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Soy story: Midstate producers cranking out biodiesel fuel

By , - Last modified: February 14, 2011 at 1:43 PM

A Cumberland County biodiesel manufacturer has produced its first batch of fuel.

A Cumberland County biodiesel manufacturer has produced its first batch of fuel.

Race Miner started Keystone BioFuels Inc. last year in the former Quaker Mills plant in Hampden Township. After months of construction and testing, the company has produced about 9,000 gallons of biodiesel. Miner’s goal is to make about 1 million gallons in his first year after the entire plant is operational. Keystone is one of three companies in Pennsylvania making biodiesel.

Meanwhile, another Central Pennsylvania biodiesel manufacturer, United Biofuels Inc., is right on Keystone’s heels. The York County company is testing its batches and will begin shipping in the next few weeks, said John Cole, United Biofuels’ president. The company expects to produce about 750,000 gallons in its first year. The first batch of biodiesel is already promised to rabbittransit, York County’s transit authority.

Miner’s product also is being tested for purity, but he said he has no shortage of potential buyers. Independence Biofuels, a wholesale blending company in Middletown, has already offered to purchase all of Keystone’s fuel. Miner’s first batch was expected to be shipped to a Maryland oil company March 22.

“It’s not hard to sell this product now. The phone is ringing off the hook,” Miner said. He has received numerous calls from fuel brokers along the East Coast. He has not decided to whom to sell the rest of his product yet.

Keystone BioFuels has one employee, and seven of its 13 tanks are operating. Miner will ramp up production this year. His wife, Allison, is a partner in the firm. The Mechanicsburg couple started the business with $1.5 million to $2 million from the sale of their two start-up companies, Two Way Traffic Inc. and Traffic Safety Solutions Inc., about five years ago.

Although Miner had no background in manufacturing or the biodiesel business, he was drawn to the industry primarily for environmental reasons.

“A lot of the reason I’m doing this is to improve air quality for the area and for my family,” said Miner, who has 3-year-old twin boys.

There are 54 biodiesel plants in production in the country. That number is expected to rise because of increasing oil prices, environmental awareness and federal and state tax incentives. In 2005, U.S. plants produced 75 million gallons of biodiesel, up from 25 million in 2004. In 2006, U.S. plants are expected to make about 140 million gallons, according to the National Biodiesel Board.

Although the soy-based product can be used for home-heating fuel or in vehicles, the transportation industry appears to be buying it more frequently. Companies or agencies with numerous vehicles — such as school districts, trucking companies and bus companies — are the most common users, said Jenna Higgins, director of communications for the Jefferson City, Mo.-based biodiesel board.

Agra Biofuels in Middletown began production in January. That company expects to produce about 3 million gallons of biodiesel in its first year. Company founder and Chief Executive Officer Don Coccia eventually wants to make up to 500 million gallons a year and build 10 more facilities within five years.

United Oil Co. in Pittsburgh is the third Pennsylvania company currently producing biodiesel.

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