An Industry Rising

By Tom Bryan, Ron Kotrba and Jessica Williams | March 01, 2006
If the core talking points of the 2006 National Biodiesel Conference & Expo had to be summed up in 75 words or less, it might be done like this: The biodiesel industry is, as one speaker noted, "playing in the big leagues now," where there's no room for error. Automakers and refiners can and will answer consumer demand for diesel technology and biodiesel blends, but the pull has to be strong and sustainable. The industry must stay unified as it grows. Feedstock R&D is a must. Fuel quality is everything-it will make or break this business.

That's an austere and oversimplified way to sum up the largest, most prolific biodiesel event in U.S. history, but it denotes the requisite threads that now tie a once fledgling and fragmented industry together. The themes of fuel quality, raw material development, light-duty vehicle market penetration and industry-wide unity were echoed throughout the National Biodiesel Board's third annual U.S. conference in San Diego, Calif., where an estimated 2,500 people gathered in the first week of February.

Technical and educational breakouts were coupled with rousing general session speeches, celebrity showings, pool-side parties and live music. Despite the jubilant mood of the event, NBB front man Joe Jobe delivered an unruffled opening speech that nailed down industry priorities and set an intense tone for the sessions that ensued.

Jobe said 2005 was the U.S. biodiesel industry's "tipping point," a year in which more than 30 plants were built and production capacity tripled nationwide. "We became a significant and real player in the U.S. energy market," he said, before suggesting 2006 should be a sort of housecleaning period for the industry. "This year, I think it's important to talk about what kind of industry we've become, what kind of industry we want to be, where we go from here, and what challenges we face in getting there."

Jobe said the industry's overarching vision is to undertake activities that will allow it to achieve long-term, sustainable growth. "This year we had explosive growth and I think it might be a little unrealistic to expect that to continue," he said. "Explosive growth often has some negative side effects. We saw some of that this year. Our shared industry objective must be all about [attaining] realistic, sustainable growth now."

Jobe said the industry's long-term ability to sustain itself will be achieved by focusing on unity, feedstock development and, above all, fuel quality. "It's hard to over emphasize the importance of fuel quality at this point in the history of our industry," he said. "Quality is a business decision. It's not an accident. It takes commitment and discipline. It takes a solid plan and the will to carry out that plan." Citing reasons U.S. producers and distributors should invest in BQ-9000, the industry's only accredited fuel quality program, Jobe said automakers and OEMs are demanding stringent biodiesel quality standards, and the ultra-low sulfur diesel regulations being implemented by the U.S. EPA will put in place "presumptive liability," meaning biodiesel producers will be deemed refiners and potentially held accountable for off-spec fuel. "Everybody, all the way back to the [biodiesel producer], would be considered guilty until proven innocent," Jobe said. "One defense against presumptive liability is a strong, documentable quality assurance program." Jobe pointed out that BQ-9000 is now easier to implement and more affordable for small producers. So far, Peter Cremer North America, West Central, Johann Haltermann Ltd. and Eastman Chemical Company in Arkansas are BQ-9000 accredited producers, while several other companies are in the application process.

Drawing parallels between the ethanol industry of the early 1980s and the biodiesel industry of today, Jobe warned against "false starts" and failed introductions of biodiesel blends in mainstream markets. "Because of [the ethanol industry's] false start, ethanol's reputation still suffers with the public today," he said. "We are where the ethanol industry was then. You never get a second chance to do it right the first time. This industry has come a long way. We have a lot of momentum right now, but we are still very immature. We are at a point in our development where we are being scrutinized very closely. We are at a point where if we lose the confidence of customers and the public, it may take a decade to get it back. So we have to be prepared. We can't have a false start."

The availability of raw materials isn't hampering biodiesel's proliferation today, but Jobe and other NBB leaders are thinking critically about the abundance of affordable future feedstocks. "We need to start thinking very seriously about 10 and 20 years down the road and how we might be able to grow more agricultural raw materials for biodiesel," he said, alluding to President George W. Bush's recent State of the Union address in which he introduced his Advanced Energy Initiative that includes reducing petroleum imports from the Middle East by 75 percent by 2025-and largely achieving that aim by ramping up the production and use of biofuels. "If we are going to have that kind of significant impact on the energy market, we need to start thinking of ways now to produce more raw materials for biodiesel."

Farming and Feedstocks

The U.S. biodiesel industry was largely created by farmers, and so it was probably fitting that on the first day of the conference USDA Under Secretary for Rural Development Thomas Dorr urged the biodiesel industry to expand aggressively, but with growers in mind. "[I challenge you] to find regulatory, business and investment models that do two things: facilitate the development of [biodiesel] and, secondly, to enable farmers and other rural residents to retain a fair share of the ownership and control of this opportunity for rural America. It would be a grievous mistake if we and rural America don't capture this extraordinary opportunity."
It's difficult to predict the extent to which farmers will be involved with the U.S. biodiesel industry in 10 years, but experts say, in the very least, there will be plenty of opportunities to grow and supply raw materials for production. Jack Brown of the University of Idaho said that although soybeans are the most common production feedstock in the United States, it is important to look at other feedstock options in areas where soybeans don't grow well. For example, Brown said, brassica crops such as canola, rapeseed and mustard are good feedstock options in the Pacific Northwest. Benefits of brassicas include excellent crop rotation and a higher protein seed meal. The drawback is brassicas are more expensive and may be slightly inferior to soybean oil as a feestock for biodiesel, according to Brown.

