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Biodiesel project to get low-cost state funding

August 29, 2007|Elizabeth Douglass | Times Staff Writer

A Southern California start-up company will receive $8 million in low-cost funding for a biodiesel plant at the Port of Stockton, the state treasurer's office said Tuesday.

The plant, under construction since April, is being built by American Biodiesel Inc., an Encinitas-based company that does business as Community Fuels. Biodiesel from the plant would be sold to several wholesale distributors, including some that have retail fueling outlets in Northern California.

Biodiesel, typically made from animal fat or vegetable oil (such as corn or soybean), is a renewable fuel that could help the state reduce its petroleum consumption and its greenhouse gas emissions. The fuel is typically blended with regular petroleum-based diesel in concentrations ranging from 2% to 20%, but some sites sell pure biodiesel for use in vehicles that have been modified to burn the renewable fuel.

State Treasurer Bill Lockyer lauded the state's move to assist the renewable fuel company.

He chairs the California Industrial Development Financing Advisory Commission, which Tuesday approved the tax-free bond financing for Community Fuels.

"Any step we can take now to fight climate change and reduce our dependence on foreign petroleum is a step in the right direction," Lockyer said in a statement.

For The Record
Los Angeles Times Tuesday, September 04, 2007 Home Edition Main News Part A Page 2 National Desk 2 inches; 64 words Type of Material: Correction
Biodiesel project: An article in the Business section Wednesday about state funding for a biodiesel plant implied that all vehicles need modification to run on 100% biodiesel fuel. In fact, today's diesel cars and trucks can safely use pure biodiesel with no modifications. Diesel vehicles built before 1993, however, should have certain gaskets and other rubber components replaced to avoid potential leaks from corrosion.

"With this project, Community Fuels will benefit our environment, create jobs and boost the local economy."

Lisa Mortenson, chief executive of the privately owned company, said the plant would begin commercial production in early 2008, with an initial output of 7.5 million gallons of biodiesel a year.

She expects annual production to double to 15 million gallons after the first year, with further expansion to follow if warranted.

The company would make 100% biodiesel and supply it to the Port of Stockton as well as to a handful of wholesalers that would then sell various biodiesel blends, such as B-20, a 20% biodiesel fuel. California still lags behind other regions in making biodiesel available to the public, but there are a growing number of users among farmers, construction companies and fleet operators.

Mortenson said the company would make biodiesel from soybean oil imported by rail from the Midwest. But she said Community Fuels would eventually shift to regionally produced feedstock such as mustard seed oil and canola oil -- a move that would eliminate the need for deliveries via trains that run on petroleum-based fuel.

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elizabeth.douglass@latimes.com

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