T

ommy Johnson's initial thinking in siting a new biodiesel refinery was to look at Texas, a natural first consideration for an energy company based in Dallas. But as his search broadened, Johnson, CEO of Earth Biofuels and president of Apollo Alternative Fuels, a division of Apollo Resources, found a small town just across the border in southeast Oklahoma to his liking. Location and an assortment of incentives swayed Johnson toward Durant.

Quad/Graphics, the world's largest privately held printer, which opened in Oklahoma City in 2003 with a 218,000-sq.-ft. (20,250-sq.-m.) facility, has expanded several times and now encompasses 761,000 sq. ft. (70,700 sq. m.) of space that house operations including seven saddle stitchers.

     "Durant is just 75 miles [121 km.] from Dallas," explains Johnson. "And the state and city came in with so many incentives."
     The icing on Durant's cake was House Bill 1398, recently passed by Oklahoma lawmakers. The incentive provides a tax credit of 20 cents per gallon up to US$5 million per year per facility for a five-year period beginning Dec. 31, 2007.
     Biodiesel is made from soybean or canola oil, or used fryer oils from restaurants. The used oil, which Johnson calls "yellow grease," must be refined to use as a fuel. Biodiesel plants are beginning to sprout across the country. There are at least 60 active or planned refineries in 22 U.S. states, according to the National Biodiesel Board. About 30 million gallons were produced in the U.S. in 2004.
     Biodiesel adds to the already vast energy-producing repertoire of Oklahoma, which boasts some 85,000 oil and natural gas wells and is ranked 8th in wind energy potential among U.S. states.

     The Durant Industrial Authority was a Site Selection Top Group for 2002, and Durant's recent economic development momentum was a factor. Johnson took notice of the spate of projects finding their way there, like a Cardinal Glass plant and several major distribution centers. Durant's proximity to Apollo's headquarters isn't its only location advantage. The new refinery will be just seven miles (11 km.) from a stretch of the company's 1,800 miles (2,896 km.) of pipeline between Texas and Kansas.
     "Oklahoma is being very proactive in bringing industry in," Johnson says. "It's something they need. Durant is unrecognizable from two years ago with the amount of commercial construction going on. Tommy Kramer [executive director of economic development for the Durant Industrial Authority] took a big interest in us. He's got the ear of every representative in the state. That's important. You won't get that in Texas or even in Mississippi for that matter."
     Earth Biofuels will build its $10-million refinery, which will employ about 100, on the

North Carolina-based foam manufacturer Nomaco chose Oklahoma City for its fourth manufacturing plant.

east side of town in an area that qualifies as a New Market Tax Zone and is currently the site of an old field mill. The refinery will be the state's first, but others are planned.
     Biodiesel is manufactured in 100-percent form and in blends. Johnson is confident of a ready-made market for his biodiesel, a blend called B20 that is a combination of 20 percent biodiesel fuel and 80 percent petroleum diesel. The facility, set to begin production in October 2005, will have a 10-million-gallon (37.9-million-liter) per year capacity. Schools, government agencies and a variety of commercial users that use diesel-powered vehicles are all potential customers.
     "We could contract every gallon right now," Johnson says. "Fifty-two percent could go to the Choctaw Nation, which owns 13 truck stops, and we could contract more to the railroad."
     Earth Biofuels also operates a refinery in Mississippi, and the company is already looking at a second Oklahoma facility with a frontrunner emerging.
     "We want to build in the northern part of the state and Claremore has come to the top of the list," Johnson says.

     Oklahoma also wasn't immediately on the radar screen of foam-manufacturing specialist Nomaco of Zebulon, N.C. But the company's due diligence in its search for a location to serve markets in the Midwest and West eventually brought it to Oklahoma City. Nomaco manufactures engineered polymer foam extrusions and serves the transportation, recreation, agriculture, toy, packaging, construction, OEM appliance and marine industries. Its 314,000-sq-ft. (29,000-sq.-m.) plant is set to open in July 2005 with employment of about 75.
     "Initially, Oklahoma was just a data point for us," says Julian Young, Nomaco's president. "We had Colorado, New Mexico and Texas on our list and weren't considering Oklahoma."
     Young says Nomaco went through a rigorous matrix in its siting process, which also included vetting a list of cities that included Denver, Waco and Abilene, Texas, and Albuquerque, N.M. Nomaco's manufacturing process results in some permitting issues. As a result, California and many major metro areas with strict air pollution controls are eliminated, Young says, adding that the regulatory agencies in Oklahoma were easy to work with.
     "One of the other dynamics that affects our business is that shipping a lot of air across the U.S. becomes expensive," Young says. "We need to be manufacturing where we are distributing our products. It will allow us to reach more customers and to be competitive."