I'm concerned by what appears to be a universal decision by American refiners to deny biodiesel a chance to contend as an ultra-low sulfur diesel (ULSD) lubricity additive, or for that matter, even a dilutor for off-spec fuel. The oil industry's wholesale pronouncement of this decision became crystal clear during "The Refining Industry and Biodiesel" breakout session at this year's National Biodiesel Conference & Expo, where at least three refiners said they had no plans to use biodiesel for either purpose.
 
 Hey, I'm not a real insider when it comes to fuel properties and blending, but for months there's been all sorts of people in the industry talking about the big-time opportunity awaiting biodiesel this October when refiners make their official switch to ULSD-diesel fuel that consists of no more than 15 parts per million (ppm) sulfur. Some said biodiesel was precisely the type of lubricity blend stock ULSD would need. They also said biodiesel would maybe be used to dilute "contaminated" ULSD-batches of diesel that picks up impurities in pipelines, for example. 
 
 As it turns out, refiners-at least the ones at the National Biodiesel Conference-are not planning to do either of those things. They say biodiesel works well for both purposes, but specialty additives give ULSD the lubricity it needs in a cheaper, more effective way. As for plans to blend down off-spec ULSD with the renewable fuel, refiners say it would simply take too much biodiesel to be viable. That is, they say it would take blends as high as B15 or B20 to clean up even slightly contaminated ULSD. 

 
 In this month's comprehensive National Biodiesel Conference Review, BP's Michael Winward said a blend approximating B2 is needed to achieve the level of lubricity that is stripped from diesel when it is made cleaner. However, unless there are other compelling reasons to use biodiesel-such as strong consumer demand for B2-he said biodiesel is not the most attractive lubricity additive on the market. "The alternatives are formulated to be a little more powerful," he said, explaining that since commercial lubricity additives can be used in lower concentrations, they're a better bang for the buck. "You do the math and tell me what sort of proposition that is. Tell me how I can go back to my people and say they ought to use biodiesel as a lubricity additive." 
 
 Even Indiana-based Countrymark Cooperative, which blends biodiesel in 75 percent of its diesel fuel, is going to use a commercial lubricity additive in its ULSD starting this summer. The truth of the matter is that refiners have spent millions of dollars getting the infrastructure in place for the use of commercial lubricity additives because unless they blend biodiesel in 100 percent of their ULSD-which no big players are talking about-it doesn't make sense to use two different additives for one purpose. For that reason alone, Winward said, it is "overly optimistic" to think biodiesel is going to be used a whole lot for either purpose.
 
 Other petroleum representatives are singing the same tune. At the National Ethanol Conference in late February, Marc Meteyer of the American Petroleum Institute said he simply couldn't predict whether biodiesel would be used at all as a lubricity additive in ULSD. "That's yet to be determined," he said, adding that looming concerns about biodiesel fuel quality is making refiners shy away from using it in ULSD. "The last thing we need to have happen when we have a major diesel change going into effect in June-and ultimately at the pump in October-is to have a fuel quality problem relative to biodiesel in the midst of having a potential problem in getting ULSD to the consumer. We're at a critical juncture."
 
 As are we, Mr. Meteyer. As are we.

Editor's note

The Missouri Soybean Association (MSA) and the Missouri Corn Growers Association (MCGA) have jointly announced its opposition toward building biodiesel and ethanol facilities in counties that have enacted health ordinances to restrict livestock and poultry production. The MSA and MCGA are claiming these county health ordinances will limit livestock and poultry production and reduce marketing potential for distillers grains, therefore making biodiesel and ethanol plants less viable.

Missouri ag groups oppose biofuel expansion

Roaring Fork Transportation Authority (RFTA), which operates transit vehicles in communities in and around Aspen, Colo., is again using a 5 percent blend of biodiesel after bacterial growth caused mechanical problems in some buses in October. RFTA Director of Maintenance Kenny Osier said slime buildup was discovered in several Cummins engine transfer pumps, and algae was found in fuel tanks. Biodiesel use was discontinued from mid-December to mid-January. All biodiesel is now treated with a biocide, and no additional problems have been detected

RFTA solves biodiesel algae problems

U.S. Secretary of Agriculture Mike Johanns announced the availability of $19 million in grants to support the development of renewable energy projects. Priority for the grants will be given to applicants that have at least 51 percent of project costs invested in biodiesel, ethanol, wind and cellulosic energy. The grants must be used for feasibility studies, marketing and business plans, or to provide working capital for a project. The deadline for applications is March 31

USDA announces renewable energy grants

A handful of heating oil companies, including First Call Heating & Cooling, Automatic Heat Company and StarOil Company, are turning toward biodiesel use. Oregon's reputation for environmental awareness has helped create a market for the renewable fuel. After receiving increasing interest in biodiesel from customers over the past year, the company decided the fuel's market potential was too great to ignore, according to First Call Heating & Cooling President Molly Brady.

Oregon's largest heating oil companies back biodiesel

The equity drive is completed for a proposed 30 MMgy biodiesel plant to be built in Newton, Iowa. Central Iowa Energy raised $20 million in less than two weeks and canceled its remaining equity drive meetings. Project Coordinator Tobin Bush told Biodiesel Magazine that Renewable Energy Group will design and build the plant, which will use feedstocks of virgin soy oil and animal grease. Construction is scheduled to begin in March with production to start in January 2007.

Iowa biodiesel plant holds speedy equity drive

Serving as a guide for soybean purchasers in the United States and abroad, Iowa State University (ISU) released the results of its 2005 U.S. Soybean Quality Survey that measures the levels of protein and oil percentages in soybeans across the country.
 
 Dr. Tom Brumm, professor of agricultural and chemical engineering at ISU, said the study provides valuable information to processors who are searching for the best-quality soybeans. For the 2005 survey results, visit www.abe.iastate.edu/soysurvey.

Study serves as purchasing aid for processors

Florida Gov. Jeb Bush is proposing $1.5 billion in tax cuts for his state, a small portion of which may spur renewable fuels production. According to a Jan. 31 governor's office press release, Bush is pushing for an annual, yet "time-limited," budget of $15 million to help fund biodiesel and ethanol production, and their use in Florida through tax credits and exemptions, among other alternative forms of energy. The governor's proposals must be approved by the state legislature before becoming law.

Gov. Bush proposes Florida energy incentives

Axiom Energy Ltd. of Australia, through an agreement with Safer Energy Group, will be building two 150 MMly (40 MMgy) biodiesel plants on the country's eastern seaboard. According to David Vinson, managing director of Axiom Energy, plant sites are being explored and must include port and road access for marketing biodiesel locally and exporting to Europe. The plants, which will use a mixture of tallow, palm oil and some yellow grease, should be producing at full capacity in early 2007.

Axiom Energy proposes two Australian plants

International design/build corporation Technip announced in early January that it will build a 100,000 tons-per-day processing unit for French biodiesel producer Diester Industrie. The unit, which will utilize Axens process technology, will be clipped onto the Diester Industrie's existing biodiesel plant near Compiègne, France, doubling its capacity. The project will be completed by July. Technip constructed a biodiesel plant in Rouen, France, 10 years ago and is currently building another unit in Sète, France.

Technip to handle French plant expansion

In January, the USDA and U.S. DOE agreed to share resources and coordinate the study of plant and microbial genomics. To start, the DOE Joint Genome Institute (JGI) will be sequencing the soybean genome, which is of interest to the DOE because of its role in biodiesel production. The study's purpose: "contributing to the development of new avenues for clean energy generation and for crop improvement," said Eddy Rubin, DOE JGI director.

USDA, DOE explore soybean genome sequencing

Carolina Soya LLC, a soybean processing plant in Estill, S.C., is adding an oil refinery to further process crude oil extracted there. The refined oil will be sold for use in food products and industrial uses, such as feedstock for biodiesel.
 
 Preliminary construction on the $8 million project began Feb. 1, said Paul Hankey, vice president and general manager. It is expected to be completed by late fall or early winter of this year.
 
