As any home-brewer knows, making biodiesel isn't rocket science. But when rocket science and biodiesel production commingle, new heights in automation and control are achieved. A collaborative effort between U.S. Navy environmental engineers and Biodiesel Industries Inc. was expanded a year ago to include aerospace and defense contractor Aerojet Inc. The same space-age sensing and automation technology that sent men to the moon decades ago is helping propel modular, remote biodiesel production to new heights. 

 
 Russell Teall, the founder and CEO of Biodiesel Industries, is well known for his work in developing modular biodiesel systems. In 2003, the Santa Barbara, Calif.,-based company signed a cooperative research and development agreement with the Naval Facilities Engineering Service Center at nearby Port Hueneme, Calif. Since then, one of Biodiesel Industries' modular units has been in use on the naval base, converting waste vegetable oil collected from the mess halls to biodiesel, as ongoing research led to continued improvements of the system. "The navy is interested in modular, deployable, self sustainable systems that can be operated remotely," Teall says.
 
 It isn't obvious how an aerospace company such as Aerojet, accustomed to designing propulsion systems to maneuver the space station, ended up working on biodiesel. "We thought it was a natural fit," says Kathy Robinson, executive director of sustainability for Aerojet. "We have been an energy management and solutions provider for the Department of Defense and the civil aerospace sector for 50 years. We're continually looking for what's new with our customers in terms of emerging requirements." She says DOD's emphasis on distributed fuel production, for tactical and security reasons, has been apparent in the past few years. Robinson is responsible for finding areas where Aerojet's systems engineering and thermal management systems can fit into the energy market, which led her to study a number of alternative fuel paths. Early on, she says, biodiesel was on her radar as a near-term, deployable solution to which Aerojet could provide service. "When I called the Navy, the country's largest user of diesel fuel, they told me to contact Russ," Robinson says. 
 
 Teall has been experimenting with every type of feedstock he could acquire for more than a decade, building a database of feedstock characteristics and process reaction results. A one-tenth scale commercial system with flexible configuration was set up at the naval facilities engineering center. It allowed for scaled up production and testing as the team developed a truly feedstock-flexible system producing ASTM quality biodiesel.
 
 Teall says the project took a gigantic leap forward with Aerojet's expertise in integrated system design, fluidic management and control systems development. In August, after only one year with Aerojet onboard, the team announced the successful demonstration of ARIES (automated, real-time, remote, integrated energy system). With a nameplate capacity of 3 MMgy, the modular unit was to go from the fabrication shop to an Aerojet facility for further testing in late August, before moving to the National Environmental Test Site at Naval Base Ventura County, in Port Hueneme, Calif., for additional validation and demonstration. 
 
 Real-time sensing is at the core of ARIES' capabilities. The typical ASTM test for glycerin takes 35 to 40 minutes using a gas chromatograph. "That's fine for quality control but not very good for process control," Teall says. "The ability to assess in real time what's going on in the reaction means you can shape the reaction kinetics to drive the reaction forward more quickly." Knowing where the reaction is at any point facilitates automation and helps optimize the process. "Based on tens of thousands of reactions we've conducted over the years, there's a library of intelligence that can be programmed in," he explains. The data collected includes feedstock characteristics such as the oil profile, water, contaminants and other factors, along with resulting impact on the reaction. 
 
 The goal has been a system that is completely automated. "We characterize the feedstock that's coming in for the day, dial in the appropriate recipe and start the programming with quality control stops along the way," Robinson says. "There are stop points where the program will come up on the screen, saying, 'Here's what we are reading, do you want to proceed?' While there are opportunities for the operator to interact with the system, it can go from start to finish automatically." Teall initially found the automation challenging. "It takes some getting used to," he says. "Having made biodiesel all these years at different plants across the world, there's a lot of physical and human interface in most plants. The hardest thing for me was to sit there and watch the computer making biodiesel-I have this compulsion to get up and open and close valves." 
 
 The remote sensing and automation ensure transesterification is complete, an important step in hitting ASTM specs. "The joy of ARIES is that it's all real-time now," Teall says. "At the end of a transesterification you don't have to wait 30 or 40 minutes to get test results. That's a huge savings of time, and you're assuring ASTM compliance sequentially in-process," verifying water and methanol removal, sulfur content and more. The traditional ASTM tests can be run at the end to verify results for a certificate of analysis. Teall is reluctant to put a number to the efficiency gain until the validation and demonstration data can be compared to existing systems. Preliminarily though, he says hours, not minutes, are shaved off the process. 
 
 Remote Operability

 Coupling modern communications technology with real-time sensing and automation allows operators to be 100 feet, or 100 miles, away. For the Navy, that means a unit could be deployed anywhere in the world, with technical support coming from a central location. The centralized technical staff can monitor process data and do trends analysis. The plan is for all units to use the same standards of reference, so as problems are solved in one plant the lessons learned can be applied elsewhere. "What we learn in Ventura can be applied in Afghanistan," Teall says.
 
 The U.S. military market alone, with more than 5,000 bases worldwide, could provide a significant market for ARIES. "Policies from the Pentagon state we need to get all facilities energy independent," Robinson says. The Navy has a directive on B20, although Teall says it's exploring the capability of using B100 in tactical and non-tactical vehicles in times of emergency. "There's obviously some challenges in doing that, cold flow being one of them," Teall says. "But if you anticipate that need, the vehicles themselves can be properly configured to operate B100 in cold conditions. The military obviously has the ability to mandate something across its whole fleet, which will obviate the problems."
 
 The two companies see potential beyond military applications. By supplying its own power and designed to be self-sufficient, ARIES has the potential to be deployed in remote, rural regions. "We've done some work in India with the U.S. Agency for International Development," Teall explains. "There are more than 20,000 villages that don't have electricity. They're not on the internet, they don't have telephones. [We have] the ability to help provide electricity not only for the plant but for the surrounding areas." Urban applications, such as remote monitoring of a biodiesel unit in a water treatment facility, also exist.
 
 First, however, validation and demonstration must come, to give numbers to the efficiency gains. The immediate goal is to get final testing of the alpha unit completed for the Navy. Once completed, Teall says he'll finish patent applications for particular process technologies being newly deployed in the unit, and finalize details on a feedstock solution to accompany ARIES. 
 
 While biodiesel is a well-known fuel today, Teall recognizes it's not always been this way. "It's gone from having a lot of hurdles such as getting DOE and EPA to recognize it, doing health effects testing, and getting ASTM standards in place," he says. "Now we're addressing feedstock issues. That's part of what the AIRES system will enable us to do-to look at advanced biofuels both in terms of feedstocks and production technologies. We have a very keen interest in algal culture as well as jatropha and other inedible plants. ARIES is part of an integrated energy system-that's the ultimate configuration. Feedstock production has to be vertically integrated, too."
 
 Given the excitement around algae, it's not surprising that developers of a modular, portable biodiesel system designed for waste vegetable oils are looking towards second generation feedstocks. The race to deploy advanced biofuels has begun to take on the flavor of the space race. Teall remembers the initial meetings with Aerojet when they discussed the difficulties of designing a remote-controlled biodiesel processing system. "We put things on the moon," was the response given to Teall from an Aerojet engineer. Teall says the major difference in developing ARIES is, "If a question arose in the control room they could step into the plant and check on it. When in space, the challenge is infinitely more complicated."
 
 Robinson says, "The people at Aerojet working on this are excited to be working in renewable energy. There's a lot of national support. It's almost like the last race to the moon in terms of support in Congress and everywhere we go."
 
 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a> or (701) 738-4922.

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A worker samples the product from the top of the tank. PHOTO: BIODIESEL INDUSTRIES

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The ARIES team gathers around its test production unit to celebrate the first successful demonstration of the system components. PHOTO: BIODIESEL INDUSTRIES

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In collaboration with the U.S. Navy and Biodiesel Industries, Aerojet-a company that helped put man on the moon-has turned its sights toward biodiesel.

Rocket Science Meets Biodiesel

Malaysian biodiesel exporters are motivated to fill some of the gap created by the implementation of anti-dumping measures imposed on U.S. B99 going to the European Union, and recent deals signal market interest in the area's products. While the quality and price of palm methyl esters (PME) are attractive to traders, there is growing opposition to the fuel in Europe mostly because of record-setting deforestation in Indonesia, which was preceded by destruction in Malaysia. These are practices that the notoriously conscientious European consumer does not want to be associated with. "They don't want dirty palm oil," says Rolf Skar of Greenpeace USA. "The marketplace is going to be more demanding than government regulations." 

 
 Now in the midst of its own indirect land use debate preceded by similar controversy in the United States, Europe is reassigning emissions values to varying types of methyl esters. On that note, palm has the highest oil yield per hectare of all vegetable oil feedstocks-seven times soybeans and three times rapeseed-but the practices behind its production are said to have destroyed countless millions of acres of the world's most amazing real estate and contribute to global warming. "We are concerned about market sentiment in regard to palm biodiesel," says Bryan See of Carotech Bhd, a palm oil and biodiesel producer located near Perak, Malaysia. "But the government of Malaysia does have regulations in place that serve to protect our forests." 
 
 The EU and the European Biodiesel Board have also been involved in an aggressive campaign to ensure fair competition in the market. The EU gives preferential treatment to so-called developing countries in regard to tariffs, but including Asian PME under that umbrella seems strange to European producers. "It doesn't make sense to consider Malaysia and Indonesia 'developing countries' when it comes to palm oil production," says Rafaello Garofalo, secretary general of the European Biodiesel Board. "Their palm oil industries are the most developed in the world."
 
 Recent developments indicate Europe's market for PME is growing. Recently, South Korea's SK Chemicals has signed a $48 million contract with European trader Trafigura for palm oil-based biodiesel supplies. SK Chemicals will supply Trafigura, the third largest independent oil trader in the world, with a total of 60,000 metric tons (18 million gallons) of PME in 5,000-ton monthly shipments starting in January. SK Chemicals has completed the expansion of its Ulsan refinery, which tripled its biodiesel capacity to 2,450 barrels (102,900 gallons) per day, with plans for future expansion. 
 
 Trafigura has two blending terminals in South Korea and another in Singapore. Asia's installed biodiesel capacity currently stands at around 4 million tons per year and will continue to grow, the Foreign Agriculture Service reports. It estimates Asia-Pacific biodiesel exports around 500,000 tons per year. In Malaysia specifically, 12 biodiesel plants, with a combined capacity of about 1.5 million tons, are in operation, and the Pasir Gudang port in Johor, Malaysia, is the largest vegetable oil handling terminal in the world today, FAS reports. 
 
 The Roundtable on Sustainable Palm Oil is a certifying body that provides certain palm oil products with a "green stamp" of best production practices, although it does not make very strong demands of its members. "Their tools on the ground are not very reliable for verifying that palm oil is produced in a sustainable way," Skar tells Biodiesel Magazine. "Also, several of their members really have no interest in changing their businesses, but want to profit off the green stamp of belonging to the roundtable."
 
 In late 2008, Carotech also inked a $57 million contract with Trafigura to supply between 60,000 and 84,000 tons of biodiesel a year to Europe. "This contract will account for 60 percent of our biodiesel capacity," says See. "This very significant contribution to the world market gives us a platform for consistent production in these difficult times."
 
 The uncertainty of crude oil and palm oil prices is causing difficulties in Malaysia, along with fears that the EU could restrict or even prohibit PME from entering its ports because of sustainability criteria. "Palm oil biodiesel makes up less than 5 percent of the entire European market," Garofalo says. "So it has very niche sales."

 
 Coconuts
 The Philippines are also positioning to be a net exporter of biodiesel. Here, coconuts are a staple of the national economy and an excellent source of oil that can be used for biodiesel production. Twelve biodiesel producers are accredited by the Philippine Department of Energy. The Biofuels Act took effect in February 2007 and initially mandated B1 nationwide, which has since become a B2 mandate.
 As a whole, the companies accredited by the Philippine Department of Energy to produce and supply coco methyl ester (CME), have a combined capacity that is three times more than the mandated volume requires. "We expect the mandated blend to increase to 3 percent in 2010," says Jun Lao of Chemrez Technologies in Manilla. "As for feedstock availability, the current consumption of coconut oil to serve the B2 mandate consumes 9 percent of the available feedstock supply, so there are significant amounts of coconut oil and coco-biodiesel available to the world market." Lao also says Japan has drafted a biodiesel standard so particular that only coco-biodiesel can meet it. 
 
 Approximately 1,168 gallons of coconut oil can be produced per hectare, compared with 296 gallons per hectare for rapeseed and 123 gallons per hectare for soybeans. The FAS reported that, for 2008, CME exports were up 1,488 tons from 2007 to 3,979 tons, and were mostly purchased by India and Italy. "Our export business is based around oleochemicals, of which coco-biodiesel is only a part," Lao says. "But we do expect stronger foreign sales of CME in the near future."
 
 There are still more than 1 million hectares (2.5 million acres) of land intended for agriculture-coconut plantation under development in the Philippines, and some of these are from foreign countries. There is a Japanese group, Pacific Biofuels Holdings, which started to plant coconuts in the Ilocos region of the Northern Philippines intending to cover 100,000 to 300,000 hectares, according to Lao. "The intention is to produce coco-biodiesel for export to Japan," he says.
 
 FAS Roundup
 The FAS released detailed reports this summer on the biofuels industries in Asia. It has observed that while countries like Indonesia, Malaysia and the Philippines have developed biofuels industries and the power to be net exporters of the fuel, others in Asia such as Japan, China and India are looking to do the same. Japan's domestic annual production is virtually non-existent-around 2,640 gallons per year, but is engaged in a mixture of public and private investment and development projects in other countries.
 
 Several Japanese trading companies have started to invest in Malaysia and Indonesia for producing biodiesel from palm oil and bioethanol from sugar cane and jatropha. Toyota is investing heavily in biofuels and has a multi-million research and development program based on jatropha with Temasek Life Sciences Laboratory in Singapore. Japanese firms may also be looking to start jatropha plantations in developing countries such as the Philippines or Malaysia. The trend of industrialized nations buying land for agricultural production in less developed countries-exploiting their resources-has received a lot of attention in the international press, and is sometimes referred to as agri-colonialism. "I think it's more positive than that," Lao says. "These companies are bringing jobs to lands that have been unproductive for years, so they are welcome." 
 
 In Asia as in the West, biofuels cannot flourish without considerable government support, and China has virtually no policies in place promoting the production or use of biofuels. China is the world's largest importer of soybeans and oils, however, the most common feedstock for biodiesel production in China is used cooking oil. But there is no standard or scale collection for used cooking oil and with spotty supply, production is relatively insignificant. 

 
 Currently, Chinese biodiesel plants are small-scale, ranging from 100 to 20,000 tons of production. These plants usually operate for only a few months out of the year due to lack of a sufficient supply of feedstock, resulting from the short supply of edible vegetable oils-China has instituted a ban on grains for use in biofuels production. Three demonstration projects for the manufacture of biodiesel from jatropha were approved by the state government in 2008 and there is ongoing work to study biodiesel production from oil bearing tree seeds or "energy trees."	
 	
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

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A palm tree nursery sits next to an existing plantation in Malaysia. PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

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A plantation laborer uses a long-handled blade to chop the stem of the palm fruit bunch. The bunches are hand carried out to plantation roads and trucked to the processing plant. PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

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Malaysia and the Philippines are building their exporting power as the market for biodiesel becomes increasingly global. China and Japan are investing heavily in feedstock development for their own biofuels industries. Other regions of Asia are also becoming hot spots, even though some suggest these developments may come at the expense of ancient, ecologically diverse landscapes.

Pacific Rim Panorama

Controversy hit the international commodities trade sector in August when a shipment of contaminated U.S. soybean meal was unloaded and detained in Tarragona, Spain, the nation's largest port. But the problem wasn't the soybeans themselves-commercial soybean events are all approved in the EU-it was a dirty container. As a result, 180,000 tons of soybean meal were sequestered and EU importers are refusing to book additional shipments of U.S. soybeans and soybean meal until the issue is resolved. 
 
 "We're disappointed that a shipment was halted and that there was a disruption to trade and to our customers in Europe," says Johnny Dodson, president of the American Soybean Association. This certainly affects the biodiesel industry, Dodson says, even if not directly. Certainly, biodiesel producers that possess complimentary crush operations have potential markets in the EU, even if U.S. methyl esters have essentially been banned there. When trade is disrupted, even a single shipment, there is a ripple effect that is felt by everyone in the system, especially risk managers.
 
 The issue is that when more and more genetically modified organisms (GMO) are cultivated and traded globally, accidental contamination in shipments may become more frequent. Hence, it is it likely that, in the future, buyers may not want to face the costs of a more frequent rejection of grain at the border of countries applying a zero-tolerance policy towards low-level presence of unapproved GMO crops. "That puts us all in an uncertain, risky trade situation, and that is most serious for the entire European Community trade, livestock production and economy," says David Merino, a spokesman for the European Commission.
 
 A different source in the American soybean industry had another opinion. "I've been involved in the futures markets since 1972 and I never saw any problems until we had the price explosion," the source tells Biodiesel Magazine. "Then the bottom fell out of the market, and buyers obviously want out of those contracts." 
 

 Sources further observed that ports in the EU are often stricter with shipments coming from the U.S. than they are with other sources such as Brazil, Argentina and India. "It wasn't like they found 100 pounds of corn in this shipment," says Jerry Gidel of North American Risk Management Services in Chicago. "They decided to test the dust. I don't know how often they test dusts and residues, but it seems a little odd." GMO contaminated corn dust was found along the edges of the soybean shipment in Spain. It is speculation, however, to say the situation resulted from a disgruntled buyer looking for a reason to keep from paying on delivery. There are many corn "events," or commercially ready genetic modifications, in different stages of the approval process, but GMO maize is still prohibited in the EU.	
 
 Zero Tolerance, New Products
 Dodson says the ASA has been working for the past 18 months to make the approval process quicker for new GMO events, and to have a "reasonable tolerance" level for any material that is not approved. "We want there to be something besides zero tolerance," Dodson says. "It's almost impossible to meet these criteria, and we need to have some level of tolerance that would be acceptable to not disrupt trade."
 
 Two out of three of the biggest GMO developers in the world are headquartered in Europe. Also, 80 percent to 90 percent of the soybeans grown in the Western Hemisphere are genetically modified. RoundUp Ready 1 and RoundUp Ready 2 made by Monsanto, and Liberty Link, made by Bayer Crop Sciences U.S., are approved for cultivation and use in Europe. Bayer just launched Liberty Link earlier this year as an alternative to Monsanto's glyphosate platform, which certain weeds have started to resist.
 
 "If they had [marketed an event] that focused on increased oil or a better protein schedule, the whole world would have loved them," Gidel says. "Instead, the first thing they come out with is something that encourages the increased use of their herbicides. People act like these are radioactive beans, and you're lucky they don't explode in your system as soon as you eat them."
 
 Before the commercial launch of the product, import approvals were obtained in key soybean export markets with biotech approval processes including Australia, China, the EU, Japan, Mexico, New Zealand, Russia, South Africa and Taiwan, as it has been recognized that certain crop threats have already developed a resistance to Monsanto's glyphosate platform.
 
