Oct. 25--EL PASO -- The collapse of the biodiesel market last year prompted a new biodiesel plant in El Paso to stop production and do something you might not expect -- expand.

Global Alternative Fuels, or GAF, decided it made sense to go through an already planned expansion while market conditions were bad, said Carlos Guzman, president and co-founder of the company.

The expansion will increase the plant's biodiesel production capacity from 5 million gallons a year to 20 million gallons a year, Guzman said. The expansion also includes installing equipment so that the plant can process grease thrown out by restaurants without having to blend the grease with refined soybean oil. This and the higher processing capacity reduces production costs significantly, he said.

The first phase of the biodiesel plant, in a former cotton processing facility at 3500 Doniphan on the West Side, was completed late last year. It was in production for only two weeks before it stopped in December to go into expansion mode, Guzman said.

It plans to begin production again in November. The plant will use grease discarded by area restaurants, but that won't be enough to meet its needs. So GAF will import grease from brokers who get discarded grease from restaurants and food processors around the country, Guzman said.

The plant employs 23 people. Ten more jobs will be added when production begins, he said.

The climbing price of oil, which went above $80 a barrel last week, and the plant's lower

production costs make biodiesel a viable product again, Guzman said.

The National Biodiesel Board reported in May that biodiesel production had fallen to 2006 levels in the United States. It said that many plants were idle and at least 20 had gone out of business.

The El Paso plant's expansion is being done with part of a $20 million loan from the North American Development Bank. Private investors also have helped finance the fledgling venture.

Royal Jones, CEO and president of Mesilla Valley Transportation, one of the largest trucking companies in this area, and one of the main shareholders in Global Alternative Fuels, isn't worried about the biodiesel market.

"The market will be there for the rest of our lives," said Jones, who also is CEO of Global Alternative Fuels. "By producing renewable fuels, it reduces our need for foreign oil." Jones also likes the fact that the company is using grease waste, and not soybean oil or vegetable oils, which can affect food prices, he said.

Biodiesel also has lubricating qualities that make it useful to be blended with low-sulfur diesel fuel, Jones said.

GAF plans to sell its biodiesel to Western Refining, which will blend it with regular diesel made at its El Paso refinery.

"It will give us a new product that we can market" to companies seeking a biodiesel blend, said Gary Hanson, a Western Refining spokesman. "There's some demand for that type of product. It's a more green product."

Guzman said GAF has additional expansion plans. Its goal, he said, is to be producing 100 million gallons of biodiesel by 2015.

Vic Kolenc may be reached at vkolenc@elpasotimes.com; 546-6421.

For more information: www.globalalternativefuels.com

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