We have a new player in the TDP world.   Tyson Foods is pairing up with Conoco-Phillips

HOUSTON and SPRINGDALE, Ark., April 16, 2007 --- ConocoPhillips [NYSE:COP] and Tyson Foods, Inc. [NYSE:TSN] will announce a strategic alliance at 12 p.m. CDT today to produce and market the next generation of renewable diesel fuel, which will help supplement the traditional petroleum-based diesel fuel supply. The alliance plans to use beef, pork and poultry by-prodBenefits of Renewable Dieseluct fat to create a transportation fuel. This fuel will contribute to America’s energy security and help to address climate change concerns.

Over the last year, the companies have been collaborating on ways to leverage Tyson’s advanced knowledge in protein chemistry and production with ConocoPhillips’ processing and marketing expertise to introduce a renewable diesel to the United States. Tyson will make capital improvements this summer in order to begin pre-processing animal fat from some of its North American rendering facilities later in the year. ConocoPhillips also will begin the necessary capital expenditures to enable it to produce the fuel in several of its refineries. The finished product will be renewable diesel fuel mixtures that meet all federal standards for ultra-low-sulfur diesel. Production is expected to ramp up over time to as much as 175 million gallons per year of renewable diesel.

“We are firmly committed to leveraging our leadership position in the food industry to identify and commercialize renewable energy opportunities,” said Richard L. Bond, Tyson president and chief executive officer. “This strategic alliance is a big win for the entire agricultural sector because it paves the way for greater participation of fats and oils in renewable fuels.”

“ConocoPhillips believes the key to a secure energy future is the development and efficient use of diverse energy sources,” said Jim Mulva, ConocoPhillips chairman and chief executive officer. “This alliance will provide a new and significant contribution to our nation’s domestic renewable fuel supply. It also offers an excellent opportunity to use our company’s manufacturing expertise and advanced technology to help increase the supply of renewable fuels and to reduce greenhouse gas emissions.”

Using a proprietary thermal depolymerization production technology, the animal fats will be processed with hydrocarbon feedstocks to produce a high-quality diesel fuel that meets all federal standards for ultra-low-sulfur diesel. The addition of animal fat also improves the fuel’s ignition properties, while the processing step improves its storage stability and handling characteristics.

Investments made by ConocoPhillips and Tyson will allow for the processing and handling of fat and enhance the ability of the United States to produce energy from a variety of sources, including domestically-produced vegetable oils.

The processing technology was developed at ConocoPhillips, culminating in a successful test at the company’s Whitegate Refinery in Cork, Ireland. ConocoPhillips began commercial production of renewable diesel using soybean oil in Ireland late last year.

This alliance is expected to be a positive step for Tyson’s long term financial performance. “Production is expected to begin in late calendar year 2007, ramping up through spring 2009,” Bond said. “Once at full production, we currently project between $0.04 and $0.16 cents per share in additional annual earnings. However, this will be driven by factors such as the prices of wholesale diesel and animal fat."

 Boy this gets interesting.  To begin with Conoco/Tysons requested clarification from the IRS regarding the 1$/gallon tax credit, and they got a ruling in their favor.  But now the NBB and the soybean growers are apoplectic - to them, this tax credit was for them and for them only. 

04/16/07 - When he first decided to open a biodiesel plant, Delaware farmer Marty Ross knew that it wouldn't be easy. But he believed in biodiesel's potential for both providing energy security and adding value to the Delaware soybean crop. Seven years later, his Clayton, Del. plant is in production, and beginning to enjoy some hard-earned success. The plant has the capacity to produce 5.5 million gallons of biodiesel a year, and Ross has plans to expand that as demand increases.

However, a dark cloud now hangs over his business and threatens to dampen the benefits that the biodiesel industry brings to all Americans.

"We feel like we are about to be stranded on a bridge to nowhere," said Ross, president and founder of Mid-Atlantic Biodiesel.

And now there is this in the news:

April 20 (Bloomberg) -- Democrats in Congress plan to reverse an Internal Revenue Service ruling that allowed ConocoPhillips and Tyson Foods Inc. to benefit from a tax break for producing alternative energy.

If adopted, the legislation would threaten a joint venture announced this week by ConocoPhillips and Tyson to produce diesel fuel from animal fat. Lawmakers said that the tax credit was intended to benefit new technologies using animal carcasses and other food waste and that the companies pressured Bush administration officials to redefine it.

``There appears to be abuse that demands legislative correction,'' said Texas Representative Lloyd Doggett, who is drafting a measure to overturn the IRS rule with Representative John Larson of Connecticut. Senator Maria Cantwell, a Washington Democrat, said yesterday during a Finance Committee hearing that the companies tried to ``go around'' Congress and that the tax credit needs to be ``re-examined.''

The IRS's decision this month to expand the break may be worth hundreds of millions of dollars to Houston-based ConocoPhillips and other refiners, while increasing demand for products from Springdale, Arkansas-based Tyson.