East of the Mississippi River, biodiesel production is growing. More than 10 facilities are making the renewable fuel, while 18 plants are in the planning stages. Biodiesel use is strong too, judging from more than 200 biodiesel retail facilities spread across the eastern United States, offering B2, B5, B20 and B100.
 
 With all the positive industry growth, however, consumers still have many questions about biodiesel. Why does it cost more? What is the optimal blend? Can it be used in cold temperatures? 
 
 Rapid industry growth coupled with a need for greater consumer education make this part of the country ideal for the second annual Biofuels Workshop & Trade Show. Held last year on the West Coast, this year's Eastern Region conference will take place at the Hyatt Regency Atlanta downtown hotel Oct. 10-12. Themed "Building an Industry," the conference will include general sessions, breakout sessions and networking receptions, along with a trade show. At last year's event in Sacramento, Calif., more than 400 people attended, including 51 speakers and 44 exhibitors. This year, more than 400 attendees are again expected along with nearly 50 exhibitors.
 	 
 Correcting misconceptions
 Opinions of biodiesel differ depending on what part of the country you live. In Rome, Ga., approximately 70 miles northwest of Atlanta, SoyMet Biofuels has been producing soybean-based biodiesel for the past two years. Rick Sargent, chairman of the company's board of directors, said biodiesel use is so new in the southeast that it's hard to tell what consumers think of the fuel, but early indications are good. "People are willing to be more accepting to alternate ideas," Sargent told Biodiesel Magazine. "[We're] getting a good response and general interest."
 
 SoyMet is currently upping production by adding a reactor and opening another plant, according to Sargent. He said consumers most commonly ask questions about biodiesel's performance, cost, benefits and advantages, and whether the fuel would harm or impair machinery. "It's a matter of getting some trial [use] from some customers, which will pave the road for biodiesel [acceptance] through word-of-mouth because of its performance." 
 
 Near Virginia Biodiesel Refinery in New Kent, owner Doug Faulkner said only first-time users have questions, while those who have used biodiesel at least once in the past are satisfied with its performance. "Anybody that uses it loves it, but they tell somebody else that's not using it and they're going to have questions," Faulkner said. "It's part of any new industry." 
 

 Further north, in Brooklyn, N.Y., the state's only biodiesel producer, Environmental Alternatives, has the capacity to produce 5 mmgy of the renewable fuel. Director Bob Lindenbaum told Biodiesel Magazine that he feels consumers don't have an accurate understanding or acceptance of biodiesel. He said consumers are hesitant to buy biodiesel when regular diesel fuel is less expensive. "[Others] who think they understand the tax incentives don't understand why you have to blend it [to receive the credit]," Lindenbaum said. "The private sector is nervous about using it in their fleets." 
 
 Philadelphia Fry-o-Diesel in Pennsylvania is planning to build a pilot-scale plant that turns trap grease to biodiesel. Business Development Associate Emily Bockian Landsburg told Biodiesel Magazine that fleet managers are concerned about warranty, infrastructure and availability issues, among other things. "[Availability] will be relieved as we build the market and the infrastructure," Bockian Lansburg said. "We also get a lot of inquiries into how end-users or filling stations can receive grant money to subsidize the costs. The funding that is out there now is really helping to drive the market."
 
 In Massachusetts, Northeast Biodiesel LLC plans to build a 10 mmgy facility that turns waste vegetable grease to biodiesel. Spokeswoman Lynn Benander said locals have had several questions about biodiesel, especially after Cornell Professor David Pimentel released information in mid-July that said the ethanol production process uses more energy than it produces. "When that hit the papers, people had a lot of questions for us, wondering if the same was true for biodiesel," Benander said. "But we're making biodiesel from recycled vegetable oil so we estimate 5.4 units of energy created for every one unit of energy used." The energy return from biodiesel made with soybean oil is 3.2 units, according to an NREL study.
 
 Benander said consumers often confuse waste grease with biodiesel. They think they have to modify their engines to use biodiesel and are surprised to hear it can be mixed with diesel. "They also have questions about pricing," Benander told Biodiesel Magazine. "People want to have their energy source fairly priced. " 
 
 Conferences like the Biofuels Workshop & Trade Show can help answer the questions that consumers, future producers and even current producers may have. "Anything that puts [biodiesel] in the public's eye helps," Lindenbaum said. 
 Benander said organizations like the National Biodiesel Board are also instrumental in spreading education about biodiesel. "It's one of the vehicles," Benander said. "They have an important role."
 
 Addressing the issues
 The Biofuels Workshop & Trade Show, organized by BBI International, offers several informative presentations and ample networking opportunities. The event kicks off with the trade show's grand opening, where various vendors will have their products, services and the latest biofuels technology on display. 
 

 General session topics include a national overview of biodiesel, an update on federal government programs that support biofuels and a concentrated look at biofuels in the eastern region. Breakout sessions will feature presentations about biodiesel production, emerging technologies and biodiesel products. The conference wraps up with a round robin discussion about what is needed to foster biofuels industries in the eastern region, and a review of state or regional biofuels incentives. At the end, recommendations from the round robin discussions will be reported to biofuels policy makers in order to foster growth in the industry.
 
 General registration for the Biofuels Workshop & Trade Show is $495. The fee includes admission to all general sessions, breakout sessions, the trade show, meal functions and a copy of conference proceedings on CD. Government officials can register at the reduced rate of $395. For registration, sponsorship opportunities and exhibitor information, visit www.biofuelsworkshop.com, or contact BBI International at (719) 539-0300 or <a target="_blank" href="http://">conferences@bbibiofuels.com</a>. 
 
 Jessica Williams is a Biodiesel Magazine staff writer. Reach her by e-mail at <a href="mailto:jwilliams@
 bbibiofuels.com ">jwilliams@
 bbibiofuels.com </a>or by phone at (701) 746-8385.

The Biofuels Workshop & Trade Show moves to the eastern side of the United States after last year's successful Western Region conference. The 2005 event in Atlanta promises to highlight the vast possibilities and benefits of renewable fuels, and aims to answer questions consumers may have about biodiesel.

An Eastern View of Biodiesel

Pennsylvania's Commonwealth Financing Authority approved grants through the First Industries Fund for several industrial businesses in the Keystone State, one of which is Enviro Biodiesel. According to Gov. Edward Rendell's office, Enviro Biodiesel's project in Clarion County's Paint Township received a $165,000 planning grant for early planning, design and site assessment of a large-scale biodiesel refinery. The plant will be built on a 35-acre site just north of Interstate 80. The plant will use a soy oil-fed, continuous flow transesterification process.

Enviro Biodiesel receives state grant

Biodiesel producers are principally focused on one thing-producing quality biodiesel. So it's probably no surprise that the main coproduct of biodiesel production has gone under the radar-and perhaps simply underdeveloped-during the industry's emergence. Experts say glycerin, or glycerol as it's commonly called when unrefined, is only beginning to be looked at as a value-added opportunity, rather than a liability, for producers. 
 
 It's a history that isn't unheard of in the renewable fuels industry. Ethanol producers once virtually gave away their primary coproduct, a livestock and poultry feed called distillers grains. Now that coproduct, in its various forms, adds vital dollars to the bottom line of nearly every ethanol plant processing corn in the United States and Canada. Will biodiesel producers find an equally large market for glycerin? 
 
 The implications of biodiesel production on the nation's glycerin markets are huge. If just 2 percent of the nation's diesel fuel were switched to biodiesel, an additional 325,000 tons of crude glycerin would be produced annually. Glycerin production in the United States has been consistent over the last five years, averaging more than 350,000 tons per year.
 
 Clearly, North American glycerin markets are going to be affected by industry growth. A 30 mmgy biodiesel plant will produce approximately 12,700 tons of 99.9 percent pure glycerin annually, according to Brian Duff, biochemical process engineer for Colorado-based BBI International.
 
 The glut of glycerin on the market is not only a North American concern. Raffaelo Garofalo, secretary general of the European Biodiesel Board, alerted attendees at February's National Biodiesel Conference that excess glycerin on the European market is also becoming a point of concern. Likewise, fatty acid production from palm kernel oil and coconut oil in Southeast Asia is also adding to the world's glycerin supply, according to a source with a large multinational oleochemical company.
 
 Those with a stake in the U.S. biodiesel industry, such as World Energy Alternatives President Gene Gebolys, are closely watching worldwide production levels. "We're well on the way to the biodiesel industry becoming the most important determinate in the supply of glycerin," Gebolys told Biodiesel Magazine. "We're already starting to see the indicators of that in Europe."
 
 Purada Processing LLC, a World Energy wholly owned subsidiary, operates an 18 mmgy biodiesel plant in Lakeland, Fla. A 15 million-pounds-per-year glycerin refinery is co-located on-site.
 
 Agricultural giant Cargill announced plans to build a 37.5 mmgy biodiesel plant adjacent to the company's existing soybean crush facility in Iowa Falls, Iowa. Plans also call for a 20 million-pounds-per-year USP-grade glycerin refinery.
 Both Gebolys and Duff agree its' feasible to construct a glycerin refinery collocated to a biodiesel plant. However, if a glut of unrefined glycerin enters the market, prices will undoubtedly drop.

 
 The good news, according to Duff, is that glycerin is an incredibly useful molecule. "If it became available much cheaper, people would look at it for new uses," he said.
 
 Researchers discover new uses
 Researchers are studying ways to find new uses for glycerin from biodiesel production. One idea often thrown around is converting glycerin to antifreeze. Galen Suppes, a chemical engineering professor at the University of Missouri (UM), said the first phase of a project has been completed, aimed at converting glycerin to propylene glycol through hydrogenation. The process turns one mole of glycerin and one mole of hydrogen into equal parts propylene glycol and water. Suppes said the project produced high yields of propylene glycol, and plans are underway to scale up the process later this year to allow for rapid commercialization. 
 
 Two UM graduate students and Columbia, Mo.-based Renewable Alternatives LLC are developing the project. The company provides technical service components for the commercialization of the technology, according to Suppes.
 
 Researchers at Washington State University's Biological Systems Engineering Department are studying how to develop omega-3 fatty acids using glycerol. They are also studying the possibility of creating succinic acid and succinate salts from glycerol. Succinic acid is an important industrial chemical that is widely used in many applications. In fact, due to its potential, the U.S. DOE has identified succinic acid as one of the top 12 biorefinery chemicals that can be derived from biomass.
 
 Glycerin typically doesn't burn well, limiting its use as a biodiesel plant energy source. However, Virent Energy Systems believes that glycerol can be an energy source through aqueous phase reforming (APR). The APR system generates hydrogen from aqueous solutions of oxygenated compounds, such as biomass-derived glycerin, in a single-step reactor process. Virent's technology is largely based upon the research of Jim Dumesic of the University of Wisconsin-Madison department of chemical and biological engineering. Virent targets biodiesel-produced glycerin because it is cheaper and readily converts to hydrogen, according to CEO Eric Apfelbach. He said that sodium hydroxide, methanol and the high pH levels common in low-grade crude glycerin actually help the process. "We found we can very effectively reform these crude mixtures," Apfelbach said.
 
 Apfelbach said approximately 10 pounds of glycerin can be converted to 1.5 pounds of hydrogen in Virent's process. "We can generate gas from glycerol for less than $2 per kilogram because glycerol is so cheap," he said.
 
 Duff said converting glycerin into hydrogen is possible, but the economics are sketchy. However, if natural gas prices continue rising, it may become more appealing.
 	

 Consistency, quality are key
 Crude glycerin's consistency and quality are also becoming issues with growing worldwide biodiesel production. The various impurities make it difficult to use. Excess methanol can also create costly shipping situations.
 
