The biodiesel industry has achieved a goal that has inspired us for nearly four years. The day we have looked forward to since the campaign began for the biodiesel tax incentive has finally arrived. 
 
 Passage of the tax incentive is a green light to the existing biodiesel plants in the nation and several others that are waiting in the wings to expand production of American-made biodiesel. It is also a green light for more use of biodiesel by groups across the nation like Chrysler, who just announced that it will fill its new Liberty Jeeps with a 5 percent blend of biodiesel at the factory. This legislation offers the bright promise of more such announcements to come. 
 
 This landmark legislation would not have been realized without the courageous biodiesel champions in Congress. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, Sen. Blanche Lincoln, D-Ark., Representative Kenny Hulshof, R-Mo., and others have been tireless advocates of this legislation. Biodiesel manufacturers played a critical role in lending their support and resources to get this legislation passed. We are also grateful for the support from our friends and allies in the ethanol industry. The contribution of soybean growers to this process cannot be overstated. The investment of soybean farmers to help develop this industry, as well as their unwavering commitment to the success of this campaign, has been truly inspiring. The biodiesel industry will always be indebted to America's soybean farmers for their continued commitment to this industry. 
 
 This legislation will significantly energize the biodiesel industry, and it will benefit all Americans. Every gallon of biodiesel we use will be one less gallon we need to import from the Middle East, and we all know energy security is inseparable from national security. Additionally, it's estimated that the biodiesel tax incentive could create as many as 50,000 new jobs in the United States over the next 10 years. Let's also remember that biodiesel is cleaner burning and will help our air quality. This legislation is good for the biodiesel industry and all Americans. 
 
 But this success doesn't mean we are finished. Years from now I think many of us will look back on this moment as the true launching point for the industry. The tax incentive is a part of our long-term vision. It's something we have planned for, and it is going to help us build on the strong foundation we have laid. It is more important than ever that our industry remain unified and committed. With this success comes a whole new series of challenges. To use a baseball analogy, after years of clawing our way up through the ranks of the minor leagues, we have just been called up to "The Show." We can all look forward to biodiesel truly making a difference to this nation's energy future. 
 
 
 Joseph Jobe

 National Biodiesel Board 
 Executive Director

Passage of tax incentive marks launching point, not finishing point

Point of View

As our editorial team prepared to send this issue of Biodiesel Magazine to press, we felt as though we were taking a clear journalistic risk by running an important story written before, dare I say, all the facts were in. That is, the nation was expecting President George W. Bush to sign the American JOBS Creation Act of 2004, effectively creating a biodiesel excise tax credit of 1 cent per percentage point of first-use biodiesel, beginning in 2005. However, it didn't look like Bush was ready to sign the bill before press time. 
 
 For the sake of our lead story-and the 20 pennies pictured on our cover-I'm sure glad the President signed the bill Oct. 22, a day before our deadline. After all, we didn't want to jump the gun on a story about the most significant piece of biodiesel legislation in U.S. history. As you will discover by reading our lead story, "Making Cents," on page 16, the biodiesel tax incentive could become a catalyst for extraordinary industry growth. But until the incentive is extended beyond 2007, the verdict is still out on the extent of its impact. As one distributor told us, don't expect there to be a "wild demand" for biodiesel right away. He pragmatically reminded us, "The development of biodiesel is a marathon, not a sprint."

 
 That's why Massachusetts-based World Energy is taking what its CEO Gene Gebolys calls a "long view" approach. Gebolys founded World Energy six years ago on the belief that society would, as he put it, "invest in figuring out reasonable, thoughtful alternatives to its continued dependence on foreign oil." Focusing on the big picture, and the long view, has helped World Energy become the largest biodiesel distributor in North America. 
 
 World Energy is a company that doesn't seem to place ordinary limitations on itself. We could all learn from the company's bold, opportunistic outlook on business and energy. As you may discover in reading our feature profile on the company, "Mass. Distributor," on page 22, the limits we place on domestic and international biodiesel markets are, as the saying goes, only perceived. 
 
 Tom Bryan
 Editorial Director
 tbryan@bbibiofuels.com

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Editor's Note

Northeast Biodiesel LLC has received a $250,000 grant from the USDA that will help support building equipment purchases for a 500,000-gallon per year biodiesel plant near Greenfield, Mass. The plant may be producing ASTM-certified fuel from recycled vegetable oil by the end of 2005, Interim Manager Lynn Benander told Biodiesel Magazine. Construction is expected to begin January 2005. Leasing negotiations are underway for the 8,000-square foot plant. The state has received $75,000 from the DOE to create local markets for biodiesel.

Northeast Biodiesel LLC receives USDA grant

Bently Agrowdynamics is planning on building a 400,000-gallon per year biodiesel plant near Minden, Nev. Pacific Biofuels has been contracted to build the plant that could be completed by March 2005. The immediate plan is to produce sufficient yellow grease-based biodiesel, about 200,000 gallons, to run all company vehicles and equipment. The company is also growing 550 acres of canola with plans of 1,400 acres next year. The next step for the project is permit application.

Nevada biodiesel plant in planning stages

Two Tennessee companies are moving forward with biodiesel plant projects. Clinch River Valley Energy Group has three projects in the works, including skid plants in Sevier County, Tenn., Waynesville, N.C., and Larkslane, Ky., according to Mike Ellis, company president. Blue Sky Biodiesel is also working on a biodiesel plant near Harriman, Tenn. Spokesman Mike Cretella Biodiesel Magazine the company started a small-scale operation this summer, producing approximately 350 gallons of biodiesel per week. The company is currently applying for grants to help expand the operation. For more information about Tennessee biodiesel projects, visit <a target="_blank" href="http://">eerc.ra.utk.edu/etcfc/index.html</a>.

Biodiesel projects abound in Tennessee

Mid-Atlantic Biodiesel LLC is one step closer to becoming the first biodiesel facility in the mid-Atlantic region. The company is preparing to build a 5-mmgy-biodiesel plant in Clayton, Del., where it held a groundbreaking ceremony Sept. 20 attended by Gov. Ruth Ann Minner.
 At press time, the company still needed two permits; Mid-Atlantic President Martin Ross said the plant probably wouldn't begin major construction until the end of October. The facility is expected to be on line by fall 2005. 
 
 The plant would use 60 million bushels of soybeans per year, although it will also have the capability to use recycled cooking oil. Ross said the company chose a multi-feedstock design in order to ensure access to reasonably priced feedstock supplies.
 The idea of building a biodiesel plant first arose nearly four years ago when Ross worked on an exploratory committee researching the possibility. In April 2000, then Gov. Thomas Carper announced the use of biodiesel in Delaware state fleet vehicles. Biodiesel is available commercially at four public fueling stations in the state.
 

 The plant will be located on a six acre abandoned rail yard. "We can turn an eyesore into something that is not only attractive but provides an economic benefit," Ross said.
 
 Delaware Secretary of Agriculture Mike Scuse lives near Clayton and was first to recommended the site. Ross and Scuse met with the mayor and city representatives and let them know the site would be a good fit.
 
 Mid-Atlantic then held several community meetings to address concerns about the plant. "All went well," Ross said. "It's been a very good community. Mayor [Robert] Berghorn has been very receptive. We feel very comfortable."
 
 De Smet Process Technology Inc. has completed the engineering for the plant. The Belgium-based company is the largest supplier of equipment in the world for the oleochemical industry. Tim Kemper, president and CEO of De Smet's U.S.-based office, said his company was trying to get an early start in the U.S. biodiesel industry after missing out on much of the European market. They've already worked with modifying existing biodiesel plants, Kemper said.
 
 "For us, it's a perfect fit," he said. "We want to become significant players in this business."
 
 id-Atlantic has received a boost from a $5.5 million federal funding package from USDA Rural Development. A $500,000 federal energy efficiency improvement grant is included in the package. An earlier $60,000 USDA grant helped fund the feasibility study.

State Sen. Jim Vaughn, Scuse, Gov. Minner, Berghorn, State Rep. Pam Thornburg, State Rep. Bethany Hall-Long, State Rep. Wally Caulk, USDA Rural Development Director Marlene Elliott, Ross

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Mid-Altlantic Biodiesel breaks ground

Throughout its 72-year history, the John J. Harvey fireboat has been present at many historic events and witnessed a significant amount of change. Now biodiesel is slated to become part of its history.	
 
 A group of owners are considering using waste fry oil from nearby restaurants as a feedstock to create B100 for the ship. The historic vessel uses about 10,000 gallons of fuel annually. 
 
 The boat, which is considered the first modern fireboat, was launched Oct. 6, 1932, and named after a fireman killed while on the boat. The boat was used for decades to help put out fires on shore and in the waters around New York City.
 
 The boat was decommissioned from the New York City Fire Department in 1995 and left at the Brooklyn Navy Yard for almost four years. However, 66 years to the day the ship's namesake was killed, a group of 12 people bought the boat shortly before it was to be dismantled. Six months later they had the ship back in operating condition. 

 
 The fireboat was pulled out of retirement following the Sept. 11, 2001, terrorist attacks in New York City. The John J. Harvey helped ferry 150 trapped people and acted as a staging area for volunteers. The boat was then called into service pumping water to control the fires since fire hydrants were inoperable. The John J. Harvey celebrated its 70th birthday just three weeks after leaving the World Trade Center site.
 Now boat operators are experimenting with biodiesel. The five original gasoline engines installed in 1931 were replaced with 600-horsepower diesel engines in 1957. The diesel engines provide the power for both propulsion and pumping water.
 
 "We run five diesel engines," said Tim Ivory, chief engineer of the John J. Harvey. "From an environmental level, it's just not a poster child."
 Ivory said a small site in the Brooklyn Navy Yard could be used to create biodiesel after addressing environmental and safety issues. The owners have set a goal of using biodiesel in an alliance of five historic vessels. B100 was already tested in another boat this summer.
 "The reaction is incredibly enthusiastic," co-owner Huntley Gill said. "We plan on pursuing it seriously. There has been no downside as far as public relations."
 