 "Glyphosate-resistant weeds have been confirmed in 19 states, and many states report weed resistance to multiple chemistries including ALS-, PPO- and triazine herbicides," Bayer stated. "By rotating to Liberty Link soybeans, growers have the benefit of effective, over-the-top weed control with Ignite, which has a unique, nonselective herbicide mode of action." 
 
 Peripheral Developments

 While the shipment of soybean meal contaminated with GMO corn dust has led to an indefinite de facto ban against U.S. soy shipments, the EU nevertheless started accepting GMO canola from Canada earlier this summer. "We've been shut out since 1996, so it is a very positive development," said Joanne Buth of the Canola Council of Canada. "But this is not a huge market for us, and we don't expect that it will be because Europe has increased its acreage of rapeseed quite dramatically. But any additional demand is good for our growers."
 
 Europe is a big buyer of the world's commodities but seems to have contradictory policies when it comes to buying GMO feedstuffs. Canola's primary application is as a food ingredient, but grocers and other manufacturers in Europe have to label their products appropriately if they use GMO ingredients, so they might be discouraged from buying Canadian oil or seeds. Regarding increasing feedstock availability for biodiesel production, sources say that the unofficial stance of the European biodiesel industry is that it doesn't want to be associated with GMOs.
 
 There are certain countries, Dodson says mostly in the Eastern Bloc, adopting zero tolerance policies against all GMO material, above and beyond EU guidelines. "The possibility that no GMO products will be accepted in these countries is causing great concern for their grocers and animal ag-groups," he says. About 10 percent of the U.S. crop is grown under contract for certain export markets, especially Japan, as well as the natural foods and organic industries, Dodson says.
 
 China is the biggest importer of soybeans in the world and has a strong genetic program, which it sees as something that will help the country increase production. But Asia as a whole is a strong market for U.S. growers banking on projections that world protein needs will continue to increase exponentially in coming years. Some countries, however, are still fiercely resistant to the proliferation of GMO crops, even though biotechnology is seen as a means to combat world hunger and some environmental problems.
 
 Also, there is no World Trade Organization standard for GMO acceptance. As previously mentioned, even some European countries are bucking the policies of the union in resistance to biotechnology. This is the situation of mixed signals that Dodson says some of the advocacy work he has been involved in hopes to change. Steadfast, 100-percent purity is virtually impossible to maintain in commodities shipments, and intermodal containers are used to serve the entire market, which consists of dozens of various feedstuffs. Containers are certainly not sterile, and are not boiled or scrubbed after every use, however these practices have very little to do with producers. "We have to come to agreement that is slightly more tolerable than absolute zero," Dodson says. "What percentage or level that would be, I don't know, but zero is zero and that's just impossible."
 
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4942 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

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Biotechnology is starting to have a dramatic impact on global trade scenarios as international testing, container use and tolerance levels are inconsistent. Negotiations are ongoing to prevent intense stress felt by buyers, sellers and risk managers when international trade is disrupted.

Mixed Signals

Algae claims hit stratospheric levels as excitement for the prospective new biofuel feedstock built tremendous momentum in the past three years. More than 150 companies worldwide have launched projects to capitalize on the promise of algae. With breakthroughs being announced weekly, it seems, healthy skepticism towards some overstated claims is advised. But this summer, algae gained credibility when large, established companies announced major research projects: ExxonMobil Corp. committed $600 million over the next five to six years in a collaboration with Synthetic Genomics; BP Amoco plc announced $10 million for a project with Martek Biosciences Corp. over three years; and Dow Chemical Co. and Algenol Biofuels Inc. declared a joint pilot project to produce ethanol from an algae-based biorefinery. In addition, two large U.S. Department of Defense Advanced Research Project Agency contracts were awarded earlier this year, and multiple academic research projects were announced, leaving one questioning whether the skepticism surrounding algae is overstated. 
 

 The promise and the reality of algal biofuels are laid out in a report published this summer by the U.S. DOE Biomass Program. The DOE pulled together 200 algae experts this past winter from the public and private sectors, in a workshop to discuss the future direction for public research. The comment period on the draft document closed in August, with the final version expected by the end of 2009. The draft, titled, "National Algal Biofuels Technology Roadmap," states there is unanimous agreement that a great deal of research is still needed to fully realize algae's potential, but continuing the developmental efforts is still fully supported. The report provides a status overview of key areas and identifies numerous research needs. Yet, even in a 214-page document written by committee, the excitement for algae's potential comes through. "Microalgae promises much higher productivities per unit area given its higher photosynthetic efficiency when compared to conventional crops," the roadmap says. Citing a range of reported yields between 1,000 and 4,000 gallons per acre annually, the report suggests algae could supply all of the renewable fuels targeted by the 36 billion-gallon renewable fuels standard. The report even gives a scenario, as unlikely as it may be, demonstrating algae's promise that, given acreage equal to the land devoted to the U.S. soybean crop, algae biofuel could replace the entire volume of diesel consumed in the U.S. This large-scale volume potential is a primary driver behind oil industry interest in algae research and development.
 
 Reaching that sort of potential, however, will require a concerted, coordinated research effort that many say will take a decade to complete, and it will require a commitment similar to the race to put man on the moon. Algae biology and harvesting, in particular, need major advancements, but extraction methods and conversion technology developments are further along. While that would seem to put algae commercialization a long way off, the algal roadmap does suggest there will be near-term applications, laying out a scenario for integrated energy production. Not only could co-locating ethanol production with fossil-fuel power generation increase total energy efficiency, but growing algae with the CO2 emissions from both could provide a carbon sink, plus oil for biodiesel and other coproducts. 
 
 Intermediate Steps
 The development of high-value coproducts is a key intermediate step for large-scale algae commercialization, says Bill Barclay, chief intellectual property officer at Martek. Barclay has 30 years of experience working with algae, first with the DOE's aquatic species program, then as an entrepreneur developing algae for high-value omega-3 nutritional supplements. Technological development historically occurs in small steps, he says, pointing to how the race to the moon started with orbiting around the earth, then circling manned spacecraft around the moon, and ultimately landing man there. The algae industry needs to make small steps first, he suggests, focusing on high-value products such as renewable polymers or pigments for paint. "You don't have to have everything 100 percent efficient for those products like you do to have low cost fuels," he says. The intermediate products provide cash flow as experience is gained, giving time to work out the challenges inherent in large-scale, low-cost production required for competitive fuel production. Barclay sees small steps increasingly being taken as he monitors patent applications. "You can see a wave of patents starting on intermediate technologies," he says. 
 The entrepreneurial excitement surrounding algae has contributed to increased dollars for research, says Juergen Polle, associate professor of biology at City University of New York. He's evaluating more than 800 wild algae strains, looking for high lipid producers that also show robust growth potential. Polle voices concern that over-stated claims for algae could hurt everyone in the industry if a backlash occurs. Some companies claim yields that are higher than possible in nature, he says, advising healthy skepticism toward companies making claims while withholding even basic details for "proprietary reasons." As a researcher, he would like to evaluate the technology to see if there truly has been a breakthrough, or whether the concept is flawed. There is, after all, a reason why academia developed a system for research papers to undergo peer review before publication in academic journals. 
 
 Tension exists between academia and the business community. Mary Rosenthal, executive director of the Algal Biomass Organization, calls it the dance between the cautiousness of academia and the entrepreneurial desire for commercialization. "We need both, we need academics to develop the science and the entrepreneur to keep us on a good commercial track," she says. "Then we can create an industry." Previously, Rosenthal was director of communications and public affairs for NatureWorks LLC, a Cargill Inc. subsidiary that is a large manufacturer of bioplastics. "I've spent the past four years immersed in the world of sustainable plastics, so I am well aware of the huge potential for algae to serve many different needs, including fuel, food and chemicals," she says. She sees algae development accelerating at a faster pace than the development of bioplastics, which also involves microbes, in this case fermenting a corn substrate.
 
 As one who has successfully developed algae production for nutritional supplements, Barclay says the real challenge for algae is scaling up for high-volume, low-cost fuel markets. "Anybody can make 200 gallons of algal fuel," he says. "Figuring out how to grow algae on a very large scale is where all the problems come in." It is relatively easy to grow algae in controlled laboratory conditions, and getting oil yields of 50 percent to 60 percent under ideal conditions is achievable, he points out. However, extrapolating those peak yields over a year is the source of some of the overly ambitious claims. "The average yield over a year's time in cells grown outdoors drops to 15 to 25 percent," Barclay says. "For biofuels to become cost effective that needs to be 40 or 50 percent." Put in perspective, Barclay says this will require more than a 300-fold increase in productivity. 
 
 While biologists are focused on understanding and optimizing algae performance, engineers are working to devise the systems that cost-effectively support production, harvesting and oil extraction. The DOE roadmap calls for an acceleration of that work in private-public partnerships. "Given recent and dramatic advances in relevant fields, in particular biology, and the fact that realizing the strategic potential of this feedstock will require critical engineering innovations and science breakthroughs in understanding algal mass culture and downstream processing, a more substantial and sustained investment is paramount," the report says. Prominent examples already underway are the DARPA awards with $25 million going to a collaboration managed by defense contractor Science Applications International Corp., and $43 million going to a collaboration managed by General Atomics. 
 
 Announcements of subcontracts being signed in those projects began to surface this summer. More research collaborations are in the works and are expected to be supported with economic stimulus funds. Proposals were due in mid-September from partnerships applying for a portion of the $50 million earmarked for algae consortia and $35 million for advanced biofuels. 
 

 Algae followers will closely watch those named in the various research announcements for clues on which companies and academic research teams are emerging as winners in the race to commercialize algae.
 
 Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a> or (701) 738-4922.

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Targeted Growth is one of many bioscience firms working on algae around the world. The Seattle-based company announced this summer it has developed a way to increase the lipid content of cyanobacteria by nearly 400 percent. PHOTO: TARGETED GROWTH

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Some entrepreneurs have hyped algae claims, yet business plays a key role in keeping the effort grounded while researchers advance the science. Everyone agrees, however, algae holds great promise.

The Promise and the Reality

The United Soybean Board, the national organization that invests soybean checkoff dollars to create demand for U.S. soybeans, will partner with Oranni Consulting and Transition Management Consulting to complete an external market analysis of effective international marketing programs. "It's extremely important that USB seek the best model or models because more than half of U.S. soybeans are exported," said USB Chairman Chuck Myers, a soybean farmer from Lyons, Neb. "We have been using the same model for international marketing for the past 50 years. We need to adjust and adapt to the global marketplace and our customers' needs." 
 
 A new soybean organization was formed earlier this year as a policy and advocacy group for soybean farmers. The U.S. Soybean Federation's first policy objective was to support the current soybean checkoff program administered by the USB, according to Jerry Slocum, USSF vice president and a soybean farmer from Coldwater, Miss. A recent USB update indicated only 759 producers signed a petition asking for a vote on the national soybean checkoff program, he reported. "We congratulate soybean checkoff state and national volunteer directors on this vote of confidence, but also thank U.S. soybean farmers for understanding the importance of the program," Slocum said. The USSF board set cap and trade as a priority policy to work on in the months ahead. "We need to make sure that the final cap-and-trade legislation is good for the environment without being detrimental to U.S. soybean farmers," said Warren Stemme, USSF president and a soybean farmer from Chesterfield, Mo.

PHOTO: BBI International/Susanne Retka Schill

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Soybean groups plan for future

Sweden's Chemrec AB broke ground in September on a dimethyl ether (DME) demonstration plant in Pitea, Sweden, with completion expected by mid-2010. The project will demonstrate the production of the advanced diesel fuel, DME, from forest biomass using pulp mill black liquor. The project also includes demonstration of the fuel used in heavy commercial vehicles. 
 
 Chemrec's black liquor gasification development plant, also in Pitea, reached 10,000 accumulated operating hours in June. The plant produces high-quality synthesis gas, from which DME, methanol and other fuels and chemicals can be produced from woody biomass feedstock. Today, DME is primarily used as a liquefied petroleum gas substitute, although its high cetane number and zero particulate formation make it an attractive diesel fuel.

Chemrec breaks ground on demonstration DME plant

Biodiesel will be a part of Ottawa, Ontario's new greenhouse gas (GHG) reduction strategy, which will commit the city to curtailing emissions by 30 percent within the next three years. City officials reported that the use of ethanol and biodiesel in the municipal fleet will result in GHG reductions of 3,000 metric tons per year. "From the use of alternate fuels to a wide range of fuel-efficient vehicles, the City of Ottawa will be making significant progress in reducing its environmental impact," said Mayor Larry O'Brien. The city's public works department further observed that the Green Municipal Fleet Plan has the potential to reduce fuel consumption and costs.

Canada's capital fleet using biodiesel

Addressing the past, current and future operability issues of ultra-low sulfur diesel and   biodiesel blends, Research Laboratories Inc. of Fort Wayne, Ind., has completed a recent survey of fuel suppliers and distributors in which it "canvassed those markets to ascertain the level of interest in upgraded diesel fuels." Research Laboratories has designed and developed a unique in-house cold room and equipment that uses OEM vehicle fuel pumps and fuel filters to verify the winter operability of diesel fuels and biodiesel blends.

Research Laboratories completes quality survey

All eyes were on the weather as the soybean harvest approached, and people wondered if an early frost would hit the crop that had barely caught up after delayed spring seeding and cool temperatures. By the end of August, USDA's crop progress report indicated 93 percent of the soybeans were setting pods, equal to last year's crop progress. The first survey-based forecast of U.S. soybean production given in the Aug. 12 World Agricultural Supply and Demand Estimates report was 3.2 billion bushels, 240 million bushels above last year's crop. USDA projected yields would average 41.7 bushels, 2.1 bushels per acre above last year. Global oilseed production for 2009-'10 was projected at 422.6 million tons, a record high.  European rapeseed production was projected at a record 19.5 million tons. In spite of those projections, concerns over early frosts in Canada and the U.S. and dwindling old crop stocks supported bullish markets in late summer.

Record world oilseed crops expected

Owners and contractors building biodiesel facilities can reduce capital costs and risk, and realize design scalability by specifying grooved mechanical piping for utility and process piping systems. Grooved piping compresses construction schedules to get plants on line faster, minimizing project and financial risk.
 
 Grooved mechanical pipe joining is a method of fabricating piping systems that eliminates the need for welding and flanging pipe. Grooved-end pipe, fittings, valves and accessories are joined with mechanical couplings that provide a secure, reliable union at every joint. These connections are designed to handle a variety of utility and process piping services. Grooved pipe solutions can be used on carbon steel, stainless steel and galvanized pipe, as well as high-density polyethylene (HDPE), fiberglass-reinforced pipe and American Water Works Association ductile iron pipe ranging in size from a half inch to 60 inches.
 
 A grooved pipe joint is comprised of three core elements: the pipe groove; the gasket and coupling housings; and nuts and bolts (Figure 1). Grooves are cold-formed on the pipe ends with tooling specifically designed for this process. The coupling housing engages the grooved ends of each pipe, fitting or valve to be connected. A resilient, pressure-responsive elastomeric gasket provides a leak-tight seal, even under a vacuum. The coupling housing fully encloses the gasket, reinforcing the seal and securing its position. The coupling is fastened with two track head bolts and nuts.
 
 Grooved mechanical piping has its roots in World War I, during which this innovation was used to deploy fuel and water to Allied forces on the front lines. The system proved beneficial over other joining methods, because as troops' positions changed, the pipes needed to be disassembled, transported and reassembled quickly and efficiently. 
 
 Today, the grooved pipe system still proves advantageous in critical fluid handling applications of a different kind-biodiesel fuel production. Grooved piping systems can be installed on a variety of biodiesel piping applications, including alcohol; caustic; chilled, cooling, potable, wash and demineralized water; fire protection; glycerin; instrument and plant utility air; oil feed; reverse osmosis; and wastewater treatment.
 

 Time, Money and Risk Reduction
 Ultimately, biodiesel facility owners want three things in the plant construction process: capital cost reduction, schedule compression and risk reduction. Capital costs are immense in industrial construction and, because financing is critical to companies building biofuel plants, every dollar that can be saved is significant, especially given the current lending and investment climate. However, there is funding available through such programs as the U.S. DOE's loan guarantees under the Recovery Act. The Act's 1705 Program funds renewable energy generation projects that begin construction before October 2011, providing these companies access to much-needed capital. With programs such as this, and the race to develop and commercialize next-generation biodiesel technologies, time is of the essence. The sooner a technology gets to market, the sooner the company can get others to adopt, license and otherwise leverage it. That's where speed of construction can prove a significant competitive advantage. But in construction, contractors and owners face risks such as weather delays, variable labor costs, construction delays, safety issues and capital cost overruns, all of which need to be addressed. 
 
 Grooved piping systems have multiple benefits that reduce total installed costs, save time and reduce risk during construction and maintenance, resulting in faster production of biodiesel. 
 
 Construction By reducing fabrication costs, material handling and transport costs and labor time, grooved piping can reduce total installed costs by as much as one-third compared to welding and flanging. Even within the controlled environment of a fabrication shop, welded and flanged pipe fabrication is a time-consuming and costly process. For example, a typical weld/flange fabrication shop would require 15.4 man-hours to weld and flange a fabricated spool of 14-inch pipe consisting of two three-foot sections of pipe, a valve, a tee-fitting and a 90-degree elbow, representing 56 inches total diameter of pipe connections. This is based on a typical fabrication shop productivity factor of 0.3 applied to the published estimating times from the Mechanical Contractors Association of America. In stark contrast, fabricating this same pipe spool using the grooved mechanical joining method would require slightly less than one man-hour. This dramatically improves speed of production and compresses the overall construction schedule.
 
 Once fabricated, pipe spools must be shipped to the construction site for field erection. Welded pipe spools are three dimensional, meaning their shapes are not easily stacked for maximum efficiency on a flatbed truck. In comparison, prefabricated grooved spools can be configured in two dimensions-pipe, couplings, fittings and valves assembled in one flat plane-so they can be laid flat and stacked on a truck bed (Figure 2). Assembly of the straight sticks of grooved pipe spools in the field is fast due to the ease of assembly of the grooved couplings. 
 
 Additionally, the grooved, fabricated spool concept eliminates rework often associated with welded spools. According to industry standards, an average of 5 to 6 percent of welded joints must undergo rework, adding time and material costs to construction. If a welded spool piece is incorrect, it must be cut out and reworked in the field or returned to the shop for correction, carrying with it a cost of lost time, additional labor and scrap. The grooved concept allows for pipes, fittings and valves to be rotated to the proper orientation in the field before fastening the couplings, ensuring a proper fit without rework.
 
 In the field, welders must cut, bevel and prepare the pipe lengths, align and clamp the joint, then undertake two to three passes using the selected welding method at each joint. Assembling a grooved pipe joint in the field is as simple as positioning the gasket and coupling housings on the grooved pipe ends, and tightening the bolts and nuts with standard hand tools. This can be done with a pipe mechanic and does not require the costs of a certified welder. This simple installation reduces on-site man hours by up to 45 percent compared to welding, resulting in reduced labor time and cost savings.
 
 Additional savings can be achieved by eliminating the electricity requirements of welding. On a recent biofuel plant project requiring 1,105 butt welds on Schedule 40 pipe in sizes 10 to 24 inches, the total energy consumption would have been more than 120,000 kilowatts at a cost of nearly $7,900. By using grooved mechanical piping, the plant saved the equivalent amount of energy consumed by 130 average-sized homes in one month, plus the reduction in total installed costs. This is a positive message for owners concerned with the green impact of their facilities.

