A GRAND EXPERIMENT: Ken Arnold, president of Memphis Biofuels at 2227 Deadrick Ave., pauses in a laboratory with Brandon Sheley, the company's vice president. The two are poised to make the plant one of the largest producers of vegetable oil-based biodiesel in the nation. -- Photograph By Andy Meek

On Tuesday afternoon, the cheapest gas to be found in Downtown Memphis' 38103 ZIP Code was $2.71 a gallon at a Mapco on North Bellevue Boulevard. The BP station at 695 Union Ave. had the highest price Downtown, at $2.89 a gallon.

A day later, the low price at that Mapco was up 7 cents, and two more stations were posting the price at the high end of the scale, still $2.89 a gallon. And for those Downtown workers who happen to live out East, the commute is turning into what Newsweek refers to in its current issue as "a long and grinding road."

That ribbon of highway

The highest price at the pump reported earlier this week in Collierville, for example, was barely shy of $3 a gallon for unleaded gas.

Meanwhile, as the sales prices climb at a dizzying pace for cash-strapped motorists, something else is climbing just as fast: the number of players in the alternative fuel industry in Memphis and Shelby County.

In one of its latest developments, Shelby County government is set to receive between $11,000 and $12,000 to enhance the county's infrastructure for its biodiesel program from the energy division of the Tennessee Department of Economic & Community Development.

Biodiesel refers to diesel-equivalent fuel that's usually made from vegetable oil or animal fats. It's also biodegradable and nontoxic. The county's grant will be used to retrofit a large tank at Shelby Farms and make the alternative fuel available to every vehicle in the county's fleet, said Andrew Couch, coordinator for Clean Cities of West Tennessee.

"Nobody really even knows about it yet," he said earlier this week of the cash award, which Shelby County applied for from state energy officials. "Everything, parks department trucks, you name it - it will be a great resource that any county vehicle can use to fill up."

The power of natural power

This week, the Memphis Area Transit Authority began using the experimental fuel in 25 of its buses, comparing the results to how the rest of the fleet operates. And two manufacturing companies are inching closer to opening what Couch said will be the first biodiesel production facilities in Memphis and Shelby County.

One of the new biodiesel manufacturers, Memphis Biofuels LLC, will have the ability to produce as much as 40 million gallons of biodiesel a year. That would make the company one of the largest in the country, since about 75 million were produced nationwide last year.

Memphis Biofuels' 17-acre property, at the nexus of five railroad lines, once was the site of an old Procter & Gamble soap plant that's now being transformed into a biodiesel facility. It's been around since the 1920s and currently employs about 17 people.

Once the expansion is finished, company officials said that number could grow to between 30 and 50 people.

"Once we finish our investment, we'll be making between 36 (million) and 40 million gallons a year," said president Ken Arnold. "We've applied for a permit for 36 million, but we have the capability for more than that."

Girl power, too

Earlier this month, the city-county Health Department's Pollution Control Section announced it had received the application by Memphis Biofuels to expand its production capabilities and that the department is accepting public comments about it. Memphis Biofuels' plant is at 2227 Deadrick Ave. off Airways Boulevard.

Couch, who started Deep Fried Rides - a business that installs fuel systems in cars to let them run on vegetable oil - said he's heard rumors of other facilities looking to open in Memphis. (To read The Daily News' Jan 25 story on Couch's business, visit http://www.memphisdailynews.com/Editorial/StoryFocus.aspx?id=91369.)

Both Memphis Biofuels and Milagro Biofuels of Memphis - which is building a biofuel plant at the corner of Front and Keel streets Downtown - are looking to start production by the end of this summer. Milagro, whose plant will be converting virgin soybean oil into biodiesel, is run by Diane Miller Mulloy, making it, Couch said, one of the few female-run biofuel plants in the country.

In a statement the company issued, Mulloy said: "Our goal is to be an integral part of Tennessee's transition to alternative fuels, one community at a time."

For the other biodiesel company that will be operating in Memphis, the expansion has been a long time coming.

"We've been working on this process since probably July of last year," said Brandon Sheley, vice president of Memphis Biofuels. "Construction should start by the 15th of May, and all of the engineering for the new pieces is being finalized right now.

"We're putting in distillation columns, pumps and other stuff like that. There's a lot of tank and storage capacity here - at any one time, we can store about 1 million gallons in our tanks."

Cool drink of water

The national gas price crunch is draining wallets and fuel tanks in a variety of ways. This week, the American Trucking Association projected the trucking industry will spend $94.3 billion on fuel in 2006, up from $87.7 billion last year. Association president and CEO Bill Graves said the trucking industry was facing its highest fuel prices in history.

Interest in the burgeoning biodiesel industry is soaring as fast as those numbers change at the gas pump. Nationwide, the sale of biodiesel has grown from 500,000 gallons in 1999 to 75 million last year, according to Maine's Portland Press Herald.

And there are suggestions that embracing biofuel could put Memphis in the fast lane in the race to become more energy efficient.

"We'll be looking at putting this product back into, say, the farming community and the trucking community, for example," Sheley said. "It's a great product; the material we are going to make is a very ecologically friendly fuel. You can actually even drink the material."