American Ag Fuels was set to begin testing its first batch of biodiesel in early July when Biodiesel Magazine talked with CEO Steve Lankenau in mid-June.
 
 "We are hoping to be producing … to see how the product quality is and what issues we have left to address," Lankenau said. Construction of the plant has gone smoothly since it began in October, he said. 
 

 The plant will have an initial capacity of 3 mmgy, but is expandable to 13 mmgy. "We're going to ramp up systematically but not until we know we're making ASTM 6751," Lankenau said. "We are adamant that we will not move anything but quality out of our facilities. Once that has been achieved and established, we can look at producing more."
 
 American Ag Fuels will utilize two separate process technologies to produce biodiesel. The group is working with Minneapolis-based Superior Process Technologies and Mason, Ohio-based JatroDiesel. The JatroDiesel system is smaller and expected to begin processing sooner, according to Lankenau. He said the JatroDiesel system could eventually become a backup to the larger Superior Process system. "We started [the JatroDiesel system] to start small and get into production sooner," Lankenau said. 
 Both systems use a batch process and are capable of using multiple feedstocks. Initially, both will rely primarily on soy oil.
 American Ag Fuels is also working with the Internal Revenue Service (IRS) to help local distributors understand the impact of the federal biodiesel tax credit. Lankenau said his group is looking to facilitate seminars for distributors and having IRS representatives speak to the distributors.
 
 More information on American Ag Fuels can be found online at <a target="_blank" href="http://">www.americanagfuels.com.</a>

American Ag Fuels readies for start up

I don't think the biodiesel industry is exciting only because it is growing extremely fast, or only because it has celebrity support, or only because the President of the United States has vocalized his support for it, as he did May 16 at Virginia Biodiesel Refinery in New Kent, Va. (see "Presidential Presence" on page 34).
 
 You bet I'm thrilled and honored by those things, but what really gets me energized is the sense of purpose and opportunity that biodiesel presents. This industry, along with the ethanol industry, is on the frontier of what I believe is a biofuels revolution. Being on the leading edge of a movement such as this gives regular people extraordinary opportunities to bring about change. 
 
 Opportunity drives us. 
 
 We work in an industry that thrives on innovation and is constantly striving for improved efficiency and product quality. We witness daily the achievements of American companies like South Dakota Soybean Processors (SDSP) in Volga, S.D., a farmer-owned soybean processor that manufactures oils and biobased products from soybeans, helping the nation reduce its dependence on petroleum-based products and fuels. 
 
 As detailed in our lead feature on page 24, "Pure and Simple," SDSP recently unveiled SoyPure, a refined soybean oil that the company says can help producers achieve greater throughput and lower manufacturing costs.
 
 This industry lets us grow with amazing companies like Ag Processing Inc. (AGP), one of the biodiesel industry's first large-scale producers. A decade after its inception, AGP is now expanding production capacity in Sergeant Bluff, Iowa. In our page 30 feature on the cooperative, "An Industry Pioneer Expands," AGP Vice President of Government Relations and Industrial Products John Campbell says, "To start with an idea and end up with an industry, everything in between has to change." That statement captures the nature of the opportunity-driven industry we belong to. 
 
 And you and I, like the people hard at work at AGP, SDSP and the many other great cooperatives, companies and associations in this business, get to wake up each day and ask ourselves, "How can I help the biodiesel industry face the next big challenge, capture the next big opportunity, create the next big market opportunity?" 
 If you ask me, that's exciting stuff. 
 
 Tom Bryan

 Editorial Director
 tbryan@bbibiofuels.com

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Editor's Note

Gov. Dave Heineman announced an executive order directing all state agencies that use fleet vehicles to require state employees to use biodiesel fuel whenever available within a reasonable distance. The order also requires the Nebraska Transportation Services Bureau and the Department of Roads to take steps to increase access to B2 for state diesel vehicles.  The Department of Roads has 2,300 vehicles and pieces of equipment that run on diesel.

Nebraska govenor orders more biodiesel use

Louis Dreyfus Agricultural Industries LLC, subsidiary of the Paris-based Louis Dreyfus Group, has filed an application of permit with the Indiana Department of Environmental Management (IDEM). The notice of permit from the IDEM indicates the company is looking to build a biodiesel refinery in Claypool, Ind., which is located in the north-central part of the Hoosier state. No further details were available at press time.

Louis Dreyfus applies for Indiana permit

U.K.biodiesel producer D1 Oils PLC continued its worldwide jatropha crop expansion by expanding interest in the Philippine Islands. The company announced an agreement between its subsidiary, D1 Oils Asia Pacific Inc., and Atlas Consolidated Mining and Development Corp., a tier-one Philippines mining and resource company, to cultivate jatropha on degraded lands previously used in mining operations. Jatropha-D1 Oils' choice biodiesel feedstock known for its restorative properties-will cover 7,000 hectares of impacted land in the Philippines, providing feedstock for biodiesel to power off-grid mining projects.

D1 Oils enters the Philippine market

Once again, Biodiesel Magazine offers its readers the latest news on some of the many diesel vehicle fleets making the change to biodiesel blends. Here's a sampling of what's happening in the eastern half of the United States:
 
 In Macomb County, Mich., the county road commission recently began testing B20 in 10 out of 80 of its 60,000-pound gross vehicle weight dump trucks, said Phil Frame, Macomb County's public affairs director. "Each truck uses about two tanks a week, so for the 10 trucks, that comes to about 1,000 gallons a week," Frame said. Bob Hoepfner, the commission's chief engineer, said Blue Flame in Richmond, Mich., is supplying the soy oil-derived biodiesel. Hoepfner told Biodiesel Magazine that testing would last approximately one year while mileage, filter changes and driver inputs are monitored. "We're excited about the whole process," Hoepfner said.
 
 In Charlottesville, Va., the University of Virginia's (UVA) parking and transportation department began testing B20 from soy methyl esters in two of its 30 campus buses and one recycling packer truck, according to department director Rebecca White. "Our test started May 1 and will run through August 1," she said. "If there are no maintenance or fuel efficiency concerns, we would convert the entire fleet to B20." She said 
 
 UVA is getting its biodiesel through a state contract from Whiting Oil Co. in Culpeper, Va. 
 
 Pitt County Memorial Hospital (PCMH) in Greenville, N.C., recently made the switch to run its 35 diesel fleet vehicles-including ambulances, service and utility trucks, and shuttle buses-on a soy-based B20 blend, said Barbara Dunn, public relations coordinator for PCMH. The hospital has even merged its eco-friendly use of biodiesel with efficiency; PCMH has installed a B20 pump on campus for fast and resourceful dispensing of Aurora, N.C.-based Potter Oil's premixed B20, Dunn said. In eastern North Carolina, farmers are looking for alternatives to tobacco, and soybeans offer such an option, according to Dunn. She also said the hospital understands the improvements in using B20 and wants to be a leader in such changeovers. The reduction of particulates also played a role in the decision to burn B20. "The switch has gone extremely well, and from my personal experience, I can't even notice the diesel fumes anymore," Dunn said.
 
 Ernest DeCamp, director of communications for the Springfield City Utilities (SCU) in Springfield, Mo., said that the SCU transit fleet of 30 buses-plus some "rolling stock" of various numbers-has made the switch recently to soy oil-based B2. The biodiesel blend is procured through a local supplier. DeCamp said, "Being that we are in the power industry, using renewables is the responsible thing to do." 
 -Staff Report

One of two campus transit buses testing B20 at UVA in Charlotteville, Va.

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In Macomb Country, Mich., road commission trucks are testing B20 for a year.

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Eastern United States favors biodiesel fleet use

Circumnavigating the globe in a sleek, futuristic-looking powerboat fueled by biodiesel in record time-while stopping at 60 of the world's most famous cities to promote renewable fuels-is what Earthrace is all about. Peter Bethune, CEO and founder of the Australian-based Earthrace project, said in early June the Earthrace boat was four months into construction.
 
 "This has gone mostly as expected, although a shortage of funds has meant we only have 10 guys on construction, which will have us launching later than we'd hoped for," Bethune said.
 
 The two outrigger-like sponsons are complete, and now the crew has focused its efforts on the construction of the central hull. "Composites are costing us more than budgeted," Bethune said. The war in Iraq, he intimated, has caused a global shortage of carbon and Kevlar. 

 
 Bethune said aside from composites, most other items have either been donated or sponsored to the project. "The exceptions are life rafts and a Fleet 55 Comms System, plus some odds and ends. In terms of value, items still to get sponsored account for about 10 percent," he said.
 
 He asserted that Earthrace has 150 sponsors to date. The project is still looking for a title sponsor. "We are in talks with Gillette, Emirates, HSBC and a few others, but lots of work still to do there," Bethune said.
 
 Earthrace is also looking at school competitions, where students create art, short films or essays on environmental issues in their area. Winners would receive various prizes. Earthrace is looking for someone to oversee this promotional aspect in the United States.
 
 Fifty volunteers have signed up to help with promotions in the United States. Bethune said the team would like more volunteers in the Los Angeles and New Orleans, La., areas. Interested people are urged to contact him at pete@earthrace.net. 
 -Staff Report

Earthrace CEO Peter Bethune inspects progress made on the Earthrace boat's hull.

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Earthrace biodiesel powerboat under construction

The American Soybean Association (ASA) praised the introduction of legislation May 19 in both the U.S. House and Senate that would extend the biodiesel tax incentive to 2010. The credit, a penny per percentage of biodiesel blended with conventional diesel, was enacted last year and is set to expire at the end of 2006. On May 25, the ASA also expressed its appreciation for an amendment approved by the Senate Energy Committee that would create, as part of a federal energy bill, an 8 billion-gallon renewable fuels standard.

ASA applauds action in Congress

Archer Daniels Midland Co. (ADM) recently announced Scott Fredericksen as the company's new president of North American Oilseed Crushing, "a part of ADM's overall Oilseed Processing division," said Jennifer Moore, the corporate communications manager for the global agriculture giant. "ADM has 25 crushing operations in North America." 
 
 Fredericksen has been with ADM since 1983. Previously, he served as president of ADM's Special Food Ingredients. Fredericksen also served in various positions within the North American Oilseed division, in addition to being a former division senior vice president of the company's Protein Specialties group. Fredericksen is a graduate of Minnesota State University, Mankato.

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ADM names North American oilseed crushing president

The pilot-scale biodiesel plant Lindell Smith has built on his northeast Missouri farm is tiny compared to the huge facility being developed nearby, but customers were queued up in mid-June, waiting for Missouri Biofuels LLC to reach full stream.
 "I just took a call from Chicago for 77,000 gallons," Smith told Biodiesel Magazine. "If they're bypassing larger, closer producers, that tells me that demand is very high."
 
 The batch process facility, soon expected to reach a capacity of 5,000 gallons per day (approximately 1.8 mmgy under continuous production hours) was independently financed by Smith, who is president and CEO of the company. The facility is located on Smith's 10-acre family farm just outside of Bethel, Mo. The facility was brought on line June 1 and was being gradually ramped up to its nameplate capacity through the month. When operations are fully underway, Smith expects to employ a chemist, at least one operator and a few office personnel. For now, though, he's "wearing a lot of hats," he said. 
 
