news-record.com

Believe it or not...and most do not, there are consequences when we vote. And it is absurd that a tax incentive related to alternative fuels would be tied to a jobs bill, but again...there are consequences when we vote. I trust Kay Hagan and Howard Coble will realize there is more to being a politician than showing up at parades...get back to Washington...and fix this.

From a purely business sense, it's questionable logic to get into a business with profit model reliant on a government subsidy. Too bad Patriot can't set up their own gas station. Then he could sell convenience to help the bottom line. Seriously.

Are they picking up the waste oil for free? Can they try and get a small fee (or small fee increase) for the pick up? What else can they do for their pick-up clients to generate revenue?

Have they knocked on the door of Spevco to see if they need diesel? How about Deere-Hitachi?

What about a "certification" logo that restaurants can post to say their waste oil goes toward Patriot bio-diesel? Green and local.

Time to focus on different revenue streams in order to survive. I'd buy diesel from them if I had a need for it.

Plain and simple, this was a risky business model that relied on three things:
1: Artificially inflated diesel prices staying high forever.
2: The federal government paying a $1 per gallon subsidy since biodiesel on its own is not cost competitive.
3: Not having to pay the state and federal road use tax.

They lost two out of the three and it wouldn't surprise me if the state of NC made the third one go away as well. The same thing has happened to ethanol manufacturers across the country and many companies have suffered the same fate. This is just another case of live by the government, die by the government!

In fact, U.S. energy policy is a game rigged hugely in favor of the oil companies, as the New York Times pointed out just yesterday. To suggest that these business owners were foolish to rely on a government subsidy is to ignore the context in which they do business.

Link: http://www.nytimes.com/2010/07/04/business/04bptax.html

This is just another case of the liberal media crying tears over the failure of Government. If there were a demand for this fuel, then these men would have no problem sellingit at a profit. It is social engineering ruining the live of these men, but they actually thought the Government would continue to support them for how long? And we as taxpayers, what would we get out of it? Our money going to them to make us FEEL good.
this is a perfect example of what is wortng with this country. You make the product cheaper and better and you'll stay in business.

As a former, and currently aspiring, small business owner, I hate to read stories like this. In addition to money a lot of sweat equity goes into any small business venture. However, I agree that basing your business model on a tax credit that could (and did) vanish like vapor doesn't seem wise. But I do admire the risk he took to get it going. 7000 gallons per week, however, is nothing. I was in the fuel business for many years and 7000 gallons isn't even a full load on a single transport tanker truck. I'd say Patriot was barely holding on even in their best days.

Also, any industry that can't survive without taxpayer subsidies probably isn't a valid industry, at least not yet. Perhaps the biodiesel people need to work on lowering costs thru more efficient refining methods rather than requesting a government hand-out.

Oh Boo Hoo just another business crying that it needs the government to give them more incentives....I got a ideal that might help....cut your profit out looks....and dont expect to become a overnight sucess. Business is all about taking risks. If you cant stand the risk then get out of the kitchen.

You guys have made some good comments, but I think we're missing the bigger point. I think if you asked everyone in this country, "Would you like to be independent from foreign oil sources and rely on renewable clean energy sources that are better for the environment?" You'd get an overwhelming majority answer yes (save maybe those that work for an oil company). So the problem lies in that all of those renewable clean energy sources like wind, solar, biodiesel, etc...at least for now, cost significantly more and can't produce the volume that we need.

So the question becomes, who's going to pay the extra for us to become green? It sounds like that other biodiesel company has at least one customer who's willing to pay a premium for it, but most consumers won't do it or can't afford it. So I hear what people are saying about not betting on an industry that relies on government tax break or subsidy, and I am definitely a fiscal republican, but somebody (either consumers or the government) has to be willing to invest some money for us to get through this infancy stage of the technology so that it can become a profitable industry that stands on its own.

