Rawnoc says JBII's fuel blending site gives it a monster competitive advantage

Blending sites can be extremely profitable. Think outside the box while being realistic.

What if P2O fuel is granted a tax break that the distributor normally pays?

Some insist on comparing JBII's fuel to biofuel. In some ways I agree -- do you think they'll have to pay the normal petroleum taxes as oil made from oil wells?

Ethanol, for example, is often given huge tax credits. For example, a quick Google search under "ethanol tax credit" brings up the first link:

http://www.ksgrains.com/ethanol/regcredits.html

"The Volumetric Ethanol Excise Tax Credit, also known as VEETC is a credit of $.45 for every gallon of pure ethanol blended into gasoline."

Extra $42.42 per barrel for JBII?

"Loan guarantees and grants (Section 1512): authorizes loan guarantees and grants for construction of facilities to process and convert municipal solid waste and cellulosic biomass into ethanol and other products."

http://www.reuters.com/article/idUSN2525658920100325

Interesting. Cellulosic ethanol gets a $1.01 per gallon tax credit to the BLENDING site or $42.42 per barrel.

Now while we have no idea what sort of tax credit, grants, or loans the government(s) will give plastic-to-oil producers, but since it's a green process making domestic alternative energy, I think
it's safe to say there will be some sort of tax credit coming their way in the future. And the only way to take advantage of it fully is to be in the blending side of the business.

More quick random googling....in New Mexico, all sorts of tax credits and goodies for waste-to-energy companies:

"...waste-to-energy....The credit is generally available for the first 10 years of a facility’s existence. Additionally, firms that qualify for the production tax credit can instead take an investment tax credit for 30% of the facility’s cost in the year the facility is placed in service."
http://bingaman.senate.gov/policy/stimulus_guide_energytax_manufacturers.cfm

"Projects that use solar, wind, hydro, geothermal, biomass or fuel cells (renewable fuels only) to produce energy, displace energy, or reclaim energy from waste may qualify for a tax credit."
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=OR03F

"the incineration of municipal solid waste now qualifies as renewable energy but did not previously."
http://www.epa.gov/osw/hazard/wastemin/minimize/energyrec/rpsinc.htm

"A registered blender is the only individual in the supply chain that is eligible for this credit, and it can only be taken once."

That's an extra $18.90 per barrel in an ethanol's manufacturer's pocket. Maybe with the blending site, JBII can put an extra $18.90 in its pocket per barrel.

What if they put processors at the blending site, for starters, as some have suggested?

They could have the fuel piped directly into the big tanks for blending. Seems very efficient to me and at a monster competitive advantage.

Raw