Clearly, feedstock prices have a big impact on the biodiesel industry. Because of this, Centrec Corp. conducted a study on feedstock price responses in order to understand how increases in feedstock costs could limit the growth of biodiesel production. The company studied both oilseeds and imported oils. "We're trying to seek out the level of feedstock quantity where biodiesel feedstock prices wouldn't be economical," Centrec's Chris Schroeder said. He concluded that, based on the study's 10-year outlook, diesel prices and feedstock oil prices will continue to be the two primary economic variables affecting biodiesel production. He also said maintaining or increasing federal tax incentives was essential to the industry's viability.

Survey Says

In order to get into the minds of biodiesel users, several companies conducted surveys and presented their findings at the National Biodiesel Conference.
Moore Information surveyed biodiesel consumers, trucking executives and truck stop operators. "Truckers are more familiar with biodiesel," Moore Information representative Hans Kaiser said. "They say they use it simply because they've heard nothing bad about it." Conducted in December, the Moore Information survey found that familiarity has increased to 41 percent since the company's last biodiesel survey in June 2004. Of those who were familiar with biodiesel, most held positive opinions. The top four reasons to use biodiesel, in order, were energy security, health, environment and economy. The survey also found that a majority of consumers were willing to pay more for biodiesel, but only up to four cents. Conversely, truck stop operators and trucking executives still don't want to pay more for B2 blends. Eighty-two percent of those polled supported federal biodiesel tax incentives as well. Interestingly, the number of U.S. diesel vehicle owners has remained unchanged since 2004, but 56 percent of Americans said they would consider using a diesel passenger car in order to use biodiesel. "So all in all, it's good news, but there's a lot of room for growth," Kaiser concluded.

ASG Renaissance conducted a biodiesel end-user survey to determine the implications for industry growth, posing questions to fleet operation managers while updating a similar survey conducted in 2003. The results: 85 percent of respondents were biodiesel users. Eighty percent of those hold a favorable opinion of biodiesel. Fleet operators listed environmental/health benefits, energy security, economic benefits, and federal and state mandates as the top reasons for using biodiesel. Most noteworthy, the percentage of users who had no trouble with biodiesel has decreased in the past three years. Sixty-three percent of problems were from filter clogging. "This could be because of richer blends," said Brendan Prebo, AGS Renaissance director of marketing. "If they're using higher blends, they need to increase maintenance."

Last fall, the USB conducted a biodiesel survey geared toward farmers, which indicated that a majority of farmers are not using biodiesel in their operations. They did indicate interest in using a product that they produced, although availability, performance concerns and cost were the main deterrents. The USB's Mike Orso said the soybean group was hoping federal excise tax incentives would be one way to sway farmers toward biodiesel, although many aren't even aware it exists. "I'd say the areas where we have to [gain acceptance] are the East, Ohio, Illinois and also the South," Orso said.

Minnesota Mandate Rectified

In order to get into the minds of biodiesel users, several companies conducted surveys and presented their findings at the National Biodiesel Conference.

Moore Information surveyed biodiesel consumers, trucking executives and truck stop operators. "Truckers are more familiar with biodiesel," Moore Information representative Hans Kaiser said. "They say they use it simply because they've heard nothing bad about it." Conducted in December, the Moore Information survey found that familiarity has increased to 41 percent since the company's last biodiesel survey in June 2004. Of those who were familiar with biodiesel, most held positive opinions. The top four reasons to use biodiesel, in order, were energy security, health, environment and economy. The survey also found that a majority of consumers were willing to pay more for biodiesel, but only up to four cents. Conversely, truck stop operators and trucking executives still don't want to pay more for B2 blends. Eighty-two percent of those polled supported federal biodiesel tax incentives as well. Interestingly, the number of U.S. diesel vehicle owners has remained unchanged since 2004, but 56 percent of Americans said they would consider using a diesel passenger car in order to use biodiesel. "So all in all, it's good news, but there's a lot of room for growth," Kaiser concluded.

ASG Renaissance conducted a biodiesel end-user survey to determine the implications for industry growth, posing questions to fleet operation managers while updating a similar survey conducted in 2003. The results: 85 percent of respondents were biodiesel users. Eighty percent of those hold a favorable opinion of biodiesel. Fleet operators listed environmental/health benefits, energy security, economic benefits, and federal and state mandates as the top reasons for using biodiesel. Most noteworthy, the percentage of users who had no trouble with biodiesel has decreased in the past three years. Sixty-three percent of problems were from filter clogging. "This could be because of richer blends," said Brendan Prebo, AGS Renaissance director of marketing. "If they're using higher blends, they need to increase maintenance."

