More than 200 people toured Texas' newest biodiesel facility late last week. <a target="_blank" href="http://www.geogreenfuels.com">GeoGreen Fuels</a> held an Oct. 12 ribbon cutting for its 3 MMgy biodiesel plant in Gonzales, Texas. It's the first of what the company hopes to be several biodiesel plants.
 

 Construction on the 3 MMgy facility began in May. Although the plant is producing biodiesel, the fuel isn't ready for distribution quite yet. GeoGreen has submitted the fuel for the lab testing needed for EPA certification prior to selling the product, according to Director Kathy Kartchner.
 
 <a target="_blank" href="http://www.johnsonoilcompany.com">Johnson Oil Co.</a> of Gonzales will be distributing most of the B100 from the plant. The company is already a biodiesel distributor, having distributed B20 since spring 2005. Johnson Oil distributes fuel from AGE Refining Inc. of San Antonio. Houston's <a target="_blank" href="http://www.gulfhydrocarbon.com">Gulf Hydrocarbon Inc.</a> provides the biodiesel for AGE Refining's fuel blend.
 
 <a target="_blank" href="http://www.greenlineindustries.com">Greenline Industries</a> designed and built the Gonzales facility, which is located approximately one hour east of San Antonio. GeoGreen will use soy oil as a feedstock.
 
 A holding company has also been formed for future GeoGreen biodiesel projects, according to GeoGreen's Dale Kartchner. <a target="_blank" href="http://www.fueldevelopmentcompany.com">Fuel Development Company LLC</a> (FDC) will act as the parent company for future GeoGreen plants. FDC recently completed an agreement with the Economic Development Committee of Crockett, Texas, for a 3 MMgy biodiesel plant in the city's industrial park. The plant will eventually be increased to 6 MMgy and include a 5 MMgy oil pressing facility. Crockett is located midway between Houston and Dallas.

 
 A third project, a farmer-owned facility in El Campo, is also being developed, according to Dale Kartchner. El Campo is approximately 75 miles southwest of Houston. Dale Kartchner said he hopes to move forward with both projects within the next 30 to 45 days. Greenline Industries is expected to build both facilities. 
 
 GeoGreen is also working with the city of Gonzales for a future oil pressing facility, which would be located adjacent to the biodiesel plant. Dale Kartchner said the Gonzales economic development group is pushing for the project, which it believes might signal create demand for additional cash crops. "It also fits well with what we're doing," Dale Kartchner said. "We're trying to make a footprint with a crush facility and a small biodiesel plant. We want to affect the economy from the farmer to the marketing of biodiesel."
 
 GeoGreen Fuels
 Location: Gonzales, Texas
 Design/builder: Greenline Industries
 Capacity: 3 MMgy
 Feedstock: soy oil
 Biodiesel marketer: Johnson Oil Co.
 Start of construction: May 2006
 Start-up date: October 2006
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

 
 Posted: 1:49 p.m. CDT Tuesday, October 17, 2006

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GeoGreen Fuels starts up in Texas

A long-time central Texas fuel distributor is planning on making biodiesel a much larger part of its portfolio. Gonzales, Texas-based <a target="_blank" href="http://www.johnsonoilcompany.com">Johnson Oil Co.</a> is now marketing its biodiesel-blended diesel fuel under the name TexAg BioDiesel.
 
 The company, which has distributed fuels since 1958, already markets a variety of biodiesel blends, including 2, 5, 10, 15 and 20 percent. However, a new local biodiesel producer may help the company more aggressively market the fuel. <a target="_blank" href="http://www.geogreenfuels.com/">GeoGreen Fuels</a>, a 3 MMgy biodiesel plant, held its <a target="_blank" href="http://www.biodieselmagazine.com/article-web.jsp?article_id=1191">ribbon cutting ceremony </a>last week in the Gonzales industrial park. Johnson Oil has an off-take agreement for a majority of the plant's biodiesel.
 
 Brad Julian, Johnson Oil's commercial business manager, said the company is in the process of upgrading its infrastructure to handle a larger volume of biodiesel. Splash blending tanks are being installed at several Johnson Oil distribution locations. The company's corporate office and main warehouse is located in Gonzales. Distribution plants are located in New Braunfels, Pflugerville, Temple and Abilene, Texas. 
 