 The company has the capacity to process 10 million bushels of soybeans or 15 MMgy of crude oil. Soybean meal and hulls are sold as animal feed ingredients. Carolina Soya is one of the major buyers of soybeans from local producers, and it also buys and sells corn and wheat, supplying them to area feed mills. Adding a refinery to its operations is a natural extension of what Carolina Soya already does, Hankey said. 
 

 Once the refinery is completed, all crude oil will be processed into refined bleached (RB) oil for industrial use or refined bleached deodorized oil, which is a food-grade product. Adding the refinery may not be the end of it, Hankey hinted at the possibility of future expansions. "Carolina Soya is in the discussion phase with other partners 
 concerning the construction of an on-site biodiesel facility that will use a significant portion of the RB oil produced by the refinery," he said, adding that additional details weren't being released at this time.
 
 Due to the refinery, the company plans to add about 15 to 20 employees to its current workforce of 40. That will likely include high technical jobs, maintenance workers and quality control specialists. However, more than twice that many people could be hired if plans for future expansion become a reality, Hankey said.
 
 Bobby Creech, vice president and commercial manager, said that by having an on-site refinery, value-added processes are kept within the company. It also provides more flexibility for Carolina Soya's soybean oil customers. "This further processing of the oil allows us to build on our existing reputation of high-quality soybean meal that's marketed to feed mills and the poultry industry in the Southeast," he said.
 
 Carolina Soya, a privately held corporation, has been in operation in South Carolina since the 1950s. For more information, see the company Web site at www.carolinasoya.com.

Soybean crushing plant adds oil refinery in South Carolina

Archer Daniels Midland Co. (ADM) has announced managerial changes in some of its divisions. John Hanson, who has been with the company since 1973, has been named vice president of the Bioproducts division. Previously, Hanson was vice president of the Oilseed division; Bruno Ejankowski has now taken over that role. Ejankowski was previously the manager of Softseed Manufacturing Operations at ADM. Also, Kevin Moore has been named vice president-technical director of the Bioproducts division. He has been with the company since 1990, previously serving in several manufacturing management positions.

CAA awards Volkswagen for B5 coverage

A newly funded research project seeks to bring biodiesel production and waste management together on military front lines. An initiative by Rep. Tom Latham, R-Iowa, earmarked $3.3 million in the 2006 Department of Defense Appropriations Bill for the Battlefield Plastic Biodiesel pilot research project, to be conducted by West Central Cooperative in Ralston, Iowa, and General Atomics of San Diego, Calif. 
 
 The three-year research project seeks to develop new technology to dissolve waste plastics with specialized biodiesel, thus producing an enriched fuel for use in field generators. This process is planned for use in the battlefield, where tremendous amounts of waste plastics are generated-mostly in the form of supply containers.
 
 According to Latham, who is a senior member of the House Appropriations Committee, finding a productive way to deal with this waste was a high priority for the Defense Department. He said this technology would provide a "win-win situation to recycle waste and convert it into energy." It could provide an answer to the expensive logistics of transporting fuel to the battlefield and freighting out the plastic waste.
 
 West Central CEO Jeff Stroburg said, "We're excited about the prospect of biodiesel breaking into even more diverse markets." The company, which is the largest farmer-owned soybean co-op in the United States, started producing SoyPower-brand biodiesel at the Ralston facility in 1996. It has also been a leader in biodiesel research; in 2004, the company received a $1.9 million grant from the USDA for the development of new technologies.
 
 General Atomics is a privately held company that specializes in high-technology systems development. "This project affords the opportunity to make a real difference in how biodiesel is used by the military," said James Elliott, program manager of General Atomics. "By combining West Central's biodiesel expertise with [General Atomics'] technology development expertise, the project could provide a viable waste-to-energy process for front-line use by our soldiers."

Battlefield Plastic Biodesel research project receives funding

Green Gold Biodiesel, the trade name for the Manchester Biodiesel Cooperative, has opened the first biodiesel filling station in Manchester, U.K. Claire Frisby, marketing and education coordinator for Green Gold Biodiesel, said the cooperative was started when a group of people entered into an agreement to buy biodiesel in bulk, and the filling station developed as a result of this arrangement.
 

 The Green Gold Biodiesel filling station is very close to main train station Piccadilly. "We're very lucky that we're easy to find," Frisby said. The station has B5 publicly available, but cooperative members have access to B100 as well. "I wouldn't want somebody with a brand new vehicle to put anything over 30 percent biodiesel in because it invalidates your warranty, and we want people to be members so that we can keep them informed on the best way to use the fuel," Frisby said. "It's best to change filters a couple of times when you first start using it after you've been using mineral fuels because of the cleaning effects it has on the engine, and if you have a particular kind of vehicle, you might need to change a couple of rubber fuel lines if the vehicle is over 13 years old. That is the sort of thing we want our customers to be aware of." 
 
 Green Gold Biodiesel purchases recycled and virgin-oil-based biodiesel from an international distributor, Rix Biodiesel, in bulk. The Manchester cooperative also plans to support a new biodiesel venture, a biodiesel production plant that has been proposed for construction in nearby Salford in order to meet the European Biodiesel Standard. "We may even have a container at our garage so that people can bring their used oil to us," Frisby said. "We encourage the local businesses to recycle their oil in that way, and we are looking into the possibility of getting a vehicle so we can collect oil for this new plant."

First biodiesel filling station in Manchester, U.K., opens

BioFuels of Colorado LLC, which started producing biodiesel after renovating an asphalt tank car cleaning facility last year, plans to open its second biodiesel plant in a former sheep-shearing building near the Denver Stockyards. The new facility was built "from the ground up," according to Monte Malone, sales manager for BioFuels of Colorado. He told Biodiesel Magazine that BioFuels of Colorado handles all stages of design, construction and production of its biodiesel facilities. "These buildings were basically empty shells," Malone said.
 
 The capacity expansion was based on the lack of space at the existing facility for tankage, pumps, centrifuges, other equipment and certain transportation concerns. "We needed more rail space," Malone said of the existing facility, which will be used exclusively for railcar loading. The new plant will be used for inbound and outbound truck traffic. The limitations of the original site's less than-one-acre of available space made expansion of the existing facility impossible, Malone said. The current plant operates at a 10 MMgy capacity, and the proposed facility is expected to produce 5 MMgy. Although BioFuels of Colorado shipped only 2.5 million gallons of its 10 MMgy capacity last year, current negotiations lead Malone to believe the demand for the company's Mountain-Gold-brand biodiesel will soon exceed current production limits.
 
 Most of the company's Mountain Gold Biodiesel is sold exclusively to fuel distributors and used primarily by the military, municipal trucking and school bus fleets, and over-the-road transportation firms, Malone said. BioFuels of Colorado uses only virgin soy oil to produce its Mountain Gold biodiesel.
 
 The announcement of the 50 percent refining capacity expansion was made by Tom Foley, the founding investor of BioFuels of Colorado, and U.S. Sen. Ken Salazar, member of the Agriculture, Energy and Veteran Affairs Committee, at a press conference at BioFuels of Colorado headquarters in Denver. "We'd like to thank Sen. Salazar for participating with us today and for leading the charge in Washington to emphasize the lead for our nation to further the use of biofuels as an alternative energy source," Foley said at the conference.

BioFuels of Colorado extends capacity, revitalizes infrastructure

Axiom Energy Ltd. of Australia is bringing large-scale biodiesel production to the United States through an agreement with the Safer Energy Group. In February, the companies celebrated the groundbreaking of Axiom Fuels in Conroe, Texas. 
 
 The 40 MMgy plant will be located adjacent to existing biodiesel plant Safe Fuels Inc., which is also being upgraded through an Axiom Energy venture. The expansion from 12 MMgy to 20 MMgy will result in a combined capacity of 60 MMgy, making the Houston suburb home to one of the country's largest biodiesel production sites.
 
 The Axiom Fuels facility will be constructed using Safer Energy technology to produce ASTM and Euro standard biodiesel. According to Michael Everton, marketing vice president, soy-oil-based biodiesel will be produced for export to the European Union. A smaller percentage of the output will be tallow-based biodiesel for local consumption. 
 
