December 23, 2024 [Yahoo Finance]- The former oil refinery along Rosedale Highway has launched commercial production of renewable diesel and other low-carbon fuels, its owner announced Friday, drawing to a close a long and difficult plant conversion process.
Long Beach-based Global Clean Energy Holdings Inc. said its Bakersfield Renewable Fuels Facility is now producing about 6,000 barrels per day of renewable diesel — significantly below its design capacity, as is common with refinery starts — as well as renewable propane and renewable butane.
Friday’s announcement opens a new chapter for a sprawling plant that has proved vexing for a series of owners going back well over a decade. While Global is using only the southern portion of the refinery, for now, its pursuit of renewable diesel production despite engineering and financial problems places it in alignment with California’s push for ever-cleaning energy.
“I am incredibly proud of our talented team, whose dedication over the past several years has made this achievement possible,” President and CEO Noah Verleun said in a news release.
There was no definitive word on what feedstocks the refinery is currently using to produce fuel at the plant, which was redesigned to run on a variety of materials such as used cooking oil, rendered animals fats and the non-food grain camelina. Global noted Friday the latter delivers up to 90% lower carbon and greenhouse gas emissions than petroleum-based diesel, but the company did not respond to a question about whether camelina is being used during this early stage of operation.
After purchasing the refinery in 2020 from Dallas-based Alon USA Energy Inc., which struggled to keep the plant going, Global ran into trouble of its own. Engineering problems put the project well behind schedule, budget overruns required unanticipated cash infusions and several of the owner’s business relationships soured.
The oil refinery’s capacity was about 67,000 barrels per day. Global has said it hopes to produce 15,000 barrels per day of renewable diesel at the property.
Refinery consultant Ian Goodman, who has observed the project’s progress, called the refinery’s start of commercial production “big news and huge progress” given Global’s past problems and uncertainty over whether the plant would ever start operating under its existing ownership. Even so, he noted there remain questions about where things go from here.
“The hopeful scenario is now that the project now operates well and can increase output to design capacity and also to process camelina (and other harder to process feedstocks),” he wrote in an email. “This further progress is important (and probably essential) for the project becoming profitable to operate.”
While the project has constraints that limit its output and keep costs up, Goodman added, “it may be possible to undertake follow-on work to improve the project and more fully utilize the assets at Rosedale.”
Global’s publicly traded shares surged Friday to their highest mark in more than a year, trading for as high as $1.46 — a sharp turnaround from the depths of September, when the company’s stock price bottomed out at 17 cents.
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