Renewable Energy Group today formally opened the company’s recently acquired biodiesel refinery in Mason City, Iowa. The biodiesel company also announced the start of a $20 million project to upgrade the plant to a multi-feedstock facility.
REG completed the acquisition of the former Soy Energy, LLC refinery on July 31, 2013. REG immediately began efforts to repair and re-start the plant and began producing biodiesel on October 1.
“REG Mason City fits into our existing network of biodiesel plants very well and is an ideal location to bring in raw materials for biodiesel production, is a good distribution point, and is sited well to serve our customers and terminals,” said Daniel J. Oh, President and CEO of Renewable Energy Group, Inc. “As we continue to grow as a company and an industry, we are dedicated to our communities like Mason City, and providing America with advanced biofuel.”
Brad Albin, REG Vice President, Manufacturing told the crowd about the upgrades the company will make. “With these upgrades, we will be able to utilize lower cost raw materials like inedible corn oil from ethanol production, used cooking oil and animal fats, with the majority coming from a close proximity to Mason City,” Albin said. “This will give REG Mason City the ability to deliver the highest quality product available, in line with the REG quality standards.”
REG now has eight active biorefineries in four states, with Mason City being the company’s third Iowa facility, joining the company’s first refinery in Ralston and a plant in Newton. The company also has a multi-feedstock biorefinery in nearby Albert Lea, Minnesota, where a $21 million multi-feedstock upgrade was just recently completed. REG also has two refineries in both Illinois and Texas respectively. The REG-owned biodiesel production fleet has an annual production capacity of 257 million gallons.
As we recently recognized the 40th anniversary of the Arab Oil Embargo, which back then, showed how vulnerable the U.S. was working under foreign petroleum, one of the leaders at the nation’s biodiesel leader says his industry’s green fuel is a pathway to break the Big Oil monopoly. In this piece for the political blog, The Hill.com, Renewable Energy Group (REG) Vice president Gary Haer says biodiesel has grown from just a small, novelty fuel to a billion-gallon-a-year viable alternative to petroleum, foreign and domestic.
Following the aggressive act by Arab members of the Organization of the Petroleum Exporting Countries (OPEC) to terminate exports to the West, Americans saw their gasoline prices soar fourfold setting off a decade-long recession. U.S. military involvement in Middle Eastern conflicts escalated consistently over the four decades that followed. These include the Iran Hostage Crisis, three full-scale wars in Iraq and Afghanistan, the current showdown with Syria over chemical weapons and nuclear weapons showdown with Iran.
Today the aforementioned national security experts and their supporters lead the U.S. Energy Security Council (USESC), an organization that is scathing in their conclusions of how the combination of current U.S. oil dependency and a lack of diversity in transportation fuels choices are affecting both our economy and our national security: Continue reading
As the government considers the 2014 volume obligation for biodiesel under the Renewable Fuel Standard (RFS), the man in charge of the nation’s largest biodiesel producer says his green fuel is ready to meet the mandates. On the E&ETV show OnPoint, Dan Oh, CEO of the Renewable Energy Group (REG) said biodiesel can be relied upon to provide advanced biofuels.
“We’ve commercialized over 15 years. We have a large installed base. We now are able to produce from a wide variety of raw material. And that really matters when you are thinking about keeping costs down and having broad choices in terms of how you can produce. So the study on your production has been result of innovation.”
Oh just recently met with Office of Management and Budget officials on the RFS2 on the 2014 volume obligation for biodiesel and says the attitude toward biodiesel is very good in Washington, D.C.
I think the tone is favorable and supportive. You can look at the 13 final rule on the RVO that came out with EPA. They certainly highlighted in there how strong biodiesel is, and what a good position it’s in right now. It’s very much not part of the blend wall discussion because we don’t have a blend wall. You know, we can blend it at high levels in varying ways around the country, and it is such a good carbon intensity count that people really like it.
Oh says his industry is asking for a “robust increase” in biodiesel’s obligations, and biodiesel is ready to step in if other advanced biofuels can’t meet their obligations.
Things are looking up for biodiesel producer Renewable Energy Group. The Iowa-based company says it sold 69.2 million gallons of biodiesel during the second quarter this year, up 28 percent from the same time a year ago. Revenues also increased 42 percent from a year ago, hitting $387.1 million and an adjusted EBITDA of $41.6 million during the second quarter 2013.
“This was our strongest quarter ever for production and gallons sold,” said Daniel J. Oh, President and Chief Executive Officer. “Market demand for biodiesel remained strong due, in part, to demand for biomass-based diesel RINs. REG’s substantial revenue growth this quarter can also be attributed to manufacturing and operational improvement at our biorefineries and gallons produced via a tolling agreement.”