 Everton cited proximity to rail as a primary factor in locating Axiom Fuels. A rail extension will allow 1 million gallons of feedstock to be unloaded at each shipment. The Safe Fuels plant will also access the rail after upgrade completion in April. It will continue to use soy oil for feedstock.
 

 Axiom Energy is familiar with this scale of biodiesel production. While the biodiesel industry is just taking off in the United States, Axiom Energy Managing Director David Vinson said there are six plants under construction in Australia that will produce 40 MMgy each, not counting two additional projects Axiom Energy is developing (see BIObytes, page 16).

Axiom Energy holds groundbreaking for Texas plant

An Industry Rising

What happens in Vegas stays in Vegas … unless, of course, Biodiesel Magazine is on the scene.
 
 Fresh off emceeing the largest biodiesel conference in U.S. history, National Biodiesel Board (NBB) Executive Director Joe Jobe took the stage again for the "Washington Insider's Roundtable" at the 2006 National Ethanol Conference: Policy & Marketing in "Sin City" on Feb. 20-22. Jobe was among four trade association representatives brave enough to field questions from Renewable Fuels Association (RFA) front man Bob Dinneen, a man largely credited with helping push last year's renewable fuels standard (RFS) into the energy bill and through the U.S. Congress. Entertaining a question from one inquisitive attendee who hinted that the RFA and NBB were at odds over RFS implementation, the jovial RFA leader asked Jobe, "Are we feuding?" The NBB leader answered wittily, "I certainly hope not Bob … I don't think I could take you."
 
 Dinneen also quipped that Jobe has the luxury of laying claim to celebrity friends like Daryl Hannah, Willie Nelson and Neil Young, while the less-than-sexy ethanol industry attracts few famous backers. "We got Corn Cob Bob," Dinneen grumbled.
 
 All jokes aside, Jobe said it's being rumored that more than 1 billion gallons of biodiesel production capacity will be on line in the United States in the next 18 months. Dismissing those claims, Jobe said there's a real danger in over-promising and under-delivering. He said the NBB estimates that 150 MMgy to 200 MMgy of production will be on line by the end of 2006. "We're looking at managed, but aggressive growth," he explained. "[The NBB foresees the industry ramping] up production to 1 billion gallons by 2015. The truth is, it doesn't matter if policy is good, efforts are good and economics are good. There is just no replacement for good business planning." 
 
 Earlier in the conference, U.S. Rep. Stephanie Herseth, D-S.D., indicated that there may be specific efforts underway to create a federal biodiesel volumetric mandate, as opposed to trying to maintain-or boost-the RFS credit for biodiesel in the existing RFS, which Dinneen called "essentially a gasoline program." 
 
 "Does [the NBB] look to that?" Dinneen asked Jobe. "Do you support that notion, and what do you give its chances?" 
 "Yes, we are looking at that," Jobe responded. "We continue to try to take in the full scope of the picture. We just passed the RFS, and we're looking at implementation, working with all of the groups represented here. There was a question earlier about 1.5 credits versus 1 credit for biodiesel in the [existing] RFS. We've been in communication about that from the beginning. We felt that the [EPA's] default rule had to go forward. That was our first priority. … A renewable diesel requirement is hypothetical and just beginning to be talked about. … It took us five years to get an RFS in place, so this isn't just something that turns on like a light switch."
 
 Jobe said the urgency of the issue is compounded by the fact that petroleum companies are already making decisions about how they are going to formulate ultra-low sulfur diesel. "The lubricity additives are going to have to be put in place starting in June of this year," Jobe said. "Those companies are making investment decisions right now. … We have a task force looking into a renewable diesel provision and looking at kind of the whole scope of both national and state mandates, and how they impact the market." 
 

 Marc Meteyer of the American Petroleum Institute said the refiners he represents are busy right now trying to figure our how to get on-spec ULSD "from point A to point B" without "contaminating" the fuel-something that's never been done before. "At 15 parts per million, it is unprecedented. Our challenge at this point in time is to make sure this product can get through the entire system and still make the 15 parts-per-million cut. We've done some studies. We've done some test runs and so forth, and there are problems that we've found, and we've been working on them. Frankly we've been working with the U.S. EPA to give us some flexibility to be able to provide that fuel 24/7 on spec." 
 
 Meteyer said he had no idea whether biodiesel would be used by refiners to meet the lubricity needs of ULSD. In fact, he said he was unsure of how well the petroleum industry in general would do in getting ULSD on the market by the Oct. 15 deadline. "We think there'll be enough," Meteyer said. "Whether or not biodiesel will play a role in that, I can't predict that." 
 "How about state mandates?" Dinneen asked Meteyer. 
 
 "The problem is that when you mandate a product in an individual state, you create a unique fuel," Meteyer said. "We've been through the boutique fuels debate for years, and we already have a significant problem with all the other fuels that are required, primarily to deal with air-quality problems in individual states. On top of that is the RFS. Then you lay state mandates on top of the RFS, plus mandates for ethanol content or biodiesel content or whatever, and then a federal energy bill that … doesn't deal with [biofuels] mandates in individual states. … Our problem lies with trying to deal with these layers-these different flavors, different colors. It all creates more and more complexity in the system, inefficiencies … and when we get into a big hiccup-Hurricane Katrina or a pipeline burst, for example-you've seen what can happen. 
 
 Aside from Minnesota, which has a B2 mandate in place already, Jobe said there are about a half a dozen other states that have filed Minnesota-like biodiesel requirements this legislative session. He said the NBB would like to see Minnesota's challenges squared away before other states throw their hats into the ring, but that might not be possible. "They want to see biodiesel brought to their state," he said. "They want the plants built. They want the jobs … and so they're moving forward [with biodiesel mandates]." 
 
 If that happens, if other states move forward with low-blend requirements, Jobe said it is vital that they coordinate efforts. "We need to look at a comprehensive energy strategy and not have a patchwork quilt of mandated biodiesel blends from state to state," he said. "We need to reduce that to the maximum extent possible, so you don't have B2 in one state, and B5, B11 and other blends in other states. We need to look at unifying these policies." 
 
 Meteyer agreed, saying, "The last thing we need to have happen when we have a major diesel change going into effect in June-and ultimately at the pump in October-is to have a biodiesel quality problem in the midst of having a potential problem in getting ultra-low product to the consumer.

Ethanol Folks Talk Biodiesel In Vegas

John Rothgeb, owner of AMI Pipe and Supply, decided to get serious about biodiesel last September when diesel fuel prices began to rise. He gathered together some local investors to build Tri-City Energy LLC, a biodiesel plant in Keokuk, Iowa, in four phases. With phase one completed in January, Tri-City is well on its way to producing 5 MMgy of soy-based fuel in the Midwest.
 
 Each construction phase will expand capabilities of the previous phase. The first phase will convert an old General Mills wheat processing facility into a biodiesel processing plant. Constructed by Techno-Chemicals, the $5 million plant will use pure soybean oil as its primary feedstock. According to Rothgeb, also the general manager of the plant, a biodiesel marketer is still being considered. Fabrication of the existing facility began Jan. 8 and will start biodiesel production in mid-July.
 
 Phase one also includes construction of a grinding mill, allowing Tri-City Energy to create its own soy oil for biodiesel production. The crushing facility will process 25 million to 30 million bushels of soybeans annually. The crushing plant will be located on the Mississippi River, allowing Tri-City Energy to receive soybeans by truck, rail and barge. "We have secured riverfront property," Rothgeb told Biodiesel Magazine. "This will allow us to receive soybeans three ways, which will be a great advantage." Construction on phase two and three is expected to begin in December or early January 2007.
 
 Phase three will involve the construction of a 30 MMgy to 35 MMgy biodiesel plant adjacent to the crushing facility. "The crushing facility will provide more than enough soybean oil for the plant," Rothgeb said. "We are looking at the possibility of selling any overstock to other biodiesel plants in the future."
 
 The final phase will convert the original 5 MMgy plant into a multi-feedstock plant. "After the conversion is complete, the original plant will use animal fats and waste restaurant grease as its feedstock," Rothgeb said. 
 