 More information about the John J. Harvey can be found at <a target="_blank" href="http://">www.fireboat.org</a>

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Historic fireboat testing biodiesel

The number of transportation and maintenance fleets using biodiesel blends continues to rise. Biodiesel Magazine caught up with a handful of these fleets recently. Here's what we found: 
 
 Penn State University's College of Agricultural Sciences converted all of its farm vehicles to B20 over the summer. The school uses about 100,000 gallons of fuel annually in 200 pieces of equipment. Export Fuel Co. in Export, Pa., supplies the fuel. Glen Cauffman, manager of farm operations and facilities, said that eventually all of the university's diesel vehicles would use biodiesel. He's seen no problems with the B20.
 
 In Illinois, several more school districts received funding from the Illinois Clean School Bus Program. School districts in Galva, Clinton, Eureka and Fieldcrest are turning to biodiesel blends-mainly B20. 
 
 The Chatham County school system in Moncure, N.C., is running its entire fleet of buses on B20. Durham County was the first in the state to use biodiesel in its buses. 

 
 Monroe County Community School Corp. became the first fleet in central Indiana to use B20 in its entire fleet of 107 buses. 
 The majority of vehicles in the Cambridge, Mass., city fleet have switched to B20 after a two-year pilot project. 
 
 All buses in east Jefferson County, Wash., are using B20 after Jefferson Transit officials made the switch July 13. The state-funded Olympic Region Clean Air Agency in Olympia gave Jefferson Transit $7,500 to help offset the cost of the fuel.

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Buses, maintenance vehicles using biodiesel blends

The Alabama Soybean Commission gave a $10,000 grant to fund a local initiative, "From Farm to Fleet," a project created to help inform the public about the positive aspects of biodiesel. Led by Mark Hall of the Madison County Extension Service, the initiative tested biodiesel fuel in garbage trucks to record effects on the vehicles' performance, gas mileage, etc. Huntsville Fleet Manager Celina Stone conducted the study; the grant money purchased the fuel. The result: Biodiesel showed no difference in performance compared to regular diesel. Hall plans to distribute this information to the public.

Alabama initiative educates public

The student-created Oregon State University (OSU) Biodiesel Initiative has received a $10,000 grant from the EPA for its proposal to research biodiesel and will compete in a national competition in Washington, D.C., this May. The competition winner receives a larger grant to help implement its proposal. The OSU group, which formed in 2003, uses waste cooking oil from the campus dining facilities as a production feedstock. They hope to power campus equipment with biodiesel and identify the feasibility of full-scale biodiesel production in Oregon's Willamette Valley.

OSU students lead biodiesel program

The University of Nevada-Reno (UNR) has been awarded a $69,000 grant from the EPA to find a cleaner, cheaper way to produce biodiesel. EPA Administrator Mike Leavitt announced in a Sept. 7 press conference that the grant would fund the second part of a three-phase pilot project using ethanol to create biodiesel.
 
 The project, which began Sept. 2003, has seen students at UNR create an automated, mobile biodiesel production unit prototype that uses waste cooking oil from the university's dining center as a feedstock. The current prototype is about the size of an office desk. 
 
 Hatice Gecol, an assistant professor of chemical engineering and one of the lead researchers, said the unit has been producing biodiesel for about eight hours per day for the last 11 months. It's totaled about 3,000 gallons of biodiesel, which has been tested in university vehicles.
 The next phase of the project calls for UNR researchers to analyze several oils and to seek ways to reduce the fuel's NOx emissions. The final phase of the project would include building a small-scale plant.

Leavitt pours waste cooking oil into the prototype unit.

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UNR trying to improve biodiesel technology

New biodiesel-blend distribution terminals have opened up in Peru, Ind., and Alamosa, Colo. Peru's Countrymark Co-op has added a biodiesel unit to its already existing terminal, and Blue Sun Biodiesel built a new terminal in Alamosa.
 
 Dennis Reynolds of Countrymark Co-op told EPM that the Peru facility, which opened in late June 2004, offers B2, B5, B10 and B20 blends. It splash blends automatically. Countrymark has another biodiesel blending terminal in Jolietville, Ind. A third terminal location is being planned at the Switz City, Ind., terminal near Linton on State Route 54.
 
 Countrymark often works in conjunction with the Indiana Soybean Board, which Reynolds said has given Countrymark funding assistance in the past. Reynolds said the latest biodiesel legislation, which will create a biodiesel tax credit (see page 16), "will greatly increase our business."
 
 Blue Sun Biodiesel President and CEO Jeff Probst said the Alamosa facility will provide up to 180,000 gallons of biodiesel per day, which will be delivered via tanker and railroad cars. The state-of-the-art sequential blending facility can load one tanker with pre-blended B20 in approximately 20 minutes, or four tankers in an hour. While the biodiesel blends will primarily be used to fuel government and private fleets, Probst hopes that the new distribution center will prompt the opening of more retail biodiesel fuel stations.

Distribution terminals open in Indiana, Colorado

From Utah to Vermont, more and more biodiesel pumps are springing up, indicating that demand for the renewable fuel is rising.
 In Sioux Falls, S.D., the Kum & Go station on West 12th Street started offering B2. Between 1,500 and 2,000 gallons of the renewable fuel were pumped during a three-hour promotion August 11. 

 
 In Brattleboro, Vt., Fleming Oil Co. opened the state's first biodiesel pump, which offers B20, in August. Fleming Oil Co. already offers biodiesel blends at its West Chesterfield, N.H., station.
 
 In Midvale, Utah's Sinclair gas station Dal Soglio opened the state's first biodiesel pump in August. The station sells B2. By mid-September, the renewable fuel was selling at a price lower than regular diesel. A grant from the U.S. DOE program Salt Lake Clean Cities supported the project. American Bio-Fuels of Bakersfield, Calif., and GreenStar Intermountain LLC are the suppliers. 
 
 In Ann Arbor, Mich., Meijer will build two stations that offer biodiesel in the near future. One station will be built at the Meijer store on Carpenter Road, and the second station will be built on Ann Arbor-Saline Road. Both B20 pumps are slated to open by Dec. 1, according to company spokesman John Zimmerman. The Michigan Department of Consumer and Industry Services supplied a $24,500 grant for the project, which was also aided by the Michigan Soybean Council. 
 
 In Portland, Maine, the Foods on the Go/Union fillings station on Commercial Street opened a biodiesel pump Aug. 1. Frontier Energy is the supplier.
 
 In Bloomington, Ill., an FS Farmtown fuel station on U.S. Highway 150 opened a biodiesel pump Aug. 1, dispensing B1 blends. According to Evergreen FS Energy Manager Russ Higgins, a new Illinois tax incentive prompted the company to offer the fuel. Evergreen FS sells an average of 500,000 gallons of diesel fuel per year. With 1 percent biodiesel blends, 5,000 gallons of soybean oil would be used.
 In Oneonta, N.Y., the Mirabito Fuel group received a $142,000 grant from the Clean Cities Program. The company plans to promote biodiesel use, starting with the construction of a cardlock system in Oneonta, N.Y., near Cooperstown. The cardlock pump will dispense B20, hopefully by March, according to a Mirabito spokesman. Mirabito plans to expand biodiesel sales to local gas stations soon.

Biodiesel pumps were installed at Fleming Oil Co. in Brattleboro, Vt.

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More U.S. stations pumping biodiesel

Farm Aid has added biodiesel to its all-star lineup. Willie Nelson, president of Farm Aid, welcomed its use this year saying "There's a light at the end of the tunnel, and it's called biodiesel," to the eruption of crowd cheers at the White River Amphitheatre on the Muckleshoot Indian Reservation near Auburn, Wash., on Sept. 18. 
 
 The concert for family farmers is hosted by Nelson, Neil Young, John Mellencamp and Dave Matthews, who make up its board of directors. Other performers at Farm Aid included Steve Earle, Lucinda Williams and Trick Pony. 
 
 "We're really feeling good about biodiesel-it's a great thing," Neil Young said to the crowd. Young and Nelson both use biodiesel in their tour buses and personal vehicles. "Willie and I do these things all the time and we just feel good. It's clean, it's American-grown fuel, it doesn't damage anything. This is so obvious."

Young and Nelson fuel a tour bus with biodiesel.

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Biodiesel performs at Farm Aid

November will mark a landmark moment in biodiesel use for a major auto manufacturer. Chrysler Group announced that B5 would fill the fuel tank in each new Jeep Liberty Common Rail Diesel sport-utility vehicle coming off the assembly line. The company is expected to produce the first Jeep Liberty diesel in November at its plant in Toledo, Ohio.
 Chrysler Group President and CEO Dieter Zetsche called the decision an important first step in encouraging wider use of clean renewable fuels.
 

 The decision is already popular with consumers. Despite no official marketing campaign, Chrysler already has over 30,000 people that have shown interest in the new vehicles. That number far exceeds initial production capacity for the vehicle.
 
 hrysler spokesperson Max Gates considers the announcement a small step, yet highly symbolic of what Chrysler hopes to accomplish. "The customers would have taken us there if we hadn't already done it," Gates said.
 
 The use of B5 may be the first of several biodiesel moves for Chrysler. Gates indicated that Chrysler Group is involved in research projects throughout the world trying to create new ways of making biodiesel. The specifications of B20 in larger Chrysler diesel pickup truck engines are also being considered. Gates said Chrysler has a strong interest in alternative and renewable fuels.
 
 "There has been interest in biodiesel particularly on the fleet side," Gates said. "We have been involved in that area."
 Chrysler is starting a campaign to promote the locations of fuel stations around the country that have biodiesel. They hope it's the first step of many in promoting renewable fuels. "There is a great opportunity to carry the word to those who haven't been paying attention to biofuels," Gates said.
 
 The Jeep Liberty will be fueled with soy-based biodiesel from the Ohio area. Chrysler is currently considering biodiesel suppliers in Michigan and Ohio. Their blender is Beyond Petroleum PLC.
 
 The Liberty uses technology that significantly improves efficiency and reduces emissions by exactly calibrating the amount and pressure of fuel injected into the engine's combustion chambers. The Jeep Liberty diesel will achieve 22 miles per gallon in the city and 27 miles per gallon on the highway.

Chrysler Group approves B5 in new Jeep Liberty

The Minnesota Biodiesel Task Force continues to advance production and technical issues in preparation for the state's B2 mandate, set to take effect in 2005 if sufficient in-state capacity is in place. 
 
