US ConocoPhillips pulled plug on renewable diesel venture

14 May 2009 22:31  [Source: ICIS news]

HOUSTON (ICIS news)--Major US petroleum refiner ConocoPhillips said on Thursday it idled its renewable diesel operations earlier this year due to poor economics.

Houston-based ConocoPhillips announced the 175m gal/year (662m litre/year) project as a joint venture with Tyson Foods in April 2007. One of the largest second-generation fuel operations in the country, the venture turned waste grease supplied by Tyson into renewable diesel.

The project initially enjoyed a $1/gal federal tax credit, but lawmakers working on the energy legislation last fall cut the subsidy in half. That cut, plus the cratered demand for biodiesel, forced the company to pull the plug at the beginning of this year, Conoco spokeswoman Nancy Turner said.

“It was just the economics of it,” Turner said. “We’re continuing to monitor it in case conditions improve.”

The US soap and detergent lobby fought for the reduced subsidy, as their industry depends on the same supply of animal fats that the refinery consumed.

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By: Ben Lefebvre
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