 Most of Johnson Oil's biodiesel customers are comprised of fleets, such as aggregate haulers, and bus and concrete companies. The company also offers B5 at a one-island truck stop in Pflugerville, which is near Austin. Julian said the company plans to begin selling B20 at that location in the future. The company is also considering a larger truck stop, although details on a specific location or construction timeframe weren't available. 
 

 Julian said biodiesel availability and quality concerns have limited Johnson Oil's offerings. The GeoGreen plant is expected to alleviate both concerns. He said GeoGreen's location should help reduce freight costs for shipping the fuel. The company currently obtains its biodiesel from in-state producers.
 
 Johnson Oil is considering becoming a <a target="_blank" href="http://www.bq-9000.org">BQ-9000 </a>certified marketer, according to Julian. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program. "Integrity of the product is what we're really concerned with," Julian said. 
 
 Currently Peter Cremer North America and Sprague Energy Group are the nation's only certified marketers under the BQ-9000 program.
 
 Julian said consumer demand was one of the reason's Johnson Oil began carrying biodiesel. He also said customers have told him biodiesel-blended fuel creates less vibration in vehicles using ultra low sulfur diesel. 
 
 Johnson Oil is an authorized branded distributor of Exxon, Mobil and Chevron Lubricants.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 2:56 p.m. CDT Wednesday, October 18, 2006

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Texas distributor investing in biodiesel

In eastern North Dakota, small talk-the art of making conversation for the sake of conversation-is pretty much one and the same as discussing the weather. Supposedly we talk about the weather so often because we have weather worth talking about. It's extreme, some say, but I've never really thought so. You've got hurricanes in the Southeast, fire-inducing droughts interrupted by mudslide-inducing downpours on the West Coast, epic blizzards in the Northeast, each of the last three phenomena in the Rocky Mountains, and ferocious twisters in the Central Plains below us. Truth be told, we don't get much of that really bad stuff in eastern North Dakota. It's just cold-very cold-three to five months out of the year.
 
 To be fair, though, I should admit that stepping out into 23 below Fahrenheit temperatures (not counting wind chill) at 7 a.m. on a dark February morning can, indeed, be an extreme experience. The legendary Farmer's Almanac, which has been published continually since 1818, forecasts U.S. weather-broken down by regions-on an annual basis. This year's almanac says a cold, wet winter is in store for this area of the country; the publication uses words like "stormy" and "blustery" to describe November's forecast-which closes with three vague but ominous words: "turning much colder." Remarkable prediction. 
 
 Before it actually turns "much colder"-and it will-folks up here "winterize." We seal up our homes, break out the wool and fleece, and tune up the snowplow. 
 
 The diesel industry does the same thing this time of year. It winterizes, usually by mixing No. 2 diesel with No. 1 diesel, or by adding low-temperature fluidity-improver additives. Experts say non-winterized diesel fuel won't generally cause problems as long as temperatures are at or above 10 degrees Fahrenheit. In colder temps, however, failing to make adjustments can be risky. 

 
 Biodiesel has, in my opinion, gotten a bad rap on the cold flow issue. Yes, B100 and biodiesel blends can gel at higher temperatures than conventional diesel, but if the fuel is produced, blended, stored and handled properly, blends up to B20 have been proven to have sufficient cold weather properties. Charles Neece of FUMPA Biofuels, a 3 MMgy biodiesel plant in Redwood Falls, Minn., says in this month's page 52 feature, "Remember December," cold flow concerns-especially with B2-are all but eradicated when diesel fuel is properly winterized. Likewise, the article points out that Minnesota had problems with its diesel fuel in the winter years before B2 was part of the equation. 
 
 In turn, the proper blending of biodiesel plays a large part in avoiding engine problems due to gelling and clogging. That point is made in our page 70 feature, "Conquering the Cold," in which New Hampshire fuel distributor John Rymes says his company's unique way of approaching biodiesel blending has contributed to Cranmore Mountain Resort's success with B20 use over the past three years. Rymes says he looks at the equation backward, accounting for "worst-case-scenario" temperatures and blending the product based on that information. His company also conducts lab tests on its fuels, including regular diesel (with and without additives), to come up with a product that meets its customers' requirements. In the case of Cranmore Mountain Resort, that means a B20 blend that's used in snow-grooming vehicles in frigid temperatures. "It wouldn't be crazy to hear of negative 40 [degrees Fahrenheit] on top of that ski area," Rymes says. 
 
