Liquid biofuels are manufactured at several small refineries in Virginia, and a large-scale ethanol plant finally started operating in 2014.
In 2011, Osage Bio Energy completed a roughly $200 million ethanol production facility to make 65 million gallons of ethanol per year in Hopewell from barley. Perdue Grains contracted with Virginia farmers to grow barley as the feedstock to be converted into ethanol. Osage Bio Energy planned to convert the starches in the barley grains into ethanol, while the hulls of the grain would be burned for energy and the dried distillers grain (DDGS) residue would provide a protein-rich food supplement for livestock.
The facility was expected to require 300,000 acres to grow 28 million bushels of barley. The Hopewell plant, the first ethanol production facility on the East Coast, was predicted to create a $100 million demand for a winter cover crop that would simultaneously enhance water quality, by utilizing nitrates in the soil that otherwise washed into the Chesapeake Bay.1
Osage Bio Energy encouraged Virginia farmers to grow barley for biofuels rather than corn or wheat - double cropping barley and soybeans provided a longer growing season for soybeans, enabling a higher yield
Source: Osage Bio Energy (presentation to Virginia Commission on Energy and Environment, October 14, 2008)
The completed plant never opened as planned in May 2011, apparently because the investors (First Reserve, an equity firm in Connecticut) were unable to get a bank to provide operating capital. To maintain its reputation within the farming community, Perdue absorbed a financial loss and bought the 2011 crop of barley anyway. The City of Hopewell, which had anticipated $5 million/year in tax revenues, had to sue First Reserve to collect some of the promised financial benefits.
In 2013 the equipment was sold to a company that planned to dismantle the plant and move the equipment to Northeast Lincolnshire in England. In 2014, the Hopewell City Council agreed to match a $250,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund, and the state committed up to $1.5 million/year in subsidies through 2017.
That commitment convinced the British company Vireol to start operations at the ethanol plant in Hopewell, rather than move the equipment. Up to 70 jobs were created when the plant opened in 2014, and Virginia farmers gained a customer interested in purchasing over $30 million of corn, wheat and barley each year.2
equipment at the ethanol plant in Hopewell could have been shipped to the village of Great Coates in Northeast Lincolnshire
Map Source: Google Maps
Biofuels is a high-risk business. Expenses are guaranteed, but profits are not. In 2015, Vireol stopped operating and was forced to declare bankrupcy. Gas prices had dropped 35%, and the company was behind in paying the local property and the machinery and tools (M&T) taxes. Green Plains, a large ethanol producer based in Nebraska, acquired the Hopewell facility, spent $10 million to upgrade it, and restarted operations in 2016.
Rather than rely upon barley, Green Plains announced plans to purchase 62,000 bushels of corn annually. As the plant manager described the decision to switch from barley to corn:3
the biofuels plant producing ethanol in Hopewell
Source: ESRI, ArcGIS Online
Green Plains upgraded the Hopewell plant so it could produce as much as 60 million gallons a year of ethanol. However, in 2018 the company closed the facility due to reduced demand for ethanol used as a gasoline supplemen. In the decommissioning process, Green Plains shipped equipment that could be re-used to the 13 other ethanol production plants owned by the company.
The Hopewell facility is the only facility in Virginia that has produced ethanol for sale in large quantities. The product was sold to gasoline terminal operators in Richmond/Petersburg. They blended the ethanol with gasoline before it was trucked to retail outlets for sale to customers filling gas tanks of their cars. Green Plains also sold the residue from the corn, distillers grain, to local farmers for livestock food.
Even without a large ethanol facility operating in Hopewell, Virginia farmers still can grow barley or corn for ethanol and soybeans for biodiesel. Hampton Roads ports offer easy transportation options to export biofuels, and the Virginia Biodiesel Refinery in West Point has been operating since 2003. West Point, Yorktown, Craney Island, and Portsmouth are likely candidates for future ethanol/biodiesel refineries producing fuel from renewable resources, at a scale large enough for barge export.
