It's not the largest biodiesel operation you'll find, but a tiny company called Infinifuel is doing some interesting things in an interesting place.

Based in small-town Nevada, an hour southeast of Reno, the company is about to begin producing biodiesel powered by geothermal energy - and is poised to leverage other geothermal benefits in unconventional ways.

Infinifuel is harnessing steam and power from the state's oldest geothermal plant in Wabuska, owned by owned by Homestretch Energy - which normally sells its power to utility Sierra Pacific - in order to power and heat its biodiesel production facility. With two wells and a handful of power production units, with more pending, the plant is currently outputting 2 MW of electricity, with total capacity of up to 14 MW if needed.

Infinifuel's biodiesel plant is in the final construction stage, with 17 stainless steel tanks in place, housed in and around a 5,000 sq. ft building and workshop/ lab facility. The facility currently has two biodiesel reactors with 22,000 gallon per day capacity and two methanol recovery distillation towers. The plant expects to be able to produce five million gallons per year of biofuel.

But from what? Where will the company get its oils?

"We've got a stream of waste vegetable oil, but are are planting oilseed crops. We've got 400-500 acres in and around the site, and a couple of our investors own tens of thousands of acres of geothermal property in the area," said Claude Sapp, the 38-year-old founder of Infinifuel.

Contrary to popular belief, says Sapp, the country's driest state is not a bad place to grow oilseed. And courtesy of the geothermal plant, the company has ready access to plenty of fresh water - uncharacteristic for a geothermal plant.

"I think we're the only geothermal plant in the state that can actually use the water from underground. All other sites have to re-inject the water because it's too caustic, too briny."

The access to practically unlimited quantities of warm water also makes site ideal for experimentation with algae production as a biofuel stock - surprising as it sounds in the desert of Nevada. Large algae ponds at Infinifuel's site are being visited by researchers at the University of Nevada at Reno and the Desert Research Institute to try to further some of the work the Department of Energy (DOE) did on algae as a biofuel source.

"The DOE experimented with growing algae in the desert, but concluded it was impractical because of cooling at night. Well, our water is hot all the time," said Sapp. "If this works, it could yield up to 15,000 gallons of biodiesel an acre, much better than the 50 to 150 gallons averaged today." Infinifuel is not yet producing biodiesel from algae.

The company claims it has a ready market for its product, having worked with local, county and state governments and their fleets. "That's the least of our problems. We can get rid of every last drop we can produce," claims Sapp.

Money for the project has come from private investors. The company says it's not currently looking for more funding, but could be after its proof of concept site is producing. Plans call for include establishing other geothermal-powered facilities throughout Nevada.