This is one case where I think the government has to help out. I say we tax foreign oil higher to help offset the cost of the tax incentives for alternative fuel sources like biodiesel and hydrogen fuel cell. I would go to all the big US oil companies and tell them that this country is moving to clean renewable fuel sources whether they like it or not and that if they jump on board then there will be tax credits and incentives galore, and if they fail to get on board then they will be taxed at a higher rate.

And you guys mentioned other industries. I take my above example directly from healthcare. I'm a physician. The government has realized that electronic medical records have the potential to save money and improve the quality of healthcare (if done well). So they have passed a bill that physicians who use EMRs will get an incentive for the next couple of years, but that incentive will turn into a penalty for those who do not use EMRs. I would use the same strategy to initiate this change of fuel sources.

And so I agree that it was a risky venture to depend on the government tax break, but then again, President Obama has championed this cause of being green (at least with his rhetoric). So I don't think the Patriot owners betting that he would support that industry was such an illogical decision. I admire them for a) being entrepreneurs, that's what this country is built upon and b) for putting their money and their sweat into something worthwhile. I hope they are able to find a way to survive.

We thrown enough money at biodiesel to fill a large bank.
In Virginia , Perillo has cost the taxpayers millions on this crap.
Ethanol has cost the consumers billions.
If you doubt it, go buy a box of cereal.
Not to mention the sorry gas mileage with it.
Carter blew 45 million on synthetic fuel, what have you got to show for it.
NY Times, they are about as trustworthy, as a jerk that said Palin does porn movies.
We need good safe drilling for oil, then easy in other things.
N Y Times what a frigging joke!

I really appreciate all of the debate my predicament has sparked. I think a few of you get it and a few fail to see the bigger picture. Domestic energy is a must for Home Land Security. Not only does biodiesel reduce the trillions of dollars sent to Saudi Arabia and Venezuela, but builds up our local economy. Patriot Biodiesel is the only company that actually produces energy in the Piedmont Triad. All others sources of energy are shipped in (Coal, Gas, Petroleum, Nuclear). I make my fuel from your restaurant waste.
We don't want a hand out; we expect our leaders to fulfill their commitments to my industry. With out the tax credit you will lose your only local energy producer.
Here is a little history on the Biodiesel Tax Credit: The Bush administration put it in place five years ago; he also made an infrastructure credit and an income tax credit. The credit has been renewed every year for five years by a completely bipartisan majority. The very first time that it was up for renewal under the Obama administration and the Democratic Congress, it was repeatedly voted down (mostly because it had nothing to do with healthcare). The NC biodiesel tax credit expired this year as well; it was $0.30/gallon (which is the same as the tax per gallon of diesel fuel).
One last point. I am not green when it comes to start-ups or adversity in business. Patriot has explored almost every option when it comes to maximizing profit, or in this case minimizing loses. We have teamed up with A&T school of Technology to employ more Lean Manufacturing techniques, and have called on the good graces of all of our vendors. There is no low hanging fruit left on the tree, as a matter of fact we have picked the tree clean.

Keep the comments coming and keep the Biodiesel Industry in your prayers. Over a hundred thousand jobs depend on the industry's success.

I understand your predicament and hope you can find a way to be successful. Unfortunately, relying on the government to subsidize your business is a bad choice. Our economy is busted and broke and I'd expect even less in the future rather than more as the deficit continues to grow at a record pace.

I am certainly no expert on biodiesel, traditional fuel, or economics, but I think we also have to look at the auto industry. Just last year, my husband and I did extensive research into purchasing a diesel vehicle with the intent fueling it with 100% biodiesel (i.e. not an 80-20 blend of traditional diesel and biodiesel). I will not go into all the details, but essentially car manufacturers are not producing diesel vehicles that can effeciently run on 100% biodiesel without requiring a modification to the vehicle that voids the warranty. Even then the vehicle would require very frequent maintenance. We were willing to pay the higher price for pure biodiesel but with diesel packages on cars already adding $10,000+ to the car price and then with the amount of maintenance that is required, it was completely infeasible. We ended up going with a traditional hybrid instead.