 Well, it's good to hear B20 can stand up to those temps … but you won't find me on the slopes in that weather.

Editor's Note

Cargill has announced plans for a 40 MMgy biodiesel facility to be built adjacent to its soybean processing facility in Kansas City, Mo. The plant will be jointly owned by Cargill and Paseo Biofuels LLC, a new organization formed by a group of Missouri soybean farmers. It will be Cargill's second U.S. biodiesel facility. Construction is expected to begin this fall on what will be the state's largest biodiesel plant, which will begin production in summer 2007.

Cargill to build biodiesel plant in Missouri

Northeast Kansas Bioenergy LLC, a $122 million integrated biodiesel and ethanol biorefinery to be built near Hiawatha, Kan., contracted with Burns & McDonnell to engineer the biodiesel plant. Infrastructure for both facilities is being worked on now, and construction of the 30 MMgy biodiesel facility will begin in the first quarter of 2007, according to Project Director Scott McDermott of Ascendant Partners. He said the biodiesel facility is being constructed first because the simpler process will allow fuel to be produced sooner.

Northeast Kansas Bioenergy selects engineer

The Wyoming Department of Agriculture, in cooperation with the Wyoming Rural Development Council, the University of Wyoming and other industry partners, received a $45,490 grant from the USDA to evaluate new and existing markets for biodiesel production by-products. The state will also formulate a strategy for seed crushing mills, and biodiesel producers in Colorado and Wyoming, to gain access to these markets.

Wyoming receives $45,490 to research biodiesel opportunities

The Defense Advanced Research Projects Agency's (DARPA) Advanced Technology Office (ATO) has requested proposals for research and development efforts to develop a process that efficiently produces a surrogate for petroleum-based military jet fuel from oil-rich crops. Current biodiesel production processes yield an unsuitable fuel for military applications, which require higher energy density and a wide operating-temperature range. Tests using various fuels were already underway in September at Edwards Air Force Base in California.

U.S. Department of Defense looks for renewable military jet fuel

Biodiesel Magazine noticed an increase in North American companies using biodiesel in fleet vehicles in the past month. A few are highlighted here.
 
 In August, the Greater Orlando Aviation Authority (GOAA), which operates the Orlando International Airport in Florida, announced that the airport fleet is testing B20 in 100 vehicles. These test vehicles consume about 1,000 gallons of fuel per day. "Biodiesel offers that unique blend of comparable price and quality that we were looking for," said Steve Gardner, interim executive director for the GOAA. There was no word on when the testing would conclude.
 
 Another testing project was underway onboard Anna Desgagnés, a Transport Desgagnés Inc. multipurpose merchant vessel used to ship cargo to a number of ports along the St. Lawrence Seaway, Gulf of St. Lawrence, Great Lakes, Maritime Provinces and eastern Arctic. From June to October 2006, the vessel nicknamed "BioShip" logged over 24,000 miles in three trips, during which B20 powered one of the four generators aboard, according to a project newsletter. Tests analyzed generator performance, measured emissions reduction, evaluated maintenance cost reduction, and investigated the overall potential and constraints involved in using biodiesel in marine shipping. 
 
 The single generator required over 30 million gallons of tallow-based biodiesel for the three voyages, which was supplied by Rothsay Biodiesel, a 35 million-liter-per-year (9 MMgy) producer in Quebec. The biodiesel was mixed with marine diesel at a terminal in Montreal, according to Richard Lavoie of Maritime Innovation. Lavoie's company was one of five Canadian partners in the project. 
 

