Studies estimate the nation will produce about 3 billion gallons of waste vegetable oil this year. Production of the completed fuel tripled from 25 million gallons in 2004 to 75 million in 2005. It is expected to double again to 150 million this year.

Interestingly enough, the concept is not new. The inventor of the diesel engine, Rudolf Diesel, burned peanut oil in his invention in 1895. Converted BioDiesel fuel can be burned without blending in any diesel engine. Vehicles that now burn gasoline can also be converted to burn diesel fuel or 100 percent BioDiesel.

The industry says the pure BioDiesel fuel burns 75 percent cleaner than that made from fossil fuels.

Sayers says there are other alternative sources out there still in development. And a plant called Jatropha produces 1,000 gallons of oil per acre, as opposed to soy beans used now that produce 300 gallons an acre.

Another option is an algae that can be grown, filtered and burned, using 98 percent of its mass as fuel.

New model for production
Once operational in early 2007, Xenerga's new plant will manufacture 12,000 gallons a day of BioDiesel fuel from a variety of organic products, starting with "yellow grease," the industry term for what's left after restaurants fry thousands of pounds of chicken strips, fish fillets and potatoes. The oil is considered waste by most restaurants, which pay to have the oil disposed of.

The 65 existing U.S. plants that already produce BioDiesel fuel are, for the most part, large plants with capacities of 100 million gallons a year that are relatively expensive to build and operate, Sayers says.

"We've cut out the logistical problems by distributing the product locally, eliminating much of the distribution costs," says Sayers. "We believe this model will change the way BioDiesel is profitably produced."

A second plant will follow in several months. Dave Jarrett, Xenerga's communications officer, says plans call for that plant to use "white choice," the industry term for animal fats such as beef tallow and pork fat, to produce the fuel.

Both plants will become flagships for Xenerga's partners who will use the facilities for training before their plants are operable. Similar-type plants are already in operation in more than 100 locations throughout Europe and Asia, most manufactured and installed by key individuals now involved with Xenerga.

In addition to the equipment and training, partners who sign on with Xenerga also have access to an established supply source for the used oil. Jarrett says that, in the amounts used for these plants, purchasing oil from individual restaurants is not practical. Instead, companies that handle the product in bulk are required.

Xenerga also provides contacts with companies to buy the completed product and blend it with petroleum fuels.