Virtually any location near an existing petroleum tank farm than blends gasoline with ethanol is suitable for a small-scale refinery producing E-10, E-15 or E-85 gasoline. Small projects owned by local farmers, cooperatives, or business leaders are also economically feasible.
By 2016, there were six plants across the state producing biodiesel from soybeans, canola, or waste grease from restaurants and blending it with petroleum-based diesel. By 2017, Wholesome Energy in Edinburg had stopped operating. The remaining five were still active in 2019:4
- RecoBiodiesel (City of Richmond)
- Red Birch Energy (Bassett, Henry County)
- Shenandoah Agricultural Products (Clearbrook, Frederick County)
- Synergy BioFuels (Pennington Gap, Lee County)
- Virginia Biodiesel Refinery (West Point, King William County)
Wholesome Energy (Edinburg, Shenandoah County)
Osage Bio Energy expected barley to be an interim source of biofuels, until switchgrass or other sources of cellulose could replace it
Source: Osage Bio Energy (November 18, 2009 presentation to Mid-Atlantic Crop Management School)
Since 2008, Red Birch Energy in Bassett (Henry County) has been buying canola seeds to create biodiesel sold at the company's Country Market Biodiesel Truck Stop. Canola is purchased from North Carolina suppliers, as well a farmers in Pittsylvania County, Virginia, and converted into B20 (20% from canola, 80% diesel refined from petroleum) and B100 biofuel in a $1 million refinery.
The project was stimulated in part by the truck stop's difficulty in getting fuel after Hurricane Katrina forced refineries on the Gulf Coast to close in 2005. The result was the first closed-loop biofuel delivery system in the country, where the owner could say "We grow it, we make it, we sell it, all in one community."
To facilitate using the glycerin residue from refining canola to generate electricity and power the truck stop's operations, the Biomass Energy Grant Program of the 2009 American Recovery and Reinvestment Act provided $750,000 (of the $1.2 million project) in Federal funds to Red Birch Energy.5
The Virginia Tobacco Indemnification and Community Revitalization Commission is providing state-sponsored financing in the former tobacco growing areas, in hopes of creating jobs for farmers and in refineries that create biofuel. The commission funded an assessment of nine potential biomass projects in Southside Virginia and ten sites for such projects in Southwestern Virginia, looking beyond biodiesel to the option of using cellulose-based material to generate electricity.
The top two opportunities identified were for a biomass-fueled heating system to service 20 buildings at Charlotte Court House, and a similar system to heat four facilities in the Town of Independence (Grayson County). The projects would be cost-effective if the biomass operation was large enough to generate surplus electricity to be sold to the local utilities, as well as heat for the buildings.6
In 2012, the Virginia Tobacco Indemnification and Community Revitalization Commission did provide $2.7 million to Tyton BioSciences in Danville, to create ethanol and biodiesel directly from tobacco. Farmers typically grow only 6,000 tobacco plans/acre, but if energy feedstock was the goal then farmers would grow 80,000-100,000 plants/acre. The company's founder chose Danville for a reason:7
In 2013, Piedmont BioProducts received $5.3 million in state grants to build a biodiesel refinery in Gretna. The goal was to convert perennial grasses such as switchgrass (Panicum virgatum) into biodiesel, creating jobs in the farming community to grow the feedstock and jobs at the refinery to create the biodiesel.8
availability of "yellow grease" from commercial food operations reflects where population is concentrated in Virginia - Northern Virginia, Hampton Roads, and Richmond area
Source: Preliminary Residual Biomass Inventory for the Commonwealth of Virginia (p.59)
Another oil refining opportunity is to recycle waste cooking oil and fats ("yellow grease") from restaurants, creating biofuel for use in cars and other machinery. In 2007, the Virginia Tobacco Indemnification and Community Revitalization Commission awarded Synergy Biofuels a grant to fund half of a new $1 million biodiesel fuel production facility in Lee County, in part because "There is a plentiful supply of used vegetable oil around the neighboring areas."9
Darton Environmental, a small garage-based business in Bedford, expanded in 2013 and established a new refinery at an industrial site to process grease/oil generated at food establishments around Roanoke and Lynchburg. Shenandoah Agricultural Products in Frederick County has established its own closed-loop system. It raises canola and produces edible fryer oil, which is sold to local restaurants. The waste oil is collected from those restaurants and used to produce biodiesel, which then fuels operations on the farm that raises the canola.10
not every place called a "refinery" processed petroleum - the Capitol Refinery, located where the Pentagon now sits, was built to process cottonseed oil into 1,000 barrels/day of salad/cooking oil11
Source: Library of Congress, Capitol Refining Co. plant
Valley Proteins, headquartered in Winchester, produces lipids that are used as an animal food supplement. Today it converts used restaurant oil and animal fats into biofuel as well.
