Encountering red tape isn&rsquo;t new for alternative fuels such as biodiesel on their journey to acceptance as viable, on-road fuel. The same could be said for its off-road applications, specifically in maritime use. Perhaps no one understands the trials and tribulations of biodiesel better than Randall von Wedel who, in the early 1990s, was instrumental in helping biodiesel become accepted by boaters in the San Francisco Bay area.
 Recognizing biodiesel&rsquo;s inherently higher-quality air and water characteristics, von Wedel, a principal scientist at CytoCulture International and avid boating enthusiast, recalls a pivotal point in California where he saw an opening for marine operators to&mdash;by increasing their use of biodiesel&mdash;enhance performance in marine engines and reduce their carbon footprint. In 1993, the California Air Resource Board mandated that all high-sulfur No. 2 off-road diesel fuel be switched to what was called low-sulfur, low-aromatic, which inevitably forced oil companies to lower levels of aromatic compounds, such as benzene, in the fuel, von Wedel says. The switch also inevitably caused the gaskets and seals (or elastomers) in boat engines to shrink, he says, because they were designed to swell in the presence of those aromatic compounds found in high-sulfur diesel fuel. Shortly after CARB imposed the switchover, von Wedel and his colleagues published empirical data supporting the fact that biodiesel not only restored lubricity in marine engines, but, because of its solvent properties, allowed the membranes to swell up again. Von Wedel was vindicated.
 &ldquo;That launched biodiesel in California because there was so much publicity associated with using biodiesel in marine engines then,&rdquo; von Wedel tells Biodiesel Magazine. &ldquo;We were in the right place, at the right time and with the right fuel. I didn&rsquo;t design it&mdash;it just happened.&rdquo;
 Since that time, von Wedel&rsquo;s pioneering efforts with biodiesel in the Bay area resonated to other fleet operators and boat owners, such as the Red and White Fleet, which was interested in using biodiesel. As it turned out, Red and White became the first commercial adopter of biodiesel in ferry vessels in the Bay area. Since 2006, family-owned Red and White company has been using a B20 blend in its passenger vessels with no issues directly related to engine operability, according to Joe Burgard, director of operations for Red and White.
 &ldquo;We did have some bacteria growth early on, but we didn&rsquo;t attribute it directly to the biodiesel,&rdquo; Burgard says. &ldquo;I think early on there was a lot of inconsistency on the quality standards of biodiesel, but since we adopted it there have been no issues.&rdquo;
 Not only did ferry fleet operators in the Bay area express immense interest using biodiesel, but it also proliferated northward into Washington. In 2004, the Washington State Department of Transportation&rsquo;s Ferry Division conducted a pilot biodiesel fuel test over a four-month period using a B20 blend of soy biodiesel in three of its vessels. Although the operational issues were challenging, according to Paul Brodeur, director of vessel maintenance, preservation and engineering for the ferries division, the test was successful in that it helped him gather important information that would inspire a 12-month biodiesel pilot study in 2008 using blends of B5, B10 and B20 with ULSD in three of its vessels&mdash;the Issaquah, the Klahoya and the Tillikum. Currently, Brodeur says 15 of the 20 vessels run on a B5 blend, amounting to about 17 million gallons of biodiesel consumed annually.&nbsp;
 &ldquo;When that pilot test concluded in 2009, we went to the state legislature for some funding for ongoing biodiesel use,&rdquo; Brodeur says. &ldquo;We were later funded at a 5 percent level for the incremental cost of the biodiesel, and that was based on availability.&rdquo;
 Today, many marine operators across the country are either exploring the use of or are using biodiesel in their marine engines. For example, the Virginia Port Authority expanded its voluntary program in January of using B5 with ULSD in its diesel-powered machines owned by the VPA&rsquo;s operating company, Virginia International Terminals Inc. Also, the U.S. Navy, the largest consumer of diesel fuel in the country, is studying the long-term feasibility of integrating biodiesel and other renewable forms of biofuel in its fleet of ships to reduce its carbon footprint, NOx and SOx emissions and achieve a sustainable goal of buying domestic product. &nbsp;&nbsp;&nbsp;
 Things to Keep in Mind
 Several studies have been conducted to find which biodiesel blends interact best with marine engines. Marine engines are equipped to perform efficiently without incident on B5, but issues can occur when blends exceed that amount if the proper precautionary measures aren&rsquo;t met. Two of the prominent issues that arise when ship owners consider using blends above 5 percent include incompatibility with fuel filters, gelling and potential microbial growth in older fuel tanks. Of course, operational deficiencies related to biodiesel greatly depend on the size and duty-cycle of any given ship, Brodeur says.
 &ldquo;We&rsquo;re only burning B5 so the blend ratio is pretty low, so we wouldn&rsquo;t expect to have any issues,&rdquo; Brodeur says. &ldquo;When we did our pilot testing, we started having filter issues and some gelling issues occurred when we ran on B20, especially in colder weather.&rdquo;
 Brodeur recalls suspending the use of biodiesel when his B100 product stored in stainless steel totes began to gel when it was subject to temperatures of 20 degrees Fahrenheit. That was when his team manually blended their product, compared to now where they employ in-line blending systems at their fueling sites. Brodeur advises keeping a close watch on fuel clogging that can occur when B20 is used. &ldquo;Operationally, the biggest thing we experienced [with B20] was some premature filter clogging, so you have to stay on top of cleaning out your fuel transfer filters and your fuel purifier,&rdquo; Brodeur says. &ldquo;Issues like these happen at a much slower rate with B5 or B10.&rdquo;
 Another aspect to be mindful of, according to Brodeur, is to actively participate in proper fuel management practices by using additives or biocides to ensure fuel tanks are clean to reduce the fuel-water interface that can often create an environment suitable for microbial growth, commonly known as &ldquo;diesel bugs.&rdquo;
 &ldquo;If we get an active population of microbial growth, then we&rsquo;ll do a higher dosage to kill them, whether it is diesel fuel or a blended product, then we find ourselves in good shape,&rdquo; Brodeur says. &ldquo;It&rsquo;s not more or less indicative of whether you have a blended product or not. It&rsquo;s a marine environment where you have variables that can cause microbial growth other than biodiesel, like the tanks that are integral with the hull, varying temperatures, tanks sweat, condensation and so forth.&rdquo;
 Stricter Emission Standards Ahead
With more oceangoing vessels in use, and stricter fuel and air emission regulations in both domestic and international waters expected to go into effect in the next few years, biodiesel will play a progressively greater role. This was evidenced when, in October 2008, the member states of the International Maritime Organization agreed to amend the International Convention for the Prevention of Pollution From Ships (MARPOL) Annex VI, adopting new tiers of NOx and fuel sulfur controls. The most stringent of these new emission standards apply to ships operating in designated Emission Control Areas, including the newly-designated North American ECA.
 The revised MARPOL states that as of 2015, ship operators that trade in emission control areas will be required to burn fuel with less than 0.1 percent sulfur (1,000 ppm), which will help reduce SOx and particulate matter by more than 85 percent from today&rsquo;s levels, according to the U.S. EPA. The fuel sulfur limit allowable under MARPOL today is 10,000 ppm.
 Kevin Reynolds, senior marine engineer for The Glosten Associates Inc., an engineering and consulting firm based in Seattle, authored a report on exhaust gas cleaning systems used in ships for The Ship Operators Cooperative Program, which was released in February in light of the new MARPOL regulations that are set to go into effect. Reynolds says the study was designed to guide ship operators when faced with the dilemma of switching to expensive distillate fuel in ECA or install EGS and continue to burn high-sulfur, heavy fuels. He adds that the use of biodiesel in conjunction with ULSD is a solid option for ship operators looking for ways to comply with impending sulfur emissions as prescribed by the amended MARPOL requirement.
 &ldquo;Biodiesel in our view is certainly a low-sulfur option,&rdquo; Reynolds says. &ldquo;The challenge for these large oceangoing ships is that it&rsquo;s going to be very expensive relative to residual fuel.&rdquo;
 Reynolds continues, &ldquo;One of the biggest challenges in switching over to biodiesel is that it essentially scrubs the fossil fuel residue off your storage tanks and it tends to plug your filters, hence making the switchover process fairly painful. There&rsquo;s still some interest in using biodiesel by ship owners, but there needs to be continued pilot projects to get past compatibility issues, along with increased supply, as continually switching between biodiesel and fossil-based fuels could create unwanted incompatibility issues.&rdquo;
 As for NOX, the amended MARPOL requirements will mandate that all marine Tier III engines will have to install some form of aftertreatment technology by 2016. Von Wedel admits there while there may be a slight increase in NOx when using biodiesel, it would be eliminated with the utilization of both biodiesel and aftertreatment technology to comply with MARPOL NOx requirements.
 &ldquo;Biodiesel has good potential to assist in the role, but it&rsquo;s going to have to be in conjunction with proper additives or with aftertreatment, which will be very challenging for boats,&rdquo; von Wedel says.
&ldquo;Boats aren&rsquo;t set up for that and there&rsquo;s no market right now to build equipment to retrofit a boat or ferry to accommodate those stringent standards. But, in principle, it could be done.&rdquo;
 If You Build It, They Will Deliver
 As biodiesel usage increases by ships near ports and harbors, one might ask: is there an infrastructure at ports to support installation of fuel terminals to meet that demand? The answer is no, especially in the Bay area, according to Kent Bullard, a BQ-9000 consultant and biodiesel quality assurance consultant for Little Rock, Ark.-based biodiesel consulting firm Lee Enterprises Inc. &ldquo;There really isn&rsquo;t any access, at least here in Southern California, to biodiesel unless if you&rsquo;re having a fuel company come and service your boat by wet fueling then you can get access to fuel if you order it,&rdquo; Bullard says. &ldquo;If we could have biodiesel back at Ventura Harbor at the fuel dock, it would start moving again, especially now that biodiesel is becoming price competitive with diesel now.&rdquo;
 Bullard cites California&rsquo;s ongoing underground storage issue as one of the main culprits holding down the build-out of an infrastructure at ports for greater access to biodiesel in the state. In 2009, California&rsquo;s Water Resources Board expanded its approval for storing biodiesel blends in underground tanks from the existing B5 limitation to up to B20. A 25-year-old California law requires the storage of any chemical in underground tanks to be tested and independently certified as being compatible with the tank materials, Bullard explains. With only B5 blends having been tested, the water board approved a three-year emergency variance to allow higher blends up to B20 in double-walled tanks and piping that currently meet requirements for petroleum-based fuels.
 &ldquo;You have to provide a letter from all of the tank component manufacturers showing biodiesel compatibility for getting above B5 underground,&rdquo; Bullard says. &ldquo;Then you can apply for, and hopefully your local authority will grant you, a variance, which could take about a year and a half until you receive approval.&rdquo;
 In Washington, Brodeur faces the challenge of trying to get consistent access of biodiesel. Currently, the Washington ferries that traverse the Puget Sound region under Brodeur&rsquo;s watch are all fueled from three different locations. One, he says, is a fuel terminal that delivers blended fuel by boat (also called wet fueling) and the other is equipped with in-line blending capabilities. The third is in the process of having in-line blending equipment installed at the fuel pier in Seattle.
 While Brodeur admits that biodiesel is considered a boutique fuel in many port hubs across the country with limited to no state or provincial backing to support the build-out of an infrastructure for more widespread availability, he doesn&rsquo;t have any regrets for taking a chance on using biodiesel during its pilot studies.
 &ldquo;As long as we continue to receive the necessary funding to support the program, I&rsquo;m committed to moving the fleet forward with higher biodiesel blends, up to B20, because that&rsquo;s what we tested and that&rsquo;s what we know will work,&rdquo; Brodeur says. &ldquo;Beyond that, I think we would need to go into more of a pilot project if we were considering blends higher than B20. Certainly, B20 is doable and if we&rsquo;re funded to that level, I&rsquo;m committed to make that happen.&rdquo; Author: Bryan Sims Associate Editor, Biodiesel Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

BIODIESEL ON BOARD: Family-owned Red and White Fleet has been using B20 in its passenger vessels without incident since 2006. 