 The size of Missouri Biofuels, however, does not equate to an inability to produce quality fuel. To the contrary, Smith said the facility's product meets ASTM specifications, and the retired McDonald Douglas aircraft builder is giving serious consideration to the National Biodiesel Board's BQ-9000 fuel quality program.
 
 "Other than the fact that we may fall short on history, I think BQ-9000 would be [viable]," Smith said. "I think it's something every plant should do anyway." 
 

 Smith said the plant is being brought on line with virgin soybean oil, but could easily transition to recycled vegetable oil-yellow grease-later on. The original plan called for expanding the plant's capacity to as high as 16,000 gallons per day and transitioning from a batch process to a continuous process. Now, with one other existing biodiesel plant in Bunceton, Mo., and a 30 mmgy facility being developed in nearby Mexico, Mo., Smith said he's not sure what the company's next move will be. 
 
 "I really don't know what direction we'll go," he said. "And I'm not sure what will happen when these other plants come up in Missouri. Right now, it looks like we will be just fine."

Pilot-scale facility on line in northeast Missouri

The Minnesota 2 percent biodiesel mandate is one step closer to reality. SoyMor, a 25 mmgy nameplate biodiesel facility located near Glenville, Minn., is expected to begin production in mid-July, according to Jim Blair, SoyMor chief financial officer and project manager. Eight mmgy of in-state biodiesel production is needed to trigger the mandate. 
 
 A grand opening for the plant was held June 14. Approximately 900 people, including Minnesota Lieutenant Gov. Carol Molnau, attended the event, which included plant tours. "It was a good opportunity for investors to kick the tires of their investment," Blair said.
 SoyMor broke ground in September 2004. Renewable Energy Group built the facility. Blair said a relatively mild Minnesota winter helped keep construction on track. "I think our great accomplishment was we raised our funds prior to passage of the JOBS bill," Blair said. 
 The plant has a process guarantee of 25 mmgy, but Blair believes it will produce in excess of 30 mmgy. West Central will market the plant's biodiesel, which will primarily be produced from soy oil.
 
 This will be the first county in the United States with a commercial-scale biodiesel and ethanol plant, according to Blair. EXOL, a 38 mmgy ethanol plant less than a quarter mile from SoyMor, developed an industrial park. SoyMor is the first tenant in the park. Blair said infrastructure such as wastewater lines, natural gas and electrical service was already installed. A Union Pacific rail line is also located at the site.
 
 SoyMor will trigger the mandate following engineering and fuel quality validation. Blair said the plant would then be placed on the state register for 30 days before the mandate takes effect. Redwood Falls, Minn.-based FUMPA Biofuels is currently producing 3 mmgy. The mandate is expected to create a 16 mmgy to 18 mmgy market in the state.
 "We're excited about that," Blair said. "Minnesota is a leader in the country when it comes to renewable fuels."

The SoyMor plant could produce more than 30 mmgy.

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SoyMor poised to trigger mandate

Actor Morgan Freeman and business partner Bill Luckett appear to have an interest in locating a biodiesel refinery in Coahoma County, Miss., according to Hugh Jack Stubbs, Coahoma County Administrator. He said the county industrial authority board met with a local attorney representing Morgan's interests, and they were given a "six month option" to buy two lots totaling more than nine acres in the Sunbelt Industrial Park. Stubbs said no further details were available.

Hollywood actor shows interest in biodiesel

In May, China President Hu Jintao addressed a Beijing workshop telling his top-ranking officials to optimize "China's foreign trade structure, to have more high-quality and high-tech products, high value-added products and home-developed products manufactured and exported." 
 Jintao said he wants to see China "take an active part in international economic and technological cooperation and competition," according to Xinhuanet.com, a state and worldwide news agency in China.
 
 In fact, the top legislature in China, the 14th Session of the Standing Committee of the National People's Congress, passed "The Renewable Energy Law of the People's Republic of China" on Feb. 28. The legislation aims to "promote the development and utilization of renewable energy, improve the energy structure, diversify energy supplies, safeguard energy security, protect the environment and realize the sustainable development of the economy and society." Furthermore, fuel retail businesses must include "biological liquid fuel" in their enterprises or suffer imposed fines.
 
 The 2005 World Biofuels Symposium-China on Nov. 13-15, organized by the Minnesota Department of Agriculture, Tsinghua University and BBI International, also aims to expand the country's knowledge of renewable fuels and offer networking opportunities for international industry suppliers. Biodiesel is a part of China's renewable energy plan, both as a transportation fuel and heating oil, and will be addressed at the symposium. Visit www.worldbiofuelssymposium.com for more details.

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China passes energy legislation

Legendary musician Willie Nelson has done more than a little to crack the fuel cap open for biodiesel in over-the-road trucks. The country music star made an appearance at a Greer, S.C., truck stop in June to help celebrate the availability of B20. The Spinx Co. station will carry Nelson's brand of B20, "BioWillie Diesel." 

 "Biodiesel is the future, along with other alternative fuel energies that will keep us from being so dependent on other countries for what we need," Nelson said at the event. "This is a great day for America."
 This is the first truck stop to make B20 available on the Eastern Seaboard, and the second to carry Nelson's B20 brand, following the premier BioWillie station, Carl's Corner, south of Dallas.
 In Bellingham, Wash., Yorkston Oil Co. Inc. started selling soy-based B20 in late April at two gas stations: Yorky's Market and Sammy's Exxon. The blender and supplier is Tacoma, Wash.-based SC Fuels, according to company President Barney Yorkston.
 
 In Tacoma, Wash., Associated Petroleum Products opened a biodiesel pump May 1 at the intersection of Port of Tacoma Road and Pacific Highway East. It offers soy-based B100 and low-sulfur diesel so customers can blend if they wish, according to company spokesman Chris Eakin.
 
 In Ben Lomond, Calif., Mountain Feed and Farm opened the nation's first solar-powered B100 pump in early June. The pumps and meters run on 12-volt DC power, which is charged by solar panels behind the facility and stored in a battery bank. The biodiesel is currently soy-based, but the company ultimately plans to sell recycled grease when it finds a supplier. It is the only biodiesel pump in Santa Cruz County.
 
 In Fort Worth, Texas, DFW Biodiesel opened a soy-based B20 pump in March. The company has offered B100 in bulk for three years, according to company President Bobby Camp. Texas EnviroFuels LLC in Poteet, Texas, is the company's biodiesel supplier. 
 In Apple Valley, Minn., the Farmers Union Cooperative's Marathon station recently added a B20 pump, in addition to B2 and B100 the store has offered since last summer, according to store Manager Pete Mills.
 
 Two gas stations in Tennessee have opened biodiesel pumps. Robinson Enterprises opened four pumps in April at four Jiffy 7-Elevens in Athens, Etowah, Englewood and Calhoun. Each station offers B20 supplied by Chattanooga-based Benton Oil Service Inc. According to company President Bill Robinson, the biodiesel is made from animal fat. Regal Fuels started selling biodiesel in Knoxville on April 1. The company has a B20 pump and also a B100 offloading rack for tankers. West Central Cooperative in Ralston, Iowa, supplies the soy-based fuel, according to Regal Fuels General Manager Tom Henard.
 
 Tennessee-based Tri-Cities Petroleum opened a biodiesel pump in early June at its gas station in Weber City, Va. The station offers a soy-based B20 blend from biodiesel supplier Union County Biodiesel in Union County, Ky.

Nelson with the National Biodiesel Board's Joe Jobe and Jenna Higgins

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BioWillie expands, along with other biodiesel pumps

After North Dakota Biodiesel Inc. announced plans to build a biodiesel plant in Minot, N.D., the company added plans for a nearby canola crushing plant called Minot Seed Oil and Mill Inc. According to Skip Hauth, CEO of Grand Island, N.Y.-based Biodiesel Management Inc., the biodiesel plant plans to work with the North Dakota Farmers Union to secure the canola. Biodiesel Management will construct the biodiesel plant, hire its staff, commission the plant and operate it under contract. Hauth is president of both facilities

Minot biodiesel facility adds crushing plant

The Institute for Biobased Products, part of Montana State University in Bozeman, Mont., is studying a new biodiesel feedstock that is cheaper to harvest and therefore will cut down on a biodiesel producer's input costs, according to researcher and former institute director Duane Johnson.
 
 Johnson told Biodiesel Magazine about a crop called camelina, similar to the mustard plant and commonly grown in northern Europe. The institute began researching camelina's potential as a biodiesel feedstock while trying to figure out how to lower the cost of producing the renewable fuel. In its third year of research, Johnson has some impressive numbers to present. He estimated the cost to make biodiesel from common feedstocks such as canola, mustard, sunflower and safflower is currently $2.35 to $2.65 per gallon, meaning it would retail at approximately $3 per gallon. Using camelina, Johnson said biodiesel would cost $1 to $1.25 per gallon.
 
 "About 75 percent of [biodiesel production] cost was in farm-grown raw materials," Johnson said. "We started looking at a crop that was cheaper to grow. [Camelina] is looking very good in terms of being a low-cost replacement."
 
 Breaking it down further, Johnson said it costs 8 cents per pound to grow canola, while camelina costs 1 to 2 cents per pound. The lower cost is attributed to lower fertility requirements, earlier planting, less watering, and no disease or insect problems. "It costs me $5 an acre to plant [camelina] and another $15 to $20 to combine it," Johnson said. However, Johnson did admit that camelina-based biodiesel isn't as high-quality as canola-based biodiesel.
 
 The institute, which opened in 2004, received grants for this project from the USDA, among other state and university groups. The project is scheduled for completion in 2008, but Johnson is hoping if the group shows enough progress that the project will continue.

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Montana State explores new biodiesel feedstock

Biodiesel has experienced a boost in its public profile that can be called nothing short of monumental. Yet, it is interesting to me how perspectives on the biodiesel industry differ vastly between stakeholders who have only been involved in the industry a short time versus the hardened veterans who have worked on biodiesel for many years.

 
 On one hand, the success that the industry has experienced in the past month has not fully sunk in for many of us who have been around biodiesel for a long time. This is a group that has dug in for the long haul, and those in it know better than to over-inflate expectations because of a few positive developments. On the other hand, folks that are relatively new to biodiesel might subconsciously think that this is just par for the course. Haven't we always had some of the most beloved entertainers promoting biodiesel all over the airwaves? Haven't we always had across-the-board support in Congress to achieve our policy initiatives? Haven't we always had the President of the United States giving energy speeches from biodiesel plants and calling it "one of the nation's most promising alternative fuels?" Uh … no.
 
 Biodiesel has had more recognition in the last month, from the highest levels and from all different directions, than most products get in the course of their entire existence. When actor Dennis Weaver learned of the Spinx Co. truck stop event in Greer, S.C., offering Willie Nelson Biodiesel, he and his very gracious wife Gerry traveled 12 hours to participate. Besides his phenomenal acting career that spans almost 60 years, Mr. Weaver has also been very successful in his efforts as a renewable energy advocate. "This is an incredibly exciting day," he said at the event. "We are thinking about the future and no longer stuck in what we've done in the past. The simple truth is we cannot grow oil. Here today we are changing the way we relate to the earth."
 
