As the feedstock source of choice for biodiesel, the soybean market has experienced the pinch of increased demand. While that may be forcing purchasers to tighten their belts, soybean farmers like Eric Niemann see it in a more positive light. "It creates some challenges sometimes, but it also creates opportunities," he told Biodiesel Magazine during a break from the soybean harvest on his northeast Kansas farm.

After all, creating new markets and turning up the volume on demand is one of the goals of the United Soybean Board (USB), says Niemann, who serves as the vice chairman of the board. "That's what we've been working for," he says.

One challenge associated with the growth of industrial oil markets is finding a home for the soybean meal left over after oil extraction-something USB is working hard to accomplish. Recently, Niemann learned that 13 percent of soybean oil in America is used for industrial uses. The industrial oil market includes biodiesel as well as other products like plastics, foams, ink and lubricants.

Despite the challenges Niemann-like other USB members and soybean growers-is excited about what biodiesel can do for the soybean industry and the nation. Currently, more than half of American soybean farmers use biodiesel on their farms. "That continues to grow," he says.

As the biodiesel industry expands, Niemann has been paying close attention to the news regarding new technology and feedstocks. The way he sees it, soy is available now and is a proven biodiesel feedstock. "We're excited that we can be a part of the energy needs of this nation today," he says.

While farmers are enjoying the higher prices that come with increased demand, a nagging question has arisen. As demand for soybeans ramps up, will there come a time when there's not enough of the crop to go around for feed, fuel and export markets? Niemann doesn't see that as an issue now, and with so many variables involved, it's impossible to predict when that might happen. However, it's still a concern, one that the soybean board plans to examine. In an effort to answer the supply question, and in anticipation of other questions that may crop up in the future, USB is conducting a Soy 2020 study, the results of which will be released in March, Niemann says. The study will also address the issue of increasing the oil content of soybeans. Through its Select Yield and Quality program, USB keeps farmers apprised of currently available soybean varieties that meet a 19 percent oil and 35 percent protein threshold. The Soy 2020 study will determine whether there's a need to "dramatically increase" the percentage of oil content in soybeans.

In 2006, the industry was in good shape as far as soybean supply, Niemann says. Including carryover supplies from 2005, this year's yields look good.

Soybean production was forecast at 3.2 billion bushels, up 5 percent compared with 2005 figures, according to National Agricultural Statistics Service (NASS) numbers released Nov. 9. If the forecast proves correct, this year's crop would be the largest soybean crop on record.

As of Nov. 1, the average yield was estimated at 43 bushels per acre, which is equal to last year's record-high yield. In all, soybean farmers planted 74.5 million acres, up 5 percent from last year, according to NASS statistics.

While soybean farmers in the northern Great Lakes states, Delaware, New York, North Carolina and the Dakotas had higher yields than expected in October, slightly decreased yields were reported in Illinois, Kentucky, Missouri and Pennsylvania.
Other Feedstocks

Soy oil clearly dominates as a biodiesel feedstock, but it's not the only option. In 2006, current and future biodiesel producers made significant headway in turning other feedstocks into fuel.

While rapeseed, the plant canola was bred from, is widely used as a feedstock in Europe, canola wasn't part of the North American feedstock picture until this year. Two biodiesel producers turned their full attention to canola recently and, oddly enough, are located just a little more than 20 miles apart. In May, agri-giant Archer Daniels Midland Co. (ADM) broke ground on an 85 MMgy facility in Velva, N.D. That was followed by the kickoff of a 30 MMgy Magic City Biodiesel LLC project in Minot, N.D., in August. Both companies plan to build canola crushing facilities on location. Earlier in the year, All-American Biodiesel in York, N.D., also broke ground on a plant that will use both soy and canola oil.

Biodiesel produced from canola oil more easily meets the European EN 14Z14 biodiesel specifications, compared with other feedstocks, according to Jeremy Dockter of Dakota Skies, the parent company of Magic City. "There are certain elements of the European standard that are somewhat stricter," says Dockter, who is in charge of the company's strategic planning and financing. "It just shows that our product is going to be that much more exemptible on the standards basis."

Dakota Skies chose canola for that and other reasons, including its excellent cold-weather properties. It also has lower saturated fat content and low iodine levels, which leads to better oxidative stability and less corrosive deposits.

Some future producers have their eye on the ethanol industry as a biodiesel feedstock source. GS CleanTech Corp.-the process engineering technology transfer arm of New York City-based GreenShift Corp.-and Brookville, S.D.-based ethanol producer VeraSun Energy Corp. are both working toward biodiesel production using corn oil extracted from distillers grains, a coproduct of ethanol production.