2011/06/13080862998938.jpg

PIONEERING USE: Users in the San Francisco Bay area have been instrumental in getting biodiesel into maritime applications. 

2011/06/13080863378261.jpg

SIGHTSEEING: Marine applications are especially tough for biodiesel because of the moisture, turbidity and other factors that can cause fuel issues and microbial growth. 

2011/06/13080863709044.jpg

A high percentage of biodiesel is used by consumers on land, and marine operators are trying to match that same level of usage by sea

Biodiesel Sets Sail

The railroad is already considered one of the most environmentally sustainable and efficient ways to transport freight. Although most railways address fuel efficiency in terms of gallons-per-mile rather than miles-per-gallon, the sheer volume of cargo that can be moved by a single train results in a highly efficient operation.
 The U.S. Surface Transportation Board defines three primary categories of railroads in the U.S.: Class I, Class II, and Class III. Short-line railroads, those with annual operating revenue of less than $20 million, are primarily classified Class III. Regional railroads, those with annual operating revenue between $20.5 million and $277.7 million, are generally classified as Class II. The largest railroads in the U.S., defined by the STB as having annual carrier operating revenues of $250 million or more&mdash;are classified Class I. Currently, seven rail lines in the U.S. are recognized as Class I, including Burlington Northern Santa Fe, CXS Transportation, Canadian National/Grand Trunk, Kansas City Southern, Norfolk Southern, Soo Line and Union Pacific.
 According to the Association of American Railroads, Class I railroads alone operated more than 94,000 miles of track in 2009, with 24,047 locomotive engines in service. During the same year Class I railroad operationed 1.53 trillion ton-miles. A ton-mile equates to 1 ton of freight moved one mile. Furthermore, the AAR estimates that the average Class I train transported 3,546 tons of cargo 919 miles per trip.
 Most locomotive engines in the U.S. are powered by diesel, and the fuel they use to transport freight is not insignificant. Data published by the STB illustrates that the seven Class I railroads consumed nearly 964 million gallons of fuel during the first quarter of 2011, which is a slight increase over the more than 900 million gallons of fuel the same railroads consumed during the first quarter of 2010.The U.S. Energy Information Administration estimates that more than 2 billion gallons of distillate fuel oil were used by the railroad in 2009, representing a fraction of the 34 billion gallon on-highway market. However it is important to note that even a 2 billion gallon market represents the opportunity to blend 100 million gallons of biodiesel into a B5 blend, or 400 million gallons of biodiesel into a B20 blend of fuel.
 Some railroads are beginning to recognize the benefits associated with employing a renewable fuel in their operations. In fact, Amtrak and BNSF Railway Co. are each participating in long-term B20 trials. While there are obvious benefits of using renewable fuel in terms of energy security and reduced carbon emissions, those who wish to fuel locomotive engines with biodiesel face a different set of challenges than those using the fuel in on-road operations.
 &ldquo;The railroad industry is a bit different than trucking in that we use our locomotives for a very, very long time,&rdquo; says Marc Magliari, Amtrak&rsquo;s media relations manager, noting that there are still some locomotives in the U.S. that have been operating for more than 50 years. Perhaps most importantly, the reliability has to be incredibly high in order for biodiesel to be used commercially by railroads. While a company running a trucking fleet likely has &lsquo;spare&rsquo; trucks that can be utilized if biodiesel-associated issues pop up unexpectedly with one engine, the railroads do not have that luxury. Any fuel that a locomotive uses has to have little or no impact on locomotive reliability and availability, says Magliari. There really aren&rsquo;t spare locomotives a railway company can rent or otherwise utilize if one in their fleet becomes inoperable for a period of time.
 Amtrak Trial 
 Amtrak kicked off a one-year B20 trial in the spring of 2010. The trial, which wrapped up May 15, focused on the Heartland Flyer, a P32 model train purchased in the late &rsquo;90s that travels between Ft. Worth, Texas and Oklahoma City, Okla. While it will take several months to compile and analyze the data gathered during the trial, Roy Deitchman, Amtrak&rsquo;s vice president of environmental, health and safety, says preliminary results seem to indicate the fuel&rsquo;s performance has been acceptable. &ldquo;For the Amtrak part of the trial, we&rsquo;re very happy with the performance,&rdquo; he says. Magliari adds that the trial resulted in no problems related to operational reliability.
 The biodiesel fuel used in the trial has been manufactured using beef tallow as a feedstock. Magliari stresses that this was not an intentional decision made by Amtrak, rather beef tallow biodiesel simply happened to be locally available. The B20 was splash blended in a truck using ULSD, and directly introduced into the locomotive. In other words, the B20 blend was not stored in a tank prior to fueling the train.
 The trial, which was funded with a $274,000 Federal Railroad Administration grant along with support from the Texas and Oklahoma departments of transportation, includes several discrete components. Two of the 16-cylinder engine&rsquo;s assemblies were replaced with brand-new components at the start of the trial. According to Deitchman, detailed measurements of the gaskets and assemblies were taken at the start of the trial. Following the competition of the trial, a comparative set of measurements was taken.
 Emissions testing is also being completed as part of the project. &ldquo;A locomotive is difficult to emissions test,&rdquo; Deitchman continues. &ldquo;It has to go on a specially built dynamometer, and there are only two or three places in the U.S. that do that testing.&rdquo; For Amtrak&rsquo;s trial, the Heartland Flyer will undergo emissions testing at General Electric Co.&rsquo;s facility in Erie, Pa. &ldquo;The locomotive was built by GE, which is one of the reasons it make sense to take it back to its manufacturer [for emissions testing],&rdquo; Deitchman says.
 A third component of the project involves fuel efficiency. According to Deitchman, Amtrak&rsquo;s diesel-powered locomotives generally consume approximately 1.7 gallon of fuel per mile traveled. In addition to looking back on trial data, he says Amtrak will likely continue to operate the Heartland Flyer on biodiesel for a little bit longer, and then switch it over to ultra-low sulfur diesel fuel in an effort to determine if the fuel has any impact on mileage.
 According to Deitchman, Amtrak is interested in adding biodiesel to its fuel mix as long as the fuel is proven to be a viable option. Better mileage and reduced emissions would help motivate the company to utilize the fuel. One possible impediment is cost. Magliari notes, however, that the relative cost of biodiesel-blended fuel has dropped dramatically since Amtrak first started considering this trial five years ago.
 Montana Trial
 A similar one-year B20 trial is also being completed in Montana on the BNSF railway. The project, which wrapped up July 1, actually grew out of on-road biodiesel trial that was spearheaded by Montana State University-Northern and Opportunity Link Inc., a local non-profit. &ldquo;The [on-road] trials went so well and got so much press that [we wanted] to do a trial with some significance on the railroad,&rdquo; said Jessica Alcorn-Windy Boy, director of MSU-N&rsquo;s Bio-Energy Center. She emphasizes that the goal was not to simply run a train for period of time using a low blend of fuel, such as B5. Rather the goal of the trial was to gather long-term, scientific data that could address the severe winter conditions present in northern Montana.
 BNSF signed on for the trial. Two of the railway&rsquo;s locomotives have been employed in the trial. One is a control that operates using No. 2 diesel. The other has been fueled with B20 for one year. The identical locomotives were manufactured in the 1970s. While the locomotive technology is slightly older, those involved in the trial note the decision to use older locomotives was intentional as they are no longer covered by manufacturer warrantees.
 The B20 is blended onsite in a controlled environment using locally sourced biodiesel. Fuel samples have been taken from the locomotives on a regular basis and analyzed by MSU-N staff for fuel quality and biodiesel content. According to Nestor Soriano, Jr., lead research scientist at MSU-N&rsquo;s Bio-Energy Center, the monthly analysis also addresses oxidation, fuel stability, acid content and degradation. While most biodiesel produced in the U.S. is sourced from soy beans, the crop cannot be grown in northern Montana. Rather, the locally produced biodiesel used in the trial has been manufactured from alternative feedstocks sources, including camelina, canola and safflower.
 The fuel injectors in the engines also undergo regular testing. The locomotives are serviced after every 92 days of operation. Each time the trains involved the trial have been serviced, fuel injectors are removed from both locomotives. At the end of the trial, they will be supplied to the manufacturer, which will disassemble the injectors and analyze them for wear and other abnormalities.
 &ldquo;There is an emissions testing component of the study as well,&rdquo; said Soriano. During the summer, the team will borrow a portable emissions testing system from the National Renewable Energy Lab. Soriano says the equipment will allow his team to compare the emissions that result from the two locomotives.
 Economic development is another component of the project. According to Barbara Stiffarm, executive director of Opportunity Link, a primary goal of her organization is to increase local opportunities for economic growth. Biodiesel represents a significant opportunity for economic growth in the region, she continues. The goal is to keep the entire biofuel operation local, from cultivating the oil seeds, to processing, conversion and use. Stiffarm notes that Opportunity Link believes railroads could offer an important local market for biodiesel blended fuel.
 The data gathered by the trial could ultimately be used to support the establishment of a biodiesel mandate for locomotive fuel. &ldquo;We are hopeful that in the future there will be some sort of [renewable fuel] mandate in the railway industry,&rdquo; Soriano said. &ldquo;We want to identify the challenges that the railroad industry may face should that mandate come in&hellip;Hopefully, [if and when that mandate] is established, BNSF and others in the railway industry will have this data so they can be ready.&rdquo; Author: Erin Voegele Associate Editor, Biodiesel Magazine (701) 560-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

GREENING THE RAIL: Amtrak recently wrapped up a one-year trial of B20 in its Heartland Flyer. 


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FUELING THE FUTURE: Amtrak fuels the Heartland Flyer with biodiesel-blended fuel while photographers capture the fill-up. 


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USING LOCAL FEEDSTOCKS: A biodiesel trial in Montana is testing B20, manufactured using camelina, canola and safflower oils, in a BNSF locomotive. 