 Another biodiesel project in the Great Lakes area is the National Oceanic and Atmospheric Administration (NOAA) Green Ship Initiative. The NOAA operates a fleet of research vessels and small boats on the Great Lakes through its Great Lakes Environmental Research Laboratory (GLERL). Over the past seven years, NOAA has been exploring options to fill its research vessels that are 30 to 50 years old with renewable and environmentally friendly products as opposed to petroleum-based fuels and lubricants. By May, all three GLERL vessels had been completely converted, and they now incorporate rapeseed-based hydraulic oil for the deck crane, winches, transmission and steering gear; 100 percent soy biodiesel for engine fuel; and canola-based motor oil, according to the agency.
 
 On a smaller scale, a San Francisco Bay cruise company called Red and White Fleet began using B20 in its four ships in August. Because there is no biodiesel fueling station in Fisherman's Wharf, the company receives biodiesel directly from Golden Gate Petroleum, according to company President Tom Escher. Golden Gate Petroleum is a biodiesel supplier affiliated with Bay Biodiesel LLC, a 5 MMgy production plant under construction. Red and White Fleet, a family-owned business since 1892, started to use biodiesel because of environmental concerns.
 
 Up the road, Blue Sky Shipping LLC claims to be the first shipping and delivery company dedicated to transporting goods via trucks that use alternative, domestic fuels. The Crockett, Calif.-based company, which serves a 200-mile radius, uses B100 to fuel its box truck, flat-bed truck and full-size pickup truck. Charles Whitwam, who purchased Blue Sky in June, said the company was founded with the purpose of having an entire shipping fleet running on B100. "We didn't start for shipping, but to change shipping," Whitwam said. 
 
 Blue Sky makes its own biodiesel from waste vegetable oil recycled from local restaurants. Whitwam estimated that the company uses 300 gallons of biodiesel every two weeks. "We're aiming to get bigger," Whitwam said. "If we can compete with some larger companies, they're going to be forced to do something about their trucks and diesel fuel."

In the San Francisco area, Red and White Fleet uses biodiesel from Golden Gate Petroleum in its ships.

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Boats, trucks test biodiesel usage

A group of Iowa-based companies has formed a new biodiesel project development venture with plans for up to 10 biodiesel plants in and around Iowa. TC Energy is already nearing start-up for its first biodiesel plant, a 5 MMgy facility in downtown Keokuk, Iowa.
 Formally announced in August, TC Energy is a joint venture between equipment supplier Technochem International, oil extraction company Insta-Pro International and the developers of the Keokuk plant, Tri-City Energy, according to Tri-City's Al Moander. The new venture offers turnkey biodiesel projects. 
 
 Technochem is already building the Keokuk plant, which Moander said is expected to start up in late September. Keokuk is located in southeast Iowa, near the Illinois and Missouri borders.
 
 The Tri-City plant is a revamped former General Mills facility, which offers existing infrastructure. "We saved a tremendous amount of money while breathing new life into downtown Keokuk," Moander said.
 
 The size and location of the facility, which began construction in January, will allow soy oil to enter and biodiesel to leave via truck. Moander said the "valves would be turned" Sept. 15, with final testing thereafter. He expects a ribbon cutting later this fall. He also said the plant will eventually feature glycerin-refining capacity.
 
 The Keokuk facility will eventually be expanded to include a soy crush facility on the city's waterfront and a 30 MMgy biodiesel plant. Moander said the city is the farthest north location on the Mississippi River that can be navigated year-round.
 

 Democratic presidential candidate Joseph Biden toured the Tri-City plant in late August. "Farm-grown fuels are not the ultimate answer to our energy challenges," Biden said after visiting the plant.
 
 Moander said TC Energy is using the Technochem process because it produces high quality glycerin. He added Insta-Pro's pressure-based oil extraction process doesn't use hexane. The company will be building additional biodiesel plants in Keokuk and shipping them to plant sites in modules via truck. "Once they arrive on-site, they can be quickly connected," Moander said.
 
 TC Energy has already announced its second project. Lion Energy is a 15 MMgy plant proposed for Altoona, near the outskirts of Des Moines. The project, which also includes a soy crush facility, is expected to break ground in November, according to Moander.
 Moander said eight other biodiesel plants will be announced in the near future. He told Biodiesel Magazine the plants will mainly be located in Iowa and produce 30 MMgy.
 