 The cost involved for all four phases is estimated at $50 million and will create 62 jobs.

Phase one of Tri-City Energy construction underway

The entrepreneur behind Big Daddy's Biodiesel Inc. said in mid-February that his "quiet" Texas Panhandle start-up could be up and running within 90 days. Roy Messer, CEO of the colorfully named Hereford, Texas, business, told Biodiesel Magazine that Big Daddy's Biodiesel is retrofitting a former molasses factory for biodiesel production. "The project has been in the works for 18 months," Messer said. 
 
 The building that will house the biodiesel plant was erected decades ago, but was reengineered and equipped with stainless steel tanks and piping around 1990. The structure stands three stories tall and spans 45,000 square feet. Its massive on-site tank farm has 6 million gallons of storage capacity.
 
 Over the past three months, Messer and his team have been busily prepping the facility for work that's now commencing. At press time, centrifuges and boiler equipment were being delivered, and Messer said the retrofit was proceeding on schedule.
 
 The facility will have a 30 MMgy production capacity and utilize a multi-feedstock process design that is a hybrid between batch and continuous processes. Big Daddy's Biodiesel will come on line using soybean oil as a production feedstock. However, the plant is located in "cattle country," and transitioning to rendered raw materials is part of the company's near-term strategic plan, as is becoming a BQ-9000 accredited producer.

Big Daddy's Biodiesel Texas-sized retrofit underway

At press time, Midwest Biodiesel Producers LLC, the first biodiesel plant in South Dakota, expected to begin full-time production by the end of February, according to Lewis Bainbridge, board member and area farmer.

 
 The plant will churn out between 1 MMgy and 2 MMgy of biodiesel. For feedstock, the company is purchasing soybean oil from the South Dakota Soybean Processors crushing facility in Volga, S.D. 
 
 Midwest Biodiesel Producers, a 10-member ownership group of whom eight are farmers, is interested in producing biodiesel with soybeans grown in the area rather than shipping the feedstock out of the area. The farmers on the board were already involved in value-added projects, such as ethanol plants. "We grow an awful lot of soybeans in this area," Bainbridge said. "We just thought this would be a natural next step." 
 
 Board members started working on the idea of a biodiesel plant about three years ago. It began with company President Paul Iberg, who took three Iowa State University biodiesel classes and started experimenting with biodiesel production using a blender from his kitchen, Bainbridge said.
 
 Construction on the plant began last summer, with board members and their families doing the bulk of the work. Using an existing building and mostly used equipment, the plant was completed in early winter 2005. "We built it ourselves and designed it ourselves," Bainbridge said.
 
 In test runs, 20,000 gallons of biodiesel had been produced by mid-February. The fuel, which meets the ASTM D6751 standard, has already found a market in the area. 
 "So far, we've marketed quite a bit of it ourselves to local farmers, irrigators and that sort of thing," he said.
 
 Currently, two full-time employees handle work at the plant in one shift. Board members and their families have also been working a lot of hours on the project.

First S.D. biodiesel plant to begin production

Pursuing its mission to become the "leading manufacturer, processor and distributor of premium biofuels," NewGen Technologies Inc. has acquired three fuel terminals on the Colonial and Plantation pipelines from Crown Central LLC. The terminals, which have a total storage capacity of over 10 million gallons and an annual throughput capacity of more than 500 million gallons, will be used for the storage and distribution of alternative fuels. Two of these terminals, located in Charlotte, N.C., and Spartanburg, S.C., are expected to be operational by the second quarter of 2006, with the Columbus, Ga., location to come on line in the fourth quarter.
 
 At these terminals, ReFuel America, a subsidiary of NewGen Technologies, will begin blending and distributing biodiesel 
 currently available on the market. Ultimately, the terminals are intended for NewGen Technology's own biodiesel once its production facilities are up and running.
 

 Based in Alpharetta, Ga., the Colonial Pipeline delivers a daily average of 100 million gallons of gasoline, home heating oil, aviation fuel and other refined petroleum products to communities and businesses throughout the southern and eastern United States. The Plantation Pipe Line Company operates as a carrier of refined petroleum products: different grades of motor and aviation gasolines, commercial and military jet fuels, heating oils, and diesel fuels.

NewGen to operate first renewable fuels terminals on regional pipelines

It was 1997, and Andrew Kingston was about to break a promise. He had sworn to his wife that he was done with energy ventures, but he was now faced with an opportunity that was simply too good-and too challenging-to pass up. The former oil company executive was then heading his own consulting firm, and the temptation now luring him was a promising British Columbia-based biofuels start-up called DynaMotive. To cut to the chase: Kingston doesn't just get involved with the company; he becomes president and CEO. Just like that, he's back in energy. 
 
 From its conception, DynaMotive's mission was to exploit its principal asset, a patented process for making "bio-oil," a clean-burning, bio-friendly alternative to hydrocarbon oil, and a fuel that is perhaps in the same family tree-although definitively different than-biodiesel. What proved irresistible to Kingston was the once-in-a-lifetime chance to market a brand new commodity. Kingston envisioned DynaMotive's future as a vertically integrated company, not unlike the corporate giants of the petrochemical world. That meant the company would be involved in every aspect of the bio-oil business from research and development to sales and marketing. 
 
 The actual product isn't impressive to look at. As opposed to the clean appearance of biodiesel, bio-oil is a dark brown viscous liquid that looks like used motor oil. Although it's sometimes called "liquid smoke" or even "biodiesel's ugly lookin' cousin," Professor Franco Berruti of the University of Western Ontario points out there isn't much of a family resemblance. "Bio-oil and biodiesel are very different things," Berruti says. "Biodiesel is produced by transesterification of fats and oils. Bio-oil is produced through the thermal cracking of molecules that contain carbon, hydrogen and minor quantities of other elements." 
 

 The closest ties between the fuels may be that they are both made from biomass and considered environmentally friendly. Burning bio-oil produces virtually no sulfur dioxides and very little nitrogen oxides. Plus, because bio-oil is made from biomass, experts say the raw materials grown for its production absorb more carbon dioxide than is emitted when it is burned. It's a fuel that can be burned with an open flame to heat a boiler, or combusted in a turbine or a slow- or medium-speed diesel engine. It's also very cost-competitive with hydrocarbon oil. 
 
 Kingston points out that bio-oil doesn't have the high upstream costs of the traditional oil business. "You need to prospect, find, extract, transport, refine and market [petroleum fuels]," he says. "If you can find a technology that can take aboveground biomass and convert it into a fuel that can be used in similar [ways]-and you can do it economically-it's quite compelling." But in the late 1990s, not even Kingston, a seasoned oilman, could have predicted today's skyrocketing oil prices. "Our business model took a look at being competitive at about $25 per barrel at the wellhead," he says, pointing out that with today's world oil prices hovering near the $60 mark, DynaMotive's pricing has a lot of wiggle room.
 
 Bio-oil is produced by a process called pyrolysis, which simply means heating biomass in an oxygen-free environment. DynaMotive uses temperatures of 450-500 degrees Celsius in its process. If oxygen were present at those temperatures, the material would burst into flame. But with no oxygen to feed the flame, the biomass breaks down into bio-oil, char and non-compressible gasses. Professor Robert C. Brown of Iowa State University explains , "It is technically a 'pyrolytic liquid' (PL), consisting of highly oxygenated organic compounds." Other scientists like David Chiaramonti of the University of Florence use the term "pyrolysis oil" (PO). 
 
 Experts point out that burning biomass alone produces energy, but by first converting that biomass to bio-oil, the energy yield is multiplied by 12 to 15 times. It's also easier to move that energy to where you need it. In liquidity, it closely resembles light fuel oil, which means you can run it through a pipe, pump it aboard a tanker truck, or funnel it into containers. 
 
 It's also very cheap to produce. Principal feedstocks are agricultural and forestry residues, which not only turn waste materials into useable fuel but solves major waste disposal problems for those respective industries. There's also plenty of biomass available. The forestry industries of British Columbia and Alberta alone generate close to 12.3 million tons of it annually in the form of forest residue-enough to produce approximately 20 MMgy of bio-oil. 
 