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Railroad companies investigate benefits of using biodiesel-blended fuels

Steaming Ahead to a Better Fuel

Aaron Levinthal is the first to admit that he didn&rsquo;t want to be in the generator business. He&rsquo;s a concert producer at heart; and if companies like Caterpillar or Kohler had listened to him five years ago, he would still be a concert producer. &ldquo;As a concert producer,&rdquo; he says, &ldquo;you hate hearing no, especially when I&rsquo;d given them a million dollars of business in one year.&rdquo; Levinthal&rsquo;s requests were pretty simple: run the generators powering events like the Tribeca Film Festival in New York City or a major concert in Central Park using biodiesel-blended fuel. The obvious reason Levinthal might have pointed to may seem to be the cleaner burning nature of the fuel, or the added lubricity the biodiesel could offer the generators that typically burn 35 gallons of fuel per hour, but for Levinthal, it wasn&rsquo;t.
 &ldquo;No one had requested it when I started using it,&rdquo; he explains. &ldquo;For lack of a better term, I had an epiphany one day that I&rsquo;m in the most wasteful business I&rsquo;ve ever seen. Something that is for entertainment purposes only shouldn&rsquo;t be doing the damage it&rsquo;s doing environmentally.&rdquo; So Levinthal entered into the diesel generator business, and today his business of powering concerts and events in the Northeast is booming, all because of B100.
 His company, GreeNow, isn&rsquo;t alone, however. Genset companies across the country are and have been using biodiesel blends for several years, but the success of GreeNow should be a reminder that vehicle fuel and home heating aren&rsquo;t the only markets biodiesel can reach. If the example of GreeNow doesn&rsquo;t ring loud enough, listen to what Levinthal explains as a typical occurrence at one of his events. &ldquo;When a client (like former American Idol winner Kelly Clarkson) makes an announcement about [B100 powering the concert], they get a pretty good cheer out of the crowd.&rdquo;
 GreeNow isn&rsquo;t Alone 
 SidRam Power Inc. has provided diesel generators to events everywhere from Florida to Georgia, and even to Singapore. Over the past four years, the Florida-based company has averaged roughly 535 events per year, and during that time, if a client asked for biodiesel, Jamie Mardis, president of SidRam Power, says that client got it. &ldquo;I think when our customers feel it at the pump and people start talking about it,&rdquo; Mardis says, &ldquo;that is when they start asking for biodiesel in their generators.&rdquo; And it&rsquo;s that very reason Mardis and his team started offering B20 to customers in the first place. &ldquo;When gas prices were going up,&rdquo; he says, &ldquo;we were looking for alternatives, and then our customers started asking for it.&rdquo;
 While Mardis explains that it was the customer requests that spurred his company to start providing a cleaner burning alternative, Joe Gere, marketing consultant for On-Site Energy, a genset provider that also uses B20, had an epiphany moment similar to Levinthal&rsquo;s. And if you know Gere&rsquo;s past, it&rsquo;s easy to see why.
 &ldquo;Me being a 9/11 survivor,&rdquo; Gere says, &ldquo;or whatever they call it with continuing health issues,&rdquo; is the main reason Gere first started pushing On-Site Energy to use biodiesel in the first place. &ldquo;I was the first AT&amp;T person on site and I suffered a lot of health problems from my exposure,&rdquo; and after that, he says, &ldquo;I was a champion of a cleaner-burning fuel and On-Site was totally behind it.&rdquo;
 On-Site Energy, SidRam and GreeNow are just a handful of companies that are linked to the biodiesel industry, and regardless of their reasons for running biodiesel blends to power their customers&rsquo; needs, all of the genset companies show reasons why producers shouldn&rsquo;t forget about events, emergencies and other situations requiring diesel-oriented power.
 The first thing to know about genset companies is that, in most cases, the clients will ask for the cheapest (which sometimes means the dirtiest) fuel available. As Gere explains, if a 500 kW generator is running at 100 percent load, it will consume 35 gallons of fuel per hour, totaling roughly 840 gallons per day. At $1 a gallon that is $840 dollars per day. From there, anyone can do the math and see that the price today would be quadruple that, which means in most cases &ldquo;the fuel costs more than the rental of the piece of iron,&rdquo; Gere says.
 For Mardis, the price of the fuel has made his requests for the use of biodiesel trend both up and down. &ldquo;The requests for biodiesel go in spurts,&rdquo; he says. &ldquo;It seems like the demand for biodiesel had gone down, mainly because the price of diesel had gone down.&rdquo;
 But those circumstances have changed, at least for Levinthal. &ldquo;Right now we have the advantage,&rdquo; he says. &ldquo;Biodiesel is cheaper than petroleum fuel at the moment.&rdquo;
 The price of fuel and the competitive locale of biodiesel compared to petroleum diesel, however, isn&rsquo;t the only factor that will push a genset company to use biodiesel. &ldquo;I can tell you that most of our biodiesel clients are doing events, something that is a high-profile event where green is of concern to them,&rdquo; Gere says. But the clients aren&rsquo;t the only ones creating a need for biodiesel in genset operation. Gere says the people who attend the events and live in the surrounding area of the event appreciate it when biodiesel is used. &ldquo;If there was a way to chart that, to show the positive impacts that were made by running the biodiesel as opposed to not running biodiesel,&rdquo; Gere says, &ldquo; I think more customers would opt to run the biodiesel.&rdquo;
 As for the physical advantages of running biodiesel, Levinthal can certainly attest. &ldquo;If you put bad fuel in a $100,000 generator and the light goes bad if there is a voltage fluctuation,&rdquo; the result can be a big problem, he says&mdash;especially if it&rsquo;s during a concert. All of the GreeNow generators are converted by eliminating the existing rubber hoses and yellow metals. &ldquo;Because we never put anything but B100 in them, I&rsquo;ve never had any problems. I get longer run time on my filters, and,&rdquo; Levinthal explains, &ldquo;my generators burn so much cleaner.&rdquo;
 For each event, SidRam goes through 200 to 1,500 gallons, and each week, the company orders 2,500 gallons of fuel. GreeNow is busy from April through November and Levinthal says the company keeps storage tanks and extra B100 at its offices. Even with as many gallons and events both companies are going through a year, the overall significance of their biodiesel use might not seem important. Fortunately, Steven Levy of Sprague Energy has a reason why every biodiesel producer should care about how the latest concert in its hometowns is being powered. It&rsquo;s called The BioGenset Project, aimed at educating and creating more genset biodiesel operation.
 The BioGenset Project
 Judy Jarnefeld, senior project manager for the New York State Energy Research and Development Authority, is helping Levy make the BioGenset project a success. The project was chosen, she says, as a business assistance program, &ldquo;so rather than helping somebody develop new intellectual property for a new product, we are helping them with marketing assistance and finding new customers, and new kinds of customers in new sectors.&rdquo; Those customers are the same ones that people like Levinthal or Mardis are targeting, customers who have power needs that can be met by using biodiesel.
 &ldquo;The point of the project was to help identify who those users were,&rdquo; she says, &ldquo;and then once they figured out who they were, to help educate them that they could use biodiesel and it would have benefits.&rdquo; For NYSERDA, the reason to help a project like this is also pretty simple. According to Jarnefeld, 85 percent of the petroleum used in the state of New York comes from foreign oil, &ldquo;so if there is something we can do to increase the percentage of domestically produced liquid fuel,&rdquo; she says, &ldquo;that is to our benefit.&rdquo;
 Levy says the program is geared toward three types of users. The first is a user looking to power an event, something like fashion week in New York City or the U.S. Tennis Open. The next group he says is for stationary emergency generators at buildings, in the event of a disaster or power outage. And the third user, he says, is the larger buildings where a diesel generator might be a primary, or in most cases a secondary, power source for that building. &ldquo;Everyone has been looking at reducing emissions for on-road vehicles,&rdquo; Levy says. &ldquo;This particular application is to reduce emissions and reduce our dependence on foreign oil for off-road applications.&rdquo;
 To do that, Levy has set up a website and will hold a workshop for interested parties on the advantages and requirements of participating in the BioGenset program, or simply using biodiesel in their generators. &ldquo;I think the objective of the program is to jumpstart the use of biodiesel in this particular arena and once users see that it&rsquo;s transparent to their use, they will incorporate it,&rdquo; he says, &ldquo;and even expand on their blends.&rdquo;
 To participate in the program, a genset user simply has to schedule a time with Levy that he can go over the generator&rsquo;s warranties, schedule a fuel delivery time and answer any other questions the user might have. Like Levinthal and Gere, Levy also says there should be no question about performance of biodiesel in genset use, and for the future success of the program or the chance that more biodiesel will be used in genset operations, he points to Sprague Energy&rsquo;s past with ULSD. Back in 1998 he says, the company started marketing ULSD 12 years before a national mandate, and historically the companies that Sprague worked with would demonstrate the product &ldquo;and after a month or two, they would expand the use of it in their fleets.&rdquo; This project is no different, he says, because it&rsquo;s &ldquo;bringing industry together and showing them the benefits.&rdquo; Some will change and use the products right away (as the example of ULSD use shows) and others will demonstrate it and see if they are comfortable with it.
 Fortunately for Levy, he won&rsquo;t be worrying too much about the BioGenset program, at least if he remembers the achievements of that former concert producer turned generator provider. He seems to be doing pretty well on B100-powered gensets, and if you don&rsquo;t believe it, listen to the crowd after Kelly Clarkson tells her fans the lights overhead are powered by biodiesel. Author: Luke Geiver Associate Editor, Biodiesel Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

GREEN CONCERTS: GreeNow uses B100 in its mobile power gensets, which power concerts and other events in New York City and the Northeast.

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PIONEERING CHANGE: Sprague Energy began delivering ULSD nearly a decade before U.S. EPA mandated it, and Levy says getting customers used to biodiesel is very similar. 

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Why biodiesel is important to events and concerts 

Don't Forget  the Event

In my estimation, there is probably no application with greater potential for biodiesel than the off-road markets. The multibillion gallon U.S. heating oil market is a candidate, but then there is what some call the &ldquo;real&rdquo; off-road markets: tractors and combines, locomotives, marine vessels, stationary (or mobile) gensets, countless types of forestry equipment, loaders&mdash;the list goes on.
 Just like the drastic reductions in emissions that have taken place over the past decade for new on-road diesels, thanks to regulations set by U.S. EPA, off-road diesels are on the path to the same greener fate. Implementation dates are staggered for the various off-road sectors, but once they are phased in completely, the not-so-distant future holds a clean-air promise from all newly manufactured on- and off-road diesels. That means the near elimination of the black soot commonly associated with diesels, as well as nitrogen oxides (NOx), a smog-forming pollutant. The new off-road emission reductions will require the use of low and ultra-low sulfur fuels, not only to reduce sulfur dioxide emissions, but chiefly so expensive catalysts used in aftertreatment systems aren&rsquo;t fouled. The growing, positive body of work on how biodiesel interacts with these devices will certainly help ease people&rsquo;s minds about using biodiesel-blended fuels in the presence of aftertreatment systems.
 These upcoming emissions reductions are great for the environment, but once in effect, the regulations will only apply to new models. Diesels last a very long time. It is reasonable to think it could take 50 years or more to replace the pre-existing fleet. There are retrofit programs if environment-conscious farmers, loggers, contractors, engineers, ship captains or others in the off-road sector wish to voluntarily reduce their equipment&rsquo;s carbon footprint. These programs would help install particulate filters and NOx abatement devices (e.g., SCR systems) to drive down emissions and drive up its greener image.
 Certainly, incorporation of biodiesel is a seamless game-changer in reducing off-road fleet emissions. Biodiesel reduces particulate matter by nearly 50 percent compared to petroleum diesel. Total hydrocarbon emissions from biodiesel are 67 percent less. Carbon monoxide drops nearly 50 percent.
Sulfur emissions are virtually wiped out since biodiesel is a sulfur-free fuel. Health effects testing has shown cancer-causing polycyclic aromatic hydrocarbons (PAH), and the nitrated variety of PAH, were decreased by 75 to 85 percent, except for benzo(a)anthracene, which was reduced by half. Finally, I would be remiss not to mention the most clich&eacute;d line about biodiesel exhaust ever: it smells like French fries.