 Iowa is already home to one of the industry's leading turnkey biodiesel companies. Ralston-based Renewable Energy Group recently announced a $100 million private equity financing package and several strategic partnerships that will allow it to expand production to 640 MMgy by 2009.
 
 More information on TC Energy is available at www.tcenergy.com.

Tri-City Energy offices are located in downtown Keokuk, Iowa.

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The Tri-City Energy biodiesel plant is located in a renovated General Mills facility.

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Iowa biodiesel developer announces plans

At press time, Valley Co-Op Oil Mill, a cottonseed processor based in Harlingen, Texas, was doing preliminary engineering for a 3 MMgy biodiesel plant, Valco BioEnergy, which will use cottonseed oil as a feedstock. Hollis Sullivan, president and general manager of the facility, said Greenline Industries will start construction of the biodiesel facility off-site in November and deliver it to the site in January. He expects production to start in March.

Texas cottonseed crusher to build biodiesel plant

The renewable fuels industry has been busy preparing comments for the U.S. EPA since the agency proposed a renewable fuels standard (RFS) implementation plan Sept. 7. Established by last fall's Energy Policy Act of 2005, the RFS creates a floor of 7.5 billion gallons of renewable fuel use in the United States by 2012. 
 
 In addition to preliminary analyses of the economic and environmental impacts, the EPA's proposed plan explains how the industry is likely to comply with the RFS for 2007 and beyond. It proposes that the blending standard for 2007 be at 3.71 percent. 
 
 "The system allows renewable fuels to be used where they are most economical, while providing a flexible means for industry to comply with the standard," said a statement from the EPA. The rule contains compliance tools, and a credit and trading system, which would require a renewable identification number (RIN) to be issued with each shipment of biofuel. Blenders would have the option of using the RIN for their own compliance or trading it to others. Any party that produces gasoline for consumption in the United States would be subject to a renewable volume obligation. Each year, obligated parties-including refiners, importers and blenders-must acquire enough RINs to demonstrate compliance with their RFS obligation. 
 
 The credit-trading program permits renewable fuels that are not blended into gasoline, such as biodiesel and biogas, to participate in the RFS program. Biodiesel would be given 1.5 credits for every one credit issued for corn ethanol. "We were happy with that," noted Scott Hughes, director of governmental affairs for the National Biodiesel Board (NBB). "We're still going through and assessing [the proposal], but in our cursory review, the credit-trading program should hopefully be a friendly process." 
 

 Hughes said the NBB has a working group to evaluate the proposal and submit comments by the Nov. 12 deadline. NBB members can provide feedback to the board or directly to the EPA, which will then issue a final rule in early 2007.
 
 Before the implementation plan was released, fuels were required to be blended at the default standard of 2.78 percent, or about 4 billion gallons, in 2006. Actual blending equaled about 4.5 billion gallons, according to the EPA. The 2006 standard will remain applicable through the end of the year.

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EPA proposes RFS implementation plan

Australia's biodiesel industry, still in its infancy, needs more favorable policy settings to grow, according to Bob Gordon, executive director of Renewable Fuels Australia. The industry is still reeling after a tax reform law passed in June. "The industry was caught by surprise by the impact of that, potentially on the capacity of biodiesel to enter into the petroleum fuel market," he told Biodiesel Magazine.
 
 With the policy change, the relatively small industry went from 100 percent access to the entire petroleum diesel market to potentially being restricted to less than 10 percent of the petroleum diesel market. Biodiesel projects that already had financing in place are still moving forward, but other potential investors have turned their attentions outside of Australia-at least until the "policy mess" is sorted out. "To the best of our knowledge, [the result of the policy] was never intended," Gordon said. "But it had the impact of bringing any new biodiesel production to a shuddering halt in the country until this issue is resolved."
 
 Still, Gordon is hopeful about the future of the biodiesel industry in Australia. "We're hoping that we can get over those remaining barriers for getting ethanol and biodiesel into the main transport fuel markets," he said. 
 
 Currently, the country has two operating biodiesel facilities, with a third nearing completion. The Australian Biodiesel Group Limited (ABG) operates a 10.5 MMgy plant on the Central Coast in New South Wales and recently completed construction on a 42 MMgy facility near Narangba, Queensland. Natural Fuels Darwin Biodiesel Plant, a 40 MMgy plant, is expected to begin production soon, possibly in October, Gordon said.
 