 Willie, Weaver, and George W. were all very powerful voices last month, having dramatically lifted the level of discourse about American biodiesel. But before we become too proud of ourselves, let's be mindful of the fact that our work is not done. In fact, in some ways it is just beginning. The biodiesel tax credit must remain the industry's top priority until it is extended. That process is on track, but we must be vigilant until it is done. Rapid industry growth has its own set of challenges. The surge in demand and corresponding surge in production of biodiesel has put a heightened emphasis on fuel quality. Biodiesel has a pristine image as a quality fuel. We must do everything in our power to protect that reputation as we continue to grow. 
 
 Another important issue that must be embraced as we continue this period of rapid industry expansion is safety. As industry stakeholders rush to expand capacity, it is important that safety standards do not suffer. Alcohol used in the biodiesel reaction can be a very dangerous industrial product if not handled properly. Biodiesel is one of the safest fuels to produce, store and handle. It is important that we keep it that way. 
 
 There is no question that this is an exciting time to be involved in the biodiesel industry. I am very proud of this industry and the success we have experienced. We are very blessed by the leaders and public figures who are making great personal efforts to help the biodiesel cause.
 
 
 Joseph Jobe
 National Biodiesel Board
 Executive Director

NBB In Sight

The B20 Fleet Evaluation Team (FET), formed by the National Biodiesel Board (NBB), supplies supply data and information to develop an informed, fact-based position on the use of biodiesel blends up to B20 in diesel engine applications in the United States. The team is comprised primarily of engine and fuel injection equipment companies (see list at right), and has been actively assessing actual fleet operation, as well as conducting controlled validation tests. The team was set up by NBB to foster the NBB's Original Equipment Manufacturer (OEM) program goals of:
 1.OEM support of the use of B20 in existing equipment
 2.Inclusion of B20 in current OEM research and development programs

 3.OEM support of the use of B20 in future engine technologies
 
 In June, the B20 FET issued its preliminary report about the equipment effects of using B20. The report summarizes the findings and provides recommendations for B20 users based on the data generated. The recommendations are found below. Additional activities are currently being executed by the B20 FET to provide more detailed data from in-use fleet operations, and to address the items identified for further follow-up, including updating the biodiesel standards within ASTM. 
 
 "We set up the B20 FET to provide the engineers and scientists in the OEM community with the data they need in order to provide sound advice to their customers on the use of B20," said Steve Howell, NBB technical director. "So we pulled together the group of experts from the OEMs. The OEMs realize biodiesel is here to stay and that many customers are already using B20 even though most OEMs only outwardly support B5 at this time."
 
 Technical recommendations for fleets using B20
 
 Issued by B20 FET, June 2005 (Based on existing data from B20 FET, June 2005)
 -Biodiesel is the pure, or 100 percent, biodiesel fuel. It is referred to as B100 or "neat" biodiesel. 
 -A biodiesel blend is pure biodiesel blended with petrodiesel. Biodiesel blends are referred to as Bxx. The xx indicates the amount of biodiesel in the blend (i.e., a B20 blend is 20 percent by volume biodiesel and 80 percent by volume petrodiesel).
 -Ensure the biodiesel meets the ASTM specification for pure biodiesel (ASTM D 6751) before blending with petrodiesel. Purchase biodiesel and biodiesel blends only from companies that have been registered under the BQ-9000 fuel quality program.
 -Ensure the B20 blend meets properties for ASTM D 975, Standard Specification for Diesel Fuel Oils or the ASTM specification for B20 once it is approved. 
 -Ensure your B20 supplier provides a homogenous product. 
 -Avoid long-term storage of B20 to prevent degradation. Biodiesel should be used within six months. 
 -Prior to transitioning to B20, it is recommended that tanks be cleaned and free from sediment and water. Check for water and drain regularly if needed. Monitor for microbial growth and treat with biocides as recommended by the biocide manufacturer. See the National Renewable Energy Laboratory's "Biodiesel Storage and Handling Guidelines" for further information. The document is available at www.nrel.gov.

 -Fuel filters on the vehicles and in the delivery system may need to be changed more frequently upon initial B20 use. Biodiesel and biodiesel blends have excellent cleaning properties. The use of B20 can dissolve sediments in the fuel system and result in the need to change filters more frequently when first using biodiesel until the whole system has been cleaned of the deposits left by the petrodiesel.
 -Be aware of B20's cold weather properties and take appropriate precautions. When operating in winter climates, use winter blended diesel fuel. If B20 is to be used in winter months, make sure the B20 cloud point is adequate for the geographical region and time of year the fuel will be used. 
 -Perform regularly scheduled maintenance as dictated by the engine operation and maintenance manual. If using B20 in seasonal operations where fuel is not used within six months, consider storage enhancing additives or flushing with diesel fuel prior to storage. 
 
 These recommendations on use of B20 are preliminary and are not provided to extend or supplant warranty limitation provided by an individual engine or equipment supplier. Use of B20 blends is solely at the discretion and risk of the customer, and any harmful effect caused by the use of B20 is not the responsibility of the engine or equipment maker.

B20 Fleet Evaluation Team update

The upgraded Biodiesel Store, for purchasing biodiesel merchandise, is up and running at https://store.biodiesel.org. In addition to new items, the e-commerce site has an eye-catching new layout, easy-to-navigate menus, product ratings and help options. The home page has timely featured items and NBB member discounts. 
 
 New at the Biodiesel Store are subscriptions to the Alternative Fuels Index (AFI) newsletter. AFI is read by more than 4,000 different organizations each week and is used by a variety of states to benchmark major alternative fuel contracts. 
 Published by the Energy Management Institute, the AFI is the only weekly benchmark that focuses on the current wholesale price of seven alternative fuel products, including biodiesel. In addition to the index, the AFI delivers news from the marketplace. Coverage includes: industry commentary relating to supply, price, policy and news, detailed accurate prices and trend analysis at the wholesale level, and refined products cost comparisons. 
 
 Please go to the Web site to subscribe. Read a sample issue at <a target="_blank" href="http://">https://store.biodiesel.org/comersus/store/catalog/print/AFI_newsletter.pdf</a>.

Enhanced Biodiesel Store open for business, offers AFI subscriptions

BMW North America
 Caterpillar Inc.
 CNH Global N.V.
 Cummins Inc.
 DaimlerChrysler 

 Defense Energy Support Center
 Delphi Automotive Systems
 Denso International America Inc.
 Engine Manufacturers Association
 Fleetguard Inc.
 Ford Motor Co.
 General Motors Corp.
 International Truck and Engine Corp.
 John Deere Power Systems
 Mack Trucks Inc.
 National Biodiesel Board
 National Renewable Energy Laboratory
 Parker Hannifin-Racor Division
 Robert Bosch Corp.
 Siemens VDO Automotive Corp.
 Stanadyne Corp.
 United States Air Force

 Volkswagen AG

FET memebers

Quiksilver, the makers of surf-related clothing and gear, hit the waters for its Quiksilver Crossing tour in June and July. Its boat, running on B100, is stopping at several harbors in and around Los Angeles, Calif. "With use of biodiesel becoming an issue of national pride in the United States-not to mention national security-and becoming less reliant on the Middle East, we felt it was the right thing to do," a company representative said of the importance of the fuel in their boat. NBB is helping the tour coordinate fueling. Visit <a target="_blank" href="http://">thecrossing.quiksilver.com</a> for more information

Biodiesel clocks high mileage in tours around the nation

The U.S. Fish and Wildlife Service-Pacific Region's Lewis and Clark Bicentennial Traveling Exhibit chose biodiesel in the spirit of traveling on a more natural fuel. Through 2006, a Sprinter cargo van will be making its way throughout Oregon, Washington and Idaho, after seeing several other parts of the country in the order Lewis Meriwether and WilliamClark did.
 
 Idaho, Oregon and Washington have developed major tourism marketing campaigns and a series of bicentennial events planned for host communities along the trail. The exhibit focuses on the Lewis and Clark story as it relates to natural history, culture and the people of our nation.
 
 NBB is helping the tour coordinate fueling.

Clif Bar's touring van was powered with B100.

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Lewis and Clark expedition exhibit using biodiesel

Approximately 150 bills related to biodiesel have been introduced this session in 36 states. Some highlights include the following:
 
 Passed:
 -Arkansas-Provides a 50-cent-per-gallon (cpg) tax credit for biodiesel blended to make up to a B2 blend.
 -Illinois-Beginning July 1, owners of vehicles operating on a domestic renewable fuel (which includes B20) are eligible to apply for a fuel cost differential rebate. The rebate program is applicable to fleets and expands the Alternative Fuel Infrastructure Program to include B20 fueling infrastructure. Beginning Jan. 1, 2006, all diesel vehicles owned or operated by the state, county or unit of local government, mass transit agency, or any state college or university must use at least B2 when fueling at a central fueling site where available, unless the engine is designed to operate on higher blends or ultra low sulfur diesel.
 -Indiana-Expands state tax credits for biodiesel producers, blenders and retailers. This provides for state agency use of biodiesel blends (B2-B99) whenever possible.

 -Kentucky-$1 per gallon state income tax credit for biodiesel producers and blenders enacted. 
 -Maryland-Establishes a renewable fuel production credit program to create biodiesel production through per-gallon payments to certified biodiesel producers.
 -Minnesota-Provides for the study of the feasibility in using biodiesel in commuter rail locomotives.
 -Mississippi-Incorporates biodiesel production into the existing ethanol production incentive program. This program makes a per-gallon grant to producers of ethanol and biodiesel.
 -Missouri-Makes changes to the Missouri Qualified Biodiesel Producer Incentive program, providing, among other things, the ability for a qualified producer to receive an additional 10-cpg grant for up to 15 million gallons produced beyond 30 million gallons in a fiscal year.
 -Montana-Two bills were passed to develope a biodiesel industry in the state. One, a tax credit for fuel distributors and retailers for investments made in blending infrastructure, provides a tax refund to distributors and owners or operators of motor fuel outlets for special fuel taxes paid on biodiesel made from Montana feedstocks (2 cpg for distributors, 1 cpg for retailers). It also removes the provision taxing biodiesel at 85 percent of the special fuel tax rate. Biodiesel is taxed at an equal rate as diesel fuel. 
 
 The second bill creates several tax credits and incentives, including an Oilseed Crush Facility Tax Credit and Biodiesel Production Facility Tax Credit. The Biodiesel Production Incentive provides a 10-cpg payment for new production above the previous year for the first three years of production. This bill sunsets in 2010.
 -North Dakota-A Biodiesel Production Incentive Fund, partially funded by a new state soybean check-off program, will help create in-state biodiesel production. A tax credit for installation of infrastructure to sell B2 blends and higher, and a sales tax exemption on equipment used to sell B2 blends and higher was also implemented.
 -Oklahoma-Provides a 20-cpg income tax credit for production facilities. Credit is applicable for tax years 2005 through 2011. Credits can be accrued for facilities wholly or partially on line before Dec. 31, 2007. Credits may be claimed for 60 months but not later than Dec. 31, 2011. Beginning Jan. 1, 2012, a biodiesel facility shall receive a 3/4-cpg credit for new production for a period not to exceed 36 consecutive months. Biodiesel and B20 are defined as an alternative fuel. 