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Clean Burning

The flooded Mississippi River may be slowly receding, filtering back into its banks, but the damage has already been done. Pictures of soaked out homes and buildings, street signs poking through a wave of water or even distressed farmers looking across their fields covered by three feet of water clearly show the immediate effect of the culmination of heavy moisture that came at a bad time. As Bernie Crowley, vice president for Delta American Fuels, a biodiesel plant with a terminal on the Mississippi river, notes some of the photos out there sensationalize the damage, however, but some minimize it.
 The USDA&rsquo;s Under Secretary Dallas Tonsager has already toured everywhere from Missouri to Louisiana to assess the damage. Joining Tonsager on the tours was Michael Scuse, under secretary for Farm and Foreign Agricultural services at USDA. &ldquo;Our hearts go out to all of those affected by the disasters,&rdquo; Scuse said. &ldquo;Our first-hand assessments will allow us to identify the unique farm safety net and rural community development needs of the impacted region.
 Although it might be too soon to assess the flood&rsquo;s impact on biodiesel production, Crowley&rsquo;s attitude towards the flood may be an indication. As a soybean farmer himself, he says the good news is &ldquo;farmers, especially around here,&rdquo; have a good understanding of soybean planting requirements. If, he says, &ldquo;you get seven sunny days, you can get the planting done.&rdquo; And regardless of when the water fully recedes, the soybean fields will get planted&mdash;that, he says, will happen.
 &ldquo;It&rsquo;s going to be an expensive flood for us but it could&rsquo;ve been a lot lot worse,&rdquo; he says, pointing out that a high number of cotton acres will be lost as most cotton growers in the area plant in the low lying areas near the river.
 Through the Farm Service Agency at USDA, an emergency loan program is available to help &ldquo;producers recover from production and physical losses due to natural disasters.&rdquo; The loans are available as soon as any flooded counties are declared a Presidential or Secretarial Disaster county, according to the USDA.
 The water at Crowley&rsquo;s pier is going down, but reports from the state of Arkansas indicate that more water needs to be released into the river, essentially reflooding the river. Eventually, he says, they will be back in business.

SKILLED FARMERS: Bernie Crowley with Delta American Fuels says soybeans will get planted despite a flooded Mississippi River. 

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Luckily, soybean farmers know what they're doing

The Early Indications of a Flooded Mississippi

A well-structured indemnity provision is critical to ensuring both parties are protected in relation to breaches of an asset or stock purchase agreement. When negotiating an acquisition, the parties carefully allocate the risks between them through the use of warranties, representations and covenants. Indemnity provisions provide the mechanism by which those obligations are enforced and limit the parties&rsquo; exposure to delayed claims. This article will discuss the key terms of an indemnity provision and the considerations that go into negotiating such provisions.
 Survival provisions serve as a statute of limitations for claims related to the breach of an agreement. Obligations under the agreement are usually divided into two sets, one set that lasts indefinitely and a second set that lapses within one to three years of the closing date.
 The indefinite set usually includes obligations related to corporate authority, government authorization, environmental matters, taxes, employee benefits, related party transactions, and similar matters that could have large liability, could completely unwind the deal, or are completely within the seller&rsquo;s control.
 The second set of obligations usually lapses within one to three years of the closing date. These obligations generally include all business related representations and warranties, including those related to financial statements, the sufficiency of assets, the condition of assets, any material adverse changes, and litigation. The time lapse provides certainty to the seller, and breaches are generally discoverable before the time period lapses. The time period is generally set to match the term of an escrow, discussed below.
 Almost every party to an acquisition agreement recognizes that there will be small breaches that do not materially impact the operation of the business. Therefore, the parties often create a minimum threshold that must be crossed before the seller will be required to pay damages for a breach. The seller also desires to limit its potential liability. The primary mechanisms used to manage these risks are a &ldquo;basket&rdquo; and/or a &ldquo;cap.&rdquo;
 A basket is a threshold amount of damages that must be reached before a party is liable to pay any claims. There are two primary types of baskets, deductible baskets and first-dollar baskets. With a deductible basket, the seller only pays for indemnity claims that exceed the deductible basket threshold. In contrast, a first-dollar basket provides that once the basket threshold is reached, the seller is responsible for all claims, including those used to reach the threshold. Through negotiation, a party can also craft a hybrid of these approaches with different basket thresholds and deductible levels.
 A cap is a flat dollar limit on the claims that the seller and/or the buyer may be liable for under the agreement. A seller&rsquo;s liability is often limited to at least the purchase price, though it may be negotiated to a lower amount as well. While the cap may be as high as the purchase price, the ability to collect may be functionally limited to the escrow amount, discussed below. Often, a cap is inapplicable to the certain obligations due to the magnitude of the liabilities that may be covered, like environmental liability. A buyer may also seek to limit his liability for damages, though the focus is usually on the seller.
 The parties should also consider how damages should be measured. While terms like materiality and knowledge are carefully negotiated in various representations and warranties, sellers often seek to ignore such limitations when calculating indemnity claims. This increases the likelihood that a basket threshold will be reached. Both parties should carefully consider whether such a provision is appropriate in their particular deal.
 All the promises in the world are not worth anything if the seller distributes the purchase price and the buyer has to chase down every shareholder to recover the funds. For this reason, the parties often place a portion of the purchase price into escrow as security for indemnity claims. A common escrow amount is 10 percent of the purchase price, though the actual escrowed amount will depend on the risks involved in the transaction and the bargaining power of the parties.
 This summary merely scratches the surface of the complexity related to indemnity provisions. Any party to an acquisition should question their attorney about the risks associated with indemnity provisions and the ways in which indemnity provisions can serve that party&rsquo;s interests. Author: Drew D. Larson Attorney, BrownWinick (515) 242-2485 <a href="mailto:larson@brownwinick.com">larson@brownwinick.com</a>

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Understanding Indemnities  

For local fuel dealers, there is a lot of talk about state biodiesel initiatives and providing new opportunities in Bioheat and other off-road biodiesel applications. To this we say: &ldquo;Get in now and don&rsquo;t wait for the mandate.&rdquo;
 Dennis K. Burke Inc. is a family-owned fuel dealer that has been delivering premium fuels for more than 50 years. The Burke family shares a unique marketing experience on the road to bringing biofuels into the mainstream oil market. Servicing state and local biodiesel contracts for Massachusetts and New Hampshire, Burke gained years of biofuels experience in off-road applications and delivering Bioheat to many schools, government buildings and commercial properties.
 Burke began its journey with biodiesel began back in 1996, primarily offering B20 blends to fleets complying with EPAct. Biodiesel looked promising, but quality issues were concerning. As quality improved and tax incentives for biodiesel became available, demand increased. By 2002, Burke was well-positioned as a biodiesel blender for major fleet operators and had the only retail fuel pumps dispensing biodiesel within 100 miles of Boston.
 Looking back, who could have imagined all of the off-road applications for biodiesel that we have today? A few worth noting include the trailblazers at Massachusetts&rsquo; Taunton State Hospital, which initially began using a B3 Bioheat blend on the hospital&rsquo;s 500-horsepower Cleaver-Brooks boilers in November 2006. After three or four weeks, the blend was increased to B5, and by January 2007, it increased to B10. The engineers photographed and documented the boiler&rsquo;s improved condition and better performance. In 2008, the blend went to B20&mdash;and has been running smoothly since.
 Dennis K. Burke does not service residential heating accounts. As fuel wholesalers, the opportunity to blend Bioheat for our fuel dealer customers has worked well and provides a more natural fit to our business. Snow&rsquo;s Fuel Oil &amp; Propane is one of Massachusetts&rsquo; largest fuel dealers on Cape Cod. The company introduced B5 Bioheat as a home heating oil alternative in 2007. More than 350 current accounts switched to Bioheat, and it quickly added 60 new accounts. A few years ago, Massachusetts-based Alvin Hollis Oilheat introduced Bioheat as a home heating oil alternative and now services more than 1,000 Bioheat accounts. Construction firms are using biodiesel to green their fleets and equipment to meet environmental guidelines necessary to bid on many government and private contracts.
 From buses and trolleys to tour boats and water taxis, tourism dollars are creating a biodiesel boom in the Northeast. More and more off-road applications are seeing economic rewards in reducing emissions with biodiesel. You can spend a day on Boston&rsquo;s historic Freedom Trail and learn that many of the historic sites and public buildings are kept warm with Bioheat.
 Newburyport Whale Watch in Newburyport, Mass., is a great tale. In 2006, it started adding home-brewed biodiesel made from restaurant grease when fueling at the marina. A few years back it realized that biodiesel was fun, but the blending wasn&rsquo;t. It now fuels by truck with a B10 blend.
 You can take a B10-powered water-taxi to the shops across the harbor at Mid-Harbor Launch in Marblehead, Mass. The company converted all of its launch service and mooring equipment to B10 in 2008 and is very happy with biodiesel&rsquo;s performance.
 Recreational boaters in Rhode Island can pull up to the fuel dock at Port Edgewood Marina and fill up with a B20 biodiesel blend. Marinas are going green to keep their waters clean with B5 to B20 blends, and boaters are getting hooked on the benefits.
 In northern New England, it&rsquo;s all about the snow. Many ski slopes and resorts are concerned with the effects of climate change on their industry. Choosing biodiesel is one way for operators to emphasize their efforts in reducing greenhouse gases.
 At Toreka Tractor Sales in Ayer, Mass., every new tractor leaves the showroom with a fill of B5 in the winter and B20 during warmer months. Using biofuels on the farm is becoming more common in our area&mdash;the more Earth-friendly, the better. Buying local plays a big role in green culture, so there are marketing rewards for local farms using biodiesel and Bioheat.
 Working with biodiesel for 15 years, we&rsquo;ve learned this: Start with a better quality biodiesel feedstock, blend it with a premium quality diesel or heating oil, and you will sleep better at night. In the end, biodiesel and Bioheat have a role in energy policy and the mandates will eventually come. As for these biodiesel pioneers mentioned, like me, they enjoyed the journey. Author: Ed Burke Chairman, Dennis K. Burke Inc. (617) 884-7800 <a href="mailto:ed.burke@burkeoil.com">ed.burke@burkeoil.com</a>

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Creating New Opportunities Off-road  

