Web exclusive posted June 23, 2008 at 1:50 p.m. CST 
 
 Texas-based Gulf Hydrocarbon Inc. has entered into a new take-off agreement with Methes Energies Canada Inc., a wholly-owned subsidiary of Methes Energies International Ltd., to purchase the total biodiesel production manufactured at Methes Energies' new 6.6 MMgy facility in Sombra, Ontario. 
 
 Under the one-year agreement, Methes Energies can reserve up to 10 percent of its monthly biodiesel production to supply the company's other clients. The agreement is automatically renewable, and will continue until terminated with a 30-day notice by either party. 
 
 While the exact price Methes Energies will receive for the biodiesel is being kept confidential for commercial reasons, Gulf Hydrocarbon has said the price will be floating equal to the sum of the regional ultra-low sulfur diesel price per gallon. 
 
 "We are extremely pleased to have reached an agreement with Gulf Hydrocarbon that provides for a win-win situation for both parties, as well as some peace of mind for us moving forward," said Nicholas Ng, director of business development for Methes Energies Canada. "With such an agreement in place, Methes Energies will be able to focus on not only producing more biodiesel, but also furthering the sales of our biodiesel processor, the Denami 600."
 
 Methes Energies has a similar agreement in place with Gulf Hydrocarbon for its 1.3 MMgy biodiesel production facility in Mississauga, Ontario. 

 
 According to Jess Hewitt, president of Gulf Hydrocarbon, his company has seen expanding interest from other companies in forming similar off-take agreements, which can help a company find potential investors and financing by showing that a ready market exists for their products. 
 
 Through its two wholly-owned subsidiaries, Methes Energies Canada and Methes Energies USA Ltd., Methes Energies International offers clients complete turn-key solutions for biodiesel production, featuring the Denami 600 biodiesel processor. 
 
 Gulf Hydrocarbon offers marketing strategies to producers that wish to contract for high-volume off-take agreements and risk management of biodiesel or biodiesel feedstocks. Specialized services include biodiesel production, blending, plant operation, tolling, plant development and financing.

Gulf Hydrocarbon, Methes Energies enter off-take agreement

Web exclusive posted July 1, 2008 at 1:42 p.m. CST 

 
 More than 600 people participated in a webinar presented by the Alternative Fuel Vehicle Institute that showcased life-cycle assessment software that can help organizations make vehicle and fuel choices benefiting the environment. 
 
 During the June 24 Well-to-Wheels Emissions Analysis webinar, Donald O'Connor, president of (S&T)2 Consultants Inc., analyzed specific scenarios in which alternative fuels and technologies are used to power vehicles. The presentation also provided listeners with general information on the strengths and limitations of life-cycle assessment tools. 
 
 From the extraction of feedstocks from the environment to the delivery of power to a vehicle's wheels, O'Connor concentrated on life-cycle assessments that are designed to be cradle-to-grave approaches. Included in the presentation were assessments based on battery electric power, hybrid electric power, fuel cells, biodiesel, ethanol, natural gas and propane. 
 
 Life-cycle assessment begins with gathering materials used to make fuel from the earth and ends when all materials are returned to the environment. It evaluates all stages of fuel production and use – treating them interdependently – and provides a comprehensive view of environmental impacts and allows for environmental trade-offs to be assessed more accurately. 
 
 The assessments help decision makers select vehicle and fuel options with lower environmental impacts. The process can also help determine where the biggest reduction in environmental emissions can be made, and can be used to reduce fuel production costs. 
 
 The downside of life-cycle assessments is that they can take a substantial amount of time and resources to complete, and most won't determine which product will work the best or is the most cost effective for any particular organization. 
 
 Life-cycle assessments are primarily conducted by software. While companies can develop their own, many pre-existing software solutions exist but have a specific industry focus. For example, GHGenius, the model offered by O'Connor's company, specializes in transportation. 

 
 Even when measuring similar activities, different analysis tools can create a large variation of results. The results often depend on where the data comes from and when it was collected. Some processes, such as ethanol production, have tended to get more efficient over time, while others, such as gasoline production, have generally become less efficient. The assessment results also depend on how coproducts of fuel manufacturing are included and treated. 
 
 GHGenius includes data from raw material acquisition, manufacturing and vehicle operations in its analysis and it accounts for vehicle materials, assembly and transport. It is capable of estimating life-cycle emissions of the primary greenhouse gases, the criteria air contaminants and the energy balance, as well as calculating the energy required to produce each unit of energy, and comparing the cost effectiveness of alternative fuels to that of gasoline and diesel engines. The program can calculate emissions for any year between 1996 and 2050, based on historical trends and forecasts. Results are calculated for each stage of the lifecycle and each contaminant. GHGenius can model many vehicle types, including light-duty vehicles with internal combustion engines, hybrids, fuel cells, or battery power. It can also model heavy-duty vehicles such as trucks and buses with internal combustion engines or fuel cells. 
 
 The U.S. EPA has a program to expand the use of life-cycle assessments in the United States and encourages the use of informed decision-making through a better understanding of the health and environmental impacts of products, processes and activities. For more information on the EPA's program, visit www.epa.gov/ORD/NRMRL/lcaccess/.
 
 Formed in 2003, the Alternative Fuel Vehicle Institute is a leading provider of education and training programs, as well as consulting services in fuel technologies.

AFVI webinar showcases software to help make fuel, vehicle decisions

Web exclusive posted July 1, 2008 at 1:45 p.m. CST 
 
 Brent Baker, president of <a href="http://www.tristatebiodiesel.com">Tri-State Biodiesel</a> in New York City, recently found himself fielding an increased number of phone calls from people wondering what is so great about biodiesel – isn't it the reason people are starving? Doesn't it take more energy to make than it creates? What about greenhouse gas emissions and the rainforests?
 
 Baker became so frustrated about having to constantly defend biodiesel to people who were being misled by incorrect information that he decided to do something about it on a larger level. A few months ago, he began writing statements to potential clients and other interested parties setting the facts straight about biodiesel. Now, he's heading a national "grassroots" movement for others to do the same. "I like to call it a 'push back'," Baker said. 

 
 One of the things he's frustrated about is that all biofuels are constantly lumped into one group by the mainstream media and biodiesel is often referred to as being the same as corn ethanol. "We're going to try to do what we can here in New York and with our circle of colleagues in the biodiesel industry to push back on that," Baker said. "I think our society is sophisticated enough now that we can say "biodiesel" when we're talking about biodiesel and "ethanol" when we're talking about ethanol."
 
 The National Biodiesel Board, of which Tri-State Biodiesel is a member, told Baker they are in the process of forming their own public relations campaign. However, Baker thinks his grassroots movement can compliment their efforts and he hopes it will catch on with others in the industry.
 
 Baker's goal is to appeal to three different groups of people. The first being members of the biodiesel industry and the biodiesel movement. "Our first step was to get this notion of 'let's make an effort to speak up and coordinate our efforts with the NBB and with each other'," he said. 
 
 The second part of Baker's plan is to inform political leaders and customers on a local level. He's doing his part in New York and hopes that biodiesel proponents across the country will do something similar.
 
 Finally, Baker plans to reach out to the press and the general public to set the record straight on biodiesel. "We're trying to get the information out there as best we can," he said.
 
 A newsletter addressing the myths and facts about biodiesel can be found on Tri-State Biodiesel' Web site – <a href="http://www.tristatebiodiesel.com">www.tristatebiodiesel.com</a>. Baker encourages anyone interested to use the newsletter for their own public relations campaign or any other way they choose to help push back misinformation about biodiesel.

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Tri-State Biodiesel fights myths

It is estimated that camelina, a crop belonging to the Brassicacae family, has been grown for thousands of years. Native to southeastern Europe and southwestern Asia, the crop was traditionally cultivated for oil production in the 19th century. Shortly after World War II however, camelina was largely displaced as more productive crops, such as wheat and rapeseed, began being produced. Shortly thereafter, it became known as a common weed called false flax. 
 
 Crop Potential
 Over the past decade, camelina has become a crop of interest inspired by its high oil composition of approximately 35 percent to 45 percent omega-3 fatty acids. It is cold-weather tolerant, well-adapted to dry conditions and has a relatively short 85- to 100-day growing season. Camelina yields an average 1,200 to 1,400 pounds per acre and the protein and fiber content in its meal byproduct is comparable with soybean meal ranging between 45 percent to 47 percent crude protein and 10 percent to 11 percent fiber. In addition, because it has lower fertilizer, pesticide and water requirements, its production cost is substantially lower than other oilseeds, positioning it as an attractive potential crop for biodiesel production.
 
 It has been suggested that camelina, traditionally used for higher value products such as culinary oil, cosmetics and animals feed, may prove more profitable for producers, but developments are in the works to assign this crop a more significant role in biodiesel production in North America.
 
 Companies such as Camelina Canada in Lethbridge, Alberta, for example, are doing their part to create more awareness of the crop. Camelina Canada grows, harvests and sells camelina for the health food and supplement, industrial oil and renewable fuel industries. Founded in 2005 by Ryan Mercer and Dan Kusalik, Camelina Canada set out to select and improve genetics, produce, commercially contract, and market the seed oil and meal. Currently, the company produces 1,300 acres annually and has been in talks with local biodiesel producers to supply camelina and help with the logistics for a number of proposed biodiesel projects.

 
 Last year, the Canadian canola industry developed an ambitious plan to produce nearly 15 million metric tons (16 million tons) of canola in Canada by 2015 and already, the country has realized a slight rise in canola acreage. As reported by Agriculture and Agri-Food Canada, canola area in Canada in the spring of 2008 has increased slightly to 14.9 million acres, up from 14.7 million in 2007. "There's still a place for canola [in biodiesel production], but just as much for camelina as well," says Mercer, who believes that camelina could be positioned as a very competitive feedstock for biodiesel due to its short crop season and ideal dry-land adaptability. And with Canada's renewable fuels standard requiring 5 percent biodiesel in all diesel fuel by 2012, the prospect of camelina's place in the industry may become clearer. "The renewable fuels standard will definitely help the canola crushers in Canada, which in turn will also help us," Mercer says. 
 
 Viability as a Feedstock
 A handful of biodiesel facilities in the United States are also researching camelina in more depth as a new and viable feedstock for the production of biodiesel. Great Plains Oil and Exploration, a Montana-based renewable fuels energy company, has moved camelina to the forefront of its recent research efforts. Great Plains anticipates constructing its first camelina crushing facility and refinery at a yet-to-be-determined location in Montana this year. "Great Plains is committed to creating a sustainable alternative crop to support future generations," says Sam Huttenbauer, president of Great Plains. "The goal here in Montana is to raise the number of camelina acres planted so we can make that dream a reality." 
 
 Great Plains and its partner INEOS Enterprises, a U.K. manufacturer of specialty chemicals and oil production, have established a goal of growing 1 million acres by 2012. As camelina is still a new crop to many North American farmers, planting significant acreage is proving to be the biggest challenge for the company. As a result, Great Plains has recently offered Montana producers three new contract options in 2008 for all camelina grown and delivered to Great Plains storage facilities. "We want to encourage new growers to sign up for the program and at the same time reward the growers who have been with us from the beginning," Huttenbauer says. "We believe these contracts offer new and old growers the best guaranteed prices for their camelina acres." Overall, camelina crop acreage in Montana has grown significantly the past few years increasing from 20,000 acres in 2006 to 50,000 acres in 2007. The company still has a long way to go though. 
 
 Putting these advancements aside, Camelina's full agronomic potential remains largely unexplored in North America and many differing views still exist in regard to the crop's oil composition. Both Camelina Canada and Great Plains boast that camelina oil contains a substantial amount of tocopherols (vitamin E), which act as an antioxidant that stabilizes the oil, giving it a longer shelf life. While this may be true, a recent study titled, "Camelina sativa: A potential oilseed crop for biofuels and GE products" published by the Department of Plant Sciences and Plant Pathology at Montana State University, Bozeman, states that it is camelina's high percentage of polyunsaturated fatty acids that makes it more susceptible to oxidation, thereby making it undesirable for the production of biodiesel. Researchers of this study however, believe that modifying and improving the crop's fatty acid compositions could allow it to become a more recognizable biodiesel feedstock. 
 
 While the camelina industry may be gaining momentum to a certain degree, it seems the crop's potential for biodiesel production in Canada remains unclear. Kevin Falk, research scientist of crop breeding and diversification for Agriculture and Agri-Foods Canada, suggests that with the many potential uses for the crop, combined with its favorable agronomics, camelina may have a place in Western Canadian agriculture however, much more research is necessary to develop it into a strong potential biodiesel feedstock. "The crop is off to a good start. Whether or not it will be a lubricant or an oil remains to be seen," Falk says. "It has great potential for short seed growing areas and perhaps as a vehicle for newer technologies."
 
 There is also a question of infrastructure. The biodiesel industry hasn't yet decided which oil is best when comparing common oilseeds used in the production of biodiesel, Falk says. "We haven't played with the oil profile [of camelina] much. We don't know right now if the lubricity benefits of canola are in camelina, but if that's true, then the benefits are even greater."
 
 Still, the viability of camelina as a feedstock for biodiesel production remains to be seen and perhaps the questions surrounding its potential will be answered in years to come when more research is conducted. Like Mercer though, Falk agrees that there is a lot of room for a variety of oilseeds in the industry. Falk also believes the upcoming renewable fuels standard will have an affect on the future of the camelina industry. "It depends on how much canola oil gets diverted and whether canola can meet the demand, but it could certainly put the pressure on camelina" Falk says. 
 

 Khalila Sawyer is Biofuels Canada managing editor. Reach her at <a href="mailto:ksawyer@bbibiofuels.com">ksawyer@bbibiofuels.com</a> or (519) 576-4500. This feature was reprinted from the April/May issue.

The arrow-shaped leaves have smooth edges and are 5 to 8 centimeters (2 to 3 inches) long.

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Mercer at a camelina harvesting site in Lethbridge, Alberta.

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This camelina field is one of Great Plains Oil and Exploration's grower fields in Havre, Mont.

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Camelina is able to adapt to extreme climates and is well-adapted to dry soil conditions.

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With a short growing season and low harvesting costs, Camelina sativa could hold a small market in the western Canadian biofuels industry. Despite those advantages, limited research has been done to determine its full agronomic potential. While it's been touted as a potential feedstock for biodiesel, it remains an under-exploited crop, and with an industry entrenched in canola-based biodiesel, is there enough room to consider camelina?

Is There Room For Camelina?

Establishing confidence with consumers is a critical step in the success of any new product or fuel. Consumer confidence is measured many ways-availability, on-time delivery, flawless service-but the most important is product quality. According to engineers from one technology company that supports the biodiesel supply chain, those seeking to capitalize on biofuels might evaluate the impact processes such as blending can have on product quality.
 
 Marketers and distributors of biodiesel have a variety of different blending options available to them. Splash, sequential, hybrid, in-line, ratio and sidestream blending can have a huge impact on product quality and the consumer's level of confidence in biodiesel. Each type of blending carries with it a variety of costs and benefits.
 
 "Blenders know that the most important part of product quality after good feedstock is to get the final product blended correctly," says Chuck Myers, electronics product manager for FMC Technologies in Erie, Pa. "They want to make sure the product is mixed correctly so they don't have their customers coming back to them with issues like failing engines and rough running. The preferred blending method will assist with a properly mixed product."
 
 What are the different blending techniques and which ones contribute to producing high-quality biodiesel? Splash blending is when a marketer first pumps B100 into a tank, followed by diesel fuel. It could also be when a marketer first pumps diesel fuel into the tank, followed by B100. Either way, splash-blended products can have a tendency to stratify, failing to mix thoroughly unless some type of static mixer is used after the products are loaded. 
 
 "The biggest issue with splash blending is that if it doesn't get properly mixed, you dump it at a service station and it is still stratified when customers fill their tanks," Myers says. "One vehicle may get straight diesel and the next one may get a majority of B100. Sequential blending may be better but the suggested method is in-line or ratio blending."
 
 Sequential blending consists of loading multiple products, one at a time, through one meter and control valve. This method is commonly used for products that have similar density and viscosity, characteristics that enable them to mix well. The disadvantages of sequential blending biodiesel is that when products have dissimilar characteristics the blend may stratify in the fuel due to inadequate mixing or there is not enough room in the truck to get the required volume of each product. 
 
 Ratio blending is achieved by loading multiple products into a tank at the same time. Ratio blending employs a meter and control valve for each product and a common header, thereby enhancing the mixture, more thoroughly integrating the final product.

 
 Hybrid blending is essentially a combination of both sequential and ratio blending that is designed for ratio blending B100 into existing diesel oil sequential blenders.
 
 Sidestream blending, sometimes referred to as injection or wild-stream blending, meters B100 into the main diesel line, allowing blending to occur directly upstream of the larger delivery meter. Sidestream blending aides in mixing as the blend passes through a meter that mechanically mixes the fuel.
 
 Finding the Best Option
 With so many options, which fits best with biodiesel? That depends on who's doing the blending, but most marketers know that the key to quality is getting products to blend thoroughly and stay blended throughout transportation, delivery and end use.
 
 Alan Jones is the operations manager for Farm & Home Oil Co. in Macungie, Pa., 60 miles north of Philadelphia. Jones operates the Farm & Home terminal, off-loading railcars, storing vegetable oils (primarily soybean oil), and blending and loading tank trucks for distribution. Farm & Home has handled biodiesel for the past two years and runs a variety of blends ranging from 2 percent to 20 percent biodiesel and has seen increased demand recently for higher blends, especially from school districts and other government agencies. A large part of his business is Bioheat, a branded blend of regular heating oil and biodiesel used for residential home heating.
 
 "I'm more comfortable with ratio blending," Jones says. "I think it delivers a better end product because it gets thoroughly mixed." Jones has considered using sequential blending but has never tried it because of concerns about separation. 
 

 "I understand that with sequential blending you can end up with product that isn't completely blended," he says. "I don't need product performance problems. That's the best way I know to lose a customer."
 
 A key part of Jones' ratio blending process depends on equipment, something he believes makes a difference in overall product quality. He says he likes the flexibility the AccuLoad III provides when moving from lower blends of 2 percent to 5 percent, to higher blends of 10 percent and above. The AccuLoad controller is capable of accommodating typical ratio blending where all products are mixed in the piping downstream of the individual product control valves. It can also handle sidestream blending where the smaller of the components is plumbed in upstream of the main product delivery meter.
 
 Another critical part of effective blending is properly sized measurement equipment such as strainers, meters and flow control valves. "I suspect we will see an increase in demand for a variety of types of biodiesel, low percentages and higher percentages," Jones says. "That's why I like equipment that gives me the flexibility to handle a wider range of flow rates. It's easier to adapt, and in today's market that's important."
 
 <center><img src="/images/upload/20080617033227.jpg" alt="" />
 
 <img src="/images/upload/20080617032035.jpg" alt="" /></center>
 
 Two typical layouts for blending biodiesel at the loading rack are shown. The ratio blending diagram, left, illustrates how products are blended downstream of the metering equipment, before the product goes into transport. The side-stream ratio blending diagram shows where the minor component of the blend is injected upstream of the combined product measurement system. Here it is measured as a component by the measurement system, then is connected and measured again by the 
 combined product meter.
 
 SOURCE: FMC TECHNOLOGIES INC.
 
 Entering the Market

 Lake Erie Biofuels, a 45 MMgy biodiesel producer located near the shore of Lake Erie in Erie, Pa., started blending biodiesel roughly seven months ago and has seen a marked increase in interest and demand for its products. "In the beginning we exported our first one-and-a-half million gallons," says Mike Noble, director of operations for Lake Erie Biofuels. "Domestically we have gotten a lot more interest recently."
 
 Noble uses injection blending with a Smith Meter Accuload III controller for loading and unloading. The plant's first shipment of 99 percent biodiesel went to the export market in December 2007, and since that time Noble has shipped another 6 million gallons for export. To date the facility has produced and shipped a total of 9.5 million gallons of biodiesel. 
 
 The AccuLoad's controls also perform successful unloading of trucks without setting a preset volume. Controlled delivery is accomplished by the use of three digital inputs, configured as stop-, low- and high-flow switches. The switches are located on a float installed in an air elimination tank upstream of the meter. The inputs define when to open the control valve, when to advance from low flow to high flow and when to close the valve.
 
 Noble previously consulted for Lurgi at a Cargill biodiesel plant but when the opportunity came to become part of Lake Erie and be involved in the construction and operation of a biodiesel plant from the ground up, he took it. In addition to special attention to blending, Lake Erie conducts a panel of five product tests on all inbound feedstocks, including acid value, moisture, soap and metals. 
 
 Throughout the blending and refining process Noble tests for density, flashpoint, total contamination, oxidative stability, acid value, and free and total glycerin. He tests for metals every two hours throughout the process. Once produced the biodiesel runs through cold-soak filtration to meet current and future ASTM specifications. All biodiesel produced and stored by Lake Erie Biofuels is blanketed with nitrogen to maintain stability and eliminate moisture from the time it leaves the plant until it is delivered to finishing tanks, railcars, tanker trucks and ships.
 
 The operation was built to produce the highest quality biodiesel and Noble says he is proud of the operation. "I've toured a large number of biofuel plants in my career and I don't know that anyone has the lab capabilities, blending and filtration systems that we have," he says.
 
 Whatever blending technique a marketer selects doesn't matter unless attention to quality is maintained throughout the process. It's comparable to the widely heard axiom "garbage in, garbage out" in the early days of the computer industry. If biodiesel is going to be a significant part of the long-term global energy solution, quality must prevail throughout. 
 
 Joe Gallehugh is a freelance writer. Reach him at <a href="mailto:jgallehugh@triad.rr.com">jgallehugh@triad.rr.com</a> or (336) 254-0964.

A tie-in skid is a configuration of equipment that is used at an existing loading rack to "tie-in" ethanol or B100 to be either blended or loaded as straight product into a transport. This skid has a four-inch feed line that is split into three, two-

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Biodiesel Blending Techniques Key to Quality Fuel

In the past four years, production of biodiesel fuel in the United States has increased approximately 2,000 percent. From 25 million gallons in 2004, U.S. production has now reached almost 500 MMgy. The federal government's 2007 Energy Bill is helping to fuel further growth by mandating the use of 1 billion gallons per year by 2012. 

 
 Such explosive growth is usually cause for celebration, but a range of additional factors, including the rising prices of soybean oil and other feedstocks, are putting extreme cost pressures on the industry and threatening the viability of emerging biodiesel producers. An April 28 CNETNews.com article noted that these factors are causing some producers to shutdown, citing the March 2008 production halt of Glenville, Minn.-based SoyMor Biodiesel LLC. In addition, this publication's May 2008 issue reported 21 idle plants.
 
 Whatever the current market conditions, the long-term viability of biodiesel production is not likely to be in serious jeopardy. Biodiesel's properties and benefits make it too attractive an option to those favoring energy independence or wanting to reduce greenhouse-gas emissions for the industry to suffer a true reversal of fortune. For instance, the University of Idaho in cooperation with the USDA found that biodiesel produces 3.5 units of energy for each unit of fossil fuel burned. Today's market dynamics are the byproduct of growth; the growing pains that every new industry must experience at one time or another.
 
 Nevertheless, the fact remains that while the industry will survive and prosper, individual biodiesel producers must find ways to maintain margins and growth in the midst of truly challenging conditions. While certain factors are beyond their control, producers can achieve sustained success by placing a relentless focus on the factors they do control and by managing these factors with an eye toward maximizing efficiencies, reducing costs and increasing yields. Central to such an effort is the analysis and optimization of the production supply chain. 
 
 Supply Chain Success Factors
 From soybeans to catalysts such as sodium methylate, biodiesel producers rely on third parties to supply them with essential materials. Until relatively recently, the biodiesel market was too immature to support a variety of third-party vendors. As a result, producers were at times captive to the dictates of certain vendors and may have had to compromise critical business concerns. 
 
 Now that the market has grown, however, the supply chain presents producers with new opportunities to improve their business. In addition to concerns related to the pricing of raw materials, there are three critical supply chain success factors that every producer should keep in mind when analyzing their suppliers.
 
