Biofuels Industry Revs Up With Milagro Opening

By Amy O. Williams

AUSPICIOUS MOMENT: Diane Miller Mulloy, president of Milagro Biofuels of Memphis LLC, stands before a line of settling tanks used in the production of soy-based biodiesel. -- Photo By Amy O. Williams

Milagro Biofuels of Memphis LLC is officially open for business.

The alternative fuel company at 61 Keel Ave. is slated to start selling biodiesel once it receives the necessary approval from the U.S. Environmental Protection Agency (EPA) in coming days.

Milagro, which already has been tested and approved by the American Society for Testing and Materials (ASTM), also must have EPA approval before it can begin selling the fuel. Like petroleum, biodiesel must meet EPA standards.

In celebration of the opening, Milagro will host Shelby County Mayor A C Wharton Jr. and U.S. Rep. Harold Ford Jr., D-Tenn., along with other state and local officials today at 11:30 a.m. at the company's grand opening. The celebration will include a speech by Ford on the importance of alternative fuels.

After the ceremony, company officials will give a tour of the facility. Wharton said he was pleased Milagro decided to open its refinery in Memphis.

"We welcome companies that produce alternative fuel sources that decrease our dependence on fossil fuels and aid us in our efforts to meet federal clean air standards," Wharton said.

Emissions omissions

In recent years, biodiesel has become a viable option as an alternative fuel without requiring that engines are modified. Any vehicle that runs on diesel can use biodiesel, which typically is sold as a blend of 80 percent diesel and 20 percent biodiesel.

Even at that relatively small amount, biodiesel can have a big effect on the environment because its use reduces the output of carbon dioxide and other pollutants, according to the National Biodiesel Board (NBB). At 100 percent soy oil, the amount of carbon dioxide is reduced by 78 percent, according to the NBB.

At today's event, Milagro president Diane Miller Mulloy will introduce Milagro Biofuels partners and board members James Mulloy, Barbara and Gary Meloni, and Pat Nelson and Rick Moore, both of Lehman-Roberts Co., general contracting business based in Memphis.

Milagro began making biodiesel last month at its refinery in Uptown Memphis.

"We turned our facility on Sept. 11 and started making biodiesel," Mulloy said.

Milagro's opening marks the first biodiesel facility in the Memphis area to sell the renewable, clean-burning fuel made from soybean oil.

Another biofuel plant, Memphis Biofuels LLC, started construction in July on a biodiesel production facility at 2227 Deadrick Ave. That facility is expected to begin producing biodiesel late this month.

Memphis Biofuels won't necessarily be in direct competition with Milagro, said Kenneth Arnold, president and CEO of Memphis Biofuels. Milagro will be producing 5 million to 10 million gallons annually, and his company has the capacity to produce close to 50 million gallons a year.

"We're excited to see Memphis and West Tennessee becoming a major producer of biodiesel," Arnold said. "With Milagro's operation, and with us coming on board in October, it will make this area a significant producer of biodiesel."

More and merrier

A third biodiesel producer, Mean Green Biofuels, is considering opening a facility in Memphis. The company, based in Alpharetta, Ga.,in July was granted an 11-year payment-in-lieu-of-tax (PILOT) freeze to build a $55 million biofuel plant on President's Island.

Most of the benefits from biodiesel in Memphis and Shelby County will be seen in government entities, which Mulloy said are some of the biggest consumers of diesel. Memphis Light, Gas & Water Division, Memphis Area Transit Authority and Shelby County Schools all operate vehicles that use diesel.

"They are all looking at converting their fleets to biodiesel," Mulloy said.

By converting the fleets to biodiesel, Shelby County could get closer to meeting its air quality goals and be in compliance with EPA guidelines. Shelby County has been in "non-attainment" or out of compliance with the guidelines for nearly a year because the level of pollutants in the air - which varies daily depending on the temperature and the wind - is higher than what the EPA allows.

If biodiesel were used in the government vehicles, it could have a huge effect on the county's air quality, said Andrew Couch, executive director of the West Tennessee Clean Cities Coalition (WTCCC) and a biofuels consultant for Frazier, Barnes & Associates LLC.

Couch, also the former owner and now partner of Deep Fried Rides, a business that converted diesel engines to run on vegetable oil, has been working with local officials to get them to use biodiesel in government-owned vehicles, such as school buses and MLGW trucks. Couch said Milagro's opening means government entities now may buy the fuel because it will be available locally, and as a result will be affordable.

"It's hard to have biodiesel compete in the diesel market when you have to bring it from Arkansas or Mississippi to be in the market," Couch said. "Having local production is going to be a really big deal."

Earth to Willie

For Mulloy, the opening is also a very big deal. She agrees that city and county officials need to consider biodiesel as a potential solution to the county's air quality problem.

"Pure diesel is very much a pollutant and most cities have (city) buses and school buses, and commercial vehicles and trucks that all run on diesel," she said. "So biodiesel is a huge answer to a big problem."

Milagro will sell the biodiesel to distributors, such as Panther Oil Co. in Jackson and Willoughby Oil in Savannah. Consumers then will buy the biodiesel through the distributors and will pay about what they are paying for diesel, which ranged from $2.34 to $2.89 per gallon as of Wednesday, according to

Milagro also could sell its biodiesel to companies such as Dallas-based Earth Biofuels Inc., which owns the company that distributes Willie Nelson Biodiesel under the BioWillie brand name. The company opened its first pump March 26 in Grenada, Miss. BioWillie is available at Mid-Tenn Auto Truck Plaza in Cookeville, and is currently the only place to buy BioWillie in Tennessee.

The opening of the Milagro plant could present an opportunity for the distributors of BioWillie, said Rob Reed, director of public relations for Earth Fuels.

In markets where Earth Fuels doesn't have production, it works with third-party producers such as Milagro.

"If possible, we would work with them to distribute their fuel as BioWillie, so that's actually very good news for us," Reed said. "It would make it very efficient for us to distribute it."

Whether the company teams with Milagro or not, Earth Fuels plans to sell BioWillie in the Memphis area by the end of the year, Reed said.