 
 By eliminating the need for open flame and hazardous fume risk associated with welding, grooved piping systems increase jobsite safety. Safety is a primary concern when welding, and the physical impact on the individual welder is significant. Welding exposes the worker to hazardous fumes and particulate matter, as well as potential burns, eye damage and the risk of fire or explosion. Because fire is a real concern during construction and maintenance, welding requires a fire watch during and following the work, which slows the construction schedule and adds cost. With these risks, and with the types of chemicals present in biodiesel plants, eliminating welding in construction and during future maintenance is ideal.
 
 Visual Verification The design of a grooved mechanical pipe joint makes verification of proper installation possible. Following installation, grooved systems can be inspected visually. Metal-to-metal contact of coupling bolt pads confirms that the coupling has been properly installed and secured into place. Conversely, welding requires X-ray verification to ensure a sound installation. 
 
 System Expansion During the design and construction phase, plant owners should consider future system expansion and potential tie-ins. As biodiesel facilities are often bolted on to other plants, a piping system that allows for simple system tie-ins is important. Furthermore, as a plant scales up production, modifications and tie-ins will likely need to be made to the piping systems. With grooved piping, there is a union at every joint, which permits easy access for rerouting and tie-in with other systems. The speed of installation and ability to expedite expansion and reroute grooved piping minimizes downtime, therefore reducing costs and minimizing safety risks.
 
 Maintenance Piping systems maintenance is necessary to ensure efficient operation. Reducing plant downtime during scheduled and unscheduled maintenance is crucial. In a biodiesel plant, equipment may need to be cleaned, replaced or serviced, and valves and other wear points in the system may require maintenance and periodic replacement. Grooved mechanical piping allows for quick and easy access to piping systems to conduct this maintenance. When system components are connected using couplings, access is gained by loosening two nuts and bolts on the coupling and removing the housings and gasket. A typical flanged valve connection would require removal of 16 bolts and two flange gaskets, significantly increasing maintenance downtime. 
 
 Performance Grooved mechanical piping systems are known for their reliability; some manufacturers have developed products that withstand pressures as high as 4,000 pounds per square inch and products are pressure-tested to ensure a minimum safety factor of 3-to-1 over published working pressure ratings. To ensure that the gasket materials are suitable for service, manufacturers publish data and gasket selection guides. Manufacturers with experience in the biofuels industry will also provide project references describing other facilities and the applications in which grooved piping was used.

 
 Depending on the application requirements, rigid couplings can deliver the same rigidity as a welded system. To accommodate pipe system movement, flexible couplings can be used to address expansion and contraction, deflection, seismic movement and vibration, minimizing the need for traditional expansion joints. Additionally, couplings localize vibration within the pipeline, dampening the vibration of the system and lessening the need for maintenance.
 
 Perhaps most importantly, mechanical couplings are designed to last as long as the facility itself. For more than 85 years, mechanical coupling systems have been used in critical applications in facilities worldwide ranging from ethanol and biodiesel to chemical, oil and gas, power, mining and others, such as the Hoover Dam, which features a grooved piping system that has been in service since it was completed in 1936 (Figure 3). 
 
 Grooved Piping: It's Not Just a Coupling
 When most people speak of grooved mechanical piping, they're speaking of the couplings that join pipe. But in reality, the concept is much greater than that. Grooved mechanical piping is a concept that delivers quantifiable benefits at every phase-from design and engineering to construction drawings to shop fabrication and field erection, to maintenance throughout the life of the plant. These benefits deliver real value to biodiesel plant owners, engineers and contractors to reduce capital costs, minimize risk, improve safety and get plants running and generating revenue faster.
 
 Jim Renner is vice president of Biofuels, Water System Technologies and Shipbuilding at Victaulic Co. Reach him at (610) 559-3688 or visit<a target="_blank" href="http://www.victaulic.com" rel="external"> www.victaulic.com</a>.
 
 The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biodiesel Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

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Jim Renner, vice president, Biofuels, Water System Technologies and Shipbuilding, Victaulic Co.

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The pressure on companies to bring new technologies to market quickly is intensifying due to the availability of stimulus dollars and other subsidies, so speed to market and capital cost reductions are essential.

Grooved Mechanical Piping Reduces Risk, Cost and Construction Schedules

SRS Engineering Corp., an engineering firm that designs biodiesel plants, has been named to Inc. Magazine's Fastest-Growing Private Company list in 2009. SRS Engineering ranked 60th out of the top 100 in the energy industry category and 2118th overall on the Inc. 5000. 
 
 SRS Engineering experienced a 149.8 percent growth in the past four years, which equaled $5.4 million in revenue. The company credits its success to 25 years of recognized engineering and "good standing" in the industry. "We are thrilled and honored to receive this prestigious ranking", said Clayton Hawranik, CEO of SRS. "Our company has been truly devoted to designing, engineering and manufacturing biodiesel plants and equipment that would stand out in the industry as the most energy-efficient and technologically advanced in the industry. We have gathered decades of our process and engineering knowledge and poured it all into this new biodiesel industry."

SRS named to Inc. Magazine list

Brazil's fuel consumption has climbed 0.3 percent from last year to more than 13 billion gallons in the first half of 2009, according to Brazilian National Petroleum Agency data. Ethanol usage increased 17.7 percent to nearly 3 billion gallons, and biodiesel consumption rose 42.7 percent in the first six months of 2009. 
 

 On July 1, a four percent blend mandate went into effect for biodiesel representation in the country's diesel fuel reservoir. The USDA Foreign Agriculture Service reported in July that Brazilian biodiesel consumption for 2009 is an estimated 1.5 billion liters (400 million gallons) related to the increased mandatory blend level. Brazilian biodiesel consumption for 2008 was 1.08 billion liters (285 million gallons), according to the FAS.

Brazil biodiesel use up 43 percent

The Naval Air Systems Command fuels team is preparing for flight tests related to biofuels use in the F/A-18 Super Hornet at Patuxent River, Md., by summer 2010. NAVAIR has asked for 40,000 gallons of JP-5 fuel from bio-based feedstocks in a request for proposal issued by the Defense Energy Support Center. The feedstocks targeted for use in test flights will be nonfood-based, such as camelina, jatropha and algae.

Adding to its biodiesel involvement, the U.S. Navy will test a biologically derived synthetic paraffinic kerosene fuel in the Super Hornet by next summer. PHOTO: U.S. Navy 

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Navy Super Hornet to test biofuel

As summer came to a close, four more biodiesel plants completed commissioning-a testimony to the vision of biodiesel as an alternative, environmentally friendly fuel. Bluegrass BioDiesel LLC completed commissioning of its 14 MMgy multifeedstock plant at Falmouth, Ky., in late August. General Manager Rich Wojtkowski described a number of features incorporated into the plant design to decrease capital cost and allow flexibility, such as using stainless steel only where required, substituting lower-cost carbon steel where possible, and using flexible hosing to give the ability to reroute product streams when required. Gravity separation will be used, which he said eliminates the cost of centrifuges. Using standard acid pretreatment and base transesterification, Wojtkowski said the plant is capable of handling 2 percent to 22 percent free fatty acids, and includes three stages where water can be removed. "Our objective is to produce a very pure product that we can market as B100 ultra, removing all impurities," Wojtkowski said. The plant also includes methanol recovery and glycerin purification.
 
 In Colorado, Bioenergy Inc. held a grand opening in mid-August for Rocky Mountain Biodiesel, a new 1 MMgy plant in Parker, Colo., near Denver. The company is offering free pickup of waste vegetable oil in the metro area, and will be organizing consumer drop-off points. In addition to supplying biodiesel to regional fuel distributers, Rocky Mountain Biodiesel is signing up consumers in a biodiesel club for an annual fee of $20. In August, the Web site reported members could get B99.9 for $2.30. Bioenergy was founded in 2008 as a wholly-owned subsidiary of Hawaiian Islands Bioenergy Inc. President and CEO Sanda Lichner said the company plans to develop plants in Hawaii, Nevada and California.
 
 Mississippi Investment Petroleum Co. LLC reported commissioning was complete at its 8 MMgy plant at Houston, Miss., retrofitting an idled facility purchased from Tri-State Petroleum Products LLC. MIPCO CEO Jon Lunsford said the company expects to begin construction this fall on a 10 MMgy facility at Aberdeen, Miss. Groundwork had been started earlier this year when the Aberdeen mayor requested work be put on hold while the city applied for grants to help with access roads in the port area. MIPCO hopes to gain another 24 MMgy in capacity after retrofitting another shuttered biodiesel plant. Arrangements were close to being finalized, Lunsford told Biodiesel Magazine, on the purchase of a mothballed biodiesel refinery in Nettleton, Miss. Target feedstocks are poultry fat and waste vegetable oil.
 
 The fourth start-up is Mother Earth Energy Inc.'s new 3 MMgy plant located near Philadelphia in Chester, Pa., which uses waste vegetable oil as its feedstock. "We're able to offer great customer service," company spokesperson Laurie Mallette said. "We keep batch samples and have the capacity to test-people like that if they haven't used biodiesel before." Cherry Hill Biodiesel in Cherry Hill, N.J., is the sales office for the company.
 
 -Susanne Retka Schill

MIPCO used the existing 100,000 gallons of tank storage at Houston, Miss., while the interior of the idled biodiesel plant was retrofitted with new process equipment. PHOTO: TOMMY FARRAR, MIPCO

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4 new plants start operations

Posted September 21, 2009
 
 The comment period for the U.S. EPA's proposed rule to implement the renewable fuels standard is due to close Friday, Sept. 25. Both the American Soybean Association and the National Biodiesel Board are encouraging those supporting the biodiesel industry to submit their comments, if they haven't already. Both organizations have made it easy to access information at their Web sites, providing background information, sample comments, links to the EPA Web site and instructions on emailing comments. The ASA form is available at <a href="http://www.soygrowers.com/policy/RFS2.htm">www.soygrowers.com/policy/RFS2.htm</a>. The NBB's action center is available at <a href="http://biodiesel.org/news/RFS/">http://biodiesel.org/news/RFS/</a>. The NBB provides an express comment that features a condense message and only requires a name, city, state and email address. "it takes less than 20 seconds to fill out and submit," the NBB says. The NBB also offers long and short versions of sample comments to make, and provides information for an individual to craft a unique response.

 
 The stakes are high for the biodiesel industry. "As EPA's proposed rule is written, soy biodiesel would no longer qualify under the specific federal mandate for biomass-based diesel use," ASA President Johnny Dodson explained. "With the future of the U.S. biodiesel industry at stake, farmers need to get involved right now by voicing their opposition to the proposed rule." The ASA has reached out to U.S. soybean farmers in their campaign, as have several state soybean associations and corn grower associations as well to comment on the impact on corn ethanol.
 
 The NBB has spent the summer encouraging the industry to respond, developing the action center on its Web site, as it continued to evaluate the lengthy proposed rule to provide detailed and comprehensive positions and data to address all aspects of the proposed rule.
 
 The most contentious portion of the rule for biofuels producers is the inclusion of international indirect land use impacts into the calculations of greenhouse gas emissions. Another widespread concern is the possibility of having to certify that feedstocks were grown on cropland currently in production, raising the question of whether a new certification system would have to be formed and whether commingled, bulk commodities like soybeans could be traced.
 
 Language to further study the indirect land use issue and deal with the eligible feedstock problem did pass the U.S. House as an amendment to the Climate Change Bill. That legislation has not been taken up by the U.S. Senate as yet, and it is uncertain whether that language would be maintained in the final version. Industry spokesman have said that it would be quicker to have the rule itself be corrected, which will require an informed public response during the comment period.

RFS2 comments due Friday, Sept. 25

The African nations of Rwanda and Mozambique are moving forward with plans to boost biodiesel production. Landlocked Rwanda considers biofuel production from locally grown feedstocks an important part of national security. "Our main plan is to use biodiesel so that we can produce our own energy that is environmentally friendly," Jean Baptiste Nduwayezu, director general of the Rwanda's Institute of Scientific and Technological Research, told Biodiesel Magazine. 
 
 Since 2007, the institute has experimented with a number of feedstocks including palm, jatropha, moringa, castor and soy oils, in a 2,000 liter per day (approximately 160,000 gallons per year) pilot facility at Kigali, Rwanda's capital city. With the successful completion of that research, the government of Rwanda has announced plans to build a 300,000 liter per day (25 MMgy) facility in a public-private partnership. The ISTR suggests several possibilities for biodiesel feedstocks in Rwanda. New varieties of oil palm developed for high-altitude and low-temperature production offer high-yield potential for cultivation in Rwanda. Jatropha is also being planted in several regions where the land is more suited to the drought resistant plant. The ISTR is also exploring intermediate crops to use as feedstocks while the oil-bearing trees mature, including castor bean and avocado. While avocado is widely cultivated in Rwanda, the oil-bearing seeds are not currently utilized.
 
 The country is also considering the use of Moringa oleifera oilseeds as an additional biodiesel feedstock. Moringa has recently been introduced in several rural districts for use as a nutritional supplement due to its high levels of beta carotene, vitamins A and C, protein, iron, calcium and potassium contained in the leaves. In addition, the seed pod is used for water purification. The ISTR has included moringa in plots to study its potential as an oilseed, along with its oil palm and jatropha trials.
 
 Along the southeast coast of the African continent, Mozambique is also developing a biofuels industry with the hope of contributing 15 percent of the national fuel consumption in the next five years. In the Ecomoz Project, the Mozambique state-owned fuel company, Petromoc, and several other partners have produced about 1 million liters (approximately 260,000 gallons) of biodiesel, primarily from coconut oil, at a pilot facility near Maputo, Mozambique. This summer the Galpbuzi consortium, consisting of the Mozambican Buzi Co. and the Portuguese Galpenergia, announced its intention to develop sunflower and jatropha production for a planned biodiesel refinery, using feedstock from its own plantings and area farmers. "If we manage to get enough seeds to justify the installation of the refinery, both for export and for the domestic consumption, Galpbuze will go ahead with project," said Goncalo Barradas, the general director.

African nations are looking to locally grown oil feedstocks for biodiesel as a means of economic development, energy independence and security.

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African nations develop biodiesel production

Financial reports of international biodiesel companies reveal an industry in turmoil. Palm oil production and palm methyl ester sales are strong. Asia is increasing its exports to Europe, and a South Korean company, in particular, has taken advantage of demand there, adding $48 million in revenue from one sale. While a Wall Street Journal headline characterizes the U.S. biodiesel industry as "running on empty," the world market is seeing renewed interest in new projects and cargo shipments continuing to move. 
 

 Construction firm BioDiesel International AG, headquartered in Grambach, Austria, is seeing financial interest in new projects again after the extended credit crunch since the global recession began. Several factors are spurring new construction and investor confidence, including greater yields, the ability to meet stricter quality standards and ever increasing feedstock flexibility, said Oberzaucher Bernd, BDI marketing and communications manager. 
 BDI is spurring the construction of new biodiesel plants with multi-feedstock technology. This includes improving biodiesel quality to fulfill stricter standards, increasing of feedstock flexibility and processing of high free fatty acid feedstock to reach greater yields. Other features the company pushes involve upgrading process automation, reducing operating material, energy consumption and plant safety. Adapting to new regulations is also very important. 
 
 "When key criteria for a successful biodiesel project are fulfilled, funding is easier," Bernd said. "Key criteria are secured feedstock supply and off-take markets, proven technology [which includes] guaranteed capacity, yield and the ability to adapt to upcoming stricter standards." 
 
 BDI reported sales in the first six months of 2009 were actually down nearly €20 million ($28 million) from 2008, but it recently received a €31 million order to build a biodiesel plant in Amsterdam, Netherlands. Therefore, total orders on hand amounted to €47.5 million. The company said it is "delighted" that the European Parliament now specifies that biofuels produced from waste and residual materials are rated twice as high as other biofuels as far as CO2 assessment is concerned.
 
 Biodiesel Magazine found Asian companies are performing particularly well. Take the case of Wilmar International Ltd., headquartered in Singapore. In 18 years, it has gone from a small palm oil trading company to a multinational agribusiness that posted 23 percent growth in the second quarter, ending June 30. The group's total assets at that date were $20.7 billion. The company's first biodiesel plant in Riau, Indonesia came on line in January 2007 and has a current production capacity of more than 107 MMgy. 
 
 Willmar added two more biodiesel plants at the same site later in 2007 identical to the first facility, and has a combined biodiesel manufacturing capacity of approximately 320 MMgy. Palm oil is the feedstock of choice and one of the largest companies on the Singapore Stock Exchange reported that plantations and palm oil mills "registered a 26 percent increase in pre-tax profit to $107 million due to higher [crude palm oil] selling prices and higher production volume." ADM Asian Pacific Ltd. is a reported partner of Wilmar in several palm oil plantation companies that own 85,000 hectares (210,000 acres), mostly in Indonesia. Wilmar's total "land bank" weighs in at more than 180,000 hectares. 
 
 To the north in the Philippines, Manila's integrated oleochemical company, coconut grower and biodiesel producer Chemrez Technologies Inc. said that its coco-biodiesel sales were driven up by "the step up local requirements as the government mandate for biodiesel blend was increased from 1 percent to 2 percent effective February 6, 2009 pursuant to the Biofuels Act of 2006," the company reported in August. Chemrez said it is the largest biodiesel manufacturer in the Philippines and has a market share of 50 percent. Backed by strong demand for biodiesel and oleochemicals, Chemrez stated the bulk of revenues was "contributed by coco-biodiesel sales but these gains were partially dampened by the general soft pricing on account of much lower coconut feedstock costs and a more intensely competitive market environment." 
 
 An international trade deal increased the revenue of South Korea's SK Chemical, which recently completed its first biodiesel plant with more than 30 MMgy in production capacity at a refinery complex in Ulsan, South Korea. Switzerland-based Trafigura Beheer BV, an international oil trader that set up a biofuels desk in Singapore this year, has agreed to buy 18.48 million gallons from SK over the next year in a transaction estimated to be worth $48 million. The Asian chemical operation recorded total sales of $863 million and an operating profit of $59 million in 2008.
 

 In the U.S., for the six months ending June 30, GreenHunter Energy Inc. of Houston reported a net loss of $4.3 million as compared to a net loss of $15.6 million in the same six-month period in 2008. The company has reportedly stopped producing at its refinery and is looking for a buyer. Dallas-based Evolution Fuel financial statements reflect the recognition of a gain of $14.46 million for the six-month period ending June 30, primarily "as a result of further reductions of debt and the elimination of certain contingent liabilities," the company stated in an August press release. Evolution Fuels has stopped production and stated in a Securities and Exchange Commission filing that it may not be able to continue. 
 
 In June, Nova Biosource Fuels of Montana was scheduled for delisting from the New York Stock Exchange for performance failures, having filed for bankruptcy protection in March. Global agri-giant Cargill Inc., one of America's largest biodiesel producers, reported net earnings of $327 million in the fiscal 2009 fourth quarter, down 69 percent from $105 billion in the same period last year. The company stated, however, that agricultural services in origination and processing remained strong and losses were related primarily to "risk management and financial" performance in the markets. Archer Daniels Midland Co. added that oilseed processing operating profit decreased as global demand weakened, down 73 percent to $208 million in quarter four 2009. "Refining, packaging, biodiesel and other operating profit decreased $13 million for the quarter," ADM reported. "Decreased European biodiesel margins and restructuring charges related to the Stratas JV (joint venture) negatively impacted results."