Last fall, the USB conducted a biodiesel survey geared toward farmers, which indicated that a majority of farmers are not using biodiesel in their operations. They did indicate interest in using a product that they produced, although availability, performance concerns and cost were the main deterrents. The USB's Mike Orso said the soybean group was hoping federal excise tax incentives would be one way to sway farmers toward biodiesel, although many aren't even aware it exists. "I'd say the areas where we have to [gain acceptance] are the East, Ohio, Illinois and also the South," Orso said.

Nailing Down Technical Priorities

With the topic of biodiesel quality dominating the conference, it was natural that a significant amount of time was spent explaining the temporary suspensions of Minnesota's B2 mandate. In spite of the troubles, the state has inadvertently become an invaluable guide to other states that may be considering similar action.

Starting in October, the same month the mandate went into effect, a Minnesota refiner reported off-spec biodiesel had surfaced at its facility. A 10-day variance was issued when flashpoint tests failed to meet ASTM specifications. Later, in December, the Minnesota Trucking Association asked Minnesota Gov. Tim Pawlenty for another suspension after a rash of fuel filter problems. Samples were sent to the University of Minnesota, where rust particles were discovered, according to Rick Neville of Western Petroleum Company in Eden Prairie, Minn. The biodiesel also failed to meet ASTM specifications for total glycerin. A handful of factors could have caused the problems: Tank sediments could have surfaced, something aggravated by fuel shortages after Hurricane Katrina; cloud point additives could have been added too late; or product could have been filtered too early in the production process, allowing for particles to solidify as the fuel cooled. In any case, Neville said it was a learning experience for all.
Steve Harrington of the Minnesota Department of Commerce and Steve Howell of Marc IV Consulting stressed that fuel quality is the main issue that needs to be addressed in this instance. It is possible that the existing biodiesel ASTM spec will be improved in order to avoid future problems. "We're going to put steps in place to make sure it's going to be OK," Howell said.

Diesel technologies and fuels are in the midst of a revolution here in the United States, and biodiesel's strong, growing presence in the domestic marketplace only validates the integral role biodiesel is fulfilling. This shift in the direction of engine technologies and fuel choices is changing Americans' (and U.S. vehicle manufacturers') traditionally ill-perceived approach to vehicle efficiency and environmental responsibility.

Howell laid out the NBB's top priorities for 2006, and first on the list was biodiesel fuel quality, as well as the quality standards themselves. "In going from a niche market to a commodities market, you can't just have 95 percent of the answers," Howell said. "You need 99.999 percent of them. ... We need to drive home the message that fuel quality is the most important thing."
The importance of biodiesel fuel quality wasn't just an issue for biodiesel producers, blenders or end users, but also for engine manufacturers, all of which have invested years of time and a lot of money in developing technologies to meet the imminent emissions reduction targets laid out by the U.S. EPA. The next big phase in emissions reductions regulations for NOx and PM begins in 2007, and these new engine and exhaust treatment technologies are going to be extremely sensitive to changes in fuel.
Maintaining and improving ASTM D6751 is critical for the biodiesel industry, which is why the NBB has made this its No. 1 priority. Not only that, but the NBB strongly encouraged producers throughout the conference to become BQ-9000 accredited producers and certified marketers to ensure their product meets or exceeds ASTM quality specs. "We will have training sessions for implementing ULSD," Howell said, adding that there will be a "presumptive liability" clause that state's if the fuel is over 15 ppm sulfur (+/- 2ppm) after Oct. 15, all of the companies that have touched the fuel pay penalties to the tune of $25,000 per day for a minimum of 30 days. "BQ-9000 is your protection against that," Howell told the crowd.

Staying On-Spec and Stable

While becoming BQ-9000 certified would certainly help ensure that a producer's biodiesel meets ASTM specifications-Mack Findley from Cincinnati-based Peter Cremer, the first BQ-9000-certified biodiesel producer, presented what BQ-9000 entails and what its benefits are-it might not be economically feasible for some producers. A "quick and dirty" field test would also help monitor quality, and the NBB encourages the development of this.

Randall von Wedel, the founder and principle biochemist behind Cytoculture International, said he's got just the kit to do the trick. "We've developed a test," von Wedel told the audience. "It's a quick check that's practical in the field." The test can determine if there's too much total glycerin in the sample, or water or catalyst contamination, the acid range and whether or not the sample is aged or has been exposed to the atmosphere. "This kit is more sensitive to these problems than ASTM," von Wedel said. "Our concern is that this may be too sensitive." But if a producer uses this kit and detects a problem, von Wedel insisted that the sample should be taken to the lab.

Although quality programs and quick field tests to help guarantee on-spec fuel were mentioned at the conference, a main concern was improving ASTM D6751 to meet the real world needs of the diesel supply chain and diesel operating systems.

