A biofuel company with Montana ties has sold to a global holding company interested in developing camelina in the state.
Sustainable Oils, which previously contracted camelina acres in Montana and operated genetics and production laboratory in Bozeman, is now owned by Global Clean Energy Holdings Inc.
A founding partner in Sustainable Oils, Washington-based Targeted Growth, will stay in the mix as a Global Green Energy shareholder. Targeted Growth was instrumental in setting up Sustainable Oils in Bozeman.
“Targeted Growth continues as a significant shareholder in the holding company. That was part of the deal,” said Scott Johnson, Sustainable Oils president. “Our agreement with Targeted Growth includes a services contract for the Bozeman breeding facility for camelina. We will be contracting with Targeted Growth to access the facility in Bozeman, which has a breeding and plant science laboratory.”
Johnson said employees will begin contracting for camelina acres in the fall. At the high point of Montana’s biofuel activity, farmers raised 22,000 acres of camelina, but that number has since fallen to 2,000 or less, according to the National Agricultural Statistics Service.
Biofuel development stumbled as the recession hit and investors backed away, while at the same time agriculture commodities prices hit record highs, discouraging farmers from planting a crop that was at times uninsurable and priced much lower than conventional crops like wheat.
Global Clean Energy is a U.S.-based company that has previously specialized in biofuel made from the fruit of the tropical jatropha bush. The fruit contains oily seeds from which biodiesel can be extracted.
Like camelina, jatropha was a biodiesel up-and-comer a few years ago. Both plants were praised for being fuel sources that were not also food sources, a problem that has plagued corn as ethanol production contributed to rising costs for animal feed and corn products marketed to humans. Both crops were used to make jet fuel, which was tested by the military and manufacturers of commercial jets.
But camelina and jatropha developers fell on rough financial times as the recession curbed private investment and then federal funding for military biodiesel research all but ended.
Things could be improving for the two biofuels. Last month, the Environmental Protection Agency added camelina to the federal Renewable Fuels Standard, which should give camelina an inroad with biofuel production mandated by the federal government to wean America off carbon-based fuels. RFS fuels are provided with several perks to incentivize fuel manufacturers to use them.
European countries are also requiring commercial jets to move away from carbon-based fuels, which could open a market for jet fuel from jatropha and camelina.