NBB In Sight

Navigating a Changing Landscape
By | January 17, 2008
As the newly elected chairman of the National Biodiesel Board, I am humbled by the enormous potential and daunting challenges facing the biodiesel industry. 2007 was a year of explosive growth and dramatic progress, but also a year of instability in the global energy and commodity markets, which distressed the economics of the industry. 2008 promises to include continued challenges requiring hard-fought successes in public policy, trade, technical, outreach and fuel quality.

The NBB members elected a strong and capable governing board, a team of seasoned leaders with good representation of all stakeholders. I was honored to be elected as chairman during this critical time. My intention is to harness the power of our large and diverse membership. Our differences should build us up and not tear us down. To that end, I will remain open to all viewpoints, concerns and desires of our board members, and ask only in return that we never work against each other.

My first step in this effort was to call upon Gary Haer as the vice chairman to take a strong role in the leadership of this body. Gary has offered his full partnership, starting with overseeing the formation of the board's 2009 Program Plan. This plan is developed each year through an intensive prioritization process and sets the course for the NBB in fiscal year 2009.

This is a year that promises to bring more dramatic changes, challenges and opportunities to our industry. A unified organization with engaged members has never been so critical.

I commend Chairman Ed Hegland for his bold plan to energize our industry through cooperation and leadership. 2008 marks my 10th year serving NBB. I have seen tremendous changes in both the industry and our still-growing trade group. I have observed a model of cooperation among farmer leaders, biodiesel producers and allies, which has led to unprecedented success.

This cooperation came full circle with the passage of the Energy Bill, which included NBB's preferred provisions in an expanded renewable fuels standard. This extraordinary NBB public policy victory will bring some much-needed stability to our industry.

Our world-class federal affairs team has not achieved such political wins on its own. These victories are the direct result of efforts by NBB members. Our fuel producer dues enable our association to fund these efforts. Many active members provided additional resources beyond their dues, including lobbying activities, outreach to their delegations and fundraising. We also recognize our most important public policy ally, the American Soybean Association, for standing with us on every one of our policy issues.

As a leadership team, Ed and I will work diligently with the rest of the governing board to reach out to members for strong, effective and unified action during 2008. We have tremendous challenges that we must face. We commit to you that we will do everything we can to serve your interests, and we ask for your support in working together to move this industry forward

Energy Bill passes Congress, signed into law by President Bush
At the end of 2007, President George W. Bush signed H.R. 6, the Energy Independence and Security Act of 2007, into law. The measure passed both the House and Senate by significant bipartisan margins. In addition to implementing new measures designed to improve energy efficiency and increase Corporate Average Fuel Economy standards, the measure provides for a significant increase in the renewable fuels standard. The expansion of the RFS as provided for in H.R. 6 will significantly increase the use of biofuels in the United States.

"The U.S. biodiesel industry praises President Bush, Speaker [Nancy] Pelosi, Majority Leader [Harry] Reid and the bipartisan supporters of biofuels in Congress who worked tirelessly to enact an expanded renewable fuels standard," says Joe Jobe, National Biodiesel Board CEO. "This is good public policy that meets the needs of consumers and addresses America's pressing energy security concerns by increasing the use of clean-burning, domestically produced biofuels like biodiesel to reduce our dependence on foreign oil. The nearly five-fold expansion of the RFS in this legislation is truly a landmark achievement."

Under previous law, the RFS was set to expand to 7.5 billion gallons by 2012. The Energy Independence and Security Act expands the minimum amount of biofuels that will be used in the United States to 36 billion gallons by 2022. Within the expanded RFS, the measure contains specific provisions that will, for the first time, implement a renewable requirement for diesel fuel. The enactment of a renewable requirement in the diesel pool that includes biodiesel has been a top priority for the U.S. biodiesel industry. The NBB views the enactment of H.R. 6 as a historic achievement that will lessen America's dependence on foreign oil and help create a viable, growing domestic market for biodiesel.
"Of particular note, increasing the minimum renewable requirement in the diesel pool from 500 million gallons in 2009 to 1 billion gallons in 2012 will create a stable, viable domestic market for biodiesel," Jobe says. "In addition, the fuel labeling requirements in the bill will promote consumer confidence in renewable fuels and help ensure that only quality fuels are entered into commerce."

To get a renewable component in diesel fuel, the Energy Independence and Security Act specifically requires the use of biomass-based diesel fuel, which is a diesel replacement fuel that reduces greenhouse gas emissions by 40 percent to 50 percent. Biodiesel qualifies as a biomass-based diesel fuel. However, under the statute, coprocessed renewable diesel specifically does not meet the definition of biomass-based diesel fuel. The usage requirement for biomass-based diesel begins at 500 million gallons in 2009 and expands to 1 billion gallons in 2012. Beyond 2012, a minimum of 1 billion gallons must be used, and the amount can be set higher by the administrator of the U.S. EPA, in consultation with the secretaries of the USDA and the U.S. DOE.