 The prospect is equally attractive for processing large quantities of agricultural waste. For example, disposing of bagasse, the remains of sugarcane after the sugar has been extracted, is a major problem for sugar producers. Brazilian sugar-producing giant Cosan Bom Jesus has signed an agreement with DynaMotive to explore the possibility of building a bio-oil plant that could very well turn a waste disposal problem into a profit stream. 
 
 There's scarcely a source of low-cost biomass that DynaMotive hasn't explored. The company has also signed contracts with Classic Power and Megacity Recycling to develop a plant that will make bio-oil from construction and demolition waste wood.
 
 With over a hundred successful production feedstocks tested, it's not finding raw materials that is DynaMotive's main problem, it's finding markets. From his earliest days at the helm, Kingston recognized that his company faced a multi-tiered problem. First, the company had to develop its production process to the point where it could replicate the quality of its product. Secondly, DynaMotive needed to be able to produce enough bio-oil to enable it to be tested by the large-scale industrial users that Kingston saw as his primary target market. Finally, the young company had to sell the benefits of using its product, especially its environmental advantages.
 
 Despite pressure to rush the product onto the market, Kingston stuck to a cautious approach: research and development, independent testing and modest scale-ups. It took four scale-ups before the company built its first commercial-scale plant, the 100 metric-ton-per-day CAN$20 million plant in West Lorne, Ontario. It's a long way from British Columbia to southwestern Ontario, but what made the site attractive to DynaMotive was the chance to partner with Erie Flooring and Wood Products, a well-established company that had been a fixture of the tiny community since 1927. Not only did Erie Flooring produce bio-oil feedstock in the form of about 70 metric tons of wood waste a day, but there was also enough space on the property to accommodate an adjacent bio-oil plant. Waste could be ground into sawdust and piped right into a DynaMotive processor.

 
 "We were looking for a host that would provide waste on a continuous basis, that had good operational capabilities and seemed to be a good fit," Kingston recalls. "The project came to life once we developed a consortium with Magellan Aerospace, Sustainable Development Technology Canada (SDTC), UMA Engineering and Ontario Power Generation. How things came together was almost serendipity."
 
 DynaMotive's trademarked BioTherm fast-pyrolysis process in use at the West Lorne plant does not extract bio-oil from sawdust, but rather converts sawdust into bio-oil. Sawdust is blasted into a reactor containing an anaerobic atmosphere above a bed of fluidized sand. The reactor temperature is about 450 degrees Celsius. The reaction takes place in less than two seconds, producing bio-oil, char and non-condensable gases. The bio-oil and char are vacuumed off, cooled and separated. The non-condensable gases are used in two ways. Some gas is recycled into the reactor to fluidize the bed of sand, and some is consumed in the burner that heats the reactor. Everything produced is either sold or used in the process. Nothing goes to waste. 
 
 But that's only part of the story. The plant also generates steam, about 12,000 tons per hour, which is piped off to Erie Flooring and used to heat the lumber kilns. On top of that, some of the bio-oil is used to power an Orenda OGT2500 gas turbine hooked up to a generator that produces 2.5 megawatts of electricity, enough electricity to provide power for the DynaMotive plant, Erie Flooring and 2,500 residential homes besides. That also makes West Lorne the world's first bio-oil-powered cogeneration facility. 
 
 Frank Button, vice president and general manager of Orenda, which is a division of Magellan Aerospace, says that his company has long been excited by the prospect of burning biofuels in its turbines. The problem was getting enough high quality bio-oil, before DynaMotive came along. Still, adapting the OTG2500 to burn bio-oil took some clever engineering. The fuel naturally contains a substantial amount of water, is moderately corrosive and has a tendency to gum up nozzles. 
 
 A bit of tinkering is still going on, but the commissioning procedure is all but wrapped up. The plant's ability to produce bio-oil in commercial quantities has certainly been proven, and Kingston confidently expects the plant to produce a profit. At least one independent financial analyst has speculated that if operated at capacity, the plant could produce close to $2 million in profits annually. The plant can produce enough bio-oil to fill existing contracts plus some new ones, with enough left over for product testing by other potential high-volume users. Char, too, has commercial value. It's in demand for processing into briquettes or fuel pellets. 
 
 Still, the plant's real value is as a "proof of concept" facility. It has attracted visitors from around the world, and announcements of new DynaMotive projects have followed rapidly, including a plant being developed in partnership with Megacity Recycling and another facility in Nova Scotia. Kingston, however, sees most of DynaMotive's future revenue coming not from operating plants but from license fees, royalties and long-term service contracts. "There was a determined decision to build a platform, rather than a company, that would build and own two or three plants," Kingston explains. "There's nothing wrong with that strategy, but our objective was to develop a commodity in the form of pyrolysis oil." This strategy meant focusing on partnerships that would give DynaMotive the strength and ability to service multiple markets.
 
 Indeed, DynaMotive's ability to forge alliances seems to be one of the company's key strengths. The list includes Magellan Aerospace, UMA Engineering, Bruks-Klockner, Ramsay Group, RTI Resource Transforms International Ltd. and Mitsubishi. An alliance that has served DynaMotive especially well is with South American engineering firm TECNA, which has resulted in a modular design for future plants to be put together quickly and scaled to almost any size. 
 
 Despite the focus on construction, DynaMotive continues a substantial research and development program. A particularly tantalizing prospect is the hope of finding commercial applications for some of the hundreds of chemicals that make up bio-oil. A lot of research and development effort is directed toward finding ways to blend the product with other fuels. "There's a lot of room for cooperation and symbiotic [relationships]," Kingston says. "We've seen that with the sugar industry and ethanol producers. I believe we can do the same thing with biodiesel producers. With the market and geopolitical conditions we have today, it's very worthwhile to explore."

Alright, bio-oil may not actually share a family tree with biodiesel, but it is an environmentally sound product derived from biomass. This dark, viscous renewable fuel is produced through the thermal cracking of molecules, a process known as pyrolysis. An ambitious anadian firm is on a mission make this stuff work commercially-and it's something biodiesel stakeholders should keep an eye on.

A Biofuel of a Similar Line

The biodiesel industry is rapidly emerging as one of the hottest markets in the world and for good reason. We consume nearly 65 billion gallons of diesel fuel each year, yet it is estimated that we produced less than 100 million gallons of biodiesel in 2005. The Energy Policy Act of 2005, Hurricane Katrina, impending ultra-low sulfur regulations and rising fuel prices have all contributed to the abundant optimism that surrounds the industry. Such optimism, however, must be viewed with caution as investors look to develop multi-million dollar production facilities. 
 Many different factors can impact the viability of a new biodiesel project, including site selection, organizational structure and strategic partners. Generally speaking, however, the most important factors fall into three main categories: feedstock, process technology and product marketing. If mistakes are made in these three main categories, the resulting pain could sour the most enthusiastic biodiesel proponent.

 
 Feedstock
 The biodiesel industry is exciting because the product can be produced from such a wide array of feedstocks. Renewable fuel is being produced from virgin vegetable oils, animal fats and recycled grease. No other fuel has such a broad spectrum of options for raw material. When developing a new biodiesel project, one must always consider the source, cost and quality of the feedstock, as each of these factors can seriously impact the success of the plant.
 
 Process technology
 Technology providers have responded to the demand for processes that can handle multiple feedstocks in various quantities. For developers, technology selection may at times seem like a trip to the roulette wheel, but in all fairness to the providers, they are dealing with a multitude of issues:
 
 <ul>
 <li>A wide range of project sizes from 1 MMgy to 60 MMgy</li>
 <li>Low free fatty acids/high free fatty acids</li>
 <li>Crude, partially refined and fully refined feedstocks</li>
 <li>Crude versus technical versus USP or Kosher-grade glycerin</li>
 <li>Increasingly stringent quality standards</li></ul>

 These are just a few of the issues. Technology selection is one of the most difficult and important decisions a potential biodiesel producer will make.
 