 -South Dakota-Tax benefit to assist in the development of production facilities.
 -Tennessee-Authorizes Tennessee Department of Transportation (TDOT) to develop public-private partnerships with fuel providers to develop a supply network for biofuels including B20 and E85. Provides authorization for TDOT to establish a grant program to assist in the purchase and installation of storage tanks and dispensing infrastructure at private fueling sites.
 -Virginia-Requests a study to be done examining production and use of biodiesel, and to make recommendations to the legislature as to any possible legislation to encourage in-state growth.
 
 Pending:
 -Michigan-A B2 requirement has passed out of the House Agriculture Committee and is pending action by the full House.
 -New Hampshire-Authorizes appointment of a committee to examine use of biodiesel as a home heating fuel and vehicle transportation fuel. Requires the committee to report findings and recommendations for legislation by Nov. 1.
 -New York-Legislation requiring diesel fuel having sulfur content of 15 parts per million shall not be sold or offered for sale unless it contains biodiesel as its lubrication additive has passed the Assembly and is pending in the Senate.
 -Ohio-Comprehensive bill requiring state agency use of alternatively fueled vehicles and alternative fuel (e.g., B20). EPAct credit banking and selling program to help offset incremental costs for state agencies using biodiesel. Established a grant program to help encourage installation of blending, storage and refueling infrastructure.

 -Oregon-Provides an income tax credit and corporate excise tax credit for Oregon farmers selling qualifying feedstock to an Oregon biodiesel producer. The credit is equal to 5 cpg of biodiesel produced from the farmer's agricultural product. Provides a carry-forward provision for unused tax credits. Monies from the Clean School Bus Grant Fund may be used by schools for biodiesel pilot projects. It requires state fleets to use alternative fuels to the extent economically feasible in all owned vehicles/equipment, reduces the state motor fuel tax rate for B100 and blends, and provides for a limited refund on fuel use tax for B100.
 -California-Provides the ability for EPAct and federal executive order-covered fleets using biodiesel to be in compliance with state air quality rules.
 -Wisconsin-Provides for aid to school districts to assist in offsetting costs for using biodiesel in their school buses.
 
 Implementation:
 -Minnesota-Expectation that B2 requirement legislation will go into effect this summer, potentially in early August.
 
 For more legislative information, the NBB maintains the most comprehensive biodiesel Web site in the United States at www.biodiesel.org. Contact Scott Hughes, regulatory director for the NBB, at shughes@biodiesel.org.

Biodiesel state legislative update

Clif Bar and Co., an all-natural energy and nutrition foods company, set off on its second annual Natural Energy Tour in May fueled by 100 percent biodiesel. The four-month trip throughout the eastern United States will promote the use of renewable energy. Biodiesel supplier World Energy Alternatives donated the fuel to the tour.
 
 Clif Bar ambassadors will drive a biodiesel-fueled vehicle from Washington, D.C., to Boston with many stops in between. The Natural Energy Tour concludes Sept. 30 in Boston. Featured stops along the way include the Boston and New York Triathlons, a pro cycling tour in Philadelphia, the Smithsonian Folklife Festival and the Bonnaroo Music Festival in Manchester, Tenn.
 
 Through the purchase of wind energy credits from NativeEnergy, the entire tour will be certified climate-neutral. For more information on the Natural Energy Tour and a schedule of tour stops, please visit <a target="_blank" href="http://">www.clifbar.com.</a>

Clif Bar drives the East on biodiesel

Biodiesel was a top performer in the National 2005 Tour de Sol events in mid-May. At the Monte Carlo-style Rally, with a minimum 150-mile range, a biodiesel Volkswagen Passat driven by Jonathan Bartlett of Sterling, Mass., delivered 77 miles per gallon (mpg). The average of the five biodiesel vehicles in the event was nearly 53 mpg, including a 20-mpg Ford F-250. Three top-placing teams-West Philadelphia High School; Quebec Advanced Transportation Institute (ITAQ) in Saint-Jerome, Quebec; and Western Washington University in Bellingham, Wash.-demonstrated incredibly low greenhouse gas emissions by running their vehicles on biodiesel. The ITAQ entry rode 67 mpg in a Mercedes Smart diesel vehicle.

 
 Two student teams from Western Washington University and West Philadelphia High School took top honors with their purpose-built hybrid vehicles, which used biodiesel and produced 85 percent less climate-changing emissions compared to a conventional 27-mpg gas car.
 The 17th annual Tour de Sol, a sustainable energy and transportation festival and competition, featured more than 60 biofuel, hybrid and electric vehicles from throughout the United States and Canada.

Biodiesel top performer at Tour de Sol

The same historic week in mid-May President George W. Bush visited a biodiesel plant-marking the first time any U.S. president has done so-biodiesel champions in the U.S. Senate and House of Representatives introduced bills to extend the federal tax incentive. Sens. Blanche Lincoln, D-Ark., and Jim Talent, R-Mo., are the chief sponsors of the Senate stand-alone bill, which would extend the biodiesel federal excise tax credit to 2010. The existing incentive is scheduled to expire at the end of 2006. Legislation has been included in the Senate Finance 
 
 Committee's energy tax package, which will be written by a longtime biodiesel supporter, Chairman Chuck Grassley, R-Iowa.
 
 Extending the tax credit is the biodiesel industry's No. 1 priority in order to maximize its benefits to the United States and to boost investor confidence that the government will make a long-term commitment to seeing biodiesel succeed.

Biodiesel tax insentive extension introduced in U.S. Congress

American Biofuels LLC (ABF) announced that it is producing biodiesel from restaurant waste oils at its biodiesel plant in Bakersfield, Calif.
 Bakersfield is one of the worst air quality districts in the United States, and 20 percent of the children in the city have breathing problems by age 10, said Joseph LaStella, president of Green Star Products Inc., which owns 35 percent of ABF.
 
 A National Biodiesel Board member, ABF sponsored and contracted with a newly established company called Safe Environmental Alternatives (SEA), which collects waste cooking oil from restaurants. "SEA has signed up more than 80 restaurants and other baking facilities in Bakersfield and surrounding towns in the past four months, including independently-owned, well-known chains and privately owned establishments in the area," LaStella said. SEA is rapidly expanding its collection program and will soon be collecting waste oils from Fresno, Calif. 
 
 ABF has been producing biodiesel, mainly from soybean oil, at its Bakersfield plant since 2003, and has recently increased plant capacity to handle larger quantities of waste cooking oils, the company said. 
 
 More information on ABF can be found at <a target="_blank" href="http://">www.GreenStarUSA.com.</a>

ABF partners with restaurants in its production

National Biodiesel Board (NBB) members met to discuss biodiesel policy and meet with their federal legislators in Washington, D.C., for their summer board meeting June 13-14.
 

 The board approved a 10-year strategic plan, which outlined wide-scale low-blend use of biodiesel as the biggest potential market, but recognized that higher blends such as B20 will continue to play a significant and visible role. 
 
 embers also heard the latest on developing marketing strategies for the trucking industry. The Regulatory Committee identified as a top priority working with the Internal Revenue Service to quickly publish the regulations on the biodiesel tax incentive for industry clarity. 
 The National Biodiesel Accreditation Commission (NBAC) recognized developments in the BQ-9000 fuel quality program, such as introducing a Canadian representative to the commission. NBAC also recognized Steve Howell, NBB technical director, with an award for his work on the commission. NBAC announced a promotional period for a discounted rate in becoming an accredited producer or certified marketer. 
 David Geanocopoulos, director of industry/government relations for Volkswagen, addressed the board about the company's increasing support for biodiesel in the United States. Donald Schregardus, U.S. Navy Deputy Assistant Secretary for the Environment, addressed the board after accepting NBB's National Energy Security Award for Outstanding Energy Leadership through Biodiesel award on behalf of the U.S. Navy. 
 
 The board also honored Sen. Mark Dayton, D-Minn., with the Biodiesel Lifetime Achievement Award. "America's interests are on your side," he told the group. 
 
 NBB recognized Mark Reisinger, energy staff member to Sen. Chuck Grassley, R-Iowa, and thanked him for his valuable work in supporting biodiesel. Reisinger is leaving to become the head of Iowa's Rural Development Initiative. Deputy Secretary of Agriculture Charles F. Conner, Dennis Smith of the Department of Energy and Sen. Jim Talent, R-Mo., also addressed the group. "Of all the alternative energy sources we talk about, this is not the fuel of the future, this is now," said Talent. 
 
 "We've all here today talked about how dangerously dependent we are on foreign oil," Smith said. "If there was ever something made-to-order to help solve that problem, it was biodiesel."
 
 NBB members visited with congressional representatives on Capitol Hill before wrapping up the meeting with a Congressional reception.

NBB Members discussing policy in Washington

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NBB Washington meeting targets industry, national policy

Swanson Flo-Systems recently announced its newest business venture: BioFuels Automation Inc. According to Swanson Flo-Systems, the new company offers pre-engineered automation packages customized to the unique requirements of each biodiesel or ethanol plant, including optimized load-out skids, precision causticity control, anhydrous ammonia delivery solutions, business software solutions and inventory management. It has applied proven automation solutions in more than 70 North American biodiesel plants and dry grind ethanol plants. 
 
 BioFuels Automation Inc. also provides planning, specification, education, training, assembly, maintenance and repair services. Its goal is to improve the project construction phase by providing timely, experienced project execution insight and advice to eliminate all late project contractor re-work.
 
 To learn more about BioFuels Automation Inc., visit <a target="_blank" href="http://">www.BioFuelsAutomation.com </a>or contact Business Development Manager Hans Alwin at (763) 383-4700 or <a href="mailto:hansa@swanflo.com.">hansa@swanflo.com.</a>

Swanson Flo-Systems Co. launches new business unit

Ralston, Iowa-based biodiesel producer West Central Cooperative has achieved its BQ-9000 accreditation, according to the National Biodiesel Board (NBB). The SoyPower brand biodiesel is now certified under the National Biodiesel Accreditation Program, a voluntary fuel quality program adopted by the NBB and Biodiesel Association of Canada.

 
 BQ-9000 is a quality assurance program that details procedures for fuel storage, handling and management aimed at ensuring fuel quality throughout the distribution system. "The quality of biodiesel is the cornerstone the industry will be built on," said Nile Ramsbottom, West Central's vice president of soy processing and nutrition. "BQ-9000 certification is the guarantee that quality will be there."

West Central earns BQ-9000 accreditation

On May 31, Cambridge, Mass.-based GreenFuel Technologies Corp. announced Martin Goldenblatt's appointment to the position of vice president of sales. Goldenblatt's assignment will primarily encompass creating GreenFuel's market share in an increasingly competitive biofuels industry. Previously, Goldenblatt was senior vice president of sales and business development at World Energy Exchange, where he helped the company increase revenue by 50-fold. Prior to that, Goldenblatt was founder and vice president of sales at Lodestar Corp., where his key accounts renewal rate at Lodestar exceeded 95 percent. Goldenblatt's utilities experience spans more than 20 years.