 Reliable supply With margins tightening and competition rising, producers need to know that their suppliers are reliable. Reliability, however, is more than just years of experience in a given industry or with a given material. For biodiesel producers, making a determination as to the reliability of a vendor to supply a given good or commodity can only be accomplished by analyzing a supplier's production capacity and any factors that may jeopardize delivery. Chief among these is the next success factor.
 
 Geography It would be easy for most producers to ignore questions of geography. After all, the location of a supplier's manufacturing facility is a decision the supplier makes. 
 

 However, geography can have a tremendous impact. Consider the following questions: What is the distance between the supplier's and producer's facilities? How versatile is my supplier's supply chain in responding to weather-related emergencies? What transportation factors need to be taken into account? How might these factors impact cost both now and in the future with fluctuating transportation costs?
 
 Quality Fuel is the ultimate commodity, and biofuel-despite its relative novelty-is still fuel. The issue of quality is more critical to producers of biodiesel in the current environment than it has been in the past. The quality of the materials, particularly catalysts, used to make biofuels has a direct correlation to yield, and to the purity and quality of the fuel itself. Higher quality production materials will increase yields-and therefore profits-favorably.
 
 An Illustration: Sodium Methylate 
 Sodium methylate is used to catalyze the production of biofuels in a large percentage of biodiesel plants in the United States. Demand for sodium methylate is expected to grow in line with demand for biodiesel. Biodiesel, through government mandates, is forecasted to grow to 1 billion gallons by 2012 with sodium methylate used at approximately 0.5 percent concentration for most biodiesel processes (most sodium methylate is supplied as a 25 percent or 30 percent solution in methanol). Today sodium methylate is estimated to represent 70 percent of the global biodiesel catalyst market. Because of its pervasiveness, and its critical role in biofuel production, sodium methylate is an ideal place to start for producers looking to review and optimize their supply chain. 
 
 Many U.S. biodiesel producers became accustomed to receiving their supply of sodium methylate from overseas and from companies producing sodium methylate at only one site. 
 
 While the biodiesel industry was in its formative stages, this arrangement may have been acceptable, but it was not ideal. The growth of the biodiesel industry has put a strain on this system. Additionally, rising demand for biofuel has led to concerns about sodium methylate supply capability. Responding to rapid increases in demand can be difficult with long raw material delivery cycles, which in turn can lead to production delays. 
 
 The good news for biodiesel producers, however, is that the maturation of the biofuels industry has led to new investment in sodium methylate manufacturing facilities. For example, DuPont has invested significantly to expand capacity and to diversify its manufacturing base. DuPont now has three locations in North America that manufacture and ship sodium methylate. Combined with other growth in U.S. capacity, biofuels producers now have the capability of eliminating the problems of long delivery times, product availability and rising transportation costs.
 
 These multiple supply points enhance reliability of supply, reduce freight costs and generate fuel savings, thereby contributing to the overall biofuels initiative. Further, the location of sodium methylate facilities in proximity to biofuel producers has a potential impact on quality as well. After all, long supply routes, many of which originate in Europe, can lead to multiple handling points and repeated movement of product. That, in turn, can lead to contamination of the product. Due to the hydroscopic nature of methanol, contaminants such as the humidity or moisture in the air can decrease the effectiveness of the catalyst, creating the potential for yield loss and foaming in biodiesel production. The ability of producers to minimize handling and exposure to the elements is absolutely critical.
 
 Finally, much like biodiesel itself, the price of sodium methylate is affected by the raw material used to make it. Sodium methylate consists of up to 92 percent methanol, and, as many industry consumers know, methanol has experienced extreme volatility in price and availability in recent months. As biodiesel producers examine their supply chain, however, they have the opportunity to segment vendors by their ability to secure a stable supply of methanol. A secure supply of methanol will likely correlate with a secure supply of sodium methylate.

 
 Conclusion
 While the current market presents a rocky time for biofuels producers, a focus on optimizing supply chains can solidify raw material reliability while favorably influencing margins and production yields. As the earlier example illustrates, when looking at each of the critical supply chain success factors-reliable supply, geography and quality-producers do have the opportunity to regain a degree of control, maximize efficiency and optimize their operations. 
 
 Michael Daly is business manager, reactive metals, at DuPont. Reach him at <a href="mailto:michael.j.daly@usa.dupont.com">michael.j.daly@usa.dupont.com</a> or (610) 347-2103.

Thanks to the industry's maturation, biodiesel producers now have a wider selection of suppliers, such as those providing acid and base catalysts.

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Industry Maturation Allows for Supply Chain Optimization

After being shut down by an explosion and fire in January, American Ag Fuels LLC in Defiance, Ohio, made its first sale of biodiesel May 22, according to company President Steve Lankenau. When the accident occurred, the company had nearly completed an expansion from 2 MMgy to 7 MMgy. Two workers were injured in the incident, but both have since returned to work. American Ag Fuels is now working with the Occupational Safety and Health Administration to help new biodiesel producers deal with safety issues in a positive and proactive way.

American Ag Fuels back on line

Houston has long served as the nation's oil epicenter. It's the headquarters of some of the largest oil companies in the world, and since the 1990s, more than 30 percent of the city's 2 million people are employed by the oil industry. Knowing all that makes one wonder why a biodiesel company would want its headquarters in the same city. Are they oblivious or genius?

 
 The genius behind it is yet to be proven, but the executive members of Nova Biosource Fuels Inc. in north Houston are certainly not oblivious to their proximity to Big Oil. Actually, they're very keen to the idea that having a close relationship with the oil industry could help their company. Most of the executives at Nova are former oilmen and know what the people holding the money at oil companies are looking for in new business ventures.
 
 Nova's Chairman and Chief Executive Officer Ken Hern has a long history with the oil business. His resume lists an impressive 13 years as an executive with Texaco. From 1981 to 1984 he served as president of Texaco Saudi Inc. From there he moved to Nigeria and worked from 1984 to 1989 as vice chairman and managing director of Texaco Nigeria Ltd. From 1989 to 1994, when he retired, he served as president of Texaco Brazil. He dealt in oil in Baghdad and even met Sadaam Hussein while making deals for Texaco Saudi. He knows the ins and outs of the fuel industry and is serious about the biodiesel industry.
 
 Hern says Nova would be foolish not to work with oil companies and try to get their interest. However, he says, they'd prefer to work jointly with oil companies rather than be bought out by them. "Nova's successful with or without an oil company," he says. "Oil companies are our clients so we want to satisfy their needs." For now, he says, oil executives like what they hear from Nova but they're waiting for the company to expand its production capacity. "We're sensible about it because we all come out of those companies," Hern says. "We know what their drivers are. Quality is paramount. Cost is paramount. Because, after all, they're out there serving the motoring public every day, and right now … truckers are parking their big rigs on the streets of Washington, D.C., because of cost."
 
 Rusty Sammons, vice president of Nova's refining operations, also started in the fuel industry at an oil company. He began working at Exxon in 1995 as a mechanical engineer and worked into refinery profitability and energy analyst positions as well as other planning and supervisory roles at Exxon and ExxonMobil before leaving to join Nova. He agrees that oil companies should want to work with biodiesel companies, but he's realistic about how that will happen. "The foundation of energy in this country has [and] will, for all practical purposes, be petroleum," he says. "We need to focus on utilizing that petroleum base for higher value [products] and figure out a different way to supplement and move our vehicles, and also to focus on mass transit. Not in our lifetime will we ever see a decrease in the demand for the petroleum base." 
 
 Sammons thinks the public is better served by using the country's petroleum supply for the production of plastics and other products, and to supplement the petroleum needed for fuel with something else, such as biodiesel. However, the industry is still in its infancy and oil companies won't make "big plays" until the industry has been legitimized, he adds. Although that's true in the case of biodiesel, oil companies are investing in renewable fuels that have yet to be legitimized (see sidebar on page 68-69), although not to any great extent, yet. So why are those companies willing to invest millions into cellulosic ethanol production or deep-sea oil drilling that has yet to be proven successful when they could be putting that money in an already established method of fuel production? "That is the question of the century," Hern says.
 
 The Typical Answer
 The answer could be that there's not enough feedstock available for a sufficient amount of fuel to be made and the oil companies are aware of that. Hern knows it too, which is why his company uses technology that allows for a variety of feedstocks to be utilized for biodiesel production. "If we had enough raw materials we could cause a paradigm shift of diesel fuels in America," Hern says.
 
 According to Hern, Nova employs a patented propriety process that uses a heterogeneous catalyst to seamlessly transition between sources of feedstock with varying percentages of free fatty acids (FFAs). Nova's equipment can run a feedstock with virtually no FFAs and immediately afterwards run a feedstock with a relatively high percentage of FFAs with no problems. Fish oil, corn oil, poultry fat, tallow, yellow grease and brown grease can all be used. Hern says they are currently using feedstocks that consist of no higher than about 10 percent FFAs. "That's really the difference," Hern says. "The other guy can do it, but he's got to run an acid esterification. We don't have to do that."
 

 Because of their capabilities, Nova can use cheaper feedstocks than are available to most other producers. While other biodiesel producers may claim they are multifeedstock, they still have to blend whatever supplemental feedstock they get with soy oil, Hern says. Nova doesn't have to do that. They also don't use feedstocks that could be used for food 
 products. Other than that, they'll buy whatever happens to be the cheapest option on the market, even low-grade butter when it recently became available.
 
 Although somewhat controversial, Hern has no reservations about using imported palm oil. "If we can get it at the right price, we're going to use it," he says. Hern is not interested in virgin palm oil, though, he has other ideas. "I wouldn't buy that [virgin palm oil] because first, I don't want to pay that price and second, because I don't want to take it out of the mouths of people who could use it," he says. Instead he is researching what he calls "dregs"-secondary forms of palm oil that are cheaper and aren't used as a food source. 
 Nova's process is unique in that it is a continuous production process rather than a batch method. They can produce biodiesel that exceeds ASTM standards in 10 hours rather than the conventional 40-hour process. 
 
 The result of Nova's production process is a crystal-clear fuel that smells like mineral oil and runs better than conventional diesel in motor engines. It's even safe enough to drink, although Hern doesn't recommend pouring a glass of biodiesel to accompany your next meal.
 
 Breakthrough technology comes at a cost, and Hern admits that it costs more to build a Nova facility than a conventional biodiesel plant. He says they can't construct a plant for less than $1.25 per gallon, but it's worth it in the long run. "The secret to success in the biodiesel industry is not what you pay to build a plant, it's what your feedstocks cost you and what you can sell [the biodiesel] for," Hern says. 
 
 Hern has the statistics to back it up. Nova is on a short list of biodiesel producers currently expanding production capacities. The flagship of what the company hopes will one day be its biodiesel empire is a 60 MMgy facility in Seneca, Ill. In April, the company announced it had produced 1 million gallons of biodiesel from the first 20 MMgy train (the line of machinery required to produce 20 MMgy of biodiesel) at the facility and that they expected to start up the second and third 20 MMgy trains in the near future. "It's just a joy to operate," Sammons says. "It's a really nice facility."
 
 Nova built the Seneca facility after constructing plants for Sanimax in Wisconsin, Clinton County Bio Energy LLC in Iowa and Scott Petroleum Corp. in Arkansas. Nova purchased the 10 MMgy plant in Clinton in 2007 and currently operates it at capacity. The company owns a 50 percent share of the biodiesel produced at the Scott Petroleum facility. A mechanical pump failure caused the facility to cease operations in the spring, but repair work was underway and at press time, the plant was expected to be operational again in mid-June. The 20 MMgy facility was operating at capacity before the shutdown.
 
 The company is in pre-construction mode at a 20 MMgy to 60 MMgy facility in Oklahoma. Work has yet to begin on Nova Biofuels Muskogee, but Hern says he has six of Nova's 20 MMgy trains sitting in storage just waiting for the right facility to be put to use. The company hopes to be producing 80 million gallons of biodiesel by the end of the year.
 "I believe in the long term we could be economically viable," Hern says. "It's hard right now. But our company's objective is to try to use material that people don't eat, to make products that are inexpensive enough to compete with regular oil, and to make it in a volume that it's available to the motoring public. It's a noble objective. Of course, along the way we've got to make a reasonable return for our share holders."
 

 Nova has partnered with several companies to achieve its success. Kaluzny Bros. Inc., based in Joliet, Ill., provided funding for the Seneca facility. Its subsidiary, Lipid Logistics LLC, supplies the feedstock. "ConAgra is our big off-taker," Hern says. "They've got access to huge markets out there. They're one of our partners and they trade in commodities all the time. They're smart, big, well-connected and easy to work with." Nova has yet to export any of its products overseas.
 
 Support for the Industry
 As Nova produces and sells its product, the company is an anomaly in a struggling industry. What the industry needs, according to Hern, is a "runway" that will allow it to spread its wings and grow. "We need government support, government understanding and access to capital," he says. Hern is passionate about his product and how it impacts national security. "We import $1 billion worth of oil a day," he says. "To lay that kind of fire power out there is not good." 
 
 Renewable fuels, such as biodiesel, can play an important role in increasing our country's energy independence and decreasing our reliance on less-than-friendly Middle East nations. However, in order to compete with other fuels, biodiesel needs a more powerful lobby. Ethanol has been able to hold its own against oil because it has a big lobby that has been working to promote ethanol for decades. "We have a biodiesel lobby-the National Biodiesel Board has an office [in Washington, D.C.]. We are a member of it," Hern says. But maybe that's not enough. Maybe the NBB just needs more people like Hern to speak out. 
 
 Hern says he would be willing to personally lobby more and has done so in the past. "I say, 'Talk to me. I've got a product right now that's ready for the market today. It's high quality. Help me-my industry,'" he says. "It's ready today. Cellulosic is a decade away. We ought to be working on it [cellulosic], but I'm saying if you get me a feedstock I'll make you the biodiesel." 
 
 Kris Bevill is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:kbevill@bbibiofuels.com">kbevill@bbibiofuels.com</a> or (701) 373-0636.

Hern, chairman of the board and chief executive officer of Nova Biosource Fuels, at the company's headquarters in Houston.

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Nova Biosource Fuels is headquartered on the north side of Houston, located close to some of the world's largest oil companies.

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Nova Biosource Fuels Inc. is headquartered in Houston-the heart of America's oil industry. The biodiesel company has several former oil executives and industry professionals on its payroll who think there's room enough in Texas for both fuels.

Do Oil and Biodiesel Mix?

An explosion at Greenlight Biofuels LLC in Princess Anne, Md., on May 18 killed a contractor who was welding pipes in the idled 4 MMgy multi-feedstock plant. The exact cause of the explosion is being investigated, but company President Allen Cunningham said the facility's safety features worked as designed. Another welder died April 15 in an explosion at Western Biodiesel Inc. in High River, Alberta, while conducting repairs. The plant suffered structural damage but was expected to be back in operation by late June, according to Chief Exeuctive Officer Dean Cockshutt. The process equipment at the 5 MMgy multi-feedstock plant was mostly unaffected.

Explosions kill welders at two biodiesel facilities

Biodiesel is an alterative fuel derived primarily from vegetable oil or animal fat. It consists of mono-alkyl esters of saturated or unsaturated long-chain fatty acid, depending on the feedstock. Unsaturated fatty acid alkyl ester-like linoleic and linolenic acid esters are more susceptible to oxidation than saturated fatty acid ester. As a result, biodiesel can become oxidized by the oxygen in the air during storage. The oxidation rate can be influenced by many factors such as temperature and chemical composition. Oxidative degradation is harmful and can deteriorate many physical properties of the biodiesel including viscosity, and acid and peroxide values. Antioxidants such as alpha-tocopherol or tert-butylhydroquinone are often added to increase the oxidation stability of biodiesel. 
 
 Differential scanning calorimetry (DSC) is a well-established technique to characterize the physical properties of oils including petroleum and vegetable oils. Since the oxidation reaction is exothermic, DSC can be used to study the oxidation stability of biodiesel. The method is called oxidation induction time (OIT), and it has been used to evaluate the oxidative stability of petroleum oil. This test is conducted under accelerated conditions (e.g., high temperature or high pressure) in order to shorten the experimental time to minutes instead of hours or days, which is required under normal storage conditions. The pressurized differential scanning calorimetry is specially designed to conduct the DSC measurement under elevated pressure. It has been used to study polymer phase transition and polymerization reaction and the oxidation stability of lubricating oil. 
 
 Oxidation Testing
 For the following experiment, OIT testing of four different biodiesel samples using pressure differential scanning calorimetry was performed to determine compliance with ASTM D 6186 standard test methods. Elevated pressure was employed to accelerate the oxidation reaction and suppress the evaporation of the biodiesel at high temperature. Meanwhile, the oxidation onset temperature (OT) was also determined using pressurized differential scanning calorimetry.
 

 The instrument used was a PerkinElmer Diamond DSC with a high-pressure cell. The instrument was calibrated using indium under the experimental condition. 
 
 The biodiesel tested included samples 1 and 2 from animal sources, sample 3 from rice biodiesel and sample 4 from soy-based biodiesel.
 
 The conditions included a minimum purity of 99.5 percent oxygen and an operation pressure of 500 plus or minus 25 pounds per square inch (psi). The purge rate was 100 plus or minus 10 milliliters per minute (ml/min). 
 
 The test temperatures were 210, 180, 155 or 130 degrees Celsius.
 
 The following describes the test method. For OIT test ASTM D 6186, 3 plus or minus 0.2 milligrams of biodiesel was weighted into a new aluminum sample pan without the cover. 
 
 <center><img src="/images/upload/20080617032106.jpg" alt="" /></center>
 Figure 1. OIT of sample 3 rice biodiesel at 130 degrees Celsius
 
 SOURCE: PERKINELMER
 
 Beginning at ambient temperature, the test temperature was ramped to 100 degrees Celsius per minute and held for two minutes. The oxygen valve was opened to slowly pressurize the cell to 500 plus or minus 25 psi within two minutes. As soon as the pressure equilibrated, the cell purge rate was checked, adjusted and maintained at 100 plus or minus 10 ml/min. The OIT time was measured from the time the oxygen valve was opened.

 
 For the OT test, 3 to 3.5 milligrams of biodiesel was weighted into a new aluminum sample pan without the cover. The pressure was adjusted to 500 plus or minus 25 psi and the purge rate to 100 plus or minus 10 ml/min. Beginning at ambient temperature, the pressure was held for two minutes then ramped to 220 degrees Celsius at 10 degrees per minute. The onset temperature was calculated and recorded.
 
 Results
 Sample 3, rice biodiesel, is used as an example to illustrate the results. The OIT test started at 210 degrees Celsius, following the ASTM D 6186 method. The data indicated that the oxidation reaction happened quickly after the oxygen valve was opened. According to the standard, if the OIT is less than 10 minutes, then lower the temperature to the next level and repeat the experiment. Consequently, the same test was conducted at 180, 155 and 130 degrees Celsius.
 
 The OIT can not be readily measured until 130 degrees Celsius with an OIT of 6.4 minutes, still a relatively short period of time (Figure 1). In this figure, the first minute is the temperature ramp-up from room temperature to test temperature. The next two minutes are isothermal at the test temperature. The oxygen valve was opened at three minutes. From three to five minutes, the cell was gradually pressurized to 500 psi and the purge rate was adjusted to 100 ml/min. Note, the software used takes into consideration the zero time, which is the moment the oxygen valve was opened when performing the OIT calculation.
 
 Further reducing the experimental temperature may result in a longer OIT. When the temperature is set to 110 degrees Celsius the OIT is calculated to be 34.6 minutes. The repeatability of this test was checked by running the same method on sample 3 five times. The results are 6.439, 6.442, 6.326, 6.440 and 6.372 minutes respectively with an average of 6.404 minutes and a standard deviation of 0.053 minutes. The DSC with the high-pressure cell gives highly repeatable results under identical experimental conditions. 
 
 Although, generally speaking, it is not possible to correlate the oxidation induction time directly to the oxidation onset temperature, the OT measurement gives another way to look at the oxidation stability of the material. In order to determine the oxidation onset temperature, the sample is scanned from low temperature to high temperature instead of being held isothermally, and the OT is determined as the onset temperature of exothermic reaction. For example, sample 3 was heated from room temperature to 220 degrees Celsius under the same experimental conditions (pressure 500 psi, oxygen 100 ml/min). The onset temperature was found to be approximately 155 degrees Celsius. The OT results for all four samples are summarized in Table 1. Clearly, the OT sequence is sample 2 is greater than sample 1 equals sample 3 which is greater than sample 4. 
 
 The OIT results are summarized in Table 2. The measurement temperature was 130 degrees Celsius for samples 1, 3 and 4 and 155 degrees Celsius for sample 2. For sample 2 at 130 degrees Celsius, no obvious OIT was detected within the measurement time of 120 minutes. Again, samples 1 and 3 performed similarly. Note, for samples 2 and 4 the oxidation happened so quickly after the oxygen valve opened that their OIT can not be determined accurately. 
 
 Conclusion

 The OIT test following ASTM standard D 6186 or OT test can be used to study the oxidation stability of biodiesel. The use of pressure DSC can significantly reduce the experimental time under accelerating conditions. Therefore, pressurized differential scanning calorimetry may be a useful tool to screen different antioxidants or different antioxidant concentrations for biodiesel fuel. 
 
 Peng Ye is an applications scientist with PerkinElmer Life and Analytical Sciences. Reach him at <a href="mailto:peng.ye@perkinelmer.com">peng.ye@perkinelmer.com</a> or (203) 402-1708.

Weighing Oxidation Stability Tests for Biodiesel

Many biodiesel projects, companies, service providers and other stakeholders along the supply chain are driven by individuals and small groups. A board of directors commonly oversees operations. With today's market environment, boards must remain proactive and committed to the industry. 
 
 The role of the board includes oversight, direction, implication, anticipation, synthesis of information, probing and robust conversation, just to name a few. The end result from the actions of this collective body is to ensure successful growth, viability and the legacy of the organization. 
 
 When a chairperson walks into the boardroom and takes her or his seat at the head of the board table, the unique role of a leader among equals begins. First-rate chairmen/leaders stimulate an energy and atmosphere that invites the directors to step up and participate in robust discussions. With that come many challenges.
 
 The first challenge of the chairman/leader is to stir a readiness for participation from all directors and trigger internal reminders of their role and responsibilities to the board and organization. The way in which the chairperson creates the climate of the boardroom can shape the effectiveness of the meeting. We have seen chairmen do this well and seen that effect mirrored in the high quality of the discussions, decisions and questions asked during the meeting. We have also seen a chairperson do this poorly and it too receives the same poor reflection to the detriment of not only the quality of the meeting output, but the un-energized effect that it can have on the organization. The chairperson sets the tone for the "tone at the top"-a phrase coined by the Institute of Internal Auditors.
 
 Being chairman of the board of a growing and successful organization is more demanding today than it was 10 or 15 years ago. Today's boards have more diversity of people, viewpoints and experiences. Organizations today are challenged with more variables, market and economic conditions that can change overnight, compressing reaction time for both board and management. Most experts predict that the competitive environment will get even tougher in the future. Competing and succeeding in this environment requires a board chairperson to accelerate his or her ability to grasp complex issues quickly and completely and requires him or her to obtain information from different sources to stay informed from different viewpoints. Many boards are working in environments that include comprehensive environmental issues, audit and regulatory concerns, increased homeland security issues, higher CEO turnover and multiple perspectives that range from local to global.
 
 Balancing Priorities,Relationships

 Another chairman challenge is the judicious balance between full board discussion and committee work. Committees are charged with the "leg work" of the board, but the chairman needs to check-in with the committee chair to make certain that full board issues are brought back to the board. A role of the board chairperson is to help the board overcome reluctance to create committees and to define key issues or topics that need a committee. For example, a board may find itself needing to establish a committee to review the recommendations of management on new technology issues or purchases. The full board can be a committee. However, this practice can bog down the board, take valuable time and often does not dig into the issues as thoroughly as a small committee can. It is vital to a board's effectiveness to ensure that board members not relinquish their education on compensation, audit, nominating committee and finance because "it is the committee's responsibility." The full board can struggle with discussion and recommendations brought to them from the committee if this knowledge and education is ignored. The board chair can be instrumental in ensuring that this does not occur.
 
