REG Could Be Planning Illinois Biodiesel Plant Expansion

reg-logoBiodiesel behemoth Renewable Energy Group (REG) could be looking to expand one of its Illinois biodiesel plants. This article in the Champaign (IL) News-Gazette says REG is buying up lots around its Danville biodiesel plant, as well as asking city officials to vacate alleys and portions of streets around the facility and change the local zoning from residential to industrial. The city council last night unanimously reversed the city’s planning and zoning commission’s original denial of the request back in June.

“We don’t have a project plan that’s approved, but we do have thoughts to expand in the future, and we have thoughts of what we might want to do,” said Bruce Lutes, general manager of the Danville plant at 300 Anderson St., east of the city’s downtown. An approved plan, Lutes added, would be an approved capital project through REG, which has done some expansion at other plants.

“We have an idea of what we would like to do,” he said.

But Lutes would not disclose details about the company’s ideas for future expansion or whether an expansion would include a boost in biodiesel production. REG Danville currently has the capacity to produce 45 million gallons of biodiesel per year, and Lutes said the facility is close to that.

“We have some needs for this place, for space… We are very cramped… and sitting on a small footprint,” said Lutes, who added that the space needs are for additional storage, maintenance and office space. “And there could be other things, but we’re not at the point where we have any definite plans or a project.”

REG officials had characterized the earlier denial of the zoning change as “dumb.”

Iowa Congressman Visits Biodiesel Producers

braleyCongressman Bruce Braley (D-IA) visited the REG biodiesel plant in Mason City, Iowa on Friday to meet with members of the state’s biodiesel industry concerned about the proposed lowering of volume requirements under the Renewable Fuel Standard (RFS).

The current RFS proposal would set biodiesel volumes at 1.28 billion gallons, a sharp cut from last year’s actual production of nearly 1.8 billion gallons. “We’re grateful to Rep. Braley for his support on renewable fuels, and we’re asking for his help specifically in increasing the proposed biodiesel volume to at least 1.7 billion gallons,” said Grant Kimberley, executive director of the Iowa Biodiesel Board.

braley-biodiesel2A recent national survey of producers conducted by the National Biodiesel Board found that more than half have idled a plant this year and 78 percent have reduced production from last year. Nearly two-thirds have already laid off employees or anticipate doing so. “Iowa is the leading biodiesel state, which generates jobs and economic advancement,” Kimberly said. “The future of these promising businesses is threatened.”

Braley, who is running for the U.S. Senate seat being vacated by Tom Harkin promised that he will “continue to reach out with strong voice and talk about importance of biofuels for Iowa and nation.”

REG Completes Dynamic Fuels Acquisition

The largest U.S. biodiesel company Renewable Energy Group (REG) has announced that its wholly-owned subsidiary REG Synthetic Fuels, LLC has completed its acquisition of the remaining 50 percent ownership interest in Dynamic Fuels, LLC. Dynamic Fuels was previously owned by Tyson Foods.

The new biodiesel facility will be known as REG Geismar, LLC and is a 75-million gallon renewable diesel biorefinery located in Geismar, Louisiana. The plant was formerly jointly owned by Tyson and Syntroleum and completed in 2010 as the first U.S-based large-scale renewable diesel biorefinery. The majority of the employees will stay on with REG Geismar.

REG Geismar LLCAs a result of last Tuesday’s closing of its purchase of substantially all of the assets of Syntroleum Corporation and the closing of this transaction with Tyson, REG now takes full ownership of Dynamic Fuels’ 75-million gallon nameplate capacity renewable diesel biorefinery.

“Closing these transactions enables our entry into the renewable diesel market in a significant way,” said Daniel J. Oh, Renewable Energy Group, Inc. president and chief executive officer. “We are excited about the opportunity to offer new products to our customers, while building on our core competencies in research, engineering, production, and distribution of advanced biofuels. We look forward to bringing the Geismar biorefinery online and work to do so has begun.”

REG paid Tyson approximately $16.5 million in cash at closing and retired approximately $13.5 million of Dynamic Fuels’ indebtedness to Tyson. REG has also agreed to make up to $35 million in future payments to Tyson tied to product volumes at the Geismar biorefinery over a period of up to eleven and a half years. REG intends to use proceeds from its recent $143,750,000 convertible senior notes offering to either replace the letter of credit that Tyson Foods obtained to support the biorefinery’s $100 million in Gulf Opportunity Zone Bonds, issued through the Louisiana Public Facilities Authority, or to redeem these bonds.