For all of the well-funded algae development firms rushing to commercialization, there are also companies led by the likes of Kim Jones. As the founder of Alganomics, Jones and her husband aren&rsquo;t focused on global scale-up; they just want to make an impact in North Carolina through their work with algae. &ldquo;There is a greater interest in algae right now than there ever has been,&rdquo; Jones says. And she should know, after spending much of her academic career researching algae strains for uses that range from tumor treatments to environmental remediation.
 Jones is an example of why one could argue that the algae growth curve is going nowhere but up. Although she teaches at a community college in the chemistry and biology departments, Jones felt that some of her ideas on algae were worth pursuing, so she started her algae venture. For the past two years, Alganomics has been located at the Oak Island Waste Water facility where Jones has plans to turn the area into a renewable energy park. The facility already reuses the recycled water from the plant to water several baseball and football fields nearby, but Jones is looking to add her originally designed algae photobioreactors to the site in some way. She is still in the research and development stage but her ongoing work with strain selection and culture growth can prove important to the overall growth of the industry.
 Jones, with the help of her husband&rsquo;s engineering skills, has designed a trailer-mounted technology that she plans to employ at a local lake. Using her equipment, the state plans to remove unwanted algae from the water. &ldquo;They could care less what we do with the algae,&rdquo; she says. &ldquo;They just need to get the algae out of the lake as well as the nutrients. They can kill the algae, but the nutrients will just go back into the lake and then the lake will just have another algae bloom.&rdquo;
 The technology is based on current processes already being used at wastewater facilities, she says, and all the algal strains Alganomics works with are wild and found in the area. &ldquo;We are looking at how different strains work together,&rdquo; she says, and so far she has found that when combining different strains into the same culture she can avoid major culture crashes.
 In addition to algal biomass-to-power research, environmental remediation work at a local lake and mass culture research, Jones is also looking to work at several of the hog farm lagoons in the state. &ldquo;We would be using the hog lagoon waste and all those nutrients we are trying to keep out of our natural water to cultivate the algae.&rdquo;
 While Jones and her small team may not be ready to go commercial with any of their technologies yet, there is no doubt the role companies such as Alganomics play in the sector. How can the industry not grow if every state has its own version of the Jones&rsquo; catering to local needs through their innovative approaches with algae? &ldquo;There isn&rsquo;t a specific business model that we are looking at,&rdquo; she says. &ldquo;We are trying to be a bit opportunistic and looking at what the needs are.&rdquo;

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Kim Jones knows algae, and how to make a statewide impact 	

Why Every State Needs an  Alganomical Approach

The Council of the European Union adopted regulations to extend the anti-dumping and countervailing duties that currently apply to imports of biodiesel originating in the U.S. on May 5. Those duties now also apply to U.S.-produced biodiesel that is cosigned from Canada. The anti-dumping&nbsp; and countervailing duties have also been extended to apply to imports of fuel containing 20 percent or less biodiesel by weight that originates from the U.S.
 Documentation sourced from the Europa website states that the European Commission received a request from the European Biodiesel Board last June to investigate the possible circumvention of anti-dumping measures that had been established. The request alleged that U.S. biodiesel blended fuel containing 20 percent or less biodiesel was being exported to Europe via Canada and Singapore. The request also alleged that a significant change in pattern in trade involving biodiesel exports from the U.S., Canada and Singapore had taken place since the duties had been established and the remedial effects of the existing anti-dumping measures were being undermined in terms of quality and price.
 The investigation concluded that U.S. biodiesel did flow through Canada to Europe, effectively circumventing the required duties. This was not found to be true in Singapore, and that portion of the investigation was terminated.
 The EBB has spoken out in support of the new measures. &ldquo;The anti-circumvention measures adopted by the council represent a decisive move to ensure that the remedial effect of the EU duties on U.S. biodiesel is fully maintained over time,&rdquo; said EBB Secretary General Raffaello Garofalo. &ldquo;Operators should be aware that any future attempt to circumvent the existing duties can be investigated and remedied in the same way, with retroactive financial implications for the companies involved.&rdquo;

EXPORT ISSUES: The European Commission has taken action against U.S. biodiesel that was imported to the EU via Canada. 

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U.S. biodiesel exported to Europe via Canada now covered by duties

EU anti-dumping, countervailing duties extended

Diesel prices show no signs of going down, but a new bipartisan bill introduced by Congressmen John Shimkus, R-Ill., Eliot Engel, D-N.Y., Roscoe Bartlett, R-Md., and Steve Israel, D-N.Y., aims to change that in three years by offering more fuels at the pump come 2014. Coined the Open Fuel Standard Act (HR 1687), the proposed legislation is focused on driving innovation, bringing a variety of fuels to the pump and encouraging investments in research to find cheaper fuels to diesel.
 Specifically, the OFS would require that 50 percent of new automobiles in 2014, 80 percent in 2016 and 95 percent in 2017, would be warranted to operate on nonpetroleum-based fuels, in addition to or instead of petroleum-based fuels. Compliance possibilities include an array of existing alternative fuel vehicles&mdash;such as flex fuel, natural gas, hydrogen, biodiesel, plug-in electric drive and fuel cell&mdash;and a catch-all for new technologies. The CEOs of the Big Three automobile manufacturers have repeatedly gone on record stating their willingness to commit to making 50 percent of new cars flex fuel vehicles or warranted to operate on biodiesel blends above B5 by 2012.
 For retail owners like California-based Propel Fuels, the proposed legislation falls in line with the company&rsquo;s mission of providing more alternative fuel choices at its pumps in the state, according to CEO Matt Horton.
 &ldquo;We&rsquo;d love to see more vehicle manufacturers come out with stronger support for blends of at least B20,&rdquo; Horton tells Biodiesel Magazine. &ldquo;We&rsquo;re hopeful legislation like this, especially for diesels, will raise awareness of the issues around education of the public and OEM support for biodiesel.&rdquo;
 While the proposed legislation supports the diversification of fuels that retailers can supply, it fails to mention at what cost, if any, would be going to the retailer to build out the infrastructure necessary to install the equipment required to make those fuels available at the pump.
 &ldquo;We&rsquo;re advocating for an extension and an expansion of the existing infrastructure tax credit to make it easier for retailers to install this very expensive equipment,&rdquo; Horton says. &ldquo;Addressing the vehicles is certainly an issue, but it doesn&rsquo;t matter if we got a lot more vehicles on the road if we still don&rsquo;t have the infrastructure to deliver the fuel.&rdquo;

PROPELLING BIOFUELS: Matt Horton, Propel CEO, says heâ€™d love to see more OEMs support B20 in their auto warranty. 

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Open Fuel Standard Act aims to diversify fuel availability at the pump

Driving Choice

Iowa is positioned to become the nation&rsquo;s leader in biodiesel production and consumption. That&rsquo;s because in May, the state&rsquo;s Senate and House both voted to extend its biodiesel tax credit program, which was set to expire at the end of the year, to Jan. 1, 2018. The biodiesel tax incentives are one portion of a comprehensive renewable energy bill (Senate File 531) worth an estimated $89.6 million aimed at creating a system that incentivizes local biofuel production and consumption in The Hawkeye State. Gov. Terry Branstad signed the bill just before press time.
 Specifically pertinent to biodiesel, the new bill: extends the Iowa biodiesel retailer credit at 2 cents per gallon for blends of B2 and 4.5 cents per gallon for B5 in 2012, followed by 4.5 cents per gallon of B5 through 2017; makes it easier for petroleum marketers to achieve the credit; adds a biodiesel producer incentive of 3 cents per gallon in 2012, 2.5 cents per gallon in 2013 and 2 cents per gallon in 2014 (for first 25 million gallons per producer) and provides $3 million a year to the Renewable Fuels Infrastructure Board to help companiesoffset the cost of installing infrastructure components, such as fuel pumps.
 For biodiesel producers, like Ag Processing Inc., which operates a 30 MMgy facility in Sergeant Bluff, the proposed biodiesel tax credit system is a strong indication of how Iowa supports not only bolstering biodiesel production, but also promoting increased use of the biofuel by end-users within the state.
 &ldquo;It&rsquo;s especially helpful that the provisions that benefit consumers have been extended,&rdquo; AGP Vice President John Campbell tells Biodiesel Magazine. &ldquo;The main thing is to help consumers buy it. If consumers buy it, we&rsquo;ll make it and this bill has both sides of it."

States take initiative to incentivize their biodiesel industry where federal incentives fail to

Executive Decision 

National Biodiesel Board CEO Joe Jobe was a featured speaker at the International Biomass Conference &amp; Expo in St. Louis May 3. Jobe joined the leaders of six other trade associations active in the bioeconomy to discuss cooperation and federal policy during a plenary session, titled Association Executive Roundtable: Our Industry in a Changed Political Landscape.
 During the session, Jobe stressed the importance of extending the biodiesel tax credit. &ldquo;There are certainly folks that like to sort of chatter and speculate on policy, but it is our industry&rsquo;s position that our No. 1 priority is to get the extension of the biodiesel tax credit,&rdquo; he says.
 While the RFS2 is now a central part of the policy framework going forward, Jobe noted that the program and tax credit are designed to work together. &ldquo;This is the first full year of [RFS2] implementation,&rdquo; he says. &ldquo;Last year was a half year, the first year transition year from RFS1 to RFS2, and it wasn&rsquo;t generating any demand. So, this is the first year of the RFS2. That is critical&hellip;and this is the first year that we&rsquo;ve ever had the tax credit and the RFS2 working in tandem&mdash;and guess what? It works.&rdquo;
 Jobe also notes that the biodiesel tax credit has been a very effective piece of energy policy. &ldquo;It has led to investments in plants and plant science research,&rdquo; he says. &ldquo;It is driving a significant amount of plant science research&hellip;We are investing in algae, the greening companies are investing in yield technology because of what&rsquo;s going on in the sector. It works and we need to get it extended and it is going to help to [make] the RFS2 be more successful, buffer against waivers by the petroleum industry and other things. I would urge those who are publically speculating about the tax credit within our sector to not do that. We don&rsquo;t really want to negotiate with ourselves, and it is very important that we put ourselves in the best position possible to get the credit extended. We&rsquo;re not helping that position by suggesting that it&rsquo;s not needed.&rdquo;
 Given the focus on debt reduction in Congress right now, Jobe admits it&rsquo;s going to be a challenge to get the tax credit renewed before the end of the year. He also stresses that he thinks the biodiesel industry has a good chance at success. &ldquo;We&rsquo;ve got a different set of circumstances in our industry,&rdquo; he says. &ldquo;Our tax credit is a quarter-century younger than the ethanol tax credit. We just need a little bit more time to get a little bit more mature.&rdquo;

POLICY GOALS: National Biodiesel Board CEO Joe Jobe speaks about the benefits of the biodiesel tax credit at International Biomass Conference & Expo held by BBI International. 