 A third challenge facing any leader and the boardroom is not an exception. It is the relationships and interactions that occur in the boardroom between board members. While relationships can be like weather, if it is persistent it engulfs us, and we get used to them in such a way that we don't see how it is not impacting our behavior in ways that impede or slow down effectiveness. The longer a board has worked together, the more a board culture, atmosphere and generally accepted way of operating are created. This can give the illusion that everything is business as usual when in fact the boardroom is a constantly changing interplay of viewpoints, personalities, organizational issues, marketplace changes, economic impacts and experience, among others. Each board meeting brings its own dynamics that the board chair needs to recognize, adapt to and adjust facilitation techniques to ensure an effective meeting. The more a board chair is aware of his or her own personal leadership style and can adjust his or her response, the more opportunity exists for successfully channeling the meeting dynamics.
 
 Establishing protocols for resolving conflict is important for the board and the chair to implement when difficult situations arise. It is important for board chairs to frame difficult issues and topics in a way that will allow other interpersonally talented board members to step in and diffuse emotionally charged comments or lead the discussion toward a neutral ground for a more objective view. Conflict can create opportunity for candid, open discussion that elevates a board to a higher level of dialogue. Astute board chairs can use the energy of these situations to broaden views, expose new ideas or identify new concerns that need to be addressed before proceeding with a decision or a vote. 
 
 Switching Roles, Board Additions
 A fourth challenge happens when a chairman must move in and out of the role of being a chairman and into the role of director. Moving between the two roles must be carefully chosen and executed. It is not often that a chairman can remove the leadership hat and ask the board's permission to speak as a director without undue influence to the situation. 
 
 At times this happens without intentional thought. A chairperson must be constantly aware of his or her role and influential position during vigorous discussion. The chair should encourage constructive contention while also participating in the debate.
 
 If you are a board chairperson you realize that any upstanding board will include evaluating the chairperson in its board evaluation or peer evaluation process. To reduce the anxiety that this can cause, the board should consider the following guidelines: 
 › Select a designated time and place to meet 
 
 › Create the questions together to ensure consistency and agreement
 

 › Make time for dialogue and discussion with the chairperson to ensure full understanding and input 
 
 A final challenge is welcoming new members to the board. This can be one of the most enjoyable aspects of a chairperson's role while being one of the most important duties. We have been in boardrooms where the chairperson did not introduce new and old members to each other and help them know something about each other. At their best, the chairperson should be active with the board to identify orientation programs internal and external to the organization that can help accelerate a new board members knowledge and contribution. The chairperson can identify existing board members with different skills, experience and knowledge that can act as mentors for the new board member. The chairperson as leader can ensure a smooth introduction and acceptance of the new board member and shape positive dynamics and board chemistry to continue even with a new personality coming into the boardroom. 
 
 Tracy E. Houston is a senior consultant in governance with Summit Point Consulting. Reach her at <a href="mailto:tracy.houston@summitpointconsulting.com">tracy.houston@summitpointconsulting.com</a> or (303) 721-3219. Cindy Knutson is the vice president of organizational effectiveness for Summit Point Consulting. Reach her at <a href="mailto:cindy.knutson@summitpointconsulting.com">cindy.knutson@summitpointconsulting.com</a> or (303) 721-3277.

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Overcoming Challenges in the Boardroom

Owning illiquid investments in biodiesel projects, like other investments, involves risk. Many investors may be unaware of all the risks associated with investing in a specific company. Providing current and future investors with risk factors allows investors to evaluate a company and make an informed investment decision. Risk factors are those features of a company that contain an element of uncertainty and where actual results may differ from expected results. Thus, good business practice dictates that companies provide current and future investors with a written list of the most prominent risk factors which may impact the investment. 
 
 Management is required to know the risks involved with investing in their company. While companies do not want to publicize possible negative events, the U.S. Securities and Exchange Commission requires reporting companies to list risk factors in offering documents and quarterly and annual reports. A non-reporting company may want to include risk factors in its newsletters or other correspondence to inform their investors of the risks associated with any investment. More importantly, if investors are aware of the risks at the time of the investment, management may have a defense to an antifraud claim that investors were unaware of the risks involved when making their investment decision. 
 
 In determining what risk factors are important, keep in mind that investors want to know what risks apply specifically to the company, not risks that could apply to any company. Categories of risk factors include, but are not limited to, risks related to the industry, production, financing, the company, regulation and government action, conflicts of interest of management and other key persons, securities and tax issues. 
 

 Due to the difficulties biodiesel companies are facing in obtaining debt financing and the increased cost of feedstock, specific risk factors to consider include, among other things, risks associated with a company's: 1) lack of operating history, 2) lack of profitable operations in recent periods, 3) financial position, 4) business or proposed business, and 5) the high cost of feedstock. 
 
 How you draft a risk factor is very important. Write in clear, plain English. Always list the most important risk factors first. State your conclusion as your risk factor heading. Provide the facts supporting your conclusion. Restate your conclusion. For example, a heading for a risk factor may state "declines in the price of biodiesel and its primary coproduct will have a significant negative impact on our financial performance." The risk factor would then explain that revenues are affected by the price at which a company can sell its biodiesel and glycerin and that prices can be volatile due to a number of factors over which the company has no control. The factors affecting the price volatility should also be explained. 
 
 Risk factors assist investors in assessing a company and allow for a more informed investment decision. Management is offered greater protection if an investor has been informed of all the possible risks at the time of making the investment decision. Good business practice and legal counsel will tell you that the best way to protect yourself in a lawsuit is to make certain investors have all the necessary information at the time of making their decision. Risk factors are an important means of providing this information.
 
 Sara L. Thompson practices primarily in the areas of securities, employment law and corporate transactions at BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. Reach her at <a href="mailto:sthompson@brownwinick.com">sthompson@brownwinick.com</a> or (515) 242-2485.

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Risk Factors: Protect the Company and the Investor

Canola oil, prized in food uses as the vegetable oil lowest in saturated fat, is not only good for the heart, but also good for the engine. It's the gold standard as a feedstock for biodiesel production due to its fatty acid profile and high oil content. 
 
 Canola yields more than 40 percent oil when crushed compared to only 18 percent for soybeans, the most common biodiesel feedstock. Since refined oils currently represent approximately 90 percent of total biodiesel feedstocks, a crop's oil content is an important factor in the value chain.
 
 Quality is also important. Canola's unique composition-61 percent monounsaturated fat, 32 percent polyunsaturated fat and 7 percent saturated fat-allows for excellent cold-flow properties. Saturated fats not only clog arteries, but can clog fuel lines, too. That's why canola-based biodiesel is particularly well-suited for cooler climates in such regions as the northern plains and the Midwest. 
 
 According to Purdue University Extension, 100 percent canola biodiesel has better cold-flow properties than biodiesel made from 100 percent soy, lard or tallow. Others quality aspects of biodiesel are related to the proportion of polyunsaturated fats in the feedstock oils. Oils high in polyunsaturates have higher nitrogen oxide emissions when burned, according to the University of Idaho. Canola oil is relatively low in polyunsaturated fats, so it produces less of these emissions.

 
 Agronomic Advantage, Burgeoning Supply
 From an agronomic standpoint, canola offers the advantage of being both a spring and winter crop in the United States. Spring canola, which is grown primarily in North Dakota, is being sought as a new rotational crop in several states due to widespread interest in biodiesel production. Acreage of winter canola is taking off in Oklahoma, Kansas, Georgia and Alabama.
 
 The potential for winter canola in the Great Plains is tremendous given the wheat monoculture in the region. It is estimated that if every wheat farmer there added canola to crop rotations, U.S. canola acreage could increase from just more than 1 million acres to approximately 3 million. 
 
 Canola is a good rotational crop for wheat, helping clean up weeds and break disease cycles in wheat fields. In fact, canola has been cited as the best broadleaf crop for winter wheat due to its ability to create a mellow seed bed that maximizes wheat seedling establishment.
 
 The ratio of domestic canola production to demand in the United States is approximately 1:3. As a result, a significant amount of canola is imported from Canada, which harvested nearly 15 million acres of the crop in 2007. Demand for canola oil in the United States continues to grow, primarily for food use due to consumer interest in healthier foods and trans fat labeling requirements and use restrictions. However, there is also significant interest around the country in using canola for biodiesel production. 
 
 The U.S. and Canada are striving to increase canola acres, oil content and yields to meet the increasing demands for both food and fuel. The U.S. Canola Association recently launched a Promote Canola Acres program to increase acreage to 2 million by 2010 and more than 4 million acres by 2015. The Canola Council of Canada's goal is to produce 17 million acres by 2015. 
 
 The North American canola industry is confident that canola supply will continue to be adequate for both food and fuel markets in the foreseeable future. Ultimately, the marketplace will determine how much canola is channeled into biodiesel production.
 
 Canola's role in the biodiesel industry must be supported by demand for the meal coproduct left over after oil extraction. Canola meal is an excellent source of protein for livestock, and has the potential for use in human food as well as in composites for construction materials and automotive applications. 
 

 Angela Dansby is the director of communications for the U.S. Canola Association. Reach her at <a href="mailto:angela@uscanola.com">angela@uscanola.com</a> or (773) 697-7686.

Canola Biodiesel: Good for the Heart, Engine

Now that we're posting more stories on www.biodieselmagazine.com, we have the ability to track our readers' interests. Our site tallies how many page views each story receives, and it shows some interesting trends.
 
 For example-and this should come as no surprise-we are seeing an increased interest in alternative biodiesel feedstocks, particularly algae. Of all the stories we've printed since January 2004, one that Staff Writer Jerry W. Kram wrote in the November 2007 issue, "Supersized Algae Bioreactors," is the No. 7 most-read story. In the past two weeks, this story was read by an additional 500 people, which is out of the ordinary for an issue posted online several months ago. In addition, the No. 11 most-viewed Biodiesel Magazine story, called "Algae on the Edge" and also written by Kram, addressed algae in our March 2007 issue. Other highly viewed feedstock stories featured hemp, palm oil, food waste, pennycress and camelina, among others.
 
 Here's an example of a more recent feedstock story that just cracked the top 100 most-viewed stories: In the June 2008 issue, Staff Writer Susanne Retka Schill wrote "Multidimensional Moringa." In the first week the story was posted online, it was viewed approximately 100 times per day. I predict it will be one of our highest-viewed stories by the time our August issue is printed. Retka Schill received various letters to the editor (see page 14) in regard to this story, and they give interesting perspectives on Moringa oleifera from around the globe.
 
 In this particular issue, Retka Schill takes another look at palm oil in a feature called "Palm Oil Fights Back" on page 46. This stemmed from a trip she recently took to Malaysia to attend the Malaysian Palm Oil Council's International Palm Oil Sustainability Conference. Camelina is also discussed on page 82 in a feature written by Biofuels Canada Managing Editor Khalila Sawyer, titled "Is There Room for Camelina?" 
 
 With all these alternatives, people may start to think soy oil is a feedstock of the past, but I wouldn't say that quite yet. In taking a look at the latest USDA World Agricultural Supply and Demand Estimates, I found that biodiesel plants are projected to use slightly more soy oil this year than last year (see page 21) even though soy oil prices are likely stay the same. 
 
 I think it's safe to say we'll probably have a feedstock-themed story in every issue of Biodiesel Magazine for quite a while. The real challenge will be to figure out which of these feedstocks will emerge as the most viable and inexpensive. Rest assured, Biodiesel Magazine will keep you posted.

 
 Jessica Sobolik
 Managing Editor
 <a href="mailto:jsobolik@bbibiofuels.com">jsobolik@bbibiofuels.com</a>

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Focusing on Feedstocks

After hosting a ribbon-cutting ceremony in January, Paseo-Cargill Energy LLC officially started production at its 40 MMgy biodiesel plant in Kansas City, Mo., in early April. It's adjacent to Cargill Inc.'s existing soybean-processing facility and will use soybean oil as a feedstock. It has also completed the requirements to become a BQ-9000 accredited producer. "Customers expect trouble-free performance from their fuel, and we are confident that biodiesel produced at this facility meets those standards," said David Durham, chairman of Paseo Biofuels. The plant, which also includes an integrated glycerin refinery, is a joint venture between Paseo Biofuels, Cargill and the Missouri Soybean Association.

Paseo-Cargill Energy begins production

With support from both conservatives and liberals, Canada's House of Commons overwhelmingly passed Bill C-33 by a 173 to 64 margin May 28. The legislation, the first of its kind in Canada, will implement a national renewable fuels standard, requiring ethanol- and biodiesel-blended transportation fuels in Canada. The bill still needed to be approved by the Senate at press time. If enacted, Bill C-33 would require that diesel fuel contain a 2 percent renewable content by 2012. Canadian Soybean Council Chairman Jim Gowland acknowledged the neutral biodiesel feedstock approach taken in the bill. Canada's largest biodiesel producer Biox Corp. called the vote in Parliament a big boost for biodiesel and other renewable fuels in Canada.

Canada's House of Commons passes renewable fuel bill

Iowa Gov. Chet Culver signed renewable fuels legislation May 12 that will expand the use and availability of biodiesel statewide. The legislation will increase grant amounts and cost-share percentages for biodiesel infrastructure and retailer enhancements. It makes retailers eligible for multiple awards for biodiesel and E85 improvements at the same site. In addition to incentives, the legislation will also set into motion a state-funded marketing campaign aimed at educating the consumer. "This bill will help Iowa's biodiesel industry continue to grow and strengthen," said Randy Olson, executive director of the Iowa Biodiesel Board.

Iowa governor signs biodiesel legislation

In May, the Biofuels Center of North Carolina awarded Central Carolina Community College's biofuels program with a $195,000 grant to purchase biofuels production laboratory equipment at its Chatham County campus. Andrew McMahan, the college's biofuels coordinator and curriculum developer, said the grant money will also be used to customize a training program to meet industry needs. The college will offer an Associate in Applied Sciences degree in alternative fuels this fall. Its sustainable biofuels, sustainable agriculture and green building programs will eventually be housed in a Sustainable Technology Building to be built on the Chatham campus. Since 2001, CCCC has offered biofuels courses through its Continuing Education Department.

CCCC receives funding for biofuels program

In May 2009, Minnesota will boost its biodiesel blend requirement from B2 to B5 as it phases into a recently passed mandate that calls for B20 by 2015. Signed into law in May 2008 by Minnesota Gov. Tim Pawlenty, the legislation not only mandates increasing amounts of biodiesel in the state's diesel pool, but also incorporates a flexible blending schedule and funding for research.
 
 "The final legislation incorporates many of the ideas that Minnesota's biodiesel producers requested as part of the governor's Biodiesel Task Force," said Chuck Neece, chairman of the Minnesota Biodiesel Council. He is also director of research and development for FUMPA Biofuels, the state's first biodiesel plant, and was one of several on the task force charged with devising a plan to ramp up the state's biodiesel consumption after Pawlenty announced his proposed mandate increase in August 2007. Minnesota was the first state to require a biodiesel blend with its B2 mandate that took effect in September 2005.
 
 The latest mandate calls for biodiesel blends to increase in stages, starting with 5 percent May 1, 2009; 10 percent May 1, 2012; and 20 percent May 1, 2015. The 10 percent and 20 percent blends are mandated for seven months of the year, from April through October, with a fallback to B5 during the winter months. "We hope to see technology in the future that can help with the B20 blends during our Minnesota winters," said Lance Peterson, president of the Minnesota Soybean Growers Association and member of the task force.
 
 Recognizing the volatility in the market and the need for further infrastructure improvements, the ramp-up in biodiesel blends isn't automatic. "There is well-thought-out, built-in flexibility," Neece said. The new law includes an approval process before moving to higher blends, which will allow all stakeholders-including legislators, state agencies, end users, consumers and biodiesel producers-to gauge the economic, supply and environmental impacts before moving to a higher blend. "We want to be sure we don't disadvantage our fuel providers in Minnesota if we have a large price disparity," Peterson said. 
 
 The national furor over the impact biofuels have on food supply and global warming is also reflected in the bill's provisions. The legislation requires that 5 percent of the mandated biodiesel comes from nonfood feedstocks, such as algae, waste oils, tallow, and someday even cuphea and industrial hazelnuts that are currently being researched in the state. The legislation includes funds for algae research at the University of Minnesota and a carbon footprint study.
 
 The legislation also addresses quality assurance by requiring that all biodiesel exceeds federal ASTM specifications. 
 
 The new mandate also benefits the state's economy by requiring that 50 percent of the biodiesel be produced in Minnesota. The state's current biodiesel production capacity exceeds 64 MMgy, more than enough to meet the 5 percent mandate that would require approximately 40 million gallons, according to the Minnesota Biodiesel Council.

Minnesota Gov. Tim Pawlenty signs the B20 mandate into law May 12. State Rep. Al Juhnke, left of Pawlenty, introduced the biodiesel legislation in the Minnesota House of Representatives.

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Minnesota passes B20 mandate

Green Star Products Inc. has released a technical report on its 40,000-liter (10,566-gallon) demonstration facility in Montana. The company operated the facility through the summer and winter of 2007-'08. The third and final stage of the project gave the California-based company experience in operating the facility in summer and winter conditions. 

 Furthermore, Green Star and its consortium partner Biotech Research Inc. announced they will move their existing microalgae laboratory at the UABC University in Ensenada, Mexico, to Utah in preparation for the development of a commercial-scale algae production facility in that state. 
 
 Green Star calls its pilot facility a hybrid algae production system (HAPS). It's basically a covered pond system that combines the controlled environment of a photobioreactor with the lower costs of an open-pond system. Phase III of the demonstration trial showed the process was robust enough to continue producing algae even when outdoor temperatures were as low as 0 degrees Fahrenheit and snowfalls measured 14 inches. The production of algae was reduced because of shorter daylight hours and cooler water temperatures. 
 
 However, the report stated the experience will allow significantly improved cold-weather production for its next-generation system, which at press time was scheduled to start production by the end of 2008. For example, exhaust from an electrical generator was used to not only warm the water in the system but also provide carbon dioxide as a nutrient to enhance the growth of the algae.
 
 Phase I of the trial focused on controlling the environmental conditions in the HAPS facility. The most important parameters were found to be light control, temperature and salinity. The tested algae species were found to grow best under 25 percent to 50 percent direct sunlight. The HAPS includes a light barrier to provide the optimal level of sunlight. 
 
 Inexpensive controls maintained a constant temperature even though the outdoor temperature varied from 30 degrees to 82 degrees Fahrenheit. The enclosed design of the HAPS limits evaporation, minimizing problems in controlling salinity. "In summary, [Green Star] has already addressed the main causes of failures in other systems," the report concluded. 
 
 Phase II of the project demonstrated that the HAPS could sustain an acceptable level of algae production. Using a strain of algae that the company calls ZX-13, the system was allowed to go to environmental extremes to test the limits of the algae's productivity. The ZX-13 strain survived temperatures of 115 degrees Fahrenheit for several hours and salinity levels outside normal operating conditions, doubling its population between 1.5 and four times per day. The harvested algae had an oil content of 21 percent, which the report described as "acceptable." The report didn't mention the level of production or operating costs of the facility.
 
 Green Star licensed the HAPS technology from Biotech Research. The Ensenada algae biotechnology team will be moving to the new expanded facilities in Utah to support the commercial algae production facility scheduled to go into operation sometime in 2008 or 2009. The Ensenada lab has been responsible for developing commercial algae strains for biodiesel production and high-protein algae biomass for food use. The Ensenada facility also developed algae harvesting and production techniques. The new lab will also be supported by other universities, consortium partners and industrial technology companies.

Green Star reports Phase III algae results

Industry experts and suppliers are discussing the impacts that federal mandates in the Energy Independence & Security Act of 2007 are having on the renewable fuels industry. 
 
 The renewable fuels standard in EISA mandates 600 million gallons of advanced biofuel consumption, including biodiesel, in 2009. During a DTN-hosted webcast on the topic in late April, Sherri Cabrera, director of legislative affairs for the Petroleum Marketers Association of America, said the association is specifically concerned about biodiesel pump labeling requirements that will be put into place by the U.S. Federal Trade Commission in June. For pumps containing less than 5 percent biomass-based diesel blends (including but not exclusive to biodiesel) and meeting the ASTM D 975 diesel specifications, there are no new labeling requirements. However, B5 to B20 blends will be labeled "contains biomass-based diesel" or "biodiesel in quantities between 5 percent and 20 percent." Blends above B20 will be labeled "contains more than 20 percent biomass-based diesel or biodiesel."
 

 Brandon Wright, manager of communications and the heating fuels division for the PMAA, said the association is concerned about the costs and burdens for its members to meet the biodiesel labeling requirements, which may be too restrictive. The PMAA would like the rule to be more flexible, allowing its members to change the labeling color from purple to green, a color many people already associate with biofuels.
 
 Most recently, despite a veto from U.S. President George W. Bush, Congress has also enacted the Farm, Nutrition and Bioenergy Act of 2007, which will further transition the country to next-generation biofuels by helping farmers collect agricultural residues and plant perennial energy crops on less-productive land. Together with EISA, these two bills signal the strong and committed support of the federal government to the future of biofuels, said a statement by the Biotechnology Industry Organization, which represents more than 1,200 
 biotechnology companies, academic institutions, state biotechnology centers, and related organizations in the United States and more than 30 other nations.
 
 The farm bill will reauthorize the Commodity Credit Corp. Bioenergy Program, which provides support to biodiesel producers to offset feedstock costs used to produce the renewable fuel. The National Biodiesel Board said the $300 million provided for the program will help bring some stability to the industry. "The National Biodiesel Board thanks all the senators and congressional leaders who have worked hard to include provisions for biodiesel and the CCC Bioenergy Program," said Joe Jobe, chief executive officer of the NBB.

Industry assesses impact of EISA, farm bill

The second annual Monographic Conference on Jatropha Curcas was held in Madrid, Spain, in May. The event's purpose was to connect biodiesel producers, firms and entrepreneurs from across the world, while informing them of the biodiesel feedstock and updates to technology.
 
 Global Energy Trading Co.'s Chief Executive Officer James Fanning was one of the 10 experts invited to speak, the only one from the United States. GETCO, founded in 2006 by Fanning, is launching a program designed to mass-cultivate and produce jatropha in underdeveloped nations as an "environmentally friendly worldwide alternative biodiesel fuel." 
 
 Fanning's presentation, titled "Economic Impact of Jatropha in Local Communities and International Trade," summed up what GETCO sees as a need in the biodiesel industry: to create sustainable communities and long-term solutions to the world's energy needs. "We looked at jatropha, which has had very little scientific long-term study, because it isn't part of the food chain, it has a 35- to 40-year life cycle, it grows in arid soil, and it's also labor-intensive," he said. "Some people might think [choosing a labor-intensive crop] is crazy." 
 
 Many in the biodiesel industry haven't considered jatropha seriously enough as a viable alternative to soy, canola or palm oil, Fanning believes. "When we started a few years ago, African palm was the feedstock of choice along the equatorial line because of its yield at 5,000 kilograms per hectare per year," he said. "The problems came when people tried to take it into colder climates."
 
 Another benefit of jatropha is the long-term yield. While a plant such as soybeans has to be harvested and replanted every year, jatropha can be harvested almost continually over a 30-year period. The plant produces oil-rich seeds nine months out of the year. "When we looked at the research, we found that even the 30-year yield on the jatropha crop makes it economically viable to have labor at formal labor wages in South America," Fanning said. "This allows us to have people employed full-time." He expects future yield improvements, too. "Of all the feedstocks out there, jatropha is the only one that hasn't been genetically modified, meaning the yields can only get better," he said. "Based upon the studies done in the past three or four years, we believe we can get three or four times the yield of today."
 
 The company originally planned to build its own biodiesel production plant. This would further integrate the company vertically but no longer interests Fanning and his team. "We realized that demand is a big part of this business, and we back-burnered the actual production of biodiesel," he said.

