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Abandoned citrus plant transforms into biodiesel producer

A shuttered citrus processing plant could become the country's largest biodiesel maker, fueling Florida's push toward alternative energy.

DADE CITY -- For 40 years this sleepy town 35 miles north of Tampa was the epicenter of the global citrus trade -- home to the world's largest orange juicing plant, which could squeeze 15 million pounds of oranges a day and ship concentrate by the train-load along a busy rail spur. When the Lykes Pasco plant shut in 2003, its massive storage tanks seemed destined for the scrap metal market.

Now the factory has lurched back to life -- this time churning out clean-burning biodiesel that could fuel Florida's push to go green.

Agri-Source Fuels took over 60,000 square feet of the aging plant in January and hopes to hit full production in about four months. If it does, it will be pumping 120 million gallons of the fuel a year, making it the nation's largest biodiesel producer.


The plant comes online just weeks after Gov. Charlie Crist signed an executive order requiring all state vehicles -- including the 3,876 that run on diesel -- to begin using biofuels.

Brewed from vegetable oils, animal fat and other renewable sources, biodiesel is biodegradable and nontoxic. While it is usually blended, most diesel motors can run on pure biodiesel, or B100, with little or no modification.

But like the gasoline additive ethanol, biodiesel is still in its infancy, representing less than 1 percent of the total diesel market.

Rick Higdon is trying to change that. A Pensacola real estate developer, Higdon owns Agri-Source Fuels and financed the retrofitting of the juice plant out of his own pocket. While he won't discuss financial details, he said he was drawn to the project not only for its environmental promise but as a matter of national pride.

''I'm all for trying to do as much as possible for our country,'' he said. ``And every gallon we can produce is one less we have to buy overseas.''


But biodiesel sales may have more to do with price than patriotism, analysts said.

Kendal Reeves runs the biodiesel operation for Mclure Oil Co., an Atlanta-based fuel distributor which has committed to buying up to 60 million gallons of Agri-Source's output. Mclure will sell the biodiesel -- both pure and blended -- to more than 120 distributors around Florida and the Southeast. Although Reeves said he's seeing record demand now, he's also seen demand evaporate in the past.

''Consumers are definitely interested in biodiesel and they want it, but they will vote with their dollars every time,'' he said. Many of Mclure's clients have standing policies on biodiesel purchases that depend on price. ''When it's cheaper bring me bio,'' Reeves said. ``When it's not, [they say] don't.''


The price sensitivities work their way down to the pump, too.

Sol Atlantic Biodiesel at 9695 NW 79th Ave. in Hialeah Gardens is one of several South Florida stations that carry the product and one of the few that sells B99, or 99 percent pure biodiesel.

Open for five months, the company is supplying a few corporate fleets and has found a niche among eco-minded enthusiasts, said owner Lisa Bowman. The company is holding a rally Aug. 5 for the TDI Club, a group of VW and Mercedes owners that run their cars on biodiesel. But even fans have their limits, she said.

''Our ability to sell it depends directly on the fact that it costs less than regular diesel,'' Bowman said. Last week her product was selling at $2.91 a gallon while a nearby station was selling conventional diesel for $2.99. ''But when our prices go up, we struggle,'' she said.

At the heart of Agri-Source's price-control operation are 28 massive storage tanks -- each the size of a South Beach apartment complex. The 180,000-gallon receptacles, which once swirled with orange juice concentrate, will hold soybean oil, beef tallow, cotton seed, fish oil and other raw materials that can be turned into biodiesel. The company's first batches are being made with poultry fat trucked in from Alabama.

By using several kinds of feedstock, Agri-Source hopes to play the market and stay ahead of rising commodity prices.

That could be a tricky proposition, said Jim Robertson, who runs the biodiesel desk at BiofuelsConnect, an Orlando-based brokerage of alternative fuels.

As demand for feedstock spikes, so do prices. Soybeans have hit an all-time high, which has some biodiesel producers, who rely on the product for making cold-weather blends, reining in production, he said. And cheaper substitutes -- like poultry waste -- aren't available on the scale that Agri-Source might need for full production, he said.


''To move that kind of volume, biodiesel needs to be cheaper than the regular diesel that's on the market, and I just don't see how the supply economics will work at that scale,'' Robertson said.

But the environmental and national security benefits could ultimately trump economics, he said.

And the state's green initiative won't hurt. While the press and government have touted the benefits of ethanol, many drivers are still leery of using high concentrations of biodiesel. But having the state vouch for the fuel by using it in government vehicles might put consumers at ease, he said.

Higdon has no doubts about which way the market is heading. Agri-Source is already building an 18-million-gallon biodiesel plant in Pensacola that it hopes to have online next year.

But even then, Agri-Source's operation will be just a drop in the ocean, he said: ``We can't cure all the world's problems; this is just an alternative.''