Quarterly financials provide snapshot, construction funding loosens

B99 could soon be a thing of the past. That's what producers are saying will happen if the Biodiesel Tax Incentive Reform and Extension Act, a piece of legislation introduced to Congress in August by U.S. Sens. Chuck Grassley (R-IA) and Maria Cantwell (D-WA), becomes law. The National Biodiesel Board said this was a "common sense" proposal that will bring stability and reliability to the marketplace by extending the tax incentive for five years, and changing the excise tax for biodiesel from a blender to a producer credit.
 
 As industry leaders responded to Biodiesel Magazine's questions about the proposed changes, some strongly disagreed with NBB's applause of the measure in Washington to convert from a blender excise tax credit to a producer excise tax credit. "I don't understand their wanting to change that," said one NBB member, who asked not to be named. "I don't see the sense or the advantage in it." 
 
 The source indicated that producers who sell B100 are able to keep their books clean because they don't file any claims with the Internal Revenue Service. This allows them to bill the $1 per gallon credit into their sale price and let distributors, who blend the fuel, deal with the paperwork. "It usually takes about 10 days for us to get paid by our customers," said the source. "When you're dealing with the federal government, 45 days is good."
 
 The longer a producer has to wait to get paid, the more of its own capital it has to invest to maintain its inventory and procure feedstocks, which could be a problem imposed by a conversion of the credit. "I understand that it's a cash flow issue," said Bobby Heiser of Bulldog Biodiesel. "But most of the time we're the blender of record anyway, so we're already dealing with the IRS. The way that this change will make it easier for us will be by eliminating B99."
 
 Management at Lake Erie Biofuels, a plant with a 45 MMgy capacity in Erie, Pa., agreed. "We sell maybe a couple of truckloads of B100 while B99 makes up almost 90 percent of our total sales," said Michael Noble, director of operations at LEB. "Changing the excise tax will be better for our customers, but it doesn't change our position."
 
 Griffin Industries in Cold Spring, Ky., stated that it receives payments from the federal government about once a month regarding its excise tax credit benefit for selling B99. "Once you're in the system, the payments come in pretty regularly," said Jim Conway, Griffin Industries vice president of marketing and sales. "So, I don't see that as a problem." 
 
 Aaron Parrish of OceanConnect, a blender and distributor in White Plains, N.Y., said converting the credit will lessen the paper work for blenders and encourage sales. "We'll still get benefits because we'll pay less for biodiesel on the front end, and producers won't be able to bill the dollar into their sale price," he said. "So if we were buying biodiesel at $3 per gallon before and having to file a claim to get reimbursed, [but if the measure passes] we'll be buying biodiesel for $2 per gallon and we're done."

 
 On the West Coast, Joe Gershen of Tellurian Biodiesel also expressed his support for the new measure. "The way we see it, this would basically eliminate B99, and a lot of extra work that producers are currently doing," he said. "So we're all for it. Grassley and Cantwell introduced this last week-good for them."
 
 The only complaint was that the $1-per-gallon benefit be extended for a much longer period than five years. "It'd be better if it was 10 years," Heiser said. "But I am glad that there is a proposal to extend it for more than one year. We need stability and consistency from the government in this industry."

Legislation active in the U.S. Senate proposes to extend the federal excise tax credit from one year to five years, in addition to switching the incentive from a blender to a producer credit. 

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US biodiesel industry responds to tax credit legislation

Responses to a European preconsultation on the indirect land use change concept indicate a lively debate is in store for the European Commission. The EC invited comments on several possible policies in preparation for implementation of the EC Renewable Energy Directive and related Fuel Quality Directive. The commission's goal is to submit a report by the end of March so member states can take into account their individual national renewable energy action plans, which must be submitted by the end of June 2010.
 
 In the notice for preconsultation, several policy options were set out, including:
 - Extend to other commodities/countries the restrictions on land use change that will be imposed on biofuels consumed in the European Union.
 - Seek international agreements on protecting carbon-rich habitats.
 - Do nothing.
 - Increase the minimum required level of greenhouse gas (GHG) savings.
 - Extend the use of bonuses.
 - Require additional sustainability requirements for biofuels from crops/areas whose production is liable to lead to a high level of damaging land use change.
 - Include an indirect land use change factor in GHG calculations for biofuels.
 
 Responses to the preconsultation were somewhat predictable with the biofuels industry and developing nations raising questions about the reliability of indirect land use modeling, and the majority of European countries and environmental groups strongly supporting the use of the concept. The United Kingdom, Denmark, Netherlands and Norway were among those that said doing nothing is not an option. Others such as France and Poland were supportive of the concept but expressed the need for caution before applying it in the near-term. Austria, Italy and Spain expressed stronger concerns about the use of the indirect land use theory. Spain suggested the GHG reduction targets are enough. The EU's renewable energy policies start at a 35 percent reduction in GHG for biofuels compared to fossil fuels, rising to 60 percent reduction for new facilities, and 50 percent for existing installations by 2017.
 
 Outside of Europe, Indonesia and Malaysia echoed Italy's input that the GHG reduction targets are sufficient. Malaysia called for land use discussions to consider the impact of such policies on rural incomes, and suggested the notion of stopping deforestation in developing countries is one-sided. The Malaysian response was that the EU should practice reforestation. China brought in the food-versus-fuel debate by suggesting the EU prohibit the importation of biofuels made from food crops from food-scarce countries. Brazil and Argentina said their experience calls into question the reliability of indirect land use modeling. Productivity gains in Argentina means the country now raises the same number of cattle on less land, indicating a positive GHG savings from land use change. The Brazilians pointed out that since 2004 as biofuel production has increased, sugar cane production and cattle herds have been increasing, while deforestation in the Amazon is decreasing. 

 
 Brazil also pointed out that policies preventing the development of an international market for sustainable biofuels will become a de facto direct subsidy to fossil fuel consumption, which the EC policies intend to reduce, and will thus indirectly increase GHG emissions. In addition, Brazil raised the point that developing countries have been hurt by developed countries' farm policies that have resulted in production surpluses and low world-crop prices. "The possibility of sustainably producing biofuels and becoming energy suppliers represents a new opportunity to revitalize the agricultural sector in [developing] countries," the Brazilians wrote. Several of the international responses also questioned the compatibility of proposed policies with both world trade agreements and the United Nation's climate change efforts.
 
 More than 50 responses were received from private industry and organizations. The European Biodiesel Board called the indirect land use change concept debatable and challenging. "The cause-effect relations implied are open loops of many 'if' questions that are extremely difficult, if not impossible to be capped by an econometric model," they wrote. It is impossible to link indirect land use change effects to individual consignments of biofuels, they added. The EBB also suggested that if sustainability concepts were applied to all agricultural production regardless of its end use, whether for food, feed, bioenergy or other industrial applications, indirect land use change would not be an issue.
 
 The EBB also suggested the positive indirect effects of agricultural production for energy be considered, such as the improved yields for both oilseeds and cereals when new oilseed crops for biodiesel production are added to crop rotations. Biofuel crops can be a tool for local progress in developing countries, and the investments brought by energy crops help improve agricultural mechanization and yields worldwide, according to the EBB. Furthermore, biofuel coproducts have brought abundant supplies of feed, displacing the need for more land for feed cultivation and decreasing feed prices. 
 
 The European Oilseed Alliance put numbers to those coproduct feed benefits. Pointing out that 70 percent of the soy meal used by European livestock feeders is imported, the oilseed alliance said biodiesel production in Europe has led to the production of 4 million tons of rape meal, which substitutes for an equivalent of 2 million hectares (5 million acres) of soy production in Brazil. European use of rapeseed meal is projected to reach 16 million tons by 2020, they add, which would displace 8 million hectares of soy production in Brazil by 2020.
 
 To access all of the responses, visit <a target="_blank" href="http://www.ec.europa.eu/energy/renewables/consultations" rel="external">www.ec.europa.eu/energy/renewables/consultations</a></a>, and follow the links.

EU launches indirect land use discussion

In early September, Bay State Biofuels CEO Jesse Reich was waiting for the fire marshal to give final approval to the company's new fuel terminal in Andover, Mass., so the facility could start operating. "Hopefully, we'll be delivering fuel as early as next week," Reich said. The company's start-up is coming on the heels of a controversial announcement from the Massachusetts Department of Energy Resources, about its decisions related to implementation of a state biodiesel mandate. Among other things, the announcement declared that the state will only accept tax benefit applications for biofuels "derived from waste feedstocks, which, as defined and provided in the statute, are exempt from a detailed greenhouse gas reduction analysis," the department stated. It cited both the U.S. EPA and California Air Resources Board methodologies indicating that waste feedstocks can surpass the 50 percent GHG reduction threshold, satisfaction enough they will meet the 50 percent reduction in the Massachusetts law.
 
 This decision, although not final law, has caused extreme unrest among the state's biodiesel industry, especially those companies developing production platforms based on non-waste, second-generation feedstocks such as algae. 
 
 "By permitting only biofuels made from waste feedstocks under its mandate, Massachusetts is preventing its own biotech companies from deploying their advanced technology to turn other sources of renewable biomass into advanced biofuels," said Brent Erickson, vice president of the Biotechnology Industry Organization's Industrial and Environmental section. "The decisions released by the Massachusetts Department of Energy Resources will have a detrimental effect on Massachusetts' considerable bioscience industry, which employs millions of Massachusetts workers and attracts a tremendous amount of investment to the state. We're surprised to see the state disadvantage its own companies."
 

 Massachusetts law defines waste feedstocks as previously used or discarded material from industrial, commercial or household food service activities, including animal waste, animal by-products, organic portions of municipal solid waste, grease trap waste, construction and demolition debris. 
 
 Bay State Biofuels' distribution platform revolves around recycled wastes so this aspect of its business related to the state energy resource department's recent decision affected it the least, Reich said, but other items were bad news. "What I'm extremely disappointed about is the fact the mandate has been pushed back to 2011," he said. Officially, the department stated that a mandated volume will be waived for the first year, but "early action credit" will be provided for all gallons of qualified advanced biofuels, and they will be applied to second year mandate obligations. "That means that we don't have mandated buyers for the next year," Reich said. 
 
 Another discouraging item in the Massachusetts decision is the "averaging basis" that oil companies and other "compliance entities" must use to show that sufficient volume of qualified advanced biofuels was supplied to "meet the required percentage on average" over the full year. "So instead of regular monthly orders, which would be the best for our business, companies can buy all of the biodiesel [required] in one lump sum-essentially in one month-they can basically purchase fuel in very sporadic amounts over the course of the year on an arbitrage basis, which could mean that we don't have any steady production and sales," Reich said.
 
 Reich added that he thought the energy resource department was still supportive of the biodiesel industry, but was as cautious as it could be in every single detail of its recently published decision. This resulted in a relatively weak policy in support of producers and distributors in the state. Massachusetts officials, however, acknowledged that meeting the objectives and concerns of parties on all sides has been a difficult challenge for the design of the mandate, "but we feel that we have reached a solution that will serve the objective of the statute and will place Massachusetts in the forefront of opening new markets," stated the department. 
 
 Maintaining market stability, yielding the level of reductions in GHG emissions required by the act, and adapting to the changing scientific and federal landscape were the major factors in determining the state's initial decision, which may be altered yet, according to Reich.

Bay State Biofuels CEO Jesse Reich is disappointed that the state mandate will be pushed back to 2011. PHOTO: BAY STATE BIOFUELS 

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Massachusetts bans certain biodiesel fuels under its mandate

As the owner of a newer model Volkswagen Jetta TDI and a biodiesel fan, I took particular interest in concerns related to engine oil dilution in diesels using in-cylinder post-injection technology. Alarming rumors about catastrophic results from use of biodiesel blends higher than B5 have trickled through discussion forums and industry gossip. 
 
 Like many biodiesel myths, rumors about the incompatibility of biodiesel blends with new light-duty diesel vehicles' emission control technologies are, for the most part, inaccurate. Of course, B5 blends are virtually indistinguishable from diesel fuel in terms of engine performance and compatibility with emission control systems, making all diesel engines easily compatible with blends up to at least B5. 
 
 Reports about incompatibility stem from concerns about the possibility of increased engine oil dilution that can come into play with the use of biodiesel blends higher than B10 in some of the new light-duty diesel vehicles that utilize an emissions control system with in-cylinder post-injection. This system utilizes a late in-cylinder injection of raw fuel to burn off the material collected on particulate traps required by U.S. EPA to meet stringent, new emissions standards for particulate matter. The design is predominantly limited to the light-duty diesel product offerings from Volkswagen, Audi, Mercedes and BMW. While they are a small portion of the total U.S. diesel market, they are among the best known light-duty diesel passenger options in the states-my diesel Jetta included. 
 
 So I was pleased to learn that avoiding operation concerns with in-cylinder post-injection technology using higher biodiesel blends could be as easy as implementing more frequent oil changes. The fact is, some amount of oil dilution in diesel engines will occur over time with normal operation even with regular diesel fuel, leading to oil degradation and the need for oil replacement. But with use of in-cylinder post-injection, the oil dilution impacts can increase whether fueled with a biodiesel blend or petroleum diesel alone. The late injection events increase the opportunity for unburned fuel to reach the cylinder walls and, in turn, enter the lubricating oil. With conventional diesel fuel, some of it can boil out of the lube oil, lessening the long-term dilution effect. But it still occurs. This effect, however, is accentuated with biodiesel because of its higher boiling point relative to petroleum diesel, which can lead to more fuel being retained in the lube oil. The increase in oil dilution can be easily addressed with an oil change and can be further mitigated through a proactive engine oil change service interval (e.g., consider an oil change at 7,500 miles instead of 10,000 miles). 
 
 Volkswagen's concern lies in the fact that their normal 10,000-mile service interval, which is longer than the industry standard, may allow more than the desired amount of engine oil dilution to occur. However, recent research studies by Volkswagen as well as the National Renewable Energy Lab both concluded that, despite the slightly higher dilution levels with biodiesel blends above B10, the absolute level of viscosities still remained in an uncritical range for the applied oil quality, and there were no negative impacts on vehicle emissions, engine performance, or parts wear as a result of the biodiesel use. Volkswagen and NREL are also planning further studies on this issue. Other light-, medium- and heavy-duty diesel engine manufactures do not generally use late in-cylinder injection of raw fuel and have not reported problems with B20 compatibility, or excessive engine oil dilution in their new diesel models. They have opted for systems that utilize an exhaust-stream injection of fuel to regenerate the particulate traps, therefore mitigating the risk of engine oil dilution.

 
 Volkswagen's warranty position on biodiesel remains in support of blends up to B5, although it is currently conducting further research on higher biodiesel blends. However, the bottom line is that with more frequent oil changes, which would still be a longer mileage span than any gas guzzler, and the responsible use of high-quality biodiesel blends meeting ASTM specifications, users can still fuel up confidently with blends up to B20 without concern for engine performance. 
 
 Look for a white paper, on "2010 Diesel Technology and Biodiesel Compatibility," coming soon and available for NBB members a <a target="_blank" href="http://www.biodiesel.org" rel="external">www.biodiesel.org</a>.
 
 Jennifer Weaver with ASG Renaissance is the OEM Outreach & Education Program Manager for NBB

Jennifer Weaver, OEM Outreach & Education Program Manager, NBB 

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New and Old Diesel Engines Remain Compatible with Biodiesel

High Plains Bioenergy, the newest BQ-9000 producer, calls Guymon, Okla., home and opened in March 2008. The company is a subsidiary of Seaboard Foods and reports the 30 MMgy biodiesel plant uses animal fats, including pork fat from its parent company's local processing plant, and vegetable oils as feedstock for biodiesel.
 
 Vice President Gary Louis said producing high-quality biodiesel is among High Plains Bioenergy's baseline objectives. 
 
 "Achieving BQ-9000 Producer status is just one of many goals we have achieved in our effort to continually improve our process so that we can consistently produce biodiesel that will perform for our customers," Louis said. "BQ-9000 certification provides our customers further validation of High Plains Bioenergy's commitment to producing consistent, high-quality biodiesel. The BQ-9000 program is not only important to High Plains Bioenergy but we feel it is a critical program that will promote the commercial success and public acceptance of biodiesel." Louis also noted that some customers work exclusively with BQ-9000 certified producers. 
 
 The National Biodiesel Accreditation Commission also recertified BQ-9000 Producer status for AGP, Sergeant Bluff, Iowa, and Sun Products, Pasadena, Texas. Recertification is good for a three-year term and affirms companies continue to meet the high standards defined by the BQ-9000 program.

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BQ-9000 welcomes new producer

On June 26, the U.S. House passed H.R. 2454, the American Clean Energy and Security Act, intended to wean America away from fossil fuels, spur innovation in alternative energy and energy conservation, and reduce the generation of greenhouse gases (GHG), principally carbon dioxide (CO2). The bill now goes to the Senate, which is expected to take it up this fall. While significant amendments can be expected, several features of the House bill (below), or provisions like them, will likely become law:

 
 4The emission of CO2 by large generators, such as coal-fired power plants, will be regulated through a form of cap-and-trade system, under which such emissions will be capped. Companies will be allowed to purchase emission allowances. Generators that perform better than their cap level can sell their excess or unused emission allowances in a form of commodity trading similar to how transactions are conducted today on the Chicago Climate Exchange. In addition, other businesses, including farming or other agricultural operations that voluntarily sequester, meaning permanently remove, GHG from the environment in a certifiable manner will be entitled to offset credits, which may be similarly sold or traded as commodities, to industries needing to acquire them.
 
 4Electric utilities will be required to meet 20 percent of electricity demand through a combination of renewable energy sources and energy-saving measures by 2020.
 
 4Federal funding will spur new clean energy technology, including energy efficiency and renewable energy ($90 billion in new investments by 2025), carbon capture and sequestration ($60 billion), electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion). 
 
 4Energy-saving standards will be federally mandated for buildings and appliances, to be incorporated into state building codes.
 
 While smaller businesses will not be subject to direct regulation of GHG emissions-and the bill contains provisions to ease the economic impact of the compliance cost on electricity consumers-such businesses will nonetheless feel the impact of climate regulation, negatively and positively:
 
 - While initial utility costs to business may rise as utilities subject to GHG regulation pass compliance costs on to customers, the costs for owned or rented buildings, in the long run, will decrease as new (or energy-retrofitted) structures come on line.
 - Real estate construction costs and delays may display short-term increases reflecting initial regulatory uncertainties and product shortages. Developers and builders may face increased compliance costs. All of these will correct over time as marketplace and regulatory adjustments take hold. 
 - A new universe of vendors will come into existence as the market opens up for engineering, manufacturing and product innovation, as well as infrastructure development. New players large and small will emerge in a manner similar to the development of the computer industry in the 1970s and 1980s.
 - Corresponding shifts will take place in service industries, such as law, insurance, finance, securities and commodity trading and higher education, as whole new specialties and disciplines emerge.
 In short, the passage of H.R. 2454 marks this country's first, hesitant step into the post-carbon economy, and the beginning of a process that will ultimately have a profound effect at every level of the public and private sectors. 
 