There's no question that the biodiesel industry and partnering industries agree unanimously on the need for an oxidative stability requirement in ASTM D6751. The Rancimat test is the preferred stability test in Europe, but according to Roger Gault of the Engine Manufacturers Association, it's very feedstock specific. "We just don't have a good oxidative stability test method right now," he said. Magellan Midstream Partners' Rod Lawrence said in June 2005, a stability standard for ASTM D6751 was balloted, but the dichotomous choice was between modifying the ASTM D2274 test method or the Rancimat test for inclusion into ASTM D6751. The proposition failed. "These two items measure different phenomena, so it can't be an either/or situation like this," Lawrence said. ASTM meets again this June in Toronto, where this is on the agenda.

NREL senior engineer Bob McCormick discussed NREL's ongoing look at oxidative stability. NREL is looking at fuel blends aged in storage, fuel tanks and in the high temperature environment of engine fuel systems. "We will be doing tests to find out whether or not rapid tests are predictive of real world conditions," McCormick said. "Low stability is still an issue for some biodiesels." The Rancimat test in Europe uses a six-hour minimum induction time, but McCormick said he's seen domestic samples with an induction time much lower than that.

According to Gault, six-month-old diesel fuel in the supply chain isn't that uncommon. "As biodiesel becomes more mainstream, oxidative stability becomes more and more critical as the fuel sits around for months, "he told the crowd.

Magellan conducted a drum farm project in 2005, with some interesting results on oxidative stability. This study compared accelerated with actual storage in steel drums-not in glass reaction vessels-Lawrence said. In one off-spec biodiesel sample, he observed rust forming above the liquid level in the drum. "That's a concern to me," he told the crowd. "Up until that point, we did not know all the consequences of off-spec fuel." He solicited producers to participate in this year's drum farm test with Magellan, which he said would start May 1.

Getting On the Same Page

ASTM not only deals with specifications, but test methods and practices too. According to Porter, there's round robin action underway to look at total and free glycerin testing method (ASTM D664) and acid value methods (ASTM D4739). Also, a 5-ppm maximum sodium and potassium content will soon be in ASTM D6751. Porter mentioned other areas of focus too, like viscosity (ASTM D445), a round robin for which will commence this year, distillation, methanol levels, which affects flash point, particulate contamination specs and more. Westbrook said there's ongoing work to replace ASTM D2709 water and sediment maximum of 0.05 percent by volume to the Carl Fischer moisture method. "It's been a challenge this year keeping up with all of the activities," Howell admitted.

There's a lot of work for biodiesel blend specifications as well. Ongoing work to include up to 5 percent biodiesel in ASTM D975-the standard diesel fuel specification-is underway. Finalizing and publicizing a standalone B20 specification, with an entirely new ASTM number, is on the books for 2006 too. "The B20 specification will use some values found in ASTM D975," Westbrook said.

Certainly all of this talk about biodiesel's fuel quality is important, but additional considerations brought up throughout the conference focused on ULSD-the standard diesel fuel across the U.S. beginning Oct. 15 at retail outlets-and blending it with biodiesel. Come Oct. 15, the maximum sulfur content for ULSD fuel is going to be 15 ppm, down from 500 ppm currently. Many unresolved issues with ULSD alone still remain, which only get compounded when biodiesel is thrown into the mix. The American Trucking Association's Rick Moskowitz brought up several ULSD issues, like what happens when misfueling occurs-when operators of 2007 or later diesels fuel up on 500 ppm sulfur diesel? What about supply disruptions? When Hurricane Katrina hit and disrupted on-road diesel fuel supplies, the EPA allowed off-road diesel to be blended with on-road diesel fuel. That's something that couldn't happen with 2007 and later model diesel vehicles, mainly because the emissions control devices on the new diesels will be hypersensitive to the fuel's sulfur content. "This could shut down the industry for some time," Moskowitz told attendees. "We don't have experience with running many ULSD fuels in these engines-and we certainly don't have much experience running biodiesel in them." With not much time left to hammer out these issues, problems seem inevitable. "I think we'll find out a few things the way we'd rather not," said Chris Sharp from Southwest Research Institute. Ultimately, available supplies of ULSD are critical in meeting the new emissions regulations.

According to Sharp, diesel combustion systems have improved over the years, but there's room for further improvement. Fuel injectors are moving to smaller injector hole sizes, which means higher pressures. And not only the sizes of the injector holes are important, but also the shapes of them, with variable nozzle turbines on most injectors now. Also common rail and multiple rail injectors were discussed. Much of these fuel system technologies, including those still under development-like Homogeneous Charge Compression Ignition (HCCI) systems-aims to optimally time and finely disperse the fuel into the cylinder heads to avoid hot spots, or areas of rich fuel concentration that burn hot in combustion, producing elevated levels of emissions like NOx.

Exhaust gas recirculation (EGR) systems have been invaluable in meeting 2004's regulated reductions, and will continue to play a vital role through 2010.

"DPFs work well at trapping soot," Sharp said on PM management. "The hard part is regeneration." When soot accumulates, backpressures increase and could damage the engine, Sharp warned. Either active or passive regeneration of the soot is possible, but many agree that active regeneration-where hydrocarbons are injected into the exhaust stream to generate heat and raise the temperature in the DPF to burn off the soot-is the more preferred, sound and predictable approach.

