Remember December

With a new test in place and some lessons learned the hard way, the Minnesota biodiesel program is geared for a less "devastating" winter in its sophomore season. As Washington prepares to implement a similar requirement for diesel fuel, will it learn from the North Star State's December debacle?
By Nicholas Zeman | October 13, 2006
A chill permeated the entire diesel industry last December when it was discovered that an off-spec fuel had entered the blending pool in Minnesota. Fuel filters began to clog and falter. The circumstances were so severe that the Minnesota Department of Commerce issued a variance to the requirement that all diesel fuel be blended with 2 percent biodiesel. The initial variance was issued Dec. 23, 2005, and was extended through February at the request of the Minnesota Biodiesel Council and the National Biodiesel Board (NBB).

"It was devastating," says Charles Neece of FUMPA Biofuels in Redwood Falls, Minn. "Everybody was a suspect during that period of time." The suspended requirement ultimately meant that no one had to buy FUMPA's biodiesel, as the measures that backed the fuel as part of the state's blending pool were overruled. "So what was moved ended up going into the fuel oils market," Neece says.

FUMPA Biofuels is a multi-feedstock facility that sells B100 and B99.9. The company possesses a blending license but doesn't specifically market blended fuel, and 95 percent of FUMPA's product is handled by independent fuel distributors below the rack. "Probably what saved us was that we had a distributor in Ontario that had some of our product and was not having trouble," Neece says. "That information later spread back down into Minnesota and saved us; but it was [still] devastating. All Minnesota producers were suspected of producing substandard product, and each of us had to prove that our product was appropriate."

One of FUMPA's clients is Western Petroleum Company, headquartered in Eden Prairie, Minn.; it is currently one of the largest distributors of biodiesel in the United States. With over 300 railcars in biodiesel/diesel service and heated storage for over 600,000 gallons, Western Petroleum is a major position-holder at seven locations in the Magellan terminal system, and it holds an exclusive storage location in St. Paul Park, Minn. "So we were knee-deep in it," says Greg Kary of Western Petroleum. "I've talked to local transporters, and they argue that we could be 40 percent to 50 percent of the biodiesel market."

Despite careful preparations made by Western Petroleum, which was fully aware of the challenges involved in the mass distribution of biodiesel, significant problems still surfaced. "We set it up pretty Cadillac-style with a lot of measures and procedures in place to make sure that the spec would not be off, or that once it was in the tanks, it wasn't going to be too thickly blended," Kary says. "We got stainless steel trucks, and everything was delivered hot. We blew lines out but there were still some problems that came from the fact that some off-spec product got in there, and some of those tanks at Magellan were not kept at the right temperature."

Another culprit, besides an off-spec product, could have been a carrier mixing too much biodiesel with petroleum. "Have our procedures changed? I wouldn't say so much, but our carriers have," Kary says. "One thing that we've learned is to be careful who we sell to, and where the liability ends and starts."

The problem is that distributors have no way of knowing at what levels their carriers blend, Kary says. "What we have found is that a lot of our customers have gone around us and gone straight to the plant, and that also scares us," he says. "Diesel [prices were] so high that guys were starting to blend [biodiesel] at really high numbers, and what happens is that it gets cold and the stuff gels."

Mike Youngerberg of the Minnesota Biodiesel Council (MBC) says that it is hard to prevent circumstances like that from occurring. "It's hard to keep people from doing what they want to do," he says. "What we can do is provide information on the qualities of B100, how to blend it properly and what the operability of high blends (over B20) is in cold weather."

Kary maintains that other factors were involved in the sub-par situation last year, in addition to the surfacing of a bad batch. "I will confirm that there was off-spec product out there, but there were other things to blame," Kary says. "It wasn't always off-spec. I'm not blaming any one thing; I'm blaming a number of things. The price went through the roof, and plants started to sell (biodiesel) to every Tom, Dick and Harry. These are folks who do not have appropriate equipment, testing or experience."

Quality Control
When the smoke cleared and temperatures started to warm, FUMPA, Western Petroleum and other players in the Minnesota biodiesel industry began investigating how the situation occurred. The companies worked closely with the state Department Of Commerce to determine their roles and responsibilities in the effort to ensure that customers got a product that met the qualifications of ASTM D 6751, would be compliant with the U.S. EPA and would meet the requirements for the excise tax refund.

