Editor's Note

Reporting actual production volumes should be standard practice in biodiesel industry
By Bryan T | July 01, 2006
There's a great deal of crossover interest in biodiesel and ethanol, and that's reflected in the fact that hundreds of Biodiesel Magazine readers also subscribe to Ethanol Producer Magazine (EPM). Both magazines are published by BBI International, and each is a first-rate publication on a steep growth curve. EPM's monthly page count and soaring circulation have mirrored the U.S. ethanol industry's expansion. I sing praises for BBI's other magazine not simply because I'm proud of it-although I am-but because its monthly content serves as a sort of industry benchmarking tool. In addition to BBI's up-to-date plant lists, EPM's exacting construction reports, and coverage of plant groundbreakings and start-ups, are second to none. Our team prides itself in producing accurate reports with great consistency.

Biodiesel Magazine is younger than EPM, and so is the industry it serves. Nevertheless, our editorial staff is committed to providing the same type of accurate, scrupulous reports on biodiesel plant construction, start-ups and production. However, even though the U.S. ethanol industry is 10 times larger than the U.S. biodiesel industry, the latter has proven to be more difficult to report on in many respects.

Some say the U.S. biodiesel industry is a decade behind the U.S. ethanol industry in terms of its maturation and build-out. I don't think so. In my opinion-leaving irrelevant volume comparisons aside-the vivacious American biodiesel industry is only a few years behind its biofuels counterpart. If I'm right, a rather noticeable gap should be closing between the way project development, construction, permitting and production volume reporting practices are carried out in the biodiesel and ethanol industries. In other words, if the biodiesel industry's maturation level is trailing the ethanol industry as closely as I think it is, the manner in which biodiesel plants-both publicly and privately held facilities-are developed, built, brought on line and maintain production needs to become more uniform and predictable.

I make this assertion not as an expert in either project development or production, but as an editor who oversees two trade journals in similar industries. Our entire editorial staff-now five reporters and three editors-are dually responsible for both magazines. Because the two magazines have similar departments and similar editorial styles, it's easy for us as writers and editors to spot the disparities between the industries represented by our publications. Here's what we see: The 25-year-old U.S. ethanol industry, now dominated by highly efficient dry mills, essentially operates like clockwork. The way plants are developed, financed, built and managed-while not utterly cookie-cutter-like-has a semblance of standardization to it. The size of ethanol plants, too, has become somewhat regularized by necessity. Small ethanol plants just aren't economically competitive anymore, and there aren't many of them left.

Dry mills are developed, built and brought on line in a very mapped-out fashion. While it's not uncommon for developers to begin dirt work before equity and debt financing is completely wrapped up, an official groundbreaking ceremony is usually held when a plant is totally financed and construction is well underway. By and large, it takes about a year to build an ethanol plant. What happens next is very predictable: The new ethanol plant will quickly ramp up to its nameplate capacity-typically ranging from 40 MMgy to 100 MMgy-and probably surpass its nameplate capacity within weeks. A grand opening is held, which often includes a community event and tours of the facility. From that point, the ethanol plant will produce ethanol year-round-24 hours a day, 7 days a week-with the exception of planned and unplanned maintenance. With few exceptions, the ethanol industry is really that predictable.

Predictability is a good thing. Transparency is a good thing. I think the biodiesel industry could use a little more of each. When a project developer or builder says it's breaking ground on a plant, the industry needs to be able to believe it. When a plant comes on line, the industry and the public should be informed of the facility's production capacity, planned production targets and annual production totals. When plants expand, we should hear about that, too.

In my opinion, the biodiesel industry needs to follow the ethanol industry's lead on project development and production reporting practices. First, it would be beneficial to the entire industry to have better production numbers-both current and planned-for all U.S. biodiesel plants. BBI International is well respected for its project/plant tracking reports. However, it's extremely challenging to gather accurate production data on existing, under construction or proposed biodiesel plants because there's very little transparency in regards to actual production. Most U.S. biodiesel plants don't operate on a continuous basis and therefore produce below their maximum capacities. That means the public is often left in the dark, forcing people to estimate actual U.S. production totals. Furthermore, several U.S. biodiesel plants run intermittently, depending on the cost of raw materials, market conditions, pretreatment and process success, and perhaps available government funding.

I think it's time for this to change. The biodiesel industry is ready for a new era of openness and pragmatic, managed growth. In Biodiesel Magazine's "Proposed Biodiesel Plant List: 2006," which ran in our June issue, we provided details on 65 would-be plants representing 1.46 billion gallons of potential new production. But what does that really mean?

In the ethanol industry, 1.46 billion gallons of planned capacity means just that; the only unknown would be the percentage of plants that succeed (i.e., get built) versus those that fail. In the biodiesel industry, however, the success rate of proposed plants isn't the only x-factor to consider. There's also the issue of plants producing far below capacity, and that turns market analysis into mushy guesswork. The trouble is, figuring out how much biodiesel is produced annually by existing producers isn't much easier. It's a problem I'd like to see the industry work on.
Array ( [REDIRECT_REDIRECT_HTTPS] => on [REDIRECT_REDIRECT_SSL_TLS_SNI] => biodieselmagazine.com [REDIRECT_REDIRECT_STATUS] => 200 [REDIRECT_HTTPS] => on [REDIRECT_SSL_TLS_SNI] => biodieselmagazine.com [REDIRECT_STATUS] => 200 [HTTPS] => on [SSL_TLS_SNI] => biodieselmagazine.com [HTTP_HOST] => biodieselmagazine.com [HTTP_CONNECTION] => Keep-Alive [HTTP_ACCEPT_ENCODING] => gzip [HTTP_X_FORWARDED_FOR] => [HTTP_CF_RAY] => 775b900999559c52-IAD [HTTP_X_FORWARDED_PROTO] => https [HTTP_CF_VISITOR] => {"scheme":"https"} [HTTP_USER_AGENT] => CCBot/2.0 (https://commoncrawl.org/faq/) [HTTP_ACCEPT] => text/html,application/xhtml+xml,application/xml;q=0.9,*/*;q=0.8 [HTTP_ACCEPT_LANGUAGE] => en-US,en;q=0.5 [HTTP_CF_CONNECTING_IP] => [HTTP_CF_IPCOUNTRY] => US [HTTP_CDN_LOOP] => cloudflare [PATH] => /sbin:/usr/sbin:/bin:/usr/bin [SERVER_SIGNATURE] =>
Apache/2.2.15 (CentOS) Server at biodieselmagazine.com Port 443
[SERVER_SOFTWARE] => Apache/2.2.15 (CentOS) [SERVER_NAME] => biodieselmagazine.com [SERVER_ADDR] => [SERVER_PORT] => 443 [REMOTE_ADDR] => [DOCUMENT_ROOT] => /datadrive/websites/biodieselmagazine.com/ [SERVER_ADMIN] => [email protected] [SCRIPT_FILENAME] => /datadrive/websites/biodieselmagazine.com/app/webroot/index.php [REMOTE_PORT] => 45230 [REDIRECT_QUERY_STRING] => url=articles/957/editors-note [REDIRECT_URL] => /app/webroot/articles/957/editors-note [GATEWAY_INTERFACE] => CGI/1.1 [SERVER_PROTOCOL] => HTTP/1.1 [REQUEST_METHOD] => GET [QUERY_STRING] => url=articles/957/editors-note [REQUEST_URI] => /articles/957/editors-note [SCRIPT_NAME] => /app/webroot/index.php [PHP_SELF] => /app/webroot/index.php [REQUEST_TIME_FLOAT] => 1670398296.645 [REQUEST_TIME] => 1670398296 )