As of October, GS CleanTech had signed agreements with seven ethanol plants and one animal processing facility, according to Kevin Kreisler, chairman and CEO of GreenShift. In total, these agreements represented the capacity to extract 22.5 MMgy of biodiesel feedstocks. Meanwhile, GS AgriFuels, a sister company, is in the process of developing three biodiesel plants where corn oil will be processed.

VeraSun is working on a different type of technology to abstract corn oil from distillers grains, according to Matt Janes, VeraSun's vice president of technology. At one time, VeraSun had announced that it was working with some of the people now working on the GS CleanTech project, but the two projects have since went different directions, he told Biodiesel Magazine.

In November, VeraSun announced that it was evaluating sites to build its first biodiesel production facility to process corn oil. The plan is to start construction on a 30 MMgy facility in 2007 with a production date in 2008. "We do plan to move quickly on this project," Janes says. With currently producing plants and others under construction, the company could make biodiesel out of corn oil extracted solely from its own operations. However, that doesn't mean it won't look for corn oil at other ethanol plants, he says.

Others, like Philadelphia Fry-o-Diesel, are considering waste greases such as trap grease, which hasn't garnered a lot of attention as a biodiesel feedstock. The company hopes to break ground on a 3 MMgy biodiesel plant in the Philadelphia area by June 2007, with production slated for May 2008, according to company President Nadia Adawi.

There are biodiesel producers using trap grease as part of a multi-feedstock operation, but to Adawi's knowledge, her company's plant would be the only one to focus primarily on trap grease. The company favors trap grease because it is readily available in the urban area where the plant will be built, she told Biodiesel Magazine.

Unlike yellow grease, trap grease is a true waste product that restaurants sometimes pay companies to haul away. Philadelphia Fry-o-Diesel wants to turn that trap grease into an ASTM-spec biodiesel and sell it in the local market. "I think sometimes the waste greases have a stigma," Adawi says. "There's a belief that they make an inferior biodiesel. We want to prove, once and for all, that we can make a high-quality biodiesel out of a complete waste feedstock."

Back-End Product
On the opposite end of the biodiesel production process is biodiesel's by-product, glycerin. As biodiesel production capacity ratchets up, so does the supply of glycerin-rapidly pushing the U.S. industry toward the glycerin saturation point.

From 2003 to 2005, between 400 million and 450 million pounds of glycerin was consumed in the United States yearly, according to the U.S. Bureau of the Census. Between 2006 and 2015, the U.S. biodiesel industry is expected to produce an estimated 1.4 billion pounds of glycerin valued at $289 million, according to an economic study conducted by John Urbanchuk, director of LECG Inc. The biodiesel industry could produce as much as 200 million pounds of glycerin this year alone, according to the National Biodiesel Board.
The burgeoning supply and subsequent lower prices has producers scrambling to find new uses for glycerin. The price of crude glycerin, which was priced between 20 and 25 cents per pound, has dropped to 5 cents and lower.

The nation's synthetic glycerin market has also felt the effects. Dow Chemical was once the only synthetic producer of glycerin in the United States. In January 2006, the company closed down its Freeport, Texas, plant, saying the flood of glycerin from U.S. biodiesel production was partially to blame. "We are beginning to produce more than the market can bear under the current scheme of things," says Jim Conway, vice president of sales for Kentucky biodiesel producer Griffin Industries.

The subject of finding new applications for glycerin came up at the Energy & Environmental Research Center's biomass conference, held in July in Grand Forks, N.D. Paul Bloom, an ADM scientist, says the company isn't worried about glycerin applications. ADM plans to produce propylene glycol and other "large-volume" chemicals from biodiesel's by-product. "I encourage you to go home and look at the products you have on your shelves," he says. "Propylene glycol is not just a deicer like you've probably heard, but it's in many of the end applications-fiberglass resins, personal care [products] and cosmetics. Go home, look through the chemicals you have around your house. You'll see propylene glycol all over."

At the same event, Everett Dobrinski, president and CEO of Magic City Biodiesel says his company would likely find a ready market for the 150 metric tons of canola meal it will produce annually at the facility. The glycerin was another story. "There's an awful lot if it out there right now," he says.

In September, Cargill Inc., another company with a growing presence in the biodiesel industry, announced its plans to commercialize a process using glycerin as a feedstock for producing bio-based products. The company operates a 30 million-pounds-per-year glycerin refinery in Iowa Falls, Iowa. The refinery, which produces U.S. Pharmacopeia grade and other grades of glycerin, is collocated with a 37.5 MMgy biodiesel plant that Cargill has been operating since May.

Holly Jessen is a Biodiesel Magazine staff writer. Reach her at hjessen@bbibiofuels.com or (701) 746-8385.