 At the group's last meeting in July, representatives of three Minnesota plant projects presented updates. The Farmers Union Marketing and Processing Association (FUMPA) biodiesel plant in Redwood Falls is under construction. The Minnesota Soybean Processors project in Brewster is delayed, but still aiming for a June 2005 start-up. SoyMor in Albert Lea is also shooting for a June 2005 start-up. These project reports were presented before the federal biodiesel excise tax credit was passed by the U.S. Senate in October. 
 
 It was also reported that Task Force members helped launch a Cold Flow Study designed to answer questions about the blending characteristics of biodiesel in cold weather conditions. 
 

 At press time, members of the task force were preparing for a Nov. 1 meeting in Eagan, Minn.

Task force makes steady progress in Minnesota

The New York State Energy Research and Development Authority has awarded Mirabito Fuel Group, a third generation New York energy marketing firm, more than $142,000 in funding to install biodiesel fueling infrastructure at two of its existing New York locations. The company is installing a 15,000-gallon B100 tank ,and a loading and unloading dispensing system at its Sidney terminal. Funding will also be used to purchase 8,500 gallons of B100 for that location. In Oneonta, a 4,000-gallon tank will be installed for the storage of B20. A fuel dispenser and pump will also be installed there. It is estimated that approximately 38,000 gallons of B20 will be sold to fleets and citizens with diesel vehicles at this site during its first year of operation. 
 
 "Biodiesel is a very easy way for our country to lessen its dependence on foreign oil-producing countries and at the same time offer a more environmentally- friendly fuel for consumers to use," said Joseph Mirabito, president of Mirabito Fuel Group.

Mirabito to receive $142,000 for biodiesel stations

Maui, Hawaii-based Pacific Biodiesel recently received the American Society of Mechanical Engineers-Hawaii Section's annual Outstanding Project/Design Competition Award. The award recognizes outstanding mechanical engineering-related projects or designs in Hawaii, Guam and American Samoa that have been completed within the past five years. Pacific Biodiesel earned high marks for the design of its Sand Island biodiesel plant. The plant was built in 2000 and uses grease trap waste as a production feedstock. The first Pacific Biodiesel plant was built on Maui in 1996 as the answer to grave concerns over potential environmental and health problems resulting from restaurant grease clogging the Central Maui Landfill. 
 
 "Being a mechanical engineer by trade, I am thrilled by this award," Pacific Biodiesel President Bob King told Biodiesel Magazine. "It's an honor and also a validation of our biodiesel process as well as our physical facility."
 
 More information about Pacific Biodiesel is available online at <a target="_blank" href="http://">www.biodiesel.com. </a>

Area residents gathered at Pacific Biodiesel's Sand Island facility for the plant's grand opening in 2000.

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Pacific Biodiesel receives ASME award

The 2004 Biodiesel Handling and Use Guidelines is now available. This updated version of the popular industry publication features a "frequently asked questions" section, expanded "biodiesel basics" information and the most current blending information available. 
 Published by the National Renewable Energy Laboratory (NREL), the document is a guide for those who blend, distribute, and use biodiesel and biodiesel blends. It is intended to help fleets and individual users, blenders, distributors and those involved in related activities understand procedures for handling and using biodiesel. NREL's Shaine Tyson said the recommendations of U.S. biodiesel producers and technical experts were taken into account when updating the publication. 
 The publication is free and available online at<a target="_blank" href="http://"> www.nrel.gov/vehiclesandfuels</a>/npbf/feature_

 guidelines.html.

NREL releases 2004 Biodiesel Handling and Use Guidelines

Bio-Diesel Canada Inc. announced in late September that John W. Cooper has joined the company as president and CEO, effective immediately. Cooper has extensive experience in the Canadian energy distribution and service industry, having spent nearly 20 years with Superior Propane, Canada's leading marketer of propane. 
 
 Bio-Diesel Canada is a marketer and distributor of biodiesel, and provides conventional diesel fuel and related services to its customers. 
 Cooper can be reached at <a href="mailto:jcooper@biodieselcanadainc.com. ">jcooper@biodieselcanadainc.com. </a>

Bio-Diesel Canada Inc. announces new CEO

The recent passage of biodiesel tax incentive legislation makes this a time where a unified, informed biodiesel industry is more important than ever. The 2005 National Biodiesel Conference & Expo, being held Jan. 30-Feb. 2 in Ft. Lauderdale, Fla., will provide the platform for bringing together and energizing a broad range of biodiesel stakeholders.
 
 This timely, vital national conference and exhibition was created to meet the educational needs of all biodiesel stakeholders-fuel producers, petroleum distributors, marketers, biodiesel consumers, feedstock growers and processors, in addition to those interested in the technical issues.
 
 You will hear from and interact with the most influential industry experts, and exciting public figures and leaders about the role of biodiesel as a component of our energy future. Feasibility and investment, marine applications, cold flow, state and federal legislation, marketing techniques from the successful European industry, and an all-star user panel are just a small sampling of seminar topics. A common thread of the conference will be new, cleaner diesel technology mandated by the U.S. EPA and what it means for consumers and the biodiesel industry. 
 
 A tentative schedule with more conference details is at <a target="_blank" href="http://">www.biodiesel.org.</a>

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Update: 2005 National Biodiesel Conference & Expo

The National Biodiesel Board (NBB) announced that Peter Cremer North America LP of Cincinnati, Ohio, is the first BQ-9000 accredited producer of biodiesel under the National Biodiesel Accreditation Program-a cooperative and voluntary fuel quality program that operates as an autonomous committee of NBB. 
 
 "The BQ-9000 program was developed to promote the commercial success and public acceptance of biodiesel by recognizing producers and marketers who demonstrate compliance with high quality standards," said Joe Jobe, executive director of NBB.
 
 The BQ-9000 program is a unique combination of the American Society for Testing and Materials (ASTM) specification for biodiesel and a quality systems program that includes storage, sampling, testing, blending, shipping, distribution and fuel management practices. 

 The certification process, which is open to all companies that actively-or plan to-produce, distribute or market biodiesel either in its pure form or for blending, includes an application review and on-site inspection by independent auditors. The two types of accreditation in the program are Accredited Producer and Certified Marketer.

Peter Cremer North America becomes first BQ-9000 accredited biodiesel producer

The fall board meeting of the National Biodiesel Board will be held Nov. 16-17 at the Adams Mark Hotel in St. Louis. Members, associate members and other interested parties are welcome. Agenda items include governing board elections, committee meetings and a networking reception.
 
 To register, contact Lola Helming at<a href="mailto: lhelming@biodiesel.org"> lhelming@biodiesel.org</a>. If you are interested in sponsoring the reception, please contact Tammy Sachse at <a href="mailto:tsachse@biodiesel.org.">tsachse@biodiesel.org.</a>
 
 Hotel reservations can be made by calling (314) 241-7400 or (800) 444-2326.

Register now for November NBB board meeting

In partnership with the Petroleum Marketers Association of America (PMAA), the National Biodiesel Board (NBB) has started a Web-based informational system for petroleum distributors called the Biodiesel Education Network (BEN), where interested parties can send in questions. 
 
 Some facts about Ask BEN:
 4 Resource for petroleum distributors to 
 ask technical, marketing and other 
 biodiesel questions
 
 4 Found on PMAA Web site 

 (www.pmaa.org)
 
 4 A biodiesel/petroleum expert answers 
 all questions within 48 hours
 
 4 BEN has helped over 180 petroleum 
 professionals since inception in July
 
 4 There are over 1,000 petroleum 
 distributors carrying biodiesel nation-
 wide, and growing
 
 4 Funded by the USDA Biodiesel Education 
 Program

New educational network boosts petroleum industry's biodiesel interest

"Jumpstart Our Business Strength."
 
 That's what biodiesel proponents had in mind when they added tax incentive language to the acronym-friendly American JOBS Creation Act of 2004, also known as the FSC-ETI bill or H.R. 4520. This legislation finally came to fruition Oct. 22 when President George Bush penned his signature on the bill the U.S. Senate passed 69-17 on Oct. 17 and the House passed 280-141 four days earlier.
 

 For the biodiesel industry, this bill will certainly have the potential to jumpstart business strength. The biodiesel tax incentive gives 1 cent 
 per percentage point of first-use biodiesel to the fuel blender. First-use biodiesel includes soybean oil or any other virgin non-recycled oil. A gallon of B20, for example, will give the blender 20 cents. Second-use biodiesel, which includes any recycled oil, gives the blender a half-cent per percentage point. A gallon of B20 will give that blender 10 cents.
 
 According to National Biodiesel Board (NBB) President Bob Metz, the different tax incentives were created because recycled oil is typically half the price of virgin oils. "We wanted to keep all feedstocks on a level playing field," Metz told Biodiesel Magazine. "There was an effort to give neither recycled or virgin oil any advantage."
 As it stands today, the incentive will take effect Jan. 1, 2005, and last for two years.
 
 A hard-fought battle 
 The history of the biodiesel tax incentive, from inclusion to passage, is a long one. Simply ask any member of the NBB or American Soybean Association (ASA), who tirelessly lobbied for the bill to be passed. They worked with political figures like Sen. Chuck Grassley, R-Iowa; Sen. Tom Daschle, D-S.D.; Sen. Blanche Lincoln, D-Ark.; Rep. Kenny Hulshof, R-Mo. and many others. "This was a very bipartisan effort," Metz said. Finally they have seen success. 
 
 "We knew we needed a tax incentive to be competitive with No. 2 diesel," Metz said. "Diesel has incentives and rightfully so. But it was hard to compete with that. Once we could be competitive in price, we felt our product would sell itself, because it is home-grown and [environmentally] clean."
 
 The biodiesel tax incentive language, combined with the volumetric ethanol excise tax credit (VEETC), was written by Grassley staff member Elizabeth Parish with much help from both sides of the aisle, according to Metz. The package was added to the energy bill, which failed to pass in November 2003. It was then added to the transportation bill, which stalled. Finally, the incentives found a home in the JOBS bill, where it passed through both the House and Senate. "[The biodiesel tax incentive] was more germane to that bill because it's a tax bill," Metz said.
 