 
 GETCO's message to conference attendees was built on the foundation that a company's responsibility to a community is just as important as its drive to realize profits. "Our belief as a commercial entity is that we are as important to the success of any feedstock production as the research and development," Fanning said.

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U.S. expert speaks at jatropha conference

As a leading process technology and engineering firm in the global ethanol and biodiesel markets, India-based Praj Industries Ltd. is expanding its research and development in order to advance next-generation biofuels. 
 
 In late April, Praj Industries opened a state-of-the-art integrated research and development center, Matrix-The Innovation Centre, near the company's headquarters in Pune, India. 
 
 It occupies five acres and includes 12 laboratories, seven clean-room facilities, a biodiesel plant and a cellulose-to-ethanol pilot plant. It also houses a brewery laboratory meeting European Brewing Convention standards.
 
 The new facility was inaugurated by ICICI Bank Managing Director and Chief Executive Officer K.V. Kamath and Tata Motors Executive Director Prekash Telang in a formal ceremony. Praj Chairman Pramod Chaudhari spoke at the event.
 
 "We believe that Matrix-The Innovation Centre is a unique biotech research and development [center], not only for biofuels, but also for an array of industrial biotech process studies," Chaudhari said. "It's the only one of its kind that has integrated facilities for industrial and agri-biotech. We will concentrate on 'last-mile' technologies for industrial biotech, which will create their own milestones."
 
 Realizing the importance of implementing nonfood-based feedstocks to support demand for biofuels production, Praj undertook a three-pronged approach toward this end. First, it developed an innovative process technology for second-generation biofuels that uses a novel pretreatment process for agri-waste, followed by a specific microorganism for fermentation. A patent has been filed for this process. Second, it developed a production process for ethanol blends with a 25 percent to 35 percent higher energy content using a special microorganism that converts simple sugars. Third, the company integrated its knowledge of crop sciences with biofuels to promote sustainability. Praj created a separate division that deals with plant tissue culture, variety selection, farm yields and cultivation practices particularly for second-generation energy crops such as algae for biodiesel production. The division will also provide knowledge for new biodiesel feedstocks such as jatropha (wasteland cultivation), Pongamia and safflower. 
 
 Praj provides engineering design, equipment and project management for biodiesel and ethanol plants, and breweries, as well as related wastewater treatment facilities worldwide.

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Praj opens R&D center in India

Each month, the USDA releases its World Agricultural Supply and Demand Estimates, which include reports on oilseeds. Between each report, many factors can alter those numbers, but a broad look at the overall direction of oilseed supply and demand can be useful to biodiesel producers. Furthermore, it offers concrete statistics to those who say renewable fuel production is cutting into world food supplies.

 
 The USDA projects U.S. oilseed production to increase 16 percent to 93 million tons in 2008-'09, mainly because of higher soybean production, which is expected to increase to 3.1 billion bushels this year. Production of sunflowers, canola and cottonseed are each projected to decline compared with 2007-'08 numbers.
 
 Soybean crushing is projected to decrease slightly (less than 1 percent) to 1.85 billion bushels. Conversely, domestic consumption of soybean oil is projected to increase slightly through higher biodiesel use, which is mostly offset by a continued decline in food use. Keith Menzie, a chairman with the USDA's World Agricultural Outlook Board who prepares the oilseed report, stressed the food and fuel uses aren't necessarily related, however. "You have food processors and biodiesel manufacturers bidding for oil, and food processors are willing to pay more to get it," he said. "When McDonalds needs oil for French fries, for example, they're going to pay to get it. I think it's more of an issue of trans fats. Food processors are transitioning away from [oils high in trans fats]."
 
 Approximately 45 percent of U.S. biodiesel plants are set up to exclusively use soybean oil as a feedstock. That's not including the nearly 40 percent of biodiesel facilities that are multi-feedstock capable. Biodiesel plants are projected to use 15 percent of the total U.S. soybean oil production for 2008-'09, compared with 14 percent in 2007-'08. 
 
 Farmers are slated to produce more soybeans in 2008-'09, and the U.S. season-average soybean price for that time frame is projected at $10.50 to $12 per bushel, compared with $10 per bushel during the previous growing season. Soybean oil prices are projected between 50 and 54 cents per pound. Last year's price averaged 52 cents per pound. "This is a straight-up, 12-month average, so it's a little bit misleading," Menzie said. "It doesn't indicate the months that were higher or lower. Right now, prices are still in the 60s."
 
 What puzzles analysts such as Menzie is the fact that soy oil prices are high, but so is supply. "We certainly don't have a shortage of soybean oil," he said. "If you had 3 billion pounds of oil in any other given year, you could expect to see prices closer to 20 cents. Prices are disconnected from fundamental forces right now."

Soybean production is projected to increase in 2008-'09, according to the USDA.

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Examining U.S. oilseed trends

A partnership between Golden Grain Energy LLC, an 80 MMgy ethanol plant in Mason City, Iowa, and Madison, Wis.-based Best Energies Inc. has resulted in a new entity called Corn Oil Bio-Solutions LLC, which plans to extract corn oil from ethanol plants for biodiesel production.
 
 "Golden Grain is going to put in the ICM-designed corn-oil-extraction system here," confirmed Walt Wendland, president of Golden Grain Energy. "We will install back-end extraction equipment to take out the free oil in the solubles." The ethanol plant expects to generate enough corn oil to produce 15 MMgy of biodiesel.
 
 The extraction unit utilizes proprietary technology owned by Best Energies. Commercial-scale testing of the technology was conducted at Best Energies' biodiesel plant in Cashton, Wis. "There are processes designed to work with corn oil," Wendland said, adding that corn oil has "interesting and challenging components to turn into biodiesel."
 
 Wendland stressed that the corn-oil project is not just for his plant. Corn Oil Bio-Solutions plans to actively recruit other ethanol plants to become owners in the facility, so they can vertically integrate their corn-oil production into biodiesel, as well. 
 

 The new entity received a significant financial boost in April through $200,000 from the Iowa Department of Economic Development Board. Half of the funding will be in the form of an industry loan, and the other half will be a grant to be used to assist with project costs.
 
 The partnership is expected to create 11 jobs, seven of them paying an average wage of $20 per hour. Those jobs include operators, supervisors, a maintenance technician, a technical manager and an office manager.
 
 Wendland said no firm dates are set for the installation of the extraction unit, but he said progress is being made and significant developments should be seen by the end of July. "We continue to move forward with permitting, engineering and design work," he said.

Crude corn oil from ethanol, extracted in a centrifuge, can be processed into ASTM-quality biodiesel. 

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Partnership to focus on corn-oil extraction

Two recent collaborations for separate renewable diesel projects indicate the same underlying theme-renewable fuel technology is advancing from vegetable oil and virgin soy oil. From sugarcane to municipal solid waste, anything goes when it comes to making renewable diesel.
 
 California-based technology company Amyris Biotechnologies has joined forces with Crystalsev, one of Brazil's largest ethanol distribution and marketing companies, to form Amyris-Crystalsev Pesquisa e Desenvolvimento do Biocombustiveeis Ltd. The new company plans to produce renewable diesel from sugarcane on a commercial scale by 2010. At press time, a research and development facility was scheduled to open in Campinas, Brazil, in June. A pilot plant is scheduled to open in the same location in 2009. Amyris, the majority stakeholder in the new venture, will provide the technology to create hydrocarbons through sugar fermentation. Amyris Chief Executive Officer John Melo said the collaboration represents a "historic first for the global transportation fuels industry." He added that with the feedstock provided by Crystalsev and Santelisa Vale, one of the largest sugar and ethanol producers in Brazil, Amyris can take its technology out of the lab and rapidly scale production to begin meeting the world's fuel needs. 
 
 Two other California-based companies, BioGold Fuels Corp. and Energy Dynamics Corp. International, have entered into a strategic licensing agreement to produce renewable diesel from municipal solid waste and other waste streams. BioGold will provide the front-end technology to sterilize, sort and size the feedstocks. Energy Dynamics will be responsible for the gasification technology to produce a diesel blendstock, among other products. BioGold intends to utilize Energy Dynamics' technology to build and operate a biorefinery in Kansas, according to BioGold CEO Steve Raccosin.

New developments in renewable diesel

In Wisconsin, Virent Energy Systems Inc. received the 2008 Red Herring North America award, which is given annually to six cleantech/energy companies selected by Red Herring as top technology start-up companies. In addition to its partnership with Shell to advance biogasoline production, Virent also aims to produce propylene glycol from glycerin, a biodiesel byproduct, via its patented BioForming process. The company is currently designing a glycerin-to-propylene-glycol pilot plant, which will be associated with a biodiesel production facility in Arkansas. In addition, Virent opened a pilot plant in Madison, Wis., in July 2007 to collect data on the production of hydrogen gas from glycerin.

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Glycerin company receives award

State regulation of biodiesel is becoming more and more important to ensure availability and quality of the fuel, as well as state economic benefits. For the past six years, Scott Hughes, as director of governmental affairs (and before that a governmental affairs contractor) for the National Biodiesel Board, has made great strides in ensuring appropriate state regulations. During his tenure, Scott was instrumental in overseeing NBB's state regulatory program, including working through TxLED issues in Texas, and assisting in getting consistent definitions of biodiesel and fuel quality standards in state statutes across the country. We are grateful to Scott for moving the industry forward. We wish him great success in the Laborers International Union, which he represented previously in his career. 
 
 Filling Scott's shoes is not an easy task, but we were able to find someone with extensive experience in government relations concerning renewable energy and economic development. Shelby Neal comes to the NBB with 10 years of hands-on lobbying experience at the federal and state level, including a position with Missouri Gov. Matt Blunt. His experience also includes consulting with agricultural and biodiesel customers. 
 
 After graduating from the University of Missouri-Columbia, Shelby began his career in Washington, D.C., where he served three members of the U.S. Congress (Reps. Jim Talent, Kenny Hulshof and Denny Rehberg) as a policy advisor and legislative director. He eventually returned to Missouri to work as a state and federal lobbyist for the Missouri Soybean Association and then as a policy advisor to Blunt. 
 
 Much of Shelby's career in the public service sector has been focused on agriculture and energy. He wrote the Missouri Renewable Fuel Standard, which requires most Missouri gasoline to contain 10 percent ethanol. He also helped pass two of the first ever value-added agriculture bills to be signed into law by the president. These bills, enacted in 2000 and 2002, created the Value-Added Producer Grant Program and the Agriculture Product Marketing Center Program, both of which continue to be two of USDA's most effective rural business development programs. In his new position as the director of state governmental affairs for the NBB, Shelby will focus on the needs of industry stakeholders around the country. 
 
 "Every state is different and it is incumbent upon me to become as expert as possible about the unique aspects of biodiesel in each one," Neal said. "I plan to become a key and trusted resource for the industry, working in conjunction with stakeholders to achieve desired outcomes in the state regulatory and legislative arenas."

 Shelby is originally from Joplin, Mo., and now resides in Columbia, Mo., with his wife Laura. Please welcome Shelby to our team. 
 
 NBB facilitates $1.2 million for soy research 
 
 In May, the NBB announced support for a three-year research project designed to increase America's supply of renewable oil used in the production of biodiesel. The $1.2 million 
 grant includes funding support from the U.S. Department of Transportation. 
 
 The recipient, Donald Danforth Plant Science Center, is a not-for-profit research institute based in St. Louis. The center specializes in research on how plants grow and develop, and resist disease, drought, heat and cold, and what adaptations must be made to decrease the need for chemical fertilizers and pesticides. This research project will focus on increasing oil produced in soybean seeds-while keeping the same amount of protein-by altering specific biochemical pathways that are embedded within the soybean plant. 
 
 U.S. Sen. Kit Bond, R-Mo., was instrumental in getting the NBB and Danforth together to make this happen. "Making biofuels more efficient puts America one step closer to a stable home-grown energy supply, and I applaud the partnership of the Danforth Center and the National Biodiesel Board for their leadership and vision," Bond said.
 
 Maintaining and enhancing environmental sustainability is a priority of the biodiesel industry. Using less energy to produce more oil from the same acreage represents a fundamental step toward sustainability. 
 
 "We are proud to support the Danforth Center as researchers there look for ways to get more bang for the buck from each soybean seed," said NBB CEO Joe Jobe. "Whatever advances are made on soybeans will have a high likelihood of being transferred to other oilseed crops-other biodiesel sources."
 
 Upcoming BQ-9000 workshops announced

 
 The National Biodiesel Accreditation Commission is continuing its workshops on how to become and stay BQ-9000 compliant. To continue building upon the increasing percentage of in-spec biodiesel in the United States, the commission offers the following schedule of workshops:
 
 Understanding and Implementing BQ-9000-This one-day seminar provides the fundamentals for implementing the BQ-9000 quality management program, the voluntary quality management system requirements for biodiesel producers and marketers. This includes understanding the details of the requirements, the scope of work required to implement them, and the most efficient approaches to managing the registration project. 
 
 › July 30-Denver
 
 › Nov. 19-Indianapolis
 
 Internal Auditor Training-The current revisions of the BQ-9000 quality management standards for both producers and marketers require annual internal audits of BQ-9000 quality management programs. The two-day auditor training workshop teaches in-depth quality procedures to stay in compliance with updates and revisions necessary to keep BQ-9000 compliance.
 
 › Aug. 1-2-Denver
 
 › Nov. 20-21-Indianapolis
 
 For more information and registration, visit <a href="http://www.bq-9000.org">www.bq-9000.org</a>.

 
 Sincerely,
 Joe Jobe
 NBB CEO

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Welcome, Shelby; NBB Looks Toward Continued Success in State Governmental Affairs

If you have called the National Biodiesel Board headquarters lately then you have probably spoken to Michelle Muenks, the newest member of the NBB team. She is filling an integral position at the NBB. Muenks assists and directs callers to get them what they need as well as assisting the NBB staff. With her degree in early childhood care and education from Lincoln University in Jefferson City, Mo., the staff has joked that her skill set may come in very handy. She is a self-described people person, so she is looking forward to meeting the industry's members, backers and supporters, whether on the phone or in person. Please welcome Michelle.

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NBB welcomes new team member

In the continuing debate about biofuels benefits, President George W. Bush made it clear in recent months that he is for increased usage of renewable fuels such as biodiesel. In two speeches, the president called for lowering greenhouse gases through the use of renewable fuels. 
 
 First, the president reiterated the requirement of fuel producers to supply at least 36 billion gallons of renewable fuel per year by 2022. On a separate occasion, during a Rose Garden news conference on the economy, he reinforced America's need for biofuels, saying, "It's in our national interests that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us."
 
 The president also countered questions about biofuels' impact on food prices, stating that the vast majority of the world's food prices "are caused by weather, increased demand and energy prices," and not biofuels. His comments were in response to the recent frenzy of attacks on biofuels.
 
 "It's encouraging to hear the president reinforce that producing and using biofuels is the right thing to do for our country," said NBB CEO Joe Jobe. "In recent months, U.S. biofuels have been accused of everything from food cost increases to gender discrimination in Third World countries. These claims are largely based on faulty science that has not been peer-reviewed, ignoring the large body of credible scientific evidence that shows biodiesel is a bright spot in our fuel supply-socially, environmentally and economically."
 
 In recent remarks, the president also said, "Another reason for high gas prices is the lack of refining capacity." The U. S. biodiesel industry is helping increase the nation's refining capacity by building plants that produce an American-made, cleaner burning fuel. The 500 million gallons of biodiesel produced in the United States in 2007 displaced 20 million barrels of petroleum.

Bush reaffirms biofuels support

Truckers across the nation are hearing ads on the Midnight Trucking Radio Network touting the benefits of the BioTrucker Fuel Card. The fuel card was introduced at the Mid America Trucking Show (MATS) in March to benefit small fleets and owner operators. Now, five state soybean boards in Kentucky, Ohio, Iowa, Indiana and Illinois are helping truckers find biodiesel and save money on fuel.
 
 "This program is a great way to drive truckers to the participating truck stops in each state," said Tom Verry, director of outreach and education for the National Biodiesel Board. "It came out of a discussion that we had at MATS this year with Jaime Vincent of the Kentucky Soybean Board, and Midnight Trucking Radio Network, and (it) grew into this program."
 
 The NBB and state soybean associations have been actively promoting biodiesel to truckers for several years. The Kentucky Soybean Board has teamed up with NBB at MATS for the past four years, promoting biodiesel to 75,000 truckers at the Kentucky State Fairgrounds. The Kentucky Soybean Board, Iowa Soybean Association, Illinois Soybean Association and Indiana Soybean Alliance have gone on tour with trucks featuring colorful graphics and the soy biodiesel message. All of these activities become focused with the BioTrucker Fuel Card program.

 
 "We saw the benefits right away of having a fuel card that helps truckers find biodiesel and save at the pump," Vincent said. "Two of the stops carrying biodiesel in our state are already offering a 2-cent discount per gallon of biodiesel for BioTrucker Fuel Card holders. The radio co-op program is a great way to get publicity for them."
 
 Kentucky truck stops Waddys Unocal 76 and Donerail Travel Center in Lexington as well as Sapp Bros. in Peru, Ill., offer the 2-cent discount. In addition, truckers benefit with no fuel transaction fee on biodiesel at 226 in-network truck stops, 75 of which are in the five participating states. 
 
 "We would like to encourage more truck stops in Ohio to carry biodiesel," said Tom Fontana, director of new use development for the Ohio Soybean Council. "Programs like this help." 
 
 Listeners may have to stay up late to hear the spots, but many truckers drive at night. They listen to the Midnight Trucking Radio Network on AM stations across the nation and XM Radio channel 171. With 231 10-second ads and 150 30-second public service announcements, the soybean boards can get their messages across about biodiesel quality and energy independence, while promoting BioTrucker Fuel Card in-network truck stops.

State soybean associations, NBB partner to bring biodiesel to truckers

Energy Minister Jack Keir announced in January that 2008 would be the year for developing a larger biofuels industry on Canada's East Coast. Backed by federal support and an upcoming renewable fuels mandate, which was passed through the House of Commons in late May, this may just be the boost eastern Canada has been looking for. The mandate requires that all gasoline sold in Canada contain 5 percent ethanol by 2010 and that all diesel and heating oil contain 2 percent renewable fuels by 2012, according to an Agriculture and Agri-Food Canada press release. The legislation will now be debated in the Canadian Senate. With the promise of new funding for projects in the provinces of New Brunswick, Nova Scotia and Prince Edward Island, increased activity in the biofuels industry supported by increased federal funding may prompt provincial governments to invest in the production of biofuels. 
 
 Buzzing with Biofuels

 In January, Christian Paradis, secretary of state for agriculture, announced funding from the government of Canada for two projects aimed to help New Brunswick farmers turn a profit in the biofuels and bioproducts markets. To establish New Brunswick as the energy hub of the East Coast, $860,000 was invested in renewable energy projects in the province, and $61,000 was contributed by Agriculture and Agri-Food Canada to the Centre of Excellence in Agriculture and Biotechnological Sciences in Grand Falls, a branch of the New Brunswick community college in Edmunston, to develop environmentally friendly plastics. The bulk of the funding, however, was granted to BIO-D Énergie Inc. to construct a biodiesel facility in Clair, New Brunswick. Using canola and soybeans as feedstocks, the biodiesel producer received nearly $500,000 in the form of a loan from Atlantic Canada Opportunities Agency and $300,000 from Biofuels Opportunities for Producers Initiative. The money was used to purchase new processing equipment and refine its current production technology to meet North American standards. 
 
 BIO-D Énergie, formerly known as Ouellet Feeds mill, uses crushed canola and soy as meal for animal feed and for oil, which it has been refining and using in its 50-truck fleet in New Brunswick, Québec and Ontario. The company, in partnership with Belisle Solution Nutrition of Montreal and biofuels producer Biocardel, plans to develop a 10 MMly (2.6 MMgy) facility in the town of Clair, New Brunswick, and anticipates increasing production to 30 MMly (7.9 MMgy) in the next three years. All biodiesel produced will be used for trucks and as heating fuel for furnaces. 
 
 Other funding is also available this year for the biofuels industry in the province. Approximately $1.3 million will be contributed to the University of New Brunswick over the next five years by the Atlantic Canada Opportunities Agency for a Hydroprocessing Laboratory and Magnetic Resonance Imaging Centre. The lab will specialize in fuel analysis, catalyst synthesis and characterization, and researchers will develop technologies to produce high-quality, clean diesel fuel and reduce nitrogen oxide emissions from biodiesel. The MRI Centre, in collaboration with Saudi Armco and Green Imaging Technologies, will allow researchers to develop faster, more precise and more economical measurement techniques for petroleum core analysis. 
 
 The ACOA grant is part of a federal announcement that will see six research and development projects in New Brunswick receive up to $12.6 million in funding under Round V of the Atlantic Innovation Fund. "Agriculture is an important sector in northwestern New Brunswick and we are pleased to support innovative initiatives like these projects," says Robert Thériault, a director on the New Brunswick Agricultural Council. "These Agriculture and Agri-Food Canada programs are designed to be flexible and responsive and are administered by industry leaders who understand regional needs in New Brunswick." 
 
 Pushing for Support
 Despite recent contributions from the federal government to a handful of projects, eastern Canada is still challenged by the lack of support from its provincial governments, which has proved to be the biggest hurdle. As the biofuels industry in western and central Canada have seen enormous development the past few years, Maritime producers are working extra hard to garner provincial governmental support for more biofuels facilities. 
 
 Eastern Greenway Oils Inc. owns a small-scale pilot 3 MMly (800,000 gallons per year) biodiesel facility in Waterville, New Brunswick. EGO incorporated in 2006 with the aim of developing a feasibility analysis to establish a business model for the production of bio-oil crops in Atlantic Canada. After stiff competition from the U.S. biofuels industry, high taxes and fuel prices, the company decided to branch out and explore the production of biofuels additives, which help eliminate carbon monoxide and heavy particles in diesel, in addition to providing a reliable revenue stream for EGO. Boasting the production of primarily canola-based biodiesel and a number of value-added diesel additives, the company has developed a process to replace sulfur with canola oil, eliminating sulfur dioxide. The company is examining other potential value-added coproducts.
 
 Currently, EGO's pilot facility is in the pre-commercial testing phase and plans to become fully operational when the timing is right. "We're more or less in the process of making design changes," says Ray Carmichael, general manager of EGO. "We don't anticipate a full seven-day run until the fall." The company is also producing biodiesel for internal process heat. 
 
 Despite the small steps biofuel producers are taking, more action is still needed to fully develop eastern Canada's biodiesel industry, according to Carmichael. Competing U.S. markets and existing road taxes have also become a noticeable challenge. "The U.S. has federal and state subsidies, which means a liter of biodiesel can be imported and sold in Canada for approximately 85 cents," says Carmichael. "[EGO] can produce the same amount for $1.60 per liter, but obviously no consumer wants to pay more for their fuel." In addition, the Maritime provinces, with the exception of Nova Scotia, are the only provinces subject to what is known as a "road tax"- a 16.9 cents-a-liter fuel tax intended to help improve local roads. Ontario and British Columbia eliminated road taxes for biodiesel a few years ago, making it competitive with regular diesel. "We're just not on a level playing field here," Carmichael says.

 
 Nevertheless, the company's business is still thriving locally as the city of Fredericton recently announced it will be using EGO's 4 Plus Premium Biodiesel in its fleet of 27 transit buses. The city added 15 milliliters of the canola and mustard seed-derived fuel to its buses as a test run aimed at reducing emissions and fuel costs. After preliminary testing, the city noticed a slight improvement in combustion efficiency, performance and mileage, and decreased levels of greenhouse gas emissions. In the future, the city plans to introduce biodiesel into its other diesel vehicles, such as snowplows and trucks.
 
