The federal government has agreed to loan $4 million to two Teche Area businessmen to develop a biodiesel facility at the Port of West St. Mary.

New Iberia lawyer David Groner and New Iberia’s Michael Valls, veteran of the oil and gas industry, have known each other for years and have been searching for an investment opportunity to go into business together.

After two years spent developing the project, the two men formed Sustainable Fuels LLC, which will produce biodiesel from brown grease and waste vegetable oil at the West St. Mary site.

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“Biodiesel is the most effective alternative fuel available in the world today and is a drop in substitute for diesel fuel,” Groner said. “It has a positive energy balance, which means it creates more energy than it takes to produce, is better for the environment, more fuel efficient and easier on engines.”

Groner said U.S. Rep. Charlie Melancon, D-Napoleonville, has been a great supporter of Sustainable Fuels LLC and made the announcement of the guaranteed federal loan made available through the U.S. Department of Agriculture’s Rural Development program.

“As gas prices continue to rise, Americans are looking to alternative fuels to rein in energy costs and make our nation less dependent on foreign oil,” Melancon said. “Biofuels will help increase our country’s energy independence while creating new jobs for our workers and opportunities for our small businesses. The loan we are announcing will enable a locally owned business to jump into the growing biofuels industry, and is just the beginning of a promising economic opportunity for South Louisiana.”

Groner said the pair is also busy meeting with equity investors because the $4 million is part of the total money they need to get things under way.

“The money will go toward technical equipment and infrastructure,” Groner said. “We are looking at some very exciting new technology, and I have no doubt this will be the most technically advanced biodiesel plant in the United States.”

Valls predicts oil will reach $200 per barrel by Christmas, making the need for alternative fuels that much more imperative.

Sustainable Fuels LLC has set January as a target date to begin production at the new facility. Th company has rented an existing facility at the Port of West St. Mary and will begin bringing in equipment as it is purchased.