REG Completes Deal to Buy Renewable Diesel Plant

REGSyntIowa-based Renewable Energy has closed on the deal to buy all of the assets of a renewable diesel plant owner. REG was able to finalize the deal when a majority of Syntroleum shareholders voted to approve the asset sale to REG.

The assets acquired from Syntroleum include a 50% ownership interest in Dynamic Fuels, LLC, which owns a 75 million gallon per year nameplate capacity renewable diesel biorefinery located in Geismar, Louisiana. REG has a separate pending agreement with Tyson Foods, Inc. to acquire the remaining interests in Dynamic Fuels.

Most of the employees at Syntroleum’s Tulsa headquarters will join REG as part of the newly formed REG Synthetic Fuels.

“We are very pleased to bring new advanced biofuel technologies into the REG portfolio of products that will expand our biomass-based diesel business and launch us into new customer segments,” said Daniel J. Oh, Renewable Energy Group, Inc. President and Chief Executive Officer. “We welcome the newest members of our team in Tulsa to REG Synthetic Fuels.”

REG owns and operates nine active biorefineries in five states and distributes biodiesel through a national network of distribution terminals.

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Biodiesel Maker REG Making $125 Mil Public Offering

reg-logoBiodiesel giant Renewable Energy Group, Inc. (REG) intends to make a $125 million public offering. This company news release says proceeds will be used to help pay for its stake in a recently acquired renewable diesel plant in Louisiana.

REG intends to use approximately $100 million of the net proceeds from this offering to replace the letter of credit that guarantees the Gulf Opportunity Zone bonds issued in connection with the Dynamic Fuels, LLC biorefinery in Geismar, Louisiana or to redeem those bonds. REG has previously announced its agreements to acquire all of the equity interests in Dynamic Fuels from Syntroleum Corporation and Tyson Foods, Inc. REG also intends to use a portion of the net proceeds from this offering to fund the cost of the capped call transactions described below. REG intends to use the remaining net proceeds from this offering for working capital and other general corporate purposes.

The offering will be in the form of convertible senior notes due in 2019. Prior to December 15, 2018, the notes will be convertible only during certain periods and subject to certain circumstances, into cash, shares of REG common stock, or a combination of cash and shares of REG common stock, at REG’s election.

Biodiesel Producer Certain Uncertainty Will End

christjansenThe manager of a biodiesel refinery from the Nation’s largest biodiesel producer believes the uncertainty in the green fuel’s future will disappear. I caught up with Bryan Christjansen, a general manager for Renewable Energy Group’s Albert Lea, Minn. and Mason City, Iowa plants, shortly after a news conference where several biodiesel producers joined with a group of U.S. senators to decry the uncertainty brought by the government’s proposal to lower the amount of biodiesel to be mixed into the fuel supply and Congress’ failure to renew the $1-a-gallon federal biodiesel tax incentive.

“Some of the things happening here on Capitol Hill, as well as in the White House, are not good for our industry. We are here, and [Congress and the Administration] have helped us get to this point, and we need to continue to grow this industry through what you guys have created already,” he said.

While Bryan said that the current Environmental Protection Agency (EPA) proposal on the Renewable Fuels Standard is hurting the biodiesel industry by causing so much uncertainty, he is certain that will change.

“With this [news] conference and the open comment period with the EPA, I think we’ve voiced our opinion that we need to reduce our dependence on foreign oil, and what better way to do it than by producing biodiesel.”

You can hear my conversation with Bryan here: Bryan Christjansen, REG manager

And you can hear what he and other producers said here: Biodiesel Industry Concerns
And what the U.S. senators attending the news conference said here: Senators Voice Biodiesel Concerns

Biodiesel Producers, Farmers Take to The Hill

goergerBiodiesel producers and farmers who raise the feedstocks for the biodiesel industry took to Capitol Hill this week, joining a group of U.S. Senate Democrats in their calls to end policy uncertainty that is hurting their industry.