 Parish had an advantage when writing the biodiesel tax incentive, Metz said. She looked at the pre-VEETC ethanol tax credit, identified some problems that had surfaced and corrected them in the biodiesel language to make sure biodiesel didn't fall into the same trap. "Many people say, 'Give the incentive to me when I buy [biodiesel],'" Metz said. "But there's no incentive for people to blend it if there's no financial reward. This encourages [blenders] to make the financial inputs to put in an infrastructure to blend right at the pipeline."
 
 When the biodiesel blender receives the tax incentive, the savings will theoretically be passed along to the retail and consumer levels. For example, one Southwest retailer told Biodiesel Magazine that his station would attempt to pass along as much as 12 cents of the 20-cent excise tax credit on B20 to the consumer. 

 "If they don't pass along part of that incentive, they won't sell any biodiesel, and they will have built the infrastructure for nothing," Metz said. "That's the beauty of this arrangement."
 
 Awarding incentives to the biodiesel blender is common in Europe, where the biodiesel industry is more mature than the United States.
 It is currently unofficial how the blender would receive the incentive. NBB Executive Director Joe Jobe told Biodiesel Magazine nothing is certain until more details are worked out. "Our interpretation of statutory language will indicate the terminal owners submit excise tax return papers with their payment, and they would be able to take credit against that liability," Jobe said.
 
 Currently, biodiesel blenders pay 24.4 cents per gallon of fuel sold, no matter the blend. With the legislation in place, one gallon of B20 will give them a 20-cent tax credit, thus the blender will only pay a 4.4-cent tax on the same fuel. The credit is taken from the U.S. general fund and put into the Highway Trust Fund (HTF) before given to the blender. This ensures that HTF funding is unaffected by the program.
 
 Growth projections
 In 1999, only 500,000 gallons per year of biodiesel was being produced in the United States. That number grew to 2 mmgy in 2000, and by 2003, the country was producing 25 mmgy, according to Neal Bredehoeft, president of the American Soybean Association (ASA). This year, over 20 biodiesel plants are on task to produce 30 mmgy of the oil-based fuel. When the tax incentive goes into effect, this number could increase dramatically. 
 
 After the biodiesel legislation passed, some people estimated biodiesel plant capacity to grow to 150 mmgy in the next few years. If that is the case, soybean demand would increase to 100 million bushels per year. Metz said the new tax incentive could create as many as 50,000 new jobs. Existing biodiesel plants could expand production to meet demand, while several biodiesel projects in the planning stages would be able to move forward. In the end, farmers, producers, blenders and consumers could all benefit from this new legislation.
 
 "This will have a huge effect on the industry," Metz said. "The timing is perfect."
 
 Metz also mentioned the U.S. EPA's recent mandate on oil producers to reduce the sulfur content in diesel fuel. Right now, diesel contains 500 parts per million of sulfur. The EPA said the number must be reduced to 15 parts per million by 2005. The process of removing sulfur from the diesel makes it an extremely dry fuel that won't function in today's diesel engines. Oil producers would need to add a lubricity agent, and a percentage of biodiesel as small as B2 would give diesel fuel more lubricity than it currently has. "When people decide what lubricity to use, they do have several choices," Metz said. "But the fact is, this [biodiesel] incentive is now out there, and it gives us an advantages over the other choices." 
 

 Mixed reactions
 Enthusiasm for the new bill varies throughout the industry. Between associations, blenders, lenders, and current and future producers, some said the legislation will make a difference in everyday business activities, while others said not much will change.
 
 For example, Imperial Western Products, which didn't produce biodiesel last year because of the lack of Commodity Credit Corporation funding, will not see much significant change, according to Sales Manager Bob Clark. "With this incentive, it will hopefully broaden the markets for us and increase demand," Clark said. "But for us, and I would think for many others, [business] won't change very much."
 
 Ultimately, an increase in demand starts with the consumer. Will lower prices be enough for consumers to use the renewable fuel? No one knows for sure. Clark also said it was tough to project an impact on the industry when it is uncertain how the new incentive will be awarded and used. Oversaturation is also a concern.
 
 "We know of five or six projects in development, which is interesting from my perspective," Clark said. "If only three 30 million gallon plants are built, that will [be enough to] exceed demand."
 
 Mike Ellis, president of Clinch River Valley Energy Group in Sevierville, Tenn., told Biodiesel Magazine that unless the consumer sees the savings from the tax incentive, the bill won't benefit the biodiesel industry. "One of our distributors told me that it's not going to have any effect on the pump at all," Ellis said. "I don't see blenders passing that incentive along. I'd like to think it's going to help, but it's going to depend on whether they pass on the savings."
 
 Ellis also pointed out that biodiesel in Tennessee is already competitive with No. 2 diesel because wholesale regular diesel prices are so high. When asked if the tax incentive would affect his proposed biodiesel project, Ellis replied, "The jury is still out on that."
 Roger Peterson, a spokesman for future producer SoyMor, said the biodiesel legislation had no effect on the company's construction plans. SoyMor had already broken ground, and Peterson told Biodiesel Magazine the project would've started with or without the JOBS bill.
 
 In contrast, David Max of future biodiesel producer Sustainable Systems LLC in Missoula, Mont., said the biodiesel incentive is already helping his project move forward. He hopes to break ground this spring.
 

 "This [biodiesel legislation] is the missing piece of the puzzle that will help us really develop a market for our product," Max said. "We needed this to demonstrate that if we build [the plant], we can sell the fuel. With the excise tax lowering pump prices, the sky is the limit."
 
 Pacific Biodiesel Marketing Director Kelly King said the JOBS bill is positive, because it will allow the current biodiesel producer to look at other feedstocks. Pacific Biodiesel currently refines recycled vegetable oil, but, with the new incentive, it can afford to look into other options.
 
 This bill shows support for renewable fuels on a national level," King said. "We've had great support in our county and state. This is a good indication nationally."
 
 Mike Carson of Premier Ag LLC, a biodiesel blender and marketer, said, although exact details were scarce, the company will be sure to pass savings on to the consumer. "We have to do that because of the competitive pricing," Carson said.
 
 Meanwhile, lenders are concerned about the incentive's two-year span. Denny DeVos, senior vice president of Ag Country Farm Credit Services, said lenders and investors need to feel comfortable that the biodiesel industry is a more permanent fixture before they are willing to give funds to new projects. "If you're making a 10-year commitment for lending and the tax credit is only two years, it puts the lender in a bad position," DeVos said. "If it moves forward like the ethanol credit, I think you will see expansion, but there will have to be a pretty concrete assurance."
 
 Despite mixed reactions, organizations like the NBB and ASA celebrated the victory when the JOBS bill finally passed, but they are aware their job is far from over. When the tax incentive expires in 2007, they plan to get the incentive extended. 
 
 "We've been a niche market for so long," Bredehoeft said. "Now biodiesel is going to move from a niche market to being more promotionalized." 
 
 Jessica Williams is a Biodiesel Magazine staff writer. She can be reached at <a href="mailto:jwilliams@bbibiofuels.com">jwilliams@bbibiofuels.com</a>.

Rep. Hulshof visits with NBB Chairman Metz, right, in Washington, D.C.

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Sen. Grassley speaks at a press event in Washington, D.C., with the ASA's Ron Heck, center, and the NBB's Jobe, right.

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The biodiesel excise tax credit housed in the American JOBS Creation Act of 2004 wasn't necessarily the long-term guarantee project developers had wished for, but the legislation has given existing U.S. producers and distributors something to smile about.

Making Cents

Gene Gebolys was an economic development official with the Massachusetts governor's office in 1994 when biodiesel entered his life, planting in him a seed of interest that would eventually transform his career. A successful businessman named Jim Ricci was interested in purchasing a Massachusetts oleochemical plant owned by Proctor and Gamble. Ricci, seeking guidance from the governor's office in brokering the deal, intended to turn the facility into the nation's first large-scale biodiesel plant. 

 
 "That's when I first heard the word biodiesel," said Gebolys, who helped make the deal happen and, two years later, joined Ricci's company, Twin Rivers Technologies (TRT). 
 
 Gebolys was enamored with biodiesel. At a time when most Americans had no idea that the renewable fuel even existed-much less what it was good for-Gebolys joined industry pioneers already fighting hard to get the fledgling industry off the ground. Of course, getting the petroleum industry, engine manufacturers and consumers to accept biodiesel was-and still is-a hard-fought battle. As late as 1999, three years after Gebolys joined the industry, annual U.S. consumption of biodiesel was just 500,000 gallons. That number has grown greatly due in large part to the marketing and production efforts of a company Gebolys would eventually create. 
 
 Shortly after joining TRT in 1996, Gebolys realized that the route the company was taking to produce biodiesel was, in his view, simply not going to work. TRT was, and continues to be, a full-line oleochemical producer and supply company that produces fatty acids, glycerin and methyl esters. But their biodiesel division was slow to get going. According to Gebolys, the scale of the newly purchased plant was out of sync with the size of the biodiesel industry at that time. He could see that biodiesel wasn't fitting in at TRT. So in 1998 Gebolys spun off the biodiesel division into a stand-alone company. He became founder and CEO of World Energy Alternatives LLC.
 
 His initial strategy was simple: World Energy would make its mark by marketing energy, not necessarily creating it. 
 
 "By then it was clear to me," he said. "For the company to be successful, it needed to focus on selling and distributing renewable Btus at a premium. We started selling niche energy rather than focusing on how to produce it."
 
 The birth of a biodiesel leader
 Looking back on his split with TRT, Gebolys now feels that TRT and World Energy followed appropriate paths by pursuing their respective strengths. For World Energy, biodiesel was it. 
 
 Based in Chelsea, Mass., World Energy has built the largest biodiesel distribution network in the United States, operating a delivery infrastructure with national reach. They are a licensed fuel seller in 35 states, a total even major oil companies seldom reach. Customers include the U.S. Postal Service, the U.S. military, large commercial operations and numerous government agencies.
 

 World Energy has capitalized on its ability to aggregate customers. For example, Gebolys explained, for someone to start up a large-scale biodiesel facility in Oklahoma, they would only have a couple of customers. They would need to reach a more broad market further away from their area to be profitable. He said small-scale plants could meet the demands of local customers but tend to be inefficient. World Energy gathers customers from large areas and provides a market for large-scale producers. "The upside is that we don't have to buy in from fuel distributors in every market," Gebolys said. "Where a willing and able distributor has yet to surface, we can go in and sell to customers directly."
 