 Jonathan P. Scoll is an attorney with Lindquist & Vennum. Reach him at (612) 371-3546 or <a target="_blank" href="mailto:jscoll@lindquist.com" rel="external">jscoll@lindquist.com</a>.

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How Climate Regulation May Impact Small Businesses

As I witness several biofuel companies in distress due to lack of feedstock, I feel attention needs to be directed at some very basic but overlooked industry standards. If biofuel producers intend to compete with rendering companies for spent cooking oil, it is imperative that more attention be paid to the sales tactics; especially to the person who is representing your company. There are numerous "high-tech" positions available in help-wanted ads throughout the entire United States, but very few of those ads are from companies in search of feedstock procurement personnel. Securing an experienced feedstock procurement employee in lieu of a salesman could very well be your ticket to success. I know for a fact that there are knowledgeable feedstock people in the rendering business who would entertain the biodiesel industry as a new challenge. There are numerous things to learn about waste oil and the places that produce it, so why would you not send in a person who is seasoned in the waste oil business? By the time a salesman figures out how to approach, introduce and secure an account, his credibility is gone, your company looks foolish and, most importantly, you can add this customer to your do not call list. 
 
 I recently took a working vacation and visited several biofuel companies I had been speaking with regarding their feedstock procurement practices. I was amazed at what I learned and how blind these producers were when looking at their collection procedures. The companies I visited were all competitors and I did not mention the names of other companies while visiting each. They all had the same story and just didn't see the big picture. They all needed feedstock in the form of waste cooking oil, but were not willing to pay a wage for a sourcing agent, which is the industry standard for similar companies such as renderers.
 
 They all wanted large sales forces, a salesman in every town, and thought that commission sales was the way to go. One company relayed to me that it had just lost a major account that was 25 percent of its feedstock. The company knew nothing about account retention and was too embarrassed to revisit. No benefits, no transportation, no reimbursement for company-spent money equals no business. These companies, and possibly other biofuel companies, are dealing in gallons while the waste oil business has always used pounds. You use scales with liquids that vary in viscosity and I don't know of any scale that reads in gallons. At plant level use what ever works, but on the street, pounds are the measurement of choice.
 
 Rendering companies have been working with grease for longer that biodiesel will ever be alive. The feedstock that is needed is available, provided the right person is representing your company. Waste oil producers want one main thing: their oil gone and no mess. Resistance to change is the biggest obstacle to overcome; all suppliers have heard it all before, and have made the change only to find out that the new company failed to perform as promised. When you tell a customer that you will perform, you'd better do it-do it better than promised-because there aren't many second chances.
 
 With my 40 years of rendering experience focusing on feedstock procurement, I see this as an issue of different playing fields. Biodiesel producers have a great opportunity to grow customer bases if they understand how the game is played. I see competition from biofuel producers, but they are not competing in the same game. The end result is the same: acquire waste oil for free or for as little payment as possible. But the reason they can't grow a solid customer list is that biofuel producers are wearing hockey uniforms to play baseball. There is no need to step out of the box-you need to step back into the box. Look at what your competitors are doing, they have been doing it a very long time. Talk to a competitor's driver. Drivers are always the first to tell you what their company is up to. Seek out a solicitor from the rendering business and don't be afraid to pay him or her a damn good salary. He or she can bring you years of experience that will never be achieved by a salesman. Let's face the real truth-without feedstock we have no business. 
 
 Bill Reed is the sole owner of Gold Coast Services. He can be reached at (530) 824-1106 or at <a target="_blank" href="mailto:wastecookingoil@aol.com" rel="external">wastecookingoil@aol.com</a>.

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A Feedstock Tip

As I write this editor's note the morning after Labor Day, it is still tough to get my mind around the fact that summer is virtually gone. While most of September is technically summer, the month brings with it the aura of change. After its long hiatus, football returns to sports' center stage. The air feels a little crisper. 
 

 I imagine many feel that the summer was too short. There is always so much to do, but never enough time to do it. I was well aware of this going into the Labor Day weekend, so I made a concerted effort to organize the tools and equipment in my Quonset. For those of you who don't know what a Quonset is, it is a shed that looks like half of a huge cylinder sticking above ground, typically used by farmers for machinery storage and maintenance. Surprisingly, the chore was not so terrible-actually it was kind of fun, in a way, going through years of junk and disarray-and afterwards I wondered why I had procrastinated over the years. 
 
 In Biodiesel Magazine, a topic we've put off covering for some time is algae, mostly because of the difficulty in ascertaining legitimate progress from mumbo jumbo investor hype. To tell the truth, I am skeptical of many claims by companies working on algae cultivation and oil extraction. In the past, this magazine may have been guilty of giving too much coverage to algae, while at the same time not understanding the particulars well enough. But after the recent bombardment of news about companies and government agencies such as ExxonMobil and NASA spending hundreds of millions of dollars in algae research, assistant editor Susanne Retka Schill and I began talking about how to approach a grounded feature article on algae. The result is her story titled, "The Promise and the Reality," on page 44. Check it out and let Retka Schill know what you think. 
 
 The theme of this month's issue though, is trade. In writing a featured article on international trade and genetically modified organisms (GMO), associate editor Nicholas Zeman learned of an interesting development that was unfolding in real time. A ship loaded with intermodal containers of soybean meal was refused EU entry at a Spanish port, not because of problems with the soybean meal itself but because testing revealed containers tainted with GMO corn dust. Zeman raises some interesting points on this topic in "Mixed Signals," on page 40.
 
 In a separate article, Zeman gives a thorough rundown of project development activity and biodiesel markets in Asia-Pacific, including the Philippines, Malaysia, China and Japan. Biodiesel is a globally traded fuel, and what's happening in eastern and southeastern Asia impacts those on the other side of the planet. Read "Pacific Rim Panorama" on page 36 for the full story. 
 
 Lastly, Retka Schill provides an overview of the collaborative effort between the U.S. Navy, Biodiesel Industries and more recent partner Aerojet Inc., an aerospace company that helped land man on the moon and maneuver the international space station. With Aerojet's involvement, the partnership is making strides in automation, process controls and remote controllability. Read "Rocket Science Meets Biodiesel" on page 30. And enjoy the cool, crisp autumn weather while it lasts.

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Trade, Algae and Rocket Science

Biodiesel remains one of the most efficient ways to deliver energy as a liquid fuel. Ongoing technology improvements also continue to improve the balance of energy-in to energy-out. The National Biodiesel Board recently completed the most comprehensive survey in the world of the actual energy used by commercial biodiesel production plants. The survey showed that energy used in biodiesel production has decreased by 30 percent compared to previous industry estimates. 
 
 <img src="http://images.bbibiofuels.com/img/9212009_3_56_48_PM.gif" alt="BDM.oct.09-nbbchart" border="0" />
 

 Most biodiesel producers use a combination of electricity and natural gas. Some small producers use only electricity, and several producers reported using alternative sources of energy such as used motor oil or biodiesel. The survey concluded that a gallon of biodiesel contains more than 37 times the energy used to convert vegetable oil into usable fuel. 
 
 Based on survey results, the average energy used to produce a gallon of biodiesel from virgin vegetable oils is 3,184 Btus. Energy use among plants that use blends of virgin oil and recycled or reclaimed fats and oils varies, as does the composition of these feedstocks. Taking into account all of these variations, the overall industry average for all feedstocks and all production technologies is 4,192 Btus per gallon of biodiesel. For comparison, 3,184 Btus is about the same amount of energy required to power a 60-watt light bulb for just less than six hours.
 
 These numbers represent total energy used at biodiesel production plants and were not reduced to account for coproduct generation. The energy used in biodiesel production is also much less than the energy used in a petroleum refinery. Even when we include all the life-cycle energy to produce and transport vegetable oil, biodiesel's energy balance is 4.5-to-1 and soon improving to exceed 5.5-to-1. Petroleum's energy balance, however, is 0.83-to-1 and growing worse due to crude oil becoming harder to get and harder to refine.
 
 The year 2008 was a record one for U.S. biodiesel production, and the survey data returned by U.S. producers represents 37 percent of that record volume. The NBB study is the first and only survey of actual data ever representing such a substantial volume of biodiesel production. NBB has provided the information to oversight agencies including the U.S. EPA, USDA, the National Renewable Energy Laboratory and others to ensure the most current and accurate industry information is used as a basis for energy use and output comparisons.

NBB Energy Use Study shows 30 percent efficiency improvement

Posted September 21, 2009
 
 At a national oilheat industry policy summit last week in Baltimore, Md., leaders expressed unequivocal support for biodiesel-blended heating oil, ultra-low sulfur heating oil and other clean fuels. Oilheat organizations, such as the National Oilheat Research Alliance, the New England Fuel Institute and the Petroleum Marketers Association of America, approved a statement resolving to ensure that by July 2010, a minimum of 2 percent bio content is present in all U.S. heating oil. This depicts an interesting approach to creation of a biofuel standard compared to a purely governmental directive, as the majority of biofuel standards are. Two percent bio content in heating oil would be a starting point, after which the volume is expected to increase.
 
 The Main Oil Dealers Association labeled the gathering last week as "an unprecedented legislative and policy summit," the goal of which was to address challenges and work toward creating ways to turn existing obstacles into opportunities. The National Biodiesel Board characterized the atmosphere of the summit as not unlike "the original Continental Congress of 1776," where "oilheat leadership from Maine to South Carolina stood one at a time to set the industry on a new, cleaner, greener and more sustainable course." 
 
 A 2 percent biodiesel blend required in the entire volume of U.S. residential fuel oil would mean an annual outlet for 180 million gallons of B100.

Oilheat leaders support industry-imposed bioheat target by mid-2010

The National Biodiesel Board is gearing up for the annual election of directors to the governing board. The election will be held at the NBB meeting in Washington, D.C., on November 16 to 18. The governing board and election process is designed to reflect the diverse makeup and interests of the industry. Representatives are elected by members in farmer, render/producer, producer and at-large categories.
 
 Eight of the 15 directors' terms are set to expire, including Ed Hegland, a farmer; Gary Haer and Kris Kappenman, producers; Jim Conway, a renderer, Darryl Brinkmann, Bob Metz and Jeff Trucksess and Ed Ulch, all of whom are at-large. 

 
 NBB is among the most diverse trade associations in the world. NBB's membership is comprised of state, national and international feedstock processor organizations, biodiesel suppliers, fuel marketers and distributors, and technology providers. In an effort to capture the assorted and varied membership makeup and accompanying complexity, the NBB election includes both a straight and weighted voting selection process. The straight voting (one vote per voting member) elects one candidate from the farmer category, one candidate from the render/producer category and two candidates from the producer category. The weighted voting (member votes are calculated in consideration of total financial contribution to NBB) elects four candidates at large. Candidates serve two-year terms. The election of officers, chairman, vice-chairman, secretary and treasurer, will follow the governing board election. All officers serve a one-year term.
 
 The NBB governing board directs the strategic planning, project development and overall direction of the NBB. All NBB members are encouraged to attend the November meeting and participate in the election.

NBB prepares to elect governing board members

The scope of research targeted at algae was evident as more than 100 research and industry leaders gathered for Algae-to-Energy in the South, a regional summit examining algae's potential as a renewable energy resource held late this summer.
 
 Ted Abernathy with the Southern Growth Policies Board captured the yet unknown potential for algae at the event. "When this started, it seemed interesting," he said. "Now it seems really interesting." 
 
 The National Biodiesel Board has been proactively supporting research and development of algae's potential, as well as honing algae extraction techniques. NBB's feedstock program, with funding from the U.S. Department of Transportation, is working with Richard Sayre, the director of the Enterprise Rent-A-Car Institute for Renewable Fuels at the Donald Danforth Plant Science Center, to further develop a non-destructive oil extraction process-sometimes referred to as "milking the algae"-that is capable of continuously removing oil from living algal cultures. The program is considering which strains perform best and how the process may benefit production efficiency by removal of contaminants.
 
 Noting biodiesel's role as a sustainable component of our fuel supply, Sayre said, "Biodiesel is going to be very important for transportation. Oil-based systems and biodiesel are really going to be the future."
 
 Sayre explained that oil-based fuels, such as biodiesel, have many benefits. They boast twice the energy density of alcohol, oil-producing plants have reduced impact on the environment, and algae-based biodiesel can be produced on land not suitable for other uses, and results in more oil per acre than what is currently available. 
 
 The Center for Evergreen Energy, the St. Louis Regional Chamber and Growth Association and the Southern Growth Policies Board hosted the event, where academic and industry experts from 10 states reported on the wide range of algae-based research underway around the country.

NBB program helps develop 'slime's' future as fuel

In an effort to drive more than 10,000 comments to the EPA, the National Biodiesel Board asked every member and biodiesel supporter to take an active role in its grassroots effort. RFS2 plays a critical role in the biodiesel industry's future, and NBB thanks the many thousands who submitted comments. 
 
 Grassroots team captains played a significant part in the effort and worked diligently to generate as many comments as possible. Their hard work is greatly appreciated. 
 

 NBB's Web site continues to be a reliable resource for up-to-date information about RFS2 and related impacts. Please visit <a target="_blank" href="http://www.biodiesel.org" rel="external">www.biodiesel.org</a> or contact NBB's Washington, D.C., office for the latest news and information.

NBB rallies proactive grassroots response to RFS process

> Dynamic Fuels LLC, a 75 MMgy renewable diesel plant currently under construction in Geismar, La., is a 50-50 joint venture between Tyson Foods Inc. and Syntroleum Corp. Dynamic announced in August that it will use automation and process control technology designed by Emerson Process Management of Austin, Texas. Emerson's PlantWeb digital plant architecture, which will be integrated into the Dynamic Fuels facility, networks an automation system and predictive maintenance software with smart devices installed throughout the operation, including control valves, flow meters and temperature transmitters.
 
 > Tenaska Biofuels LLC of Omaha, Neb., and Prairie Pride Inc. of Deerfield, Mo., are integrating their businesses for a stronger position in the marketplace by applying a traditional partnership template to the biofuels industries in an effort to compete against vertically integrated, multi-national agricultural corporate giants. Feedstock procurement requires expertise in risk management and hedging, which necessitates substantial capital.These are all assets that Tenaska brings to the partnership, along with several years experience in marketing biodiesel and virgin oil. The companies will cooperate to purchase the soybeans, and Prairie Pride will participate in marketing meal and hull pellets. 

 
 > The Air Transport Association of America Inc., an organization for the leading U.S. airlines, said eight of its member airlines have signed an unprecedented agreement with Rentech Inc. and Aircraft Service International Group to purchase up to 1.5 MMgy of renewable diesel fuel. RenDiesel, will be used in ground service equipment at Los Angeles International Airport beginning in late 2012, when Rentech's production plant is scheduled to go into service. 
 
 > In a deal between companies that dominate the seed business and have historically been fierce rivals, Syngenta AG of Switzerland has agreed to purchase St. Louis-based Monsanto Co.'s sunflower business for $160 million. The sunflower seed market is currently valued at around $700 million, and is developing at a fast pace, Syngenta stated in August. The transaction is subject to the approval of regulatory authorities. 
 
 > JatOil Ltd. of Pyrmont, Australia, has signed a memorandum of understanding with PT Waterland, a Dutch-Indonesian consortium that has "developed extensive jatropha operations in central Java to supply European power markets," JatOil announced. The pending transaction would involve JatOil buying a controlling interest in 1,000 to 2,000 hectares (2,500 to 5,000 acres) of established jatropha farms in central Java, an island of Southern Indonesia. 

 
 > The non-profit Renewable Energy Institute International announced an alliance of industry, academic and government organizations to build a pilot demonstration plant in Toledo, Ohio. The alliance includes Red Lion Bio-Energy, Pacific Renewable Fuels, Grace Davison, PACCAR, SolarTurbines/Caterpillar, National Renewable Energy Laboratory (NREL), Desert Research Institute, Quanta Services, Worley Parsons, University of Toledo, Midwest Terminals/Port of Toledo, among others. A propriety waste-to-energy thermal conversion process has been designed and validated at test sites in Sacramento, Calif.., and Toledo. The demonstration plant has a capacity of 350,000 gallons of waste-based, high-cetane diesel. Plans are to deploy the first commercial plant at Gridley, Calif., where rice harvest waste, wood waste and other local biomass residues will be converted to diesel fuel and renewable electricity.
 
 > Amalgamated Inc., Fort Wayne, Ind., has introduced a new additive, Winter 3,000, for lowering the cold filter plugging point temperature of diesel fuel for improved winter operation. The new technology works directly with the nucleator receptors present in all diesel fuels to enhance the molecular bonding of paraffin and biodiesel particles. The improved additive-to-paraffin bonding allows for lower additive rates, as low as 1 part per 3,000 for acceptable cold point temperatures in nearly all areas in the U.S. The company adds that when combined with Amalgamated's Wax Dispersing Additive, the new additive provides unmatched winterization protection and performance.
 
 > Biofuel Advance Research and Development LLC recently received an award from the National Algae Association as the best algae development company for 2009. The Philadelphia-based company is developing a photo bioreactor system for algae production. It also has permits, contractors and offtake agreements in place for a 60 MMgy biodiesel plant at the Keystone Industrial Port Complex outside Philadelphia. Plans are to begin production using soy oil and incorporate algae oil as it becomes available.
 
 > Grant Menke has joined the staff of Iowa Renewable Fuels Association as biofuels manager. In his new role, Menke will focus on the promotion of biodiesel and biodiesel coproducts, the oversight of regulatory affairs and other duties. Prior to joining the IRFA, Menke served as the research assistance for Sen. Chuck Grassley (R-IA) on the U.S. Senate Finance Committee. 

 
 > Wika Instrument Corp., Lawrenceville, Ga., has introduced a process pressure gauge to the biodiesel industry as a durable gauge engineered to provide years of reliable service in harsh and demanding environments. The Wika Type 232.34 Bourdon Tube gauge's design and construction is suited for applications involving pressure pulsation, vibration, corrosive environments and a wide range of operating temperatures. Wika has developed a brochure for the biodiesel industry showing applications for its line of gauges across the production facility.
 
 > A recent upgrade to The National Renewable Energy Laboratory's interactive map, TransAtlas, will allow marketers and distributors to locate product sources and high proportions of diesel drivers who might be interested in using methyl esters. TransAtlas now correlates biodiesel production locations with diesel vehicle density and fueling stations across the United States. "Flying J, for instance, might be able to plan the installation of a new station in an area where there is a high density of diesel vehicles and a production plant but little retail availability," said Kristi Moriarity, senior analyst for NREL. To view the map visit <a target="_blank" href="http://rpm.nrel.gov/transatlas/launch/" rel="external">http://rpm.nrel.gov/transatlas/launch/</a>.
 