 Crown Iron Works, a Minneapolis-based process technology provider, produces biodiesel plants and glycerin refineries for the oleochemical industry. "Glycerin coming out of our biodiesel plant has to be relatively standard so a glycerin refiner doesn't have to get equipment specialized for the glycerin," said Derek Masterson, product sales manager. 
 
 Masterson said the crude glycerin from Crown Iron Works plants is typically 80 percent pure. He said the refineries are not designed to handle all the contaminants in the crude glycerin. "Some people ignore the glycerin end, and allow methanol and other things to go along for a ride," Masterson said. "It's difficult for a refiner to take care of."
 
 Crude glycerin from the Asian fatty acid markets is generally more consistent than the North American crude supply. The most consistent North American crude glycerin is typically from biodiesel plants integrated in soy oil processors, according to the oleochemical company source.
 
 Gebolys said even regarding today's market conditions that he would put in a glycerin refinery in today's biodiesel plant. "If you put in a refinery, you have two markets to play in-the refined market is different than the crude market," he said.
 
 "We used to call glycerin a niche," Apfelbach said. "Then we looked at global supply and forecast and realized it's a big niche." n
 
 Dave Nilles is associate editor of Biodiesel Magazine. Reach him by e-mail at <a href="mailto:dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or by phone at (701) 746-8385.

Surging biodiesel production is sure to have  a major impact on the North American glycerin market. With millions of gallons of biodiesel capacity expected to come on line in the next few years, U.S. producers are trying to find solutions to alleviate the projected glycerin glut.

A Glycerin Factor

Nestled in a secluded region of the fertile Minnesota River valley, the tan concrete building a few miles northwest of Redwood Falls, Minn., doesn't appear to be anything out of the ordinary. Primarily a rendering facility, it takes a closer look to distinguish the telltale signs of the booming biodiesel producer housed within. A methanol storage tank, a tanker fueling station and, most notably, a large round logo featuring a Siberian husky are the only items tipping off the casual observer to the enterprise housed within.

 
 What that facility does hold, in fact, is Minnesota's first commercial-scale biodiesel plant. FUMPA Biofuels, the biodiesel division of the Farmers' Union Marketing and Processing Association, has been quietly churning out the renewable fuel since late 2004.
 
 The facility also represents something much bigger. It's helping to build the supply of biodiesel needed to trigger the state's biodiesel mandate-a ruling requiring the use of B2 in nearly all the state's diesel fuel, effective as early as this fall.
 
 Since FUMPA Biofuels went on line, the construction of two larger plants Minnesota commenced. Both now approaching completion, these larger facilities will have a combined capacity that is greater than the estimated 2004 production output of the entire U.S. biodiesel industry. And by becoming the state's first plant to come on line, FUMPA Biofuels' husky logo-BioPup-has been synonymous with biodiesel production in Minnesota.
 
 A Minnesota first
 Chuck Neece joined FUMPA in 2001, intent on evaluating potential new business ventures for the association. He brought with him extensive experience in the pet food industry, in addition to a background in chemistry and physics-ideal experience for his current role as the biofuels division director of research and development.
 
 Biodiesel was one of several business ventures Neece considered. It made sense. After all, Minnesota was considering mandating the use of biodiesel, the nationwide industry was beginning to take off and, most importantly, FUMPA Biofuels already had ready access to a steady supply of feedstock. Central Bi Products, another one of FUMPA's five divisions, already operated a large rendering facility located just northwest of Redwood Falls.
 
 "There was lots of excitement in a young industry," Neece said, referring to biodiesel. "We weren't sure where to go." He was eventually led to Europe to study production techniques and the various technologies employed in the more mature European biodiesel industry. One year later, FUMPA put out a request for proposals to design and build a plant. Lurgi PSI was selected as a design/build firm, mainly based upon initial capital and ongoing production costs. "They also had the ability to meet the DIN standard," Neece said, referring to the European biodiesel standard that is typically considered more stringent than ASTM D 6751.
 
 Lurgi quickly went to work constructing the skid-mounted continuous flow facility at its Memphis, Tenn., production facility. Six months later, the unit and a separate methanol recovery tower were shipped via semi-trailers to Redwood Falls, where on-site assembly took just a matter of days.
 

 In order to accommodate the unit, FUMPA essentially cut a hole in an existing wall in Central Bi Products' pre-existing rendering facility. The unit was then lifted off the truck and slid inside the building for final assembly. Lurgi's Martin Kleber said the 2.8 mmgy unit, a model that FUMPA was the first to purchase, is designed to be compatible with pre-existing facilities.
 
 FUMPA Biofuels started up in early December 2004 as the first commercial-scale biodiesel facility to begin producing in a state known for its biofuels leadership. Neece said the facility ramped up to 30 percent capacity quickly. Although the plant still hasn't been pushed to 100 percent capacity, Neece said he expects it can produce more than its 2.8 mmgy nameplate guarantee.
 
 The Lurgi unit operates with two reactors and two separators, bypassing the need for a centrifuge, Kleber said. Neece said the first reactor produces a 90 percent methyl ester/10 percent glycerin blend. After moving through the second reaction tank and a second separation, "The final product is a high quality, water-free methyl ester," Neece said. The process also utilizes an acid wash to remove impurities from the methyl esters.
 
 FUMPA Biofuels produces biodiesel from several feedstocks, including rendering materials-mainly poultry fat-provided by Central Bi Products. A pretreatment unit was built at the site to prepare rendering feedstocks for biodiesel production. The plant initially started up using SoyPure, a trademarked pretreated virgin soy oil produced by South Dakota Soybean Processors. SoyPure is still used in varying quantities, depending on the market prices for soy oil and poultry fats. 
 
 Currently the plant produces approximately 7,500 gallons of fuel per day, slightly more than the capacity of a typical tanker truck. Neece emphasized that FUMPA Biofuels tests its biodiesel daily and inputs the information into a computer program to keep track of quality.
 Despite its rigorous testing program, FUMPA Biofuels initially found it difficult to get its biodiesel into the market. Despite strong demand, especially in the Denver area due to the Clean Air Act, petroleum companies just weren't willing to readily accept the product. As the industry progresses, Neece hopes to move beyond that. "It's like a new batch of kids in high school," Neece said. "Eventually everyone begins to grow up and get along. Right now we're the freshmen."
 
 Creating a new glycerin market
 The glycerin produced at the plant is approximately 85 percent pure, pH neutral, and free of soaps and methanol, according to Kleber. Those properties provide FUMPA with a unique product opportunity. Capitalizing on the synergy between its biodiesel and animal feed divisions, the association has developed an innovative, patented product making use of the plant's glycerin.
 
 FUMPA has developed an animal feed consisting of a blend of Central Bi Products' hydrolyzed feather meal and the biodiesel plant's glycerin. Gro Mor Hi-Torque, as the product is branded, was developed in part through the Agriculture Utilization Research Institute's (AURI) coproduct utilization lab in Waseca, Minn., where AURI developed a method for making pellets from the mixture.
 

 AURI's Alan Doering, a technical services specialist, developed the product by testing various blends of glycerin and feather meal. Eventually a blend was found that created a high density feed with pellet durability greater than 95 percent, making it ideal for high volume transportation. Perhaps as important was the product's extended shelf life. Doering said AURI recently disposed of several unopened bags of year-old product. "It looked like the day we pelleted it," he said.
 
 While Gro Mor Hi-Torque provides a new product avenue for FUMPA, it also creates a floor value for the biodiesel plant's glycerin. FUMPA can produce Gro Mor Hi-Torque or sell crude glycerin on the open market depending on market conditions. The plant produces approximately 2.2 million pounds of glycerin annually.
 
 Gearing up for the mandate and the future
 State officials are suggesting the groundbreaking Minnesota B2 mandate will take effect this fall. For FUMPA, it will just be a natural progression of what is already occurring in the marketplace. "We've been selling into the infrastructure since Jan. 1," Neece said. He added that the biodiesel fuel infrastructure has been growing steadily with several injection blending terminals coming on line throughout the state.
 Neece hopes FUMPA can add to that infrastructure by becoming its own biodiesel blender. Permitting has been completed, and Neece is awaiting final word from the Internal Revenue Service. He hopes to begin moving forward with plans this fall.
 
 For its own part, the state's B2 mandate is expected to create demand for 16 mmgy to 19 mmgy of biodiesel. Neece said even without the mandate, there is considerable demand on the market. He expects demand will remain strong even with Minnesota's two new plants bringing on line an additional 55 mmgy.
 
 Neece attributed the mandate to kickstarting the industry in Minnesota. "It feels like the whole government realizes renewable fuels will provide much better options for energy independence," He said.
 
 FUMPA is doing its own part to make consumers realize the importance of biodiesel through its unique marketing strategy. The plant's fuel is marketed under the name Northland Choice Biodiesel. BioPup, that Siberian husky moniker, is helping FUMPA build the brand and is featured on Northland Choice's general information Web site www.biopup.com. "We look at the husky as representative of the attributes we see in our product," Neece said. "It's loyal and protective. And the husky loves cold weather." 
 
 More information about FUMPA Biofuels can be found at www.northlandchoicebiodiesel.com. 
 

 Dave Nilles is associate editor of Biodiesel Magazine. Reach him by e-mail at <a href="mailto:dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or by phone at (701) 746-8385.

FUMPA Biofuels helped open the door for biodiesel production in Minnesota. Operating since late 2004, this small, innovative producer is capitalizing on its coproducts and utilizing a unique marketing strategy to gear up for the state's widespread acceptance of B2 blends

The Northland's Choice

Diesel fuel producers, suppliers and retailers gained an extra six weeks of transition time to introduce mandatory ultra-low sulfur diesel (ULSD) to the marketplace. The U.S. EPA recently announced plans to postpone its ULSD compliance date from Sept. 1, 2006, to Oct. 15, 2006. The EPA requires a maximum diesel sulfur content of 15 parts per million (ppm) to accommodate 2007's clean diesel engines and emissions after-treatment systems. During the additional six-week period, the EPA will allow 22-ppm fuel to be sold as ULSD to ease the transition.

Federal ULSD compliance date pushed back

I've been a journalist in the ethanol and biodiesel industries for almost five years, and if there's one thing that's been entirely constant during that time, it has been the unremitting joint effort of the two industries-via a partnership that's grown noticeably stronger with time-to help members of Congress fashion and pass a comprehensive energy bill that includes a renewable fuels standard (RFS) and, more recently, an extension of the federal biodiesel excise tax credit. 

 	
 As you probably know, these long sought-after legislative goals were achieved July 29 when the Senate, following House action, approved an energy bill that includes a 7.5 billion gallon RFS, an extension of the biodiesel exercise tax credit until 2008 and additional key biofuels provisions. The bill was awaiting the president's signature at press time. 
 
 July 29 was a Friday, and I was on the tail end of my summer vacation in northern Minnesota when the news broke. In fact, the news didn't reach me until Saturday night. That was a shocker. After all these years of watching and waiting for Congress to pass an energy bill, it happens while I'm on vacation-and then I don't hear about it until the weekend. Sure, I was elated, but to be honest, I thought the whole thing would be a little more dramatic than it was. After all, we are witnessing the creation of historic legislation that all but guarantees the U.S. biofuels industries will continue to grow for another decade, and yet there wasn't much to say Monday morning but, "OK, let's get to work." I'm betting that's how lawmakers and lobbyists felt as well. 
 