REG officials also announced that the company’s acquisition of a 30-million gallon per year nameplate capacity biodiesel plant from Soy Energy, LLC in Mason City, Iowa, was approved by Soy Energy unit holders, and they intend to repair the refinery and start cranking out soybean-based biodiesel soon.
REG also reported major multifeedstock upgrades at the Albert Lea, Minn., biorefinery and repairs, upgrades and start-up at the company’s New Boston, Texas, biorefinery in the second quarter. Finally, construction on an Illinois River barge load-out at REG’s Seneca, Ill., location is underway.
Biodiesel giant Renewable Energy Group (REG) will soon offer the green fuel in New York Harbor. The deal was struck for the International-Matex Tank Terminals (IMTT) in Bayonne, N.J., one of the world’s largest petroleum trading hubs.
“The Northeast has an active biodiesel market and this terminal position allows us to provide more high quality REG-9000® biodiesel to better serve this growing market,” said Gary Haer, REG Vice President, Sales and Marketing. “In conjunction with our five other terminal locations in New York and New Jersey, we will be able to provide a reliable and consistent supply of biodiesel to serve existing transportation fuel applications and barge business as well as the growing Bioheat® (heating oil blended with biodiesel) market in and around New York Harbor.”
The New York State Legislature recently passed a B2 biodiesel requirement in home heating oil. Once signed into law by the Governor, it will require all heating oil for use in any building within Nassau, Rockland, Suffolk and Westchester counties to contain at least two percent biodiesel, effective October 1, 2014. On July 1, 2015, all heating oil sold for use in any building statewide will meet this standard. New York City already has a B2 biodiesel requirement for home heating oil in place.
REG officials say the deep water port able to cater to many ships and barges matches well with the company’s marketing capabilities.
Biodiesel giant Renewable Energy Group (REG) recently finished a $21 million upgrade to one of its biodiesel plants in Minnesota that allows the refinery to also use locally-sourced agricultural byproducts, such as animal fats, used cooking oils, inedible corn oils and yellow grease as well as vegetable oils. This REG news release says the Albert Lea plant is already cranking out a high-quality fuel.
Within days of start-up, all biodiesel produced met the company’s REG-9000® quality specifications, which exceed the industry’s ASTM B100 standard. The multiple feedstock product has been available since June 19, 2013 and enhances biodiesel product availability options as the State of Minnesota prepares to increase its diesel blending requirement from B5 to B10.
The company will hold a formal ribbon-cutting ceremony later this summer. REG has more than 225 million gallons per year of owned/operated production capacity at its network of refineries nationwide.
Biodiesel-producing giant Renewable Energy Group (REG) restarted an idled biodiesel plant in Texas. According to Biodiesel Magazine, the Iowa-based green energy producer re-opened the former North Texas Bio Energy, a commercial scale biodiesel production facility near New Boston, Texas, acquired by REG in October 2012:
[N]ow named REG New Boston, [the plant] employs 25 people and can produce 15 MMgy of biodiesel from recycled fats, oils and greases. The company scheduled a ribbon-cutting ceremony for June 28.
REG says the facility was idle for about four years and underwent some repairs and minor upgrades before the new start-up. The company also points out that besides the 25 workers at the plant, there will be indirect jobs, including truck drivers for the hundreds of inbound and outbound trucks that will channel through the plant each month.
It appears biodiesel giant Renewable Energy Group (REG) has inked a contract manufacturing agreement with an Iowa biodiesel maker. Biodiesel Magazine reports REG signed the 12-month contract with Iowa Renewable Energy LLC to purchase raw materials for the 30 MMgy multifeedstock plant and market biodiesel produced at IRE’s refinery.
“We are pleased REG has chosen to work with Iowa Renewable Energy,” said Ron Lutovsky, IRE’s chief operations officer and chief financial officer. “Our focus on fuel specifications and our BQ-9000 processes are aligned with REG’s commitment to biodiesel quality.”
Biodiesel from the IRE facility will be used to meet growing national and regional demand according to Gary Haer, REG’s vice president of sales and marketing. “We are working closely with the IRE team to include their gallons with biodiesel from our existing REG plant network to fulfill new and existing contracts.”
“IRE’s processing technology allows REG to expand our diverse raw material procurement strategy as well as our transportation and logistics programs to meet our growing customer demand,” said Dave Elsenbast, REG’s vice president of supply chain management.
REG was the actual general contractor and technology provider for the construction of the IRE facility back in 2007.