Biomass-based diesel is one schedule within a larger advanced biofuel schedule provided under H.R. 6. Within the advanced biofuel schedule, there is also a specific use mandate for cellulosic biofuels and undifferentiated advanced biofuels. In addition, the total amounts of advanced biofuels, when added to the use requirements for conventional biofuels, make up the total RFS provided for in H.R. 6. In addition to qualifying as a biomass-based diesel fuel, biodiesel can also qualify as a conventional biofuel or an undifferentiated advanced biofuel. The following chart illustrates the RFS schedule provided for in the Energy Independence and Security Act and shows the categories under which biodiesel qualifies:

As this chart demonstrates, H.R. 6 commits the United States to a long-term energy policy that envisions renewable fuels like biodiesel playing a significant role in meeting America's future energy needs. "U.S. biodiesel producers are eager and capable of meeting the aggressive renewable goals in this bill, and our industry looks forward to doing its part to help America meet its energy security needs," Jobe says.

San Francisco meets citywide biodiesel use
A pledge made in 2006 by San Francisco Mayor Gavin Newsom came to fruition by the promised deadline. At press time, San Francisco was on track to have all its diesel vehicles running on B20 by Dec. 31, 2007. To help achieve that goal, an innovative program was recently launched to help collect feedstock to make the city's biodiesel.

In an effort to reduce greenhouse gas emissions, combat climate change and curb the growing number of clogged sewers plaguing city residents and businesses, the mayor launched an effort to collect fats, oil and grease free of charge from city restaurants and turn them into biofuel for city-owned vehicles. SFGreasecycle is the nation's first citywide program to turn fats, oil and grease into fuel for municipal fleets. It is expected to save residents and businesses money, unclog city sewers and reduce greenhouse gas emissions.

SFGreasecycle was developed by the San Francisco Public Utilities Commission as a sustainable alternative to combat sewer blockages caused in part by excess cooking oils and fats discharged down drains from restaurants and homes. Each year, the SFPUC estimates that 50 percent of sewer emergency calls are related to backups caused by grease blockages costing their ratepayers $3.5 million per year in repairs.

San Francisco, a national leader in initiatives to reduce greenhouse gas emissions, has a city fleet of more than 1,600 diesel vehicles to accept the new biofuel source. Eventually biodiesel for the city fleet will all come from biodiesel generated from San Francisco's restaurant waste oil stream. Tellurian Biodiesel, a National Biodiesel Board member, supplies the fuel to San Francisco Petroleum, which distributes to the city.

Recycled fats, oil and grease from San Francisco restaurants is estimated to generate 1.5 million gallons of biofuel each year. San Francisco is now the largest city to use B20 fleet-wide. The program even included holiday waste cooking oil drop-offs. Visit www.sfgreasecycle.org for more information.

Member profile: Tellurian Biodiesel
Tellurian Biodiesel is a California-based biodiesel sales, distribution and production company with offices in Los Angeles and San Francisco. The National Biodiesel Board member markets a significant portion of the biodiesel consumed in California and the southwest United States. Customers include terminal operators, petroleum distributors, municipal, transit and public fleets as well as commercial fleet and logistics transport operators.

Tellurian has successfully managed the biodiesel fleet transition process for the cities of San Francisco, Santa Monica, Beverly Hills and Inglewood and has worked with companies such as Warner Brothers, Clif Bar, American Apparel and Google.

Tellurian provides fuel to San Francisco Petroleum, the distributor that has the contract with San Francisco. Tellurian CEO Eric Bowen helped establish San Francisco's B20 program for the city fleet. He also serves as chairman and wrote the legislation that created the city's Biodiesel Task Force.

Another high-level fleet that Tellurian is assisting with fuel and education is Clif Bar in southern California. Clif Bar, an energy bar manufacturer, is using biodiesel blends in its entire southern California fleet.

With funding from the South Coast Air Quality Management District, Tellurian is managing a biodiesel NOx reduction demonstration project in partnership with the National Renewable Energy Laboratory, California Energy Commission and Air Resources Board.

Tellurian Biodiesel is currently developing biodiesel production facilities in California and throughout the United States. Tellurian officials say its goal is sustainability, and to strive to use local and domestically available feedstocks for regional biodiesel production and consumption whenever possible in order to maximize carbon reduction and energy conservation.

Fred Wellons of Tellurian is an immediate past governing board member of NBB.
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