“The uncertainty caused by these policy setbacks in Washington, with this proposed retreat on biodiesel volumes under the Renewable Fuels Standard (RFS) and the expiration of the [$1-a-gallon federal biodiesel] tax incentive is threatening to unravel [the good built up by the biodiesel industry],” said Terry Goerger, a third generation farmer from Mantador, North Dakota. He added that this is especially hard on the industry that took cues from Congress and the Obama Administration and took the risk to try to build up biodiesel. “We feel like the EPA (Environmental Protection Agency) and the Administration is pulling the rug out from underneath us.”

christjansenBryan Christjansen, who manages Renewable Energy Group biodiesel plants in Albert Lea, Minn. and Mason City, Iowa, echoed those sentiments, saying his company believes in the long-term future of biodiesel but wonders if Washington does.

“If the Administration chooses to go with a short-sighted EPA proposal, it does not just put domestic fuel into jeopardy, but it also harms the local economies and billions of dollars in investments,” he said.

haasJeff Haas, CEO of General Biodiesel in Seattle, said that while his company, as well as much of the biodiesel industry, wants to invest and grow, not knowing what the EPA or Congress will do next makes the industry feel like it is just floating adrift.

“We’re nearly halfway through the year, and we still don’t know what the RFS volume will be or whether the biodiesel tax incentive will be reinstated,” adding that the industry relies on these policies for direction. “It’s analogous to setting off across the ocean without a compass for six months.”

Haas also said that some of the best and brightest in biodiesel are losing confidence and leaving the industry because of the uncertainty, and the delays are just wins for opponents of renewable energy.

presbyWayne Presby, owner of White Mountain Biodiesel in North Haverhill, N.H., said his company was founded on the Obama Administration’s stated desire to lessen our dependence on foreign oil, reduce greenhouse gases, put more Americans to work, and increase our national security. But now, after investing millions in his plant alone, as well as hiring workers and buying supplies for a fledgling business in a community that desperately needed it, and making a successful biodiesel production facility, they can’t expand and grow that business because of the uncertainty in biodiesel policy.

“The industry is constantly taking two steps forward and two steps back because of the policy uncertainty.”

Listen to what the group had to say here: Biodiesel Industry Concerns

REG Biodiesel Sales Up But Revenues Down

REG LogoSales and production of biodiesel are up for Iowa-based Renewable Energy Group (REG), but revenues have taken quite a hit. The latest information from the biodiesel behemoth shows during the first quarter of 2014 sales were up 22 percent compared to a year earlier, along with a 5 percent increase in production. But REG also reports a revenue drop of 17 percent and an adjusted EBITDA down by 91 percent.

“This quarter was very challenging, coming off an outstanding year,” said Daniel J. Oh, President and Chief Executive Officer. “Despite the challenges, we were able to generate positive adjusted EBITDA, which is evidence of the durability of our business model. While some of the challenges that affected the first quarter remain, in the near-term we are focusing our efforts to respond when markets normalize, and on executing our longer-term strategies.”

Oh continued, “We recently achieved two very positive milestones in REG’s history, both of which are a tribute to the efforts of many people, partners and the strength of our business model. The Company reached cumulative sales of over 1 billion gallons in mid-April. And, in late March, we redeemed the last of the remaining preferred shares outstanding, eliminating the dividend obligation and resulting in a more simplified capital structure.”

The drop in revenues is being attributed to the retroactive reinstatement of the 2012 federal $1-a-gallon biodiesel blenders credit, which again expired at the end of 2013.

REG sold 47.3 million gallons of biodiesel during the first quarter of this year, while producing 41.8 million gallons of the green fuel.

REG Sells One Billion Gallons of Biodiesel

REG LogoCongratulations to our friends at Renewable Energy Group, Inc., as they have sold one billion gallons of biodiesel! The Iowa-based biodiesel behemoth thanked a lot of people who helped them reach this milestone of the company’s 17-year history.

“On behalf of the board of directors and employees of REG, I want to say thank you to all of our customers; vendors; investors; federal, state and local supporters; partners; and team members over the years without whom we could never have met this milestone,” said Daniel J. Oh, REG President and Chief Executive Officer.

“Since our inception we have endeavored to provide customers with a reliable and durable product that helps diversify the energy complex and increases energy security, improves our environment, and supports agriculture,” Oh said. “Our desire to continuously deliver quality products is a driving force behind REG reaching the billion gallon mark.”

REG officials credit their fully integrated value chain including manufacturing, sales & marketing, and supply chain management capabilities for the success, as well as a commitment to research and development and continuous improvement.