 The National Roads and Motorists' Association (NRMA) in Australia considers both biodiesel and ethanol essential for the country's future, according to association President Alan Evans. The country's fossil fuel resources are declining, meaning it is now a net importer of oil, rather than an exporter. Alternative fuel sources need to be developed, he said. 
 
 The NRMA supports the idea that the Australian Competition and Consumer Commission should have greater powers to monitor petroleum prices. Major oil companies are gaining increasing profit margins in refinery, retail and wholesale sectors on the back of crude oil prices, Evans said. 
 
 For biodiesel to gain acceptance with motorists, it must be demonstrated that it won't have a negative effect on engine life. Also, availability of the alternative fuel needs to be expanded. "If it's not available, people aren't going to use it," Evans said.

 
 The NRMA uses a biodiesel blend for its own truck fleet. However, there are currently no service stations that offer biodiesel in Sydney, Australia, where the association is headquartered. The nearest major oil company offering a biodiesel blend is about 62 miles away, Evans said.

Australian biodiesel industry struggles with tax reform

The U.S. DOE is looking for projects that promote the president's Advanced Energy Initiative (AEI) and are eligible to receive loan guarantees based on the Energy Policy Act of 2005. Up to $2 billion in loan guarantees will be issued to projects that support the AEI's focuses: changing the way vehicles are fueled, and the way homes and businesses are powered. Projects must fall into one of 10 categories, including biomass and alternative fuel vehicles. Pre-applications are due Nov. 6.

DOE offers new loan guarantee program

Missouri Gov. Matt Blunt declared in August that only majority farmer-owned biodiesel and ethanol plants can receive state tax incentives, denying corporate-owned biofuels facilities any discretionary tax breaks. "Companies that are not farmer-owned are more than welcome to locate in Missouri, but I want to make clear that our state's commitment is primarily to our farm families …," Blunt said in a press release.

No tax breaks for corporate biodiesel in Missouri

A sweeping energy plan was announced by Sen. Richard Lugar, R-Ind., at the Richard G. Lugar-Purdue University Summit on Energy Security on Aug. 29. Lugar proposed dramatic and immediate action to increase energy security in his keynote address. "The plan I am proposing today would achieve the replacement of 6.5 million barrels of oil per day by volume-the rough equivalent of one-third of the oil used in America and one-half of our current oil imports," he said. He introduced the legislation Sept. 29.
 
 Most of the senator's plan focuses on ethanol and includes action plans such as expanding ethanol production to 100 billion gallons per year by 2025, requiring all gasoline to contain 10 percent ethanol and expanding E85 access to filling stations by ensuring that at least one-fourth of filling stations have E85 pumps. 
 
 Lugar did include biodiesel as another alternative in his plan. "[Congress] should continue to encourage research, development and deployment of hybrids, plug-in technology, ultra-light auto materials, biodiesel and coal-based transportation fuels, among other promising technologies," he declared to a crowd of 1,000 attendees, which included leaders from government, business, academia and various energy-related fields.
 
 Other aspects of the plan focused on stricter vehicle mileage standards. He pointed to the Fuel Economy Reform Act, which seeks a 4 percent annual increase in fuel economy, as an example. Lugar cosponsored the bill with Sen. Barack Obama, D-Ill.
 
 Lugar admitted that the goals he set forward were ambitious and would take "political breakthroughs and intensive government oversight." However, he said that America could end its oil addiction through technology, and targeted government incentives and regulations. He noted that federal mandates should follow if incentives don't receive sufficient response.
 
 Lugar said he has proposed or cosponsored legislation on every idea that he discussed in his speech. "While we are asking for greater statesmanship from our automobile and oil companies, we must demand the same from our federal legislators and administrators," he said.

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Sen. Lugar hosts summit, outlines expanded energy plan

In 1999, David Boocock, professor of chemical engineering at the University of Toronto, had a eureka moment and discovered an alternative method for refining vegetable oils and yellow greases into methyl esters with far less intensive energy inputs than was previously thought. Several years later, his discovery is the backbone of Biox Corporation, which is producing biodiesel at a full-scale facility in Hamilton, Ontario. The Biox process is the only commercial technology capable of converting high fatty acid feedstocks into biodiesel with one-to-one yields. 
 