 World Energy also handles credit-trading capabilities for EPAct customers. World Energy facilitates the sale of those credits and often replaces them with credits through biodiesel. "From our beginning, we have been absolutely committed to working with environmental groups and health groups," Gebolys said.
 
 From spin-off company to partnership building
 Several U.S. industries, including alcohol, tobacco and fuel, are intensely regulated and taxed. Fuel taxes provide a large source of revenue to the U.S. government. Due to regulations, it becomes a significant task to keep up with the licensing procedures required when distributing fuel in even one or two states. So how does World Energy maintain licenses in 35 states? "If you're going to be a broad aggregator of the market you better prepare to be licensed all over the country," Gebolys said. "It's a monumental undertaking to keep track of all of that. 
 
 We became licensed so our manufacturing partners don't have to deal with it." 
 
 World Energy typically has four or five manufacturing sources per year, with contracts being both long- and short-term. 
 Petroleum industry relationships are, of course, equally important to World Energy. One company with World Energy for the long run is Gulf Oil LP. Gulf Oil has been providing financial backing and a platform for growth to the company since its start in 1998, making World Energy the first alternative energy company backed by a major petroleum company. "Gulf is known to be a very forward-looking company," Gebolys said. "That makes them an ideal partner for us."
 
 With Gulf Oil's backing, sales have continued to improve, growing by over 50 percent every year of existence. World Energy sells at least 50 percent of the biodiesel gallons consumed in the United States annually.
 
 World Energy's success is rooted in customer ties. "We've always been about-and focused on-the customer, from the get-go," Gebolys said. "In the mid- to late 90s, while people were focused on plants, we were jumping on airplanes and talking to customers and prospects."
 Gebolys said his approach is simple: The most efficient way to provide consumers with consistent supplies of biodiesel is to provide high-quality fuel through a distribution system that fits-as seamlessly as possible-into the petroleum industry's existing infrastructure. 

 World Energy now has 50 distribution "nodes," or central distribution points, across the United States. Gebolys said only in very rare exceptions can customers not get fuel within 24 hour's notice. 
 
 The company also has a small but growing global presence-they've exported small amounts of biodiesel to Southeast Asia, Canada, Mexico and Europe-but the company's main focus remains in the domestic market.
 
 A Florida asset boosts production
 World Energy greatly increased its biodiesel production capability this summer with the reopening and upgrading of an 18-mmgy plant in Lakeland, Fla. According to the company, the plant is the largest multi-feedstock biodiesel production facility in the United States. Purada Processing LLC, a World Energy wholly-owned subsidiary, manages the facility and sells the plant's refined glycerin. "It really gives us all facets of the biodiesel business," Gebolys said. "It makes us knowledgeable in all aspects of the industry."
 
 Although World Energy continues to obtain most of its biodiesel through contract manufacturing, the Lakeland plant guarantees that World Energy can provide reliable supply. "With the diversification, if other sites go down, World Energy customers will never know it," Gebolys said.
 Gebolys said the industry has, at times, experienced inconsistency of supply. That has made it difficult for some distributors and customers to fully embrace the industry. World Energy is facing that head on. The Florida facility has proven capabilities with both virgin and recycled oils.
 
 The possibility of expanding production
 "The future looks like the past, except in a much larger scale," Gebolys said of his company. World Energy grew by creating lines of distribution from the customer backwards. In other words, they started by bringing in a few customers and building up the company's assets and capabilities where railcars and distributors were needed.
 
 "Keeping it simple," Gebolys said. "Our philosophy is to focus on the customer and deliver value to them."
 World Energy continues to grow with new offices in Minnesota and Ohio. They now have six locations for 43 employees. Gebolys said they are working on the first non-United States office that could be announced by the end of the year.

 
 Meanwhile in the United States, World Energy is looking to increase its own biodiesel capacity. They are in a joint venture to build a new start-up facility in Delaware. World Energy is contracted to own all of the output of Mid-Atlantic Biodiesel LLC. "I'm a real believer in the people behind the project," Gebolys said.
 
 Martin Ross, president of Mid-Atlantic, said he first contacted World Energy three years ago when looking at supply and demand estimates within the biodiesel industry. "It was part of market research," Ross said. "Gene is a great guy, and we hit it off immediately. It developed into a partnership."
 
 World Energy helps take the risk out of selling the product once the plant is running. This helped Ross gather financing for the project. "We're five years ahead of where we thought we would be," Ross said.
 
 World Energy's alliance with Gulf Oil helped solidify Ross' beliefs. "Even with ethanol, we have to have a partnership and alliance with the current fuel infrastructure," explains Ross. "We can't have an island with a plant and not get into the fuel industry supply lines."
 The Mid-Atlantic plant is the first project World Energy has been involved in that is a pure start-up. Gebolys feels the plant is located in a very strong market. "We bring a market to the project," Gebolys said. "We are able to bring a whole existing list of customers to the mix. We're able to cut out a lot of risk in any new venture."
 
 The 5-mmgy plant held a ceremonial groundbreaking in September and could begin production by fall 2005.
 
 A boost from the tax credit
 The U.S. biodiesel industry, World Energy included, is expected to receive a boost from the passage of the American JOBS Creation Act (see page 16). However, Gebolys cautions against getting carried away with the good news. 
 
 "This is a great step in the right direction and it will certainly help, however, it is a two-year credit as it sits today," Gebolys said. "New capital investment still faces a speculative environment. You still have to sell the value of biodiesel rather than the price of biodiesel." Gebolys added that this is what World Energy has done since its inception-sell the value of biodiesel.

 
 Gebolys was pleased with the biodiesel tax incentive but doesn't anticipate that it alone will revolutionize the industry. "On Jan. 2, I don't expect there to be a wild demand for biodiesel," he said. "The development of biodiesel is a marathon, not a sprint. The technology and the industry are still very volatile, very young. We would do well by taking the long view."
 
 World Energy's place in the biodiesel future
 Gebolys credits much of World Energy's success with the biodiesel pioneers that came before him. Ricci, for example, helped introduce Gebolys to biodiesel.
 
 "Jim was the first guy to bring vision, scale and commercial viability to biodiesel," Gebolys said. "He was always convinced it would be big in the U.S." 
 
 Gebolys also credits Bill Ayres and Doug Pickering and those that came after them at Ag Environmental Products LLC. "These were people seeing things that didn't even exist," Gebolys said. "I'm probably a member of the second generation. It started with just a handful of visionaries."
 
 Those visionaries would likely be proud to see World Energy's accomplishment of being named a Clean Cities National Stakeholder award winner in 2004. "It's indicative of how far biodiesel has come," Gebolys said.
 Biodiesel will emerge in the next decade or so as an important component of the energy portfolio of this country, according to Gebolys.
 
 He feels the biggest challenge is that the economics of biodiesel is beyond one's control. A stakeholder is squeezed between multiple commodities such as diesel, soybean oil and other feedstocks that do not trend in any discernable way with each other.
 
 "This country has an addiction to fossil fuel," Gebolys said. "For a host of social reasons, that simply cannot continue indefinitely. Society is almost certainly going to continue to invest in figuring out reasonable, thoughtful alternatives to its continued dependence on foreign oil. I believe biodiesel is that alternative." 

 
 Dave Nilles is a Biodiesel Magazine staff writer. He can be reached at<a href="mailto: dnilles@bbibiofuels.com"> dnilles@bbibiofuels.com</a>.

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World Energy reopened this Lakeland, Fla., plant this summer.

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In just six years, Chelsea, Mass.-based World Energy Alternatives has built the largest biodiesel distribution network in the United States, operating a delivery infrastructure with national reach.

Biodiesel's Mass. Distributor

It is now possible to determine the volume of biodesel and the renewable fuel's precursor fatty oils simultaneously through infrared (IR) analysis to an accuracy of 0.1 volume percent. This, along with ascertaining the fuel's cetane number, its cetane improver volume and its density is made possible by advanced spectroscopy. 
 
 In the United States, most biodiesel blends are produced accurately, but in rare cases, B2 has been found to contain both lower and higher percentages of biodiesel. The introduction of PetroSpec's Cetane 2000 now allows distributors to verify the precise volume of biodiesel in diesel/biodiesel blends. 
 
 The technology also allows distributors to determine the fuel's cetane number. Most diesel customers currently use a "cetane index" (a mathematical model using distillation and density as a correlation to the cetane number) instead of a cetane number to evaluate their fuel's combustion quality. However, because biodiesel dramatically changes the distillation qualities of the blended diesel fuel, the current cetane index equation is unusable for the estimation of a cetane number. Therefore, the blender is forced to use "cetane engines" or correlative cetane methods and analytical instruments such as the Cetane 2000.
 
 The Cetane 2000 analytical instrument is the result of a two-year co-development project between BP, Shell and PetroSpec. Cetane 2000 is the first analytical tool that includes analyses for density, cetane number and cetane index plus cetane improver, total aromatics, polynuclear aromatic and biodiesel content in the same portable instrument. 
 
 In an effort to produce a cost effective and accurate instrument that would allow BP and Shell to monitor diesel quality worldwide, BP and Shell Research approached PetroSpec with an idea for determining cetane numbers through the detailed analysis of mid- and near-infrared spectra. Hundreds of fuels were provided to produce a European calibration set in which each of the diesel samples included a minimum of three independent cetane engine ratings. Many samples were rated by 17 independent laboratories. The cetane number was the average of the multi-rated results, optimizing the chance of an accurate cetane number. The Ethyl Corporation calibration set included over 600 samples from all over the United States with varying amounts of cetane improver. The correlation between the measured cetane number and the spectral data obtained using Cetane 2000 is outstanding. 
 
 How does mid-IR detect the biodiesel?

 In the mid-IR spectral range, there are two spectral positions that uniquely identify biodiesel in diesel fuel. The level of absorbency (large or medium) is a function of spectral positioning (see Figure 1). 
 
 The absorbencies in the mid-IR region for biodiesel, being unique, are separated from other component absorbencies in the fuel. The absorption of light is directly proportional to the quantity of biodiesel. Thus, by using a gravimetrically-produced calibration set of biodiesel in diesel, the amount of biodiesel in the fuel can be quantified. This spectroscopic separation allows for the characterization and quantification of biodiesel in much the same way as the physical separation that is produced on a gas chromatograph. The accuracy of this method is exceptional (see Figure 2). Over the range, the instrument has been calibrated, (0 percent to 30 percent biodiesel) the standard error for the calibration is 0.09 percent.
 