Since 1949, Valley Proteins has recycled waste oil from restaurant, chickens and turkeys that died before they were suitable for processing into human food, dead horses - and, at one time, pets collected from veterinarians. (After the US Food and Drug Administration banned the use of brain/spinal cord tissue from older cattle for production of animal feed to reduce the risks of "mad cow disease," recycling of most cows stopped.)
The company used to have a monopoly in Northern Virginia and Richmond as well as in the Shenandoah Valley. The company normally charged restaurants for removal of waste oil, since municipal solid waste landfills will not accept liquid waste, so the raw material was essentially free.
There were opportunities to generate profits from selling waste collection services to nearly 50,000 restaurants, plus profits from the sale of the processed "yellow grease" used as animal feed. Market demand has varied, and smaller companies who enter the waste oil collection business typically disappear during the downturns. After other biofuel companies entered the business, such as Greener Oil in Richmond in 2008, Valley Proteins was forced to compete in order to maintain its sources of supply.
At times, demand gets high enough for restaurants to charge for their waste oil, and "rustling" can become a problem. In 2012, thieves were getting $3 per gallon. During that peak market, Valley Proteins bought over 1,000 locks monthly to re-seal dumpsters, after thieves cut off the old locks. In some cases, they bypassed the locks and used torches to cut into the storage tanks in order to drain the oil.
In 2019, there was another surge of thefts in Northern Virginia. The region was attractive to waste oil theft because many restaurants were located close to each other, providing a target-rich environment. One man was caught draining 150 gallons at a Burger King in Annandale Shopping Center. A Valley Proteins lawyer reported that the company had lost $5 million in stolen oil in 2015, plus another $1 million that year for re-securing waste oil storage tanks. Thieves were thought to make as much as $10,000 per night.12
The governor of Virginia stretched the definition of "biodiesel" in 2014, when he announced plans by Appalachian Biofuels LLC to open a new biodiesel production facility in Russell County.
Appalachian Biofuels will use enzymes to reprocess used oil and oil products as the "feedstock" to produce "biofuel to be blended with petroleum diesel fuel as mandated by the federal government." The process does not involve using plant material to create fuel, but the state claimed a "green energy" company would produce an "alternative fuel."13
in early 2013, Virginia had 10 E85 fueling stations - 4 in Tidewater (Virginia Beach, Norfolk, Hayes/Gloucester County, Newport News), 2 on the I-95 corridor (Chester, Petersburg), 3 in the Piedmont (Charlottesville, Warrenton, Ashburn), and 1 in the Valley and Ridge province (Wytheville)
Source: US Department of Energy, Alternative Fuels Data Center
in early 2013, Virginia had 3 biodiesel (B20 and higher) fueling stations in Hayes (Gloucester County), Basset (Henry County), and Hillsville (Carroll County)
Source: US Department of Energy, Alternative Fuels Data Center
Production of ethanol and biodiesel from food crops, such as corn, canola, and barley, raises demand and thus the prices paid to farmers. Virginia adopted a voluntary Renewable Portfolio Standard (RPS) in 2007, but the Federal Renewable Fuel Standard (RFS) established a minimum volume of renewable fuel to be used annually for gasoline/diesel.