 Our editorial team was rushing to get this issue of Biodiesel Magazine to print after the energy bill passed, so I didn't have time to talk to any Washington insiders-the folks working for the National Biodiesel Board, the American Soybean Association, the National Corn Growers Association, the Renewable Fuels Association and other groups-who deserve strong praise for accomplishing their mission. But I can only imagine how they feel. Like gold medal winning Olympians basking in post-competition victory, I envision our friends on Capitol Hill looking centered, at ease and ready for the next big challenge.

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Editor's Note

The Minnesota B2 mandate, which requires 2 percent biodiesel blends in most of the state's diesel fuel supply, is expected to take effect this fall. SoyMor, a 25 mmgy plant in Glenville, and Minnesota Soy Processors, a 30 mmgy plant in Brewster, were both expected to come on line the first week of August, according to a state official. FUMPA Biofuels currently produces 2.8 mmgy in Redwood Falls. For more information on the mandate, please see Talking Point on page 46.

Minnesota mandate to kick in soon

American Biofuels LLC in Bakersfield, Calif., has started an expansion project that will increase biodiesel capacity from 5 mmgy to 10 mmgy by December. According to Managing Director William Fowler, new equipment such as heat exchangers and reactors are being installed while the original plant is still producing. The facility uses soybean oil, animal fat and waste vegetable oil as feedstocks. American Biofuels is the eighth largest producer of biodiesel in the United States, according to the USDA Bioenergy Program.

American Biofuels to expand production plant

With all of its drawbacks, sodium hydroxide (or potassium hydroxide) for chemical ester conversion is by far the most commonly used catalyst in the industry today. Steve Howell, technical director for the National Biodiesel Board (NBB), told Biodiesel Magazine why sodium hydroxide has become the "catalyst of choice." He succinctly said, "It's effective and it's cheap."
 
 The disadvantages of using sodium hydroxide for biodiesel catalysis are known all too well. Some of these shortcomings include the formation of soaps or salts through saponification when inordinate amounts of free fatty acids (FFAs) and/or water react with the base catalyst. When methanol is mixed with sodium hydroxide to form sodium methoxide or sodium methylate, it presents a whole new set of problems.
 
 For starters, sodium methoxide is highly explosive; its formation is the most perilous part of biodiesel production. Even without combustion, the mix can be a serious health hazard to humans upon contact. From a process perspective, separating the methanol from its sodium hydroxide emulsions illustrates one more hoop that producers need to jump through to achieve proper ester conversion. 
 
 On top of that, add the growing movement to "clean up" industrial chemistry to curtail byproducts from chemical conversions, minimizing the disposal of hazardous and non-hazardous pollutants from various processes. It's called "green chemistry," and utilizing its potential could align the catalytic process used to refine biodiesel with the environmentally friendly reputation its end product already enjoys.
 
 The realm of research
 Since 1992, researchers at Iowa State University's Center for Catalysis (CFC) have been working toward the goal of developing more environmentally affable and process-efficient biodiesel catalysts, according to Dr. George Kraus, the center's director. 
 
 For the environmentally conscious, the CFC's mission is a necessary one. "In essence, we're dedicated to developing useful, practical catalysts and what we call sustainable, green chemistry methods in agriculture, the environmental sciences and various industries," Kraus said. "Green chemistry basically is trying to do chemistry without creating byproducts or pollutants." He said the driving cause of the organization is the pursuit to find chemical reactions that are as mild as possible. 
 

 A solid, or heterogeneous, catalyst would alleviate both the environmental aspects of dealing with sodium methoxide as well as the issues concerning the separation of the catalyst from the reactant for later reuse. 
 Kraus said the sodium hydroxide/methanol solution is a homogeneous catalyst, meaning it completely dissolves in the medium. "The removal of the catalyst from biodiesel has been an issue in the past," Kraus explained. "Often times there's a water wash, and sometimes that leads to some problems. So we thought heterogeneous catalysts would be a good answer there, because we could just fish them out later on and, if necessary, reuse and recycle them. In other words, reactivate them."
 
 Chief NREL engineer Robert McCormick explained in simple terms what a heterogeneous catalyst is and why its use might benefit the industry. He said, "A heterogeneous catalyst is usually a solid whose surface is catalyzing reactions of gases and/or liquids," McCormick said. "The main advantage of a heterogeneous catalyst is that the catalyst is easily separated from the reactants and products. A common approach is to have a reaction vessel packed with catalyst particles … with the reactants just flowing past." The trouble-free removal of the heterogeneous catalyst from the "reaction product" is where the economic advantage would lie along with the elimination of sodium deposits in the biodiesel. 
 
 The physical structure of such a catalyst provides a massive surface area-packed with catalyst particles like non-noble metals, McCormick said-in a relatively small amount of space in order to efficiently convert the triglycerides to methyl esters and glycerin. McCormick said some heterogeneous catalysts made from aluminum oxide develop a "large pore network" gained through firing and drying during their production, after which the catalyst's surface area can reach an impressive 100 square meters per gram. 
 
 Intermediate steps toward commercialization
 Howell cited three process changes that could potentially revolutionize the industry: Michael Haas' in situ transesterification process (profiled in the June 2005 issue of Biodiesel Magazine), a cost-effective solid catalyst and, lastly, easier mechanisms to handle low-quality feedstocks with high levels of FFAs. "If a solid catalyst could be found that would handle both taking the triglyceride to a methyl ester as well as the fatty acid to a methyl ester, that would be a significant step change forward in process technology," Howell said.
 
 With almost three-fourths of the cost of producing biodiesel stemming directly from the cost of its feedstock, the cheaper FFA-laden feedstocks would be ideal if the right catalysts were developed. Traditionally, a homogeneous acid catalyst is used in a pretreatment esterification process to convert the FFAs to esters before basic transesterification. This necessitates an additional process step plus adding more hazardous chemicals to the already caustic cocktail of chemicals. 
 
 To tackle these acidic and basic catalysis problems, Kraus and others at the CFC have been working with Ralston, Iowa-based West Central Co-op to bring a couple of research initiatives to commercial fruition. Kraus said the CFC and West Central received a $1.2 million grant from the USDA's Industry Lead Program to fund their progressive research. 
 
 "We've been working with Iowa State's Center for Catalysis for about a year now, and we've gone through several iterations," said Jeff Stroburg, CEO of West Central. He said the CFC-West Central team is working on heterogeneous catalysts for both acidic and basic requirements. "One thing we're looking at is whether or not they can be used together," Stroburg said. "We just don't know at this point."
 Stroburg said they hope to have the catalysts ready for commercial-scale testing within a year. The alternative, solid catalysts initially would be implemented in West Central-designed facilities.

 
 Production ready: Axens' Esterfip-H catalyst
 Across the pond in Europe, Paris-based Axens has a 13-year history in biodiesel research and development. With assistance from Axens' technical experts in France, including Michel Bloch and Jean-Alain Chodorge, Axens' North American technology marketer Joseph Ross told Biodiesel Magazine, "Over the last three to four years, we developed a solid catalyst system to reduce the high catalyst and chemicals cost of the original process. This resulted in the Esterfip-H process." 
 
 Ross said the first commercial-scale plant to use the Esterfip-H catalyst technology is currently under construction in Sète, France, for Diester Industries. The Sète plant will boast a remarkable 50 mmgy capacity. 
 
 Exemplifying the previously described benefits of heterogeneous catalysis, Esterfip-H represents a technological marvel. "Without caustic present and [with the] elimination of water washes, the product separation scheme is more simple and clean with less effluent to treat and dispose of," Ross said. An added bonus is the resulting glycerin's 98 percent purity. 
 Ross explained that the Esterfip-H catalyst is composed of cylindrical extrudates "that are treated and transformed into the solid catalyst." 
 
 The catalyst is a spinel-mixed oxide of two non-noble metals. "Many catalysts are composed of a solid support with an active metal deposited on the support," Ross said. "In the case of a spinel, one co-mixes the alumina support material with the non-precious metal." Of course, he imparted that the exact formulation is proprietary and not up for disclosure. 
 
 In operation, Esterfip-H will require slightly higher operating temperatures to perform, but Ross said the catalyst's stability and longevity-several years worth of use-cut conventional biodiesel catalysis costs by two-thirds. The solid catalysts' cost-efficiency represents one more plus to its already long list of advantages.
 
 Axens and the West Central-CFC team are possibly on the forefront of a process revolution in the biodiesel industry, and as this technology marches forward with vigor, these advancements are sure to be catalysts for change. 
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him by e-mail at<a href="mailto: rkotrba@bbibiofuels"> rkotrba@bbibiofuels</a>.com or by phone at (701) 746-8385.

Though some industry players look at the biodiesel production process with an "if it ain't broke, don't fix it" mindset, a handful of them are in pursuit of step-changing advancements-like alternative catalysts-to more readily incorporate lower-cost feedstocks with altogether streamlined processes while "greening up" the routine method of chemical ester conversion.

A Catalyst for Change

The government of Saskatchewan and industry representatives have launched the Biodiesel Development Task Force to lead the growth of the province's biodiesel industry. The group will determine the current status of the biodiesel industry and its potential for the province; identify challenges and opportunities; consult and communicate with key stakeholders; and make recommendations to further the industry. Task Force Co-Chair and Saskatchewan Canola Growers Association Executive Director Judie Dyck said the group is currently documenting recommendations for the provincial government to increase biodiesel production.

Saskatchewan forms biodiesel task force

A program to test B20 in advanced diesel emission control systems is virtually underway. National Biodiesel Board (NBB) technical director Steve Howell said, "The light duty testing is scheduled to start yet this summer." 
 
 The program was initiated by the NBB in February 2003. "Determining that B20 was compatible with all of the new diesel technologies was a critical project," Howell said. The U.S. DOE (DOE) and Original Equipment Manufacturers (OEMs) are partners in the project. 
 The program consists of three phases: program organization and preliminary testing; engine and vehicle testing, and in-use fleet evaluations. Phase two testing will cover light-, medium- and heavy-duty diesels, in addition to off-road diesel testing.
 
 "Most of the major companies are part of the steering committee … and MECA (Manufacturers of Emission Controls Association) has just signed up here recently," Howell said.
 
 Hardware and engineering support are all that is required to participate, according to Joe Kubsh, deputy director of MECA. 
 Completion of the program should take place in the 2007-2008 timeframe. The DOE, NBB and OEMs are providing funding to the tune of approximately $10 million, with the lion's share of $7.2 million coming from the DOE. 
 
 In related news, the U.S. EPA issued a new ruling affecting how heavy-duty diesel emissions will be tested in order to comply with the EPA's not-to-exceed (NTE) standards, which start with model year 2007 diesels. With EPA oversight, manufacturers will then be required-at their cost-to use onboard, portable emission testing equipment to help replicate real-world conditions for the more stringent regulations, the EPA reported.
 

 Previously, heay-duty emission testing consisted of out-of-vehicle testing on an engine dynamometer, which may present inaccuracies. 
 
 "There's been a long controversy over what's the best way to test heavy-duty [diesel] engines," Howell said. "Historically, it has been very difficult to use the in-field validations to come up with any numbers that were reliable enough to set any regulations on, at least from a vehicle-testing standpoint."
 
 The new rule begins with a pilot program, launching into a fully enforceable program for 2007 trucks. Tests will monitor hydrocarbons (HC), carbon monoxide (CO), particulate matter (PM) and NOx. 
 
