TexCom has been in the site selection process and has completed due diligence on several  locations. TexCom expects to construct and operate a grassroots Biodiesel production plant with  an annual capacity of 30 million gallons based on a continuous operational design, using virgin  soybean oil as its feedstock.

Production
The primary products marketed by the venture will be pure Biodiesel, Biodiesel / Petrodiesel blends and by-product crude glycerol. Engineering design and operating process technology for the plant using virgin soybean oil have been selected utilizing a proven engineering design.

Political Climate
Both the U.S. Federal and State governments have been increasingly supportive of financial incentives and subsidies for Biodiesel production. The USDA, through its Commodity Credit Corporation affiliate, makes direct payments to Biodiesel producers based on the equivalent amount of soybeans consumed in making the fuel.

NOTE: Biodiesel is Included in the list of fuels classified as alternative for purposes of government agency fleet compliance

EPA Link Here:

Demand
Three market factors are generally seen as the driving forces behind the expected rapid growth in U.S. demand for Biodiesel.

:: Government and private fleets will use B20 in existing diesel engine vehicles to help comply with the Energy Policy Act (EP Act).
:: Refiners will use 2-5% Biodiesel in diesel fuels to improve lubricity of ultra-low-sulfur petroleum diesel.
:: Off-road markets will use B100 to obtain the benefits of lower emissions and less engine wear.

B20 in Fleets
Interest in the use of Biodiesel in the U.S. started to become significant in 1998 when the Energy Policy Act of 1992 was amended to include Biodiesel as a means for vehicle fleets to meet the requirements for using alternative fuels. Administered by the Department of Energy, the Energy Policy Act is intended to reduce consumption of petroleum based fuels in transportation by mandating increased use of alternatively fueled vehicles in state and federal vehicle fleets. Under the amendment, fleet operators can comply with EP Act requirements by using an alternative fuel rather than acquiring additional alternative fuel vehicles (AFV) that may or may not ever operate on any alternative fuel.

Fleet managers may now choose to operate existing diesel vehicles on blends of Biodiesel in lieu of purchasing a new AFV. The Biodiesel content of the fuel blend must be a minimum of 20% by volume. The fleet may then count the Biodiesel portion of the blended fuel towards their annual AFV requirement. For each 450 gallons of Biodiesel purchased and consumed, a full vehicle credit is allowed. To maintain a diversified market for AFV, fleet operators may only substitute their Biodiesel fuel consumption for up to one-half of their total annual AFV purchase requirements. Based on current statistics, this would generate a potential demand for Biodiesel of nearly 30 million gallons per year in just the federal government fleet vehicles. State fleets, utility companies and private fleets would represent additional requirements.

The American Bio fuels Association projects that if government incentives for Biodiesel are made comparable to those provided for ethanol use in gasoline, U.S. Biodiesel blend sales could reach two billion gallons per year, about 6% of current on-road diesel consumption. At 20% of the blend, this would be equivalent to a Biodiesel demand of 400 million gallons annually.

Realistically, the government and private fleet vehicle portion of this total represents an annual market for Biodiesel contained in B20 blends of approximately 75 to 100 million gallons, with the balance being sales to the general public.

Biodiesel as a Lubricity Enhancer
The need for diesel fuel lubricity to promote less engine wear has been long known. In 1993, the EPA mandated that the sulfur content of on-road diesel be reduced from 5000 ppm to 500 ppm in order to reduce sulfur dioxide emissions from diesel powered vehicles. The issue generated much publicity when it was recognized that the reduced sulfur diesel fuel suffered from lowered lubricity properties. There is a lack of understanding about why low sulfur petroleum diesel has poorer lubricity. Some believe that the sulfur compounds themselves common in diesel provide lubricity. Others believe that the severe hydro treating process used by refineries to reduce sulfur also causes other compositional changes in the hydrocarbons that reduce lubricity.

Already a problem requiring the use of lubricity enhancing additives, the situation will become worse when a new EPA regulation will require a further reduction of sulfur content to 15 ppm maximum by 2007. One of the most economical options to correct the expected lubricity problem will be the addition of small amounts of Biodiesel, most likely in the range of 2-5% by volume. If generally used by the refining industry to alleviate the lubricity problem of ultra-low-sulfur diesel, this factor alone could result in an annual demand for over 500 million gallons of Biodiesel.

Legislation enacted by the State of Minnesota to become effective in June, 2005 requires that all diesel fuel sold for internal combustion engines contain 2% Biodiesel. It has been estimated that this will create a demand in the state for Biodiesel contained in these blends of about 16 million gallons per year.

B100 in Off-Road Markets
The forecast use of B100 in off-road diesel engine markets is based on Biodiesel’s benefits of being non-toxic and biodegradable as well as the fact that it produces significantly lower emissions and has a non-objectionable odor. Accordingly, the major market segments showing potential for use of B100 are marine, mining, airport, agriculture and construction. The segment considered most likely to realize deep penetration by B100 is for use by airport vehicles in air quality non-attainment areas. Biodiesel has also found good acceptance in areas such as state and federal parks and resorts, primarily due to lower emissions and odor.

One of the contributing factors to depressed agricultural commodity prices has been a surplus supply of vegetable oils and animal fats. It can be argued that increased production and use of Biodiesel will diminish this surplus and result in higher prices for soybean oil, for example, thus lowering the outlays in the USDA soybean marketing loan program. On the other hand, a significant amount of diesel fuel is used in U.S. agricultural production. Motivated by the potential for reducing surpluses and increasing vegetable oil prices, agricultural producers should be expected to support increased use of Biodiesel in their own equipment.

The total U.S. demand for diesel fuel in off-road and stationary engine markets is more than 3 billion gallons per year. A conservative estimate of only a 5% penetration of these markets by B100 Biodiesel predicts a potential demand for 150 million gallons per year.