The proposed increase from 10% volume ethanol (E10) to 15% volume (E15) has triggered concerns that prices will stay so high that the livestock industry in Virginia and other southeastern states will be damaged. Concerned that the cost of ethanol was too high to justify an E15 Renewable Fuel Standard, Rep. Robert Goodlatte introduced legislation to repeal or modify the Federal Renewable Fuel Standard mandate.14
Goodlatte represented the 6th District, including the most productive livestock operations in the Shenandoah Valley, and Virginia does not produce enough corn to support its livestock industry. The Virginia Grain Producers Association claims the state imports 90% of its animal feed, while most Virginia-grown corn is exported. A 2012 study by an economist associated with the poultry industry claimed:15
However, a separate study by the National Corn Growers Association reached a different conclusion. That study argued that beef and dairy farm profits have climbed since RFS expansion, though the 12 states analyzed did not include any Mid-Atlantic or Southeastern states (except Florida).16
Whatever the impact of the Renewable Fuel Standard on food prices or profits of different sectors of the agricultural industry - if ethanol remains more expensive than gasoline, and the Federal mandate for adding ethanol to transportation fuels is lowered, then the potential for another ethanol refinery in Virginia (in addition to the one at West Point) would drop until cellulosic-based facilities can replace those using food crops.
as of March 8, 2012, ethanol plants were located primarily near corn producers
Source: US Department of Agriculture, National Agricultural Statistics Service (NASS), Production by County and Location of Ethanol Plants (2011)
Switchgrass (Panicum virgatum) could be grown for a profit on agricultural land not suitable for food crops (too steep, too sandy, too poor in nutrients). Like any crop, switchgrass would have to be harvested, digested, and converted into ethanol. Switchgrass is a native species, but now rare due to patterns of past grazing:17
In the future, tissue culture technology might facilitate production of genetically-identical plants to grow non-native grasses such as (Miscanthus genus), giant cane (Arundo donax), or other species for conversion into biofuels. The Institute for Advanced Learning and Research in Danville, working with the College of Agriculture and Life Sciences at Virginia Tech, has developed micropropagation technology that could result in commercial-scale production of biorenewable feedstock.18
switchgrass (Panicum Virgatum) is a native species in Virginia that could become a source for ethanol
Source: US Department of Agriculture, Switchgrass - Panicum virgatum L.
1. "Maximizing Barley Bioprocessing to Create Food and Fuel," Osage Bio Energy presentation to Virginia Commission on Energy and Environment, October 14, 2008, http://dls.virginia.gov/GROUPS/energy/meetings/101408/Presentation_Warren.pdf (last checked April 24, 2013)
2. "Virginia ethanol plant apparently headed to England," Southeast Farm Press, April 22, 2013, http://southeastfarmpress.com/grains/virginia-ethanol-plant-apparently-headed-england; "A cautionary tale," Virginia Business, March 28, 2012, http://www.virginiabusiness.com/index.php/news/article/a-cautionary-tale1; "Another twist in Hopewell's ethanol plant," Petersburg Progress-Index, December 29, 2013, http://progress-index.com/news/op-ed/another-twist-in-hopewell-s-ethanol-plant-1.1607612; "Hopewell council backs incentives for ethanol plant," Richmond Times-Dispatch, March 28, 2014, http://www.timesdispatch.com/business/economy/hopewell-council-backs-incentives-for-ethanol-plant/article_dab776e8-845b-5daa-861c-b98692ac3a7a.html; "Governor McAuliffe Announces 70 New Jobs in City of Hopewell," Governor of Virginia news release, April 9, 2014, https://governor.virginia.gov/news/newsarticle?articleId=3831; "Grant for ethanol plant to be matched," The Progress-Index, August 14, 2014, http://progress-index.com/news/grant-for-ethanol-plant-to-be-matched-1.1735607 (last checked August 26, 2014)