 Another related story involving what was thought to be a 4 percent to 5 percent NOx reduction in two diesel buses tested on a chassis dynamometer at NREL recently surfaced. According to senior NREL engineer Robert McCormick, NREL's results originally showed a NOx reduction in B20 use. Afterwards, it was released that the B20 tested contained an additive that apparently reduces NOx. 
 McCormick said, the two buses were tested as a larger fleet demonstration project, which includes long-term testing of nine buses traveling identical routes, during which maintenance and mileage are monitored. The buses get tested with the fuel they use in operation. Five out of the nine buses operated on biodiesel provided by Blue Sun Biodiesel. 
 
 wo of the buses were then brought to NREL's lab for emissions testing. "All of Blue Sun's biodiesel contains their multifunctional additive package," McCormick said. "So we tested with it since that is the actual in-use fuel."
 In reviewing the results, McCormick said typical emissions reductions were found in PM, CO and HC. He noted, however, "Somewhat unexpectedly we observed a 4 percent reduction in NOx emissions." 
 
 Because of other chassis dynamometer tests showing similar NOx reductions-as opposed to EPA-documented increases on engine dynamometer tests-McCormick said he couldn't make a definite ruling as to why a NOx reduction was observed.

Biodiesel, emissions testing developments

Biodiesel was high on the agenda for many of the nearly 2,300 people in attendance at the 21st International Fuel Ethanol Workshop and Expo held June 28 through July 1 in Kansas City, Mo.
 
 Biodiesel 101, an introductory workshop featuring biodiesel production and use, covered several important areas of the biodiesel industry. Supply of the renewable fuel was a concern. West Central's Myron Danzer said there is currently a short supply of biodiesel on the market. National Biodiesel Board technical director and MARC-IV consultant Steve Howell said there is currently approximately 220 mmgy of installed capacity. He said approximately 240 mmgy of added capacity is expected within the next 12 to 18 months.
 
 Howell said 1 billion gallons of biodiesel production would utilize approximately 25 percent of the United States' annual production of fats and oils. That number utilizes all excess capacity currently on the market. He added that a potential increase in the soaps market in China could increase the cost of animal fats.

 
 BBI International's Brian Duff explained the basic process, operating costs and revenue of biodiesel production. He said the longer a vegetable oil is heated, the higher its free fatty acid content becomes.
 
 David Belseth of Minneapolis-based Superior Process Technologies said there is approximately 8 percent to 14 percent free fatty acid content in residual corn oil from ethanol production. Superior Process is focusing on catalyst reduction, and the effective pretreatment and processing of all feedstocks, according to Belseth. He said they have been working at the Biomass Energy Conversion facility in Nevada, 
 
 Iowa, to work on a fully continuous process for both low and high free fatty acid feedstocks.
 Integrated oilseed extraction and biodiesel plants are becoming a definite possibility, according to Larry Sullivan of Lawrence D. Sullivan and Co. Inc. He added the Chicago Board of Trade is likely to begin trading biodiesel futures in 2007-2008. 
 
 BI International Vice President of Project Finance Jeff Kistner stressed the importance of a comprehensive business plan before initiating a biodiesel project. Plants must have 40 percent to 60 percent equity in order to be successful, he said.

Biodiesel 101 attendees listen to various speakers in Kansas City, Mo.

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Biodiesel touted at world's largest ethanol conference

Construction on Smithfield BioEnergy LLC, formerly Best BioFuels LLC, was well underway in early August with completion expected as early as September, according to project representative Jim Boushka. The 12 mmgy plant in Cleburne, Texas, will utilize animal fats as feedstock. Boushka told Biodiesel Magazine the group has developed its own process technology for the facility.

Texas biodiesel project continues

Oregon's first biodiesel production plant, Sequential Pacific Biodiesel LLC, held a grand opening ceremony in Salem in early July and was producing batches of the renewable fuel by month's end, Pacific Biodiesel's Kelly King told Biodiesel Magazine.
 
 Oregon Gov. Ted Kulongoski and Salem, Ore., Mayor Janet Taylor attended the opening ceremony that included a taped interview of singer Willie Nelson, who is a partner along with Sequential Biofuels in Oregon and Pacific Biodiesel in Hawaii. Other partners include: Kettle Foods founder Cameron Healy, John Miller of Wildwood/Mahonia and Ron Tyree of Tyree Oil Inc.
 
 Pacific Biodiesel designed and built the 1 mmgy plant, which Tomas Endicott of Sequential Biofuels now manages. Tyree Oil will blend most of the plant's finished product, and Sequential Biofuels, which has been selling biodiesel for three years, will be the main distributor of the renewable fuel.
 
 Kettle Foods will supply some used cooking oil as feedstock, while hauling company Metro Rooter and Plumbing will supply the rest. King said other feedstocks could be used in the future. However, the Oregon Department of Agriculture is proposing a ban on canola production, which could influence the plant's feedstock choices if enacted.

 
 Pacific Biodiesel and Sequential Biofuels originally set out to build a turnkey plant in Portland, but the city's restrictive permitting process prompted a move to Salem. King said Sequential Pacific Biodiesel is still waiting for permits to be awarded in Portland, where it could build a 4 mmgy plant in the future. The Salem plant may also be ramped up to 4 mmgy or 5 mmgy if demand continues to be strong.

Guests, speakers and media gather for the Sequential Pacific Biodiesel's grand opeing in Salem, Ore.

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Sequential Pacific Biodiesel LLC begins production

Despite a recent unexplained drop of 1 percent in China's oil consumption, fuel shortage is still a primary driver influencing China's launch into biofuels production. With upwards of 1.2 billion people in the country, China now has close to 30 million automobiles on its roads. Use of petroleum increased 11 percent in 2003 and 15 percent in 2004. Its oil imports are second in the world; the Chinese are consuming petroleum products at a rate increasing faster than any other country. Some analysts venture to say that China is one of the reasons international oil prices exceeded $60 per barrel recently.
 
 To help curb the increase in fossil petroleum use, a petroleum tax may be issued soon; currently there is only a consumption tax that is 3 percent of the pump price. There is also a campaign to encourage the purchase of energy efficient vehicles. 
 
 The latest in biodiesel production technologies is being sought by potential biodiesel producers in the effort to reduce China's consumption and dependence on fossil fuels in their diesel transportation vehicles.
 
 Professor Dehau Liu of Tsinghua University in Beijing spoke at the recent International Fuel Ethanol Workshop and Expo in Kansas City, Mo., and noted that a specification and incentive policy on biodiesel has now been issued and that a few small plants have been built. These are the initial steps toward what one day should be a significant biodiesel industry in China. 
 
 If China maintains its current vehicle structure and fuel consumption, approximately 100 million vehicles will be on the roads, and 228 million tons of gasoline and diesel will be consumed in 2020. The need to produce reliable sources of domestic, renewable diesel is evident.

Use of petroleum in China increased 15 percent in 2004

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China works to increase biofuels production, use

Biofuels of Missouri Inc. announced plans to convert a pharmaceutical manufacturing plant to a 20 mmgy biodiesel refinery in St. Louis, provided local and state approvals are granted. The plant will intake refined soy oil for methyl ester conversion but will be capable of using other feedstocks. A hybrid corporate/limited partnership structure is being used to increase funding opportunities. Production is slated to begin two months after funding is secured.

Biodiesel plant coming to St. Louis

The Iowa Energy Center's Biomass Energy Conversion Center in Nevada, Iowa, is nearing completion of a $500,000 upgrade to its biodiesel facility.
 
 When Biodiesel Magazine spoke with Facility Manager Norm Olson in mid-July, the facility was going through final control testing before start-up. The facility will produce 60 gallons of biodiesel per hour, or about 500,000 gallons per year.
 
 The facility will now be able to operate 24 hours per day, mainly through computer control. Iowa State University's Energy Center, Mid-States Biodiesel and Minneapolis-based Superior Process Technologies began rebuilding the plant last fall. Improvements include the addition of 12,000 gallons of raw product storage, 12,000 gallons of neat biodiesel storage, cooling towers and chillers, and a methanol recovery system. The facility will also operate on a continuous flow process. Olson said the plant will have every component of a major commercial-scale biodiesel plant.
 
 The rebuilt facility will allow Mid-States Biodiesel and Superior Process Technologies the opportunity to showcase new technologies. Although the plant will handle multiple feedstocks, Olson said research would mainly be conducted on yellow grease and brown grease. He said the new plant will create a better understanding of how various animal fats can produce biodiesel, more opportunities for economic development in Iowa, and practical training for Iowa State and community college students.

BECON biodiesel facility starts up

Move over methyl soyates, there's a new ester in town. SunSource Bioenergy LLC recently announced plans to develop a 50 mmgy corn oil-fed biodiesel plant in the heart of ethanol country. There's a twist though-synergistically speaking, a big twist. 

 
 SunSource-a recently formed partnership of investors that includes four ethanol plants and Ethanol Oil Recovery Systems LLC (EORS)-has unveiled a plan to distribute its proprietary technology of crude corn oil extraction from the ethanol production process. The young company hopes to procure enough low-cost corn extract for its newly planned biodiesel refinery.
 
 The idea of this technology revolves around the removal of crude corn oil extract from the syrup in the evaporation stage of the ethanol production process before the syrup gets mixed with distillers grains in the dryers. 
 
 David Winsness and David Cantrell of EORS developed the extraction unit. Subsequently, they formed EORS to facilitate the transfer of the extraction technology.
 
 he crux of SunSource's plan is to get enough ethanol producers (14 40 mmgy plants in addition to the four partner plants) on board with using this technology, signing a contract to sell their extract to SunSource at a set price. SunSource would provide the extraction skid units and most maintenance requirements.
 
 Matt Janes, vice president of technology at SunSource's partner plant VeraSun Energy LLC, said SunSource's plan is to build a centralized biodiesel plant to refine and process the extract from participating ethanol plants. "This will be a large-scale plant to take advantage of the best available technology and economies of scale," said Janes, revealing what he could this early in the plant's development. 
 SunSource hasn't chosen a site yet-that will come once the necessary ethanol plants are signed onto the deal, giving SunSource a better idea where a centralized location might be. 
 
 "The plant will be efficient-high yield [and] low energy, minimizing waste products-fully automated, continuous operation with minimal labor requirements, and will have comprehensive health, safety, environmental and quality programs," Janes said. "We will refine the biodiesel and the glycerin to produce the best product[s] on the market that meets all quality standards so that it will be readily accepted in the market. The initial plant is planned to be 50 mmgy, based on the amount of oil we believe will be available using this extraction technology."
 
 There will be a high level of free fatty acids (FFA) in the resulting crude oil. FFAs will constitute up to 13 percent of the extracted crude corn oil, Cantrell said. Janes said, "Separating the impurities and converting the FFAs make it more challenging to produce biodiesel, but because of the low cost of the crude extract ... " he believes SunSource BioEnergy's biodiesel venture will be a profitable one.

SunSource BioEnergy unveils technology, biodiesel project

Petroleum distributor Worley & Obetz received a $175,000 planning grant through Pennsylvania's First Industries Fund. Worley & Obetz is putting together a working business plan, and selecting a site and technology provider for a biodiesel facility, according to Brian Gerhart, vice president of wholesale operations. The company also plans to open the East Coast's first biodiesel injection blending facility this fall. The First Industries Fund is a $150 million grant and loan program aimed at strengthening Pennsylvania's agriculture and tourism industries.

Worley & Obetz receives planning grant

A new biodiesel plant using revolutionary new process technology is going to begin operations in New York. NextGen Fuel Inc. is going to begin biodiesel production in the facility that, when construction is finished later this year, will be the second biodiesel plant in New York.

 Gov. George Pataki announced the New York State Energy and Research Authority awarded NextGen a $250,000 grant, which will be used for the plant's initial start up.
 
