ConocoPhillips kills green diesel partnership with Tyson, says reduced subsidy made project uneconomic

In Texas, ConocoPhillips announced that it has killed its partnership with Tyson Foods to produce renewable diesel from animal fat. The company said that the production partnership could be restarted if the full $1.00 per gallon subsidy for green diesel was restored by the federal government.

The project had been inactive since last fall when the subsidy was cut to 50 cents per gallon as part of the Wall Street bailout bill, although it had produced 15 Mgy of green diesel at its peak.

The Wall Street Journal said that  “The announcement reinforces the notion that major oil companies—which have been trying to boost their profiles as producers of cleaner fuels—won’t hesitate to reduce their biofuels initiatives if projects become less profitable amid the economic downturn and changing legislation.” ConocoPhillips had been processing Tyson animal fats at its Borger refinery. The subsidy had been opposed by several industries on the grounds that it might drive up the cost of animal fats for soap making and other activities.

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