Friday, June 26, 2009

From Washington to Texas, Biodiesel Makers Sitting Idle

Imperium Renewables’ dream of profiting from peddling biodiesel while doing its part to save the planet has turned out to be just that: a dream. The two-year old biodiesel facility that was meant to be the cornerstone of the Seattle company’s renewable-energy empire hasn’t produced a drop of fuel since February. And it’s not the only one sitting idle. The 100 million-gallon-a-year plant – once the largest such facility in the U.S. – located in an isolated logging town on Washington’s coast now serves as a storage depot for biodiesel – and a symbol of America’s stalled biofuels industry. From the beginning it was a tall order for biodiesel makers to turn a penny. Even though petroleum prices skyrocketed last year, providing the rationale for a renewable alternative to diesel, the cost of agricultural feedstocks needed to make biodiesel also went through the roof, eating up profit margins. But Imperium chief executive John Plaza also places the blame on the U.S. politicians’ failure to create a market for the product. Ethanol enjoys a well-defined federal mandate, but the administration has been slow at enacting rules that would compel fuel blenders to take in more of the fuel. “We invested in building these facilities based on the efforts and legislation put forward by the government,” he says. Mr. Plaza’s comments underscore how the first wave of biodiesel producers – many of whom took on substantial debt to build commercial-scale facilities – anticipated a huge upturn in demand that never materialized...WSJ

Society is better off when entrepreneurs take risks to produce a new product for which there is sufficient demand to turn a profit.

Society is not better off when an entrepreneur produces a product so the government can "compel" us to purchase it. In fact, we are worse off. We end up with a shoddy product and a larger, more intrusive government.

Entrepreneurs of the second type we don't need. I hope more of them go bankrupt and the sooner the better.

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