 > LiveFuels Inc. started pilot operations at the company's test facility in Brownsville, Texas. Consisting of 45 acres of open saltwater ponds, the facility will be used for tests on its low-cost, open-water algae system. To harvest the mix of native algae, LiveFuels uses a mix of oil-rich algae grazers, such as filter-feeding fish species and other aquatic herbivores that can be processed into oils and other coproducts. The company's concept is to harness flows of agricultural pollution from the Mississippi River along the Louisiana coast to support algae production. Based in San Carlos, Calif., LiveFuels has raised $10 million in private funding for its research and development

Dynamic Fuels nears 50 percent mechanical completion as Emerson Process Management installs automation and controls hardware. PHOTO: EMERSON PROCESS MANAGEMENT

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Biodiesel plant locations shown on a TransAtlas layer. PHOTO: National Renewable Energy Laboratory

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BusinessBriefs: Companies, Organizations & People in the News

The U.S. DOE Loan Guarantee program provides loan guarantees for renewable energy, including biofuels, projects to accelerate their development. Currently this program has two parts, Section 1703 and Section 1705, and both are financed via the ARRA.

 
 Section 1703 applies to U.S. projects that employ innovative technologies constituting new or significantly improved technologies. The loan guarantees are intended to facilitate accelerated commercialization of these energy projects. Under this solicitation, technology may not be currently used or installed in three or more commercial projects (for periods of at least five years) in the U.S. in the same general application as in the proposed project. Section 1705 doesn't require that technology be innovative, but both 1703 and 1705 require greenhouse gas (GHG) reductions. 
 
 More specific requirements include: 1.) the face value of the guarantee can be no more than 80 percent of the total project costs, although the guarantee can cover 100 percent of the total debt; 2.) the borrower and other principals must have made or will make a significant cash equity investment in the project; and 3.) there must be a reasonable prospect of repayment by the borrower of the guaranteed portion of the obligation and other project debt. Section 1705 also requires that the projects be located in the U.S. and commence construction no later than Sept. 30, 2011. Proposed projects under Section 1705 are not required to meet the innovative technology standards of Section 1703, but they must aid the economic conditions of the nation by assisting with the creation and preservation of jobs, infrastructure investment and facilitation of energy efficiency. 
 
 The following are the categories of eligible Section 1705 projects: 1.) renewable energy systems that generate electricity or thermal energy and facilities that manufacture related components; 2.) electric power transmission systems projects; and 3.) leading edge biofuels projects. Leading edge biofuels projects are those that use technologies performing at the pilot or demonstration scale, and that the DOE Secretary has determined are a technology that is likely to become commercial; and that will produce transportation fuel that substantially reduces life-cycle GHG emissions compared to other transportation fuels. Under the ARRA, $6 billion is authorized to pay the credit subsidy costs of loan guarantees issued under Section 1705. Of this amount, DOE will make available up to $500 million to pay the credit subsidy costs of loan guarantees for leading edge biofuels projects. 
 
 Applications for the loan guarantees are broken into two parts. Part I for current submission is due no later than 11:59 p.m. Eastern Standard Time on Sept. 14. Part II for current submission is due no later than 11:59 p.m. on Nov. 13. Ongoing application submission dates for both parts roll forward with the last due dates of Aug. 24, 2010 and Dec. 31, 2010. Applicants may be required to provide oral presentations with each written submission.
 There are three application fees that must be paid to cover the internal DOE costs. The application fee will vary by the size of the loan guarantee, and will either be $75,000, $100,000 or $125,000. A facility fee will also vary by the size of the loan guarantee, and will be 1 percent of the guaranteed amount, $375,000 plus 75 percent of the guaranteed amount or $1,625,000 plus 50 percent of the guaranteed amount. Finally, a maintenance fee is expected to be between $50,000 and $100,000 per year while the loan guarantee is outstanding.
 
 New Market Tax Credits
 Congress created the new market tax credit program to encourage financing for certain businesses in low-income census districts. The ARRA expanded the program to increase the total amount of credits available to $5 billion.
 This program offers the possibility of loans to construct or refinance biofuels projects on very favorable terms because the lender receives the new market tax credit equaling 39 percent of the amount loaned from the bank via an intermediary referred to as a community development entity (CDE). Typically, CDEs are affiliates of state governments, nonprofits or banks. 
 
 This program requires the loans to be interest-only (typically at a fixed rate) and with a seven-year term. Because the loan entitles the bank to the 39 percent tax credit, the bank can usually offer interest rates several percentage points below market rates and forgive a sizable portion of loan principal at the seven-year maturity. 
 

 The loan that generates the tax credit to the bank must be made to a "qualifying business" in a low-income census district. All types of biofuel or renewable energy projects are "qualifying businesses." A business is treated as in a low-income census district if approximately half of the total income, services provided by employees and tangible property of a project are in the low income census district (among other factors). Once a street address for a project is identified, a tax advisor can quickly determine if it's in a low-income census district. Not every bank participates in this tax program, and biofuels projects will usually need to work with a CDE before a bank gets involved. 
 
 Tax Credits and Grants
 Biofuel producers looking to burn waste biomass (e.g., glycerin) for electricity are eligible for a new grant created by the ARRA. Under this program, the treasury department will issue a grant to help fund part of the cost of constructing a facility to generate electricity from biomass.
 
 The grant is generally equal to 30 percent of the tax basis (i.e., the cost) of the tangible property used in the facility, except for the land and building. The grant is paid in one lump-sum payment shortly after the facility starts generating electricity. Thus, a biofuels producer would typically need to obtain financing of the entire cost of the facility and use the grant to pay down a portion of the financing when the facility becomes operational. 
 
 To be eligible for the grant, the facility must become operational by the end of 2010. Alternatively, if construction started before the end of 2010, the facility need not be operational until December 31, 2013. In lieu of this grant, a biofuels producer can choose to claim a comparable federal income tax credit. 
 
 Federal Grant Programs
 There are numerous grant programs available for biofuels producers. Specifically, grants are available for applied research, development, demonstration and deployment projects for renewable energy, with funds specifically allocated for the production of energy and biofuels. Funds are also available for state energy programs. States are awarded funds by the federal government on a pro rata basis determined by their share of total electric consumption. These funds are only available to states that intend to adopt strict building energy codes and incentivize utilities to adopt energy efficiency measures.
 
 Additional funds are available through 2012 for biorefiners that replace fossil fuel boilers with new systems that use renewable biomass or produce energy from renewable biomass. Yet another program provides for mandatory funding through 2012 to encourage greater production and use of advanced biofuels, including lower-carbon biodiesel and cellulosic ethanol.
 
 Lastly, the USDA will provide financial assistance to biomass producers who sell their crops to qualified biomass conversion facilities. More specifically, the USDA will pay up to 75 percent of the cost of planting and establishing biomass crops; provide annual payments to help compensate for lost opportunity costs while crops are being established; and pay for collection, harvest, storage and transportation of biomass by matching the amounts paid by the biomass conversion facility, up to $45 per dry ton.

 
 Attorneys Porter Martin, Hamang Patel and Melissa Turczyn are members of the Michael Best & Friedrich Renewable Energy Practice Group. Reach them at (608) 257-3501 or through <a target="_blank" href="http://www.michaelbest.com" rel="external">www.michaelbest.com</a>.
 
 The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biodiesel Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

Porter Martin, attorney, Michael Best & Friedrich Renewable Energy Practice Group

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Hamang Patel, attorney, Michael Best & Friedrich Renewable Energy Practice Group

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Melissa Turczyn, attorney, Michael Best & Friedrich Renewable Energy Practice Group

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The American Recovery and Reinvestment Tax Act of 2009 (ARRA) and other federal incentives created and expanded a number of programs to help fund certain biofuel projects.

Identifying Biofuel Funding and Incentives

Posted September 22, 2009
 
 Kinder Morgan Energy Partners L.P. today announced it has started commercial transportation of blended 2 percent biodiesel (B2) through its 115-mile Oregon Pipeline that runs from Portland to Eugene. The company recently completed a successful test batch by moving B2 through the pipeline. Upon receipt of B2 at both its Portland and Eugene facilities, extensive tests were performed on the biodiesel blend to ensure that the samples met specifications. Kinder Morgan's Oregon line is one of only a few pipelines in the United States able to regularly transport blended biodiesel, as this pipeline does not transport jet fuel, thereby eliminating the potential for "trailback" of product into subsequent jet fuel batches.
 
 "This new biodiesel shipment capability will help diesel fuel suppliers throughout Oregon meet a state biodiesel mandate that goes into effect on Oct. 1," said KMP Products Pipeline President Tom Bannigan. "We are transporting B2 in a way that's operationally efficient, quality controlled and cost effective."

 The first commercial batch of approximately 100,000 barrels of B2 was created using a newly installed blending system to inject B99 into ultra low sulfur diesel at the company's Willbridge terminal in Portland. Other area terminals are expected to be able to deliver B2 to the Kinder Morgan pipeline. 
 
 Kinder Morgan has undertaken additional renewable fuels projects at several of its Pacific Northwest facilities, including improvements to allow for the blending of biodiesel at the truck-loading rack at the Willbridge terminal and into barges at the Linnton terminal in Portland, which handled the first regional barge-load of B2 for upriver movement to Umatilla, Ore. In the company's Southeast operations, Plantation Pipe Line Company (operated by Kinder Morgan), became the first pipeline in the country to transport biodiesel for commercial purposes in June.
 
 KMP – Oregon Biodiesel
 Kinder Morgan Energy Partners, L.P. is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 28,000 miles of pipelines and 170 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of approximately $25 billion. The general partner of KMP is owned by Kinder Morgan, Inc., a private company, www.kindermorgan.com.
 
 SOURCE: KINDER MORGAN ENERGY PARTNERS L.P. 
 
 Contact:
 Kinder Morgan Energy Partners, L.P.
 Media Relations:
 Larry Pierce, 713-369-9407
 Investor Relations:
 Mindy Mills, 713-369-9449
 www.kindermorgan.com

Kinder Morgan begins biodiesel shipments on Oregon Pipeline

Posted September 22, 2009

 
 A study of energy subsidies by the <a href="http://www.eli.org/ ">Environmental Law Institute</a> released Sept. 18 confirmed the federal government provides substantially larger subsidies to fossil fuels than to renewables. "The primary insight we want people to understand from the study is that the vast majority of subsidies support greenhouse gas emitting energy sources," said John Pendergrass, senior attorney with the institute and one of the authors of the study. "The majority of subsidies are through tax breaks rather than direct spending."
 
 Fossil fuels benefited from approximately $72 billion over the seven-year period studied from 2002 to 2008, while subsidies for renewable fuels totaled $29 billion. More than half the subsidies for renewables-$16.8 billion-were attributed to corn-based ethanol. The calculated subsidy for corn ethanol included a portion of federal farm program payments attributed to corn used for ethanol. The combined biodiesel blenders credit and biodiesel excise credit for the same seven year period total $182 million. Of the fossil fuel subsidies, $70.2 billion went to traditional sources-such as coal and oil-and $2.3 billion went to carbon capture and storage, which is designed to reduce greenhouse gas emissions from coal-fired power plants. While the volume of fossil fuels is much higher than renewable fuels, Pendergrass said they chose to analyze the cost to taxpayers. "We have not attempted to measure the benefits that may be gained from the subsidies," he added.
 
 The U.S. energy market is shaped by a number of national and state policies that encourage the use of traditional energy sources, the study noted. These policies range from royalty relief to the provision of tax incentives, direct payments, and other forms of support to the non-renewable energy industry. "The combination of subsidies-or 'perverse incentives'- to develop fossil fuel energy sources, and a lack of sufficient incentives to develop renewable energy and promote energy efficiency, distorts energy policy in ways that have helped cause, and continue to exacerbate, our climate change problem," Pendergrass said. "With climate change and energy legislation pending on Capitol Hill, our research suggests that more attention needs to be given to the existing perverse incentives for 'dirty' fuels in the U.S. Tax Code."
 
 The report, <a href="http://www.elistore.org/Data/products/d19_07.pdf ">"Estimating U.S. Government Subsidies to Energy Sources: 2002-2008,"</a> is available on the Environmental Law Institute Web site.

Subsidies for fossil fuels double that of renewables

Posted September 23, 2009
 

 Providing "floating" biodiesel prices has allowed Ultra Green Energy Services of Chicago to create some enticing deals for would-be buyers, said Michael Cooper, vice president of sales and trading for UGES. The city of Oxford, Conn., recently negotiated with UGES to supply the city works and appliances with B5. UGES reported that its selling price of $2.35 per gallon was more than a dollar less than what the city was paying under a previous contract. 
 
 "Most other [distributors] offer a fixed price for diesel fuel," Cooper said. "But our price is always NYMEX heating oil…plus." 
 
 The transportation example: a trader prices out 42,000 gallons of biodiesel in Chicago at $1.80 a gallon, and by the time the rail car has gotten to a Boston distribution terminal the bottom has fallen out of the market and FAME is at $1.60. "I haven't lost that 20 cents," said Cooper, "because our price [x + heating oil] floats." 
 
 Managing risk in that way also limits the traders upside rewards. "If it goes up to $2 we don't benefit from that either," Cooper said. "Floating our price is just one of the ways we manage our risk."
 
 UGES uses only methyl esters made from recycled fats and cooking oils in its name-branded Ultra Green Biodiesel, which is cost effective because FAME has lower commodity risk, more regional production and lower distribution costs, the company stated after delivering its first load to the Oxford Municipal Garage last week. 
 
 "I hope all the towns and cities in Connecticut understand that they can both control costs and use clean burning biodiesel blends," said Danny Falcone, USEG's wholesale manager. "This is a win for everybody-for the next three years the town gets a better product at better price, and all the town's buildings will use clean burning Bioheat."

Daniel Falcone, UGES wholesale manager/PHOTO: ULTRA GREEN ENERGY SERVICES

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Ultra Green Energy Services gets Oxford, Conn., a nice biodiesel price

Posted September 23, 2009
 
 Those responsible for implementing the European Commission's Fuel Quality Directive and Renewable Energy Directive are currently evaluating modeling of indirect land use (ILUC) and are planning to present policy alternatives for public comment this fall, with a goal of announcing the final policy in the spring of 2010. Ariane de Dominicis said it is still undetermined just how ILUC will be treated, although direct land use change will be addressed in the sustainability criteria for eligible fuels.
 
 Dominicis and Wojciech Winkler spoke about implementation of the EU renewable fuel policies at a Sept. 23 Webinar hosted by the<a href=" http://www.ifqc.org "> International Fuel Quality Center</a>, a nonprofit facilitated by Hart Energy Consulting. Winkler assisted in the Fuel Quality Directive's legislative process and is presently responsible for its implementation. Dominicis is coordinating biofuels policies. Both work at the Directorate General for Environment of the European Commission.

 
 The EC's Fuel Quality Directive calls for a 6 percent life cycle analysis greenhouse gas (GHG) intensity reduction between 2010 and 2020 for all transport fuels. Additional biofuels sustainability criteria call for a direct GHG savings threshold of 35 percent now for biofuels, rising to 50 percent in 2017 and 60 percent in 2018 for new installations. 
 
 According to the preliminary default GHG ratings shown in the EC presentation, that will present a challenge for all but waste-based biodiesel feedstocks. Rapeseed biodiesel's current default GHG savings value of 38 percent is eligible only for the first years of the program; soy biodiesel at 31 percent is not. Palm oil rated 56 percent if methane emissions at processing facilities are dealt with, and only 19 percent if methane is not mediated. Waste-based biodiesel scored above 80 percent in GHG reductions. Emissions can be reported using either the default values, Dominicis said, or actual values can be used, a policy that should create incentives to improve GHG reduction performance for different fuel pathways. The regulations also include a provision that default values and GHG methodology can be updated when new science or evidence is available or new fuel pathways created, she added.
 
 Direct land use change is addressed in the EC policy by prohibiting eligible biofuels from the conversion of high carbon stock areas such as wetlands, continuously forested areas or undrained peatland. While the permanent conversion to cropland is prohibited, Dominicis added, the biomass from that land could be used. "You could use the forest, but you can't clear the forest and convert it to cropland," she said. Guidelines on how to identify such areas also are being developed now, she said. 
 
 Dominicis said the indirect land use issue is being studied now by the EC in two tracks. One group is examining the current science while another is exploring possible policies. She gave no hints whether indirect land use will ultimately be incorporated into the EC policy. While the EC directive said a policy determination should be in place by the end of 2010, the internal goal is to have that determined by the spring of 2010 following another round of public comment this fall.
 
 Winkler addressed the fossil fuel component of the Fuel Quality Directive in the Webinar. A system to collect national fuel quality data is being developed, he said, along with a system for monitoring compliance, including specifying the appropriate analytical methods. The system will allow some flexibility, he added, mentioning the potential for special specifications for states with low ambient temperatures as an example. 
 
 The directorate of the environment is also working on the methodology to determine non-biofuel GHG emissions as well as determining the baseline value for the fuel mixture used in 2010. The goal is to develop technology neutral approaches to achieving a 6 percent reduction in carbon intensity for suppliers of energy used in road transport and non-road mobile machinery between 2011 and 2020. That will require developing a baseline GHG value for the fuel mix used in 2010. Winkler added that some studies have indicated that to achieve those sorts of carbon reductions in the next decade, the EU will see a change in the ratio of diesel used to gasoline that approaches 50/50, compared to the current ratio where 65 percent of the fuel used in the EU is diesel, and 35 percent gasoline. 
 
 To learn more about the EU renewable energy policy development visit: <a href="http://ec.europa.eu/energy/renewables/index_en.htm">http://ec.europa.eu/energy/renewables/index_en.htm</a>.

EC representatives give update on renewable policy progress

Posted September 23, 2009

 
 Diesel exhaust fluid (DEF) and the aftertreatment technologies relying on it are critical in giving original equipment manufacturers the ability to make new diesel drivetrains that can meet U.S. EPA's strict 2010 reductions for on-road diesel exhaust. 
 
 Yara International, out of Oslo, Norway, is the world's largest producer of DEF and will be leveraging Mansfield Oil's supply and logistics infrastructure to sell the Air 1 brand. "Mansfield's Delivery One network is already poised to provide DEF in every major local market," the company stated on Monday.
 
 All the vehicles that use selective catalytic reduction (SCR) technology to clean [NOx] emissions will need to use this product," Chad Dombroski, director of Yara North America, told Biodiesel Magazine. "There are no differences between the way petrol diesel and biodiesel are treated, though high-level blends of biodiesel might need increased dosages of DEF." 
 
 Currently, there are two methods used to treat heavy-duty diesel NOx emissions, SCR and exhaust gas recirculation (EGR). Navistar's strategy, for instance, has relied more heavily on the latter. "EGR alone will not meet the EPA's threshold for emissions, so Navistar will have to use credits to get there," Dombroski says. "In the next two years, they are going to need a significant upgrade in their technology."
 
 SCR exhaust treatment using DEF improves fuel economy by approximately five percent and achieves NOx reductions in excess of 90 percent.

Mansfield Oil and Yara partner to market diesel exhaust fluid

Posted September 28, 2009
 
 Finding alternatives to conventionally derived aviation fuel was the impetus behind a new ASTM International standard, ASTM D7566, Specification for Aviation Turbine Fuels Containing Synthesized Hydrocarbons. The new standard was developed by Subcommittee D02.J0.06 on Emerging Turbine Fuels, part of ASTM International Committee D02 on Petroleum Products and Lubricants.
 

 "The issuance of ASTM D7566 is the culmination of a focused, collaborative effort by the commercial aviation industry to move toward more environmentally friendly fuels, and to diversify the suppliers of aviation fuel," says Mark Rumizen, aviation fuels specialist, Federal Aviation Administration, and chair of the task group that developed ASTM D7566. 
 