 Product markets
 The size of the potential market for biodiesel is almost hard to comprehend. The government has certainly helped by making the price differential more competitive and removing barriers to entry. Diesel fuels (and distillates in general) are projected to be one of the fastest growing segments of the U.S. and European fuel industry. Potential biodiesel producers must identify the proper market channels to distribute their products and coproducts, develop a pricing strategy, and deliver a product that meets or exceeds current and future ASTM specifications on a continuing basis. The only way to remain competitive over the long-term is to develop a reputation for providing quality products at competitive prices. BQ-9000 will become a critical differentiating factor that biodiesel buyers will come to expect. 
 
 There are many aspects to developing a new biodiesel project, or evaluating an existing one. It is perfectly acceptable to be optimistic; just be sure to remain realistic and diligent in your endeavor.

Competing in the New Biodiesel Arena; Developing Viable Projects Developing Viable Projects

Legal Perspective

Australian adventurer and television personality Shaun Murphy came to America to prove that there are alternatives to gasoline and diesel, and the result was a one-of-a-kind "cool fuel" road trip.
 
 An 18-part TV series, Cool fuel Roadtrip debuted this past fall on UPN and follows Murphy, his Jack Russell terrier sidekick Sparky and the Cool fuel crew as they set off on an incredible journey to conquer 16,000 miles of American road using nothing but biodiesel and other fuels. "A Cool fuel is anything besides gasoline," Murphy explained. "You can grow it, squeeze it, fry it, heat it up or catch it. Heck, you can even eat it!" By using 12 of the coolest fuel sources he could get his hands on, Murphy crossed 30 states on 30 different vehicles including cars, motorcycles, boats and even an airplane in order to tackle the "no gas" challenge.
 
 "The cool thing is most of the fuel we've used is being produced today on American farms," said Murphy of the different fuels that got him across the country, particularly biodiesel, Murphy's most precious resource. Able to run in any diesel engine, he took full advantage of biodiesel. He used it to power a boat through the Orcas Islands to the Canadian border. From Los Angeles to San Francisco, Calif., he used it to fuel a 32-foot Hummer H1 stretch limousine that hit 75 miles per hour. For kicks, he took a spin around a track in a 125 mph biodiesel dragster. Whenever Murphy couldn't find a clean source of electricity to power his electric vehicles, it was biodiesel to the rescue; he'd just plug into a biodiesel-fueled generator for the quick fix that would get him another 40 miles or so down the road.
 Made of everything from soybeans to vegetable oil, and increasingly available across the United States, biodiesel was the Cool fuel crew's lifeblood. "Biodiesel is the single fuel that made the TV production possible," Murphy explained. "Our production crew charged camera batteries, computers and lights via our biodiesel-powered generator, and our RV, which we lived and produced the TV series in, ran on B100 for 16,000 miles." 
 
 Murphy made use of some more creative fuels as well. Cow manure that produced electricity powered an array of electric bikes. Hempoline (a mix of hemp oil and ethanol) powered a truck that has a helicopter jet turbine for an engine. Fresh beignets and crawfish were fed into the gasifier of a green Hummer. Corn whiskey (100 percent ethanol) powered Murphy through the air across Iowa in a 1982 Mooney 201 airplane. The sun helped him knock off some miles by powering a solar canoe across gator-infested Lake Okeechobee in Florida. Vegetable oil-straight from the fryer-powered Murphy all through Texas.
 
 Murphy's challenge took him from San Francisco to the Canadian border, across the Rockies to the Great Lakes, east to New York, south to Florida, then across the Deep South all the way to Los Angeles and back to San Francisco. To complete the trek, Murphy and his crew found innovators and inventors who knew a thing or two about designing and building vehicles, and developing fuels from a wide range of resources, and who ultimately enabled them get down the road. They also had some star power to keep them going with the likes of Daryl Hannah, Jack Johnson, Alexandra Paul from Baywatch and actor Ed Begley Jr. 
 
 Throughout their adventure, the Cool fuel team tackled the challenges of life on the American road-searching for new and out-of-this-world fuels, discovering strange vehicles, meeting amazing people and, on occasion, getting very, very lost.

 You can catch Cool fuel Roadtrip this April on The Science Channel and OLN Canada beginning April 18. Check out <a target="_blank" href="http://">www.coolfuelroadtrip.com</a> for more information on the show and local network listings.
 
 Alexandra Lambrinidis can be reached at 
 <a href=mailto:"alex@coolfuelroadtrip.com.">alex@coolfuelroadtrip.com.</a>

Cool fuel pioneers: 16,000 miles of American road and not a drop of gas

Talking point

Pursuing its mission to become the "leading manufacturer, processor and distributor of premium biofuels," NewGen Technologies Inc. has acquired three fuel terminals on the Colonial and Plantation pipelines from Crown Central LLC. The terminals, which have a total storage capacity of over 10 million gallons and an annual throughput capacity of more than 500 million gallons, will be used for the storage and distribution of alternative fuels. Two of these terminals, located in Charlotte, N.C., and Spartanburg, S.C., are expected to be operational by the second quarter of 2006, with the Columbus, Ga., location to come on line in the fourth quarter.
 
 At these terminals, ReFuel America, a subsidiary of NewGen Technologies, will begin blending and distributing biodiesel 
 currently available on the market. Ultimately, the terminals are intended for NewGen Technology's own biodiesel once its production facilities are up and running.
 
 Based in Alpharetta, Ga., the Colonial Pipeline delivers a daily average of 100 million gallons of gasoline, home heating oil, aviation fuel and other refined petroleum products to communities and businesses throughout the southern and eastern United States. The Plantation Pipe Line Company operates as a carrier of refined petroleum products: different grades of motor and aviation gasolines, commercial and military jet fuels, heating oils, and diesel fuels.

BP to spend $9.4 million on Indian biodiesel study

During most of the 1990s, I served as a volunteer farmer leader representing the Minnesota Soybean Research and Promotion Council (MSRPC) on the National Biodiesel Board (NBB). I now serve on the board of directors of SoyMor Biodiesel in Albert Lea, Minn. SoyMor is one of more than 30 new plants that began production within the past year. In recent months, I have heard a couple of these newcomers comment about NBB membership and dues.
 
 It is easy to imagine how someone penciling out various operational costs might do the math on projected NBB membership dues and question whether it is a necessary cost. However, those who have been involved in the biodiesel industry know the enormous value that the NBB provides through its federal and state regulatory, technical and informational resources; its coordination role with government and academic research; and its valuable communication role, which supports its government policy work and helps protect the industry from attacks. They also know the importance of being engaged in industry leadership efforts through the NBB.
 
 Like many of my fellow soybean farmers, after the first Gulf War, I saw the development of a biodiesel industry as a way for farmers to contribute to our nation's energy supply. We envisioned a thriving biodiesel industry that would help revitalize agriculture and help farmers participate in the growing economy, which seemed at the time to be growing in all sectors except agriculture. Beginning in 1992, the NBB coordinated research that was funded by the soybean checkoff. The soybean checkoff is a program that collects an assessment from the grain check of all soybean farmers and invests those dollars in soybean research and education. During most of the 1990s, the NBB had only farmer representatives because there were very few entities producing biodiesel. The NBB's soybean checkoff funders were eager for a biodiesel industry to emerge so that the private sector could help fund the development programs. Meanwhile, soybean farmers like me sponsored more than $30 million in checkoff resources during the 1990s for critical research, including the $2.2 million in health effects testing for Clean Air Act compliance.
 
 Farmers are generally long-term thinkers, and they view the investment of the roughly $1 per acre into research and development as essential to keeping their industry healthy. The checkoff program has demonstrated success. In addition to the checkoff, soybean farmers contribute personal dollars to support the government policy efforts of the American Soybean Association (ASA), which has led the legislative activities for biodiesel in Washington D.C., since the beginning.
 
 As biodiesel production companies began to emerge in the mid to late 1990s, farmers recognized a need to include them in NBB membership and involve them in the direction and prioritization of resources. However, at that time, these companies were not selling very much biodiesel, so they were not generating sufficient revenue to contribute to the significant technical, regulatory and educational efforts that the NBB implemented. 
 