For those who might not know, REG’s roots come from its days when it was producing biodiesel as the West Central Coop in Ralston, Iowa. As a grad of good ol’ Glidden-Ralston (probably the BEST school in all of Western Iowa), I can tell you it’s no surprise of the success REG has become. Congrats, guys!

Analysis: Surviving Without Biodiesel Tax Credit

regdarlingWhile the expiration of the federal $1-per-gallon biodiesel tax credit (BTC) has been pretty tough on the industry this year, some biodiesel makers could survive without it. This analysis from The Motley Fool, a website that looks at investments, points to how biodiesel giant Renewable Energy Group and renderer and renewable diesel maker Darling International have business models that seem to make it possible, although not easy, to be successful without the credit that expired at the 2013.

REG, for example, anticipated the expiration and took that into account when doing their earnings forecast for the first quarter of 2014. And even while biodiesel production was even lower than the company anticipated, due to an abnormally cold winter that caused natural gas prices to spike, while feedstock costs rose and biodiesel prices fell, REG seems to be weathering the storm.

The silver lining is that Renewable Energy Group was able to produce positive adjusted EBITDA despite a barrage of unfavorable conditions. That can be chalked up to the company’s commitment to operational efficiency derived from willingness to invest in a national logistics network and the best process technology. And, of course, management’s focus on the long term.

Darling International is not focused solely on producing renewable fuels, but has taken advantage of its leading rendering business (animal fats and used cooking greases, or the inputs for diesel) to create the Diamond Green Diesel joint venture. Renewable diesel is a hydrocarbon, has a different molecular structure than biodiesel, and can capture higher RIN values as a next-generation fuel. Despite the advantages, it is still blended into the existing petroleum-based fuel supply, and therefore benefits from the BTC. Luckily, Darling International’s diverse business structure has insulated it from the expiration of the credit. In fact, the company has benefited from the increase in feedstocks since the end of last year.

The article goes on to say that while the return of the tax credit would be good news for REG and Darling, and of course, other biodiesel makers, at least these two companies show you could survive without the credit. In addition, the authors say this short-term uncertainty for biodiesel might present a great buying and investing opportunity if you’re looking at the long term.

Biodiesel Giant Gets Into Petroleum Distribution

REG LogoThe country’s biggest biodiesel maker is getting into the petroleum distribution business. This news release from Renewable Energy Group (REG) says it has launched a new division that will sell petroleum-based heating oil and diesel fuel, which will also give the company a chance to offer more biofuel blends.

REG Energy Services, LLC will sell heating oil and ultra-low sulfur diesel (ULSD) at seven terminals throughout the northeastern U.S. as well as BioHeat® blended heating fuel at an existing REG terminal location.

“REG Energy Services complements our advanced biofuel business as we optimize and grow our fully integrated biodiesel business across North America,” said REG President and CEO, Daniel J. Oh. “It allows us to offer more products to our customers, including more biofuel blends, while also expanding our customer base.”

The new company will be regionally headquartered in Portsmouth, New Hampshire and led by Barry Knox, a long-time downstream petroleum distribution specialist. Before joining REG, Knox served the last 14 years as Chief Operating Officer at Total Energy Solutions, LLC. Knox just completed his term as a board member of the New England Fuel Institute (NEFI), and the Massachusetts Energy Marketers Association (formerly MOC), and was also a board member of the National Oilheat Research Alliance (NORA).

REG Energy Services is now offers heating oil and ULSD at several terminals in New England and has BioHeat in up to 20 percent biodiesel blends at REG’s location at the Clifton, NJ Dutch Hill terminal.

REG Making $13.2 Million Upgrade to Biodiesel Plant

REG LogoRenewable Energy Group, Inc. (REG) is making a $13.2 million improvement to one of its Iowa biodiesel plants. The Ames, Iowa-based biodiesel giant, already the country’s biggest producer of the green fuel, broke ground on the improvements at its Newton biodiesel refinery.

“This investment shows our continuing confidence in biodiesel for the long-term,” said Daniel J. Oh, President and CEO of Renewable Energy Group, Inc. “It furthers our efforts to enhance our lower-cost, multi-feedstock biodiesel business by continuing to broaden our customer base and provide more options for our customers to choose from.”

The upgraded process, including distillation, removes impurities and leaves behind the purest form of the fuel. The final product far exceeds quality standards set by the biodiesel industry, while meeting the company’s more rigorous REG-9000® quality specifications.