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Jobe addresses importance of tax credit at International Biomass Conference 

Push for Tax Credit Renewal

Fluid Imaging Technologies Inc. was founded in 1999 as a spinoff from Bigelow Laboratory for Ocean Sciences in West Boothbay Harbor, Maine. So, when FIT forged a strategic partnership with algae-to-biofuel developer Bard Holding Inc. to use its FlowCAM imaging particle analyzers for algal cell detection and classification at Bard&rsquo;s commercial algae production plant in Morrisville, Pa., the venture was a natural progression.
 Originally developed at Bigelow for studying plankton in ocean water, Fluid Imaging Technologies&rsquo; FlowCAM technology is designed to combine the benefits of a flow cytometer and a high-speed microscope in a single instrument, which will allow algae-to-biofuel developers like Bard to monitor nourishment levels and detect contaminants in algal cells more efficiently than traditional methods, according to Lew Brown, marketing director for Fluid Imaging Technologies.
 &ldquo;In algae-to-biofuels, the biggest advantage is that we can rapidly acquire lots of images of algal cells,&rdquo; Brown explains. &ldquo;When we acquire the image, we take up to 26 different measurements of those images looking at things like diameter, length, species and so forth. What that gives you the ability to do is, in post processing, algorithmically design filters where you tell the software to look for all the cells that look like a particular kind.&rdquo;

TRADING UP: Bard Holding will use the FlowCAM from Fluid Imaging Technologies to speed up its algae developments. 

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How advanced imaging technology will play an instrumental role in algae-to-biodiesel development

Taking a Closer Look

Raj Mosali and his team at Jatrodiesel thought they had the latest, best biodiesel process available to date, but they were wrong&mdash;and that was a good thing. After tweaking their supercritical-esque process that also employs a heterogeneous solid metal catalyst, they improved the economic superiority of the process again. &ldquo;This beats the traditional process by a long shot,&rdquo; Mosali says. And, according to him, this newly trademarked &ldquo;Super&rdquo; process is nothing like traditional biodiesel manufacturing.
 In most biodiesel production methods today, processing requires at least four to five steps using a homogeneous catalyst. This process, however, &ldquo;eliminates all of these multiple stages,&rdquo; Mosali says. The Jatrodiesel process mixes the methanol with the oil, which can be at any free fatty acid (FFA) content&mdash;15, 20 or even 100 percent&mdash;he says. The mixture is fed through a super column along with the solid metal catalyst and the resulting product is an ASTM spec biodiesel.
 The reason this process is better than a traditional approach, Mosali says, directly relates to the reuse (or lack thereof) of the catalysts. He says in a typical process, the liquid catalysts used cost up to 15 cents a gallon. Through pilot-scale work, Mosali and his team thought they had that number down to roughly 1.5 cents per gallon using the Super process. But, after a few tweaks to the entire process, they found that using their system wouldn&rsquo;t require the reuse of the catalysts, and that dropped the price per gallon down to under a half a cent per gallon. &ldquo;So, now there is a huge difference in cost savings,&rdquo; he says.
 Although part of the savings stems from some tweaks to the super column by changing the way the product trickles through and is packed in, the main reason for the greater improvement to the process is a simple preprocess they perform on the feedstock. Because the feedstock they were testing, which ranged from corn oil to yellow grease to pork fat, all had different impurity levels and water content values, the team decided to add a preprocess step to clean up the feedstock, and that, Mosali says, &ldquo;makes a huge difference in the longevity of the catalyst.&rdquo;
 The system operates at supercritical temperatures and pressures, and there are already at least three interested parties who have begun soliciting renderers or ethanol facilities for feedstock supplies. The process is scalable to any size, but for now Mosali and his team are focusing on the 3 MMgy range. Although the pilot testing is already complete, Mosali says the real proof will come after the Super process is put to commercial use.

Jatrodiesel was wrong about their Super process—and they're happy about it	

Is the Next Best Process Already Here?

Utah doesn&rsquo;t house an operating commercial biodiesel plant, but that will change by mid-year when Washakie Renewable Energy LLC produces 10 million gallons of fuel-grade methyl esters annually from virgin oils such as safflower near the town of Plymouth.&nbsp;&nbsp;&nbsp;
 Dallas Hanks, Utah State University Extension bioenergy agronomist and director for the USU Extension Center for Agronomic and Woody Biofuels who toured the plant in April, tells Biodiesel Magazine that WRE&rsquo;s plant is a welcomed sign that a portion of the feedstock research conducted at the university will now be channeled towards in-state biodiesel production and consumption.
 &ldquo;Our activities [at USU] are more focused on the feedstock side so we&rsquo;re really excited to have something here to refine those feedstocks into biodiesel,&rdquo; Hanks says.
 According to Hanks, the plant features state-of-the-art process technology that was designed in-house by WRE, including a distillation tower that enables the company to produce biojet fuel in addition to biodiesel. Previously, WRE held trial production runs in its pilot facility in Plymouth before scaling up to its 10 MMgy plant, Hanks says. &ldquo;We&rsquo;re lucky to have a plant here in Utah,&rdquo; he says.

Moving In

There are more than 300 Indian reservations in the continental U.S. and for a company that has just filed an IPO based on its ability to produce biofuels from jatropha, that number is pretty significant. Mission NewEnergy has been one of the leaders pushing for the use of jatropha as a biodiesel feedstock, and if its perceptions regarding the potential of marginal land use in the U.S. are true, then the company should expect a nice payout. James Garton, president of Mission NewEnergy, believes there are outstanding biodiesel opportunities in the U.S. right now based on &ldquo;the rapidly increasing RIN value representing the dramatic short supply of U.S. feedstock and operating refining capacity.&rdquo;
 For Garton, those factors aren&rsquo;t the only reasons biodiesel looks good right now. &ldquo;Growing on Indian reservations,&rdquo; he says of the jatropha used for its biofuels process, &ldquo;has the potential of utilizing otherwise unusable resources and providing a great number of jobs.&rdquo; Here&rsquo;s a new twist: &ldquo;Mission has been invited to meet with a number of significant Indian tribes,&rdquo; Garton says. Now, he hopes for &ldquo;fruitful&rdquo; discussions and the ongoing evaluation of this opportunity.
 It&rsquo;s hard to say which situations and geographic locations would be best suited for jatropha farming, or more importantly, which tribal political locations would cater well to such a project. But if jobs, biofuels and marginal land use are all involved, then the project should be welcomed with open arms.

Jatropha farming on an Indian reservation? Mission NewEnergy says yes

Marginal Lands Offer 'Fruitful' Potential  

Impacting the future direction of the biodiesel industry is an important goal for the National Biodiesel Board. The direction of the industry is best driven by one collective voice. Cultivating that voice takes time and members, not just dues and membership, but true member engagement and interaction. This is why the NBB has made it a priority to increase engagement among members. Why is an engaged member so important? To achieve the goals of the NBB, we need the input of all our members. Because we&rsquo;re a member organization, we ask that our members contribute their time, talent and treasure for the betterment of the biodiesel industry. True member engagement supports the entire industry and helps members see the value of their investment. What steps have been taken to increase member engagement? Over the past two years, NBB has taken a new approach to member interaction with more personal and face-to-face contact. We&rsquo;ve also streamlined both verbal and written communication with our members. By traveling to meet with groups of our members face-to-face at our Member Briefing &amp; Industry Updates, we&rsquo;ve gotten an &ldquo;on-the-ground&rdquo; look at things from their perspective. Sitting in person with a member ensures clearer communication and proves very beneficial as we strive to engage all of our members. What steps are planned in the near future to increase member engagement? NBB will continue efforts to achieve more face time with our membership. But, we also know that it is not feasible to meet with every member in person, so those who aren&rsquo;t available to attend regional and national meetings will be invited to attend program specific webinars. This will ensure that we are capturing the views of all our members so that the organization&rsquo;s voice is true to the issues facing the industry.
 What is the feedback from members? Members are, now more than ever, seeing the value of their membership in NBB. For a long time, some segments of the industry thought they were &ldquo;required&rdquo; to be a part of this organization. I have seen that perception changing as members become more engaged and learn the value of the core programs and what NBB does for them. Now, membership stems from a desire to be part of the collective voice, rather than something they may have felt required to do. This is a positive step for our organization. What aspects of membership development have you most enjoyed? Overall, the goal of membership development is to inform our members how NBB is investing their dollars for the betterment of the biodiesel industry. When I see a member&rsquo;s eyes light up as they hear about one of our accomplishments, it is rewarding. Whether it&rsquo;s getting biodiesel defined in a state&rsquo;s statute or RFS2 Regional Training, there&rsquo;s no better feeling than sharing our industry&rsquo;s successes with our membership. What is the main focus of member engagement? I think that overall, this initiative will be successful if we hold onto the idea that NBB should be one, collective voice working towards the best interests of the biodiesel industry. That one voice is the NBB, and we want to do everything we can to engage the biodiesel industry so that we can represent our members to the best of our abilities. We are only able to achieve our goals as an industry if we all work together. Doug Whitehead,&nbsp; Director of Operations, National Biodiesel Board

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Membership Development Works to Unify Industry

In May, the National Biodiesel Board began production for the advertising portion of the Advanced Biofuel Initiative. The initiative will use one-on-one outreach and NBB&rsquo;s first-ever national television ad among other avenues to help secure biodiesel&rsquo;s role as an advanced biofuel.
 The 30-second television commercial will be presented as a testimonial showcasing biodiesel at work in real settings. After much testing and research, this format proved to be the most effective among the target audience. The simple, direct message will help reiterate that biodiesel is here now, working to support our economy and energy independence. There are many great cities that use biodiesel, but Dallas was selected for its universal appeal as a &ldquo;typical&rdquo; American city free of regional or other stigmas.
 The commercial will air during Sunday morning news shows and will begin with local cable advertising targeted at the Mid-Atlantic region. The National cable ad buy is scheduled for the fall with additional regional ad buys and a print and online media outreach portion of the campaign to reinforce both the images and the messages in the television commercial.
 The advertising effort is just part of the overall Advanced Biofuel Initiative. The program also includes opportunities for direct outreach to likely detractors such as environmental organizations, all designed to establish biodiesel as an advanced biofuel.
 Campaign information including the TV commercial and print advertising pieces can be found at www.biodiesel.org.

The Advanced Biofuel Initiative includes a 30-second commercial to secure biodiesel's role as an advanced biofuel. 

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The new commercial showcases biodiesel use in real-world settings. 

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The Mid-Atlantic region, including Washington, D.C., is the targeted region for the television commercial. 