NOx abatement devices like urea SCR systems and lean NOx traps were also detailed. Although these will be critical, they won't be seen on production models until 2010, which leaves more time to hone the technology.

Cold Water Dousing

Biodiesel is inextricably linked with its petroleum-derived counterpart, and low-blend advocates say the renewable fuel's best near-term shot at serious market penetration is playing the role of an innocuous ULSD blend stock-a lubricity additive, for example, or a sulfur dilutor.

Oil industry officials doubt the economics of those plans, though, and representatives of both BP and Valero said so during a breakout session based largely on those talking points. BP's Michael Winward said U.S. oil companies have already met the federal renewable fuels standard (RFS) target for biofuels use in 2006-4 billion gallons-and have no real incentive to exceed that until 2007. He also said BP will use specialty additives, not biodiesel, to achieve ULSD lubricity targets, and labeled the idea of remedying off-spec ULSD with biodiesel unrealistic.

"I'm going to throw a bit of cold water on the party here today," Winward said. "You need to understand the reality of this industry."

Winward, a chemist by trade and a 25-year veteran of the petroleum industry, said BP is one of the largest ethanol users in the world, but will likely level out its consumption of renewable fuels until the year's over. "2006 isn't going to be a whole lot different than last year in terms of [how much ethanol and biodiesel] is going to be used," he said, before detailing the U.S. EPA's interim RFS enforcement decision that requires U.S. oil companies' total fuel sales to be represented by at least 2.78 percent biofuels each year.

Raymond Fernandez of Valero said his company, too, would meet its RFS requirements through ethanol purchases alone, at least through 2006. The EPA will allow oil companies to carry over credits, minus or negative, year to year based on whether they exceed or fall short of their annual targets.

"There's really no incentive, in terms of the RFS, to go out and make an investment in biodiesel this year," Winward said. "Nothing is going to force the industry to move that way."

By in large, the oil industry endorsed the RFS, for which it received a repeal of the federal gasoline oxygenate requirement in trade. Winward said his industry's acceptance of the legislation falls short of actual support though. "The refining industry doesn't support mandates," he said matter-of-factly. "We feel it interferes with the market system, takes away choice, creates boutique fuels and generally causes pervasions that are inefficient in the marketplace. However we obey the law. So whether we like it or not, we will comply with the mandate."

The EPA recently issued an RFS implementation document to essentially buy its decision makers more time to figure things out. Meanwhile, Winward said, industry stakeholders are actively trying to shape the interpretation and final rule-making of the law. "We'll see in the next six to eight months exactly what role biodiesel will play [in the RFS]," Winward said, adding that the biodiesel industry would like to see one gallon of biodiesel represent 1.5 gallons of renewable fuel under the RFS. "We'll see how that works out."

Winward said biodiesel advocates may be placing false hope in the idea that biodiesel will be used to help ULSD attain the lubricity it needs once sulfur is all but removed from the fuel. He said a blend approximating B2 is needed to achieve the level of lubricity that will be stripped from the fuel when it is made cleaner. However, unless there are other reasons to use biodiesel-such as strong consumer demand for B2-Winward and others say its an uneconomical lubricity additive. "The alternatives are formulated to be a little more powerful," Winward said, explaining that since commercial lubricity additives can be used in lower concentrations, they are a much better bang for the buck. "You do the math and tell me what sort of proposition that is Tell me how I can go back to my people and say they ought to use biodiesel as a lubricity additive."

Despite the fact that Indiana-based Countrymark Cooperative is arguably the oil industry's strongest supporter of biodiesel, the ag-specialty refiner will also turn to commercial lubricity additives when it converts to ULSD. "As the market progresses, and as the sustainability of bio-blended fuels grows in the marketplace, the need for biodiesel as a lubricity additive may be there," said John Lantz of Countrymark. "Right now, we have to make sure [lubricity additives] are in there whether the customer wants biodiesel or not." Lantz noted that about 75 percent of the petroleum distillates it markets are now blended with biodiesel, primarily at low levels.

Biodiesel is inextricably linked with its petroleum-derived counterpart, and low-blend advocates say the renewable fuel's best near-term shot at serious market penetration is playing the role of an innocuous ULSD blend stock-a lubricity additive, for example, or a sulfur dilutor.

Oil industry officials doubt the economics of those plans, though, and representatives of both BP and Valero said so during a breakout session based largely on those talking points. BP's Michael Winward said U.S. oil companies have already met the federal renewable fuels standard (RFS) target for biofuels use in 2006-4 billion gallons-and have no real incentive to exceed that until 2007. He also said BP will use specialty additives, not biodiesel, to achieve ULSD lubricity targets, and labeled the idea of remedying off-spec ULSD with biodiesel unrealistic.

"I'm going to throw a bit of cold water on the party here today," Winward said. "You need to understand the reality of this industry."

