MOUNDVILLE, Ala.  After residents of the Riverbend Farms subdivision noticed that an oily, fetid substance had begun fouling the Black Warrior River, which runs through their backyards, Mark Storey, a retired petroleum plant worker, hopped into his boat to follow it upstream to its source.

It turned out to be an old chemical factory that had been converted into Alabama’s first biodiesel plant, a refinery that intended to turn soybean oil into earth-friendly fuel.

“I’m all for the plant,” Mr. Storey said. “But I was really amazed that a plant like that would produce anything that could get into the river without taking the necessary precautions.”

But the oily sheen on the water returned again and again, and a laboratory analysis of a sample taken in March 2007 revealed that the ribbon of oil and grease being released by the plant  it resembled Italian salad dressing  was 450 times higher than permit levels typically allow, and that it had drifted at least two miles downstream.