From: Ryan Robinson, Lancaster New Era
Published October 18, 2005 12:00 AM

Green Oil: New Energy Crop for Farmers?

LANCASTER NEW ERA, Pa. — A private Pennsylvania company wants farmers along the East Coast to grow a new cash crop that it would convert into bio-energy products. The crop is canola, which currently is used mostly in cooking oils.

The Green Oil Company Inc., of Langhorne, wants to build a plant on the East Coast to crush and refine BB-sized canola seeds into 20 million gallons of biodiesel additive, motor oil, hydraulic fluid and other lubricants per year.

It is looking for farmers to grow about 200,000 acres of the crop to supply the plant. And after the first plant gets up and running, Green Oil would seek to build five other large plants in the next five years to make more bio-energy products.

"It's the wave of the future," John A. Nikoloff of Green Oil told about 40 people gathered Thursday at the Agricultural Issues Forum at the Eden Resort. "As far as I know, we are the only company looking to do what we're doing this way."

Biofuels and biolubricants made from canola and soybeans grown in the United States can replace similar petroleum-based products, slightly lessening the country's reliance on foreign oil, he said.

Nikoloff said Green Oil already makes several canola-based products that have a market because they are environmentally-friendly.

Getting a wholesale source for canola will allow the company to greatly expand its product line and operations. The plant will be able to process soybeans in addition to canola, Nikoloff said.

For farmers, canola can especially be valuable as a "second crop," taking the place of winter wheat or grasses, Nikoloff said. Canola can be planted in the fall and harvested in the spring, though Green Oil would need year-round growers as well.

One hundred acres of canola could yield 5,500 bushels of seed. Green Oil would pay the farmer about $6 per bushel, or $33,000 for the crop, Nikoloff said as an example.

All acreage would be contracted before planting. Green Oil would make meal byproducts from the canola available to the farmers and would sell them oil for their farm equipment at cost, he said.

Nikoloff said there have been problems finding a suitable site for a plant, which must be close to major roads and have rail car access. Sites in Franklin and Lebanon counties are being considered, as is the Jefferson County/Clearfield County area. Other sites are being considered from Georgia to New York.

Nikoloff retired last year from his Harrisburg-based public affairs firm to join Green Oil. He has served as a lobbyist for many farm organizations and previously served in the state House, state Senate, and under three governors.

Noting his ties to Pennsylvania, Nikoloff said, "if it kills me, one of Green Oil's plants will be in Pennsylvania."

Financing and strategically locating the first plant are the biggest hurdles for the project.

Nikoloff criticized Pennsylvania government leaders for not giving Green Oil more incentive to locate its plant in the state. North Carolina and Virginia have offered Green Oil millions of dollars, Pennsylvania just $300,000, he said.

He did not offer a specific project timetable.

Green Oil Company, founded in 1992, supplies tractor-trailer loads of gasoline and diesel fuel to commercial accounts and gasoline stations.

"We plan to become a world leader in biolubricants," Nikoloff said.

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Source: Knight Ridder/Tribune Business News

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