SURGOINSVILLE - The region's first biodiesel manufacturing plant is expected to be up and running in just a few months.
Hawkins County businessman Brian Hullette and his accountant and business partner, Joel Day, have started a company called nu-energie, and plan to establish a biodiesel production facility in the Phipps Bend Industrial Park.
The project is expected to produce 15 million gallons of biodiesel a year, and create 35 jobs in a 36-month period. Production could start as early as August.
"I think it's perfect timing," Hullette said.
Biodiesel is a clean burning fuel made from natural, renewable resources such as vegetable oil and soy bean oil.
It and other biofuels are being promoted by the federal government on down to the states to help reduce the nation's dependency on foreign oil.
"We have to start thinking about using new energy and be more independent and less dependent on foreign oil," Hullette said. "This makes this an exciting time for the U.S. to be able to produce our own fuels from renewable resources and put our farmers back into business and add jobs back to our economy."
Hullette didn't always have his sights set on biofuels. The self-proclaimed entrepreneur started Box Worx, a supplier of wooden crates for local businesses, in the Phipps Bend Industrial Park four years ago.
But when his main customer experienced an equipment catastrophe that caused a major manufacturing disruption last summer, Hullette was left to fend for himself.
"It more or less put me out of business. I had to figure out what I was going to do," he said.
In an e-mail, a friend half-jokingly suggested that Hullette look into the biofuels business.
Hullette took it seriously.
"I started researching the biodiesel market and I realized this is a great opportunity," Hullette said.
He contacted Day to help sort through the idea. Together, they started nu-energie, which shares its headquarters with Day's accounting and bookkeeping business in Blountville.
Hullette and Day have spent the last few months laying the groundwork for the company.
"Basically the last four or five months, we've been eating and sleeping biodiesel," Day said. "We wanted to make sure it was a feasible project to get into."
The nu-energie production processes will be located in a 13,000-square-foot building surrounded by a biodiesel "tank farm" next to Hullette's Box Worx plant.
Hullette and Day said they hope to be up and running by this August, and eventually plan to produce 15 million gallons of biodiesel a year by 2009.
The company will produce 100 percent biodiesel, which will be sold to distributors, who will mix it with petroleum-based diesel to form various blends of biodiesel.
Those blends will be sold for use in diesel-based vehicles, from school buses and city trash trucks to company fleets and farm equipment.
The most common biofuels are B20 - or 20 percent biodiesel blended with 80 percent petroleum-based diesel - and E85 - or 85 percent ethanol and 15 percent gasoline.
"One of the reasons you don't see more of them (biofuels) now in this area is because the stations don't have anybody to buy it from. There is nobody producing it in this area," Hullette said.
But the number of vehicles that could use biofuels is on the rise. According to a new study by R.L. Polk and Co., more than 190,000 hybrid electric, ethanol-capable E85 and clean-diesel vehicles were registered to Tennesseans in 2006, up 31 percent from nearly 146,000 alternative fuel vehicles in 2005.
Nationwide, some 1.5 million alternative fuel vehicles were sold in 2006, bringing the total number of alternative fuel vehicles to 10.5 million in the nation.
To Hullette and Day, such statistics show a market niche for producers of alternative fuels.
But one of the challenges was figuring out how to get the feedstock to Phipps Bend for the production process. Hullette and Day knew they wanted to use virgin soy bean oil - meaning the oil has never been used for anything else - to make their biodiesel. The easiest way to ship the oil to Phipps Bend is by rail. But the rail system inside the industrial park is broken and in need of repair.
Hullette and Day contacted the state about their plans, and are now awaiting approval for grant funding to repair or install 2,700 feet of rail system at Phipps Bend.
Day said the rail upgrades will not only help their project. "It will economically help Phipps Bend because it brings more access into the park" which could help generate new business, he said.
Ultimately, Hullette and Day hope to expand with manufacturing operations across the region.
"We're trying to provide a clean, green fuel. Our main goal is to offer a quality product that people will want to buy. We want to make nu-energie - at least here in East Tennessee - a household name. We want our customers to have confidence that they're getting something of quality and something that's good for the environment," Day said.