Talking turkey about biofuels.

A factory stands in Carthage, Missouri with a singular purpose: transforming turkey byproducts--beaks, feathers, bones and all--into oil.

"It's real," says Alan Libshutz, president of Changing World Technologies (CWT), the small New York company that developed the factory's process. "You put turkeys in the front and you get oil out the back."

The two-year-old plant has the capacity to make 3,000 barrels of crude biofuel each week. The raw material is 1,200 tons of turkey parts, which food giant ConAgra supplies from an adjacent slaughterhouse. The federal government granted $17 million toward the $40 million factory.

The process, called thermal depolymerization, speeds up Mother Nature's recipe for black gold by combining heat and pressure to convert the feedstock into an oil fuel. CWT claims it works on anything containing carbon: agricultural byproducts, used tires, sewage, even discarded appliances. Just oil, natural gas, carbon, minerals and water come out.

"The application of the technology to waste materials could lead to a very large production of fuels that would replace imported oil," says Reid Detchon, director of the Energy Future Coalition. "These are fuels that don't contribute to global warming."

But Detchon and other analysts remain skeptical of the economics. Indeed, in Carthage, CWT is having trouble turning turkeys into dollars. Making a barrel of biofuel costs more than $80, still more than conventional oil. Turkey guts cost more than expected. So has working out technical kinks, which has temporarily prevented the factory from reaching full capacity, and nearly doubled its price.

Perhaps the biggest kink is an odor that prompted so many citizen complaints that Missouri's Attorney General filed a lawsuit last spring. "It's a very rancid smell. It's just like burning meat," says Carthage Mayor Kenneth Johnson. The company installed new odor-busting equipment, and officals say the complaints are dying down.

Company executives say the factory may break even now that the federal Energy Policy Act included a dollar-per gallon tax incentive for turkey biodiesel.

The technology's financial equation looks more promising in Europe, where biofuels have already been commercialized and market incentives under the Kyoto Protocol favor renewable energy. CONTACT: Changing World Technologies, [phone], www.changing worldtech.com.