Seattle's Imperium Renewables plans to rule biodiesel

Wednesday, June 21, 2006

By ROB DIETERICH
BLOOMBERG NEWS

Imperium Renewables, a 2-year-old Seattle company backed by billionaire Paul Allen, plans to control 40 percent of the growing U.S. market for diesel fuel made from vegetable oil by 2009.

Imperium said last month that it will build a plant in Grays Harbor that will be the largest biodiesel refinery in the U.S. The plant, set to open a year from now, will make 100 million gallons a year. Three more of that size are planned by the end of 2008, Imperium Chief Executive Martin Tobias said Monday.

The U.S. last year produced about 75 million gallons of biodiesel, which is made mostly from soybeans, according to the National Biodiesel Board, a trade group in Jefferson City, Mo. Output will reach 1 billion gallons a year by 2009, Tobias said.

"We're probably the most optimistic biodiesel producer in the country right now," said Tobias, the founder of Loudeye Corp., a company that provides technology for Internet audio and video downloads. "We're building a 100 million-gallon refinery when last year the entire market was 75 million gallons."

Tobias said Imperium, known as Seattle BioFuels LLC until earlier this year, has raised $10 million. Funders include Allen's Vulcan Ventures; Technology Partners, a venture capital firm in Palo Alto, Calif.; and Nth Power LLC, a firm that has invested more than $250 million in energy technologies such as solar power and fuel cells.

He declined to comment on how the company will raise additional funds needed for its planned refineries.

Imperium has a plant in Seattle that produces 5 million gallons of biodiesel a year.

Tobias said he expects to be able to produce biodiesel that is competitive with petroleum-based diesel fuel so long as crude oil remains above $50 a barrel. A 99-cent-per-gallon federal subsidy established in 2004 and extended in the energy legislation Congress passed last year makes his fuel cheaper than petroleum-based diesel, he said.

"One of the major factors for the biodiesel industry is the federal biodiesel tax credit," said Amber Thurlo Pearson, a spokeswoman for the National Biodiesel Board. The trade group is seeking to extend the subsidy past 2008 or make it permanent.

By building larger plants and deploying new technologies, Tobias said, Imperium expects to cut the construction cost per gallon of production capacity by two-thirds. He also expects to have operating costs that are 20 percent lower than existing biodiesel operations.

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