HAMMOND — Indiana unveiled its first soy biodiesel plant on Wednesday, and Gov. Mitch Daniels grabbed the first gallon for “RV1,” his diesel-enabled vehicle designed specifically to use soybean-based fuel.
More than 100 people attended the ceremony at the Wolf Lake Industrial Center Terminals. The soybean biodiesel plant is a business alliance between the terminals and Evergreen Renewables LLC.
But the private enterprise drew plenty of support from government and environmental sectors.
Selena Weatherwax, district director for U.S. Sen. Richard Lugar, R-Ind., said Hoosiers consume 13.5 million gallons of fuel a day, or 4.93 billion gallons a year.
Daniels said the state is seeking by the end of 2007 to annually produce 1 billion gallons of soy diesel and ethanol.
That would be a huge supplement, according to Carl Lisek, coordinator for South Shore Clean Cities Inc., who said the United States gets 60 percent of its oil from foreign sources.
Daniels said the state supply is taking off faster than expected and Indiana’s 1 billion gallons of soy biodiesel may arrive faster than the market can absorb.
“That’s a terrific problem to be wrestling with,” Daniels said.
Soybean diesel is different than ethanol or grain alcohol. For one, Daniels said, the soy fuel can be used in diesel engines without modification. Ethanol requires engine modifications or a “fuel-flexible” design. Biodiesel does not significantly improve mileage, but burns cleaner that gasoline.
The state already has five public soy pumps and all 92 counties are within commercial-delivery reach of 30 soybean fuel distributors, according to Belinda Puetz, marketing director for the Indiana Soybean Board.
Puetz said marketing for the fuel has already begun. In Hammond, school buses already use a type of biofuel.
Puetz said the fuel demand will help Indiana’s 28,000 soybean farmers and workers, who now face competition from Brazil.
Indiana is the nation’s fifth largest soybean producer, producing 5 billion bushels annually, she said.
While biodiesel has yet to bring costs down — B20 diesel fuel costs almost as much as regular gasoline — Puetz said prices will come down.
Wolf Lake Terminals Inc. employs 60 people, with 11 working to produce biodiesel, according to Garland Middendorf, president of the industrial center.
The Hammond plant is the state’s second renewable energy plant. New Energy Corp. in South Bend produces more than 100 million gallons of ethanol a year.
The state has committed to $32.7 million in incentives, and the companies, which will employ about 600 people, are investing about $1.3 billion, said Jane Jankowski, the governor’s press secretary.
The Associated Press contributed to this report.