Fill up the tank with chicken fat

Animal fat is becoming a bigger source for biodiesel fuel.
DEXTER, Mo. (AP) -- Jerry Bagby is typical of the oil men who are prospecting for a fortune in the Midwestern biofuels boom. He's convinced there's oil in these hills -- and he's found a well that no one else is using.
Bagby and a longtime friend have cobbled together 5 million to build a new biodiesel plant on the lonely croplands outside this southeast Missouri town. They're betting they can hit paydirt by exploiting a generally overlooked natural resource that's abundant in these parts -- chicken fat.
There's a virtual gusher of the stuff at a nearby Tyson Foods Inc. poultry plant. Currently, the low-quality fat is shipped out of state to be rendered and used as a cheap ingredient in pet food, soap and other products.
Bagby and his partner, Harold Williams, plan to refine the gooey substance, mix it with soybean oil and produce about 3 million gallons of biodiesel annually.
Today, only a tiny fraction of U.S. biodiesel is made from chicken fat, but that seems likely to change. The rising cost of soybean oil -- which accounts for roughly 90 percent of all biodiesel fuel stock -- is pushing the industry to exploit cheap and plentiful animal fats.
What's happening
The nation's biggest meat corporations haven taken notice. Tyson Foods announced in November it has established a renewable energy division that will be up and running during 2007. Competitors Perdue Farms Inc. and Smithfield Foods Inc. are making similar moves.
As meatpackers enter the field, they bring massive amounts of fuel stock that could make biodiesel cheaper and more plentiful.
The shift to animal fat as a fuel stock could be key to making the budding biodiesel industry a reliable fuel source for U.S. trucking fleets, said Vernon Eidman, a professor of economics at the University of Minnesota who has extensively studied the biofuels industry.
Eidman estimates that within five years, the U.S. will produce 1 billion gallons of biodiesel, and half of it will be made from animal fat. By that time, soybean-based biodiesel will account for about 20 percent of the total, he said.
For fuel refiners like Bagby, the allure of animal fat is clear. Soybean oil costs 33 cents a pound while chicken fat costs 19 cents. He plans to include soybean oil in his blend only because it adds necessary lubrication for engine parts.
Using leftover fat
For companies like Tyson, the attraction is simple. Being the nation's biggest meat company, Tyson is also the biggest producer of leftover fat from chicken, cattle and hogs.
Having a massive new source of fuel stock is a welcome development for the biodiesel industry, said Amber Thurlo Pearson, a spokeswoman for the National Biodiesel Board.
"More biodiesel in the marketplace could help make biodiesel's cost even more competitive with diesel fuel," Pearson said.
The board estimates that U.S. biodiesel production is tripling annually, going from 25 million gallons in 2004 to 75 million gallons last year. The final tally for 2006 should be between 150 million and 225 million.
Biodiesel costs about 1 a gallon more to produce than conventional diesel, but federal tax breaks for fuel distributors help hide that cost from consumers.

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