 Using technology developed by Clarkson University, the entrepreneurial company hopes to begin production this fall. "Our technology is a new way to process chemicals," said Jeff DeWeese, president and CEO of NextGen Fuel. "It is based on a theory called chemical process intensification. It takes your typical chemical process and makes everything a lot smaller. We like to say that every molecule receives the same treatment in our process." 
 
 The process uses no wastewater, very little electricity and is the most advanced approach to manufacturing biofuels, according to DeWeese. 
 All washing occurs within each continuous flow reactor. 
 
 Each 5 mmgy unit is modular in fashion. Plants that use this system can ramp up production with the addition of the 10-foot by 14-foot skid system. "What we have is a very small reactor that is able to process a very high throughput rate," DeWeese said. "Our reaction takes place in seconds, so we have a reactor that produces very high shear rates. This factor significantly reduces the size of a plant. The reactor is able to handle a variety of feedstocks but will concentrate on soy oil and fryer grease in a continuous process. We can use some of the higher free fatty acid feedstocks as well as the typical soy oils and other oils that are available."
 
 NextGen has partnered with engineering firm O'Brien and Gere to manufacture the skid-mounted units. Capital expenditures at this plant are reported to be 25 cents per gallon. "We are starting off as a pilot, and our intent is to show those interested in building a biodiesel plant how the technology works and all the economics that are associated with the technology," DeWeese said.

Multi-feedstock plant is first in New York

Minnesota is proving once again why it is at the leading edge of the renewable fuels industry. A long-time ethanol producer, the state is now taking a lead in biodiesel production.
 
 Minnesota Soybean Processors' (MnSP) 30 mmgy plant in Brewster, Minn., was expected to come online the first week of August. The plant is one of three biodiesel plants in the state. FUMPA Biofuels produces 2.8 mmgy in Redwood Falls and SoyMor was also slated to begin production at its 25 mmgy Glenville plant in early-Aug.
 
 Thomas Kersting, South Dakota Soybean Processors (SDSP) commercial manager, said the MnSP plant was running through final tests in late July. He said construction went smoothly on the Crown Iron Works-designed continuous flow facility. SDSP has a construction and management partnership with Minnesota Soybean Processors. The group is also contracted to manage the plant. SDSP and MnSP are separate companies with independent farmer-owned boards, but with common management and ownership crossover.
 
 Minnesota's 2 percent biodiesel mandate is effectively triggered with the state's 58 mmgy of in-state nameplate production capacity. The actual date of implementation of the mandate was unclear at press time. 
 

 Kersting said the mandate provided underlying support for the project. "It definitely was a driver," he said. "We had plans before. But that 
 
 really moved it along. It was a key development." The mandate triggers a guaranteed demand, with estimates ranging from 16 mmgy to 19 mmgy.
 
 The Brewster site is already the location of a 100,000-bushel-per-day soybean processing plant. Therefore, the site already creates a steady supply of crude soy oil and provides infrastructure including steam, electricity, water and labor.
 
 A soy oil pretreatment facility is also being constructed next to the methyl ester plant and is expected to come on line Sept. 1. The pretreatment facility will produce SoyPure, a trademarked pretreated virgin refined soybean oil tailored for biodiesel production. Until September, MnSP will utilize SoyPure from SDSP's Volga, S.D., facility. "It's a big step in the process for the producer to not worry about cleaning up the in-bound oil," Kersting said.
 
 Ron Marr, MnSP's manager of biodiesel, said he has had a lot of interest in biodiesel from various people indicating significant market demand. Marr said the cost per Btu of B100 compared to crude oil, and No. 2 diesel in particular, has narrowed to the point where biodiesel is economically appealing.
 
 Marr said the MnSP plant would ramp up to maximum production quickly while maintaining or exceeding ASTM standards.

Minnesota Soybean Processors biodiesel plant starts up

Four years after President Bush first called for renovation of America's energy policy, Congress answered. His signature on the Energy Bill, which was expected in early August, will seal the deal on extending the biodiesel excise tax credit through 2008, capping off the most successful four seasons for biodiesel that the industry has ever seen. 
 
 Extending the tax incentive through 2008, just seven months after it was first instituted, is our greatest victory in the Energy Bill. Although the Senate's version of the bill would have extended the tax credit through 2010, the date was shortened to keep the cost of the program down so conferees could comply with the agreed upon overall cost of the tax title. Nevertheless, supporters should be proud that they accomplished this critical task so soon. Extending the tax incentive demonstrates that the government is behind biodiesel for the long run. 
 
 That backing will build confidence in the industry in the form of plant investment, infrastructure investments from the petroleum industry and user commitment. 
 
 This extension wouldn't have happened without the leadership of Sen. Chuck Grassley, R-Iowa, who serves as Senate Finance Committee chairman and was a member of the Energy Bill Conference Committee. Sens. Blanche Lincoln, D-Ariz., and Jim Talent, R-Mo., were the chief sponsors of the extension, with Rep. Kenny Hulshof, R-Mo., leading the charge in the House.

 Among other key biodiesel provisions in the Energy Bill:
 
 -Renewable Fuel Standard (RFS)-establishes a renewable fuel content requirement for the nation's fuel pool. Mandates 
 7.5 billion gallons of renewable fuels by 2012. Ethanol is the primary focus, but biodiesel is also defined as an eligible 
 renewable fuel. A compliance credit trading program is also established under the RFS. The EPA Administrator is tasked 	
 with promulgating the implementing regulations, including appropriate credits for biodiesel. 
 
 -Credit for Installation of Alternative Fuel Refueling Infrastructure-installation of infrastructure that dispenses biodiesel 
 blended fuel (B20 minimum) qualifies.
 
 -Small Agri-Biodiesel Producer Tax Credit - establishes a 10 cents-per-gallon tax credit for agri-biodiesel producers. The 
 credit is applicable up to 15 million gallons of agri-biodiesel produced by a plant with capacity no longer than 60 mmgy.
 
 - Biodiesel Engine Testing Program-provides $5 million-per-year funding authorization (FY 2006-2010) to initiate a 
 collaborative research project testing biodiesel in advanced diesel engine and fuel system technologies.
 
 Another critical win came for biodiesel in the Transportation Bill, which passed the same day as the Energy Bill. Sen. Kit Bond, R-Mo., chairman of the Senate Transportation and Infrastructure subcommittee and long-time biodiesel champion, secured an $8 million program for biodiesel engine testing under the umbrella of NBB. This funding is critical to ensure acceptance of biodiesel in the clean diesel technology slated to begin hitting the market in 2007. 

 
 We must all thank our champions in Congress who made this happen. For those of you who called on your members for support, please let them know your appreciation for this success. Many people came together to make this happen including the NBB regulatory team, industry members, and allied organizations too numerous to mention. However there is one group that must be mentioned, and that is the American soybean farmer. Soybean farmers are very well represented by their state and national checkoff organizations, which helped develop the biodiesel industry. This legislative victory is due in very large part to the magnificent policy leadership of the American Soybean Association. 
 
 Thank you to everyone who helped in this historic achievement.
 
 Joseph Jobe
 National Biodiesel Board
 Executive Director

Attacks on biodiesel are a measure of its success

NBB In Sight

A country music star once paraphrased his father, who told him that when you climb high enough up the flagpole, more people can see your backside and will use it as a target.
 
 Biodiesel has reached a new level of visibility, and this is a great achievement. However, with a new level of success comes a new level of opposition. 
 
 A recent study published by Cornell Professor David Pimentel and University of California-Berkeley Professor Tad Patzek concluded that biodiesel has a negative energy balance, requiring 27 percent more fossil energy than it generates. This is strange, given that the International Energy Agency recently reviewed nine serious, peer-reviewed, published lifecycle studies on biodiesel, all of which showed extremely positive fossil energy balance. How is it that this one can have such dramatically different conclusions?
 
 One needs only to read the study to see why. The authors appear to go so far out of their way to support their case that it borders on the absurd. For example, the study counts calories consumed by farmers as fossil energy inputs for biodiesel, yet it does not give biodiesel credit for the value of glycerin as a co-product. While soybeans are approximately 80 percent protein meal and 20 percent oil, the study allocates 79 percent of the energy inputs for growing soybeans to the oil. It also uses energy data for growing soybeans from 15 years ago when 2002 data is readily available. 
 
 It seems Pimentel has made a career of getting publicity as a biofuel naysayer. Co-author Patzek, by the way, happens to be director of the University of California Oil Consortium. 
 

 Ordinarily, this type of flawed science would simply be ignored. However, media and opponents of ethanol have used Pimentel's "data" as evidence of the fallacy of ethanol in energy policy, despite the fact that most serious science shows a positive energy balance for today's ethanol. Pimentel gets plenty of attention and continued grant funding, and opponents of biofuel have their dirty bombs to throw. 
 
 Now that biodiesel has climbed higher up the flagpole, Pimentel is setting his sights on it. When anything becomes successful, there are always people who try to tear it down. The National Biodiesel Board, which has earned a reputation as technically conservative and thoroughly credible, rejects his work, as do researchers at the U.S. Departments of Energy and Agriculture. 
 
 Bad science has a negative energy balance. It must be confronted and exposed.

OPINION:  Attacks on biodiesel are a measure of its success

The National Biodiesel Board (NBB) has announced the approval of funding to double the amount of the Glycerin Innovation Award starting in 2006. The award will increase from $2,500 to $5,000. The Glycerin Innovation Award recognizes outstanding achievement for research into new applications for glycerin with particular emphasis on commercial viability. "We are pleased to partner with the Soap and Detergent Association (SDA) to double the funding they have provided on an annual basis over the last three years," said Steve Howell, technical director for NBB and membership chairman of American Oil Chemists Society (AOCS) Industrial Oil Products (IOP) Division. Howell said NBB is tightening details with SDA and AOCS, and will issue a formal announcement soon. 
 
 "With the dramatic increase in biodiesel production, increased high value uses for glycerin will assist in the profitability of biodiesel operations," said Joe Jobe, executive director of NBB. For every 10 pounds (or about 1.4 gallons) of biodiesel, one pound of glycerin is produced. 
 
 "Worldwide biodiesel production has already driven glycerin prices low enough to where it is now re-taking market share of other lower priced petrochemicals like ethylene glycol and propylene glycol," Howell said. "There is a natural floor for glycerin prices that we are essentially at worldwide. Most prospective biodiesel companies are already taking this into account in their economics, but higher value glycerin uses would help both the new biodiesel businesses and the existing oleochemical businesses who produce glycerin byproduct for detergents and soaps."
 
 This Glycerin Innovation Award is administered by the AOCS IOP Division. It goes to the individual researcher not the company or organization-who develops the most innovative new use for glycerin that has commercial potential. It has been solely sponsored over the last three years by SDA, the trade association representing manufacturers of household, industrial and institutional cleaning products; their ingredients and finished packaging; and oleochemical producers. The award review panel consists of members of the AOCS IOP Division and SDA's Oleochemical Committee.

NBB and SDA increase amount of Glycerin Innovation Award

In March 24, Brazil's President Luiz Inácio Lula da Silva inaugurated the first large-scale biodiesel plant in Brazil. The plant, located in Cássia, in the state of Minas Gerais, has a capacity to produce 12 million liters (3.17 million gallons) of biodiesel per year and will be the first of many, if the President's biodiesel program is a success. At the event, President Lula said he believes Brazil has the potential to become one of the world's largest biodiesel producers. "We have everything necessary to produce biodiesel, and we hope that someday we will be able to supply the world," said Lula, who had promised earlier that Brazil's state-controlled oil giant Petrobras will play a key role in the sale and distribution of the renewable fuel.