 Another question that has been asked of this method is do the results vary with different types of biodiesels made from different types of oils? An experiment was performed to show that ester concentration predictions do not vary with biodiesel produced from different sources. As expected, all fatty acid methyl esters gave similar concentration results. All fatty acid methyl esters have very similar molecular weights being produced with fats that average 18 carbons in length. 
 
 Finally, this analysis can distinguish between the methyl ester fatty acid (biodiesel) and the raw fat, which is an ester of trigylcol. Figure 3 shows the infrared spectrum between 1,000-1,300 wavenumbers for two raw fats (canola and peanut oil) and two FAME samples (methyl derivatives of lard and yellow grease). It is clear that there is a significant difference between the spectra of the raw fats and the samples of FAME. The raw fat has a single band of around 1,160 wavenumbers, and FAME has two bands at 1,170 and 1,200 wave numbers. Testing indicates that as low as a 1 percent contamination of fat in the sample can be determined.
 
 It is now easy for anyone to accurately analyze biodiesel blends. Designed for laboratory or field use, Cetane 2000 quickly provides important diesel fuel quality information wherever it is needed. Refiners and regulators can monitor blending operations and measure final specifications more efficiently. Marketers and distribution groups have a cost-effective quality control tool for monitoring diesel fuels as the fuels move through the distribution system. This virtually eliminates the sale of non-branded product throughout the distribution system and the liability of selling product that is off specification. n 
 
 Authors G. Patrick Ritz, Ph.D., and Michael C. Croudace, Ph.D., represent PetroSpec, a PAC company. Ritz can be reached at <a href="mailto:ritzpc@aol.com. ">ritzpc@aol.com. </a>Croudace can be reached at <a href="mailto:petrospecw@aol.com. ">petrospecw@aol.com. </a>

Cetane 2000 is an analytical method that utilizes this diesel fuel analyzer.

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A new technology allows blenders to accurately analyze biodiesel blends. Designed for laboratory or field use, Cetane 2000 provides important diesel fuel quality information wherever it is needed.

Mid-Infrared Fuel Analysis

Gazing up curiously at the alternative fuels dispenser at the Amigo Mart Conoco station at the corner of Baca Street and Cerrillos Road in the heart of Santa Fe, N.M., a customer might think pump No. 10 has been mass produced by a giant international fuels distributor. The vibrantly colored pump has a sharp design-a very clean look-and clear, uncomplicated labeling. Filling up their vehicle's fuel tank with one of three biofuel blends, the customer would have no idea that the pump they are using is 10 years old, refurbished and one of a kind.
 That's right. The alternative fuels pump fondly referred to as the Baca Street Biofuels Station is, in a sense, homemade. 
 

 The pump, which was dedicated by New Mexico Gov. Bill Richardson in early October, is likely the first of its kind in the nation, perhaps the world. It was designed, created and is maintained by a not-for-profit organization called Renewable Energy Partners of New Mexico (REP), an organization now run by Biofuels Program Director Charles Bensinger. The pump offers Santa Fe drivers a choice of B20, E85 or E10. It's what REP refers to as "something for everyone."
 
 Bensinger developed the concept and raised the grant money for the station and also administers its operation in conjunction with Amigo Mart. He is responsible for such tasks as ordering fuel and handling calls from customers (some delighted, some confused). At the end of the day, REP's mission is being accomplished. More of Santa Fe's 80,000-plus residents are buying clean fuels. 
 
 "Our intention is to clearly demonstrate that domestically-produced renewable fuels can be used by anyone right now in their existing vehicle without modification," Bensinger said. "We wanted to make these alternative fuels available at a typical gas station. We didn't want it on the outskirts of town."
 
 Bensinger said Santa Fe is a biodiesel-friendly town. "We've got a good mix of people here, from people pulling horse trailers and driving diesel trucks to those driving diesel-powered Volkswagons. It's a very environmentally-conscious community … and a wealthy community where people are willing to pay for the fuel they want." 
 
 The Biofuels Station is the result of what Bensinger describes as a two-year process in which REP developed the station's concept, found an appropriate site and raised the funds needed for the equipment and the fuel. 
 
 The U.S. DOE and the National Ethanol Vehicle Coalition provided major equipment grants (administered through the New Mexico Energy, Minerals and Natural Resources Department) and local foundations pitched in with administrative and operations support. 
 
 The pump itself was purchased for $2,500, a bargain compared to a new pump, which can cost $15,000 to $25,000, Bensinger said. 
 A grueling eight-month period of site preparation (including the installation of a 10,000-gallon underground biodiesel storage tank) and creative work led up to the project's completion. The storage tank was delivered in June and installed a few weeks later. The dispenser itself was painted at an Albuquerque auto body shop and installed in late July. Special graphics for the dispenser were added to the pump in mid-August. Everything is distinctly identified on the pump and color-coded-right down to the hoses-to clearly differentiate between the fuels. 
 REP purchases its biodiesel from Colorado-based Blue Sun Biodiesel, which has additives that reduce NOx and improve the cold flow properties of biodiesel.
 
 REP installed its first biofuels station, an E85 pump, at a separate Amigo Mart in Santa Fe in 2003. The group is currently working on a grant for a 20,000-gallon aboveground biodiesel tank that would serve area fleets. Bensinger is also working on creating another not-for-profit group that would help communities start up their own biodiesel and ethanol stations. "I'm working on a six-step plan to get biofuels into more communities," he said. 

 
 For more information about Renewable Energy Partners of New Mexico or the Baca Street Biofuels Station, go to<a target="_blank" href="http://"> www.
 renewableenergypartners.org. </a>
 
 Tom Bryan is editorial director of Biodiesel Magazine. He can be reached at<a href="mailto: tbryan@bbibiofuels.com. "> tbryan@bbibiofuels.com. </a>

The Baca Street Biofuels Station is the first triple renewable fuels dispenser in the United States.

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Gov. Richardson speaks at the dedication of the triple renewable fuels station.

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Renewable Energy Partners of New Mexico has created a one-of-a-kind pump that offers Santa Fe drivers a choice of B20, E85 or E10

Take Your Pick

Biodiesel is widely accepted as a fuel for transportation fleets, but the idea of using it for backup power generation has, to put it mildly, remained stationary. However, despite challenges, the idea has merit and there appears to be a growing interest in running standby generators on biodiesel blends to produce green power. 
 
 Standby generators, also known as backup generators or emergency generators, are commonly found at "critical facilities"-airports, hospitals, military bases, police stations, prisons, telecommunications centers and water treatment plants. Standby generators are present in all different types of manufacturing: mining and industrial facilities for chemicals, food processing, ore processing, pharmaceuticals, printing plants and semiconductors. Other hosts for standby generators include bank and credit card facilities, high-rise apartment buildings, laboratories, office towers and universities. Finally, small standby generators are found in millions of homes and small businesses across the United States. 
 
 There are an estimated 100,000 standby generators in the United States serving industrial and commercial facilities. Collectively, these standby generators represent about 10 percent of total U.S. generating capacity. 
 The large majority of standby generators are diesel engines, which provide independent, on-site energy sources. The large majority of these diesel engines sit idle all year, except for a few dozen hours when tested or operated for short-term power outages.
 

 Increasing use of standby generators
 The steady growth in the demand for power coupled with the challenges of siting massive new power plants and highly visible transmission lines is making decentralized energy resources more popular. The electric industry term is called "distributed generation," as distinguished from large "central generation" plants.
 
 Standby generators are one type of distributed generation resource. Standby generators can start and reach full load in less than 15 seconds. Standby generators may be integrated directly into the power grid, but most are wired to meet specific electric needs at their host facility.
 
 More and more utilities are working with their large commercial and industrial customers to operate standby generators in order to help meet peak loads on the power grid. Customers are being paid to generate power for up to 100 hours per year; this is on top of the normal hours of power generation for testing and emergency outage purposes. In practice, the use of standby generators in anticipation of power shortages should prevent such blackouts. Utilities are asking customers with as little as a half-hour notice to operate standby generators for typically about three hours at a time on hot summer afternoons or cold winter mornings. 
 
 Biodiesel in standby generators
 Environmental restrictions can inhibit the use of standby generators for peak load management. Standby generators are normally exempted from air emission requirements as long as they are operated only for emergency purposes when the power goes out. If standby generators are operated for power generation purposes in non-emergency conditions, such as to meet peak power needs on the electrical grid, more stringent permitting rules may apply.
 
 Biodiesel may allow increased use of standby generators due to lower air emissions for most types of pollutants. Biodiesel also offers the opportunity to reduce soot deposits, unsightly exhaust gases and objectionable odors associated with diesel engines. Furthermore, biodiesel is less hazardous when spilled. All these benefits increase in importance for standby generators located near populated areas, which is typical. 
 
 While transportation fleets are experiencing a surge in the use of biodiesel, generation fleets are far behind. During the California blackouts of 2000 and 2001, a few standby generators experimented with the use of biodiesel. But these have been discontinued, except for a hospital using B100 with an additive to reduce nitrogen oxide emissions.
 
 Currently, one of the leaders in the use of biodiesel is the U.S. National Park Service (see Biodiesel Magazine, July/Aug. 2004). An overlooked aspect of their leadership has been to deploy biodiesel in standby generators as well as transportation fleets. Standby generators are burning B20 at Channel Islands, Glacier and other national parks. Mt. Rainier National Park is using B50 in two engines, each sized at 90 kilowatts (kW) or about 120 horsepower. Significantly, each engine runs for two weeks continuously and then is shut down for maintenance, while the other runs for a two-week period. They are located in a remote part of the park that is beyond the power grid and is open only in the summer months.

 
 A utility in Minnesota has been using B2 to B5 in a fleet of standby generators to meet peak power requirements for several years. A utility in Tennessee is embarking on an experiment with B100 with a large 2,000 kW generator that will be tested for 1,500 hours of continous operation starting in early 2005.
 