3. "Former Hopewell ethanol plant operator moves into Chapter 11 bankruptcy," Richmond Times-Dispatch, December 22, 2015, http://www.richmond.com/business/local/article_155f9bcb-04f2-5b4b-8f32-95d22f897aab.html; "Green Plains resumes Hopewell ethanol operations," The Progress-Index, August 26, 2016, http://www.progress-index.com/news/20160826/green-plains-resumes-hopewell-ethanol-operations; "Vireol plant in Hopewell suspends ethanol production," Progress-Index, August 28, 2015, https://www.progress-index.com/article/20150828/NEWS/150829682; "Green Plains acquires Hopewell, Va., ethanol plant," Ethanol Producer Magazine, October 26, 2015, http://ethanolproducer.com/articles/12708/green-plains-acquires-hopewell-va-ethanol-plant (last checked April 19, 2019)
4. "Green Plains to shut down Hopewell ethanol plant," Mineral Daily News-Tribune, November 15, 2018, https://www.newstribune.info/news/20181115/green-plains-to-shut-down-hopewell-ethanol-plant; "Green Plains Inc. to Permanently Close Ethanol Facility in Hopewell, VA," GrainNet, November 15, 2018, https://www.grainnet.com/article/156966/green-plains-inc-to-permanently-close-ethanol-facility-in-hopewell-va; "U.S. Biodiesel Plants," Biodiesel Magazine, December 13, 2017, http://www.biodieselmagazine.com/plants/listplants/USA/page:1/sort:state/direction:asc (last checked April 19, 2019)
5. "Biodiesel plant fuels interest in alternative energy forms," Martinsville Bulletin, July 23, 2008, http://www.martinsvillebulletin.com/article.cfm?ID=14803; "Farmer growing canola to make biodiesel," The Dispatch (Davidson County, NC), May 28, 2008, ; "Red Birch Energy achieves independence," Virginia Business, March 27, 2009 , http://www.virginiabusiness.com/index.php/regions/article/red-birch-energy-achieves-independence/199650/; "Red Birch making biodiesel fuel," Martinsville Bulletin, November 3, 2008, http://www.martinsvillebulletin.com/article.cfm?ID=16435; "Biomass Energy Grant Program," Virginia Department of Mines, Minerals and Energy, http://www.dmme.virginia.gov/de/arra-public/SEPBiomass.shtml (last checked April 16, 2013)
6. "Community Biomass Business Plan Project: Biomass Initial Screening Report – Potential Sites In Southwest & Southside Va," Public Policy Virginia and New River-Highlands Resource Conservation & Development Council, 2011, http://www.conservationrealestate.org/wp-content/uploads/2013/03/ticr_2069_b_initial-screening-report-final-083011.pdf (last checked April 16, 2013)
7. "Ringgold company finds new use for tobacco: fuel," Lynchburg News and Advance, February 21, 2013, http://www.newsadvance.com/work_it_sova/news/article_bcafa104-7c8d-11e2-b573-001a4bcf6878.html; "Could tobacco fuel your car?," WSLS-TV, May 11, 2011, http://www.wsls.com/story/20820773/could-tobacco-fuel-your-car (last checked April 16, 2013)
8. "Grants boost Gretna biofuel project," Chatham Star Tribune, January 16, 2013, http://www.wpcva.com/news/article_486a062c-6013-11e2-b455-0019bb2963f4.html; "The Future of Biofuels in Virginia," Virginia Cooperative Extension, July 2009, http://www.ext.vt.edu/news/solutions/solutions2009/Articles/biofuels_in_virginia.html (last checked April 16, 2013)