The nation’s largest biodiesel maker is going to get a bit bigger. Ames, Iowa-based Renewable Energy Group (REG) announced it is buying Mason City, Iowa’s Soy Energy and its 30-million gallon per year capacity biodiesel plant for $11 million in cash and the issuance of a $5.6 million promissory note to Soy Energy. This company news release says the plant was originally built in 2006, bought by Soy Energy and upgraded in 2010 to use more raw materials, such as animal fats and used cooking oil, but was shuttered last year.
“Renewable Energy Group’s offer provides the best value for Soy Energy unit holders while helping unit holders achieve their mission for promoting economic development in the area,” said Jeff Oestmann, Soy Energy’s President and CEO. “In addition, REG’s procurement know-how and proven business model of using lower cost raw materials makes them a reliable operator for this plant.”
REG plans to repair then restart the refinery and further upgrade the plant in the future. The acquisition would increase REG’s biodiesel production capacity to 257 million gallons annually. REG currently owns seven active biodiesel refineries in five states, including nearby plants in Newton and Ralston and Albert Lea, Minn.
“We are committed to the people of Mason City, Midwestern farmers and livestock producers and those who supply the fats, oils and greases we will buy,” said Daniel J. Oh, REG president and CEO.
The re-opening of the plant will put 30 full-time wage earners back on the payrolls.
Renewable Energy Group (REG), the nation’s largest producer of biodiesel, posted its best first quarter ever. The Iowa-based producer of the green fuel announced its financial results for the quarter that ended on March 31, 2013, with the first quarter 2013 adjusted EBITDA at $22.0 million after adjusting for the $57.4 million related to the 2012 retroactive reinstatement of the Biodiesel Mixture Excise Tax Credit, commonly referred to as the blenders tax credit (BTC). This compares to the same quarter a year ago of an adjusted EBITDA of $12.7 million before including the allocation of the 2012 retroactive BTC of $10.4 million. REG sold 38.9 million gallons of biodiesel during the first quarter, up 14 percent from the first quarter of 2012:
“This was our strongest first quarter ever for production and gallons sold,” said Daniel J. Oh, President and Chief Executive Officer. “Biodiesel demand is being driven by a number of positive factors including the 2013 RVO and biodiesel’s ability to meet certain advanced biofuel targets that are not being fulfilled by imported sugar cane ethanol.”
Oh added, “Demand also benefited from the reinstated tax credit, and new counter-seasonal markets such as Northeast heating oil. We are optimistic about industry conditions for the months ahead, and are taking concrete actions to capitalize on them.”
REG officials also credited their use of biodiesel Renewable Identification Numbers (RINS) to fulfill the advanced biofuel and renewable fuel (corn ethanol) renewable volume obligations (RVO) for helping the bottom line. REG also has a Rochester, New York distribution point to help boost winter heating oil mixed with biodiesel demand.
Apparently tired of false claims that biodiesel takes from the food supply, biodiesel maker Renewable Energy Group has put out a whitepaper that actually shows how the green fuel is helping the food supply. Biodiesel Magazine has this good summary of “Food THEN Fuel: How the American Biodiesel Industry Is Strengthening Food Security.”
“[C]ritics of biofuels have [tried] to convince the public that biodiesel is merely part of an amorphous group of energy sources that share the same alleged disadvantages,” the paper states. “Indeed, they would have the public believe that biodiesel not only depletes the food supply by creating a competing use in fuel, but that it also contributes to higher prices at the grocery store. In reality, biodiesel is playing a vital role in strengthening America’s food security and reducing rising pressures on food prices. Rather than competing with food, biodiesel production applies a “food THEN fuel” approach by adding economic value for food industry byproducts and sending economic signals to the market to produce more. Biodiesel production helps make the food and agricultural sectors more profitable, incentivizes the production of protein and generally helps keeps grocery items, like meat, from increasing in price more than they already would due to inflation and petroleum energy costs.”
Some of the facts REG cites are that soybean oil is the historic primary feedstock for U.S. biodiesel and still makes up the largest single feedstock used. With the soy oil used for biodiesel, that still leaves more than 80 percent of the bean to be made into meal for livestock, keeping feed costs down for livestock producers.
In addition, other feedstocks for biodiesel, such as animal fats and used cooking oils, have created value-added markets in those food industries to help farmers and restaurant owners make more money and allow them to them to produce even more food at cheaper prices.