 In February 1999 at an NBB meeting in Albuquerque, N.M., the existing biodiesel producers proposed a plan to expand NBB membership to include biodiesel producers. I was serving as vice chairman of the board at that meeting. The producers proposed that their dues should be based on a penny per gallon so that biodiesel producers could contribute to industry efforts at a rate that corresponded to the level at which they participated in the biodiesel market. The concept was that farmers and fuel producers would work together in a combined effort to direct and prioritize development activities. Although fuel supplier contributions would be very small for a while, the volume-based dues structure called for a growing amount of contribution as biodiesel sales grew.
 

 It is important to note that private company contributions can be used to support important state and federal government affairs, which cannot be performed with other sources of funding. As the industry has grown over the years, the NBB volume dues structure has evolved so that large producers are not overly burdened. The dues rate incrementally steps down to 1/10 of one cent per gallon on volumes over 15 million gallons. Also, in an effort to be fair to small producers, the minimum dues amount was cut in half, and a policy was enacted that allows small producers to apply up to two years worth of their dues toward certification fees related to BQ-9000 participation.
 
 If SoyMor's biodiesel operations are successful and we are able to produce for a full year at full capacity, our NBB dues would amount to less than 1/3 of one cent per gallon. That represents somewhere on the order of 1/10 of 1 percent of the value of each gallon we sell. I do not view this as an expense but rather a small, critical investment in the future of our industry. The only reason our industry has the potential for success right now is because of the strong energy policy that is in place. That energy policy, on both a federal and increasingly state level, will need to continue in the foreseeable future. It will be up to the NBB and its partnership organizations to conduct the government affairs work and the coordination that will keep the energy policy strong.
 
 I believe this historical perspective is important because those who are just coming into the biodiesel arena may not fully appreciate the fact that the opportunities they are pursuing in the biodiesel market today did not just appear by coincidence. That market was built by a lot of hard work from a lot of people. We have now entered a whole new era of growth and visibility, and the need for technical, regulatory and communications efforts has never been greater. Soybean farmer funders still see this need and are glad to see the vision from 1999 may finally materialize. As the market grows, biodiesel companies are better positioned to step up to the plate to help fund their own industry initiatives. It should be noted that a handful of leading biodiesel industry companies have been supporting legislative efforts with the NBB and ASA for a number of years-on top of their dues to the NBB. Farmer funders have shown a willingness to continue their support of critical research priorities in the foreseeable future, if private companies are willing to support the necessary energy policy work.
 
 As an example, farmers have committed $2.1 million toward the 2007 engine testing program, which will be leveraged with over $10 million of funding from the U.S. DOE and the engine companies. This funding will be used to conduct engine certification testing with ultra low sulfur diesel fuel and biodiesel blends on the new advanced diesel technology, which will be employed on new engines after 2007. Without this critical testing, biodiesel would not be able to be used in future diesel engines. Likewise, farmers are funding hundreds of thousands of dollars for biodiesel blends to be tested under the state verification procedures for California and Texas (the No. 1 and No. 2 highest diesel fuel users in the country, respectively). I might also point out this soybean checkoff funding will benefit all biodiesel feedstocks, not just soybean oil-a commitment that demonstrates benevolent leadership in the biodiesel industry.
 
 As a soybean farmer, I am proud to contribute $1 per acre to the checkoff program. It is 1/2 of 1 percent of the value of my crop, and it is wisely invested to see that the industry stays healthy and strong. Likewise, as a biodiesel producer, I see the investment of around 1/10 of 1 percent of the value of my biodiesel production as a critical investment in the future of the biodiesel industry. Indeed, NBB dues represent less than 1 percent of total federal and state incentives that will be applied to the biodiesel that my company produces-and it is a part of critical government energy policy that the NBB will be called upon to support. The NBB has established an impressive record of success and continues to coordinate a growing partnership among all industry stakeholders. Anyone who expects to participate in the biodiesel market should be willing to do their part to invest in the future. A unified and coordinated biodiesel industry is the only path to continued success and sustainable growth.

Why NBB membership matters: From a farmer-leader-turned-fuel-producer

Guest Editorial

Actress and long-time biodiesel supporter Daryl Hannah participated in the National Biodiesel Conference & Expo in San Diego for the third year in a row. She participated in a press conference with fellow actor Luke Perry. Both elaborated on the importance of the family farmer; Perry is originally from rural Ohio.
 
 EPA Administrator Stephen Johnson addressed one of the general sessions, titled, "Cleaning up America: Biodiesel, NOx and Long-Term Plans for Pollution Control." Johnson recognized the important role biodiesel can play in helping to clean up the nation's air and in weaning the United States from its dangerous addiction to foreign oil. "The president knows we are too reliant on foreign oil," Johnson said. "Our country is on the verge of a dramatic change for how we power our cars, our homes and our businesses. And innovation-including innovations in biodiesel-is the catalyst of this change." 
 
 Johnson added that he believes, "25 years from now, we can make foreign sources of oil go the way of the typewriter and the Walkman." He also complimented the NBB on "greening" the conference through recycling, composting and purchasing eco-friendly products.

Star power

All the informational sessions were complemented by a little play. More than 90 attendees enjoyed a golf tournament at the world-class Maderas golf course. A Super Bowl party in a football-field-inspired venue helped "kick off" the conference. Attendees were also treated to an Emily Richards concert Tuesday night. Richards volunteered to perform in show of her support for biodiesel; she also attended the conference. She is known as the most downloaded independent pop/rock artist on MP3.com.
 
 Of course, the conference could not have been this substantial without the help of sponsors like the USDA; NREL; the DOE; Earth Biofuels; Core Ventures/Croplan Genetics; Volkswagen; Biodiesel Magazine; Marc-IV Consulting; Ag Environmental Products; Axens North America; BASF Corporation; Biofuels Brokers LLC; Degussa Corporation, Building Blocks; Fremont Industries; John Deere Agricultural Marketing Center; Superior Process Technologies; West Central/Soy Power; World Energy Alternatives; Crown Iron Works Company; Inspectorate America Corp.; Nationwide Agribusiness Insurance Company; and Pacific Biodiesel, Inc.

A well-rounded event

Legendary musician and biodiesel advocate Willie Nelson headlined the 2006 National Biodiesel Conference & Expo. However, Nelson was not the only public face to draw attention to the largest event the industry has ever seen. Several other stars; high profile government officials, such as U.S. EPA Administrator Stephen Johnson; and private industry leaders helped build biodiesel momentum during the San Diego Convention Center festivities Feb. 5-8.

 
 The conference, hosted by the National Biodiesel Board (NBB), drew record attendance, which more than doubled the 2005 numbers-a two-year pattern since the inaugural event-with approximately 2,500 people. There were a record number of exhibitors at the expo as well, with more than 140 companies filling the exhibit hall.
 The event wrapped up with Nelson and Daryl Hannah on stage with industry leaders for a live broadcast of the Bill Mack, "Satellite Cowboy," XM Radio show and its regularly scheduled "Willie Wednesday" program. This augmented Nelson's presence at a BioWillie pump opening at the San Diego Pearson Ford Fuel Depot later that afternoon. Pearson Ford Fuel Depot is a station offering several alternative fuels, including BioWillie-Nelson's own brand of B20.
 
 "I'm looking forward to bringing biodiesel to the people of San Diego through the city's first BioWillie pump," said Nelson, a partner in the company Willie Nelson's Biodiesel. "Through biodiesel, we can reduce dependency upon foreign oil and adopt an energy source that's clean, renewable and helps family farmers find new uses for their products." 
 
 Other guests appearing onstage during the Bill Mack show included Joe Jobe, CEO of the NBB; Bob Metz, a South Dakota soybean farmer, current president of the American Soybean Association and past NBB chairman; Don Borgman, a market planning manager with John Deere; Hannah; Connie Scarpelli of General Motors; and Carl Cornelius, owner of Carl's Corner, the first truck stop to sell BioWillie, and partner in Willie Nelson's Biodiesel.