 Heading east, ethanol production is also gaining momentum in the Atlantic provinces. The Renewable Energy Growers Association in conjunction with Atlantec BioEnergy Corp. plan to build a plant in Borden, Prince Edward Island. The proposed 85 MMly (22.4 MMgy) ethanol facility will be located on an existing commercial site where the company will have access to nearly 25 acres of surrounding sugar beet cropland. Atlantec BioEnergy will begin construction in May and anticipates coming on line sometime in 2009. Field trials began last summer where local farmers grew 970 hectares (2,396 acres) of sugar beets. The proposed plant would require at least 2,205 hectares (5,448 acres) for initial production and eventually 7,300 hectares (18,038 acres) when production is increased. In addition to ethanol, the company will also produce thermal and electric energy.
 
 According to Ronald Coles, communications manager for Atlantec BioEnergy, sugar beets are ideal for P.E.I because of the crop's high energy, sugar and water content. Sugar beets are also easily grown on the East Coast and can be produced in rotation with cereal and forage crops.
 
 Recently, REGA and Atlantec BioEnergy joined other organizations to make a pitch for the province to support the building of a local ethanol facility. The companies' biggest challenge has been attempting to produce biofuels when no provincial mandate or incentives currently exist. "That would be our biggest hurdle," Coles says. "We've only been getting indications that the P.E.I. government is releasing a strategy [but] the key is implementing [an actual] ethanol and biodiesel mandate. I think everything would flow easily from there." So far, Atlantec BioEnergy has not received any funding directly outside of private investments. 
 
 Other future producers include Roach Ethanol of New Brunswick, which plans to build a 40 MMly to 60 MMly (10.4 MMgy to 15.9 MMgy) ethanol facility using cereal grains including wheat, rye and corn as feedstock. The company recently completed a feasibility study and hopes to move forward in the biofuels industry. 
 
 Opportunities Not Lost
 These challenges may have delayed the potential for swift growth in the biofuels industry but they have not deterred Atlantic Canada. In fact, the challenges have even helped companies outside of the producer market such as Charlottetown Metal Products Ltd., realize the potential for an even greater market. CMP manufactures stainless steel food processing equipment and systems. Two years ago, CMP Vice President Wendell MacDonald traveled to Alberta on a trade mission to better understand the oil industry and to find good sourcing for the company's stainless steel fabrication system. A meeting with a representative from an ethanol facility that was looking to expand led MacDonald to realize there was an opportunity to market his technology in ethanol applications. "I found that our equipment, used for the food processing industry, was compatible and profitable within our manufacturing capabilities," MacDonald says.
 
 As a result, CMP has focused on the ethanol and biodiesel industry as secondary production lines and has been attending biofuels conferences across Canada ever since. "Our ultimate goal is to identify and bid on every pending ethanol and biodiesel plant in Canada," MacDonald says. "There are several proposed projects in eastern Canada that we hope to have the opportunity to bid on and secure a substantial proportion of that system."
 

 While the biofuels industry is mainly driven by western and even central Canada, MacDonald maintains that Atlantic Canada is doing its part to boost the biofuels industry as well. 
 
 And with increased interest and support from the provincial governments, industry progress on the East Coast could help put eastern Canada on the map as a biofuels production area in the future. In the meantime, new developments are creating opportunities for new production facilities and technologies, and are instilling an air of pride within the industry players. "We have been in the food industry for 16 years now and becoming a part of this new and exciting industry will give us the growth we need as a company and will provide a positive outlook for the Maritimes," MacDonald says. 
 
 Khalila Sawyer is the Biofuels Canada managing editor. Reach her at <a href="mailto:ksawyer@bbibiofuels.com">ksawyer@bbibiofuels.com</a> or (519) 576-4500. This feature was reprinted from the April/May issue.

With a number of new developments in the biofuels sector, eastern Canada is making waves with new funding, projects, opportunities and hope. But, with a lack of provincial government support and biofuel initiatives, the renewable fuels industry in the Maritimes is struggling to catch up to the rest of the country. Nevertheless, eastern Canada continues working to establish its presence in the biofuel industry with a variety of resources and opportunities.

Rising in the East

In May, the USDA released economic analysis that shows high energy prices, increasing global demand, drought and other factors-not biofuels-are the primary drivers of higher food costs. During a briefing on the case for food and fuel, Agriculture Secretary Ed Schafer pointed to the fact that oil prices have broken through a series of price ceilings this year. 
 
 "Developing diversity in our portfolio of fuels is, if anything, an even more urgent matter than it has been in the past, and it is one that remains central to our energy security and our national security," Schafer said. "The policy choices we have made on biofuels will deliver long-term benefits."
 
 Schafer pointed to International Energy Agency data that show global biofuels production has cut consumption of crude oil by 1 million barrels per day, offering savings of $120 million per day.
 
 The National Biodiesel Board praised the secretary for speaking out on the recent attacks on biofuels. "There has been a feeding frenzy on biofuels as the reason for higher food prices, and those accusations are unfounded," said NBB CEO Joe Jobe. "It is encouraging to see USDA documenting some of the real reasons for increased food prices. The American public is being duped on this issue." 
 
 Earlier in May, Sen. Charles Grassley, R-Iowa, released a plan by the Grocery Manufacturers Association to discredit biofuels, calling their attempts to blame biofuels for food price increases "outrageous and misplaced." He blasted the plan as an "effort to undermine and denigrate the patriotic achievement of America's farmers to reduce our dependence on foreign oil while also providing safe and affordable food." 
 

 The USDA has posted economic analysis and charts at www.usda.gov that document that "even with the current uptick in food price inflation, it is much lower than it was in the 1970s and early 1980." 
 
 Schafer criticized efforts to repeal biofuels policy but urged the focus to stay on long-term solutions. He pointed to the benefits of work to increase global agricultural productivity, which is important to developing countries' food and energy needs. "The need for food and fuel is only going to grow," Schafer said.

NBB applauds USDA for truth on high food prices

Members of Congress announced a bipartisan final agreement on the Farm Bill, reauthorizing the Commodity Credit Corporation (CCC) Bioenergy Program. The CCC program provides support for biodiesel and ethanol producers, helping to offset the costs of feedstocks, thereby ensuring consistent biodiesel production. Eligible biodiesel feedstocks include soybeans, canola, sunflower seed, rapeseed, safflower, flaxseed, mustard and cottonseed as well as fats, oils and greases, among others. 
 
 "Over the past year, feedstock costs have doubled, reaching record highs and making it difficult to economically produce biodiesel," said NBB CEO Joe Jobe. "The $300 million provided for the CCC Bioenergy Program in the Farm Bill will help bring some stability to the industry so that biodiesel can continue to add to the nation's fuel supply."
 
 Also, the U.S. House Ways and Means Committee announced approval for H.R. 6049, the Energy and Tax Extenders Act of 2008. Among its many provisions, the legislation extends the biodiesel tax incentive, which is a top priority for the biodiesel industry.	
 
 H.R. 6049 contains the following provisions pertaining to biodiesel:
 › Extends biodiesel tax incentive for one year through Dec. 31, 2009. 
 
 › Provides $1 per gallon incentive for all biodiesel regardless of feedstock. 
 
 › Shuts down the abusive "splash-and-dash" loophole that currently allows foreign-produced fuel to enter the United States, claim the biodiesel tax incentive and be shipped to a third country for end use. 
 
 › Properly defines tax benefits available to co-processed renewable diesel.
 

 The U.S. biodiesel industry stands ready to play a key role in the effort to reduce America's dependence on foreign oil. 
 
 "The biodiesel tax incentive is working, and the committee's decision to support biodiesel will help our industry improve America's energy independence by displacing foreign petroleum with clean-burning, domestically produced fuel," Jobe said.

Biodiesel benefits as legislation progresses

Researchers from the USDA are creating new eco-friendly uses for natural glycerin, a byproduct of biodiesel production. Richard Ashby, Daniel Solaiman and Thomas Foglia of the USDA's Agriculture Research Service Eastern Regional Research Center in Wyndmoor, Pa., received the 2008 Glycerin Innovation Award for this research. The award recognizes outstanding achievement for research into new applications for glycerin, with particular emphasis on commercial viability. Sponsored by the National Biodiesel Board and the Soap and Detergent Association, the award was presented at the 99th Annual Meeting of the American Oil Chemists' Society in Seattle, Wash., in May.
 
 "Through the development of new eco-friendly commercial uses for glycerin, the USDA is making an important contribution to our global environmental sustainability," said NBB Technical Director Steve Howell. "Commercial uses for natural glycerin help improve the overall value of biodiesel production while finding new uses for environmentally friendly, domestically produced products that can replace petroleum-based products."
 
 The team's research focused on replacing petroleum glycerin with natural glycerin in several applications including cosmetics and automatic dishwashing detergent formulations, as well as hard items such as golf tees, disposable razor handles, credit cards and bottles, among others. Products made from natural glycerin are considered "eco-friendly" as they are produced from renewable resources and can be quickly biodegraded upon disposal.

USDA researchers honored with glycerin award

China-based biodiesel and specialty chemicals producer China Clean Energy Inc. posted a net profit of $1.04 million in its first quarter of 2008, down from $1.15 million profit during the same quarter last year. This was likely because of a spike in the cost of biodiesel feedstocks-waste cooking, cottonseed and rapeseed oil-and stagnant diesel pricing, two factors that also caused the company to suspend its biodiesel production. It will step up the production of higher-value specialty chemicals to offset the loss in revenue from its biodiesel business.

China Clean Energy reports first-quarter loss

Agri-business Archer Daniels Midland Co. generated a 42 percent increase in its third-quarter earnings that ended March 31. Net earnings for the quarter reached $517 million versus $363 million during the same quarter a year ago. Revenue surged more than 64 percent to $18.7 million, compared with $11.38 million last year. The operating profits of ADM's Oilseeds Processing Segment increased $52 million for the quarter and $119 million for the past nine months "due principally to continuing strong global demand for protein meal and vegetable oil," the company said.

ADM sees increase in third-quarter earnings

Springboard Biodiesel LLC, a newly formed provider of renewable energy products based in Chico, Calif., has acquired the BioPro family of automated biodiesel processors and accessories from AGR LLC. The processors allow small businesses to produce ASTM-quality biodiesel in batch amounts of 40 to 100 gallons for approximately $1.25 gallon, according to Springboard. The company will now be the sole manufacturer of the BioPro product line, and will sell, distribute and provide warranty support for the products. For more information, visit www.springboardbiodiesel.com.

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Springboard Biodiesel acquires BioPro

New York-based Innovation Fuels Inc. has received a working capital credit line from Citizens Financial Group Inc.'s Citizens Bank to support current and future biodiesel sales and production. The company has also announced a partnership with Belgium-based Arpadis Group SA to form Innovation Fuels Europe, and a separate partnership with Pittsburgh-based ICE Service Group Inc., which will provide logistics and strategic transportation support for Innovation Fuels' biodiesel refinery in Newark, N.J. In April, Innovation Fuels was honored for its 2007 operations, receiving a Permit Award of Excellence from the Passaic Valley Sewerage Commissioners.

Members of the Passaic Valley Sewerage Commissioners stand with Tom Grossberger, Innovation Fuels' technical director, third from right, who accepted the award on behalf of his company.

1182-1294330135.jpg

Innovation Fuels partners with Arpadis, ICE Service Group

Neste Oil Corp. has changed its biodiesel division's name to the Renewable Fuels Division. The change was made because the term "biodiesel" is often associated with fatty-acid methyl esters, which are not part of Neste Oil's NExBTL renewable diesel produced through hydrogenation. Neste's proprietary process creates NExBTL from animal fats, rapeseed oil and palm oil. In 2007, the company announced it would invest $1.1 billion in a 271 MMgy facility expected to open in Singapore in 2010.

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Neste renames biodiesel division

Mansfield Oil Co. has acquired the commercial and industrial business unit of TransMontaigne Product Services Inc., a BQ-9000 certified biodiesel marketer. Gainesville, Ga.-based Mansfield will open an office in Denver, where TransMontaigne is headquartered, in order to extend its operations in the West. Mansfield will retain the team responsible for the TransMontaigne SMS Business, which provides supply-chain management services for gasoline and diesel fuel distribution. Mansfield is a fuel supply, distribution and logistics company focused on improving efficiencies in the downstream petroleum supply chain.

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Mansfield acquires TransMontaigne unit

XcelPlus Global Holdings Inc. has acquired technology capable of converting glycerin into a fuel suitable for use in turbine engines. The new technology could provide an additional revenue stream for biodiesel manufacturers by allowing them to convert their glycerin byproduct into a second renewable fuel. The new product, known as Gly-Clene, can be made from any feedstock. According to the company, the United States has enough glycerin to produce 27,000 megawatts of electricity per day using this technology.

XcelPlus acquires glycerin technology

The second annual North Carolina Mobile Clean Air Renewable Energy Awards, which recognize exemplary efforts to reduce transportation emissions, were doled out in May. Orange Recycling Services Inc. was recognized as private fleet of the year. Its fleet of 19 trucks runs on B99 and used more than 100,000 gallons in 2007. Potter Oil Inc. was also recognized for its service as the first North Carolina petroleum distributor to widely distribute biodiesel starting in 2003.

North Carolina agencies give biodiesel awards

World Energy Alternatives LLC announced that Michael Laznik has joined the company as its chief financial officer. Previously, he worked at FTI Consulting, where he was director of corporate finance. World Energy Chief Executive Officer and President Gene Gebolys said Laznik's experience is ideally suited to keep World Energy on its positive course. Laznik holds a bachelor's degree in economics from Yale University and a Master of Business Administration from Brandeis University in Massachusetts.

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World Energy hires CFO

very day, the mainstream media seems to report record-setting fuel prices at the pump. A few years ago, this trend would have been a boon to biodiesel producers, who could price their fuel competitively against petroleum diesel. Today, however, it's lost among concerns of increasing feedstock prices and financing challenges. 
 
 Between April 2007 and April 2008, the price of No. 2 diesel shot up 35 percent. Between April 2005 and April 2008, it increased 52 percent. Thankfully, the U.S. economy can be described as "load-bearing" in its capacity to effectively support these types of increases. "The problem is that people want an alternative fuel, and some will pay a premium, but ultimately the price has to be competitive with petro-diesel," said Terry McCullars, general manager of Arkansas Soy Energy Group LLC. His plant was originally designed to produce biodiesel from soy oil, but he expects the plant to shift to a blend of 80 percent animal fats and 20 percent soy oil when the facility comes on line in July.
 
 In other biodiesel project news, Blue Ridge Biofuels, a 1 MMgy plant expanding to 2 MMgy in Asheville, N.C., closed its financing in May. To be more competitive, the plant intends to realize efficiencies via methanol recovery and high free-fatty-acid reactors, and form alliances with other biodiesel producers in the region. 
 
 Blue Ridge moves forward with its expansion at a time when few operating plants are producing at full capacity and new construction projects are rare. In July 2007, Biodiesel Magazine listed 51 biodiesel plants under construction or reaching completion. A year later, that figure has dwindled to 14, including three completed projects. The precipitous drop in biodiesel plant construction indicates that the industry has hit a plateau. 
 
 The three completed projects are: High Plains Bioenergy, a 30 MMgy facility in Guymon, Okla.; Nu-Energie LLC, a 10 MMgy plant in Phipps Bend, Tenn., which began production in February; and Perihelion Global Inc., a 60 MMgy facility in Opp, Ala., that is currently operating at a 12 MMgy capacity. According to John Beebe, Perihelion's chief executive officer, the company plans to increase capacity in several phases.

Construction Continues as Number of New Projects Dwindles

ASTM, CEN, ISO-all of these acronyms precede quality standards that are becoming increasingly familiar to biodiesel producers as the industry expands into new markets. 
 
 Producing a consistent, quality product has long been seen as an absolute necessity for convincing consumers that biodiesel is a reliable option for fueling vehicles. Determining what qualities are important for producers, consumers and equipment manufacturers is a complex process that must balance the needs of all the participants. It can take years or even decades to hash out acceptable standards plus the methods needed to accurately test those standards.

 
 So why go to all that trouble? Creating the ASTM standard for biodiesel has involved nearly 700 participants, says Steve Westbrook, chair of the ASTM International subcommittee that continues to work on the evolving biodiesel standard. Coordinating so many people alone is a daunting proposition, not to mention getting them to come to a consensus on the issues under consideration. There must be some significant benefits to an industry to having a set of standards that are generally agreed upon.
 
 Finding Consensus
 ASTM International is recognized as an independent organization whose expertise is widely used by industry and governments as a source and reference for standards and testing methods. ASTM is made up of committees that produce standards for everything from reinforced concrete to ski equipment. The D 02 Committee is responsible for petroleum products and lubricants, and Subcommittee E is responsible for burner, diesel, marine and nonaviation gas turbine fuels, which includes biodiesel. "There is a philosophy behind ASTM," Westbrook says. "No one anywhere is required to use an ASTM standard. Regulators do use our standards, and that is their prerogative. But ASTM is not a governing body. 
 
 It is just a way to get all these stakeholders together. The ultimate goal is to get the best consensus standard you can."
 
 While ASTM generally doesn't always seek out stakeholders to be a part of its standards setting process, in some cases the organization makes an effort to bring industry participants into the process. "Biodiesel has been one of those cases where we have tried to make the people we believe would have an interest aware they have an opportunity to participate," Westbrook says.
 
 The ASTM process is consensus based, Westbrook says. Any member of a committee or subcommittee can hold up the adoption of a rule by stating an objection and giving their reasons for concern. The subcommittee then must either satisfy the stakeholder that their concerns have been taken into account, modify the rule to assuage those concerns or seek a vote of a supermajority of its members to determine that those concerns are not relevant to the standard in question. Once a consensus is reached in the subcommittee, the standard must be approved by consensus at the committee level and again by the ASTM International board. At each level, an objection can send the standard back to the subcommittee for more work. "ASTM is not set up as a dictatorial process," he says. "There are specific controls and processes to prevent any kind of a change-a new specification, test method or anything-from being forced on an industry. There are checks and balances throughout the process." He adds that in his experience many items that were approved by his subcommittee were voted down by the next higher level and sent back for more work.
 
 The decision to add or modify a standard is a serious undertaking. "There is no one process [for initiating a new standard]" Westbrook says. "In my subcommittee we generally have a couple of different ways that proposed changes are introduced. It is open access to anything someone wants to bring up and a single person can start it, a group can start it or it can come from a task force." Sometimes the needs of producers or consumers drive the standards process and committee members request the change. Sometimes the impetus comes from ASTM's testing groups that work on different technical aspects of the standards. In other cases, changes in government regulations make alterations to ASTM's standards necessary. Westbrook says the mandate for ultra-low sulfur diesel fuel made it necessary for the organization to create new standards and testing methods specifically for that product. "We had no choice but to make that change," he says.
 
 Out in the Cold

 Sometimes events show the need for a new standard or testing method. An example of the latter is the widely publicized gelling problems that occurred in Minnesota in the winter of 2005-'06. Investigation showed that under certain conditions some biodiesel formed a precipitate at temperatures above the cloud point. The cold soak filter test was developed to quantify the problem and that test was under consideration as an official test under the biodiesel specification, ASTM D 6751. "The situation in Minnesota was the biggest reason we started working on that," Westbrook says. "We really didn't have anything in the specification that addressed that."
 
 Members of the subcommittee brought the results of their individual investigations of the cloud point problem to the subcommittee. Their work showed the problem was sufficiently serious to convince the entire committee the work needed to be done on it. "We started to work on what it would take to address it," Westbrook says. "There is still a lot of discussion going on about whether the test method is correct and whether the specification as a pass/fail test is the correct one. They are asking, 'Is this sufficient to protect the guy who is driving a car or driving a truck on a biodiesel blend?' I would bet if you talk to most of the biodiesel manufacturers, they would say it's more than sufficient. But if you ask some of the OEM (original equipment manufacturers) guys, there is more of a thought that it should have been tighter because we don't want the risk of plugging fuel filters."
 
 With the problem identified and a possible method to test for it, the committee had to commission work to determine whether the cold soak filter method was up to the task of protecting users' engines. An evaluation of the method is due to be completed soon. "In Subcommittee E we put a high premium on having some sort of reliable test data people can look at and make a judgement," Westbrook says. "A very large follow-up program was created that dealt specifically with making sure that the test method was as good as it could be. We want to reduce the possibility that one lab could run the same sample of biodiesel and get a completely different number than another lab. We especially don't want one lab to say it's a pass and the other says it's definitely a fail."
 
 Further tests included running vehicles with biodiesel samples with different cold soak test results in a dynamometer facility in Canada. "A lot of time and money has been spent to make sure that whenever that specification is set it is as good as we can make it," Westbrook says. "It might be made better later, but right now it is as good as we can make it."
 
 While the cloud point situation was an example of the subcommittee moving relatively quickly, albeit with deliberation and due diligence, the process of creating ASTM D 6751 has been a continuous series of negotiations. "You could go down the list of every specification in D 6751 and recognize there has been some negotiation on some detail or another," Westbrook says. "For pretty much everything in the specification, there are folks who have wanted the spec to be tighter and folks who have wanted it to be looser, or even have that spec not be included. In general, people who make biodiesel don't want these specifications to be anymore onerous than they have to be, because that adds cost to their production. On the other hand, the people who make engines don't want that specification to be any more loose than it has to be because they want to try and make sure their engines have as little problem with the fuel as possible. So you set about to create a compromise and sometimes there are properties like the precipitates issue that weren't really on the radar until there was a big problem."
 
 Even when a specification is finally adopted, the committees, subcommittees and task forces of ASTM continue to look for new and better ways of ensuring quality specifications are met. However, those methods are calibrated against existing ASTM methods to ensure manufacturers and users have consistent results. "There are tests that are designated as referee methods," Westbrook says. "Usually that's the first test method put in place for a material. But in the meantime there have been improvements in test equipment and methods. There are allowances for this. [In D 6751] you can see this in flash point, in cloud point, cetane measurement and sulfur. There are all kinds of test methods for measuring sulfur. But there is always a referee method in case there is a dispute between buyer and seller on what a test result was."
 
 Why it Matters
 What all this effort accomplishes is, in a way, simplicity. Having a clear specification for a material means that a buyer and seller have agreed, in advance, on what is to be exchanged in a transaction. "The idea is to come up with a material that is described by a particular specification or analyzed by a particular test method," Westbrook says. "That allows both the buyer and seller to look and say, 'Yes that is what I want to buy or sell.' That avoids a bunch of contract negotiations. You don't reinvent the wheel every time you write a contract. That's what started ASTM more than 100 years ago."
 
 Beyond direct purchases of materials such as biodiesel, authoritative standards make life easier for the companies that build the equipment that use that material. "Original equipment manufacturers such as a diesel truck or engine manufacturer will want to know what kind of fuel they will have to design their trucks to burn," Westbrook says. "ASTM D 975 describes that fuel. Some would argue it doesn't do a sufficient job of describing that fuel, but it is something. So the OEMs have a way to design an engine that will work on that particular fluid."

 
 Ultimately, it is the end user that benefits from all the work that goes into creating a standard for biodiesel. Ironically, Westbrook says, those are the people who are least likely to take part in the process. There are some exceptions such as companies that manage large fleets of diesel vehicles, but the average trucker driving down the road likely doesn't have the time or inclination to investigate that deeply what he is putting into his or her fuel tank. "There are very few truckers who would come to an ASTM meeting, because you have to have a bigger stake," Westbrook says. "But those are the guys who pay the price if a fuel doesn't meet the spec or an engine was designed that doesn't run on the fuel that is out there. So [ASTM specifications] are a way to make sure that everybody gets what they need to make the whole system work." 
 
 Jerry W. Kram is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:jkram@bbibiofuels.com">jkram@bbibiofuels.com</a> or (701) 738-4962.

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The D 02 Committee of ASTM International manages standards for all kinds of petroleum products and liquid fuels including biodiesel. This image represents a few of the applications that the committee creates standards for to protect manufacturers and

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A significant effort has been made by the biodiesel industry to create quality standards and encourage producers to adhere to those standards. But why are standards necessary in the first place? What do they contribute to the industry that makes all the time, effort and negotiations worthwhile?