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NBB initiative showcases biodiesel in first-ever national campaign

The million dollar question in biodiesel right now is how much fuel the industry will produce this year. In May, at a congressional hearing on biofuels, a top U.S. EPA official left little doubt what the answer is.
 Responding to questions about delays in commercial production of other advanced biofuels, Margo Oge, director of EPA&rsquo;s Office of Transportation and Air Quality, said the agency is standing firm behind its overall advanced biofuel carve-out in the RFS2 program because it believes biodiesel will not only meet its 800 million gallon mandate, but there is enough production capacity to fill in shortcomings elsewhere. &ldquo;We believe the capacity is there to make up the difference,&rdquo; she told lawmakers.
 Director Oge&rsquo;s comment is the latest in a series of statements from EPA officials that should put to rest any question about where biodiesel stands and whether its RFS2 mandate is real.
 Why is this important? Oge and her office are the referees&mdash;her team manages the RFS2 program. In fact, they have been managing congressionally imposed fuel programs for nearly 20 years, and they know how to run them. They understand the petroleum sector, and they understand advanced biofuels like biodiesel. They analyze the reports and know which companies produce every gallon of biofuel.&nbsp; Team EPA has done the math and concluded that biodiesel can reach the EPA&rsquo;s goals.
 For biodiesel, that means producing not only 800 million gallons of biomass-based diesel under the RFS2 program, but also potentially an additional 100 million gallons to help meet general, undifferentiated advanced biofuels targets. In fact, biodiesel is the only fuel being used on a commercial scale in the U.S. today that meets EPA&rsquo;s advanced biofuels criteria. Others such as renewable diesel and sugarcane ethanol are not likely to be used in significant volumes in 2011 and 2012.
 Despite this, some have continued to question whether this production will really happen, whether EPA&rsquo;s targets will really be met. The answer is yes. Here is why.
 The RFS2 program can&rsquo;t be avoided. EPA established a set of rules that provide flexibility under which petroleum companies can comply, but they must comply. If petroleum companies don&rsquo;t comply, EPA is allowed to use an elaborate set of compliance rules that could result in multimillion dollar fines and jail time for noncompliance.&nbsp;
 While options for avoidance in any given year exist for individual companies, together with possible continued exemptions and waivers, they are tightly controlled and can be used only under clearly defined circumstances.&nbsp;
 Regarding waivers, EPA is required to periodically evaluate the impact of the RFS2 requirements on the price of diesel fuel. But the statute specifically states that EPA can reduce volume requirements only in cases of significant renewable feedstock disruptions or other market factors that create significant price increases. In such cases, EPA can reduce the mandate by a maximum of 15 percent. If after 60 days the cause of the price increase continues, the requirement may be reduced again by an appropriate amount not to exceed an additional 15 percent (800 MMgy x 15 percent = 120 MMgy).
 Separately, interested parties can apply for general waivers, but EPA has made it clear that waivers will be granted only in strict circumstances. Only one partial waiver has been requested in the history of the program, by the state of Texas, and it was denied.
 Regarding options for individual companies, there are two tools that give individual companies flexibility. First, if a company generated excess RINs that were not used in 2010, it can roll over no more than 20 percent of its 2011 volume requirement to 2011. In other words, if an obligated party acquired 500 excess RINs in 2010 and its 2011 RVO is 1,000 RINs, then only 200 RINs from 2010 could be used in 2011 (20 percent of 1,000 = 200). In tracking biodiesel production volumes from 2010, we are confident that very few, if any, excess RINs were generated in 2010.
 Second, the regulations allow companies that are unable to generate or purchase sufficient RINs to meet the annual volume requirements to carry forward a renewable fuel deficit into the next year; we call this a deficit carryover. If any deficit is carried over, however, the obligated party must acquire enough RINs to meet the next year&rsquo;s requirement and satisfy the deficit. An obligated party may not carry a deficit in two consecutive years. For example, if Company A is required to acquire 1,000 biodiesel RINs in 2011 but does not do so and 1,200 biodiesel RINs in 2012, then in 2012 the company is required to purchase 2,200 RINs in order to meet the 2012 compliance requirements. Further, Company A cannot roll any of the 2,200 RINs into 2013.&nbsp;
 Finally, the last piece of the puzzle addresses small refineries. Small refineries were exempted from the program until Jan. 1. In 2009, a Senate Appropriations Committee directed U.S. DOE to study and determine whether small refineries faced a disproportionate economic hardship in meeting renewable fuel standard (RFS) requirements beginning this year. The study has been completed and is under review by EPA. If small refineries continue to be exempted from the program, then there may be some very minor adjustments to the overall volume requirements.
 In conclusion, there is no doubt this program is complicated, but compliance is a must, and the thresholds for waiving the program are extremely high. Already, we are mid-year, volumes have increased dramatically, the program has not been waived, and we are in the middle of high biodiesel blend season. As an industry, our goal is to work with our customers, the obligated parties, to ensure both producers and obligated parties meet the volume requirements of the program. Whether we produce 800 or 900 million gallons this year, let&rsquo;s start planning for 1 billion gallons in 2012.

Why the 800-million-gallon RFS2 mandate really means 800 million gallons

The price of food continues to be closely linked to petroleum prices, commodity markets and other world economics. This volatility in food prices has led to the resurfacing of the food vs. fuel debate in recent months. The National Biodiesel Board Sustainability Awareness program allows NBB to refute misinformation about biodiesel&rsquo;s role in the food and fuel debate with scientific facts.
 Recent efforts by NBB to counter food and fuel misinformation include webinars with experts, information releases, fact sheets, media outreach and much more.
 The 2011 NBB Conference hosted a presentation on food, fuel and land use with Stephen Kaffka of the University of California at Davis and Keith Kline of Oak Ridge National Laboratory. This discussion on their research supporting sustainable biofuels was so well presented and received that a webinar was conducted in May to discuss the issues in more detail.
 &ldquo;While the challenge remains for the biodiesel industry to convey the complicated truth in simple sound bites, the webinar provided an opportunity to dive into the true scientific interactions between renewable fuels, food prices and land use,&rdquo; said Don Scott, NBB director of sustainability.
 Another important branch of the Sustainability Awareness program at NBB is reaching out to members of the media who cover biofuels. Often stories written on biofuels, land use and food issues tend to perpetuate common myths. To combat those myths the team developed a background page to distribute to reporters when articles surface on the subject. This resource is designed to provide information, open a dialogue with the reporter, and offer NBB as a source for future articles.
 &ldquo;It takes more than simply sound science to counter myths,&rdquo; Scott added. &ldquo;You have to be proactive in getting that science out into the public.&rdquo;

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Sustainability Awareness program counters misinformation with science

A new study by the Michigan State University branch of the Great Lakes Bioenergy Research Center, led by the University of Wisconsin-Madison, shows that, in recent years, U.S. biofuel production has resulted in no indirect land use changes. Critics of biofuels have long claimed that increased demand for biofuel feedstocks such as corn and soybeans has led to land use changes around that world, which ultimately result in greater greenhouse gas emissions. But the Michigan State study found that, based on the most recent data available, from 2002 to 2007, biofuel production &ldquo;is not significantly correlated with changes in croplands for corn (coarse grain) plus soybean in regions of the world which are trading partners of the United States.&rdquo; Joshua Morby, executive director of the Wisconsin Bio Industry Alliance, says, &ldquo;This study is yet another nail in the coffin for the tired argument that biofuel production is causing harmful indirect land use changes around the world. The fact is that biofuels are significantly more environmentally friendly than traditional fossil fuels, and have a large role to play in reducing fuel costs, growing our economy, and increasing our energy independence.&rdquo;
 The United Parcel Service began using biodiesel blends at its most vital hub in Louisville, Ky., in May. UPS recently installed a biodiesel fuel tank and fueling station at its Worldport facility. It will allow fueling operators to blend specified percentages of biodiesel "on the fly," starting with 5 percent biodiesel, B5, and working up to B20. As the single most important point in all of UPS's global operation, Worldport processes 416,000 packages an hour, is the size of 80 football fields, and turns 100 aircraft a day. The 30,000-gallon biodiesel tank and station at Worldport fuel nearly 200 vehicles and diesel-fueled equipment, most of which help load packages on and off the planes. The National Biodiesel Board called the switch &ldquo;monumental.&rdquo;
 For biodiesel producers using corn oil feedstock, take note: Ashland Inc. says ethanol producers can now capture up to three times more corn oil during processing and extract a higher quality oil with a new product introduced by subsidiary Ashland Hercules Water Technologies. The new corn oil extraction aid, PTV M-5309, is easily introduced into the process and requires no additional capital expenditure. The corn oil extraction aid significantly increases corn oil yield by improving the release of oil during mechanical extraction. Added to the process after distillation, the extraction aid also reduces solids in the oil, resulting in a cleaner, higher-quality oil. Results also include a reduction in system deposits, allowing for less downtime related to cleaning and maintenance. The product has received the generally recognized as safe (GRAS) and Kosher certifications. Additionally, Ashland has a pending patent application for use of Ashland PTV M-5309 in corn oil extraction.
 Neuron BPh and Repsol have formalized an agreement for the development of bioprocesses focused on the production of biofuels. The Neuron biotech company from Granada is going to carry out research in collaboration with Repsol on second-generation biofuels via its BioIndustrial division. The research will be on fuels produced from agricultural waste and wood pulp. Repsol, developing projects in the biofuels sector for more than 10 years, is collaborating with Neuron BioIndustrial because of its experience and knowledge in the field, which will allow Neuron to make significant progress in a short period of time, particularly in the industrial application of bioenergy and biopolymers.
 The founders of BDI-BioEnergy International AG, Wilhelm Hammer, CEO, and Helmut G&ouml;ssler, chief technology officer, will be leaving the management board for personal reasons when their contracts end June 30. Hammer and G&ouml;ssler are taking this step after making appropriate preparations for their successors and in full agreement with the supervisory board. They will both continue to be associated with the company as shareholders and consultants. Effective July 1, the supervisory board of BDI has appointed Markus Dielacher and Edgar Ahn to be new members of the management board. Both have been with the company for years and have in-depth sales and technical experience. Hammer says, &ldquo;Since BDI was established 15 years ago, my partner Helmut G&ouml;ssler and I have worked with our colleagues to develop the company from small beginnings to the world market leader for multifeedstock biodiesel plants. In spite of the severe financial and economic crisis in recent years, BDI is well equipped for the future today.&rdquo;
The law firm of Michael Best &amp; Friedrich LLP announced Mary Ann Christopher has joined the firm as a partner in its Milwaukee office. Christopher will join the firm&rsquo;s energy and sustainability industry team as well as the transactional practice group where she will focus on project finance, complex business transactions and mergers and acquisitions. Christopher has successfully represented clients in complex commercial business transactions, mergers and acquisitions, and project finance, primarily in the development, acquisition, sale, finance, operation and leasing of major infrastructure and industrial projects, equipment assets, and related facilities; with a particular emphasis on the renewable and clean energy sectors such as wind, biomass, biofuels, hydrothermal and nuclear. Christopher received her law degree from Northwestern University School of Law and her undergraduate from Carleton College in Minnesota.
 Wika Instrument Corp. is offering its 213.40 bourdon tube pressure gauge intended for adverse service conditions where pulsation or vibration exists. It is suitable, the company says, for gaseous or liquid media that will not obstruct the pressure system. With pressure ranges up to 15,000 psi and glycerin and silicone filled options, the 213.40 is ideal hydraulics and compressions, particularly in mining operations. Also, the Wika XSEL 2XX.34 process gauge series is designed for severe service applications found in refining, chemical and petrochemical plants. The XSEL is used to measure line and pumping pressures in biodiesel reaction, wash, settling and mixing methanol catalyst. Utilizing a stress reducing Bourdon tube design, movement with hardened components and bearing technology, the XSEL process gauge pressure system is capable of producing 10 million or more pressure cycles. Wika says due to its greater resistance to vibration and pulsation, the XSEL reduces downtime from replacing regularly worn-out instruments and improves safety risks from the release of process media. With positive pressure ranges up to 30,000 psi, a five-year warranty on the gauge and a 10-year warranty on the pressure system, the company says it exceeds industry standards.
 After raising $2.5 million in working capital, EQM Technology &amp; Energy was able to restart the 12 MMgy plant in Cleburne, Texas, recently. The startup went smoothly, according to Jack Greber, CEO of EQM, who adds, &ldquo;Production and sales have met our forecasts, and customer interest and demand have been strong.&rdquo; The restart of the plant would not have been possible without the company&rsquo;s issuing of $2.5 million worth of convertible notes. The convertible notes allow the purchasers two different options. They can wait the three-year time period the notes have been issued for and receive the payment back with an interest rate of 10 percent per annum. Or the purchaser can instead convert the notes into common stock in EQM at 40 cents per share before the three-year time period. After one year, however, if EQM&rsquo;s common stock has traded at an average price per share above two times the conversion price for 60 consecutive days, according to EQM, the company can &ldquo;call,&rdquo; or forcibly convert, the notes.
 Renewable fuel retailer Propel Inc. announced the opening of a new fueling location in Redwood City, Calif. The station, co-located with a Valero station on Whipple Avenue, supplies both biodiesel and E85. The new location is the 24th Clean Fuel Point station that Propel has opened to date. More than 75 sites are planned for development across California over the next year. According to the company, those sites will all feature biodiesel in addition to E85. &ldquo;Even when diesel prices get extremely high and biodiesel is significantly less than regular diesel, we still see a lot of customers with diesel vehicles that will still drive right past the biodiesel pump and go to a diesel pump,&rdquo; says Matt Horton, Propel CEO. &ldquo;Usually it&rsquo;s because they don&rsquo;t know that they can use biodiesel in their diesel vehicle.&rdquo;
 A three-way partnership between Angel Labs LLC, Industrial Green Power Inc. and Titan Biodiesel was forged whereby Angel Labs will deliver to market its ultra-efficient, six-inch &ldquo;Massive Yet Tiny&rdquo; engine to power a 40 kilowatt genset distributed by Industrial Green Power Inc., powered by biodiesel fuel supplied by Titan Biodiesel. Invented by Raphial Morgado, co-founder and managing member of Angel Labs, the MYT-6 possesses an incredible power-to-weight ratio, low parts count, low maintenance, high mechanical efficiency and low pollution. The MYT-6 engine can be applied to benefit virtually any engine application, from ships to small generators.

