Galveston Bay Biodiesel partners sue Chevron, say oil giant backed out of promised investment

In Texas, owners of the Galveston Bay Biodiesel project have sued Chevron, which owns 22 percent of the venture, for failing to follow through on funding promises. The other partners had to put up $15 million to satisfy liens and other obligations after Chevron refused to participate in an additional funding round. Chevron said that the partnership documents did not require the company to participate in the investment round. Galveston Bay executives say that Chevron gave verbal assurances that it would participate that the company and its other investors relied upon. The plant is scheduled to expand to 110 Mgy in production capacity this year.

Rising soybean prices shuttered two Texas biodiesel plants recently, continuing a trend which has affected at least ten biodiesel plants worldwide.

In Illinois, construction was halted at the North Prairie Productions biodiesel plant owing to high soybean oil prices. The company is planning a strategic review before potentially resuming construction efforts.

The Freedom Fuels biodiesel plant in Mason City shut down production due to the high cost of soybean oil. The plant has a capacity of 30 Mgy of biodiesel, and hopes to resume production in November. Four people were laid off from their jobs as a result of the shut down. Grainnet.com reported last month on two plant shutdowns in Pennsylvania, where state production has dropped to 5% of capacity.

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