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GreenFuel appoints Goldenblatt to sales VP

Anderson, Ind.-based Remy International Inc. is now giving support to one of 17 Challenge X teams. Remy, a manufacturer and distributor of Delco Remy brand heavy-duty systems and Remy diesel engines and hybrid power technology, is providing engineering expertise and long-term sponsorship for the Rose-Hulman Institute of Technology. Challenge X is a three-year national competition in which university teams re-engineer a GM Equinox to minimize environmental impact using alternative fuel technologies. Remy's electrical engineers will advise Rose-Hulman's team on the latest technologies for electric motors, generators and advanced vehicle propulsion.
 
 The Challenge X competition recently finished its first year. The university of Waterloo's fuel cell hybrid design took top honors, while the University of Akron's through-the-road parallel hybrid, which runs on biodiesel, took second. For more information on Challenge X, visit <a target="_blank" href="http://">www.challengex.org. </a>

Challenge X: Remy becomes corporate backer; Waterloo students lead

Apollo Resources International Inc. announced May 20 that its 50-percent-owned subsidiary, Earth Biofuels, strengthened its distribution position in Mississippi through an agreement with Southland Oil Co. of Jackson, Miss. The agreement allows Earth Biofuels to include biodiesel in five bulk storage locations throughout the state. Tommy Johnson, CEO of Earth Biofuels, said the agreement will make it easier for the company to formalize franchise agreements with independent fuel station owners in Mississippi. Apollo Resources International is a public energy company focused on the acquisition and development of upstream oil and natural gas production assets.

Apollo Resources subsidiary signs biodiesel storage deal

Feedstock pretreatments can be expensive and complicated for biodiesel plants lacking the size and economies of scale needed to establish and maintain sufficient oil refining processes. With growing demands on biodiesel quality, production efficiency and yield, the adage "What you put in determines what you get out" rings especially true with today's producers. "When you use a quality feedstock, your outbound product is generally going to be that much better," said South Dakota Soybean Processors (SDSP) Commercial Manager Tom Kersting. "Your plant is going to run more efficiently, and throughput is going to be greater. It's that simple." 
 
 That's why Volga S.D.-based SDSP, a farmer-owned soybean processing company on the eastern edge of South Dakota, has developed and is now marketing SoyPure, a trademarked pretreated virgin soybean oil tailored for biodiesel and biobased product manufacturing. SDSP is reporting favorable product reviews from biodiesel producers from California and Washington to Minnesota and Iowa. "The response has been extremely positive," Kersting told Biodiesel Magazine. "Customers have reported improvements in quality and yields, and these efficiencies lead to lower manufacturing costs. I think most of these producers have experimented with recycled oils as well as refined bleached and deodorized oils-the common food-grade oil that you can buy from most major crushing plants-and they've found the pretreated oil that we're creating here works better in terms of less soap production in the process and better overall production in terms of pounds-in, pounds-out." 
 
 SDSP did not necessarily develop SoyPure for biodiesel production. However, because refined, bleached soybean oil was required by its sister polyurethane product manufacturing plant, Urethane Soy Systems Co., also based in Volga, branding and marketing the product to biodiesel plants was an easy decision. And despite the fact that SoyPure is a choice feedstock, Kersting said there is nothing particularly proprietary about the way it is made. "It's primarily a cost factor," he said. "It's more affordable for a processor like SDSP to complete the refining process because of our scale. It would be [less feasible] for biodiesel producers to take crude soybean oil and pretreat it on their own." 
 
 While SDSP did not provide Biodiesel Magazine with specific price references, SoyPure is, in fact, slightly more expensive than other domestic biodiesel feedstocks, including unrefined virgin soybean oil. Kersting said SDSP is doing all it can to keep the cost of the product "competitive" with other comparable feedstocks. Producers willing to pay a little more for the product should benefit from less pretreatment costs and greater efficiencies, according to Kersting. "When you look at the costs that a producer would incur when pretreating a feedstock on its own, using SoyPure for biodiesel production is cost-effective," he said. "When you look at this product, versus the amount of money it would take to clean up some of your recycled oils and fats-or taking crude soybean oil or some other crude vegetable oil-and trying to get it into a pretreated condition and ready to go into a reactor, this pays off."
 
 Various U.S. soybean processors have been pretreating soybean oil for years, but Kersting said a large percentage of professionals in the biodiesel industry are still unfamiliar with the numerous grades of available vegetable oil. This situation presented an opportunity for SDSP, prompting the soybean processor to brand and trademark SoyPure. "We want to make [SoyPure] known as an oil specifically made for biodiesel production, so it will not be confused with other grades of oil that are out there," Kersting said. "We are saying, 'Use this as your standard.' … I think that makes it easier for people looking for this type of thing to make a choice." 
 

 SDSP has a construction and management partnership with Minnesota Soybean Processors (MnSP), which is currently finishing construction on a 30 mmgy biodiesel plant in Brewster, Minn., just two hours southeast of Volga. The Crown Iron Works-designed facility, which will be among the largest biodiesel plants in the nation when it is completed in August, will provide SDSP with a large guaranteed market for SoyPure. SDSP and MnSP are two separate companies with independent farmer-owned boards, but with common management and a considerable amount of crossover ownership. 
 
 Kersting said the biodiesel plant being built in Brewster will benefit from the existing soybean processing plant infrastructure: heat, electricity, water, roads, rail, personnel and, most importantly, feedstock. The pretreated soybean oil that the MnSP biodiesel plant will likely use is produced in Volga, but the Brewster processing plant will soon have the capacity to manufacture SoyPure as well. Kersting said these factors, coupled with Minnesota's approaching B2 mandate, make the Brewster biodiesel plant location "a natural." 
 
 The biodiesel plant is expected to use just half of the SoyPure that the SDSP crush plant puts out annually. That's why the company is making a push to market the product to other North American biodiesel manufacturers. "The [SDSP] plant itself will produce approximately 60 million gallons of oil," Kersting said. "About 30 million gallons will go to the biodiesel plant [in Brewster]. In other words, there is an additional 30 million gallons that we could sell [to the industry]" 
 
 With established customer relationships throughout North America, SDSP is well positioned to meet the needs of biodiesel producers from coast to coast. The company has both truck and railcar fleets, and can provide delivered prices in railcar, truck, tote and drum quantities. "Some of the smaller biodiesel plants-and most of them are small right now-don't have access to railcars, they don't have a lot of contacts in the trucking industry either, so that's where SDSP can play a role."
 
 Building and managing biodiesel plants is also a role SDSP wants to play. Kersting told Biodiesel Magazine that the company has had discussions with the developers of several proposed biodiesel plants and is beginning to offer its services as a full-service provider of construction and management services in the biodiesel industry. "That is what we are pursuing," he said. "We do have industry expertise, we have the feedstock supply … and we are building up plenty of [project development, construction and management] experience." 
 
 SDSP is not placing all of its eggs in one basket though. Kersting said biodiesel production, even with the federal tax incentive, is still not quite as attractive as other forms of biobased soybean oil manufacturing, such as the production of polyurethane products. "Certainly one thing that has helped in terms of using vegetable oils [for both biodiesel and biobased products] is the fact that the price of petroleum-based products have gone up dramatically in the last few years," he said. "There was a time here in October, where on a cents-per-pound basis, vegetable oil was cheaper than petroleum oil. It's not there now, but every once in a while, when there are spikes in crude oil and drops in vegetable oils … that price relationship makes these applications work." 
 
 Kersting believes as the U.S. biodiesel industry grows, more production feedstocks will inevitably be pretreated, branded and marketed to an increasing number of producers. "I think it is something we will see," he said. "However, remember that this is still a commodity business. You can brand things all you want, but oil is oil. In this business, when we're using all these different feedstocks to make biodiesel, I think a branded product has value. It allows a company to differentiate itself from those using waste grease or something like coconut oil … if that's their intention. You can make biodiesel out of anything-any fat-so I think it is natural that others will follow along the same course." 
 
 Tom Bryan is editorial director of Biodiesel Magazine. Reach him by e-mail at <a href="mailto:tbryan@bbibiofuels.com ">tbryan@bbibiofuels.com </a>or by phone at (701) 746-8385.

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Volga, S.D.-based South Dakota Soybean Processors is now offering SoyPure, a trademarked pretreated virgin soybean oil tailored for biodiesel production. Meanwhile, a  large customer is about to come on line in neighboring Minnesota.

Pure and Simple

To start with an idea and end up with an industry, everything in between has to change."

 
 Those words, spoken by John Campbell, Ag Processing Inc.'s (AGP) vice president of government relations and industrial products, ideally describe the route his company and the biodiesel industry have embarked on together. Campbell described how the co-op's decision to build a biodiesel plant-and help jumpstart an industry-has evolved throughout the years. Today the industry's success has shown that AGP has made the right decisions at crucial points along the road.
 
 Now, 10 years after the plants inception, AGP is expanding its presence in the marketplace with a large-scale expansion of its Sergeant Bluff, Iowa, methyl ester facility. The plant, and the company, has been a dynamic part of an equally dynamic industry.
 AGP, a regionally federated cooperative, decided to expand the plant in November 2004-a move that will boost capacity by approximately 60 percent. 
 
 Campbell said AGP's management was extremely patient when the facility was initially constructed in 1996. They were essentially paying for a plant and staff to produce a relatively unknown commodity-with an even more unknown marketplace-at the time. The current expansion is proving their patience is paying off.
 
 Expanding with the industry
 The Sergeant Bluff expansion is expected to give AGP the capacity to produce 11 mmgy to 12 mmgy. Much of the work involves infrastructure improvements such as railroad track and inventory tankage intended to improve plant efficiencies and flexibility. According to the co-op's Web site, the plant was designed to produce 200 million pounds of biodiesel annually as demand increases. This expansion will produce approximately 100 million pounds.
 
 "Our plant at Sergeant Bluff is a relatively small plant, remembering that it was built 10 years before we knew if there would be an industry or not," Campbell said. "We've been expanding incrementally. The current expansion is a reaction to the market evolving for the products right now."
 
 The expanded plant, which is expected to be completed in early July, will use what Campbell terms a "continuous batch process," merging the plant's original batch process with a more streamlined continuous flow. The co-op is handling its own engineering.
 
 The biodiesel plant expansion comes on the heels of AGP's recently renovated and rebuilt soybean processing complex, also located in 

 Sergeant Bluff. AGP owns and operates soybean processing plants and vegetable oil refineries throughout the United States, making it the largest cooperative soybean processor in the world. Every month, AGP plants acquire more than 18 million bushels of soybeans for processing. 
 
 From the plant's construction in 1996 as the nation's first purpose-built biodiesel production facility, it has expanded in capacity-mainly through debottlenecking-with the industry. It's been a natural reaction to the demands of the industry, unlike how the plant's creation was sparked.
 
