By Tom Kelly
Editor and Publisher

It wasn't exactly Dad Joiner at the Daisy Bradford No. 3 in East Texas, or Col. Edwin Drake at Titusville, Pennsylvania, but at about 2 p.m. on Wednesday, April 12, 2006, Vanguard Synfuels at Pollock, Louisiana, opened the tap on what many hope will become a gusher of Louisiana-made biodiesel, refined from soybean oil.

The Grant-Parish based plant, located on a winding state road just east of U.S. Highway 165 about 30 miles north of Alexandria, is owned by a group of 24 logging contractors and forestry-related investors. It became the first in Louisiana to produce commercial fuel product from non-petroleum plant materials.

Darrell Dubroc, president and CEO, said the big day began on the morning of April 12, with the first 5,000 gallon run starting through the chemical cooking process. By mid-afternoon, Dubroc said, "We knew we had on-spec product," based on chemical analyses monitoring the flow of soybean oil, mixed with a combination of methanol (petroleum diesel fuel) and sodium methoxide as a catalyst. By the end of the day, they had a full "batch," of 5,000 gallons of usable biodiesel, converted from 5,000 gallons of soybean oil.

In the conversion process, the methanol is recovered and reused. By-products of glycerin and fatty acids are separated out, for use in making other products, including soap, biodegradable antifreeze, and some lubricants. The biodiesel is usable as motor fuel as distilled, but in commerce is normally mixed with petroleum-based diesel in ratios of five, 10, 20, or 25 percent biodiesel, making for a more environmentally-friendly, low-sulfur, lower emission fuel. Biodiesel is cleaner burning, with lubricating qualities which make for lower engine wear, the manufacturers state.

At the tap, pure undiluted biodiesel manufacturing cost is approximately equal to the pump price paid by truckers and other diesel users. With a $1.00 per gallon federal tax credit to marketers, the biodiesel mix retails out for plus-or-minus the same pump price as the conventional fuel, depending on the mix ratio.

Vanguard projects an annual production of 15 million gallons of biodiesel product per year. This equates to a fraction under 275,000 barrels--not a significant amount if used totally for fuel, but as a mixer, at the usual industry rate of 10 percent biodiesel, 90 percent petroleum diesel, this creates close to three million barrels of low-emission, cleaner burning motor fuel. As Vanguard production increases, and other manufacturers come on-line, bio-fuels, including ethanol, can stretch supplies of petroleum fuels, reducing dependence on foreign imports, while also reducing polluting emissions, Vanguard officials state.

The quest for synthetic fuel manufacture at Vanguard began in July, 2003, when the forestry-connected investor group completed the purchase of the shut-down fertilizer plant from Farmland Industries, Inc., a Missouri-based company which manufactured ammonia nitrate fertilizer from natural gas. Farmland company declared bankruptcy after natural gas prices rose dramatically, and fertilizer manufacture migrated overseas.

The announced intention of the Vanguard Synfuels group was to manufacture diesel and ethanol from wood chips. However, Vanguard CEO Dubroc said when announcing the biodiesel production, processes for making motor fuel from wood have been developed experimentally, they are not yet commercially viable for production in profitable quantities. So, facing that reality, the investor group elected to look at other possibilities. Feasibility studies were made based on various commodities, and followed by pilot tests.

In January 2005, Vanguard sold the old mothballed ammonia plant, which is not usable for making ethanol or diesel. The equipment remains on the property but will be removed by year-end for shipment to China. Remaining plant infrastructure has been modified and new process equipment put in place for the soybean oil biodiesel process.

In March 2005, Vanguard produced biodiesel from waste vegetable oil and processed soybean oil. With this success in hand, the company began gearing up the plant for full-scale manufacture, hiring key employees. With working capital available from the unused ammonia plant equipment, Vanguard completed the long-term project financing with loan and guarantees from First South Farm Credit in January 2006.

Vanguard currently is buying soybean oil by rail tank car, delivered to an eight-car siding on the company's plant site. Delivery is from South Dakota, where major commercial crushing facilities are located. Louisiana farmers currently plant about 1.2 million acres of soybeans, which are mostly sold to the major agribusiness companies ADM and Cargill. At its anticipated output of 15 million gallons of biodiesel, Vanguard will require the production of approximately 350,000 acres of beans per year--about one-third of the production in Louisiana.

Presently there are no major bean crushing facilities in Louisiana, said CEO Dubroc. (One crushing facility is just coming on-line at Ferriday, Louisiana, making livestock feed and oil. Separate story).

Marketing will be into the existing petroleum products network in this region, says Dubroc. One likely client will be the Southern Loggers Cooperative, a group formed by several of the same forestry-connected principals with the aim of marketing supplies used by loggers, who currently face high operating costs, with fuel for trucks and logging equipment being a major expense. The group is interested in cost savings for logging operations, and in profitable operation of the Pollock fuel manufacturing facility for which they have major financial obligations.

Vanguard's corporate brochure indicates its 24 corporate members include 15 logging and/or chipping contractors, three timber and real estate brokers, two retired timber company executives, two professional foresters, and two management executives.

Board members are Travis Taylor, Dean Tyler, Steve Templin, Bill Wieger, Jimmy Carter, Glenn Davis, Tim Collins, and Darrell Dubroc.

Operating personnel include Dubroc, president and CEO; Tim A. Collins, financial officer and secretary-treasurer; Johnny McDaniel, plant manager; Penny Welch, environmental/safety superintendent; and Michael Lamartiniere, marketing manager.

Vanguard anticipates a staff of 22, with annual payroll of $1,325,000, including 15 plant employees with average annual salary of $43,000-plus. Purchases of feedstock, chemicals, and utilities are estimated at $30 million-plus, with annual sales revenue of $48 to $45 million.

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