 
 "Our biodiesel program needs to have a national dimension to become a permanent source of fuel for Brazil. It is our responsibility to guarantee that all Brazilians who want to use biodiesel to fuel their cars will have the right to do so," he added.
 
 With world oil prices hovering around US$60 per barrel and growing concerns over global warming, countries are allocating more resources to develop technologies for renewable, cleaner burning fuels. Brazil, long the world leader in sugarcane-based ethanol production, launched its Pro-Alcohol Program under a military dictatorship in the late 1970s to reduce its dependence on oil imports. The program strengthened the cane industry by creating an alternative demand for its product aside from sugar.
 
 Now the country's left-leaning administration is moving ahead with a program that will make a blend of biodiesel-made from vegetable oils and ethanol-mandatory in the national fuel supply by 2008, with the expressed purpose of creating sources of income for many small family farmers in the poor, drought-plagued northeastern region of the otherwise fertile agricultural powerhouse. Officials associated with the massive soy crushing industry in the center-south, however, say the project is doomed without the scale of production that only it can provide to meet future output goals, but so far the government has not come up with the necessary tax breaks to make biodiesel production from soybean oil an attractive investment. 
 
 An ambitious national plan
 The new law (MP 227), passed by Brazil's Congress in April, will make B2 use-now voluntary-mandatory nationwide in 2008 and raise the mandatory mix to B5 in 2012, which will help reduce the country's diesel imports, currently at almost 4 billion liters (1.1 billion gallons) annually. Yearly diesel demand is about 40 billion liters (10.57 billion gallons), or 60 percent of the country's overall fuel consumption. 
 
 The B2 mandate, due to come into force in two and a half years, will require 840 million liters (222 million gallons) of biodiesel annually and create jobs for more than 150,000 small farmers, according to Brazil's Science and Technology Ministry. According to government estimates, B2 will reduce the nation's total fuel imports by 33 percent and will save the country $450 million reals (US$195 million). By 2013, the B5 mandate will require 2.4 billion liters (634 million gallons) of biodiesel per year, according to estimates from Brazil's main vegetable oils industry association. In an effort to meet this growing demand, several large-scale plants are finally beginning to appear, like the one inaugurated by President Lula in March.
 
 SoyMinas was the first company to begin producing in Brazil with a capacity of 12 million liters (3.2 million gallons) per year. In April, Brazil's Agropalma opened a $2 million reals (US$ 851,000) factory in Belem, northern Brazil, with capacity to produce 24 million liters (6.4 million gallons) per year of biodiesel from palm oil. 
 
 New plants being developed 

 According to the recently formed Brazilian Biodiesel Industries Association, ABiodiesel, eight new projects are currently in development: Ecologica Mato Grosso Industria and Comercio Ltda. (Ecomat); Ceralit; Adequim; Biolix, AgroDiesel; Fusermann Biodiesel; Petroquimica Capital (Petrocap); and Brasil Ecodiesel. Petrocap, the largest of this group is scheduled to inaugurate a plant in the coming weeks with a capacity to produce 300 million liters (79.3 million gallons) per year. These eight projects, combined with Agropalma and SoyMinas plants now in production, are expected to put out more than 450 million liters (118.9 million gallons) of biodiesel annually by 2008.
 
 ABiodiesel's forecast does not include projects under study by Brazil's state energy company Petrobras, which expects to start two biodiesel pilot projects at Guamare in Rio Grande do Norte state using castor bean oil. The company's renewable fuels manager José Carlos Miragaya said that Petrobras is also looking for sites to construct a 45 million-liter- (11.9 million-gallon) per-year biodiesel factory-using various vegetable oil feedstocks-and that it should begin development this year.
 
 Considering the demand for 840 million liters (212 million gallons) of biodiesel that will be established with a B2 mandate alone, ABiodiesel is warning that, by its current calculations, there would be a serious shortfall in supply. Many specialists in the area say that legislation, which creates favorable tax breaks and fiscal incentives for smaller, family castor bean and some palm oil producers, predominantly in the northeast of the country, will have to be widened to create incentives for other larger vegetable oil operations, especially those using soybeans. 
 
 "There is potential with this law to do social good by helping small farmers, but if the project is to succeed, it will likely need the scale that only the soy industry can bring to the equation," said Carlo Lovatelli, head of Abiove and the Brazilian Agricultural Association.
 Critics of the program say that small producers simply cannot produce enough castor and palm oil, and that castor bean producers will likely sell to pharmaceutical and cosmetic industries that offer higher prices. Technical problems with blending castor oil in biodiesel and in processing toxic castor cake residue also inflate costs.
 
 Consultants like Norberto Freund at traders Vision Grains said the price of castor and palm oil is nearly twice that of soy oil, which when used as a base for biodiesel is still about 20 percent more expensive than petroleum-based diesel when it reaches the final consumer. While soy oil accounts for 97 percent of Brazil's total vegetable oil production and runs about US$500 per metric ton, castor oil runs around US$1,000 per metric ton. Dende palm oil is in the same range as soy oil, and specialists at the agriculture ministry say that palm oil, which accounts for more than half of the world's vegetable oil exports and has a very high oil yield, may offer the most long term potential as a biodiesel raw material. But its production levels in Brazil are much too small for the demand that will be created, even with the B2 mandate. Brazil produced nearly 150,000 metric tons of castor beans last season, the biggest crop in 15 years but puny compared to a record 50 million metric tons of soybeans harvested.
 
 razil exports approximately 25 million metric tons of soybeans per year, which could be crushed into nearly 5 million metric tons of soybean oil. It already produces nearly 5 million metric tons of soybean oil a year and ships some 3 million metric tons of it abroad. To meet current market soy demand and the looming B2 requirement, producers would only have to expand farming acreage by approximately 1.5 million hectares beyond the roughly 22 million hectares already producing soybeans in Brazil. 
 
 While there are several biodiesel plants moving forward in Brazil's No.1 soy producing state Mato Grosso, the use of soy-based biodiesel has not yet proven to be cost competitive with petroleum-based diesel, according to Silvio Angel, the financial director of Ecomat in Mato Grosso. The plant, which will have a capacity to produce 17 million liters (4.5 million gallons) of biodiesel, will come on line in September. While there is a great deal of interest from local fuel distribution companies looking to buy the plant's production, Angel said that even with soy prices at record-low levels, it will cost roughly 32 percent more to produce biodiesel than petroleum-based diesel.
 
 Incentives needed for soy-based biodiesel 

 Angel said without significant tax breaks, the biodiesel program will not get off the ground. "Without significant incentives, it will be impossible for Brazil to meet the 2008 production requirements," Angel said. "Biodiesel has a great future, but we still have a lot of issues to workout."
 
 Others believe that it is possible for the program to move ahead without government subsidies. According to Artur Alves, president of Soyminas and the head of the Biobras group, which unites a group of investors interested in investing in biodiesel, the most important cost factor is the process technology used by each plant. 
 
 Alves, who was involved in developing the technology used by the Soyminas plant, believes that there are other oil seeds that are more adequate for the biodiesel program than soy, castor bean and palm. The Soyminas plant is supplied with purging nuts (Jatropha curcas L.), sunflower seeds and Fodder radish (Raphanus sativus L. also known as oilseed radishes). All of the feedstock is produced by small farmers located in the vicinity of the Soyminas plant. 
 
 Alves said that the company's production model is already being replicated and, by the end of the year, the Biobras group expects to have four plants operating with the capacity to produce a total of 70 million liters (18.5 million gallons) of biodiesel. By the end of 2006, Alves expects that companies affiliated with the Biobras group will open an additional five plants with a total production capacity to produce 150 million liters (39.6 million gallons) of biodiesel. The goal is to have 100 plants in the network by 2008, according to Alves. He added that for the plants to be viable, they need to be small, with average capacity of 100,000 liters (26,400 gallons) per day. If Biobras successfully meets its goal by 2008, Alves estimates that the group will produce enough biodiesel to meet 50 percent of Brazil's projected demand.
 "We believe that biodiesel has a great future in Brazil and that we can supply the domestic market and even begin an export program, but producers need to focus on efficiency rather than wait for government incentives," Alves concluded.
 
 The head of Brazil's agroenergy department at the Agriculture Ministry, Angelo Bressan Filho, said the government is focusing on approving studies for smaller-sized projects with annual capacities of around 20 million liters (5.3 million gallons).
 
 "The ministry is in the process of restructuring its supply department. We will be giving a lot more attention on biofuels in the future," Bressan said.
 
 One of the main challenges at present is creating a national logistic and infrastructure network to produce, store and distribute the biodiesel. Brazil's government-run National Development Bank, the BNDES, which set up a credit support program for the biodiesel plants launched in late 2004, has already received requests for 150 million reals (US$62 million) in financing. The government estimates that biodiesel production will receive more than US$390 million in investments by 2008 and in the subsequent five years before the B5 mandate comes into force, US$1.5 billion will be needed. 
 
 Elizabeth Johnson is a freelance writer who has lived in Brazil periodically since 1986. She can be reached by e-mail at <a href="mailto:eajohnson@
 uol.com.br. ">eajohnson@

 uol.com.br. </a>

The world's top ethanol producer has designs on becoming No. 1 in biodiesel production, too. With a nationwide B2 mandate-and 
eventual B5 mandate-approaching, oilseed growers, producers and project developers are keen on ramping up, but a  bit overwhelmed by the government's aggressive 
target.

Brazil's Biodiesel Rush

The Michigan Department of Natural Resources' (DNR) newest harbor of refuge will be the first public harbor in the state to offer boaters the option of purchasing a 5 percent biodiesel marine fuel this summer. The program is part of the DNR Parks and Recreation Division (PRD) Green Initiatives Committee policy to research, recommend and monitor environmentally friendly products and management practices.
 
 "This is a very important first for Michigan and Wisconsin boaters," said Chris Cope, who manages the harbor located midway between Menominee and Escanaba in Michigan's Upper Peninsula. "I'm confident that once boaters learn they have this option, they are going to start asking for additional locations to obtain biodiesel marine fuel throughout the Great Lakes."
 
 The committee is using biodiesel blends of B20 and B5 in 26 state parks, recreation areas and field offices through the Green Initiatives program.
 
 The PRD Green Initiatives Committee has partnered with an NBB member, the Michigan Soybean Promotion Committee (MSPC), to help educate outdoor enthusiasts about the use of bio-based products in state parks and harbors. In addition to educational and promotional materials, MSPC has provided a $10,000 grant to cover any cost difference of purchasing soy-based bio-products.

 
 "Our state parks, recreation areas, harbors and boating access sites protect and preserve our state's greatest natural treasures," said Ron Olson, Parks and Recreation Division Chief. "It's important that we are leaders in the use of green products such as biodiesel and other soy bio-products."

Greak Lakes state uses biodiesel in its natural areas

Willie Nelson, adored by millions for his musical talent, continued his effort to get biodiesel into the tanks of more American trucks over the Fourth of July weekend. The singer officially launched a biodiesel station in Carl's Corner, Texas, with a party worthy of the Lone Star State, including an afternoon of music, entertainment and fun at the official kick-off of biodiesel availability at Carl's Corner truck stop, entertainment center and restaurant. 
 
 Carl's Corner, located off Highway 35 south of Dallas, is a biodiesel station selling Nelson's brand of B20 (20 percent biodiesel mixed with 80 percent diesel). Since October 2004, the station has been test marketing the blend with truckers. 
 
 "The response from my trucker customers so far has been phenomenal," said Carl Cornelius, co-owner of Carl's Corner. "Almost everybody who's used it has been totally satisfied. I'm learning from truckers they find better mileage, smoother performance and more power. They're pretty excited. Everybody ought to get on this bandwagon." 
 