 Campbell joined AGP in 1991 and immediately began exploring the possibility of creating a biodiesel business. The impetus to build the plant was sparked by the result of international trade negotiations. The Uruguay Round of World Trade Organization negotiations had ended in the early '90s. The agreement was the first time that agricultural services, market access and anti-dumping rules were covered under international trade disciplines. Campbell said this caused the export subsidy program for vegetable oils to be eliminated.
 
 "We looked at the spectrum of having a lot of soybean oil piling up in storage," Campbell said.
 But did AGP really see the industry growing the way it is now? 
 
 "We didn't know," Campbell said. "We saw energy probably being on the rise, but we had a vision. It seemed to make sense. We saw energy and oil prices rising and the continued push toward renewability. The inherent advantages of biodiesel are because of its intrinsic properties. We had a hunch and believed, in the long term, this would be a good move."
 
 The plant was also built partly because AGP was having trouble finding third-party biodiesel producers. Since 1992, prior to building the plant, AGP had marketed biodiesel made by others. Many of those plants were oleochemical producers, meaning they didn't have dedicated biodiesel production. Instead they created high prices, an inconsistent product, or at times, no product. "Somebody had to step up to the plate and take the risk to build a plant the industry could depend on for consistency, reliability and low prices," Campbell said.
 
 Shortening the learning curve
 Biodiesel isn't the first renewable fuel with which AGP has been involved. The co-op's Hastings, Neb., ethanol plant was built in 1995 and currently produces 52 mmgy of ethanol. Campbell said the nature of both industries is similar, aiding AGP in getting its biodiesel project moving. It also showed them that there wouldn't be success overnight.
 

 "There are good times and bad times in ethanol," Campbell said. "So when we've been through the industries-whether it be soybean processing, ethanol or biodiesel-that are cyclical, you know to pay attention to the details. You know to plan for the ups and downs in the business."
 
 Biodiesel production could almost be seen as more of a natural fit for AGP. The co-op deals with large amounts of soybeans on a daily basis. The infrastructure was already there. AGP's vertical integration helps to deal with the peaks and valleys within the industry.
 "When we started with biodiesel, we were it," Campbell said. "There was no tax incentive, no industry. That was it."
 
 Setting the 'gold' standard
 The biodiesel produced at AGP's plant is marketed under the SoyGold name by the co-op's wholly owned subsidiary Ag Environmental Products LLC. 
 
 Campbell explained the meaning behind the name. "In a young business that is not yet totally 'commoditized,' we thought it was important to distinguish ourselves by letting people know we are soy-based," he said. "We are a soybean marketing company for farmers, owned by farmers. We want to make sure that both our owners and customers know what they're getting. That's the reason for the word 'soy.' 
 
 He continued, "'Gold' is because we set industry standards for quality. … We've learned a lot along the way about what is important in the quality manufacturing process, research and development, and laboratory analysis. We believe we have the highest quality."
 Ag Environmental markets SoyGold throughout the country. The plant's unrefined glycerin is sold to refiners.
 
 Legislative efforts and a look to the future
 Campbell admits that the USDA's CCC Bioenergy Program has played an important role in the plant's, and the industry's, development. It's allowed more producers to get more fuel to the public. But with that program slated to sunset at the end of fiscal year 2006, the industry is looking to other drivers for continued success.

 
 AGP not only produces biodiesel, but it has worked on developing the legislation to spur the industry. Campbell is chairing a National Biodiesel Board committee, assisting the Internal Revenue Service in developing the regulations for the biodiesel tax credit. He said that passage of the tax credit was especially gratifying, although he would have liked it to pass sooner, because it shows the last 10 years of research and development at the Sergeant Bluff plant have been well spent.
 
 The future of the tax credit is currently in the hands of U.S. Congress. The original credit is set to expire by the end of 2006. However, legislation is currently being formulated to extend that credit, possibly until 2010.
 
 However, other issues may affect the industry. Campbell said that in the future there will undoubtedly be a disconnect between biodiesel feedstock and capacity. "We don't know when those lines will cross, but they will at some point," he said.
 Until that day comes, AGP continues to assess the market and adjust its Sergeant Bluff plant's output as necessary to meet demand. After all, it's the same way they started in 1996.
 
 "[The industry's success] is manifest with people like John Deere and Chrysler factory-filling their vehicles," Campbell said. "Actions speak louder than words." 
 
 Dave Nilles is a Biodiesel Magazine staff writer. Reach him by e-mail at <a href="mailto:dnilles@bbibiofuels.com ">dnilles@bbibiofuels.com </a>or by phone at (701) 746-8385.

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Installation of a new feedstock tank nears completion.

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AGP's plant expansion will increase capacity up to 12 mmgy.

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In 1996, Ag Processing Inc. pioneered the biodiesel industry by building the nation's first purpose-built biodiesel production facility. A decade later, the co-op is expanding production and reinventing itself once more.

An Industry Pioneer Expands

When Doug Faulkner first met George W. Bush on May 16, the experience was "phenomenal," he said. "He has a disarming personality. The moment you shake hands with him, you're comfortable. I can see why he's able to get things done."
 
 In that moment perhaps, Faulkner had forgotten the U.S. president had dropped down from the sky in a helicopter to visit Virginia Biodiesel Refinery Inc., which Faulkner owns in New Kent, Va. Bush toured the biodiesel production facility and spoke to a crowd of 500 outside the plant, detailing his four-step plan to make America less dependent on foreign oil. Bush's visit lasted just over three hours but left a lasting impact on the biodiesel industry.
 	
 The president is coming

 Faulkner first became aware of the president's intention to visit the plant when he received a phone call from a White House staff member two or three weeks before Bush was scheduled to arrive. However, details were sketchy at first. "It's a need-to-know basis," Faulkner said. "You don't know what their plans are. They're very good about talking to you, but I don't think it's definite at any given time. When we first heard, it wasn't definite."
 
 But, sure enough, that Monday morning Bush's copter landed at Colonial Down Race Track, a few miles from Virginia Biodiesel Refinery. Secret Service agents blocked off the road, and the president's limo pulled up to the plant at 10:15 a.m. "They said he'd be here at 10:15, and at 10:15, he rolled in," Faulkner said. "He's very punctual. I'm told that that's not been true in all administrations."
 
 Bush, who traveled with U.S. Secretary of Agriculture Mike Johanns, immediately greeted various members of U.S. Congress outside the plant. Reps. Bobby Scott, D-Va.; Jo Ann Davis, R-Va.; Eric Cantor, R-Va.; Randy Forbes, R-Va.; and Thelma Drake, R-Va., were in attendance, along with State Sen. Walter Stosch and New Kent County Administrator John Budesky.
 
 Guided by Faulkner, Bush then took a tour of Virginia Biodiesel Refinery, where Faulkner showed him the process and the finished product. "[Bush] was already familiar with biodiesel, understood the concepts and did appear interested in the process," Faulkner observed. "He liked the idea a lot." Outside the plant, Bush witnessed various pieces of equipment running on environmentally-minded fuels-a Caterpillar tractor trailer on ultra-low sulfur diesel, an F-250 on B100, a John Deere tractor on B2 and an International hybrid-and referred to them as another part of his energy package to clean up the environment, according to Faulkner. 
 
 A plan for energy independence
 Following his plant tour, Bush's speech touched on various topics like taxes, unemployment, entrepreneurship and social security, but inevitably turned to renewable fuels. "To keep creating jobs and to keep this economy growing, it is important for our country to understand we need an affordable, reliable supply of energy," Bush told the crowd. "That starts with pursuing policies to make prices reasonable at the pump. Today's gasoline prices and diesel prices are making it harder for our families to meet their budgets. These prices are making it more expensive for farmers to produce their crop, more difficult for businesses to create jobs."
 
 Bush presented a four-pronged approach to making America less dependent on foreign oil. First, he said the country must improve fuel conservation and efficiency. He said his administration was leading research into new technologies that would ultimately reduce gas consumption while maintaining performance. "Today I saw a diesel-powered truck that can get up to 30 percent better fuel economy than gasoline-powered vehicles, without the harmful emissions of past diesels," Bush said. "I mean, the fellow got in the truck and cranked it up, and another man got on the ladder, and he put the white handkerchief by the emissions port, and the white handkerchief remained white. 
 
 In other words, technology is changing the world. Our engines are becoming cleaner."
 
 Bush's second step toward energy independence is to produce and refine more crude oil in the United States in environmentally safe ways. Bush said the Arctic National Wildlife Refuge in Alaska was the most promising site for oil in America. He said technology today would allow workers to drill on just 2,000 of the 19 million acres available there, yielding up to 1 million barrels of oil per day. 

 
 The third step is to ensure that other nations use technology to reduce their own demand for crude oil. For example, energy efficiency in countries like India and China could help take the pressure off global oil supply and lower U.S. gas prices.
 
 His final step is to develop new alternatives to gasoline and diesel. Bush said biodiesel producers sold approximately 500,000 gallons in 1999. By 2004, however, biodiesel sales totaled 30 million gallons. More than 500 operators of major vehicle fleets use biodiesel, including the Department of Defense, the National Park Service, Arlington County school buses, Harrisonburg, Va., city bus fleets and James Madison University, also in Harrisonburg.
 
 Bush's speech was met with several bursts of applause by the eager crowd. Faulkner, likewise, was impressed. "If you think about [what Bush talked about], there won't be any effect on me or my children, but if something isn't done, their children and their children's children are going to hit a wall," Faulkner said. "His administration is clearly two to three generations out to try to change what is going to happen if nothing is done."
 
 Nationwide biodiesel exposure
 After Bush returned to Washington around 1:30 p.m., the impact of his visit still reverberated through the nation. It was the first presidential visit to a renewable fuels facility, and because of the president's high profile status, U.S. citizens who had never heard of Virginia Biodiesel Refinery-or even biodiesel-were seeing it all over the news stations. Even fans of "The Tonight Show" and "Saturday Night Live" were hearing about the visit … even though it poked fun at the president, who is known for his ties to the oil industry.
 
 Jay Leno mentioned the visit in his monologue. "At a biodiesel plant [near] Richmond, Va., President Bush came out for alternative fuels," Leno said. "He wants to see more use of alternative fuels, that's good. He said he looks forward to the day when America will invade a country just because it has soybeans."
 
 On "Saturday Night Live's" Weekend Update, news anchor Tina Fey bantered, "To show that his energy bill is about more than drilling for oil in Alaska, this week President Bush visited a plant in Virginia that turns soybeans into a clean burning diesel fuel, which the president hopes one day will be used to fuel oil drilling machines in Alaska."
 
 In the president's defense, Faulkner said Bush isn't as oil-minded as he is stereotypically portrayed. "George W. was basically raised in the oil business," Faulkner said. "So for a man of his stature and his time of life to tour biodiesel facilities and make a speech about how much this is a new part of our energy policy suggests an open-mindedness not associated with a true oil man. He's not a scotch-drinking, hard-headed John D. Rockefeller."
 