 Rumizen says that concerns with the future cost and supply of conventionally derived aviation fuel and the imposition of carbon emissions limitations contributed to the development of ASTM D7566.
 
 According to Rumizen, the Commercial Aviation Alternative Fuels Initiative (CAAFI) was established in 2006 to facilitate the introduction of alternative aviation fuels.
 
 "The U.S. Air Force, CAAFI and ASTM Subcommittee J (Section J.06) coordinated the evaluation and qualification of candidate alternative fuels," says Rumizen. "In support of this effort, Section 6 of Subcommittee J established the synthetic fuels task group to write ASTM D7566 to accommodate blends of conventional aviation turbine fuel with synthesized hydrocarbon blend components."
 
 In addition to providing requirements for these blends, ASTM D7566 defines specific types of aviation turbine fuel that may contain synthesized hydrocarbons for civil use in the operation and certification of aircraft; it describes fuels found satisfactory for the operation of aircraft and engines.
 
 This initial version of ASTM D7566 provides criteria for the production, distribution and use of aviation turbine engine fuel produced from coal, natural gas or biomass using the Fischer-Tropsch process. However, the standard is structured to accommodate other future types of synthetic fuels produced from non-conventional feedstocks and processes as they are developed. These new fuel types can be added to ASTM D7566 in annexes after they are qualified.
 
 Potential users of ASTM D7566 include all entities involved in the production, transportation, storage, trade and use of aviation turbine engine fuel, including refineries, pipelines, airport fuel farms and airlines.
 
 All interested parties are invited to participate in the ongoing development of ASTM D7566. 
 
 "It is especially important to have participation from manufacturers of the aircraft and turbine engines, as these require fuel controlled to very high standards," says Rumizen. "In addition, representatives from companies comprising the aviation fuel infrastructure and biofuel producers would provide expertise and experience that would be very beneficial for development of future annexes of ASTM D7566."

 
 ASTM International standards can be purchased from Customer Service (phone: 610-832-9585; service@astm.org) or at www.astm.org. For technical information, contact Mark Rumizen, Federal Aviation Administration, Burlington, Mass. (phone: 781-238-7113; mark.rumizen@faa.gov). Committee D02 will meet Dec. 6-10 in Anaheim, Calif.
 
 ASTM International welcomes and encourages participation in the development of its standards. ASTM's open consensus process, using advance Internet-based standards development tools, ensures worldwide access for all interested individuals. For more information on becoming an ASTM member, please contact David Bradley, ASTM International (phone: 610-832-9681; dbradley@astm.org).
 
 Established in 1898, ASTM International is one of the largest international standards development and delivery systems in the world. ASTM International meets the World Trade Organization (WTO) principles for the development of international standards: coherence, consensus, development dimension, effectiveness, impartiality, openness, relevance and transparency. ASTM standards are accepted and used in research and development, product testing, quality systems and commercial transactions around the globe.
 
 Contact:
 Barbara Schindler, ASTM International
 100 Barr Harbor Drive, W. Conshohocken, PA 19428
 610-832-9603; bschindl@astm.org, www.astm.org
 
 SOURCE: ASTM INTERNATIONAL

New ASTM petroleum products standard covers alternatives to conventional aviation fuel

Posted September 29, 2009

 
 <a href=" http://www.biofuelbox.com/">BioFuelBox Inc. </a>announced its first installation of a new biodiesel technology has been operational since August at a potato processing facility in American Falls, Idaho. "Since we turned the plant on in August we've had 15 consecutive ASTM passes, and it hasn't failed," said Rick Reddy, vice president of marketing.
 
 San Jose, Calif.-based BioFuelBox came out of stealth mode earlier this year with the announcement that its patented and trademarked NovoStream process had successfully overcome a technical obstacle in removing sulfur from biodiesel made from low quality waste-based feedstocks. Reddy described NovoStream as a continuous flow, supercritical process using high heat and pressure to convert free fatty acids (FFA) and triglycerides to biodiesel in one pass with high yields. The process can handle up to 100 percent FFA, high contaminant levels as well as high moisture content. Pretreatment is limited to removing solids and excess water, according to Reddy. He added that the net energy ratio for the process is roughly twice that of standard biodiesel, in spite of the use of more energy for the heat and pressure used in the process. The company says the process yields 7 units of energy out for every 1 unit used, the primary energy savings coming from the minimal energy contribution from on site production and the waste feedstock itself.
 
 The first installation of the BioFuelBox 1 MMgy modular unit uses feedstock from an Idaho potato processing facility. The facility has a market for its waste vegetable oil, but not the lower quality greases which have been stockpiled in an outdoor pond before being landfilled. BioFuelBox uses the pond grease in its process, producing biodiesel that Reddy said has been described as the highest quality biodiesel their customer has purchased. 
 
 The company is pursuing an "own and operate" business model, seeking to place its modular units at municipal and industrial waste water treatment facilities generating at least 1 MMgy of waste fats, oils and grease. Reddy reports that the company has agreements with six facilities in the Southeast interested in the company locating a processing unit to handle the waste grease. "We provide a turnkey solution for people with large waste streams," Reddy said.

BioFuelBox installs first biodiesel plant in Idaho

Posted September 29, 2009
 
 Chicago-based<a href="http://www.ugesllc.com/ "> Ultra Green Energy Services LLC</a> announced the addition of two terminals to its expanding New York network. "Our long term customers have joined with UGES to exclusively store, blend, and sell Ultra Green Biodiesel at their terminals," said Michael Cooper, vice president and director of sales and trading. "We welcome Burt's Reliable in Southold, N.Y., owned and operated by John Romanelli; and Westmore Fuel located in Port Chester, N.Y., owned and operated by Dick Bologna." 

 
 The additional terminals expand Ultra Green's biodiesel network from the tip of Long Island to Westchester County and the Connecticut border. As a biodiesel marketer for 10 years, Cooper added, "Our positioning is based on a huge investment in time, effort and money. And we are going to leverage this success all the way to the finish line." Since 2007 Ultra Green has blended its branded Ultra Green Biodiesel at the only rail-to-rack terminal in New Hyde Park Fuel Terminal, owned and operated by Hart Petroleum. 
 
 "Ultra Green now has the largest network of wholesale biodiesel fuel terminals in New York Metro [region]. From Southington, Conn., to Southold, N.Y., Ultra Green has more biodiesel terminal positions than anyone else in the wholesale market," said Danny Falcone, Ultra Green wholesale manager. "We have won this business the old fashioned way-having a better product at a better price, professional business practices and service beyond customer expectations".
 
 The company said it draws upon its management experience in the biofuels and petroleum sectors which included grain trading in the 1970's and ethanol project development and marketing in the 1980's to develop unique hedging strategies and financial facilities to promote biofuels production and sales. In 2001, Ultra Green principals were the first heating oil dealers in the U.S. to market a biodiesel blend as retail Bioheat.

Ultra Green adds NY terminals

Posted September 29, 2009
 
 Ontario biodiesel producer, Methes Energies Canada Inc. learned Sept. 28 that it will receive up to $5.4 million through the Natural Resources Canada program ecoENERGY for Biofuels. "Our government is delivering results for families and workers in Mississauga by encouraging clean energy development," said the Minister of Natural Resources Lisa Raitt. "By investing in this project, we are helping to create and sustain local jobs and economic opportunities now, when they're needed the most."
 
 Earlier Methes Energies announced it had signed a contribution agreement with Natural Resources Canada to provide the maximum $5.4 million subsidy over a period of seven years, ending in 2015. Methes' operates a 5 MMly facility in Mississauga, Ontario. 
 
 The ecoENERGY for Biofuels Program supports the production of renewable alternatives to gasoline and diesel, as well as encourages the development of a competitive domestic industry for renewable fuels. The program provides an operating incentive to facilities that produce renewable alternatives to gasoline and diesel in Canada. Established in late 2007, the program offers an incentive of up to 20 cents per liter for biodiesel in the first three years and declining thereafter, and an incentive of up to 10 cents per liter for ethanol for three years and declining thereafter.
 
 Through the ecoENERGY for Biofuels Program, the Government of Canada will invest up to $ 1.5 billion (Canadian dollars) over a period of nine years in support of biofuel production in Canada. The Government of Canada's Economic Action Plan also dedicates $1 billion to the Clean Energy Fund and $1 billion for the Green Infrastructure Fund to provide additional economic stimulus while promoting a cleaner, more sustainable energy future for Canadians.
 

 Natural Resources Canada is planning three national roundtables involving provinces and territories, industry, researchers and the financial community to discuss strategies for securing a strong energy economy in the long term. The first national roundtable scheduled for Oct. 23 in Milton, Ontario, will focus on integrated community energy solutions. "The movement towards a clean energy future for Canada is plain for all to see, with tremendous growth or leading-edge development of new technologies," Raitt said. "Our Government is working to keep the momentum going strong, and these roundtables will ensure that all the key stakeholders play a part in determining the best path for our energy future."
 
 Visit <a href="http://ecoaction.gc.ca/ecoenergy-ecoenergie/biofuelsincentive-incitatifsbiocarburants-eng.cfm">Natural Resources Canada's ecoAction Web site</a> for more information about the ecoEnergy for Biofuels Initiative

Natural Resources Canada awards Methes in ecoEnergy for Biofuels program

Posted September 30, 2009
 
 Cincinnati Reds outfielder Chris Dickerson sees a new movement afoot in professional sports. His team and others are leading the way towards more sustainable practices in parks and stadiums. A growing number of pro sports teams recognize that biodiesel is a team player in their sustainability efforts. 
 
 From using the fuel in their stadiums, to collecting concession grease for biodiesel producers, to educational campaigns about alternative energy, the green trend is growing.
 
 "Where Great American Ball Park leads, I believe others will follow," Dickerson said. 
 
 Dickerson is one of the founders of We Play Green. The group works to unite athletes in encouraging environmental awareness and promoting alternative energy. 
 

 "With baseball winding down and football heating up, this is a great time to commend those teams and players who are leading the charge for biodiesel in sustainable venues," said Joe Jobe, CEO of the National Biodiesel Board. 
 
 Cincinnati Reds Player Plays Green
 The Reds' Great American Ball Park is among the greenest ballparks in the country. 
 
 Their efforts range from composting the grass clippings to using biodiesel blends for facility vehicles and standby emergency generators. Also, the park collects waste cooking oil from their kitchens and concession stands for biodiesel producers to use in making the fuel. In the last season, the Reds have sent 8,234 gallons of used cooking and motor oils to be refined for biodiesel. They use biodiesel blends in field and facility maintenance vehicles and equipment, tractors and stand-by emergency generators. 
 
 "In the global effort to be more environmentally friendly, the Cincinnati Reds believe that the use of biodiesel as an alternate fuel source is an important part of our overall greening strategy," said Declan Mullin, Vice President, Ballpark Operations. 
 
 Kansas City Chiefs Take Biodiesel to the End Zone 
 Kansas City Chiefs quarterback Matt Cassel said using biodiesel makes sense on a number of different levels, especially at sports venues. 
 
 "Turning potential waste into fuel is just a smart thing to do," he said. "If we can begin conditioning players and fans at a young age to recycle, we've taken a big step. Using alternative fuels such as biodiesel is an even bigger leap. Through the efforts of weplaygreen.org and athletes across the country, we are making our voices heard and are encouraging all sports venues to Go Green!" 
 
 Indianapolis Colts Sack Foreign Oil

 Indiana soybean and corn farmers teamed up with the Indianapolis Colts to educate consumers about the benefits of biofuels. With Colts' tight end Dallas Clark serving as the official spokesperson, Hoosier Horsepower connects with and educates students of all ages. 
 
 "Growing up in Iowa, I understand the importance of biofuels to our farmers and rural communities," said Clark. "I'm also excited that the Colts will donate $100 in the name of Indiana farmers to a scholarship program for every catch I make this season." 
 
 Biodiesel Takes to the Turf
 Other professional sports teams and organizations involved with biodiesel include:
 
 &bull;	Philadelphia Eagles 
 &bull;	Houston Astros 
 &bull;	Seattle Mariners 
 &bull;	Boston Red Sox 
 &bull;	Washington Nationals 
 &bull;	Philadelphia Phillies 
 &bull;	San Diego Padres 
 &bull;	ESPN 
 

 Biodiesel is a cleaner burning renewable fuel for diesel engines. It is made from abundant agricultural byproducts, such as soybean oil, other vegetable oils, fats and recycled cooking oil.
 
 SOURCE: NATIONAL BIODIESEL BOARD

Teams trend towards biodiesel to reduce impact on the environment

Pro sports: biodiesel takes them out to the ball game

Posted September 30, 2009
 
 With more than 4,000 delegates convening in Bangkok to discuss climate change over the next days, World Growth, a nongovernmental organization and palm oil advocate, decided it was the time to launch its campaign. World Growth's "Palm Oil Green Development Campaign" will focus on "setting the record straight and correcting the falsehoods and misconceptions" propagated by others like Greenpeace and Friends of the Earth.
 
 Indonesia would be exactly the kind of country that World Growth represents: a poor, developing nation that is also one of the world's leading palm oil producers. "Environmental groups have made palm oil a poster child in a wider campaign to pressure developing countries to stop converting forest land to productive agro-industries," World Growth said. "Developing nations must be allowed the chance to grow and develop without political intervention by environmental groups or developed nations."
 
 In a speech, a senior delegate for Indonesia told the U.N. that his country was a victim of climate change and "would like to do something to prevent it from worsening," Agency France Presse reported on Monday. 
 
 "While there have been some very general statements made here, I find it hard to imagine Indonesia agreeing to anything that inhibit their ability to support economic growth," said Alan Oxley, CEO of World Growth. 
 
 Palm oil production is rapidly expanding in Asia, partly as its use for biodiesel feedstock. Major oil companies like Neste Oil of Finland and Brazil's Petrobras are sourcing palm oil as a percentage of the raw materials they need to produce renewable diesel and biodiesel. Several companies in Malaysia, Indonesia, Singapore and South Korea are making millions of gallons of palm methyl esters, selling the fuel domestically and in Europe. "Palm oil is a highly efficient, high-yielding source of food and fuel, providing an efficient way of providing fossil fuel alternatives and capturing carbon from the atmosphere," World Growth said Monday. 
 
 World Growth said that biodiesel demand will not drive palm oil production in the future, but continued demand for the material as a food ingredient will be ravenous. "The projections are staggering," Oxley said. "Compared to the size of the fossil fuel market, palm oil biodiesel will make a relatively modest contribution to energy demand." 

 
 The meetings in Bangkok are the last big push before the U.N. summit in Copenhagen this December, and several interest groups have made palm oil a considerable target, hoping to convince delegates that rain forest destruction is a major contributor to climate change. "Palm oil generates 10 times more energy than it consumes," Oxley said. "It's very prosperous and offers excellent returns on the land used to produce it."

Palm oil crusade targets UN's climate change talks in Bangkok

Posted September 30, 2009
 
 Inc. Magazine's list of fastest growing companies featured Ohio's Jatrodiesel at the 550 slot and ranked 22 in the energy sector. The selection is evidence that there's still money to be made in the biodiesel industry, despite continued reports of bankruptcies, stalled capacities and high-priced commodities. 
 
 "The biodiesel plants that are not doing well basically have two problems," said Raj Mosali, CEO of Jatrodiesel. "Either they don't have any cash on hand, or they can't sell their biodiesel because their price is too high. Right now, there is about 35 cent margin between a producer's cost and the price of diesel fuel, so a plant that is using multi-feedstock technology and has a pretty lean operation should be able to make money."
 
 Some biodiesel plants have inefficient technologies and can't make biodiesel at a reasonable price. In addition, they often don't have capital to make improvements. "Our growth is coming from our ability to fix issues at existing plants, not from building turn-key operations," Mosali says. "The plants that do have cash are putting in polishing equipment or adding distillation columns or glycerin recovery, which can really add to the bottom line."

Jatrodiesel: making money, growing fast

Posted October 5, 2009
 
 One of India's largest automakers, Mahindra GV, is preparing to launch a two model pick-up line in the first quarter of 2010, and is currently signing up dealers for the rollout. Alpharetta, Ga.'s Global Vehicles USA, the exclusive importer and distributor for Mahindra, said they have between 300 and 400 retail outlets on-board to sell the TR20 and TR40 trucks. "A new generation of clean-burning, diesel-powered vehicles is set to take the American auto market by storm," Mahindra said.

 
 Both models, scheduled to be released in February, are four-wheel drives with four cylinder common rail diesel engines. "We've seen a positive trend in the diesel market, despite slight setbacks because of price," said Mike Geylin of Global Vehicles. 
 
 The two-vehicle line features six-speed automatic transmissions and fuel economy more than 30 miles per gallon, and is the first Indian-made motor vehicles for sale in the United States. 
 
 Mahindra has made no official endorsement of biodiesel or biodiesel blends, but is built with state-of-the-art "green technologies," Geylin said. 
 
 "We're confident we're coming to the market with the right product at the right time," said John Perez, founder and CEO of Global Vehicles. "Mahindra vehicles promise superior quality, performance and reliability, along with outstanding fuel efficiency at an affordable price. 
 
 The company just reported its largest sales month ever in the domestic Indian market, rising to the tune of 12.1 percent to a record 27,431 vehicles. The company is also one of the largest manufacturers of tractors in the world. Tomball, Texas-based Mahindra USA is a wholly owned subsidiary of Mahindra and Mahindra, and began sales operations in 1994. Overall, the $6 billion Mahindra Group has a presence in 25 countries across six continents.
 
 "Mahindra's entry into the U.S. auto market is a significant step not just for our company but for India," said Pawan Goenka, president of Mohindra's automotive sector. "The U.S. continues to be the world's most important automotive market in terms of size growth and opportunity."

MAHINDRA WILL OFFER TWO LIGHT-DUTY DIESEL TRUCKS FOR US MARKETS THIS FEBRUARY/PHOTO: MAHINDRA GV

1824-1294331930.jpg

Mahindra prepares to bring all-diesel line to U.S.

Posted October 6, 2009
 

 Lower energy prices and milder winter forecast compared to last year has led the Energy Information Administration to predict that households will spend less on heat during the upcoming cold season. 
 
 Between Oct. 1 and March 31, EIA projects an average household heating expense of $960, 8 percent below last year's heating expense. Households using natural gas or propane for heat are expected to fare the best, with expenditure decreases of 12 percent to 14 percent compared to last winter. 
 
 Users of heating oil, which represent 7 percent of households nationwide, will spend about $40 less this winter than last year. The highest concentration of oilheat consumers in the United States is in the Northeast, and EIA predicts a per-gallon average price of $2.64, 2 cents less than the average price last year. During the winter of 2007-08, Northeast residents paid an average of $3.31 a gallon. 
 
 In September, the oilheat industry committed to supporting green measures, including a minimum bio content of 2 percent in all heating oil sold by July 2010.

EIA: oilheat users will spend less this winter

Posted October 6, 2009
 
 Archer Daniels Midland Co. based in Decatur, Ill., is one of the world's leading biodiesel producers with wholly or jointly owned facilities in Germany, Brazil, India, Indonesia and the United States, and has an annual production capacity of 450 MMgy, said Beth Chandler, media liaison for ADM.
 