 Open to the public and free of charge, the day-long celebration featured tractor pulls, chili cook-offs and live music. Nelson performed a sold-out concert at nearby Hank's Place, and brought Joe Jobe, chief executive officer of the National Biodiesel Board (NBB) on stage with him to speak to the fans about biodiesel.
 
 "As the first truck stop owner in the country to offer only biodiesel blends, Carl is truly a pioneer," Jobe said. "As a business owner he was willing to risk losing customers by saying, 'If you don't like biodiesel, you can go on down the road.' Carl's Corner is incorporated as a town, and Carl is the mayor. Between Mayor Cornelius, Willie Nelson, XM radio and biodiesel, it is easy to see that there is something very special going on down here in this little corner of the world. The truckers are not going on down the road. They have heard about biodiesel on XM radio and are coming from all over the country to use this American-grown fuel, and they are proud of it. And I am proud of them for supporting Carl, and for supporting biodiesel."
 
 During the event, NBB presented Cornelius with the Biodiesel Pioneer Award for his commitment to bringing biodiesel to truckers. 
 Nelson started his company, the Willie Nelson Biodiesel Co., with partners Cornelius and Distribution Drive to improve air quality and help America's family farmers find new uses for their products. Both Nelson and fellow artist Neil Young use biodiesel in their tour buses and personal vehicles. 
 
 Nelson has been opening other biodiesel truck stops throughout the South and Southeast, and the company expects its growth will include truck stops carrying the B20 along the East Coast from Miami to Rochester, N.Y.

Willie Nelson celebrates official launch of premier Texas biodiesel truck stop

Ascendant Partners Inc., an independent Colorado-based business advisor, has launched a biodiesel pre-feasibility Web site. The tool provides organizations a cost effective means to customize assumptions and evaluate whether or not their proposed facility can be successful. Partner Mark Warren said the site offers financial modeling and market assessment tools. Variables including inputs, operational costs and outputs can be changed and compared. The financial modeling allows users to compare their project with a variety of historical benchmarks. Warren said the site could also be beneficial for government agencies determining a proposed project's validity. The site, which is updated quarterly, can be found at <a target="_blank" href="http://">www.ascendantpartners.com. </a>

Ascendant Partners launches evaluation tool

Apollo Resources International Inc.'s 50 percent-owned Earth Biofuels Inc. signed a letter of intent (LOI) to purchase its second retail fueling station with many more to come, said Earth Biofuels CEO Tommy Johnson. The intent to buy the British Petroleum-branded truck stop off Interstate 55 in Grenada, Miss., approximately 70 miles south of Memphis, Tenn., is part of Earth Biofuels' plan to own 10 percent and franchise out 90 percent of 170 retail fueling stations, starting in Mississippi and Oklahoma. Earth Biofuels will offer B20 at all of its retail outlets and regular diesel when facilities are equipped with duel storage tanks.

Earth Biofuels signs LOI for truck stop

Petrolab Co. announced it has upgraded its IROX diesel fuel analyzer to determine the biodiesel content in diesel fuel. The portable IROX diesel FTIR analyzer, produced by Grabner Instruments, features a compact mid-FTIR spectrometer.

 
 The IROX analyzer measures the complete absorption spectrum, which provides complete analysis of the substances present in the diesel fuel. The technology also analyzes cetane improver, total aromatics, poly nuclear aromatics and density of the fuel. The unit is ideal for laboratory and on-site analyses of diesel fuels, according to the company.

Petrolab upgrades fuel analyzer

Petrolab Co. announced it has upgraded its IROX diesel fuel analyzer to determine the biodiesel content in diesel fuel. The portable IROX diesel FTIR analyzer, produced by Grabner Instruments, features a compact mid-FTIR spectrometer.
 The IROX analyzer measures the complete absorption spectrum, which provides complete analysis of the substances present in the diesel fuel. The technology also analyzes cetane improver, total aromatics, poly nuclear aromatics and density of the fuel. The unit is ideal for laboratory and on-site analyses of diesel fuels, according to the company. 
 
 The American Soybean Association (ASA) board of directors recently elected officers at a meeting in Washington, D.C. Bob Metz of West Browns Valley, S.D., is now president while Neal Bredehoeft of Alma, Mo., is serving as chairman. Richard Ostlie of Northwood, N.D., was elected as first vice president, which puts him in line to become ASA president next year. Bob Rikli of Murdock, Neb., was elected secretary, and Gary Joachim of Claremont, Minn., is now treasurer. Elected vice presidents include: Johnny Dodson of Dyersburg, Tenn.; John Hoffman of Waterloo, Iowa; Dennis Jaeger of Goodwin, S.D.;

Petrolab Co. announced it has upgraded its IROX diesel fuel analyzer to determine the biodiesel cont

The boards of directors for the Canadian Renewable Fuels Association (CRFA) and the Biodiesel Association of Canada voted unanimously to merge the groups, according to CRFA executive director Kory Teneycke. At press time, the groups were working out transitional details with finalization expected in January 2006. Teneycke said both boards of directors would be combined to form one large board under the CRFA name. He added that both groups will work together well as they essentially share the same stakeholders in government.

CRFA, BAC agree to merger

Following the lead of the National Biodiesel Board (NBB) and the American Soybean Association, nearly the entire U.S. biodiesel industry was voicing collective praise at press time for Congress' July 29 passage of the energy bill. 
 
 The landmark legislation passed with several provisions to promote the growth of the U.S. biodiesel industry, including the extension of a federal excise tax credit. Extending the tax credit-a legislative pursuit the NBB claimed as its No. 1 priority in 2005-is widely considered vital to the industry's continued growth. 
 
 The excise tax credit amounts to a penny per percentage point of biodiesel blended with petroleum diesel for so-called "agri-biodiesel" biodiesel made from virgin oils and animal fats and a half-penny per percentage for biodiesel made from recycled vegetable oil. It is taken at the blender level with the intended effect of lowering the cost of biodiesel to consumers in taxable and tax exempt markets. The tax incentive, established originally as part of the American JOBS Creation Act of 2004, would have expired in 2006. It will now be extended through 2008. While the excise tax credit is the foremost legislative triumph of the energy bill for biodiesel advocates, some producers expect to benefit greatly from the 7.5 billion gallon renewable fuels standard (RFS), as well as the small producer tax credit for biodiesel, both of which were included in the final bill.
 
 While President George W. Bush had not yet signed the bill at press time-Washington pundits said his approval was all but certain-reaction from the industry was overwhelming positive. 
 
 "What [the energy bill] shows is a continuing favor for biodiesel and enthusiasm for the biodiesel industry," said Nile Ramsbottom of West Central Co-op in Ralston, Iowa. "I think it works well in helping sustain and increase the demand."
 
 As for the 7.5 billion gallon RFS, Ramsbottom said ethanol will probably represent the lion's share of that number. "But, looking at the big picture, it helps keep the public aware that there is a [biodiesel] industry that can supply more fuel," he said. "It will stimulate interest and demand."
 
 Fred Wellons of Los Angeles-based Baker Commodities, said the RFS might benefit the biodiesel industry more than some think. He said biodiesel could become the preferred way for U.S. petroleum refiners to comply with RFS implementations in years ahead. Depending upon the continuation of the biodiesel excise tax credit, biodiesel prices, feedstock prices and ethanol prices, blending biodiesel may be cheaper for refiners than blending ethanol, he said. 

 
 Wellons also told Biodiesel Magazine the industry had been lobbying for a 2010 tax extension, and advocates of that plan were slightly disappointed with the 2008 extension. However, he said, 2008 is better than nothing. "For people going ahead with plants, this cements their decision," he said.
 
 Jake Stewart of Biodiesel Industries was extremely pleased with the result of the energy bill. "We're absolutely thrilled," he said. "A tremendous amount of kudos go to the NBB and Joe Jobe who led this. They've had to clear a lot of hurdles, but they've followed through with a show of strong legislative support for stabilizing investment in the industry in the years to come."
 
 Seattle Biodiesel's John Plaza told Biodiesel Magazine he is excited about the energy bill's passing, but wants to make sure the biodiesel industry gets all it can out of the RFS. "We're very happy to see the RFS pass," he said. "We'd like to see a little more language in the [RFS] for biodiesel so ethanol doesn't take over, but this is a fantastic step for our business, the industry and the nation as a whole."
 Plaza was one of two industry leaders who told Biodiesel Magazine the RFS and tax credit extension will create at least a 1 billion-per-year market by the time the RFS goes into full effect in 2012. "We'd like to be a significant player in that," he said. "We're looking at sites across the state of Washington, and we're looking at producing 30 mmgy to 60 mmgy within the next three years."
 
 Jim Venner, who helped Western Iowa Energy's biodiesel plant into the construction stage, has seen a "surge of additional interest and activity" in the Midwest biodiesel industry through his consulting company Ag Visions. "I think [the energy bill] is a huge boost to all renewable fuels, especially biodiesel," Venner said. "Obviously [the industry is] growing, and this will be a huge boost."
 
 Since Western Iowa Energy has already begun to build the 30 mmgy facility, Venner said the company will concentrate on starting initial production and then consider an expansion if the market calls for it. But Venner said the biodiesel tax incentive extension will add stability to all start-up companies, including those throughout Iowa that Venner works with. "It'll allow us to talk to bankers, investors and have more confidence in our ability to make this thing work," he said. "It'll increase the excitement right away and will enhance additional activity within the industry. One of the concerns we've heard from financial institutions is that the incentive lasts only two years. This will give us an extra comfort level."
 
 Wellons said Baker Commodities is considering plants in Boston, Los Angeles, and in the Seattle/Tacoma, Wash., area. He said the extension should spur more people to build plants. "If people were on a fence with the two-year period, this extension should push them into building plants," Wellons said.
 
 Skip Hauth of Grand Island, N.Y.-based Biodiesel Management Inc., the company overseeing construction of a proposed 32 mmgy biodiesel plant in Minot, N.D., said he is pleased with the extension of the biodiesel tax credit. However, like Wellons, he is somewhat disappointed it was only extended to 2008. "It's problematic for those of us building large plants," he explained. "It takes us about 14 to 15 months to get [a facility] up and running at full volume."
 
 Marvin Oerke of Prairie Pride Inc., a proposed 30 mmgy plant in southwest Missouri, said he is very pleased with the energy bill. Prairie Pride is moving ahead quickly with its plans for a plant. They are readying for a membership drive, consulting with potential design/build teams and narrowing down site selection. "We had to move ahead with doing our feasibility study based on the fact that maybe we wouldn't get past [the 2006 tax credit]. When it was extended to '08 … that helps. … [The United States] had a chance 25 years ago to do something about our problem," Oerke said, referring to dependence on foreign crude oil. "It's nice to see an energy bill really get passed."

 
 Biodiesel Magazine staff writers and editors can be reached by phone at (701) 746-8385.

The U.S. biofuels industries' multi-year campaign to get an energy bill with a renewable fuels standard-and an extension of the federal biodiesel excise tax credit-through Congress ended triumphantly in late July. It didn't include everything the industry wanted, but many feel fortunate.