Winward, a chemist by trade and a 25-year veteran of the petroleum industry, said BP is one of the largest ethanol users in the world, but will likely level out its consumption of renewable fuels until the year's over. "2006 isn't going to be a whole lot different than last year in terms of [how much ethanol and biodiesel] is going to be used," he said, before detailing the U.S. EPA's interim RFS enforcement decision that requires U.S. oil companies' total fuel sales to be represented by at least 2.78 percent biofuels each year.

Raymond Fernandez of Valero said his company, too, would meet its RFS requirements through ethanol purchases alone, at least through 2006. The EPA will allow oil companies to carry over credits, minus or negative, year to year based on whether they exceed or fall short of their annual targets.

"There's really no incentive, in terms of the RFS, to go out and make an investment in biodiesel this year," Winward said. "Nothing is going to force the industry to move that way."

By in large, the oil industry endorsed the RFS, for which it received a repeal of the federal gasoline oxygenate requirement in trade. Winward said his industry's acceptance of the legislation falls short of actual support though. "The refining industry doesn't support mandates," he said matter-of-factly. "We feel it interferes with the market system, takes away choice, creates boutique fuels and generally causes pervasions that are inefficient in the marketplace. However we obey the law. So whether we like it or not, we will comply with the mandate."

The EPA recently issued an RFS implementation document to essentially buy its decision makers more time to figure things out. Meanwhile, Winward said, industry stakeholders are actively trying to shape the interpretation and final rule-making of the law. "We'll see in the next six to eight months exactly what role biodiesel will play [in the RFS]," Winward said, adding that the biodiesel industry would like to see one gallon of biodiesel represent 1.5 gallons of renewable fuel under the RFS. "We'll see how that works out."

Winward said biodiesel advocates may be placing false hope in the idea that biodiesel will be used to help ULSD attain the lubricity it needs once sulfur is all but removed from the fuel. He said a blend approximating B2 is needed to achieve the level of lubricity that will be stripped from the fuel when it is made cleaner. However, unless there are other reasons to use biodiesel-such as strong consumer demand for B2-Winward and others say its an uneconomical lubricity additive. "The alternatives are formulated to be a little more powerful," Winward said, explaining that since commercial lubricity additives can be used in lower concentrations, they are a much better bang for the buck. "You do the math and tell me what sort of proposition that is Tell me how I can go back to my people and say they ought to use biodiesel as a lubricity additive."

Despite the fact that Indiana-based Countrymark Cooperative is arguably the oil industry's strongest supporter of biodiesel, the ag-specialty refiner will also turn to commercial lubricity additives when it converts to ULSD. "As the market progresses, and as the sustainability of bio-blended fuels grows in the marketplace, the need for biodiesel as a lubricity additive may be there," said John Lantz of Countrymark. "Right now, we have to make sure [lubricity additives] are in there whether the customer wants biodiesel or not." Lantz noted that about 75 percent of the petroleum distillates it markets are now blended with biodiesel, primarily at low levels.

Will Americans Buy Diesels?

Standing in for Allen Schaeffer of the Diesel Technology Forum, industry consultant Tom Fulks said the association believes diesel technology is poised to make a significant breakthrough in the United States, for many reasons. "The big winner is fuel efficiency, of course," Fulks said. "Diesel vehicles get 20 to 40 percent better fuel economy than their gasoline counterparts." Some Volkswagen models-the Passat TDI, for example-have attained as much as a 32 percent increases in efficiency over their gasoline-powered equivelants.

Another factor swinging in favor of diesel vehicles is the escalating movement to reduce, or at least stop the rise of petroleum consumption in America. Fulks said the use of fuel-efficient diesels could help the nation achieve that goal. "We could save 350,000 barrels of oil per day with a 30 percent diesel market penetration in the United States by 2020," he said.

Deborah Morrissett of DaimlerChrysler said concerns about greenhouse gas emissions, climate change, dependence on imported oil and the rising price of fuel at the pump are causing Americans to take a hard look at alternatives to the gasoline-powered internal combustion engine. Diesel technology is one of the options being looked at, she said.

Fulks urged attendees to test drive the new diesel vehicles offered by automakers like Volkswagen, Mercedes Benz and Dodge. "If you haven't driven a diesel vehicle lately, I strongly encourage you to do so," he said. Because once you get behind the wheel, you can't go back. To experience the low-end torque of those vehicles and experience that power and performance. Check 'em out These new vehicles are quiet and clean."

Diesel vehicle penetration is increasing in every segment of the auto industry, from light-duty cars and SUVs to full-size trucks and off-road vehicles. According to Fulks, diesel vehicles are expected to make up 13 percent of the total vehicle market by 2012 and 15.5 percent by 2015.

Those numbers are encouraging, but still pale in comparison to Europe's acceptance of diesels. Still market research conducted by an independent group commissioned by the Diesel Technology Forum determined through focus group interviews with both government decision makers and the general public that awareness of clean diesel vehicles is on the rise nationwide. So-called "green diesel" (i.e., biodiesel blends) is gaining recognition, too. "People generally think diesel technology has gotten better-not worse," Fulks said. So the there are plenty of reasons for consumers to buy diesel vehicles, but getting them to bite on the technology is still a challenge. "We just need to get them in these cars," Fulks said. "The problem is, they remember the smoke and the smell of the old vehicles. Somehow we need to let them know these cars and trucks are definitely not your daddies' diesels."

