The Sad Ballad of BioWillie Biodiesel

Published April 25, 2008

BioWillie, the biodiesel fuel branded with country singer Willie Nelson’s name and face, is back in the news again. The company that owns the BioWillie brand, Earth Biofuels, recently announced it secured funding and is planning to open Willie’s Place [1], a Texas-size mega-truckstop that will feature the farmer-friendly fuel.

Biodiesel is a non-petroluem renewable fuel that can be used in diesel engines without any modification. Most commercial biodiesel is made from soybean oil, but also can be made from used cooking oil recycled from restaurants and food processing operations.

The Earth Biofuels announcement was surprising since the company has flirted with bankruptcy and seemed unsure of whether it was a vertically integrated biodiesel company—or producer and distributor of liquefied natural gas for much of the past two years. From its highpoint when it had a market cap of $1.5 billion, BioWillie/EarthBiofuels sunk to a point where its celebrity spokesperson quit its board of directors and walked away from 6 million worthless shares of stock. The company had one very serious problem with its biodiesel business: it was selling its product for less than it cost to make it and bring it to market.

A Hopeful Beginning

It was not always that way. One of the founders of the BioWillie brand, Peter Bell, spoke to Hybridcars.com about the early days of the company. Bell was working at a computer software company in Dallas, Texas, in the early part of this decade. He wanted to do something to help reduce foreign oil imports as well as aid the environmental, so he started buying 55-gallon drums of biodiesel and reselling it to local truckers and diesel car owners. The business grew and soon he had a 450-gallon trailer as the “station” for the fuel. After adding a military contract to supply B20 (20% biodiesel, 80% petrodiesel), Bell was beginning to learn the distribution business.

Willie Nelson, as board member, pumping BioWillie

One of Bell’s early customers was Willie Nelson, who stopped in to fill his tour buses. Bell, a native of South Africa, confesses he didn’t know who the long-haired singer was when he first met him, but did think he had a “cool bus.” As he learned more about the country icon, Bell realized that Nelson had just the right appeal to reach the biodiesel’s target market—the independent trucker. Over a December 2004 game of chess with Carl Cornelius of Carl’s Corner—the truckstop that is set to be reborn as Willie’s Place—Bell sealed the deal to create the BioWillie brand and began selling 1-2 truckloads of biodiesel a day.

An Associated Press reporter stumbled on the operation and wrote up a story on Willie Nelson’s new fuel. That story ended up in more than 2,000 publications, leading to Dan Rather of CBS Evening News coming to Carl’s Corner and biodiesel literally being put on the map as a going concern. The attention led to a distribution deal with Shell Oil and volumes spiking to 7,500 gallons a day, more than 10 times the previous levels. By the end of 2005 Bell and his partners decided to sell the company to Earth Biofuels.

Selling At a Loss

Willie continued as a board member and public face of the company, showing up on national television to fill up his new Mercedes, as well as his bus, with BioWillie. The public company, traded on the Over-The-Counter market zoomed up in value as the popularity of the fuel spread. Then costs of feedstock and other materials shifted and the company that looked like a proverbial billion dollars was suddenly selling its product for less than it cost to make it—and at fewer stations as well. Then, Peter Bell and Willie Nelson dropped out of the company. The stock tanked and their distribution appeared to dry up.

Creditors started lining up at the door, but Earth Biofuels appears to have pulled a rabbit out of a hat on this one—at least temporarily. The recent run-up in petrodiesel prices has brought a similar rise with biodiesel, so BioWillie Biodiesel will sell as a premium fuel at a premium price at “Willie’s Place at Carl’s Corner” located 70 miles south of Dallas on Interstate 35E, when the truck stop opens this summer. The facility will also feature two restaurants, a convenience store, saloon, and gift shop featuring official Willie Nelson merchandise and memorabilia.