 Virginia Biodiesel Refinery expands
 Since Bush's visit, Virginia Biodiesel Refinery has continued to expand its production. In June, footings were being installed to double the capacity that was previously doubled at the beginning of the year. Faulkner declined to release how much that was. The plant also increased its production time to 24 hours a day, six days a week. Pacific Biodiesel Inc. in Honolulu, Hawaii, designed and built the facility in 2004.
 Last October, Bush boosted the entire biodiesel industry by signing the American JOBS Creation Act of 2004. The bill gave biodiesel blenders a 1-cent-per-percentage of first-use biodiesel and a half-cent-per-percentage to second use biodiesel. So, for example, a gallon of diesel blended with 20 percent virgin oil would earn a 20-cent incentive. A gallon of diesel blended with 20 percent recycled oil would return 10 cents. The incentive only lasts until 2007, but lobbyists are fervently working on getting the incentive extended.
 
 Faulkner said an extension of this legislation was vital to the biodiesel industry. "[The extension] is going to be necessary if you want to see new plants built," Faulkner said. "There's a lot of people who want to do it. If all we have is a year and a half, the [finance] people aren't going to do it. You can't pay for a plant in that kind of time. It's a subsidy, but I don't think it's too unreasonable to get these plants established throughout the country so they can be serving their local areas. And that's good for the economy; it stays in the country." n
 
 Jessica Williams is associate editor of Biodiesel Magazine. Reach her by e-mail at<a href="mailto: jwilliams@bbibiofuels.com "> jwilliams@bbibiofuels.com </a>or by phone at (701) 746-8385.

Bush visits with Virginia Biodiesel Refinery Owner Dough Faulkner.

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In May, President George W. Bush visited Virginia Biodiesel Refinery Inc. near New Kent, Va., not only to see biodiesel production firsthand but also to show Americans that he is serious about a national energy policy.

Presidental Presence

It's been two short months since Indian River Marina began selling B2, but the positive effects are already being seen. Located in Delaware Seashore State Park and managed by the state's Department of Natural Resources and Environmental Control, it is the first marina in the mid-Atlantic region to offer soy biodiesel to government and commercial marine fleets, as well as to private boat owners.
 
 The marina had pumped about 5,500 gallons of B2 biodiesel by mid-June, according to park superintendent Gary King. The facility uses about 237,000 gallons of diesel fuel annually. So far the biodiesel switch has been a success.
 
 "Popcorn and French fries smell a lot better than what we call the 'bus syndrome,'" King said, referring to the smell of diesel exhaust one inhales while driving behind a city bus.
 
 The move to offer biodiesel was announced May 9 in an event attended by Gov. Ruth Minner, among other dignitaries. The switch would seem natural considering Seashore State Park already uses B20 in its diesel equipment. It was the first state park to do so in Delaware.

 The effects of biodiesel have been noticeable in the marina. King said that several of the larger boats don't leave a sheen of particulate matter on the water's surface now that they are using biodiesel-blended fuel. "We know where the boats are that have been using biodiesel because of that lack of particulate matter," he said. "People are picking up on that. Things like that don't show up in the price of a gallon of biodiesel."
 
 The price of B2 may be one reason so many boaters are willing to readily accept the fuel. In January the United Soybean Board awarded the Delaware Soybean Board more than $30,000 to fund the introduction of biodiesel at the marina, which was in the midst of a large-scale renovation. Funds helped cover the cost of infrastructure conversions and the educational and promotional materials needed to support the introduction. As a result, the marina has been able to sell biodiesel at a price comparable to petroleum diesel. "Price is not a reason for a boater to not try the biodiesel," King said.
 
 Indian River Marina obtains its fuel through Peninsula Oil & Propane in Seaford, Del. Seashore State Park's B20 is distributed by Tri Gas & Oil of Federalsburg, Md.
 
 The Delaware Soybean Board is doing its part to educate the general public about biodiesel. The board's second-year president, Jeff Allen, told Biodiesel Magazine that a general lack of knowledge about biodiesel has been the state's biggest challenge to widespread acceptance. "Once we get the education out there, we haven't heard a complaint about it," he said. 
 
 Indian River is conducting its own information campaign. It's targeting two main groups: charter fleets and recreational boaters. Indian River advertises with charter boats to promote its small business enterprise, King said. The recreational boats typically range from 35 to 55 feet and run 60 to 90 miles offshore.
 
 The marina has held several boater education forums, inviting slip owners and other marina and boat owners. Speakers have ranged from United Soybean Board members to USDA officials.
 
 Biodiesel's cause also received a boost through a reputable area diesel mechanic. Carey's Diesel Inc., a large diesel repair company with locations in Delaware and Maryland,. Owner John Carey was the first person to fill his boat with biodiesel in the marina. He gave Gov. Minner a ride in this boat at the May 9 event. 
 
 Over the next 18 months, Indian River Marina is expected to increase the available biodiesel blend up to B20. King said the company started with a lower percentage to help educate the public and to avoid clogging fuel filters in older vessels.

 
 In order to avoid mechanical problems, the marina has created a fuel system testing and maintenance program. They offer a tank-testing program at no charge to boaters. "If you give us a sample of fuel, we can send it to the lab and get it analyzed," King said. "We can tell you about your fuel system. We can, in effect, give you a prescription to get the fuel tank in good shape and at the same time get you started on B2."
 
 Biodiesel is also currently replacing the diesel fuel used to power the hot water boilers in the marina's bathhouses. King said all nine bathhouses will be burning biodiesel by the end of the summer season. The heaters burn approximately 30,000 gallons of No. 2 heating oil annually. The marina also sells soy-based products such as penetrating lubricants, hand cleaner, adhesive removers and degreasers at its ship store.
 
 Seashore State Park pioneered the move to B20 in Delaware parks. Due to a statewide initiative, all other state parks now use biodiesel. It's King's hope that Indian River Marina's move to biodiesel will become the norm throughout the Middle Atlantic.
 
 More statewide biodiesel use may be on the horizon in Delaware. Allen said a statewide B2 mandate may be proposed in next year's legislative session. He also said Mid-Atlantic Biodiesel, a proposed plant in Clayton, Del., should break ground in mid-July, moving it closer to becoming the first biodiesel production facility in the state.
 
 "We're having some impact here," King said. "We continue pushing the beneficial effects of biodiesel. In our small way, we are doing our part." 
 
 Dave Nilles is a Biodiesel Magazine staff writer. Reach him by e-mail at <a href="mailto:dnilles@bbibiofuels.com ">dnilles@bbibiofuels.com </a>or by phone at (701) 746-8385.

The United Soybean Board's Eric Niemann stands next to the B2 pump.

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Indian River Marina is targeting charter fleets and recreational boaters for biodiesel use.

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Through efforts by the Delaware Soybean Board, Indian River Marina boaters are now enjoying cleaner air and water by using biodiesel. It's possible that the rest of the state isn't far behind.

Biodiesel Outlet

Trailing California, Texas is the second most populous state in the country. The U.S. Census Bureau reported in 2002 that three of the 10 largest cities in the United States are found in Texas-Houston, Dallas and San Antonio. Ostensibly, the awareness of California's smog problems is ubiquitous, as is the state's special fuel regulations to combat this environmental hazard. Lesser known is Texas' problem with smog. Even more obscure is the state's solution to deal with this problem-a fuel specification called Texas Low Emission Diesel (TxLED). 
 
 The U.S. Census Bureau's 2000 records indicate that Texas has a population nearing 21 million. Morris Brown, program coordinator for the New Technology Research and Development Program (NTRDP) in the Texas Commission on Environmental Quality (TCEQ)-and the biodiesel industry's point-person on the TxLED rule-said 80 percent of the state's population lives in the TxLED-control zone. TxLED's regulatory rule will impact a region with a potential citizen-customer base of approximately 17 million, not to mention the myriad of diesel truck drivers hauling goods in and out of the region.
 

 A method to the madness 
 The TxLED fuel standard specifies all on- and off-road diesel fuel sold in the 110-county region to have a minimum cetane number of 48 and contain no more than 10 percent of aromatic hydrocarbons by volume. 
 
 The idea of the standard, however, has gone through changes since its inception a few years ago. Brown said the latest revision was made in March 2005, changing its effective date from April 2005 to October 2005.
 
 "When [the original rule] was first adopted in late '99 and [early 2000] … we used the California regulations as a model for this program," Brown told Biodiesel Magazine. "They've had their regulations since 1993. The only real difference is that California had a sulfur standard, and we added the cetane requirement [and dropped the sulfur requirement]." With federal standards soon to be regulating the nation's diesel sulfur content, Brown said, "We decided to get out of the 'sulfur control' business."
 
 The upcoming TxLED and federal regulations won't butt heads though. In fact, they will compliment each other.
 
 The federal NOx regulations only apply to new vehicles, but Brown said, "TxLED allows [NOx] reductions to occur in older vehicles … TxLED is designed to have reduction with just the use of the fuel. There is an automatic reduction in the combustion itself." He said a 5.7 percent to 7 percent reduction in NOx comes from using fuel meeting TxLED specifications. Similar to the federal rule, the TxLED regulation will take a phase-in approach. 
 
 According to Brown, on Oct. 1, diesel producers in the region are required to begin producing Low Emission Diesel (LED), and by Nov. 15, distribution terminals are supposed to be in compliance. "By Jan. 1 of '06 is when [LED] is required at retail stations," he said. "The Oct. 1 date is when the producers are required to begin producing and supplying the LED into the distribution system."
 
 Neat biodiesel doesn't fall within ASTM D975 standards for diesel fuel though, so B100 lands out of TxLED's jurisdiction. It's B2 to B99 that takes the hit. Dawn Howe, the Texas Soybean Association executive director, said, "People in the industry here in Texas are saying, 'This could shut us down.'"
 
 "We're not saying biodiesel isn't a good product," Brown said. "The problem is that it tends to increase NOx. The TxLED control strategy is a NOx control strategy. Any increase in NOx, we don't want to see."

 
 Lauren DeMore with the Natural Fuel & Energy Inc. (NFEI) biodiesel project said, "The NOx emissions [from] using biodiesel fuel is highly dependent on the quality of the fuel … " along with other parameters. She noted, however, "The quality of biodiesel from [NFEI] will meet the requirements of the TxLED NOx ruling."
 
 Hopped up on hope
 Jake Stewart, Biodiesel Industries Inc. project manager, said, "The fat lady has not sung" on this issue yet. "The decision has come out in the 11th hour," and he hopes to see it change. However, Brown's reply was, "This ruling has been out since 2000. Producers have known it. It has gone through three legislative sessions now, and it is moving forward."
 
 "We know NOx is the Achilles Heel of biodiesel," Stewart added. He said the decision not to include biodiesel blends is a result of the commission's interpretation of the rule. "The biggest losers are the distributors and the consumers. Texas is in the position to lead the biodiesel front, and one rule interpretation has jeopardized that for consumers." He said this is a warning shot indicating that the industry needs to more actively engage these types of state technical agencies. 
 
 Although the sale of untreated biodiesel blends will be outlawed in Texas soon, Brown offered several TCEQ-sponsored solutions allowing the sale of biodiesel cocktails in the 110-county control zone. All alternatives require commission certification though, which includes submitting an application for approval, NOx testing at an approved facility and NOx emissions results comparable to, or better than, the TxLED fuel. 
 