Things are looking up for Renewable Energy Group. According to this article on DailyPolitical.com, Piper Jaffray has increased the Iowa-based biodiesel maker’s stock price target from $9.00 to $13.00 in a research note released on Friday morning:
“We are lifting our estimates and raising our price target due to strengthening industry fundamentals where biodiesel RINs continue to improve and feedstock costs are declining. Biodiesel RINs are currently trading at ~$0.80 up from approximately $0.50 at the beginning of the quarter due to the unique ability for biodiesel RINs to qualify for both the advanced biofuel market and the ethanol market and REGI is well positioned to benefit from this opportunity. In addition to higher RINs values, feedstock costs, including soybean oil and low cost feedstocks, have been falling since February. We are adjusting our model where 1Q13 adjusted EBITDA is modestly above management’s previously guided range of $5-$15 mil and our 2Q13 adjusted EBITDA is at the high end of management’s $15-$25 mil range.,” Piper Jaffray’s analyst commented.
The article goes on to say that several other analysts have issued buy ratings for REG’s stock.
The nation’s largest biodiesel maker, Ames, Iowa-based Renewable Energy Group (REG), signed a multi-year deal with energy industry software and services company FuelQuest Inc. Biodiesel Magazine reports the deal will give REG a more accurate, transparent and agile way to calculate fuel taxes on invoices:
“Our business is growing quickly across North America,” said Jonathon Schwebach, senior manager of tax at REG. “With Zytax Determination integrated into our JD Edwards back office, we expect to achieve efficient automation of tax calculations for all of our fuel transaction invoices, which will also reduce tax accounting and support costs within the organization. Zytax Determination will allow us to scale with confidence, meeting the expectations of our customers as a reliable supplier providing accurate invoices and a seamless customer experience.”
FuelQuest Zytax Determination automates the identification and calculation of taxes for fuel, including petroleum products, natural gas, biodiesel and other products. A leading cause of inaccurate fuel invoices is incorrect tax calculations, which leads to higher internal processing and support costs as well as increased levels of customer dissatisfaction.
Phil Fraher, COO and CFO of FuelQuest [says,] “Fuel taxes are highly complex and continuously evolving. Automating tax calculations with Zytax Determination software that tracks and applies rates and rules for all major jurisdictions is the only way to achieve operational scale and reduce risk.”
The article goes on to say that Zytax Determination will give biodiesel makers more financial control, more reliable and trusted invoicing, and streamlines complex and changing tax rates and rules.
More biodiesel please. If you were on the look out for biodiesel it could definitely be seen during the 10th Annual National Biodiesel Conference in Las Vegas. Last year was a roller coaster year for the industry but some good things happened, one of which was the $1 per gallon tax credit coming back. Another – increasing the volume of biodiesel as part of the Renewable Fuel Standard (RFS).
Biodiesel can be a good tool in a farm business but Alicia Clancy, Manager of Corporate Affairs for the Renewable Energy Group (REG) said that biodiesel can play a bigger role than it currently is. What does she mean? Biodiesel can be used in farm equipment such as tractors and trucks and many use B2 blends. But, said Clancy, equipment and many trucks are approved to use up to B20.
It is this fact that spurred the biodiesel promotion, More B for Me. Clancy said the goal of the promotion is to increase awareness of biodiesel use in farming equipment. As part of the campaign, farmers (or consumers) are encouraged go to their local co-op or gas station and ask them to offer higher blends of biodiesel and then use blends up to B20.
Here is how it works. Go to www.morebforme.com to register. You must be a farmer in Iowa (although everyone should ask for more biodiesel). REG, along with all the sponsors of the program including the Iowa Soybean Association and the soybean checkoff, Iowa Biodiesel Board and the Iowa Renewable Fuels Association, is giving away 10 – $1,000 dollar certificates at the end of March, just in time for planting season.
Listen to my interview with Alicia here: More B For Me
2013 National Biodiesel Conference Photo Album
The country’s largest biodiesel producer, Renewable Energy Group (REG), has paid off its long-term debt obligations of its operating biorefinery subsidiary in Seneca, Illinois. REG Seneca, LLC retired its outstanding long-term debt obligation of $34.5 million on December 21 with cash generated from operations since April 2010. This amended and restated credit agreement went into effect April 2010 with Portigon AG (formerly WestLB AG).
“When we acquired Seneca, we believed the restrictive debt structure was appropriate because the plant was purchased out of bankruptcy. As REG Seneca came online and our state-of-the-art production technology was proven, the natural cash flow generated from this 60 million gallon refinery allowed us to pay off the debt,” said Daniel J. Oh, REG President and CEO.
Oh added, “This debt repayment makes it more likely that we will be able to grow our business, implement new refining technologies, and grow our employee base.”