Willie Nelson, attendance showcase how big biodiesel is becoming

A new industry book, Biodiesel America, was launched by author Josh Tickell during Monday's general session and also at an evening book signing reception. Another launch of sorts took place with a major fleet announcement at the Tuesday general session.
 
 Sysco, the leading food distributor and one of the largest private not-for-hire trucking fleets in the United States, announced it was using B5 in hundreds of trucks. DaimlerChrysler also discussed its recent decision to specifically cover the use of B20 in the 2007 model year Dodge Ram pickup truck for government, military and commercial fleets (see page 24).
 
 Other general session speakers included NBB Chairman Darryl Brinkmann and Thomas Dorr of the USDA Energy Council, who discussed "Great Strides for Biodiesel."	All conference attendees received some of the biodiesel star treatment as they were able to drive the newest offerings by diesel automakers Volkswagen, DaimlerChrysler and General Motors, including the Dodge Ram, Volkswagen Jetta, Jeep Liberty and Chevrolet Savannah.

Unveiling industry standouts

Some unique educational presentations, aside from the tracks and sessions highlighted in the rest of this magazine, were the pre-conference sessions. Leland Tong, chairman of the National Biodiesel Accreditation Commission, led an information session on the voluntary quality control program, BQ-9000. "Train the Trainer," or Biodiesel 101, was put on by NBB staff members for those seeking the basics on biodiesel. A standing-room-only session on biodiesel plant feasibility, "Making the Right Decision," was provided by Marc-IV Consulting. Companies and individuals interested in NBB membership were presented a membership overview by NBB Director of Operations Donnell Rehagen.

Inside Information

In a sign of growing OEM acceptance of biodiesel, DaimlerChrysler recently became the first U.S. automaker to specifically approve B20 in a warranty 
 position statement. 
 
 The National Biodiesel Board (NBB) welcomed DaimlerChrysler's decision to approve the use of B20 in its Dodge Ram pickup trucks for government, military and commercial fleet customers. Use of B20 in fleets is approved for the 2007 model for Dodge Ram pickups equipped with Cummins diesel engines. 
 
 Chrysler Group President and CEO Tom LaSorda touted the benefits of biodiesel during his remarks at the Economic Club of Detroit's meeting Jan. 23. "Biofuels represent a huge opportunity to reduce fuel consumption and our dependence on foreign oil, while also offering a significant environmental benefit," LaSorda said. "Biodiesel is proof that at least part of the solution to these national challenges can be homegrown." 
 

 Chrysler Group initiated a factory fill of B5 fuel in the Jeep Liberty CRD diesel SUV starting with the 2005 model year. Every vehicle is fueled with B5 at the assembly plant in Toledo, Ohio. 
 
 DaimlerChrysler is working with the NBB and others to develop a consistent, universally applied American Society for Testing and Materials (ASTM) quality standard specifically for B20 that would allow them to recommend the blend to all owners of Dodge Ram diesels. The B20 must also meet U.S. military specifications, which include using the blend within six months. 
 
 In addition, the NBB, DaimlerChrysler and all the other major vehicle, engine and fuel injection companies are actively engaged in a research program testing B20 and lower blends of biodiesel in the advanced diesel engine platforms mandated by the U.S. EPA for 2007 and 2010 model vehicles. Modern, clean diesel vehicles offer fuel economy improvements of 30 percent and reduced greenhouse gas emissions, compared to gas-powered vehicles. 
 
 "While diesel technology alone can make big strides toward helping us meet our national energy, environment and security objectives, when you add biodiesel and other biofuels, it gets really exciting," LaSorda said.

DaimlerChrysler approves use of B20 in 2007 Dodge Ram pickup trucks

Freedom Fuels announced that North Iowa Venture Capital Funds (NIVCF) would become its latest investor in a Mason City, Iowa, biodiesel plant. NIVCF, an organization comprised of 61 investors, is investing in various north Iowan projects by providing financial and business support to assist in the growth of local companies. NIVCF would not disclose the amount it had invested with Freedom Fuels, but the company has invested over $1 million in six Iowa companies in  the past few years. "We are pleased to be a part of new business success that will add to the growth and benefits of living in north Iowa," NIVCF President Bob Lembke said.

North Iowa Venture Capital Funds invests in biodiesel

In Chinese tradition, Fan Fuchun, vice chairman of the China Securities Regulatory Commission, struck a gong to announce the inauguration of soybean oil futures trading at the Dalian Commodity Exchange (DCE) in January.
 
 He was accompanied by Huai Zhongmin, deputy secretary of the Communist Party of China Dalian municipal committee; Wang Chengmin, vice-mayor of the Dalian municipal government; and Bai Meiqing, chairman of the Chinese Academy of Geological Sciences. The introduction of soybean oil futures would complete the product line on soybean-series futures, according to Bai Meiqing. In particular, it would provide the soybean-related firms with hedging tools on risk management.
 
 "DCE will continue to strengthen the supervision, provide the best services for all the investors and institutions in China, and help Chinese soy-oil producers to reduce the risks of drastic price fluctuation of refined oil and soybeans on the highly competitive soybean oil market," DCE President Zhu Yuchen said.

DCE begins soybean oil futures trading

Consolidated Biofuels Inc., a Texas company that plans to build and operate six 30 MMgy biodiesel plants in the United States, has found a financial advisor. Lane Capital Markets (LCM) was retained in early January to help Consolidated Biofuels with the completion of its institutional funding and to manage existing retail through a syndication of broker dealers. "We are excited to have LCM's participation," said Christopher Sharon, president and CEO of Consolidated Biofuels. "IIt's expertise and credibility will greatly aid the company as we complete our funding for the construction of our biodiesel facilities."

Consolidated Biofuels names financial advisor

Earth Vision Technology of Canada and ADI Thailand have come together to create a new venture, EVT Manufacturing. The company will initially invest in a palm-oil plantation and the construction of a palm-oil extraction plant in Cholburi, Thailand. EVT Manufacturing then intends to build seven biodiesel plants with a combined capacity of 300 MMgy, employing used vegetable oil as a feedstock. It also plans to open biodiesel service stations, with the eventual goal of exporting biodiesel.

Canadian, Thailand companies Canadian, Thailand companies

Minnesota Soybean Processors (MnSP), which operates a 30 MMgy biodiesel plant in Brewster, Minn., has received a $26,000 energy conservation grant from its utility provider, Nobles Cooperative Electric, for installing and using high-efficient lighting, motors and adjustable speed drives. A spokesman for the power supplier said the efficiencies will save the biodiesel plant $16,000 per year. This is the second grant that MnSP has received from Nobles in the past two years.

MnSP receive energy grant

D1 Oils announced that Elliott Mannis took over for Philip Wood as CEO in January. Mannis joined the company as chief financial officer in 2005. Mannis has held senior positions, including group finance controller, at Aegis Group Plc, where he worked from 1993 to 1998. The new CEO has commited to continue D1 Oils' business strategy of developing oil bearing crops, refining biodiesel from a variety of feedstocks and trading biodiesel.

March 2006

Business Briefs

CAA awards Volkswagen for B5 coverage

North Iowa Venture Capital Funds invests in biodiesel

DCE begins soybean oil futures trading

Consolidated Biofuels names financial advisor

Canadian, Thailand companies Canadian, Thailand companies

MnSP receive energy grant

D1 Oils appoints new CEO

ADM shakes management tree

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Editor's note

Legal Perspective

Guest Editorial

Featured

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Ethanol Folks Talk Biodiesel In Vegas

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March 2006.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

CAA awards Volkswagen for B5 coverage

North Iowa Venture Capital Funds invests in biodiesel

DCE begins soybean oil futures trading

Consolidated Biofuels names financial advisor

Canadian, Thailand companies Canadian, Thailand companies

MnSP receive energy grant

D1 Oils appoints new CEO

ADM shakes management tree

Columns

Editor's note

Legal Perspective

Guest Editorial

Featured

An Industry Rising

Ethanol Folks Talk Biodiesel In Vegas

A Biofuel of a Similar Line

Talking point

March 2006