The panelists said diesel advocates need to forget about the past and start talking about the present and the future. They said diesel vehicle manufacturers need to continue to make models that are clean, relevant, competitive and reliable-cars and trucks that people truly want. "American consumers would appreciate the power and performance of diesel engines if they only gave them a chance," Morrissette said. "The good news is that there are more and more drivers in this country doing just that."

That's only half the battle though. Americans need to know they can readily buy diesel fuel before they purchase a diesel vehicle. Today, there are more retailers with diesel pumps than ever before. In fact, 42 percent of all U.S. stations now offer diesel, but not all of these stations offering the fuel in a way that is attactive to a new generation of consumers.

BlueTec, an umbrella term that includes different emissions after-treatment technologies and applications to solve the basic problem of emissions reduction as well as a descriptor applied to the various solutions of reducing oxides of nitrogen, is something DaimlerChrysler is pushing hard. Morrissette said BlueTec will result in the cleanest diesel vehicles in the world. "They will have the potential to meet the toughest emissions regulations anywhere in the world-including emissions standards in all 50 of the United States," she said, adding that Dodge, Chrysler, Jeep and Mercedes Benz will all be using BlueTec technology.
David Geanacopoulos of Volkswagen said that in the United States, diesel vehicle sales represent 10 percent of the automaker's total passenger vehicle sales. "That's been trending upward a bit," he said. Volkswagen, which has had an uninterrupted run of offering diesel cars in America since 1980, is strongly committed to the further development of the diesel market in the United States. Primarily, that is because the automaker knows its customers and other stakeholders recognize the many benefits of diesel technology-increased efficiency, reduced carbon dioxide emissions, high levels of performance and customer appeal. "Most importantly, diesel vehicles provide the best platform for a range of renewable fuels, beginning importantly with biodiesel," Geanacopoulos said.

Importantly, the opportunity to use biodiesel is one of the leading reasons more consumers are turning to diesels. Morrissette said DaimlerChrysler's commitment to biodiesel is expected to remain strong in the years ahead. The company's high-profile support for the renewable fuel has been manifest in its willingness to factory fill its Jeep Liberty CRD's with B5 and, more recently, its endorsement of B20 in Dodge Ram fleet pickups. She said the biodiesel industry's focus on fuel quality is encouraging. "Our customers need to know that [biodiesel blends] will always meet the highest fuel quality standards, no matter where they buy it," she said.

According to a poll of Volkswagen TDI Club members, the possibility of running biodiesel or biodiesel blends in their vehicles was one of the main reasons they bought their vehicles, Geanacopoulos said. "Biodiesel can help diesel's image," he said.

NREL Scientist Drops NOx Knowledge Bomb

Standing in for Allen Schaeffer of the Diesel Technology Forum, industry consultant Tom Fulks said the association believes diesel technology is poised to make a significant breakthrough in the United States, for many reasons. "The big winner is fuel efficiency, of course," Fulks said. "Diesel vehicles get 20 to 40 percent better fuel economy than their gasoline counterparts." Some Volkswagen models-the Passat TDI, for example-have attained as much as a 32 percent increases in efficiency over their gasoline-powered equivelants.

Another factor swinging in favor of diesel vehicles is the escalating movement to reduce, or at least stop the rise of petroleum consumption in America. Fulks said the use of fuel-efficient diesels could help the nation achieve that goal. "We could save 350,000 barrels of oil per day with a 30 percent diesel market penetration in the United States by 2020," he said.

Deborah Morrissett of DaimlerChrysler said concerns about greenhouse gas emissions, climate change, dependence on imported oil and the rising price of fuel at the pump are causing Americans to take a hard look at alternatives to the gasoline-powered internal combustion engine. Diesel technology is one of the options being looked at, she said.

Fulks urged attendees to test drive the new diesel vehicles offered by automakers like Volkswagen, Mercedes Benz and Dodge. "If you haven't driven a diesel vehicle lately, I strongly encourage you to do so," he said. Because once you get behind the wheel, you can't go back. To experience the low-end torque of those vehicles and experience that power and performance. Check 'em out These new vehicles are quiet and clean."

Diesel vehicle penetration is increasing in every segment of the auto industry, from light-duty cars and SUVs to full-size trucks and off-road vehicles. According to Fulks, diesel vehicles are expected to make up 13 percent of the total vehicle market by 2012 and 15.5 percent by 2015.

Those numbers are encouraging, but still pale in comparison to Europe's acceptance of diesels. Still market research conducted by an independent group commissioned by the Diesel Technology Forum determined through focus group interviews with both government decision makers and the general public that awareness of clean diesel vehicles is on the rise nationwide. So-called "green diesel" (i.e., biodiesel blends) is gaining recognition, too. "People generally think diesel technology has gotten better-not worse," Fulks said. So the there are plenty of reasons for consumers to buy diesel vehicles, but getting them to bite on the technology is still a challenge. "We just need to get them in these cars," Fulks said. "The problem is, they remember the smoke and the smell of the old vehicles. Somehow we need to let them know these cars and trucks are definitely not your daddies' diesels."