 "We allow [certified] alternative diesel formulations," Brown said. The biodiesel-blended alternative formulations most likely would be spiked with NOx-reducing additives. "We accept California diesel specifications as well. We also accept California alternative formulations. Meeting the strict specifications is just one way [to meet the TxLED requirements]."
 
 Since biodiesel meets the strict standards of TxLED specifications-low aromatic hydrocarbons and cetane numbers above 48-National Biodiesel Board (NBB) regulatory director Scott Hughes said, "We asked the commission, 'If biodiesel is blended with TxLED diesel, do we need to certify?' and it's answer was, 'Yes, you do.'"
 
 According to Brown, the NTRDP is offering more than $2 million in competitive grant funding to help pay for applicants' NOx testing and certification. Hughes said, "The NBB talked to stakeholders in Texas, and we submitted three applications for funding to look at a B20 blend with additives to control NOx."

 
 Hughes continued, "TCEQ has taken the most conservative approach to this. While this can have a dramatic impact on the market [in the region], the TCEQ and the NBB have good lines of communications open, which will go a long way in getting some approved formulations out there." 
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him by e-mail at <a href="mailto:rkotrba@bbibiofuels.com ">rkotrba@bbibiofuels.com </a>or by phone at (701) 746-8385.

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Texas is a legendary Republic, world-renowned for its admiration of the laissez faire approach to economics, social policy and public oversight. Ironically, bioidesel proponents find themselves bound by Austin's upcoming Low Emission Diesel rule, which do away with the sale of untreated biodiesel blends for 80 percent of the Lone Star state's population by October.

Houston ... Do we have a problem?

July 12, 2005-Seymour, Indiana
 July 13, 2005-Clarksville, Indiana
 July 14, 2005-Evansville, Indiana
 July 15, 2005-Terre Haute, Indiana
 The purpose of these educational workshops is to provide practical information from different perspectives and to encourage an exchange of ideas. The workshops coincide with the opening of two biodiesel terminals in southern Indiana that have blending capabilities. Call to register. 
 (800) 735-0195
 <a target="_blank" href="http://">www.indianasoybeanboard.com</a>

Indiana Soybean Board: Biodiesel Education Workshops

July 27-28, 2005
 Sheraton Inn West Des Moines 
 West Des Moines, Iowa
 This conference includes information about ongoing agricultural trade negotiations, risk management strategies and livestock initiative efforts. Meet Dr. Ray Schneider of the Louisiana State University Extension, the first person to find Asian Soybean Rust in the United States. Other sessions will provide insight into future trends that will affect the soybean industry. Register now because seating is limited.
 (800) 383-1423

 <a href="mailto:www.iasoybeans.com">www.iasoybeans.com</a>

Midwest Soybean Conference

August 1-2, 2005
 Hilton of Santa Fe
 Santa Fe, New Mexico
 This conference provides a forum for the exchange of ideas and information about renewable energy. It is made up of two tracks of panel sessions: policy and technology. Together with plenary sessions, the program will present a wide range of information aimed at encouraging thoughtful discussion of issues regarding the development of wind, solar, biomass, geothermal and other forms of renewable energy on tribal, federal, state and private lands. Sessions are designed to be interactive and provide time for audience participation.
 (480) 227-8312
 <a target="_blank" href="http://">www.swrec.org</a>

The Southwest Renewable Energy Conference

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, ascertain the challenges of the future and 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 Industr

September 7-9, 2005
 Sheraton Colonial Hotel & Golf Club
 Wakefield, Massachusetts 

 This event is slated to serve as a 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 both an in-depth look into the details of successful renewable energy structures and 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

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 the 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 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
 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

The biodiesel business involves relationships with distributors, dealers and sales representatives. As a result, you should be aware of issues that can lead to legal trouble when a manufacturer, supplier, broker or master distributor decides to terminate or change those relationships. 
 
 In the past, businesspeople handled distribution relationships with a handshake and a good reputation. Those days are over. Having a business relationship with a distributor or dealer without a written agreement, setting forth rights and obligations, can be an invitation to be sued if the relationship sours. 
 
 Among many other matters, a written agreement should set forth: performance expectations and/or requirements; territory rights (and whether it's exclusive); duration; termination provisions; pricing or commission and payment terms.
 Even with a "memorialized" distribution relationship, however, additional restrictions may be imposed by law. A network of statutes, regulations and laws exist, primarily on a state-by-state level, that may regulate the distribution relationship. 
 
 Franchise laws

 At least 19 states have enacted some form of franchise regulation that may apply to distribution relationships. Even distribution relationships that do not resemble the common notion of a franchise (e.g., fast food) may nonetheless fall within the purview of franchise regulation. While there are many variations, a franchise is created when (i) the franchisor enters an agreement with a distributor granting the right to offer, sell or distribute the franchisor's goods or services using the franchisor's trademarks or commercial symbols, (ii) there is an 
 expectation of mutual economic benefit or a marketing plan imposed by the franchisor, and (iii) the distributor is required to pay the franchisor an initial or ongoing "franchise fee." Determining whether a relationship is a franchise is fact-specific. Often, however, manufacturers and suppliers are unaware they are considered a franchisor until they've been sued for violating franchise laws.
 
 The requirement of the payment of a "franchise fee" prevents distribution relationships from being deemed franchises in most-but not all-states. Most distributorships are not charged royalties or joining fees, and thus are not subject to franchise regulation. Frequently, however, disgruntled distributors claim "hidden" franchise fees in the form of license fees, advertising or marketing contributions, charges for services or training, manuals or literature, or in any payment by the distributor/dealer to the supplier/manufacturer for anything other than a bona fide wholesale purchase of goods. 
 
 If your business allows or requires your distributor/dealer/sales representative to sell or offer your company's products using your trademarks (in marketing materials, catalogs, signs, door logo decals, etc.), you need to be aware of the specific franchise statutes that may apply, evaluate the risk and make informed decisions. Should a franchise law apply to your distribution relationships, it may restrict your company's right to terminate, non-renew or substantially change the competitive circumstances of the relationship. 
 
 Sales representative regulation
 Many suppliers and manufacturers (and even many sales representatives) are simply unaware of statutes protecting independent commissioned sales representatives from improperly withheld or delayed commission, or even from termination or non-renewal of the sales representative agreement. 
 
 Thirty-five states and Puerto Rico have enacted some form of regulation protecting independent representatives. These laws typically apply to principals who use independent contractor sales representatives (not employees) to solicit wholesale orders within that state and are paid, in whole or in part, by commission. Some statutes require agreements to be in writing. Some address how commissions during the course of the relationship are paid. Two statutes are expansive and require "good cause" to terminate a sales representative. All of them address the payment of commission after termination of the agreement, and most provide penalties (of up to two or three times the actual commission due) for withheld commissions or those paid later than the statutorily payment deadline (between five and 45 days after termination, depending on the state). Most of these laws have "anti-waiver" provisions, making them applicable even if the representative agreement has inconsistent terms. All provide for the recovery of attorneys' fees and costs if the representative prevails. 
 
 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. They can be reached at (612) 371-3211.

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Effectively Managing Distributor and Sales Representative Relationships

Legal Perspective

In 1898, Rudolf Diesel formulated and demonstrated his engine using peanut oil-a fuel he believed was widely available to the common man. Eventually, the disparity between the cost of petroleum and organic oil, as well as other market forces, resulted in a near-total shift to petroleum fuel in diesel engines. Presently, economic, social and environmental factors are causing the return to Diesel's original vision of biodiesel for his engine. Accordingly, the biodiesel industry is poised to grow and capture more public attention, but such recognition is usually followed by regulation. As such, and pursuant to their respective congressional mandates, the U.S. EPA, U.S. DOE and U.S. Department of Transportation will all be encouraging-but also regulating-the emerging biodiesel industry. Fortunately, the existing environmental regulations applicable to the petroleum industry allow the biodiesel industry to look forward and anticipate regulations and enforcement actions.
 
 The refining and transportation of petroleum diesel is subject to the Clean Air Act, the Clean Water Act; the Resource Conservation and Recovery Act; the Toxic Substances Control Act; the Oil Pollution Act; the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)-otherwise known as "Superfund"-and associated regulations for the transportation of oil or hazardous materials. In short, there is scarcely an environmental law that does not apply to the industry. The biodiesel industry, a cousin of the petroleum industry, is not immune from many of these same environmental regulations. In fact, the EPA requires registration of biodiesel as a fuel and fuel additive. Environmental regulations affect the biodiesel industry at two general phases: refining and delivering.

 
 The refining of neat biodiesel, or B100, is likewise subject to many of the above-named laws-specifically, the Clean Air Act. For instance, oil extraction from seeds may require the use of solvents, which is a major source of n-hexane, a hazardous air pollutant, and may be a source for volatile organic compounds (VOCs). Sources of hazardous air pollutants (HAPs) and VOCs may include recovery systems, dryers, coolers, leaking equipment components, storage tanks and wastewater. The EPA may simply turn to Title 40 of the Code of Federal Regulations to charge a biodiesel refiner with violations of the Clean Air Act for gross emissions of HAPs and VOCs. The use of water and resultant wastewater also implicates the Clean Water Act. If proper wastewater treatment is not adhered to, and/or VOCs are allowed to percolate to an underlying water table due to accidental or wrongful disposal, then the EPA may intervene to require cleanup and process changes. In either case, the cleanup, process changes and penalties imposed through a consent decree will be substantial. Wisdom dictates that implementing "best management practices" (BMPs) today will prevent becoming tomorrow's Superfund site.
 
 Environmental laws also affect the delivery of B100 upon its blending with No. 2 diesel. Commercially, a common use of B100 is to blend it with No. 2 diesel to produce, for example, B20. This blending may occur at the refinery to allow for splash or in-tank blending during its transport to a distributor, or in-line blending at the time the fuel is delivered to the customer. At the time B20 is created, its handler becomes subject to all the same regulations as a petro-diesel handler (now the product is 80 percent petroleum). Thus, transporting B20 will require U.S. Department of Transportation permits for transporting diesel fuel, among other regulations. In addition, petroleum diesel fuel is a hazardous material, subject to disposal regulations and treatment under the Resource Conservation and Recovery Act. If a spill occurs, then soil or water testing is necessary to ascertain contamination. If strict compliance to regulations, and precautions to prevent spills and contamination of the environment are not followed, then a handler, commercial supplier or even a landowner of a commercial supplier may be subject to future liability through a potential Superfund action. 
 
 The petroleum industry spends billions of dollars each year on environmental issues. The emerging biodiesel industry is likely to face the same scrutiny and expenditures as it gains popularity and grows as an industry.
 
 Note: The opinions expressed herein are solely that of the Author and for general informational purposes only, and should not be construed as legal advice or legal opinion.
 
 Kevin C. Brague is an attorney at the Portland, Ore.-based law firm of Abbott & Prange P.C. Reach him by e-mail at <a href="mailto:kbrague@abbottprange.com">kbrague@abbottprange.com</a> or by phone at (503) 241-1254.

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As the industry grows, prepare to face regulations head on

July 2005

Business Briefs