The Nature of Standards

Palm oil is often associated with rainforest deforestation in much the same way biofuels get knocked around in the food versus fuel debate. The simplified sound bites of the debate, however, often overlook the complexity of the issues and are sometimes based on outdated and inaccurate information. The first International Palm Oil Sustainability Conference held in mid-April is the latest effort of the Malaysian Palm Oil Council's educational campaign, bringing together nearly 600 industry players from Southeast Asia, Australia, Europe and the United States to discuss the palm oil industry's environmental impact. 
 
 The conference opened with a ceremonial signing of the documents creating the Malaysian Palm Oil Wildlife Conservation fund, which has an initial investment of $6.25 million. The fund is a collaborative effort involving the MPOC, the Malaysian government, Bursa Malaysia (managers of the country's stock exchange) and the Borneo Conservation Trust. Under development for the past year, the fund has already collaborated with the Sabah Forestry Department to establish a jungle patrol to discourage wildlife poaching in forest reserves bordering oil palm plantations, and with the University of Malaysia Sabah to conduct a biodiversity conservation study. The fund is also developing a project with WWF (World Wide Fund for Nature) Malaysia to create a baseline of oil palm sector impacts on biodiversity in the country. 
 
 The collaboration with the Borneo Conservation Trust, a state-mandated nonprofit, nongovernmental organization, includes a survey of orangutans-the endangered species most often heralded in discussions critical of oil palm cultivation. Cyril Pinso, chief executive officer of the trust, explained that a 2004 orangutan survey found 60 percent of the population was living in unprotected forest fragments inside and on the edges of oil palm plantations. The current survey seeks to document orangutan numbers and develop a management plan to guarantee the survival of the endangered species.
 
 Environmental Concerns and Research
 Habitat improvements and biodiversity were discussed during several presentations. Some environmental critics have gone so far as to call for boycotts which the conference's keynote speaker, David Wilcove, professor of ecology at Princeton University, said were unrealistic and impractical. "Conflicts between oil palm expansion and biodiversity conservation will not be solved by each side portraying the other as villains," he said. "Instead, both sides must talk to each other and search for innovative solutions to these issues." He also cited the need for a balance between environmental concerns and development needs. "The oil palm industry contributes substantially to the region's developing economies, and it is important to the welfare of many communities," he said. Wilcove's research has examined the impact of biodiversity on birds, and in turn, the birds' impact on plantations. "Birds do prove a useful pest control service for oil palm agriculture," he said. "In order to maintain healthy populations of these birds, oil palm growers should protect or restore patches of natural forest including riverine buffer zones and marginal habitats within oil palm plantations." He also encouraged producers to continue biodiversity enhancement measures involving leguminous cover crops and plants supporting beneficial insects. However, he added, "small increases [in biodiversity on plantations] are possible, but they're not equal to what is lost by forest conversion." 
 

 Other speakers addressed the most recent issue to emerge surrounding palm oil-the potential for peat soil conversion to release enormous amounts of powerful greenhouse gases (GHGs). Due to increasing population pressure and the need to eradicate rural poverty, peat areas in Malaysia and Indonesia have been logged and cleared over the past 20 years for pulp and oil palm plantations, explained S. Paramananthan, managing director of Param Agricultural Soil Surveys Sdn Bhd. Although some critics claim converted peat lands are becoming a source of GHG emissions, the soils scientist said tropical peats are different from peat soils in temperate climates and may not contribute the same level of GHG emissions when drained. He called for further study and the development of a national peat land policy.
 
 As the oil palm industry has expanded it has been roundly criticized for the loss of habitat for the endangered orangutan. One of its critics, WWF Switzerland, proposed the Roundtable for Sustainable Palm Oil in 2003, an effort the palm oil producers joined in the organizational stage. Darrel Webber, RSPO representative for WWF Malaysia, described the collaboration between WWF and oil palm producers to develop the Kinabatangan Corridor of Life. The Kinabatangan River is arguably Asia's last remaining forested flood plain, he said, and prime habitat for Borneo's orangutan. Much of the rainforest conversion in the flood plain began in the 1980s, with half of the orangutan habitat from that era now in oil palm and much of the remaining habitat consisting of isolated fragments. Current efforts focus on restoring key areas to reconnect native forest fragments and provide corridors for wildlife, mainly along the river. Restoring riparian buffers will have other benefits, Webber said, such as filtering fertilizer runoff and preserving water quality. 
 
 Ann Anton, a professor of phycology at the University of Malaysia Sabah, described research on another river system, the Sugut, which still contains relatively pristine habitats. The study is being conducted to find strategies for species conservation and water quality preservation in the oxbow lakes, which are formed when a meandering loop in the river gets cut off from the main stream, often creating an island. "There is an urgent need to stop the death of the lakes due to eutrophication and aquatic weed infestations," she said. Project participants are also considering the development needed to tap into the area's ecotourism potential.	 
 
 Carbon Footprint and Lifecycle Analysis
 In addition to habitat and environmental impacts, the MPOC conference focused on the carbon footprint and lifecycle analysis of palm oil. "The palm oil industry to make itself heard, credible and authentic has to minimize the risks of being accused of greenwashing," said Chan Kook Weng, senior research fellow at the Malaysian Palm Oil Board. The board is researching local, regional and national levels of carbon accounting to develop a carbon balance budget over the 25-year life span of oil palm plantings. Malaysian analyses of its carbon footprint being developed by companies entering the carbon trading market will have to utilize ISO standards for lifecycle analysis and GHG calculations, some of which are still being developed, he said. 
 
 Minimum GHG reductions for biofuels feedstocks, often of 35 percent or higher, are being established in Europe, said Hans van Zutphen, managing director of the Dutch consultancy Carbon Solutions BV. Current production practices, in his analysis, show Malaysian palm oil, excluding land-use effects, can achieve a 60 percent net carbon dioxide reduction when used as a feedstock for biodiesel. Those figures will have to be proven, he added, since the EU regulations call for using a standard of a 17 percent GHG reduction for palm biodiesel unless otherwise documented. "The EU doesn't explain where its data comes from," he added, as he showed the lifecycle analysis supply model he used in his calculations, which incorporated production, processing and transportation components. All of the major biodiesel feedstocks-soy, rapeseed, sunflower, palm oil-have roughly the same net carbon reductions, van Zutphen said. "The highest net carbon reduction achieved is 67 percent, the lowest 53 percent," he said. Palm has the greatest potential for improving its carbon balance, he added. The main problematical emission source for palm oil is methane released from wastewater holding ponds, while for the other oils the main emission issue comes from fertilizer. "By implementing waste management solutions at palm oil mills, the carbon balance of palm oil can be greatly improved," van Zutphen said. 
 
 He estimates that by capturing the methane or composting the solid and liquid milling wastes for fertilizer the GHG reduction level for palm oil would increase to nearly 90 percent.
 
 Tammy Klein, executive director of the Global Biofuels Center managed by Hart Energy Publishing LLLP, said the biggest change in biodiesel mandates is the move to include GHG reduction goals along with volumetric requirements. Current EU mandates target 5.75 percent biodiesel blends by the end of 2010. The proposed 2008 renewable energy directive is suggesting a mandated 10 percent biofuel target by 2020, including sustainability criteria and a requirement for a minimum 35 percent GHG savings. There will be policy debates to follow since several EU groups are arguing against the 10 percent biofuels mandate, and the proposed sustainability criteria in the EU directive are less stringent than some of the individual state policies. While superior yields will continue to make palm oil price competitive, "the key for palm oil producers will be addressing the sustainability issues strongly and proactively," she said. 
 
 <center><img src="/images/upload/20080617032101.jpg" alt="" /></center>

 This chart shows van Zutphen's carbon balance calculations for different biodiesel 
 feedstocks compared with fossil fuels. The bars show the contribution from the components 
 (cultivation, transport, etc.) which are given in kilograms of carbon dioxide equivalents per ton of biodiesel. He says palm oil's carbon balance would be more favorable if producers reduce their methane emissions from the mill wastewater treatment by capturing the methane or using other recycling options.
 
 SOURCE: VAN ZUTPHEN, CARBON SOLUTIONS
 
 In his closing remarks to the conference MPOC Chief Executive Officer Yusof Basiron said the palm oil industry should not be singled out to meet emerging world market demands for sustainability. "If certification to prove sustainability is required, it should be applied to all oils and fat sources," he said. Expressing frustration for calls to ban palm oil for biodiesel in Oregon and Holland, Basiron said genetically modified soybeans and rapeseed (canola) by definition should not claim to be sustainable. 
 
 Basiron defended Malaysia's performance on environmental issues, pointing out that 60 percent of the country's land is dedicated to permanent forest reserve, with oil palm cultivated on "legitimate agricultural land." Sustainability criteria often focus on zero deforestation requirements, he said, pointing to the Malaysian state of Sarawak where the agricultural-to-forest land ratio is 8 percent agriculture to 76 percent forest. In comparison, the United Kingdom has 70 percent agricultural to 12 percent forest. "Malaysian oil palm is grown on legal agricultural land, which means that it is not the cause of recent deforestation and its cultivation does not destroy wildlife and its habitat," he asserted. "It is illogical for EU experts to assign inferior carbon emission values for palm oil compared with rapeseed or soya which are seasonal crops and have little carbon sink value." 
 
 Basiron cited the following characteristics of oil palm cultivation in Malaysia that make it a sustainable and environmentally responsible oil crop:
 › The life span of a plantation is 25 years, so only 5 percent of the oil palm trees are replanted at a time making oil palm a 95 percent permanent carbon sink. 
 
 › Malaysia doesn't allow burning, which is a highly criticized land-clearing practice still used in some regions. 
 
 › Best management practices that are environmentally friendly are encouraged, including terracing and cover crops to control erosion, using nitrogen-fixing ground covers, biological pest control and recycling biomass as mulch or for energy generation. 

 
 The MPOC is concerned, however, about the ability of the nation's small holders to meet the certification requirements for RSPO, Basiron said. He outlined the organization's efforts to brand Malaysia palm oil, offering buyers a certificate of assurance that the palm oil is derived from legitimate agricultural land. The Malaysian palm brand will also give the organization a means to educate consumers about Malaysia's quest to be a responsible and efficient supplier of quality palm oil, he said. 
 
 While the conference focused on the Malaysian industry, NGO representatives pointedly asked in open microphone sessions whether the Malaysian plantation owners were going to continue their positive management practices in neighboring Indonesia where most of the current expansion of oil palm is occurring. Scattered throughout the presentations in the conferences were references to the dilemma of balancing the development needs of poor countries with the calls to stop further deforestation and habitat loss. The palm oil industry is credited for lifting Malaysia out of poverty. A 50-year-old program reminiscent of the U.S. Homestead Act gave land to small holders if they converted it to agriculture. 
 
 Much of that conversion was done decades ago in Malaysia, and several conference speakers sympathized with the Indonesian small land holders' need for economic opportunity even while being accused of deforestation and habitat destruction.
 
 While the WWF has often been a harsh critic of the industry, the Malaysian representative Webber sounded a positive note in concluding his remarks: "Absolutely, palm oil development can be sustainable. The question is do we want it?" 
 
 Susanne Retka Schill, a Biodiesel Magazine staff writer, was hosted by the Malaysian Palm Oil Council in a tour of the Malaysian industry. Reach her at <a href="mailto:sretkaschill@bbibiofuels.com ">sretkaschill@bbibiofuels.com </a>or (701) 738-4962.

The Malaysian palm oil industry is partnering with the country's stock exchange, government and environmental groups to establish the Malaysian Palm Oil Wildlife Conservation Fund. The industry has taken a beating from critics blaming deforestation a

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Rising palm oil prices in the last few years have stimulated the expansion of the industry in Malaysia and Indonesia, suppliers of over 80 percent of the world's supply.

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Malaysian oil palm growers try to turn the tide of public criticism with a conference devoted to discussing the tropical oil crop's sustainability and carbon footprint.

Palm Oil Fights Back

The act of refueling a vehicle is often considered to be an inconvenience, but for fleets what is a mere inconvenience for the individual is compounded exponentially with lost time and labor productivity, equating to lost revenue for private businesses and municipalities-which means taxpayers may be footing the bill for inefficient fuel management. 
 
 A number of public and private fleets use the card-lock system where drivers go off-site to a fuel pump accessible only by authorized users. Some companies choose fleet cards that are good at certain chains in a given geographic region. Large fleet operators will sometimes store fuel on-site and manage their own purchases and consumption. There are degrees of benefits to each of these fuel management methods but it is possible many of the pros, when confronted with an alternative and more streamlined option, are outweighed by the cons. 
 
 The high fuel prices of today are no joke. Newscasts around the country showcase the public's frustration over new and sometimes exorbitant fuel surcharges from trucking and rail companies; even newfangled flimflam techniques to pilfer free gas from the local station without getting caught are exhibited on the nightly news, warning most how not to become a victim while at the same time teaching others exactly how to do it. At $4 a gallon gasoline, and even higher-priced diesel fuel, is of great concern to those businesses whose largest cost is fuel. Add to this the customers' increasing demand for greener living through reduced consumption and increased alternative fuel use, and fleet operators may want to consider what an on-site fuel management service provider can offer. Ken Fryer, director of clean air solutions with 4Refuel Ltd., explains what his company can offer to clients. "We try to pump up productivity where we save our client money by adding convenience," he says. "So for example, we'll take one of our tanker trucks filled with 10,000 liters (2,640 gallons) of fuel and we'll line up and fill 100 or 200 buses overnight to save them from wasting time." 4Refuel delivers 70 million liters (18.5 million gallons) a month. 

 
 Labor is one of a company's most expensive costs. A delivery driver whose job is to deliver as many packages as possible in a work day loses productivity when 20 minutes of an 8-hour workday, which equates to nearly 5 percent of the shift, is spent refueling. "If a company's drivers went to a card-lock, for example, and sat in a line for 20 minutes and then add in the time it takes going back and forth, that equates to money," Fryer says. "With our on-site system we eliminate that whole component, and we allow our client to use that labor for other things within their business. One of our clients told us, 'When you come and fill me at night, it means my guys don't need to spend 20 minutes filling up with fuel, and that means 20 more minutes worth of deliveries I can make.' It's really all about more efficient fuel use and less overall fuel consumption by becoming more efficient. The clients don't have to drive to and from the card locks and as a result they save many gallons of fuel." 
 
 The marketing angle through which 4Refuel is selling to potential biodiesel users-and clients-is its "mobile infrastructure." In most Canadian markets and smaller American markets there's a lack of infrastructure for efficient biodiesel distribution. "The advantage of our system is a fleet of more than 100 fuel trucks that can deliver custom-blended biodiesel to clients on demand," says Bill Bishop, 4Refuel vice president of marketing. "That allowed us to expand the market by as much and as fast as we wanted to. We are the mobile network. And that sets the bar for everybody." The company's corporate truck fleet runs on B5. Bishop says they also have one unique truck that's custom-designed to run on and carry B100. The truck is equipped with a heated tank to prevent the fuel from gelling. "And we're working on technologies now that will blend and dye fuel at the point of sale," Fryer says. 
 
 The Technology
 The functional heart of 4Refuel's on-site fuel management technology is to track the details of fueling and store them on line so the client can access that information and review all of their fuel purchases and consumption. The information is retained for a four-year period and is available to its clients on demand. "Our systems provide a fleet person or contractor the ability to go in and set parameters-to set their own baseline against themselves," Fryer says. "We help them help themselves by reducing fuel use as well as by managing the asset."
 
 The company's novel information-based system is founded on IBM technology. Here's what IBM's Web site has to say about it: "Working with IBM Business Partner Coastal Range Systems, 4Refuel created an integrated business system which allows customers to examine fuel consumption truck-by-truck, and learn how to improve fuel efficiency, reduce environmental impact and control costs."
 
 Compared with municipal fleets and most private companies, 4Refuel management says their technology runs circles around the competition. "They don't have what we have," Fryer says. "Their technology consists mostly of clipboards and notepads and we just blow them out of the water. Bishop adds, "And don't forget the calculators-they also have calculators." 
 
 Client vehicles and/or equipment are each equipped with identification cards only good for the specific vehicle to which it is designated. "When we go to our client's location, we scan the vehicle and all the information is sent to our truck's computer," Fryer says. "And then all the new filling information is added to the truck computer. Then all that information is uploaded to fuel management online, where the client can view all of its fleet information, whether it's the whole fleet, part of its fleet, or individual vehicles." If a fleet owner needs or desires to use an on-site storage tank, 4Refuel will install a sensor in the tank to alert its deliverers when a fill-up is needed depending upon where the threshold level is set. Also based on the vehicle cycle use, the company will set up a delivery schedule so the vehicles remain full. 
 
 The savings could add up to more than meets the eye. "We've had clients who've notice that one of their trucks was burning twice as much fuel as another truck in the fleet, but we noticed the route wasn't any longer," Fryer says. "It turned out that the engine in the truck consuming more fuel was long overdue for maintenance." Through tight on-site fuel management other clients noticed some of their trucks never needed a refill and months went by before those particular vehicles needed more fuel. "The client said, 'I realized I had two more trucks than I really needed-so I sold them,'" Bishop says. "It gives them valuable business information to use however they wish. We're helping clients save millions of dollars on their fuel bill-simply because we know what we're doing."
 

 There is another component an on-site fuel management service provider can offer-one which is not pleasant to discuss but real nonetheless-and it is one that is all too familiar right now in the transportation fuel industry: theft. "It's really hard to track and put numbers on it but it's significant, much more so than anyone realizes," Bishop says. "The one thing about an on-site solution is you can take out the human component-the theft-which reduces fuel consumption."
 
 But surely these services and technologies don't come for free otherwise companies such as 4Refuel couldn't stay in business. However, if 4Refuel can save clients money and profit from its services, it should be an indicator of how much inefficiency there really is in some fleet operations. 
 
 Environmental Benefits, Expansion
 Having a trained staff to contain spills when they occur-or better yet prevent them altogether-is a service that may be difficult to place a dollar value on. "If we do have a spill, we have spill kits available-containment socks-we look at the drainage, the layout of the land, and contain storm drains if that's an issue," Fryer says. "We have one of the best spill rates-a 0.28 instance for every 10,000 deliveries. And we take responsibility for what we do. If we spill as little as a gallon, it will cost us at a minimum $10,000 to $20,000 to clean it up. That's huge-it's enormous."
 
 While it's difficult to verify, Bishop and Fryer say through their on-site fuel management model, more than 160 million pounds in greenhouse gas reductions have occurred over the past 13 years. "That's mostly fuel that wasn't burned up to go get fuel," Fryer says. "That also includes the fuel we burn to do it. And we'll be adding more to those numbers thanks in part to the biodiesel business we're doing. When biodiesel was put on the table, 4Refuel started delivering blended biodiesel to at least 22 different cities at a time, all with different blend levels. Since then we've expanded into Alberta and into northern British Columbia." And they've gone south as well. The company's presence is not only pervasive across Canada, but it's broken into the U.S. market, with offices in Washington State. "We've opened up a shop in the state of Washington," Fryer tells Biodiesel Magazine. "We have three trucks down there now-the fourth one is on the way." 
 
 The company says it maintains several biodiesel suppliers to avoid pricing pitfalls that arise from reliance on only one dealer. Its executive team readily admits much of the biodiesel it purchases for blending and distribution into Canada comes by way of the United States in the form of B99.9, for obvious tax credit reasons. With offices now in Washington, it would be easy for the company to purchase B100, drop a dash of diesel fuel in the tanker and ship the tax-free fuel north to Canada. As long as this practice continues to be allowed, and as long as the blender's credit remains on the books, 4Refuel will possess great motivation to expand biodiesel use across Canada and the Pacific Northwest. 
 
 Nevertheless, on top of the greenhouse gas emissions averted through the company's on-site fuel management approach, proliferation of biodiesel use will only add to those greenhouse gas reductions. "If you start using say a B20 blend, you'll get about a 15 percent reduction in greenhouse gas emissions," Bishop says.
 
 When companies such as Wal-Mart start marketing themselves as green and eco-sensitive, it's obvious that the need to go green has hit the mainstream. There are unquantifiable benefits to appealing to customers' increasing awareness of climate change. 4Refuel believes its model can and should be replicated en masse. "Particularly we want to grow the business under the franchise model, where individuals have the opportunity to have their own business and make a good living doing the right thing," Fryer says. "We're looking at strategic locations across the United States and Canada, and to actually step up to the plate and be a quality player. Through our franchise expansion we have the capability of bringing on more business and growing the biodiesel market a lot quicker than anyone who's got a fixed infrastructure can. And for the first time franchisees can profit from high fuel prices and take advantage of a clean solution." 
 
 Ron Kotrba is a Biodiesel Magazine senior writer. Reach him at <a href="mailto:rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 738-4962.

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Bishop, 4Refuel vice president of marketing, left, and Fryer, the company's director of clean air solutions

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Rising fuel prices and the need to conserve resources and protect the environment make excellent motivators for fleet operators to reconsider how they refuel.

Micromanaging Fuel Use

Web exclusive posted June 23, 2008 at 2:15 p.m. CST 
 
 A class offered by Ethanol Producers and Consumers, a Montana organization that offers informational resources on biofuels, allowed citizens, consumers and members of the farming community to learn how biodiesel is produced, certified and used. The class, Biodiesel in Montana: Learn the Answers, was held at Montana State University Northern's Applied Technology Center in Havre, Mont., on June 10. 
 
 The class addressed the use of biofuels in business and by the consumer, the availability of biofuel and biodiesel in Montana, auto and implement warranties, renewable fuel standards, and the environmental impact of biodiesel. Attendees had the opportunity to tour MSU-Northern's Biodiesel Certification Lab and learn how products are tested for performance and safety. 
 
 Approximately 30 individuals attended the class, which focused more on the use and availability of biofuels than the science and technology behind its production. A panel of representatives from the local Ford and Chevrolet dealers, as well as the local John Deere implement facility, answered questions and concerns attendees had about biodiesel and if its use could affect warrantees on their vehicles and equipment. The panel also explained the difference between flex-fuel vehicles and hybrids, and offered attendees suggestions on what to research before buying a new car. 
 

 A representative from Montana Sen. Max Baucus' office spoke about the renewable fuel standard (RFS) program and how it will affect the citizens of Montana. 
 
 Brett Earl and Logan Fisher, owners of a local biodiesel production facility, spoke to attendees about their backgrounds in farming, experiences in biodiesel production and their belief that biodiesel can be produced on a community based scale. 
 
 "EPAC is an ethanol organization, but we're all in the renewable fuels business," Earl said. "Because they are a Montana-based group, we've created a relationship with them in promoting biofuels in general. We're all getting hit with the same questions about food or fuel, and all those things affect the whole industry." 
 
 "EPAC's goal is to help inform people so they can make good decisions when they pull up the pump," EPAC spokeswoman Pam Dzick said. "I think that it's important to understand that the group was initiated with an emphasis on ethanol. Now, as biofuels diversify we will be exploring those opportunities as well."
 
 EPAC sponsors similar workshops about four times a year. The next class is tentatively scheduled for October and will focus on the pros and cons of the biofuel industry.

Class offers Montana citizens the opportunity to learn about biofuels

Web exclusive posted June 23, 2008 at 2:27 p.m. CST 
 
 Palmas del Ixcan, a subsidiary of Texas-based Green Earth Fuels LLC, is developing a model project in Guatemala to create environmentally responsible, economically sustainable and socially just palm oil production. 
 
 Officials say the project will provide a much needed influx of income into the region while stemming the negative clear-cutting subsistence farming practices that have already claimed significant portions of primary growth forest. 
 
 On May 21, U.S. Ambassador to Guatemala James Derham and Gregory Bafalis, president and chief executive officer of Green Earth Fuels, sowed the plantation's first palm. "Palm is the most efficient oil-producing crop in the world," said Bafalis. "The economic viability of palm is playing a critical role in placing agriculture in the forefront as one of the largest wealth-generating sectors in Central America."

 
 "The environmentally responsible and sustainable practices being implemented at the Palmas palm plantations are quite remarkable," Ambassador Derham said. "It is impressive that an American company has taken such a strong leadership role in the environmental and economic stability of Guatemala, setting a very high standard for other palm oil producers in the region to follow." 
 