 Scott Lewis, business development manager for Biox, told Biodiesel Magazine about the company's proprietary technology. "Everybody [else] takes methanol and adds it to tryglycerides, Lewis said. "You are able to put it in a base environment, but by doing that, those ingredients are phobic. Through the use of a cosolvent-in the proper setting-it makes those ingredients philic … they bond. They go into a single phase, and it cracks off the glycerin." 

 
 Since April 2001, the company has operated a pilot plant in Oakville, Ontario, and it began building a commercial-scale production facility in Hamilton in 2004. The Hamilton site is extremely amenable to a biodiesel producer. "It's flexible from a feedstock point of view, and we have abundant access to feedstock producers, such as crushers," Lewis said. "There's a Bunge crush facility right up the street, as well as storage of tallow, and we have rail and marine shipping capabilities."
 
 The logistical template for the successful operation of the biodiesel plant is designed to have the entire infrastructure on hand. "It's already on hand with everything from maintenance people to a significant labor pool, from the transportation logistics to the suppliers," Lewis said. "Everybody is there."
 
 Biox worked with partners Lockerbie and Hole Contracting Ltd., and AMEC Engineering, which handled construction and design at both the pilot and commercial plants. "We look for partners that bring strategic benefits to the development of a project," Lewis said. "We're well-funded, and we are looking to build our own projects and operate them. We will do that with key strategic partners." 
 
 Birch Hill Equity Partners Inc., an investment firm based in Toronto, announced in August that it had made a $48 million investment in Biox. Alongside the Birch Hill transaction, existing shareholders of Biox invested an additional $22 million by way of cash and the conversion of outstanding corporate bonds for a total equity investment of $70 million. 
 
 With financial backing and a state-of-the-art site, Biox is a company with a bright future. "[The business model] is a revolutionary technology, and the potential size of the market is pretty compelling," Lewis said. "Goal one is to maximize operations, and plans for a public offering or anything like that are only going to come if the time is right. You look at the opportunity when it comes along, but we are not trying to force it or push it."

Biox, a unique biodiesel plant in Hamilton, Ontario, started production in March.

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Biox moves company vision forward

Gov. Rod Blagojevich announced $25 million in new grants to construct five biodiesel and ethanol plants in Illinois. Biofuels Company of America LLC will receive $4.8 million for a new 45 MMgy biodiesel production facility near Danville, and Stepan Company will receive $3 million for the expansion of its current biodiesel plant near Elwood, which will increase production from 10 MMgy to 49 MMgy. Together, the new facilities are expected to produce 225 MMgy of biofuels and create 150 new jobs.

Illinois invests $25 million in five new biofuels facilities

The USDA issued its first survey-based monthly crop production report, and results showed soybean output has taken a hit due to tough, dry weather conditions in the western Corn Belt and Plains. Yield is down 158 million bushels (5.2 percent) from last year's crop and down 82 million bushels from the July forecast. The projected output for the 2006-'07 season is 2.93 billon bushels. Despite this fact, recently released Census Bureau data indicated biodiesel production continues to expand rapidly, according to the report.

USDA report gloomy for biodiesel

At press time, Green Star Products Inc. (GSPI) was awaiting final approval to start construction of a 10 MMgy biodiesel facility in Glenns Ferry, Idaho, that would emit nearly zero net carbon dioxide emissions. Design features include GSPI's proprietary continuous flow, waterless process and biodiesel-run electric generators and boilers. The facility also intends to utilize waste heat from a nearby cogeneration power plant. The plant will use ethanol produced in-house, instead of methanol, to produce biodiesel.

Green Star Products to build neutral carbon dioxide plant

The 2nd Annual Biofuels Financial Conference, hosted by Christianson & Associates PLLP, may be an indication of the growing financing sector of the biodiesel industry. Attendance at the Aug. 17-18 conference in Des Moines more than doubled the number that attended in 2005. 
 
