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A Pittsburgh-based maker of supercritical fluids… replacements for solvent-based technologies in the pharmaceutical, food, chemical, and electronics industries… is getting some money to help improve the efficiency of biodiesel production.

This story from the Pittsburgh (PA) Tribune-Review says Thar Technologies, Inc. has received a $1.9 million grant from the National Institute of Science and Technologies:

Unlike most biodiesel-producing techniques, the new Thar process doesn’t use the hazardous air pollutant hexane to extract oil from oilseeds. Instead, the Thar process will use liquified carbon dioxide.

“We use carbon dioxide that we compress into a liquid and use that as a solvent in the process,” said Lalit Chordia, Thar’s CEO, during a news conference at the company’s operations center at Harmar to announce the federal grant. “Our process can use any source of oil, even oil shale and low (grades) of coal as a n oil source and convert it to biodiesel.”

The company says the process is profitable at $2.30 a gallon… and doesn’t even need the federal dollar-a-gallon subsidy to make money. Thar hopes to put up a 40-million-gallon-a-year biodiesel plant in Western Pennsylvania by 2010.

High input costs could put the damper on biodiesel growth in 2008, despite the fact that demand for the green fuel will grow. But the long-term outlook still looks pretty positive.

This story from Reuters says that assessment comes from the head of the industry’s largest trade group:

“The economics overall for the biodiesel industry are extremely challenging right now. There’s no question about it there’s been a cooling off what has been some irrational exuberance that has gone on in the investment in biodiesel production capacity over the last two years,” Joe Jobe, CEO of the National Biodiesel Board, told the Reuters Global Agricultural and Biofuels Summit in a telephone interview.

Domestic biodiesel margins are running about 10 cents per gallon to a minus 30 cents per gallon, industry analysts said.

The article goes on to point out that biodiesel production in the U.S. went from 25 million gallons a year in 2004 to 450 million gallons in 2007… pretty impressive growth. This year, biodiesel production is expected to hold steady at current levels. But with the passage of the new energy bill, biodiesel production could jump by five times over the next 15 years from what it currently is. Jobe says by 2015, his industry wants to replace 5 percent of the U.S. diesel pool with biodiesel… upping production to 1.85 billion gallons.

A Galveston, Texas biodiesel plant that looked like it was done after oil giant Chevron backed out of a deal to expand operations, now looks like it is back to expanding its efforts.

This story in the Houston Chronicle says Galveston Bay Biodiesel will spend $15 million to do some improvements and settle legal claims against it after Chevron left the project high and dry last year:

Galveston Bay Biodiesel, the partnership that owns the plant, said the money is coming from one of the original investors in the project but did not identify the investor.

Other money will go to finish some modifications and expansions of the plant, which the partnership contends were halted last year when Chevron decided not to invest more money in the project.

The article says Chevron claims it was in the deal just to get things started, but the partnership says Chevron breached its agreement and misrepresented itself to up its part in the plant. The Chevron infusion was suppose to help the plant go from 20 million gallons a year to 100 million. This new investment should help the plant expand to 40 million gallons a year.