There has undoubtedly been a lot of noise from both sides of the ethanol argument. Putting it simply, proponents of the biofuel see it as a way to ween the country off foreign oil while critics question its sustainability and energy balance. Friday's news from VeraSun, the nation's second largest ethanol producer, is surely bound to mix things up.

VeraSun announced that they would build the first large-scale commercial biodiesel production facility which uses oil extracted from distiller grains, a co-product of ethanol production, as its feedstock. That's right. Two biofuels from the same source. Unfortunately, no mention was made of feasibility studies or energy balance calculations, but TradingMarkets.com is reporting that VeraSun has contracted with Lurgi PSI for design and engineering services as well as Crown Iron Works Company for oil extraction equipment.

Construction on the 30 million-gallon-per-year facility is to begin in 2007 and production should start in 2008.

[Source: Associated Press via Netscape Money and Business]