 A pilot project is underway with a target of 16 standby generators in the Olympic Peninsula of Washington State. The generators are located at facilities such as police stations, water treatment plants, hospitals and casinos. With the permission of the facility owners, the generators will be asked to operate for up to 100 hours per year with B20 or B100 as a way to defer capacity additions to the electric power systems. 
 
 The project is being sponsored by Bonneville Power Administration and an assessment on the use of biodiesel may be found at <a target="_blank" href="http://">www.bpa.gov.</a>There are significant questions about using biodiesel in standby generators that should be clarified over the next year. More needs to be learned about engine performance, fuel storage and emissions, comparative costs, regulatory acceptance and customer attitudes. At the same time, opportunities may also grow over the next year in the use of renewable energy credits and mandates for utilities to produce more green power. 
 
 Larry B. Barrett is president of Barrett Consulting Associates Inc. He serves utilities and other energy related companies in new product planning and market analysis. He may be reached at (719) 634-4468 and 
 <a href="mailto:lbbarrett@aol.com.">lbbarrett@aol.com.</a>

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When standby generators are used for power generation in non-emergency conditions, stringent emissions regulations are sometimes a factor. Sounds like a good time to use biodiesel, doesn't it?

Biodiesel on Backup

When New Jersey-based Pure Energy Corporation shipped its second consignment of U.S.-produced biodiesel to India in late August, it did so with an important personal guarantee from its president and CEO, Irshad Ahmed.
 
 "Whether we ship a gallon of biodiesel or 100 drums, we promise to showcase the best quality product the United States has to offer," Ahmed said. "We have an obligation to help India set a standard."
 
 Pure Energy is not a biodiesel producer. Rather, the corporation is a technology provider and an international distributor that purchases-and guarantees the quality of-biodiesel produced in the United States for export to other countries. 
 

 
 But make no mistake about it. Pure Energy isn't just another random exporter trying to capitalize on the deficiencies of a nation in need. 
 
 The truth is, shipping U.S. biodiesel overseas, especially halfway around the world to India, is not economical in small amounts. Pure Energy is shipping what Ahmed called "decent amounts-but a drop in the bucket really-not the shiploads one might think." He said the economies of scale that would make biodiesel exportation profitable are in the range of "tens of millions" of gallons per year. 
 "The shipping costs are prohibitive," he explained. "The costs would eat up a company if it didn't handle everything in a very strategic manner." 
 
 So why is Pure Energy shipping biodiesel to India? Because, Ahmed told Biodiesel Magazine, investors in the United States and Europe have an opportunity-and a responsibility-to help a nation of 1.2 billion people become less dependent on fossil fuels. Pure Energy is taking a long-term approach to biodiesel development in India, establishing credibility through consistent shipments of high-quality biodiesel over an extended period of time, not just in India but worldwide. Eventually, Ahmed said, the company will help nations such as India establish advanced production technology on their own soil. "We're not just exporting biodiesel, we are exporting technology and working with government and industry stakeholders," he explained. 
 
 Displaced from the World Trade Center after the Sept. 11, 2001, terrorist attacks, Pure Energy is probably best known for its patented Puranol and polymeric fuel additive systems for ethanol-diesel ("e-diesel") blends. In addition to providing high-quality biodiesel, the corporation has developed an integrated biorefinery technology platform for producing ethanol and chemicals from agricultural and municipal wastes.
 
 Celebrating its 10th anniversary this year, Pure Energy is what Ahmed calls a "total solution company" that creates and improves fuels. "You could say we soften up the sharp edges of biofuels," he said. 	
 
 The corporation is actively pursuing new technologies that will allow it to help the international biodiesel industry overcome NOx emission challenges and separation issues. It is also working on performance enhancement additives and exploring production technologies that would make it more feasible to produce biodiesel from not only oil seeds and waste oils, but lesser known feedstocks such as fish oil. "Anything that offers an advantage," Ahmed said. 
 Indian-born Ahmed, former president of the National Biodiesel Foundation, has always believed in biodiesel. That's one of the reasons he wants to see it succeed in India, where cleaner-burning alternative fuels are desperately needed. India is the world's second-largest producer of sugarcane and, for that sole reason, its government is aggressively pursuing ethanol production and use programs. However, Ahmed said, most of the nation's motor vehicles have diesel engines. "Ethanol alone is not going to do it," he warned. 
 
 The biodiesel Pure Energy has shipped to India is being used in government-backed demonstration projects. The latest consignment was shipped to Hindustan Petroleum Corporation Ltd., India's second-largest oil company. The shipment is supporting a pilot project taking place with Brihan Mumbai Electric Supply & Transport Undertaking, one of the largest bus fleets in the world. The project is primarily focused on reducing air pollution levels in the city of Mumbai. It is the first biofuels test program of its kind in urban transport in India. 

 
 The previous consignment of biodiesel shipped to India-"just a few dozen barrels," Ahmed said-was delivered in January to the nation's largest petroleum company, Indian Oil Corporation Ltd., for use in government-sponsored field trials with the Indian Railways and Haryana Roadways. India has the largest, most complex rail system in the world, accounting for the vast majority of all motorized transportation there. 
 
 "India wants to launch a major biodiesel effort, but they have not been able to lock in on a consistent source," Ahmed said. "That's why the fuel we have supplied them with is so important. They are going to set their standards on it-this is their reference-everything else could be based on these demonstrations." 
 
 Despite what is often reported in the mainstream media, Ahmed claimed, India actually has just two biodiesel plants, both in the "development stages" and "struggling." Nevertheless, he said, government officials are intent on building a major biodiesel industry that will complement its ethanol production plans. "The willpower is there," Ahmed said. 	 
 
 But what is not there is an abundant, sustainable feedstock supply or advanced process technology. Many Westerners believe that India has an abundance of vegetable oils (oil seeds) because the nation is famous for foods cooked in vegetable oils. However, according to Ahmed, India consumes 100 percent of the edible oils it produces and is a net importer of edible oils. 
 
 In addition to being the largest U.S. supplier of biodiesel to India, Pure Energy is actively working to establish local biodiesel production on the ground in that country. The corporation is committed to fulfilling additional biodiesel orders to support the Indian government's renewable energy initiatives until domestic producers have an adequate feedstock supply. 
 
 The only real hope today lies in non-edible tree oils, such as jatropha and pongamia. These oil trees are hardy plants that require minimum water and can grow in nearly all soil types.
 
 Plants like jatropha, which produce non-edible oil seeds, can grow very well in varied regions of India. Ahmed said farmers are eager to produce it, but there's a hitch: these plants take three to five years to produce full yields. "So, at best, India is at least five years away from mass production." 
 
 And that's the positive outlook. Ahmed said that unless U.S. and European companies invest in India's fledgling biodiesel industry, India will struggle for another 10 to 12 years. Ahmed has spent a significant amount of time in India, traveling there three times in 2004 alone, and has worked with India's Minister of Petroleum and Natural Gas as well as other government officials to help the country build a successful biodiesel industry. He said the corporation will continue to establish itself in the market as a trusted supplier. "Maintaining very high quality standards is critical to what they need right now," he said. "Indian producers should be able to look at U.S. biodiesel and say 'that's the biodiesel we want to get to.'" 
 

 Ahmed believes that U.S. biodiesel is "more consistent" than biodiesel produced in other areas of the world. He said that despite the fact that the United States lags behind Europe in production capacity, he believes the U.S. industry has leapt ahead of the world in research and development, quality control standards and process technology. He sees the exportation of these standards as a huge opportunity for American firms. "The future looks very bright in the near-term with Europe, Asia and India moving toward more and more biodiesel use," he said. 
 
 Pure Energy isn't the only U.S. company helping meet the growing international demand for biodiesel. California-based American Biofuels, a biodiesel production company that is 35 percent owned by Green Star Products Inc., recently announced that it had shipped a container-load of U.S.-produced biodiesel to Asia. The shipment is believed to be the largest order of biodiesel ever shipped from the United States to Asia. The company shipped approximately 6,000 gallons of biodiesel packaged in over 100 barrels. The company called the shipment "a major step in opening Asian markets to U.S.-produced biodiesel and biodiesel technology." 
 
 World Energy Alternatives LLC, the leading biodiesel distributor in the United States, focuses mainly on growing domestic markets for biodiesel. However, the Massachusetts-based company has dabbled in the export market and, according to the company's CEO, has a small but growing global presence.
 
 As for Pure Energy's immediate plans, Ahmed said, "We are probably not going to become a producer in the immediate future, but we will continue to be an ambassador of international biodiesel business. We are dedicated to meeting the growing international demand." n
 
 Tom Bryan is editorial director of Biodiesel Magazine. He can be reached at <a href="mailto:tbryan@bbibiofuels.com. ">tbryan@bbibiofuels.com. </a>

For Pure Energy Corporation, shipping U.S.-made biodiesel to India is more than just another export opportunity. It's a chance to help a nation of 1.2 billion people set meaningful, lasting fuel quality standards.