“This is a great investment for Newton,” [Iowa Rep. Dan] Kelley said. “I couldn’t be more pleased with the commitment that REG is showing our community. Biodiesel production is important to Iowa. By making biodiesel here in Newton, REG is providing quality jobs while contributing to energy security.”

REG officials added the upgrade allows them to use lower-cost raw materials. REG is already North America’s leading biodiesel producer, with eight active refineries in four states that have a combined nameplate production capacity of 257 million gallons.

Biodiesel Giant Fuels Biggest Game of the Year

REG LogoThis weekend a Midwest biodiesel giant will fuel the biggest game of the year – the Super Bowl. Iowa-based Renewable Energy Group, Inc. says it will provide up to 15,000 gallons of biodiesel blends from B5 to B20 at MetLife Stadium in East Rutherford, New Jersey during Super Bowl XLVIII on Sunday, as well as powering more than 18 generators for events along Super Bowl Boulevard in New York City leading up to the big game.

“All of us at REG are excited and honored to help ‘green’ the Super Bowl with our high-quality, American made biodiesel,” said Daniel J. Oh, Renewable Energy Group, Inc. President and CEO. “We are proud to be working with the NFL to help in their environmental efforts and to promote biodiesel’s other benefits of energy security, energy diversity, and job creation to one of the largest sports audiences in the world.”

Biodiesel is a renewable, clean-burning diesel replacement that is enhancing the American energy complex and increasing energy and food security. Made from a diverse mix of feedstocks including recycled cooking oil, animal fats, waste greases and refined vegetable oils, biodiesel reduces greenhouse gas emissions between 57 and 95 percent when compared to petroleum diesel.

“The NFL has been working on the ‘greening’ of the Super Bowl for 20 years and adding biofuels to our mix is one more step in that process,” said Jack Groh, NFL Environmental Program Director. “We have a comprehensive program that includes solid waste recycling, food recovery, repurposing of decor and construction materials, collection of books and sports equipment for children in need, urban forestry projects and renewable energy use. Integrating biodiesel is another way we can address the environmental impact of our activities at the Super Bowl.”

REG, the Nation’s biggest biodiesel maker, will partner with local heating oil distributors Hart Energy for delivery to Times Square and Majka and Son’s for delivery to Metlife Stadium.

REG Biodiesel Conference Video Series

REG Biodiesel TrendsThe Renewable Energy Group (REG) has produced a series of videos from the 2014 National Biodiesel Conference called Biodiesel Trends.

Biodiesel Trends is a video news series that will recap the conference. You can watch short video interviews with key presenters as they discuss industry trends and topics, meet some of the industry’s up-and-coming researchers, learn about federal and state policy updates; and take a virtual ride in the latest diesel-powered vehicles.

Here is one of them:

REG Expands in NJ as Biodiesel Mandate Debated

reg-logoThe country’s leader in biodiesel production is expanding its presence in New Jersey, as lawmakers in that state look to enact a biodiesel heating oil mandate. This news release from Renewable Energy Group (REG) says it entered into an agreement with Dutch Hill Terminals, a leading heating oil terminal in New Jersey, to market biodiesel and biodiesel blended heating oil at its Clifton, New Jersey location.

“This terminal position will give us additional capacity to serve the existing markets in the Northeast and prepare for potential growth moving into 2014,” said Gary Haer, REG Vice President, Sales and Marketing. “As the region increases its consumption of biodiesel in transportation fuel and Bioheat® (heating oil blended with biodiesel) REG will continue to provide a reliable source of high quality, clean burning, advanced biofuel.”

REG Clifton is located at 568 Paulison and now has REG biodiesel blended heating oil available. The company will offer other high quality biodiesel blends for transportation fuel during seasonal periods from the Clifton terminal as well. REG has five other terminal locations in the Northeast, including Whippany and Bayonne, New Jersey and New York locations in New Hyde Park, Port Chester, Ontario and Brookhaven.

The New Jersey State Legislature is currently considering legislation which would require heating oil to contain a three percent biodiesel blend (B3), then increasing to five percent (B5). New York City has already implemented a city-wide requirement of B2 in heating oil and the New York State Legislature passed a bill which would phase in a B2 requirement state wide over two years beginning with the 2014-2015 heating oil season. As data presented by the City of New York shows, cleaner heating oil has had a profound impact on the air quality and health of the residents of the city.

REG officials see the addition of the facility as key to expand the company’s role in an area where the biodiesel market will continue to grow.