A Boost for Biodiesel

August 22-27, 2005
 Brock University
 St. Catharines, Ontario
 Hosted by the International Council for Sustainable Agriculture, the purpose of this conference is to provide an international forum for scientists and researchers in the field of sustainable agriculture to exchange information and achievements, to ascertain the challenges of the future and to offer ideas for agricultural practices. Topics include security, safety, frugality and conservation.
 conference@icsagr-fei.org
 <a target="_blank" href="http://">www.icsagr-fei.org/conference</a>

Third International Conference on Sustainable Agriculture for Food, Energy and Industry

September 7-9, 2005

 Sheraton Colonial Hotel & Golf Club
 Wakefield, Massachusetts 
 This event is slated to serve as the stage where renewable energy CFOs, investors, lenders, attorneys and other finance players can examine current renewable energy finance structures and explore the new, creative solutions that will be needed to increase renewable energy deals in the future. This event will provide the finance community with an in-depth look into the details of successful renewable energy structures and provide the innovative ideas that can be employed to get future deals done. The event will center on detailed case studies of the latest successful finance structures for multiple renewable technologies.
 (818) 888-4440
 <a target="_blank" href="http://">www.infocastinc.com/renew.html </a>

Renewables Finance 2005

September 13-15, 2005
 Warsaw Marriott Hotel
 Warsaw, Poland
 The Eastern Biofuels Conference & Expo gives attendees the chance to network and learn about biodiesel, ethanol, biomass and biotechnology. World renowned leaders will discuss new project, government directives, project finance, risk management and more. This event provides the opportunity to network with professionals, plant builders, researchers, consumers and government officials from around the globe. Experts representing the biofuels industry will address the following topics: energy legislation and government incentives; new biodiesel and ethanol plant technology; multiple feedstock sources; the future of biomass and industrial bioprocessing; finance and venture capital; ethanol futures, options and hedging; and an automotive perspective.
 +01 605 338 6829
 <a target="_blank" href="http://">www.easternbiofuels.com</a>

Eastern Biofuels Conference & Expo

September 14-16, 2005

 Hyatt Regency Chicago
 Chicago, Illinois
 The OPIS Executive Education Series presents its first-ever Ethanol & Biodiesel Management course. The two and a half day program will cover purchasing, handling, hedging and managing of renewable fuels. Course instructors have more than 125 years of experience. Attendees will also get an exclusive tour of the Chicago Board of Trade. The course will cover how to store, transport, and blend biodiesel and ethanol properly. It will also address the unique challenges and opportunities biodiesel presents. The event is targeted toward marketers, traders, distributors, dealers, blenders, and biofuels and fleet managers.
 (866) 620-5940
 <a target="_blank" href="http://">www.opisnet.com/ethbiomgmt/</a>

Ethanol & Biodiesel Management

October 10-12, 2005
 Hyatt Regency Atlanta
 Atlanta, Georgia
 The Biofuels Workshop & Trade Show-Eastern Region, themed "Building an Industry," will provide information and expertise to target regional development of ethanol and biodiesel industries. The program will include topics on biofuels production, emerging technologies, project development and policy issues. The trade show will feature approximately 40 booths displaying the latest in technology, services and products within the growing biofuels industry. For registration, sponsorship opportunities and exhibitor information, contact BBI International.
 (719) 539-0300
 <a target="_blank" href="http://">www.biofuelsworkshop.com</a>

Biofuels Workshop & Trade Show-Eastern Region

November 13-15, 2005

 Peninsula Palace Beijing Hotel
 Beijing, China
 Minnesota Gov. Tim Pawlenty, from one of America's leading biofuels states, will be the keynote speaker at the 2005 World Biofuels Symposium-China. The purpose of the symposium is to exchange technological advancements and policy options to help grow the biofuels industry in a country that is currently the second largest consumer and importer of fossil fuels. The Chinese have requested participation in the symposium by foreign engineering firms and technical experts in order to quickly move the industry forward. The renowned Tsinghau University, the state of Minnesota and BBI International have partnered to organize a highly productive symposium and promote international trade opportunities. 
 (719) 539-0300
 <a target="_blank" href="http://">www.worldbiofuelssymposium.com</a>

World Biofuels Symposium-China

February 5-8, 2006
 San Diego Convention Center/
 Omni San Diego Hotel
 San Diego, California
 Judging from the 2005 meeting, the National Biodiesel Conference & Expo 2006 is sure to attract a record number of biodiesel marketers, consumers, feedstock growers, fuel distributors, government leaders and biodiesel users. Again in 2006, the National Biodiesel Board is planning a rich educational program featuring presentations and discussions from the industry's most influential and knowledgeable leaders. The conference will include an array of networking and social events, including a golf tournament, Super Bowl party and several informal gatherings, along with an expo containing more than 70 exhibitors. 
 (800) 841-5849
 <a target="_blank" href="http://">www.biodiesel.org/expo2006</a>

National Biodiesel Board's National Biodiesel Conference

America's men and women in uniform are putting their lives on the line in the Middle East and elsewhere around the globe. Some of these men and women are leaving and returning to jobs at biodiesel plants, soybean processing facilities and other enterprises. No matter the company or industry, one way employers can honor the sacrifices of returning veterans is by understanding the protections afforded to past and present members of the uniformed services as they return home and reenter the workforce. 
 
 Recently, the Veterans' Benefits Improvement Act of 2004 (VBIA) became effective. VBIA contains several important provisions designed to improve and enhance education, housing, employment, medical and other benefits for veterans. The act also amends the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) that offers service members employment and benefit protections when they are called to active duty and after they return home. VBIA creates two new requirements of significance to employers:

 
 1. Extension of Maximum Period of Group Health Continuation Coverage
 USERRA formerly permitted employees serving in the uniformed services to continue their group health coverage under an employer-sponsored group health plan for a period of up to 18 months. VBIA increases that maximum period from 18 months to 24 months, and applies to continuation coverage elections made on or after Dec. 10, 2004. Thus, if an employee covered by USERRA would lose group health coverage because of an absence due to his or her military service, under the new law that employee could elect group health plan continuation coverage for up to 24 months, beginning with the date of the employee's absence.
 
 Similar to the Consolidated Omnibus Budget Reconciliation Act (COBRA), the employee cannot be required to pay more than 102 percent of the full premium for the coverage. If the employee's military service was for 30 days or fewer, the employee cannot be required to pay more than the normal employee share of any premium. 
 
 2. USERRA Notice Requirement
 The Act also requires employers to notify employees of their rights, benefits and obligations under the law by posting a notice where they customarily place notices for employees. The notice is available for downloading from the Veterans' Employment and Training Service of the United States Department of Labor Web site at www.dol.gov/vets. Employers are now required to conspicuously post this notice in the workplace.
 
 Because of these changes, employers' group health plan documents and summary plan descriptions that make reference to the 18-month group health continuation coverage period for employees on military leave need to be amended immediately to reflect the new 24-month continuation coverage period. Also, group health continuation coverage election forms for employees serving in the military need to be revised accordingly.
 
 New laws
 Several states have passed specific laws prohibiting employers from discriminating against applicants for employment based on military service, including prohibition against asking about an applicant's guard or reserve status. Employers may need to revise their application forms to comply with these new laws.
 

 New regulations
 The U.S. Department of Labor has published draft regulations that interpret USERRA. These regulations will more clearly define the rights of returning service men and women, and the responsibilities of employers to honor their military service. For example, the regulations will prevent against discrimination and retaliation because of military service. They will also prevent service members from suffering disadvantages due to performance of their military obligations and afford them ample time to report back to their jobs following completion of their service obligations. If the draft regulations are passed, the department plans aggressive outreach and enforcement. 
 
 To find out more about USERRA, employers can visit the Department of Labor Web site at <a target="_blank" href="http://">www.dol.gov/vets </a>or call (866) 487-2365. Another source of information about rights and benefits of service personnel is <a target="_blank" href="http://">www.esgr.org.</a>
 
 Mark Hanson and Todd Guerrero are members of the Agribusiness and Alternative Energy Practice Group of Lindquist & Vennum PLLP, a leading provider of legal assistance on bioenergy projects throughout the country. Nancy B. Vollertsen, chair of the firm's Employment Law Practice Group, contributed to this article. They can be reached at (612) 371-3211.

Give Them A Heroes' Welcome: New Rights for Veterans, New Obligations for Employers

Legal Perspective

Later this summer, Minnesota will become the first state in the nation to require B2 in nearly all of its diesel fuel. The move comes on the heels of the recent passage of legislation to double the ethanol content in Minnesota gasoline by 2013 and bolsters the state's already firm reputation as a leader in the field of renewable fuels.
 
 Minnesota Statute 239.77 requires that diesel fuel sold or held for sale in Minnesota contain at least 2 percent biodiesel. Exceptions for this requirement are limited to motors at nuclear power plants, railroad locomotives, and off-road taconite and copper mining equipment and machinery. The requirement includes fuel used in compression ignition (diesel) engines-not turbines or heating devices. 
 
 The statute prescribes that the mandate will be implemented when "30 or more days have passed since the Commissioner of Agriculture 
 publishes notice in the State Register that annual capacity in Minnesota for the production of biodiesel fuel oil exceeds 8 million gallons." Given the significant investment made in biodiesel production facilities by Minnesota farmers and businesses, it is likely that the mandate will be implemented as soon as possible under the terms of the law. 

 
 At the writing of this article, one existing biodiesel plant was operating in Redwood Falls, Minn., with a production capacity of 3 mmgy, 5 million gallons short of the amount required to trigger the mandate. However, two other plants-the SoyMor plant near Glenville and the Minnesota Soybean Processors plant in Brewster-are each expected to produce approximately 30 mmgy, and were reportedly in, or nearing, start up at press time. Before notice is published in the Register, plant operators must submit, for the Commissioner's approval, documentation verifying the annual production capacity of the plant and lab reports documenting that product made in the plant meets ASTM specifications for biodiesel. 
 
 With these considerations, it is necessary to make some assumptions to lay out a scenario of how timing of the mandate might unfold. First, we can assume that under ideal circumstances it could be possible for a plant that started production on July 19 to submit the required documentation to the department in seven days. If this happened, it would be possible for the department to submit notice for publication in the register by July 26, and the publication could appear in the State Register as early as Aug. 2. The mandate could then start as early as Sept. 2. With all due respect to Murphy's Law, it is fair to point out that this start date represents a best-case scenario. 
 
 Last year, start-up dates of April or May were projected by plant developers. If this would have happened, the mandate could have been implemented in July, and members of the petroleum industry were advised to be prepared accordingly. As it happened, weather and other factors pushed the start-up dates back. It does seem that now the end of the process is much closer at hand, and the estimates should be much more accurate. In the meantime, members of the petroleum distribution system have been busy preparing their equipment for B2 blending. Most, if not all Minnesota terminals should be ready to go and certain other border terminals including Fargo, N.D., and Grand Forks, N.D., will be ready for a September implementation of the B2 mandate in Minnesota. 
 
 The bold steps taken in Minnesota to help launch the biodiesel industry have been blessed by some timely events. At the beginning of this process, no one knew that the federal biodiesel tax credit would be passed, or that crude oil would be $60 a barrel or diesel fuel more than $2 per gallon. But those steps were taken, and it appears that Minnesota's new plants could hit the ground running in what promises to be a bull market with favorable prices. 
 
 Gov. Tim Pawlenty set a goal of making Minnesota the "Saudi Arabia of renewable energy." With 12 farmer-owned ethanol plants, a 97 percent market share for E10, more than 130 E85 stations, a statewide B2 market this year and a new goal of reaching E20 by 2013, the state is well on its way.
 
 Ralph Groschen is an agriculture marketing specialist with the Minnesota Department of Agriculture. Reach him by e-mail at <a href="mailto:Ralph.Groschen@state.mn.us">Ralph.Groschen@state.mn.us</a> or by phone at (651) 297-2223.

Minnesota Ready to Implement Landmark B2 Requirement

August/September 2005

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Business Briefs

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Petrolab Co. announced it has upgraded its IROX diesel fuel analyzer to determine the biodiesel cont

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