 In an effort to eliminate future destruction of primary forests in the area, Palmas del Ixcan has allocated approximately $3 million to establish a private preserve of primary forestland on its plantations. According to Green Earth Fuels' Executive Vice President Jeff Trucksess, while the total acreage of preserve is not currently available, the company is using satellite images to identify primary forested lands within the plantation. "If its primary rainforest – it stays, and we want documentation to stand by that," Trucksess said.
 
 In addition to providing environmentally sustainable farming practices, the Palmas del Ixcan project is designed to provide sweeping economic benefits to the local economy and social development contributions to the region, bringing in an estimated $11 million during the first year of production. 
 
 The project will provide an estimated 4,000 jobs to the area, the establishment of a savings and loan program for its employees, resettlement packages to squatters, land and materials to build schools, markets and waste water management facilities, services for public roads and fuel for villager's machinery.
 
 "Government sees it as a great economic development arm, a way to bring income generation into the region and address issues with squatters," Trucksess said. "There's been encroachment into national parks and we can help address those things by providing jobs, putting buffer zones around national parks and primary forest, and halting slash and burn subsistence agriculture."
 
 A 9,884 acre (4,000 hectare) Independent Producers Project will provide additional economic and entrepreneurial opportunities in the region. According to Trucksess there has been a lot of focus on doing what is right for the community and finding ways that the business and local residents can work together. The grower's co-op project is an opportunity for members of the local community to become entrepreneurs. Palmas del Ixcan will help individuals become independent producers that can work their own land and sell their products to the company's crushing facility to earn extra income. "It's a way to improve the economics of the local people, and give them the opportunity to work for themselves instead of just working for somebody else," said Trucksess. 
 
 "This Palmas project is just another example of the further advancement of our fully integrated business model," Bafalis said. "We are committed to ensuring global stability by incorporating economically viable, environmentally appropriate, and socially beneficial operations and management procedures into all aspects of our company's holdings."
 
 Palmas del Ixcan will continue to develop additional palm plantations and extraction plants in several Guatemala locations over the next five to ten years. Construction on the first extraction plant is slated for August 2009, with oil production to begin in 2010.

Guatemala palm plantation offers environmental, social, economic benefits

Web exclusive posted June 24, 2008 at 1:13 p.m. CST 

 
 Los Angeles-based biodiesel producer Allegro Biodiesel Corp., formerly Diametrics Medical Inc., has entered into a definitive agreement with Consolidated Energy Holdings LLC, in which CEH will purchase Allegro Biodiesel's wholly owned subsidiary Vanguard Synfuels LLC. The subsidiary holds all of Allegro's biodiesel operations and related assets, including its 15 MMgy biodiesel plant currently operating in Pollock, La. The transaction is subject to the receipt of shareholder consents and other customary conditions.
 
 According to an 8-K filing through the U.S. Securities and Exchange Commission on June 17, the terms of the transaction will enable CEH to assume Vanguard's outstanding $2.9 million in senior secured debt and all existing employment agreements for employees of Allegro and Vanguard. Vanguard comprises substantially all of the operating assets of Allegro. Allegro expects to close the transaction within the next six to eight weeks, the company said in its SEC statement.
 
 Darrell Dubroc and Tim Collins, members of CEH, and also current officers and directors of Allegro, will resign from their positions with Allegro upon closing, and CEH will fund certain transaction expenses and continue to fund Vanguard's operating expenses, which it began doing when Allegro announced its intent to sell its biodiesel plant in May.
 
 According to Allegro Chief Executive Officer Bruce Comer III, the impetus behind Allegro's decision to sell its facility and its biodiesel-related assets was attributed to the high volatility that the biodiesel market has exhibited over the past six to eight months. "If you looked at our financials last quarter, we were in financial distress, and this transaction really cleans up all of our liabilities," Comer said. "We're going to skinny down our corporate staff and expenses to explore other options in the renewable energy industry. We're going to end up with a better financial situation, and we'll be opportunistic once we clean up the balance sheet."
 
 Upon closing of the transaction, Allegro will have eliminated all of its secured debt and most of its outstanding liabilities. Although it will no longer have operations on the closing date related to its biodiesel operations, Allegro will continue as a publicly traded company, and it will have several nonoperating assets, including its remaining cash, a $1 million equity investment in Community Power Corp., a $250,000 note receivable from CPC and Allegro's claims on the remaining assets in the escrow agreement that was established when the company originally acquired Vanguard in September 2006.
 
 Earlier this year, Allegro signed a binding letter of intent to partner with an unnamed investor group for the acquisition, development and operation of a dedicated liquid terminal at the Port of Alexandria in Louisiana. The venture called for 22 acres of adjacent land with existing liquid terminal infrastructure, including 5 million gallons of tank storage and a fuel rack. Earlier this year, the company also announced it would receive and begin processing its first shipment of crude jatropha oil from Global Clean Energy Holdings Inc., a Los Angeles-based biofuel feedstock development company, at its facility in Pollock.
 
 Comer said the liquid terminal partnership didn't fall through due to financial hurdles that impeded progress. As for the jatropha shipment, this may be pursued by Vanguard and its affiliates once Allegro is freed from its liabilities of the plant.
 
 Meanwhile, Allegro will be actively exploring strategic transactions in its effort to develop a new corporate strategy, Comer said. One option it may consider is building upon its biomass gasification assets through its minority stake in CPC. "Given that we have a minority stake in the renewable sector, we're also open-minded to other opportunities, too, and whatever opportunities will be better-suited for our shareholders," Comer said.

Allegro agrees to sell Louisiana plant

Web exclusive posted June 24, 2008 at 1:41 p.m. CST 

 
 The Iowa Renewable Fuels Association and plants in the Ames, Iowa-based Renewable Energy Group Inc. network announced June 13 a $10,000 donation toward the purchase of biodiesel to aid the recovery effort of the town of Parkersburg, Iowa, and the surrounding communities. An F5 tornado ravaged the town Memorial Day weekend, leaving a path of devastation behind. Shortly after, the IRFA and REG fueled a statewide effort to accumulate dollars for donating.
 
 "The idea was to round the price of diesel up to $5 a gallon and ask people if they would like to donate just a gallon," an REG representative told Biodiesel Magazine. "We have been overwhelmed by the participation in this fundraising activity."
 
 KCPS Radio in West Burlington, Iowa, donated $1,000 accumulated from listeners, and although the deadline for helping to purchase biodiesel has passed, persistence to help continues. "My sidekick and I raised the money from our listeners in just one week," said Chip Giannettino, KCPS station owner and morning show host. "In fact, we'll exceed $1,000 as donations are still drifting in." 
 
 Numerous energy companies donated $500, including the IRFA; REG; Western Dubuque Biodiesel in Farley, Iowa; and Central Iowa Energy in Newton, Iowa. GATX Rail and the Iowa Biodiesel Board were also noted donators among dozens of others.
 
 "The team in Parkersburg has expressed that it is very excited to receive the fuel, and it will go to great use," the REG representative said. "Unfortunately, the entire state of Iowa is feeling the impact of severe weather from tornadoes to flooding. As has been said over and over again during this crisis, Iowans are resilient. We offer aid to our neighbors. This is our way to helping our Iowa neighbors to fuel the effort to start to rebuild their community."
 
 The donated biodiesel will be used to fuel equipment required for the cleanup and restoration of Parkersburg. "We felt that donating biodiesel to the recovery effort would be a uniquely Iowa way of lending a hand," said IRFA Executive Director Monte Shaw.
 
 Bob's Farm Center in Conrad, Iowa, and Wellsburg Ag in Wellsburg, Iowa, are partnering to distribute the fuel.

Biodiesel to aid Parkersburg tornado recovery

Web exclusive posted June 30, 2008 at 1:42 p.m. CST 

 
 Midwestern flooding in late May and early June sent the USDA's National Agricultural Statistics Service back to the field to re-interview approximately 1,200 farmers June 23-25 in flood-affected areas. U.S. farmers intend to harvest 96.8 percent of their planted soybean acres - up 17 percent from last year. Without this additional survey data, the June 30 acreage report stated, historical averages would have indicated 98.7 percent of soybean acres to be harvested. U.S. corn farmers reported their intentions to harvest 90.4 percent of their planted acres of corn for grain. This was a change from 92.4 percent as measured during the first two weeks of June, according to NASS. 
 
 The acreage report had been anticipated by the trade to learn just how the final acres would be affected by poor planting weather. After the rains, NASS re-interviewed the farmers and it plans to conduct a more extensive acreage survey during July that will be incorporated in the August crop production report. Planting got off to a slow start across the Corn Belt, Ohio Valley, and the northern half of the Great Plains as frequent precipitation and cool temperatures during March and April prevented spring planting preparations. NASS reports that on May 4, corn planting was 27 percent complete, down 32 points from normal. Rapid progress was made during May, despite intermittent showers and below normal temperatures, so that by the time of the survey interviews, 97 percent of the intended corn acreage had been planted, compared with an average of 98 percent for the past 10 years.
 
 While corn planting had caught up at the time of the survey, soybean planting was still delayed due to the poor spring weather. Farmers reported that 79 percent of the intended soybean acreage had been planted, the lowest since 1996. Soybean planted area for 2008 is estimated at 74.5 million acres, up 17 percent from last year, but 1 percent below the record high acreage in 2006. Area for harvest, at 72.1 million acres, is up 15 percent from 2007. 
 
 Compared with last year, planted acreage increases are expected in all states, and the U.S. planted area for soybeans is the third largest on record. The largest increase is expected in Nebraska, up 950,000 acres from 2007, followed by Illinois and South Dakota, both up 900,000 acres. Increases of at least 800,000 acres are also expected in Indiana, Iowa, and Minnesota. If realized, the planted acreage in Kansas, New York, and Pennsylvania will be the largest on record.
 
 Corn planted area for all purposes is estimated at 87.3 million acres, down 7 percent from last year. Despite the decrease, the corn planted acreage is the second highest since 1946, behind last year's total of 93.6 million acres. Growers expect to harvest 78.9 million acres for grain, down 9 percent from 2007. If realized, this would be the second highest since 1944, behind last year. Farmers increased corn plantings 1.31 million acres from their March intentions.
 
 For the complete acreages report, which includes tables for all the crops and shows plantings in all states, visit 
 <a href="http://usda.mannlib.cornell.edu/usda/current/Acre/Acre-06-30-2008.txt ">http://usda.mannlib.cornell.edu/usda/current/Acre/Acre-06-30-2008.txt</a>. 
 
 In a separate June 30 report, USDA's NASS reported grain stocks in all positions. Soybeans stored in all positions on June 1 were down 38 percent for the previous year's total at 676 million bushels. On-farm stocks totaled 227 million bushels, down 55 percent for a year ago. Off-farm stocks, at 449 million bushels, are down 24 percent from the previous year. Indicated disappearance for the March to May quarter totaled 758 billion bushels, up 9 percent from the same period a year earlier. While 2006-'07 was soybean's turn for record crops, this current marketing year is corn's. Corn stocks in all positions on June 1, 2008, totaled 4.03 billion bushels, up 14 percent from a year earlier.

USDA NASS reports soybean planting up 17 percent

Web exclusive posted June 24, 2008 at 1:47 p.m. CST 

 
 New ASTM standards for biodiesel were approved June 19 at an ASTM International meeting in Vancouver, British Columbia. The changes will take effect within three to five months once the final standards are published.
 
 Three provisions were approved. The conventional petrodiesel specification (ASTM D 975) can now contain up to 5 percent biodiesel. Don Scott, technology and regulatory engineer for the National Biodiesel Board, said the updated standard means No. 2 diesel can now include B5 and still be considered the same fuel without labeling the blend.
 
 The second change added a cold filtration test to the B100 specification (ASTM D 6751). The additional test should assure buyers that the B100 won't contain certain precipitates that can cause filter plugging in cold weather. While there was initial concern about the additional cold filtration test, Scott said, "Everyone's comfortable they can meet the specs, and the biodiesel will be a better product."
 
 The third change created specifications for blends between B6 and B20 for on- and off-road diesel. The new specifications will allow the testing of a biodiesel blend against the ASTM numbers for physical verification of quality, rather than relying solely upon the paperwork, Scott explained. The new ASTM standards will also provide original engine manufacturers (OEM) with specifications for engine testing, possibly resulting in OEM approval of higher blends. Nearly all major automakers in the United States currently accept the use of at least B5, while Cummins, New Holland and Caterpillar are already accepting B20 or higher, according to the NBB. Several more companies are expected to raise their acceptance to B20 with the approval of the new standards.
 
 "It is quite remarkable that the big oil companies and engine makers on the committee have now joined forces with the biodiesel industry to help approve these standards," said Steve Howell, chairman of the ASTM Biodiesel Task Force. Howell was presented with an award of appreciation from ASTM for his dedication in leading the effort at the Vancouver meeting.
 
 More than five years of research and consultation with the ASTM fuel experts went into the new standards. "We addressed the issues and concerns with solid, scientific research," said Joe Jobe, chief executive officer of the NBB. "Without the tremendous amount of scientific data provided by independent organizations like Southwest Research Institute, the National Renewable Energy Laboratory, the Coordinating Research Council and others, and the cooperation of the petroleum and engine communities, this would not have been possible."

ASTM approves new biodiesel blend standards

Web exclusive posted June 24, 2008 at 1:50 p.m. CST 
 
 On June 13, the European Union launched antisubsidy and antidumping investigations on U.S. biodiesel imports after a European Commission examination of complaints filed April 29 by the European Biodiesel Board found sufficient evidence of the U.S. biodiesel sector garnering subsidies and dumping biodiesel in the European market. The complaints stated that these factors have adversely affected the European biodiesel industry. The commission's investigation will determine if placing tariffs on biodiesel imports is justified under EU trade rules. 
 

 A press release issued by the EBB on April 25 details these complaints, explaining that U.S. biodiesel producers claiming maximum U.S. subsidies for B99 can then export the fuel to Europe, where it may also be eligible for European subsidies. The EBB claims that since 2007, the result of these measures has been a dramatic surge in U.S. biodiesel exports to the EU, severely injuring the European biodiesel industry by disrupting the margins of European producers and putting most of them out of business. Consequently, EU biodiesel production capacity remained largely unutilized in 2007 and increased at a much lower rate than in previous years. An EBB press release from Oct. 16 stated that B99 blends were being sold in the European market at a substantial discount-in some cases at prices lower than that of feedstocks purchased by the EU industry. The EBB claims that subsidized B99 exports are a trade practice that breaches World Trade Organization rules and threatens the concept of international trade in biodiesel, undermining the potential of biodiesel to fight climate change. "We have always said that the EU will not tolerate unfair trade practices and will pursue vigorously any well-founded complaint," said Peter Power, EU spokesman for trade. "The commission will leave no stone unturned in these investigations and will act in accordance with the findings."
 
 The commission's examination of the complaints found that the initiation of further proceedings is warranted. The complaints provided sufficient evidence of subsidies to the biodiesel sector in the United States, including federal excise and income tax credits, a federal grant program to finance increased production capacity, and various state subsidy programs. In regard to the antidumping complaint, the complainant provided sufficient evidence of biodiesel dumping on the EU market. 
 
 In response to the commission's decision to initiate these investigations, National Biodiesel Board Vice President Manning Faraci issued a statement calling the EBB's claims baseless. "The European biodiesel industry is not being harmed by U.S. competition," Faraci said. "High feedstock costs, changes to EU member policies and, in some cases,¬¬¬ poor business practices are the true issues facing European biodiesel producers. It is unfortunate that the European Biodiesel Board has found it politically expedient to blame the U.S. biodiesel industry instead of focusing its efforts on the true challenges facing its membership. The allegations made by the EBB are unfounded, and the NBB will not only vigorously defend the interests of the U.S. biodiesel industry, but will employ every tool available to challenge existing EU trade barriers that provide preferential treatment to European biodiesel producers."
 
 The commission will make its provisional findings by March 13 and present the findings to EU member states. If measures are considered justified, they would be in the form of specific duties imposed on biodiesel, called "countervailing duties" in the case of subsidies, and "antidumping duties" in the case of biodiesel dumping. 
 
 Notices in the June 13 issue of the Official Journal of the European Union describe the procedures that will be taken for each of the investigations. A review of these announcements suggests that samples of U.S. exporters and producers, EU importers and European producers will be used to gather information used in the investigation. The commission is requesting company contact information, the turnover in local currency, and the sales volume of biodiesel bought or sold in both the U.S. and EU markets, as well as various other pieces of relevant company information. 
 
 Imports of biodiesel into the EU market come mainly from the United States, with imports from other countries accounting for a minor share of the market. Imports of biodiesel from the United States have increased from an estimated 7,000 metric tons in 2005 to approximately 1 million metric tons in 2007, according to the EU.

EU launches investigation of U.S. biodiesel industry

Web exclusive posted June 24, 2008 at 2:07 p.m. CST 
 
 Pacific Biodiesel Technologies Inc. has opened a new quality assurance laboratory in Salem, Ore. State-of-the-art equipment will allow "PB Tech" to provide ASTM D 6751 certificates of analysis and support a number of additional tests to evaluate biodiesel quality. 

 
 The PB Tech analytical team has training and experience on all instrumentation and methods to ensure samples are handled and tested correctly. The company's experience with biodiesel production ensures the ability to deliver explanations along with numerical results. "If fuel samples happen to be out of specification, we have the knowledge and experience to help assess and deal with the issues in the production stream," said Lee Litvin, PB Tech quality manager.
 
 Test panels may be customized to the specifications of the customer. Service can be provided for one test, the BQ-9000 Critical Specification tests or the full ASTM D 6751 suite of tests. "If biodiesel is to succeed as an alternative fuel, it is imperative that all biodiesel producers adhere to high standards of consistent quality," said Bob King, president of Pacific Biodiesel Inc. "We have succeeded in the industry because of our reputation for sustainability and quality, and now it is time to help others achieve excellence, as well."
 
 A pioneer in the biodiesel industry for more than a decade, Pacific Biodiesel Inc. produces and sells quality fuels, and designs, builds and supports biodiesel plants across the nation. PB Tech will provide engineering, equipment, contracting and laboratory services to biodiesel producers.

Pacific Biodiesel opens quality assurance lab

Web exclusive posted June 24, 2008 at 2:12 p.m. CST 
 
 Dynamic Fuels LLC received final approval from the Louisiana State Bond Commission for $100 million in tax-exempt Gulf Opportunity Bonds to fund the building of a renewable diesel plant in Geismar, La. Dynamic Fuels is a joint venture formed between Tyson Foods Inc. and Syntroleum Corp. to convert low-grade inedible fats and greases into renewable synthetic diesel, jet and military fuel. 
 
 Jeff Bigger, senior vice president of business development for Syntroleum, thanked the bond commission for approving the maximum-allowable bond allocation. "Their timely action enables us to maintain our project schedule, creating new domestic fuel production capacity, high-quality operations and technical jobs, with initial production planned for early 2010," he said.
 
 Dynamic Fuels will build a $150 million, 75 MMgy facility at a site in Geismer near two sources of hydrogen, a key ingredient in the production process. Syntroleum is providing its Bio-Synfining technology for the project. The process utilizes fats in the final reforming step of the company's Fischer-Tropsch technology to produce renewable diesel. The company's long-range plans include adding Syntroleum's Fischer-Tropsch technology to the front end of the production process in order to convert biomass into renewable synthetic fuels.

Syntroleum, Tyson partnership receives $100 million

Web exclusive posted June 24, 2008 at 2:59 p.m. CST 
 

 The U.S. Energy Information Administration is proposing a mandatory biodiesel survey in response to the Energy Policy Act of 2005, which directed the administration to collect information on biofuels. The survey would collect data on biodiesel and coproduct production, sales and tax credits, and feedstocks. "The survey is given to all registered biodiesel producers," said Marie LaRiviere, Energy Information Administration spokeswoman.
 
 The survey would be the first of its kind, although similar information has been gathered by the EIA in the past. "EIA has, in the past, estimated some of the data we will be collecting based on, among other things, program reports collected by the [USDA] Commodity Credit Corporation," LaRiviere said, who added that the CCC program ended in 2005. "This survey will provide a more complete statistical picture of the biodiesel industry and provide it on a regular monthly basis."
 
 A one-time supplement that would collect historical data is also proposed. 
 
 For information on the survey, visit 
 <a href="http://www.eia.doe.gov/cneaf/solar.renewables/page/fed_register/biodiesel_notice.html">www.eia.doe.gov/cneaf/solar.renewables/page/fed_register/biodiesel_notice.html</a>.

EIA proposes mandatory biodiesel survey

Web exclusive posted June 24, 2008 at 3:20 p.m. CST 
 
 Alameda, Calif.-based Aurora Biofuels secured $20 million through a second round of funding led by existing investor Oak Investment Partners. Previous Series A investors Gabriel Venture Partners and Noventi also participated in the round.
 
 Aurora Biofuels intends to use the funds to expand its field of operations in open-pond algae aquaculture technology, and to increase its effort in optimizing the production cycle of growing, harvesting and extracting microalgae for biodiesel production. "We are ahead of our company growth and development plans, and the new funds will allow us to accelerate our efforts in the field even further," said Matt Caspari, founder and chief executive officer of Aurora Biofuels. "Obviously, there is a great need today to decrease dependence on foreign oil. We believe that algae are one exciting alternative to traditional agricultural sources of biofuels, and we are committed to bringing algae-derived biofuels to fruition."
 
 Founded in 2006, Aurora Biofuels was formed to develop the lowest-cost solution for growing algae, and producing bio-oil and other biofuels. The company's immediate endeavors involve exploring different strains of algae for optimum yields, improving harvest methods and increasing management practices of algal farms. 

 
 As for its long-term objectives, Aurora intends to use the funds to optimize the aforementioned tasks through the research and development of algae for bio-oil and biodiesel production. "[The funds] will essentially prove out what we're doing at a larger scale," said Jim Long of Gabriel Venture Partners. "It's exciting for us, and we have great hope for algae in the future."
 
 For more information on Aurora Biofuels, visit <a href="http://www.aurorabiofuels.com/home.htm">www.aurorabiofuels.com/home.htm</a>.

Aurora Biofuels closes finance round

Web exclusive posted June 24, 2008 at 3:23 p.m. CST 
 
 Region 4 of the U.S. EPA has awarded $200,000 to Mississippi State University for research to transform wastewater treatment plant sludge into biodiesel. Presented by EPA Regional Administrator Jimmy Palmer, the funds from the grant are intended to build upon the research that MSU is conducting in the field of renewable and sustainable fuels for the future. 
 
 "The research and development of sustainable energy technologies can translate into both economic and environmental success," said Palmer, who is also the former head of the MSU Department of Environmental Quality and an MSU alumnus. With the EPA, he oversees the agency's programs in Region 4, which consists of Georgia, Kentucky, Tennessee, North Carolina, South Carolina, Alabama, Mississippi and Florida. "EPA is committed to promoting the development of clean, sustainable and affordable energy sources," he said.
 
 The research team, led by Rafael Hernandez and Todd French, intends to increase the amount of oil that could be generated from wastewater treatment facilities by identifying microorganisms that can extract lipids-the fatty substances found in sludge-and use the fats found in the sludge as a viable feedstock for producing high-quality biodiesel. 
 
 To accomplish this, Hernandez and French said they will approach the project in two ways: First, they will attempt to identify microorganisms that are already in wastewater and engorge them with complex sugars so they become fatter and robust, which will render an improved throughput of biodiesel. The second option will be to identify all the microorganisms and inject into the wastewater sludge some types of microorganisms, such as Oleatinous, which can accumulate more than 20 percent of their body weight in fat. This would also make the microorganisms more robust with more fat content.
 

