Saving Local Biodiesel: The Death of Inland Empire Oilseeds.

The machinations of an ineffective national and global economy has claimed yet another so-called “Green Energy” business, as Odessa, WA based Inland Empire Oilseeds looks to have closed down its production for good.  The ultimate fate of the remnants of the company are now left to the determination of the bankruptcy courts, as the company’s creditors have filed for an involuntary Chapter 11, while the company management have asked to have it switched to Chapter 7 liquidation.

This is not the first time that I.E.O. has shut down operations.  It commenced operations in 2008 as a cooperative venture of, among other entities, the Odessa Union Warehouse Cooperative, Reardan Grain Growers, and individual investors.  I.E.O. had hoped to develop an Eastern Washington canola market by urging farmers to grow canola in rotation with wheat.  During this time, I.E.O became the primary source of fuel for Dr. Dan’s Biodiesel, providing a high-quality canola biodiesel with superb cold-weather properties.  But the company was forced to cease production in the summer of 2010 due to a lack of capital, spurred by the lapse of a national biodiesel blender’s tax credit and an inadequate RINs (renewable energy credits for fuel) market.

The tax credit was eventually re-installed (retroactive to all of 2010 as well as 2011) during the Congressional budget negotiations in December of 2010.  But the credit would once again lapse for 2012.  In the summer of 2011, I.E.O. came under new management, by a group calling themselves 1138 LLC, and finally resumed large-scale production and was then able to step up as a major supplier to Dr. Dan’s.

The tax credit was once again renewed (and again retroactively for 2012) this January, but the end affect was that major producers were forced to operate without profit margins during the periods the credit was not in place, placing producers under unnecessary financial duress.  The tax credit has not necessarily resulted in decreased end-user pump prices for biodiesel consumers mainly due to biodiesel producer’s efforts to keep market prices as stable as possible.

Meanwhile, in July of 2012 1138, LLC took control of 75% ownership of the company, the remaining 25% remaining in the hands of the original investment group.  There were plans at the time to significantly increase production, but by then the original model had become somewhat distorted; with most of the feedstock coming from Canada, high wheat prices affecting farmer’s willingness to grow canola, and unstable commodity markets severely compromising price controls for canola oil.

At the end of the day, Inland Empire Oilseeds represents yet another in a long line of failed “new economy” ventures rendered unworkable by the obsolete market forces, which still drive commercial agriculture.

So what does this mean for the end user?  As the biodiesel consumer it seems increasingly likely that our only hope to fight these mega-million dollar market manipulators is to band together to demand better products at better prices.  This is the heart of the cooperative movement; and this is exactly why we need the Sustainable Fuel Co-op to be able to work for area sustainable fuel users.  All you need to do is join the cause at www.sustainablefuelco-op.com and help push for a new economy

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One Response to Saving Local Biodiesel: The Death of Inland Empire Oilseeds.

  1. Evan says:

    I.e., if we join together as dedicated consumers in order to concentrate our demand, we can apply pressure to keep quality, locally-produced, job-making, community-supporting fuel on the market. Join the Co-op.

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