Shipping Biodiesel and Hope to India

November 3-5, 2004 
 International Exhibition Centre
 Shanghai, China
 This event is being launched by Reed Exhibitions, offering what organizers call a "one-stop marketing solution package" for industry players to expand their market share in China's huge environmental market. Pollutec is recognized as one of the leading exhibition brands by the international environmental protection industry sector. A similar show has been organized annually in France for more than 20 years; in 2002, it attracted 63,000 trade visitors and 2,388 exhibitors from 32 countries. According to organizers, Pollutec China 2004 has support from China's key government authorities, which include the China Association of Environmental Protection Industries, the China National Tendering Center of Machinery and Electrical Equipment, and the Shanghai Society of Environmental Sciences.
 86 21 6361 4450-115 .<a target="_blank" href="http://"> www.pollutec-china.com</a>/e/

 seminar/seminar.htm

Pollutec China 2004

November 8-10, 2004 
 Renaissance Savery Hotel
 Des Moines, Iowa 
 Biological processes that convert biomass into methane, alcohol fuels, compost and other value-added bioproducts are more vital now than ever. These products fulfill the potential for creating clean power, improving soils and cleaning up our water and air. This comprehensive three-day conference will bring together project managers, researchers, consultants, policy makers, investors and business developers, who are actively building an industry on that potential. Organizers say those who attend will advance their knowledge in the renewable energy field, meet people and companies with hands-on experience and establish their personal role in this vital, growing segment of organics recycling.
 (610) 967-4135 . <a target="_blank" href="http://">www.biocycle.net/biocycle.htm</a>

4th Annual Renewable Energy from Organics Recycling Conference

November 29-30, 2004
 Hilton Adelaide 
 Adelaide, South Australia
 This conference was established in 1997 as a government-industry forum to foster and facilitate the development of biomass for energy, liquid fuels and other value-added biobased products. Bioenergy Australia is concerned with all aspects of biomass and bioenergy, from production through to utilization, and its work embraces technical, commercial, economic, societal, environmental, policy and market issues. According to event organizers, the conference program will have over 40 presentations, covering policies and programs, bioenergy projects and project development case studies, and Australia's participation in the International Energy Agency's Bioenergy Program. The conference will also include extended panel discussions and forums on the policy framework for bioenergy and on making bioenergy a mainstream energy option.
 (02) 9416 9246 . http://<a target="_blank" href="http://">www.bioenergyaustralia.org/</a>

Bioenergy Australia Conference 2004

December 7, 2004
 Fairmont Royal York Hotel
 Toronto, Ontario, Canada	
 The Canadian Renewable Fuels Association and the Biodiesel Association of Canada are jointly hosting an important summit on ethanol and biodiesel industry development in Canada. The Canadian Renewable Fuels Summit will present the latest information on the state of the renewable fuels industry in Canada, advancements in production technology, emerging markets and the political environment for renewable fuels.
 (519) 576-4500 . <a target="_blank" href="http://">www.bbibiofuels.com/crfs</a>

Canadian Renewable Fuels Summit

December 8-10, 2004

 Hyatt Regency
 Chicago, Illinois
 The Corn & Sorghum and Soybean Seed Research Conference represents the largest annual gathering of seed professionals in the world, according to event organizers. It features informative speakers and an ever-expanding trade show, the Seed Expo. The two-and-a-half days of sessions, filled with educational and enlightening speakers, begins on Dec. 8 with soybean sessions. The morning of Dec. 9 will be highlighted by a joint session that will provide insights valuable to all corn, sorghum and soybean attendees; that afternoon features concurrent corn and sorghum sessions that continue through the next day.
 (703) 837-8140 . <a target="_blank" href="http://"> www.amseed.com</a>

ASTA's 2004 Corn & Sorghum and Soybean Seed Research Conference

January 30-February 2, 2005
 Marina Marriott & Broward County 
 Convention Center
 Fort Lauderdale, Florida
 Last year's first annual conference in Palm Springs, Calif., was a roaring success that attracted more than 600 participants. The information and enthusiasm generated by that inaugural event helped catalyze momentum for the biodiesel industry. This full-fledged national conference and exhibition was created to meet the educational needs of all biodiesel stakeholders-fuel distributors, marketers, biodiesel consumers, and feedstock growers and processors, in addition to those interested in the technical issues. An exhibition hall gives attendees the opportunity to learn about the latest products, services and advances in the field. You will hear from and interact with the most influential industry experts, and exciting public figures and leaders about the role of biodiesel as a component of our energy future. In addition to the rich educational content of the meeting, the National Biodiesel Board is hosting a number of networking and social events, including a golf tournament and several evening receptions and informal gatherings. For those able to arrive early, valuable pre-conference training sessions are available.
 (800) 841-5849 . <a target="_blank" href="http://"> www.nbb.org</a>

2005 National Biodiesel Conference & Expo

Development projects often generate disputes with local government-be it a city council, county board or even a township board-over a zoning issue, permit requirement, wastewater treatment agreement, or a similar land-use or environmental issue.

 
 For example, an ethanol plant, biodiesel plant or other agribusiness facility planning to expand its operations can encounter significant problems from the local permitting authority in obtaining a Conditional Use Permit that must be issued before the facility can be expanded. Similarly, a processing facility that discharges into the local municipal wastewater treatment system can end up in dispute with the city government about the rates it must pay for wastewater treatment, or its ability to expand because of limitations in the city's ability to handle the increased wastewater load. In addition, a negative impact on facilities can occur when local government allows zoning changes in the immediate vicinity that lead to establishment of new, conflicting land uses adjacent to or near their facilities.
 
 A key step in helping prevent these types of problems from occurring, or in managing them once they do occur, is for facility managers and boards of directors to maintain good working relationships with the local elected and appointed officials that have jurisdiction over their facilities.
 
 It is also important to monitor zoning and other regulatory actions taken by the city council, county board and township board, as well as the actions of the local planning and zoning staff, for ordinances and permit conditions that could negatively impact your business. For companies that discharge to the local wastewater treatment facility, it is essential to have a well-drafted Wastewater Treatment Agreement that clearly establishes the rate structure and a reasonable, controlled process for rate increases by the local government.
 
 For start-up facilities, it is often useful to negotiate and enter into a Development Agreement with the local governmental units. The Development Agreement outlines the roles local governments and the project developer will take in the project for providing local infrastructure, such as road improvements and wastewater treatment expansion. Tax increment financing and other local funding assistance, as well as any requirements upon the agribusiness to create a certain number of new jobs, are often also addressed in a Development Agreement.
 
 Although dealings with your local government unit regarding land use, permitting and other issues can become contentious, it is a good practice to maintain good relations with, and consistently monitor the actions of, your local elected and appointed officials. It's also essential to have clear, useful written agreements and permit conditions with local authorities that minimize the potential for future disputes.
 
 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.

Keys to Minimizing Land Use Disputes and Other Local Government Issues

Legal Perspective

Biodiesel has been used internationally as an alternative transportation fuel for many years, but the international biodiesel industry-and, to some extent, Canadian citizens-know relatively little about biodiesel activities in Canada. It's time for that to change. 
 
 In 2003, a core group of key stakeholders in Canada identified the need to have national representation for biodiesel. In December 2003, the Biodiesel Association of Canada (BAC) was formed. BAC is a not-for-profit organization represented by Canadian canola growers (comprised of the Manitoba Canola Growers Association, the Saskatchewan Canola Development Commission and the Saskatchewan Canola Growers Association), Canadian oilseed processors (Archer Daniels Midland, CanAmera Foods-Bunge and Cargill), renderers (Rothsay, West Coast Reduction, Sanimal Inc.), Ontario soybean growers and biodiesel producers (present and future).
 

 In June, I joined the association as its executive director.
 The BAC sees its role as the authoritative center of information on all significant aspects of biodiesel in Canada. Its mandate-and my job-is to promote the development of the biodiesel industry in Canada through efforts to influence government policy and legislation, to educate and create consumer awareness and acceptance, and to contribute to the creation of common trade standards and product technical specifications.
 
 he BAC has created an important industry and government stakeholder technical committee to help identify research gaps and areas that need to be studied from a Canadian perspective. The BAC is also committed to research with its sister organization, the National Biodiesel Board (NBB), to address North American biodiesel research gaps.
 
 Over the 10 years biodiesel has been researched at various education institutions across the country. From the University of British Columbia, to the University of Saskatchewan, the University of Toronto and Dalhousie University, research in the areas of production, lubricity, engine wear and fuel economy has taken place. Dr. David Boocock's research has lead to the formation of BIOX Corporation. BIOX has received two levels of federal funding, and the corporation has announced a plan to build a 60 million liter (15.85 million gallons) biodiesel plant in Hamilton, Ontario, in the spring of 2005.
 
 The federal government in Canada has shown its commitment to biodiesel in three ways. In its Climate Change for Canada document targeted 500 million liters (132.1 million gallons) of production by 2010. In early 2003, the federal government announced a CAN$0.04 exemption for biodiesel. Finally, in the fall of 2003, the federal government announced a CAN$11.9 million commitment to biodiesel initiatives over four years. These funds are supporting biodiesel demonstration projects in various areas: applications, blend ratios, regions and temperatures.
 
 Two provincial governments (Ontario in 2002 and British Columbia in 2004) have shown their support for biodiesel by waiving their road tax for the biodiesel portion of the blend. Both Saskatchewan and Manitoba have provincial/stakeholder working groups looking at biodiesel policy issues and fostering environments for biodiesel use and commercialization.
 
 Industry and municipalities have been the leaders in Canada in raising awareness and creating demand for biodiesel use. Approximately 4 million liters (1.1 million gallons) of biodiesel is being used in Canada with that number likely to increase significantly over the next year. Production in Canada barely meets our needs. Rothsay has been producing biodiesel since 2002. It supplied the biodiesel for the Montreal transit demonstration project and continues to use biodiesel in its own fleet. Milligan Bio-Tech Inc. produces biodiesel for use in its diesel additive, while also supplying canola-based biodiesel to various projects.
 
 AC is supportive and excited about the growing biodiesel industry in Canada. We are working with stakeholders from across the nation, the United States and internationally to raise awareness, and share information and advice on policy issues that support the development of the commercialization and increased use of biodiesel in Canada.
 
 <ul><ul>Christine Paquette is executive director of the Biodiesel Association of Canada. She can be reached at <a href="mailto:christinep@biodiesel-canada.org">christinep@biodiesel-canada.org</a>. For more information about the BAC, visit <a target="_blank" href="http://">www.biodiesel-canada.org.</a></ul></ul>

Oct/Nov 2004

Business Briefs

Mirabito to receive $142,000 for biodiesel stations

Pacific Biodiesel receives ASME award

NREL releases 2004 Biodiesel Handling and Use Guidelines

Bio-Diesel Canada Inc. announces new CEO

Columns

Point of View

Editor's Note

Legal Perspective

Talking Point

Featured

Making Cents

Biodiesel's Mass. Distributor

Mid-Infrared Fuel Analysis

Take Your Pick

Biodiesel on Backup

Shipping Biodiesel and Hope to India

Oct/Nov 2004.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Mirabito to receive $142,000 for biodiesel stations

Pacific Biodiesel receives ASME award

NREL releases 2004 Biodiesel Handling and Use Guidelines

Bio-Diesel Canada Inc. announces new CEO

Columns

Point of View

Editor's Note

Legal Perspective

Talking Point

Featured

Making Cents

Biodiesel's Mass. Distributor

Mid-Infrared Fuel Analysis

Take Your Pick

Biodiesel on Backup

Shipping Biodiesel and Hope to India

Oct/Nov 2004