 Hernandez and French discovered the value of the microorganisms in wastewater treatment facility sludge during their research as part of a grant awarded to their department from the U.S. DOE in July 2007. They discovered that wastewater is treated by microorganisms and that a fraction of these microorganisms are wasted every day. These wasted microorganisms accumulate in the sludge at a wastewater treatment facility, according to Hernandez. "What we want to do now is to increase the amount of oil that these microorganisms can produce," said Hernandez, an MSU assistant chemical engineer and coleader on the project. "We want to basically take a wastewater treatment facility and, in addition to treating water to EPA standards, also produce an oil that can be converted into biodiesel. So, we are adding one more goal to a wastewater treatment facility and transforming the wastewater treatment facility into a center of oil production in addition to water treatment."
 
 However, attempting to implement such a process into an existing wastewater treatment facility would translate into modifications to wastewater treatment operations, which present challenges, Hernandez said. "Some of the changes that we're proposing to the wastewater treatment facility are going to be very hard to implement if we don't have data demonstrating that we're still compliant with EPA standards for water quality," he said. He also noted that the research team will be mindful of the ASTM quality standards put on biodiesel. "We need to continue doing research and demonstrating that we can meet those standards, accumulate more oil, extract that oil and produce quality biodiesel," he said. 
 
 French added that not only can the addition of different types of microorganisms augment the fat content of the existing microorganisms found in wastewater treatment sludge, but glycerin can act as a catalyst for propagating oil, as well. "One of the other [advantages] is that these microorganisms can actually eat that glycerin and turn that back into more oil," said French, who is an MSU assistant microbiologist and coleader with Hernandez on the project.
 
 The research team will also evaluate life cycle energy costs to determine the process' net energy and environmental effectiveness. During the research, the generated oil wouldn't compete with sources of oil that are food-related.
 
 French and Hernandez have yet to fully assess economic and logistic elements of the project in order to determine whether to colocate an oil-processing facility adjacent to a wastewater treatment plant, or an oil-processing plant within a feasible distance from a wastewater treatment plant. Either way, both researchers have these crucial factors in mind for further analysis. "Depending on the city, the size of the wastewater treatment facility and the wastewater treatment facilities around the area, all these sludges could be transported to a central location to be extracted and produce biodiesel there," Hernandez said. 
 
 Currently, the grant is funding bench-scale research, which is anticipated to transition into a pilot-scale facility within 18 months to further demonstrate the feasibility of the process. If the researchers demonstrate that the technology works, it could be applied at a national level. According to Hernandez, the national wastewater treatment facility infrastructure could produce between 5 billion to 7 billion gallons of oil that could potentially be used for biodiesel production. This would be a significant boon for current biodiesel producers who are paying a hefty price for feedstocks such as soy oil, for which have soared to unprecedented highs within the past year. "Right now, we're continuing to demonstrate using the EPA funds and the DOE funds so that we can accumulate more oil using wastewater and integrating lignocellulosic sugars into the system," he said. "This would help the biodiesel industry significantly because there is a tight supply of vegetable oils right now for biodiesel production."
 
 The research is being conducted as part of EPA Office of Research and Development's Regionally Applied Research Effort. In addition to the development of a new feedstock for biodiesel production, the research aims to reduce the volume of sludge that has to be disposed of, which would reduce the amount of pollution from runoff.
 
 French said the project will likely hold proprietary rights to the researchers' novel process, or they may file for a patent once the technology is proven on a commercial scale. "We haven't decided yet," he said. "[The project] shows promise, and we're pretty excited."

Mississippi State University assistant professors of chemical engineering Rafael Hernandez, left, and Todd French work in their renewable fuels and chemicals lab analyzing chemicals and sewage to produce materials to make biodiesel./PHOTO: KRISTEN HI

1205-1294330152.jpg

Rafael Hernandez and Todd French, both assistant professors of chemical engineering at Mississippi State University, stand near a wastewater treatment plant in Starkville, Miss. They recently received a $200,000 grant from the U.S. EPA to advance the

1206-1294330154.jpg

MSU receives EPA funding for biodiesel research

Web exclusive posted June 24, 2008 at 3:46 p.m. CST 

 
 German biodiesel producer Petrotec AG has announced the start of production at its facility in Emden, Germany. The 30 MMgy plant, located in Emden's seaport, is accompanied by a refinery, storage tanks, a laboratory, and a load/unload unit for both inland and oceangoing vessels.
 
 The location of Petrotec's facility allows the company some logistical and economic benefits. It's linked directly by pipeline to a loading bridge on the pier, allowing easy transport of product to both oceangoing and inland vessels. Exports can easily be made to Great Britain, Belgium, the Netherlands, Luxembourg and Scandinavia. Also, used cooking oil from international markets can be unloaded at the site and processed directly into biodiesel.
 
 Petrotec currently operates a biodiesel production facility in Borken, Germany. Together, the two facilities bring Petrotec's annual production capacity to approximately 55 million gallons. The company has been producing biodiesel since 2000 and takes pride in the fact that it has always focused on used cooking oils as its primary feedstock. Petrotec Chief Executive Officer Roger Böing said that biodiesel produced from waste products such as used cooking oil is the most environmentally friendly fuel available. "According to the European Commission, our biodiesel cuts [carbon dioxide] emissions by 77 percent," he said. "In view of the finite supplies of fossil fuels and rapidly increasing fuel prices, sustainably produced biodiesel is a real alternative. Biodiesel made in Emden will make a valuable contribution to this."
 
 Böing also expressed his dissatisfaction with the German government's decision to not subsidize the production of biofuels from waste products. "The government talks about increasing food prices and talks a lot about relieving the burden on consumers, but only subsidizes biofuels that are produced using agricultural raw materials [that] consequently compete with food production," he said.

Petrotec begins production at second facility

Web exclusive posted July 1, 2008 at 11:26 a.m. CST 
 
 On June 26, the Canadian Senate passed Bill C-33, which will require the use of 5 percent renewable content in gasoline by 2010 and 2 percent renewable content in diesel fuel by no later than 2012.
 
 Canada's House of Commons passed the bill in late May. After the Senate passed the bill, Canada's Government General Michaëlle Jean signed it, making it official.
 
 "This is huge in terms of giving the federal government the authority to regulate fuel blending on a national basis," said Gord Quaiattini, president of the Canadian Renewable Fuels Association. "In the past, it's been up to each province, particularly in regard to biofuels. This legislation builds on the leadership that those provinces had, giving the federal government the capacity to move forward on these current targets and go beyond that." Ontario, Manitoba and Saskatchewan have currently enacted RFS mandates, and British Columbia and Quebec will continue to move forward with similar mandates.
 

 The CRFA said it expects the creation of 20 new biofuels facilities to meet this requirement. "We have some plants that are already built, some under construction and some that were at various levels of planning, financing and development," Quaiattini said. "This [legislation] provides market certainty."
 
 Suncor Energy didn't anticipate the passage of Bill C-33, but it certainly came at an opportune time. On June 12, it announced plans to proceed with a CAN$120 million expansion of its St. Clair Ethanol Plant in Sarnia, Ontario. The plant currently produces 200 MMly (53 MMgy) and will double its production to 400 MMly (106 MMgy). According to Suncor spokesman Jason Vaillant, the expansion was planned as soon as the facility began initial production in 2006. "We didn't have the crystal ball to see this was going to happen, but we're certainly glad it did," he said. 
 
 There is also the environmental benefit that will result from this legislation. According to Natural Resources Canada's GHGenius life cycle model, the RFS outlined in Bill C-33 will result in a 4.2 megatonne (4 million tons) reduction in greenhouse gas emissions annually, which is the equivalent of removing more than 1 million cars from Canadian roads ever year.
 
 Not only would Canadian producers be able to meet domestic demand, but Quaiattini pointed out that they could also look south to help meet the RFS enacted in the United States. "It also provides opportunities for the United States to provide for Canada," he said. "The bottom line is, it helps to grow the North American market."

Canada passes renewable fuels standard

Web exclusive posted July 1, 2008 at 1:37 p.m. CST 
 
 Regina, Saskatchewan-based Canadian Green Fuels Inc. made three announcements June 19 on the development of its new McLean, Saskatchewan biodiesel plant. Dynamo Electric and Mechanical has been appointed as project development partner and project lead, P3 Architecture Inc. will provide key advisory services and lead the environmental assessment component of the project, and Greenline Industries LLC will provide the majority of the infrastructure technology for the biodiesel processing systems. 
 
 "This project is moving at an incredible pace and it was time to announce the achievement of some of our milestones that are critical to the plant's success," said Michael Shenher, chief executive officer of CGF. 
 
 Ground should be broken for the new 50 MMgy biodiesel facility this summer, and it will take approximately ten months to complete construction on the plant which will also produce bio-oil and bio-additives. The facility, which should be fully operational by June 2009, will have the capacity to crush 1,200 metric tons per day of any oil seed, including canola, corn and soybean. The plant will be powered by the energy it generates, and waste products resulting from the crushing process will be sold as byproducts. The facility is expected to produce approximately 50 million gallons of biodiesel annually. 
 
 During the next 90 days, CGF and Greenline Industries will review the engineering drawings and enter into a purchase and delivery agreement. 

 
 Greenline Industries is a worldwide manufacturer of top rated waterless biodiesel production equipment for the transesterification of biodiesel from seed oils. "This company represents the philosophy of CGF and its intent to minimize the environmental footprint, build a green plant and reduce the requirement of precious resources like water" said Troy Metz, CGF's chief development officer.
 
 "CGF is committed to developing a leading edge "green plant" that will be the model of future energy and fuel development," Metz said. " Its what makes us unique, its what differentiates us from most of our competitors who place an enormous burden on the environment, and its what makes us the business of choice in North America and internationally." 
 
 "It is our intention to keep this project on target and on track for operations in 2009 and we are selecting our partners, developers and service and equipment providers on the basis of quality, cost, environmental impact, and timeliness first and foremost," Shenher said. "We hope to provide the community of McLean and the people of Saskatchewan a rendering of the project in the next while that will have every community wanting one of our facilities."

CGF to break ground on Saskatchewan plant

Web exclusive posted July 1, 2008 at 1:42 p.m. CST 
 
 Richard "Hardy" Sawall, senior vice president of Midwest operations for Innovation Fuels, has been appointed to the board of the Wisconsin Biodiesel Association. WBA is a membership trade organization promoting the commercial development, production, marketing, distribution, and utilization of biodiesel and other renewable biofuels.
 
 "It's an honor to welcome Hardy to the board," said Tony Hartmann, president of WBA. "We know that with his track record in our region, he will help us accomplish a great many things in the emerging biofuels industry."
 
 The WBA supports renewable biofuels as an effective means of promoting the United States' energy independence and domestic economy, as well as improving air quality and reducing the impact on climate change. WBA membership is open to all individuals and entities that support renewable biofuels. For more information, visit <a href="http://www.wibiodiesel.org">www.wibiodiesel.org</a>.

Sawall joins Wisconsin Biodiesel Association board

Web exclusive posted July 1, 2008 at 1:50 p.m. CST 
 

 International Fuel Technology Inc. has developed an additive which improves the oxidative stability of biodiesel. The St. Louis-based company recently announced the results of tests conducted by the Bio-Energy Innovation and Testing Center at Montana State University-Northern. 
 
 In the test project, International Fuel Technology's DieseLIFT BD-3 additive was blended with biodiesel fuel samples produced from various feedstocks, including camelina, soybean and a camelina-coconut blend. None of the untreated biodiesel samples were able to meet the European specification for EN 14112 oxidative stability. Treatment with BD-3 improved the oxidative stability index by two to 10 times, according to the Montana State University study. 
 
 Researchers and industry experts in Montana have a particular interest in camelina which is being developed in the state as a promising alternative crop. However, biodiesel made from camelina shows a low oxidative stability rating – lower than sunflower and soybean biodiesel which are also on the low end of the oxidative stability index. Improving the oxidative stability increases the shelf life of the product. 
 
 Testing results from the Montana State University-Northern study and a European laboratory are detailed in a company bulletin available on International Fuel Technology's Web site: <a href="http://internationalfuel.com/pdfs/BD3-BULLETIN-JUN-08-1.pdf">http://internationalfuel.com/pdfs/BD3-BULLETIN-JUN-08-1.pdf</a>.

Biodiesel additive extends storage stability

Web exclusive posted July 1, 2008 at 1:52 p.m. CST 
 
 Two biodiesel terminals and three retail stations received Iowa Renewable Fuel Infrastructure Program grants that cover up to 70 percent of total expenses, or a maximum of $40,000, for biodiesel dispensers or blender pumps and E85 dispensers or blender pumps. 
 
 After a retailer installs their first biodiesel or E85 pump, they are eligible for an additional multi-site bonus grant of $6,000 per location to add infrastructure to additional sites within a 12-month period up. The maximum additional grant amount is $24,000. 
 
 The Iowa Renewable Fuels Association announced the latest round of grants which included two biodiesel terminals: Northwest Ethanol Supply at Orange City and Five Star Coop at Mason City. Three biodiesel retailers also received infrastructure grants: Oak Street Station LLC, Inwood; Galva Holstein Ag LLC, Holstein; and Love's Travel Stops & Country Stores, Newton. 

 
 Infrastructure grants were also awarded to retail outlets for four ethanol blender pumps and four E85 pump installations. They were the first blender pumps to receive grants in Iowa.
 
 Changes made to the grant limits this year have sparked increased interest in the program, IRFA managing director Lucy Norton said. "Coupled with the availability of blender pumps, we expect to see more applicants moving forward."
 
 Formed in 2002, the Iowa Renewable Fuels Association represents the state's ethanol and biodiesel producers, as well as fostering the development and growth of the state's renewable fuels industry through education, promotion, legislation and infrastructure development.

Iowa biodiesel outlets receive grants

Web exclusive posted July 1, 2008 at 3:14 p.m. CST 
 
 The Illinois Value Added Sustainable Development Center has developed a sophisticated program to prospect locations for new ethanol and biodiesel plants, as well as locate existing facilities and other resources. The project was funded with an Illinois Department of Commerce and Economic Opportunity grant.
 
 The interactive GIS program is a mapping tool designed to help select the best and appropriate locations for new ethanol and biodiesel plants in Illinois – allowing the user a detailed view of over 182 different "layers" such as rivers, roads, population, railroads, etc. Jeffrey Nemeth, a research associate at the Illinois Institute for Rural Affairs, compares the tool to placing laminates on an overhead projector. "The layers really make it a great tool," Nemeth said. "Let's say you are developing an ethanol plant and you want to know how you are going to transport your product. A layer you could create is all available roads – interstates, highways and secondary roads. Next, you can view a railroad layer over that. You are able to see exactly where that rail goes – and the really nice thing is that you can click on that rail and it will tell you who owns or leases it." The application also allows a user to trace along the road or railroad to determine distances between locations. Structures such as natural gas pipelines can be located, down do the diameter of the pipe and the owner. "The tool caters to whatever criteria a developer is looking for," Nemeth said. "It is rather impressive."
 	
 The tool also allows for an aerial view of topographic structures. "You are actually able to see what kind of cars are sitting in the parking lot," Nemeth said, adding that although the tool does not replace doing a complete feasibility study, it can greatly assist communities, organizations and individuals in performing a "snapshot" feasibility study, giving them an accurate determination of whether a proposed plant site is appropriate. "When ethanol was booming a year and a half ago, many permits were being cited without researching if the proposed plant locations were really feasible," he said. "We have developed this tool to be of great assistance in such instances."
 
 A demo of the tool was released in October 2006, the final version was completed last fall. "A lot of people don't know about this tool yet," Nemeth admits. "But it is free, and extremely helpful."
 

 The Illinois GIS Site Selection Tool can be viewed at <a href="http://www.value-added.org">www.value-added.org</a>.

GIS tool available for potential Illinois plants

Web exclusive posted July 3, 2008 at 12:01 p.m. CST 
 
 Calgary, Alberta-based CR Fuels Inc. has announced it has obtained all of the key permits to proceed with the planned development of an integrated biofuels complex in Strathmore, Alberta.
 
 The project has met the guidelines set forth in the Provincial Environmental Protection and Enhancement Act and is approved by the Alberta Energy Resources Conservation Board. It has received its Alberta Environment Water Division license, Municipal Development Permit, and an Alberta Infrastructure and Transportation Road Side Development Permit.
 
 "Construction is scheduled to commence March 1, 2009," said Terry Allen, president of CR Fuels. "The project is scheduled to be fully operational and through the commissioning process by October 1, 2010."
 
 The project in Strathmore will include a 30 MMgy biodiesel plant and a 25 MMgy ethanol plant, CR Fuels said in a media release. The facility will capture approximately 40,000 tons of carbon dioxide annually. 
 
 Gordon Hart, president and chief executive officer of CR Fuels said the company is pleased with these developments. "With all key permits in place and a sufficient supply of water, this is an exciting time for the company," he said. "Now that we are past this milestone we are looking to the next phase of engineering and to beginning construction in the first quarter of 2009."
 
 Allen said investors are interested in well-structured renewable projects. He said several elements with the Strathmore project will make it a low cost producer with higher earnings, making it significantly less volatile than the majority of biofuels projects in North America. The project will sell wet distillers grains creating energy savings," Allen said. "[It will] capture and sequester CO2 for additional revenue and create carbon credits." 

 
 "Looking at the bigger picture, we expect that the Alberta government will announce provincial requirements for the use of renewable fuels that will be similar to the Canadian federal mandate," he said. "Federal legislation passed the House of Commons on May 28 and we believe the provincial renewable fuels mandate will be announced during this summer. This will create a consistent demand for CR Fuels' production. These key project attributes have proven appealing to investors in the renewable space."
 
 The Strathmore project is expected to provide more than 70 permanent jobs when it's operational and will divert raw materials that will be exported towards value-added production, adding to province's overall economic activity," CR Fuels said.

CR Fuels secures permits for Alberta biofuels project

Web exclusive posted July 1, 2008 at 3:16 p.m. CST 
 
 Seattle, Wash.-based Propel officially launched its sixth Clean Fuel Point in Seattle on June 28. The 24-hour station offers B20 and B5 biodiesel fuel. A leading retailer of renewable fuels, Propel's Clean Fuel Point stand-alone stations use environmentally-friendly standards for design, construction and operation.
 
 Construction on the fueling point began in April and took approximately 8 weeks to complete. "The station was designed to be environmentally sensitive," said John William, a spokesman for Scoville Public Relations which represents Propel. "Clean Fuel Points are small footprint, flexibly designed micro-stations that can be located at existing gas stations and new areas where it's convenient to fill. They allow us to add alternative fuels to the existing fueling infrastructure, at a low cost."
 
 The Clean Fuel Point features a modern sleek look and is designed to incorporate sustainable best practices to minimize its impact on its surroundings. 
 The design of the station implements the following: 
 	<ul><li>A canopy designed to conserve water and reduce storm run-off. </li>
 	<li>An ability to collect rainwater in a cistern neatly integrated into the canopy's western column. </li>

 	<li>A construction composed of nearly all recycled material.</li>
 	<li>A system that stores water and irrigates the landscape as needed; reducing dependence on the city's water supply.</li>
 	<li>An LED light system with photo-cells that provide illumination only as needed. </li></ul>
 
 A cosmetic feature that compliments the fuel point is plant boxes, constructed out of recycled material, which grows feedstock crops such as canola, camelina, soy, and sunflower. The plants are symbolic and represent the type of plants used to create the fuel at the Clean Fuel Point.
 
 Rob Elam, founder and chief executive officer of Propel, said the alternatives offered by Clean Fuel Points are good for the whole country, which is suffering. "It's never been more clear that we are being held hostage by our traditional reliance on cheap petroleum," Elam said. "Record high prices are crippling our economy while carbon emissions are threatening our environment." 
 
 According to Elam, Propel's Clean Fuel Points are good news because they represent an economic and sustainable alternative to petroleum fuels. "Propel offers customers something they've never had -- true choice at the pump. And with choice comes power," he added.
 Ada Healey, vice president of real estate for Vulcan Inc., owns the site and said Propel has shown it's possible to raise the bar on environmentally sustainability. 
 

 "We get a lot of positive feedback for being convenient," Williams said. "Our customers, especially business customers, also like the CleanDrive functionality that allows them to track their carbon dioxide reductions and barrels of petroleum displaced, based on their fuel purchases. It helps them quantify the impact of their choice to use clean fuels, real time."
 
 Propel plans to open more fuel points in the future along the West Coast, Williams said.

Propel opens Seattle Clean Fuel Point station

Web exclusive posted July 1, 2008 at 3:19 p.m. CST 
 
 <a href="http://www.novabiosource.com">Nova Biosource Fuels Inc.</a> has commissioned the final 20 MMgy train at its flagship biodiesel production facility in Seneca, Ill. The 60 MMgy plant consists of three sets of machinery, each capable of producing 20 MMgy. 
 
 The plant's first train, which was commissioned earlier this year, had produced 1 million gallons of biodiesel by April 1. According to Nova Biosource Fuels, the facility has now produced 5 million gallons of ASTM D6751 quality biodiesel. 
 
 "Each train has exceeded our performance objectives for yield, throughput and quality, and two are now running at near nameplate capacity," said Ken Hern, chairman and chief executive officer at Nova Biosource Fuels. Hern added that there is currently one idle train at the facility, but Nova Biosource Fuels expects it to begin producing again sometime in July after maintenance has been completed and feedstock has been obtained. Once that is accomplished, Hern said his team is prepared to "bring up all three trains simultaneously in preparation for the test run."
 
 In the July issue of Biodiesel Magazine, Hern said his company is unique in that it uses feedstocks containing high percentages of free fatty acids. Nova Biosource Fuels is capable of using multiple feedstocks – from corn oil to poultry fat – without having to mix them with virgin soy oil, he said. The result is a high-performance, crystal-clear biodiesel that Hern claims can run better in motors than conventional diesel. The Biodiesel Magazine article can be viewed in its entirety at <a href="http://biodieselmagazine.com/article.jsp?article_id=2473&article_title=Do+Oil+and+Biodiesel+Mix%3F">http://biodieselmagazine.com/article.jsp?article_id=2473&article_title=Do+Oil+and+Biodiesel+Mix%3F</a>.

 
 The Seneca facility is the first plant to be built and operated by Nova Biosource Fuels. The company has built several biodiesel facilities, including a biodiesel refinery for Scott Petroleum Corp. in Greenville, Miss. That facility was shut down earlier this year after a mechanical pump failure resulted in damage to the refinery. Repairs to the machinery were completed on schedule in mid-June and the facility restarted its biodiesel production on June 19. "We look forward to ramping up operations at the refinery so that we can begin taking our share of production under our offtake agreement with Scott Petroleum in the near future," Hern said. He predicted Nova Biosource Fuels could begin offtaking biodiesel from the facility as early as August.

Ken Hern, chairman and chief executive officer of Nova Biosource Fuels Inc. at the company’s headquarters in Houston./PHOTO: Kris Bevill, BBI International.

July 2008

Business Briefs

China Clean Energy reports first-quarter loss

ADM sees increase in third-quarter earnings

Springboard Biodiesel acquires BioPro

Innovation Fuels partners with Arpadis, ICE Service Group

Neste renames biodiesel division

Mansfield acquires TransMontaigne unit

XcelPlus acquires glycerin technology

North Carolina agencies give biodiesel awards

World Energy hires CFO

Columns

Risk Factors: Protect the Company and the Investor

Canola Biodiesel: Good for the Heart, Engine

Focusing on Feedstocks

Featured

Is There Room For Camelina?

Do Oil and Biodiesel Mix?

Rising in the East

The Nature of Standards

Palm Oil Fights Back

Micromanaging Fuel Use

July 2008.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

China Clean Energy reports first-quarter loss

ADM sees increase in third-quarter earnings

Springboard Biodiesel acquires BioPro

Innovation Fuels partners with Arpadis, ICE Service Group

Neste renames biodiesel division

Mansfield acquires TransMontaigne unit

XcelPlus acquires glycerin technology

North Carolina agencies give biodiesel awards

World Energy hires CFO

Columns

Risk Factors: Protect the Company and the Investor

Canola Biodiesel: Good for the Heart, Engine

Focusing on Feedstocks

Featured

Is There Room For Camelina?

Do Oil and Biodiesel Mix?

Rising in the East

The Nature of Standards

Palm Oil Fights Back

Micromanaging Fuel Use

July 2008