For Biofuels, This Firm Looks Beyond Corn

Biofuels made from something other than corn are beginning to look more and more promising to energy strategists and investors.

One big reason is that corn prices have risen sharply because of the grain's use in making ethanol, a fuel that's viewed by its supporters as a potentially broad replacement for the world's current petroleum-based options.

As a result of this price increase, the ethanol industry has come under increasing political pressure from adversarial lobbies who represent corn interests. And it's forcing companies to consider other means for producing alternative fuels.

Nova Biosource Fuels(NBF Quote), a $300 million Houston-based producer of biodiesel that uses 25 different types of biomass, including animal parts, as feedstock, could be in a prime position to take advantage of this shift.

Whereas many of its competitors rely on a single feedstock recipe, such as one that's corn-based, Nova builds refineries that can be adjusted to accommodate different inputs.

Vegetable oils and animal fats can be used interchangeably depending on their prices and their logistical access to Nova's refineries. While the materials that are used to make Nova's biodiesel have all sorts of textures and colors, the biodiesel fuel that leaves the refineries is as thin and clear as water.

Nova's biodiesel is 100% interchangeable with traditional diesel fuel, and today's internal combustion engines require no mechanical alterations to use it. The company is targeting its biodiesel at large vehicle fleets, including government vehicles and public transportation systems in environmentally sensitive areas.

According to the National Biodiesel Board, an industry trade group, the company's fuel produces roughly 70% fewer emissions of greenhouse gasses and particulate matter when burned than traditional petroleum diesel does.