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NEW MANAGEMENT: Dagmar Heiden-Gasteiner (center) will remain CFO while Dielacher and Ahn join BDI's management board. 


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NEW PARTNER: Mary Ann Christopher joins Michael Best & Friedrich as a member of the firm's energy and sustainability team.

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Business Briefs

Today&rsquo;s petroleum industry is at a crossroads. The U.S. government has set regulations to drive sustainability and reduce external dependency on hydrocarbon-based products, such as the renewable fuel standard program as required by the Energy Independence and Security Act of 2007. As a result, the petroleum industry is under increased pressure to meet these requirements, and must implement improved technology for the measurement and control of renewable fuels blending.
 Achieving the optimal blending of crude, gasoline and diesel fuel in refineries is challenging, but the importance of blending is migrating downstream to bulk storage and distribution terminals in the U.S., and will likely only increase as the adoption of renewable fuels accelerates.
 This situation has taken on an even greater urgency with the establishment of the revised renewable fuel standard, or RFS2. RFS2 establishes specific annual volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel that must be part of the U.S. fuel supply. It also includes new definitions and criteria for both renewable fuels and the feedstocks used to produce them. These statutory requirements will have a significant impact on operations within the petroleum and petrochemical refining, storage and distribution sectors.
 This host of regulations and standards are impacting the way manufacturers design their overall blending systems. Advances in smart blending technologies, however, are making it easier to achieve compliance while streamlining operations. Before examining technologies, it&rsquo;s important to have a thorough understanding of the actual industry standards and their impact on day-to-day operations.
 Global Standards for Measurement Accuracy
 Governments around the world are implementing new standards addressing various aspects of the alternative and renewable fuels industry, including custody transfer measuring equipment and systems. In Europe, for example, the Measuring Instruments Directive applies to custody transfer metering for liquids and gases, and is applicable in all 27 European Union countries, plus Norway and Switzerland. As a consequence of this legislation, enhanced accuracy and security are required for biofuel blending operations serving automotive fuel marketers.
 The MID contains specific articles known as annexes for 10 different instrument categories. The annex relevant to the measurement of petroleum products is based on the International Organization of Legal Metrology Recommendation R117-1. One of the key requirements in the MID is that the total fuel metering system must perform within the accuracy specification&mdash;not just specific components. Not only are flowmeters subject to MID certification, other essential parts of the metering system are, as well, including temperature transmitters, biofuel blend controllers, electronic volume converters and air eliminators.
 U.S. Regulations for Renewable Fuel
 For bulk petroleum storage and distribution terminals in the United States, the introduction of biofuels into the mainstream fuels market, coupled with stringent renewable fuels standards imposed by the federal government, has generated the need for a significant investment in improved blending measurement and control technology.
 On Feb. 3, 2010, the U.S. EPA, responding to the requirements of EISA, issued the RFS2 regulations mandating the use of 36 billion gallons of renewable fuel in the U.S. by 2022. RFS2 puts into motion the first-ever regulatory program for establishing the greenhouse gas (GHG) performance of the nation's transportation fuels.
 The RFS2 regulations contain four separate categories of fuels, each with their own feedstock and performance criteria. Obligated parties, such as petroleum refineries, ethyl alcohol manufacturers, petroleum bulk stations and terminals, and petroleum and petroleum products merchant wholesalers, are required to include specific amounts of renewable fuels in the fuels they provide to consumers. RFS2 mandates that U.S. gasoline and diesel include 12.950 billion gallons of total renewable fuel, 950 million gallons of advanced biofuels, 650 million biomass-based diesel, and 100 million gallons of cellulosic biofuel.
 Increased Demands on Terminal Operators
 As with any new industry regulation, a host of issues exist, and such is the case for RFS2. Those issues must be understood by those who manufacture control and metering equipment for biofuel blending, and by those who seek to use it. Increasingly, the U.S. fuels marketing industry is focusing on the precision of the systems it uses to create product combinations as mandated by federal law. The petroleum distribution sector is faced with a host of challenges when it comes to renewable fuels blending, including the design and performance of mechanical hardware (wetted), electronic control, reconciliation and reporting, weights and measures, and hazardous area control. The specific demands on refineries and terminal owners and operators include:
 &bull; Enhanced accuracy and control of blend components (i.e., &ldquo;I need to be sure my blend is on-spec from the start to the finish of the batch.&rdquo;).
 &bull; Increased security and monitoring of the blend process (i.e., &ldquo;How can I be sure of an accurate blend even under fault conditions?&rdquo;).
 &bull; Optimized tracking and traceability of calibration functions (i.e., &ldquo;How can I verify my systems have been correctly calibrated?&rdquo;).
 &bull; High visibility of the blend process for maximum operational uptime (i.e., &ldquo;I lack the ability to rapidly pinpoint failure modes for fast reinstatement.&rdquo;).
 &bull; Ease of transaction data withdrawal for efficient reporting within a secure environment (i.e., &ldquo;I need to be able to report comprehensive data to the authorities with respect to my renewable fuels operations.&rdquo;).
 Advanced Technology for Blending Operations
 A new generation of &ldquo;smart blending&rdquo; technology can provide significant benefits for the global petroleum refining, storage and distribution sector. Today&rsquo;s advanced blending control systems not only help end users comply with strict accuracy standards, but are also faster and easier to configure and maintain than previous equipment.
 For many biofuel producers, the use of an integrated system solution is the most efficient way of ensuring compliance with complex regulatory standards. An integrated system can alleviate the need to understand the technical intricacies of each component of a blending control system. Instead, terminal operators only need to understand their end requirements.
 By taking a system solution approach, petroleum storage and distribution facilities can partner with a single automation provider and entrust full responsibility for their blending activities and transactions. So what key elements comprise such systems, and what should producers look for?
 First, self-diagnostics built into integrated solutions enable skilled and knowledgeable support personnel to remotely maintain the performance of blending units from anywhere in the world. Today&rsquo;s integrated systems also include the first integrated additive and blend controllers to fully comply with the EU&rsquo;s MID standards. Such systems employ a robust blending algorithm that helps companies achieve the highest blending accuracy to reduce off-spec blends and the costs associated with waste. These systems also feature controllers that enable either additive injection control or blending control. And, the controllers are optimized for seamless integration into the downstream fuels distribution sector.
 These single-stream controller designs can incorporate 12 separate devices, each providing individual functionality configurable from within a single device and selectable via license key in order to optimize regulatory compliance. This enables key features such as real-time deviation graphs, which allow live monitoring of the actual biofuel blend ratio during the transfer process and refining of the blend control parameters.
 In addition, today&rsquo;s systems can provide improved flowmeter proving capabilities, enabling plant personnel to periodically check the accuracy of blending activities to ensure profitable operation. A calibration wizard can automatically capture every device calibration transaction, including time stamps, calibration volumes and meter serial numbers. A dashboard can then display complete device hardware diagnostics on a single screen to reduce the time spent on fault-finding by as much as 25 percent, compared to manual calibration.
 The use of a menu-based screen can also help users cut field configuration time from hours to a few seconds. Systems also enable hand-held devices to connect to the system to make two-way data communication easier, and to quickly and securely transfer transaction data, configuration files and calibration records.
 Improved Documentation of Critical Transactions
 Producers today must also seek systems that document the accuracy and compliance of their biofuel metering processes. Some single-stream controllers, for instance, can implement a large transaction storage memory of more than 10,000 transactions, which allows the devices to operate for more than three months in standard operating conditions without losing any transactions. Alternatively, the controllers can have their transaction data securely downloaded via local access devices (LAD) and their memory cleared in preparation for storage of another 10,000 transactions. The transactions subsequently transferred to the LAD can then be manually transferred to any peripheral for storage or printing via secure digital card. They can also be distributed via object linking and embedding for process control to third-party systems for separate reconciliation.
 Technology Investments for Future Payback
 With the prospect of increasingly stringent government standards, the need to easily and accurately measure biofuel blends becomes more important and requires a more complex set of capabilities. As a result, the petroleum distribution industry must implement new smart metering and control technologies, which help terminal owners and operators verify regulatory compliance, minimize capital expenses using a single custody transfer solution, ensure on-spec product at any time, prevent giveaways of high-value products, and achieve the &ldquo;perfect blend.&rdquo; With additional insight and control, refinery and terminal operators can fine-tune fuel blending systems for increased reliability and performance. This can result in a significant payback in terms of easier fault-finding, fewer repairs and less downtime.
 Author: Naved Reza Global Marketing Leader, Honeywell Enraf <a href="mailto:naved.reza@honeywell.com">naved.reza@honeywell.com</a>

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NEW RULES: The petroleum distribution sector is faced with a host of challenges regarding renewable fuels blending, including the design and performance of mechanical hardware (wetted), electronic control, reconciliation and reporting, weights and me

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Naved Reza, Global Marketing Leader, Honeywell Enraf

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Navigating renewable fuels blending requirements in the distribution chain  


July 2011

Business Briefs

Business Briefs

Columns

Clean Burning

Understanding Indemnities

Creating New Opportunities Off-road

Featured

Biodiesel Sets Sail

Steaming Ahead to a Better Fuel

Don't Forget the Event

Contributions

Regulatory Impact on Terminal Requirements