The panelists said diesel advocates need to forget about the past and start talking about the present and the future. They said diesel vehicle manufacturers need to continue to make models that are clean, relevant, competitive and reliable-cars and trucks that people truly want. "American consumers would appreciate the power and performance of diesel engines if they only gave them a chance," Morrissette said. "The good news is that there are more and more drivers in this country doing just that."

That's only half the battle though. Americans need to know they can readily buy diesel fuel before they purchase a diesel vehicle. Today, there are more retailers with diesel pumps than ever before. In fact, 42 percent of all U.S. stations now offer diesel, but not all of these stations offering the fuel in a way that is attactive to a new generation of consumers.

BlueTec, an umbrella term that includes different emissions after-treatment technologies and applications to solve the basic problem of emissions reduction as well as a descriptor applied to the various solutions of reducing oxides of nitrogen, is something DaimlerChrysler is pushing hard. Morrissette said BlueTec will result in the cleanest diesel vehicles in the world. "They will have the potential to meet the toughest emissions regulations anywhere in the world-including emissions standards in all 50 of the United States," she said, adding that Dodge, Chrysler, Jeep and Mercedes Benz will all be using BlueTec technology.

David Geanacopoulos of Volkswagen said that in the United States, diesel vehicle sales represent 10 percent of the automaker's total passenger vehicle sales. "That's been trending upward a bit," he said. Volkswagen, which has had an uninterrupted run of offering diesel cars in America since 1980, is strongly committed to the further development of the diesel market in the United States. Primarily, that is because the automaker knows its customers and other stakeholders recognize the many benefits of diesel technology-increased efficiency, reduced carbon dioxide emissions, high levels of performance and customer appeal. "Most importantly, diesel vehicles provide the best platform for a range of renewable fuels, beginning importantly with biodiesel," Geanacopoulos said.

Importantly, the opportunity to use biodiesel is one of the leading reasons more consumers are turning to diesels. Morrissette said DaimlerChrysler's commitment to biodiesel is expected to remain strong in the years ahead. The company's high-profile support for the renewable fuel has been manifest in its willingness to factory fill its Jeep Liberty CRD's with B5 and, more recently, its endorsement of B20 in Dodge Ram fleet pickups. She said the biodiesel industry's focus on fuel quality is encouraging. "Our customers need to know that [biodiesel blends] will always meet the highest fuel quality standards, no matter where they buy it," she said.

According to a poll of Volkswagen TDI Club members, the possibility of running biodiesel or biodiesel blends in their vehicles was one of the main reasons they bought their vehicles, Geanacopoulos said. "Biodiesel can help diesel's image," he said.

Celebrities, Awards and Gettin' Behind the Wheel

Country music legend Willie Nelson headlined the final general session of the National Biodiesel Conference. Nelson took part in an on-site live broadcast of the Bill Mack, "The Satellite Cowboy" XM Satellite Radio program (see Inside NBB, pages 22-23). He told attendees the story of how his wife introduced him to biodiesel about three years ago. She began to use the renewable fuel in her Volkswagen Jetta, and eventually Nelson started using it in his Mercedes. "It's quiet, I get good gas mileage, so I found out it was really a good idea," he said.

As a cofounder of Farm Aid, he thought it was a great way to support farmers, so he decided he was going to use it in his tour buses as well. The only problem was availability; on the road, he was having trouble finding biodiesel. "Willie Nelson wanted to use biodiesel in his buses ... so he said, "This is ridiculous. I'm going to start my own company," Jobe said on the radio show.
That same afternoon, Nelson attended a biodiesel pump opening at San Diego's Pearson Ford Fuel Depot, where a BioWillie-brand biodiesel pump was unveiled. Nelson fueled up his tour bus, and actress Daryl Hannah also filled up her diesel-retrofitted Chevrolet El Camino.

Three automakers provided four vehicles at the San Diego conference to give attendees a chance to drive the newest diesel technology. The four offerings were a Dodge Ram 2500, Jeep Liberty Common Rail Diesel, Chevy Express 2500 Van and Volkswagen Jetta TDI. All were powered on B5, except for the Ram, which was running on B20.

Approximately 200 people drove the cars during the two days of the conference the Ride-and-Drive was held. Those providing a public face to this event were actor and biodiesel enthusiast Luke Perry, who drove the Chevy van and Hannah, who test drove the Ram. Those manning the Ride-and-Drive said many drivers commented on the increased power and how quiet the diesel engine was.

The last day of the National Biodiesel Conference welcomed some biodiesel all-stars. The annual Eye on Biodiesel awards were awarded to the following:

  • Innovation-Bob McCormick, principal engineer, NREL.

  • Inspiration-Jim Evanoff, environmental specialist, Yellowstone National Park

  • Industry Partnership-Don Borgman, manager of market planning and customer integration, John Deere Ag Marketing Center

  • Influencer-Willie and Annie Nelson.
 
 
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