The MBC says it is committed to quality control, assuring that none of the companies it represents are blamed for any other issues in the marketplace. SoyMor, obtained a 2 MMgy biodiesel plant in Glenville, Minn., BQ-9000 certification, a voluntary quality control program run by the National Biodiesel Board, and Neece says FUMPA has completed the desk audit required for accreditation and will complete a plant audit within the next week. "We fully intended to have our BQ-9000 [accreditation] before this winter for that reason," Neece says. "It's going to be necessary to make that demonstration in order to have credibility in the biodiesel marketplace this winter."

Cooperation between the biodiesel and petroleum industries is also a major aspect of quality control and the successful management of the Minnesota biodiesel program, Youngerberg says. "The petroleum industry has been watching much more closely the materials that have been coming into its terminals, and that has been a big help in assuring that what reaches the market is high quality," he says.

After a thorough assessment, it was reaffirmed that biodiesel meeting ASTM D 6751 specs is adequate for sale within the state of Minnesota, but there was still room for additional safeguards. "We did add one additional test that is in review with the ASTM committees that represents a fuel cleanliness test," Neece says. "Presently, this test is being referred to as a 'cold-soak filter test.'"

From now on, the producers in Minnesota will take a sample of product-300 milliliters-and refrigerate it for 16 hours. It is then warmed to room temperature; it can't be heated nor can any other artificial means be used to speed up the process of thermal equilibrium. Once it reaches room temperature, it is filtered through a specified medium and clocked. The ability of that product to pass through the filter medium determines its cleanliness. The time in the refrigerator simulates the impact cold weather has on filtration of the product in the vehicle filters. This method has been found to be a fairly accurate predictor of products that would have unacceptable fuel-quality attributes.

In terms of identifying the origin of a bad batch of biodiesel, the department of commerce has decided not to release the results of its investigation to the public. "If [the department of commerce hasn't] made a disclosure, it is certainly not up to individuals to guess," says Neece, when asked if he could identify the producer of off-spec fuel. "I can tell you who it wasn't; it wasn't me. I couldn't even determine if it was an in-state entity or an out-of-state entity for sure."

Blends up to B20 have sufficient cold-weather properties, but sometimes diesel fuel causes problems as well. "You can't take a summer blend No. 2 [diesel] and expect to run in cold weather with it," Neece says. A project engineer for Renewable Energy Group in Ralston, Iowa, told Biodiesel Magazine in June that Minnesota has had problems with its diesel fuel in winter months for years before biodiesel was ever a part of the equation. "You need to have a cold weather No. 2 [diesel fuel], or you need to use some blend of No. 1 that will give you properties of the base fuel appropriate for the winter weather," Neece says. "When those have been tested at terminal locations and in laboratories, everything seems to work fine."

Watching and Learning
Despite the challenges Minnesota faced last winter, it has also served as an example for other states. In March, Washington became the second state to adopt legislation that requires renewable fuels in its liquid fuels market. Senate Bill 6508 also established fuel-quality standards, created a biofuels advisory board and mandated the use of biodiesel by state agencies.
This will not be an easy program to implement, says Gary Wright, bio-energy coordinator for the Washington State Department of Agriculture. "We want to avoid any pitfalls we can, and of course, a way to do that is to rely on existing experience," he says.

Officials in Minnesota believe the mandate forced the state into a bad situation last year, and that the proper quality control measures were not in place to adequately bring the program to market. Like Minnesota, Washington has learned that cooperation with the petroleum companies is absolutely necessary for the support of such measures. "It's the whole idea of a coordinated effort," Wright says. "There are a lot of special interests and government entities involved in this, and there are a lot of groups working together recognizing that cooperation is the key to long-term sustainability."

Officials in Washington have been at work allocating funds in a $17 million low-interest loan program to increase the state's oilseed crushing capacity. "The first thing is to put the infrastructure in place-have farmers growing the canola and have the crush capacity in place to meet needs in-state," Wright says.

At least 2 percent of diesel fuel sold annually in Washington must be biodiesel either by November 2008 or when the department of agriculture determines that feedstock grown in Washington can satisfy a 2 percent requirement. That would increase to 5 percent when the state director of agriculture determines that both in-state oilseed crushing capacity and feedstock grown in Washington can satisfy the mandate.

"Right now, we are in only the most preliminary discussions and just getting cranked up for this, but I am looking forward to working with the people in Minnesota and to see how we can leverage their experience," Wright says.

Nicholas Zeman is a Biodiesel Magazine staff writer. Reach him at [email protected] or (701) 746-8385.
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