Energy firm takes steps toward expansion of biodiesel facility

Energy firm takes steps toward expansion of biodiesel facility

DANVILLE — Although there are no specific plans for expansion, Renewable Energy Group Inc. has purchased several lots next to its Danville biodiesel production facility and is asking the city to vacate alleys and portions of streets in the area and change the zoning from residential to industrial.

"We don't have a project plan that's approved, but we do have thoughts to expand in the future, and we have thoughts of what we might want to do," said Bruce Lutes, general manager of the Danville plant at 300 Anderson St., east of the city's downtown. An approved plan, Lutes added, would be an approved capital project through REG, which has done some expansion at other plants.

"We have an idea of what we would like to do," he said.

But Lutes would not disclose details about the company's ideas for future expansion or whether an expansion would include a boost in biodiesel production. REG Danville currently has the capacity to produce 45 million gallons of biodiesel per year, and Lutes said the facility is close to that.

"We have some needs for this place, for space... We are very cramped... and sitting on a small footprint," said Lutes, who added that the space needs are for additional storage, maintenance and office space. "And there could be other things, but we're not at the point where we have any definite plans or a project."

On Tuesday, the Danville city council will consider the zoning change and REG's request to vacate alleys and streets within the residential properties it's purchased.

The city council meets at 6 p.m. Tuesday in the municipal building, 17 W. Main St., Danville.

The lots are immediately north of the production facility and form a rectangle-shaped area bordered by Section, Seminary, Anderson and Madison streets. Most of the lots that REG purchased were vacant, but several had residences on them, some occupied.

Chris Milliken, planning and zoning manager for the city, said the planning and zoning commission did not recommend the company's zoning request at it's June meeting. But the zoning panel's decision is not binding on the city council, which will make the final decision Tuesday night.

Milliken said prior to the June zoning meeting, REG officials had not met with neighbors in the area to inform them of their plans. Milliken said several residents attended the zoning meeting, and a few spoke, expressing concerns about the company's unknown plans and whether there would be adequate buffering between their properties and the plant if there were some type of expansion.

Since the zoning meeting, Milliken said REG officials have met with city officials about the project and also held a neighborhood meeting at the Antioch Baptist Church, 311 Collett St., and discussed the zoning change request with local residents.

"We had a very good neighborhood meeting, and we presented them with some information with what it could look like conceptually, and basically answered some questions, and I think everybody went away from the meeting feeling mcuh better about what we might do," Lutes said. "We feel like the future is good here, so we want to work with the Danville community."

In 2008, REG was originally hired by the previous owner, Blackhawk Biofuels LLC, to manage the Danville biodiesel facility and market the fuel, but in February 2010, REG consolidated with Blackhawk to become the sole owner and operator of the facility. Now REG has 10 biorefineries across the country, including Danville, and is a leading North American producer of biodiesel, converting natural fats, oils and greases into fuel.

However, the future of biodiesel production in the U.S. partly depends on whether a proposed cut in the nation's Renewable Fuel Standard becomes reality. The U.S. Environmental Protection Agency implements the regulations that ensure transportation fuel in the U.S. contains a certain amount of renewable fuel, and last fall, the EPA proposed keeping biodiesel volumes at 1.28 billion gallons, much less than the 1.8 billion gallons the industry produced in 2013. Biodiesel producers argue that a reduction in the standard will hurt their industry.

Lutes said it would be good for the industry as a whole if there were not a cut in the standard, and it would be good for REG as well, but that situation is not making any difference in the company's plans or decisions in regard to the Danville production facility.

Lutes said the plant employs 33 full-time workers and indirectly supports many other jobs in the community, especially in the trucking industry. He said about 14,000 trucks hauled in and out of the plant last year. He said the facility uses animal fat and cooking oil to produce the biodiesel.

"These are things that in a lot of cases had no value before. It was a waste. It was grease hauled to landfills, so we do a lot of good things for the environment, and I'm proud to be doing what we're doing," he said.