9. "Governor Kaine Announces 30 New Jobs for Lee County," Commonwealth of Virginia - Governor's Office news release, December 11, 2007, http://www.tic.virginia.gov/pdfs/pressreleases/Governor's%20Press%20Releases/Lee-Synergy%20Biofuels.12-11-07.pdf (last checked April 16, 2013)
10. "Green and greasy: Brothers turn used grease into biofuels," Lynchburg News and Advance, April 15, 2013, http://www.newsadvance.com/work_it_lynchburg/news/article_99dc889e-a565-11e2-8942-0019bb30f31a.html; "Company Takes Biodiesel From Field to Fryer to Fuel," Voice of America, August 26, 2011, http://www.voanews.com/content/company-takes-biodiesel-from-field-to-fryer-to-fuel-128523078/144395.html (last checked April 16, 2013)
11. "Finishing Big Plant - $450,000 Abattoir and Refinery Soon to Operate," The Washington Post, November 1, 1909, p.3 and reprinted at "Capitol Refining: 1925," shorpy.com, http://www.shorpy.com/node/4310 (last checked February 22, 2013)
12. "Greased Lightning," Richmond Style Weekly, September 10, 2008, http://www.styleweekly.com/richmond/greased-lightning/Content?oid=1371947; "‘You can make $10,000 in a night’: Thieves target used cooking grease," The Washington Post, April 18, 2019, https://www.washingtonpost.com/local/public-safety/you-can-make-10000-in-a-night-thieves-target-used-cooking-grease/2019/04/18/bab6d938-613f-11e9-9ff2-abc984dc9eec_story.html; "Many tempting things emerge from the Henny Penny Pressure Fryer 500 at Maryland’s landmark Red Rooster restaurant," The Washington Post, June 26, 2012, https://www.washingtonpost.com/local/crime/cooking-oil-thieves-hit-montgomerys-red-rooster-restaurant/2012/06/26/gJQAT5lE5V_story.html (last checked April 19, 2019)
13. "Governor McAuliffe Announces 40 New Jobs in Russell County," Governor of Virginia News Release, October 29, 2014 , https://governor.virginia.gov/newsroom/newsarticle?articleId=7032 (last checked October 30, 2014)
14. "Goodlatte Introduces Bills To Alter Renewable Fuel Standard Mandate," House of Representatives - Rep. Robert Goodlatte, October 5, 2011, http://goodlatte.house.gov/press_releases/277; Code of Virginia, Chapter 888, http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+CHAP0888 (last checked April 24, 2013)
15. "Who is VGPA?," Virginia Grain Producers Association, http://www.virginiagrains.com/index.php/download_file/view/149/103/; Thomas E. Elam, "The RFS, Fuel and Food Prices, and the Need for Statutory Flexibility," July 16, 2012, http://www.farmecon.com/Documents/RFS%20issues%20FARMECON%20LLC%207-16-12.pdf (last checked April 24, 2013)
16. "Economic Comparison Of Input Price Changes On Representative Livestock Operations Before And After The Energy Independence And Security Act Of 2007," National Corn Growers Association, 2011, http://ncga.com/topics/ethanol/ethanol-and-livestock
17. Dale D. Wolf, David A. Fiske, "Planting and Managing Switchgrass for Forage, Wildlife, and Conservation," Virginia Cooperative Extension publication 418-013, May 1, 2009, http://pubs.ext.vt.edu/418/418-013/418-013.html (last checked August 30, 2013)
18. "Governor McDonnell Attends Ground Breaking for Dan River Plants, First Commercial Venture of Danville’s Institute for Advanced Learning and Research," Governor of Virginia news release, August 12, 2013, http://www.governor.virginia.gov/News/viewRelease.cfm?id=1933 (last checked August 16, 2013)
a 2013 map of Alternative Fuel Stations shows wide availability for customers throughout North/South Carolina compared to narrow availability in urban areas of Virginia
Source: US Department of Energy - National Renewable Energy Laboratory, BioFuels Atlas