 The company recently completed acquisition of the ViaChem Group's oilseed crushing facility and biodiesel plant in the Czech Republic. "ADM is always evaluating opportunities that are in line with our strategy to grow our business," Chandler told Biodiesel Magazine. 
 
 And what a business it is-with more than 230 processing plants, ADM converts "corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses." Its sales for fiscal year 2009 were $69 billion. The company continues looking to expand the range of crops it originates and processes, and increase the volume and diversity of its product portfolio as part of a strategy to expand the size and "global reach" of its core model. 

 
 "In the oilseeds processing business, we are working to fulfill that strategy through the expansion of our crop origination capabilities in the world's key growing regions and the growth of our processing operations in markets where we see rising consumption," Chandler said. "One way we have done that is through the acquisition of ViaChem Group's oilseed processing assets in the Czech Republic."

ADM expands oilseed business in Central Europe

Posted October 14, 2009
 
 Hawaiian Electric Company announced on Oct. 14 that it has signed a contract with a subsidiary of Iowa-based Renewable Energy Group Inc. to supply 400,000 gallons of renewable, clean-burning biodiesel to be used to conduct biodiesel operational testing and collect additional emissions data for the new Campbell Industrial Park Generating Unit.
 
 REG emerged as the winning bidder from among eight companies seeking to supply the biodiesel for testing. As with all Hawaiian Electric fuel contracts, this contract has been submitted to the Hawaii Public Utilities Commission for review, as well as for input from the Hawaii Division of Consumer Advocacy, before the contract can be included in Hawaiian Electric's fuel costs.
 
 "We are proud Hawaiian Electric has chosen us as a partner and look forward to helping Hawaii meet the goals of the Hawaii Clean Energy Initiative by providing high-quality biodiesel, which reduces life cycle carbon dioxide values by 78 percent compared to petroleum diesel fuel," said REG Chairman and CEO Jeff Stroburg. "The state is to be commended for its leadership in creating a model for other utility companies across the country to follow."
 
 In August, Hawaiian Electric resumed the search for a biodiesel supplier for the Campbell Industrial Park Generation Station after the PUC rejected a previous contract with another potential supplier.
 

 In addition to the 400,000-gallon contract, a second request for proposals to supply 3 million to 7 million gallons of biodiesel per year for two years closed on September 30, 2009, with the goal of completing a contract for PUC consideration by the end of November.
 
 "We are grateful to all the bidders who responded so quickly and we are very happy to be working with Renewable Energy Group on this essential step in meeting our commitment to the PUC and Consumer Advocate to power the new peaking unit with renewable biodiesel," said Robbie Alm, Hawaiian Electric executive vice present.
 
 "Being able to use liquid renewable fuels in our generating units is one of many steps-including more electricity from other renewable sources such as solar, wind, biomass and the ocean-to meet our goal of providing reliable electric service while reducing Hawaii's dependence on fossil fuels," he said.
 
 In August 2007, the Natural Resources Defense Council and Hawaiian Electric established an environmental policy for procurement of biodiesel from sustainably-produced palm oil and locally grown feedstocks.
 REG's response to the RFP proposes to supply high quality biodiesel processed from used cooking oil and waste animal fat. While the use of waste is not covered directly by the 2007 NRDC-HECO Environmental Policy, the NRDC has indicated that this is likely to represent a positive environmental approach as compared to other feedstock that may produced through unsustainable management practices.
 
 The Campbell Industrial Park Generating Station consists of one 110-megawatt combustion turbine generator and auxiliary systems to be used as a peaking unit. Construction is complete and preliminary performance testing is underway.
 
 REG operates a national network of biodiesel production with the capacity to produce more than 300 million gallons of biodiesel per year. As a member of the National Biodiesel Board, REG adheres to the industry's Biodiesel Sustainability Principles found at <a href="http://www.biodieselsustainability.com">www.biodieselsustainability.com</a>. 
 
 For more information:
 HECO: Peter Rosegg 808-543-7780, 808-371-7474 peter.rosegg@heco.com

 REG: Alicia Clancy, (o) 515-239-8118, (c) 515-450-9692, alicia.clancy@regfuel.com
 
 SOURCE: REG

Hawaiian Electric chooses REG to supply biodiesel for generation station testing

Posted October 7, 2009
 
 Since algae feed on carbon dioxide, underground mines serve as the perfect incubators for their growth and are abundant in Missouri. Mines maintain a stable temperature and shield the organisms from sunlight. David Summers, professor of Mining Engineering at Missouri University of Science and Technology, said mines provide an infrastructure for algae cultivation that does not have to be built-the ponds, reactors and other paraphernalia usually associated with algae production. 
 
 "You can isolate the algae from the sun in a mine," Summers said. "We can use artificial light in short intervals and fool the plants into thinking that days and nights are very short [for faster growth]. We have a stable temperature underground, ambient conditions and modulated light-this means better control."
 
 A reactor could be 30 feet deep in a mine and, combined with other aspects suited to cultivation, could increase yields 500 times over algae grown on pond surfaces, Summers told Biodiesel Magazine. Algae could also help coal-producing companies find cheaper alternatives to becoming emissions-free, and may provide a carbon sink for coal-fired power plants. 
 
 In a separate project, Washington University's Photosynthetic Research Center in St. Louis and the Advanced Biofuels Systems at the Donald Danforth Plant Science Center recently received $35 million dollars from the U.S. DOE to fund research related to the oil-producing characteristics of algae. A spokesperson for the Missouri Partnership for economic development said Missouri, with its abundant access to water, flat land, fertilizer and even its own unique algae strain native to the state, could make the state a "hub" for algae-to-fuel production.

Missouri tapping coal mines for 'slime power'

Posted October 7, 2009

 
 German Chancellor Angela Merkel was reelected to a four-year term on September 27, and is working to form a coalition government between her Christian Democratic Union/Christian Social Union parties and the Free Democratic Party. 
 
 Biopetrol Industries AG, based in Zug, Switzerland, operates biodiesel plants in Schwarzheide and Rostock, Germany, and stated: "The protagonists in the coalition parties have positioned themselves in the run-up to the elections on issues concerning environmental and energy policy with virtually identical statements clearly in favor of biofuels."
 
 Biopetrol said that previous policy in Germany resulted in biodiesel actually being hampered instead of receiving tax concessions. "The current under-compensation, that is to say the insufficient support of pure biofuel, requires appropriate correction and adjustment of the tax concession," said Christel Happach-Kasan, FDP spokesman for renewable energy and rural development, in a press release. "The government has also lost sight that, when looked at overall, there are very good reasons for supporting the production of biodiesel."

German biodiesel producers encouraged by election results

Posted October 12, 2009
 
 On Nov. 12, RPL Holdings Inc. will auction "surplus" biodiesel process equipment developed by process technology provider Greenline Industries LLC, which has filed for Chapter 7 bankruptcy protection. The auction, marketed by Maas Companies Inc., will feature six 10 MMgy biodiesel production trains, or lines, for sale individually or as a package deal. 
 
 Each process train includes dosing stations, ion exchangers, first- and second-stage reactors, first- and second-stage settling tanks, and a methanol dryer. Between-train equipment such as buffer tanks, catalyst mixing stations and chillers will also be auctioned off. The equipment is crated and wharehoused in New Jersey and ready to transport, according to Maas Companies. 
 
 The auction is to be held Nov. 12 at 11am, in Harrison, N.J., at the Hampton Inn & Suites – Newark Harrison Riverwalk, 100 Passaic Ave.
 
 Equipment inspections will be held Thursday, Oct. 15 from 10am to 5pm, and again the day before the auction, which is Wednesday, Nov. 11 from 10am to 5pm. The equipment is sold "as-is" with no expressed or implied warranties. 

 
 To view photos of the Greenline Industries equipment up for auction, <a href="http://www.maascompanies.com/photos.asp?project_id=183">click here</a>. 
 
 For payment arrangements or additional information regarding the auction, <a href="http://www.maascompanies.com/response.asp?project_id=183">click here</a>.

Biodiesel process equipment auction Nov. 12

Posted October 12, 2009
 
 New York City's feedstock procurement firm, Tri-State Biodiesel LLC, which provides recycled restaurant greases to biodiesel producers, has received the 2009 Innovation Award from the Social Venture Network. Brent Baker, CEO of Tri-State, has been a member of SVN for several years and will be accepting the award at the organization's fall conference, which starts Oct. 22 in La Jolla, Calif. "These are business leaders who are dedicated to making the world a better a place, and support a mission to work with other members," Baker told Biodiesel Magazine. 
 
 As a representative of the biodiesel industry, Baker said he has been involved in dispelling the "myths" created by certain lobbying groups meant to confuse the public about the benefits and characteristics of biodiesel. "It's been particularly bad the past two years," Baker said. "One is that biodiesel production and use is worse for the environment, and takes more energy, than petroleum-and that simply is not true," he said. "The first 15 years I was involved in this business, I never heard that." Baker feels his role in education and the promotion of biodiesel led to Tri-State's selection as an SVN Innovator. "There's been a lot of negative publicity and I've been educating legislators and others about the positives." 
 

 One of the controversies surrounding biodiesel lately has been its perceived role in the destruction of South American and Southeast Asian tropical forests. Biodiesel Magazine asked him if palm methyl esters were tarnishing the reputation of the industry. "The palm oil industry was an industry well before biodiesel," Baker said. "And there is sustainable palm oil production, so we can't let pictures of fires and abandoned villages color our whole perception of palm production." 
 
 Sustainability-the continued healthiness and longevity of an enterprise-is of particular importance to the SVN, and has been a platform of Tri-State, which collects waste from 2,700 restaurants in the New York City area. Focusing on feedstock procurement from a recycling, instead of a commodity, standpoint has allowed the company to emerge as a profitable leader in the industry. Nevertheless, he congratulates what he calls predecessors to second-generation biofuels production-the ethanol industry and soy-based biodiesel.

Tri-State combats biodiesel myths, recognized for social innovation

Posted October 13, 2009
 
 <a href="http://www.rwenergies.com/">Renewed World Energies Corp.</a> has begun work on a 5 acre site to turn algae biomass into green diesel and electricity at Georgetown, S.C., with a goal of being in production by late 2010. Between 3 and 4 acres of photo-bioreactors are planned to produce algae-based fuels to generate electrical energy. "The quickest way for generating revenues is in producing electricity," said Rick Armstrong, co-founder of Renewed World Energies Corp. He and fellow co-founder Tim Tompkins unveiled their system at the Algae Biomass Summit in San Diego, Calif., the first week of October.
 
 Armstrong and Tompkins applied their experience in automation and process control to develop what they believe will be a cost-effective photo-bioreactor. Armstrong said their projections show a 12.8 percent return on investment for a 1.6 megawatt (MW) unit, while a larger 5 MW system should provide a return on investment closer to 15 percent. An individual photo-bioreactor panel measures 4 feet wide by 6 feet high by 3 inches thick, with 550 panels contained in one cell and five to six cells covering an acre of land. The process utilizes automated harvesting, reducing the moisture content in a prescreening process to about 20 percent, before being pumped to a final screen and dried further if necessary prior to processing. The estimated yield per acre is between 95 and 125 tons of dried biomass per year, according to Armstrong. 
 
 Renewed World Energies plans to use the algae produced at its Georgetown facility to fuel a green diesel biomass refinery under order from Unified Fuels. The catalyzed gasification unit has four products- the greatest proportion being a liquid green diesel, a smaller proportion of green gasoline, non-condensable gases dominated by methane and ash. RWE's facility will include two 800 kilowatt generators, one a natural gas generator modified to burn the methane and the other a reciprocating engine to burn the green diesel. The generator exhaust will be recycled through the system. Negotiations for a purchase power agreement are nearing completion with the regional utility, Santee-Cooper Electric, Armstrong added. 
 
 One of the goals of the system design, Tompkins added, was to create a system that could be adjusted to create the optimal conditions for any strain of algae. "We found there has not been a lot of work done on the automation and process control side of photo-bioreactors," Armstrong added. While the cost of a photo-bioreactor is higher than an open pond system, he said that is offset by an increase in yields from being able to control the environment, plus the ability to contain the greenhouse gases being used as algae nutrients. Target markets for the system are electrical utilities and industries with emissions that could fuel the algae system, reducing GHG emissions while generating additional power and biofuels.

 
 A group of investors backed the development of the project through the prototype stage, with another round of fundraising ongoing now. "It hasn't been as successful as I'd like it to be," Armstrong told Biodiesel Magazine. "But it's been going okay. We've had enough to continue working. We've been very frugal," he added. "We've spent less than $4 million so far." The company is working on a joint venture to build a second system similar to the South Carolina facility with Southland Renewable Fuels LLC, Paducah, Ky.

RWE plans to generate electricity from algal diesel

Posted October 14, 2009
 
 <a href="http://www.newgenerationbiofuels.com/ ">New Generation Biofuels Holdings Inc. </a>is expanding the reach of its emulsification-based biofuel technology. The company announced a letter of intent has been signed with Ace Biofuels of San Juan, Puerto Rico, to license its technology for a proposed facility in the U.S. territory. 
 
 "The whole of Puerto Rico is in the process of exploring a number of alternative and renewable energy options to decrease dependence on fossil fuels and help to decrease the impact that global warming could have on the island," said Edgardo Fabregas Rios president of Ace Biofuels. "With NGBF's unique biofuel technology we can help not only our customers, but our country as well." Ace Biofuels is a subsidiary of the Caribbean engineering firm,<a href="http://www.ace-engineering-ltd.com/index.html "> Ace Engineering & Management Ltd.</a> Initial targets for the biofuel are boiler applications in locations with no access to natural gas and limited opportunities beyond fossil fuels for a renewable energy source.
 

 Under the terms of the agreement, a successful completion of a biofuel test in a Cleaver-Brooks boiler at a Puerto Rico manufacturing firm is required before work will begin on the facility. Production is expected to begin early in 2010.
 
 In September, the New Generation announced a New York firm has signed letter of intent to license the technology for a plant to be located in the Atlantic Canada region. Eden Renewable Energy LLC will pay a licensing fee of 10 cents per gallon of biofuel produced and sold, with Eden given the exclusive rights for the Maritime provinces of Newfoundland, Novia Scotia, New Brunswick and Prince Edward Island. 
 
 New Generation brought a 5 MMgy plant on line in Baltimore at the beginning of the year. The plant uses an Italian emulsification process that combines vegetable oil, water and additives into a biofuel that can be used as a replacement for diesel and fuel oil. The company has targeted industrial boilers and heating as its initial market, along with developing licensees for the technology. New Generation holds a license for development in North America, Central America and the Caribbean.

New Generation expands to Puerto Rico, Atlantic Canada

Posted October 14, 2009
 
 Small-scale suppliers developed their business as they watched the mega-scale biodiesel plants go broke or sit idle. They don't just sell plastic cones and rubber hoses to garage-based brewers anymore. They sell everything from standalone processors for personal production to lab and testing equipment for commercial facilities.
 
 Utah Biodiesel Supply in Syracuse, Utah, offers a plethora of products-everything from beakers and filters to wash tanks and self-contained processing units. "My business philosophy has been different than the majority of home-brewing companies," said Graydon Blair, founder of UBS. "Many had a one-size-fits-all solution that tried to pigeon hole everyone into their equipment. I wanted to service them all. I sell equipment to everyone from home brewers to bona fide biodiesel factories that need testing materials-beakers, filters, etc.-for their laboratories."
 
 Companies like UBS have observed the trend of moving away from centralized plants and returning in some measure to the grass roots model of modest production volumes built around a local or community-based plan. Another of these companies is Biodiesel Experts. Ernie DeMartino is a mechanical engineer with decades of centrifuge experience. He's been a consultant and supplier to the biodiesel industry for about five years, and now owns and operates Biodiesel Experts headquartered in Pearland, Texas. "The only biodiesel plants that are staying successful are the 2 MMgy to 3MMgy plants," he said. "These are little guys that work little deals in their local area, pick up feedstock, and sell biodiesel." 
 
 "What people failed to consider or manage was the logistics- everybody knows when the mega plants centered on refined vegetable oils started to have problems," DeMartino said. "They started going broke and didn't have enough to retool for multi-feedstock processing. It hasn't worked unless you're Tyson or Cargill where you have the source right next to a large plant. Even the smaller guys who put all their eggs in refined oils couldn't make a living." 
 
 Home-based brewers, small farms and now cooperatives are still the largest sector of customers for suppliers like UBS and Biodiesel Experts, but DeMartino said an untapped market is sitting out there ready to take off. "Municipalities are really what my system is geared for," he said. "These have thousands of vehicles and mandates to use renewable fuels. If they find a way to get the logistics to work, their fuel cost is zero, they might even be able to make money with the credits they receive." 

 
 Initially servicing the needs of home-based fuel makers, Blair eventually became very well acquainted with the commercial industry selling chemicals and ASTM testing gear. "I've been moving into products that all my customers need. Even if they buy one of the BioPro processors, they're still going to need equipment to collect, filter and store grease," Blair said. "Other accessories like a methanol pump-everybody needs a methanol pump." 
 
 Because of his expertise, DeMartino started fixing problems related to maintenance and processing at the bigger plants, too. "We've been trying to convince customers that biodiesel is more about chemistry than it is equipment, and that's where their focus needs to be," he said. Not only does DeMartino serve as a vendor and consultant to industrial-scale plants, Biodiesel Experts also manufactures its self-designed Precision line of stainless steel, industrial grade biodiesel processors, which are assembled both domestically in Pearland, Texas, and abroad in Columbia, he said. 
 
 The ability of the biodiesel manufacturing process-whether personal or commercial-to compete with the cost of petrol diesel is the most vital component to generate sales, profit and interest. "Last year, we couldn't answer the phones fast enough," Blair said. "When diesel is above $3-per-gallon or $3.50-per-gallon, we get a large interest from a wide range of people. Interest was intense after Katrina when the price of diesel spiked, but since then we've seen it drop back off."

From beakers to reactors: a perspective from small-scale suppliers

Posted October 14, 2009
 
 Often there's a let-down after a record year. Cargill today reported net earnings of $525 million in the fiscal 2010 first quarter ending Aug. 31, down 65 percent from the record $1.49 billion in the same period a year ago. The Minneapolis-based processor mentioned its investment in The Mosaic Company, a crop nutrition company that specializes in concentrated phosphate and potash marketing, for weighing down the current fiscal performance. 
 
 Earnings in agriculture services, food ingredients and applications-among Cargill's five business sectors-were actually up from last year's first quarter, due in part to lower raw material costs, reduced operating costs and changes to product mix. "Risk management and financial results rose significantly, reflecting a return to profitability by its financial investment subsidiaries and good performance among the energy businesses," the company stated. "Origination and processing earnings were solid, though down from last year's record performance." 
 
 Compared to same period last year the numbers are dismal, but the company iterated that the situation is nevertheless improving. "Cargill posted a solid quarter, notwithstanding the comparison to last year's all-time record," said Greg Page, Cargill chairman and chief executive officer. "Our business unit earnings were broad based, and they were up considerably from the final two quarters of fiscal 2009." 
 
 Mosaic reported net earnings of $100.6 million, or $0.23 per diluted share, for the first fiscal quarter ending August 31, 2009. These results compare with net earnings of $1.2 billion, or $2.65 per share, for the first quarter of 2008.

October 2009

Business Briefs