 Seventy-five attendees from biofuels industries-10 representing biodiesel companies-and robust discussions about current issues made the event a success, according to Christianson & Associates representatives. 
 
 "I think the discussion was more detailed this year, and I think we had a very good crowd, including industry board members, comptrollers and CFOs," said Joel Gratz, a Christianson & Associates partner and certified public accountant. "It was a good group to bounce ideas off of."

 
 One strength of the conference is the large amount of group discussion, made possible by the smaller numbers in each of the hour-long sessions, Gratz said. Issues were addressed openly, and it added value for everyone to share in the experience of someone else in their industry, he added.
 
 Gratz was one of nine speakers during the conference, which focused on topics such as U.S. Securities and Exchange reporting and requirements, people and performance management, and financial statement and audit preparation. Brian Jennings of the American Coalition for Ethanol gave a dinner speech promoting renewable fuels as one industry that is making a difference.
 As the biofuels industry continues to grow significantly each year, Gratz hopes to also expand the Biofuels Financial Conference. Next year's event aims to double attendance again, he said. Although plans are not definite, Christianson & Associates is considering Sioux Falls for its 2007 event with the intent to hold it during the same week in August.

Financial conference attendance indicates growing interest

March 1 is not that far off. That fact is a "little bit daunting," said Pete Bethune, captain of Earthrace, a futuristic-looking, biodiesel-fueled powerboat. Bethune and the rest of the crew plan to leave Barbados on March 1 with hopes of circumnavigating the globe in a record-breaking 65 days. "I'm confident in the boat," Bethune told Biodiesel Magazine. "What I'm least confident in is our ability to have all the logistics in place."
 
 Though speed is a factor in this race, it's not the only motivation. Bethune is using the boat to spread the word about alternative fuels, particularly biodiesel. Earthrace is the world's first 100 percent biodiesel-powered raceboat, he said. 
 
 The biggest snag at press time was that the project still lacked a total sponsor. Earthrace, an effort to promote renewable fuels, was still short on funds. "We're keeping our heads above water," Bethune said. 
 
 It cost $3 million to build the race boat, he said. The boat was in the water in February, after 14 months and a total of 18,000 hours of labor. 
 
 The Earthrace powerboat is in the midst of a promotional tour that is set to come to an end Feb. 17. The boat will stop at 30 North American cities, to spread the word about the project to students, members of the public and media. Current high fuel prices help drive interest and support for the project. "It's a pretty receptive audience right now," Bethune said. 
 

 In most of the cities on the tour, host sponsors have helped with costs. Other sponsors have helped out by providing equipment, such as Panasonic, which chipped in with $150,000 in multi-media equipment. 
 
 When Earthrace stopped in Seattle, Wash., in early August, Imperium Renewables Inc., an area biodiesel producer, provided biodiesel for the boat. "The marine industry is something that we are very interested in," said Brian M. Young, director of business development for Imperium. "I think Pete's project will bring attention to the fact that you can use biodiesel in many marine applications, and you can use it safely."

The world's first 100 percent biodiesel-powered race boat goes under the Golden Gate Bridge in San Francisco in late August during a pre-race promotional tour.

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Earthrace launch date approaches; funding still an issue

An August ribbon cutting ceremony highlighted a year-long Wisconsin project to design, build, operate and study a biodiesel reactor. A collaborative effort between the University of Wisconsin-Madison (UWM) and the Madison Area Technical College (MATC), the project is part of a comprehensive renewable energy technology program at MATC, called the Consortium for Education in Renewable Energy Technologies (CERET). 
 
 The reactor was designed in the fall semester of 2005 by freshman engineering students at UWM in an interdisciplinary freshman design seminar. "[MATC] diesel instructors told students what they needed in the classroom, and UWM students set about to design the reactor and order parts," said Ken Walz, MATC project director and chemistry instructor. He collaborated with MATC Diesel Program Director Paul Morschauser, as well. 
 
 The reactor now belongs to the MATC diesel and heavy equipment program, in which fuel is produced and used in the school's fleet of heavy equipment. Initially, program members are testing B2 and B20 blends, according to Walz. In addition to measuring performance on these vehicles, the students are also operating stationary engines at a dynamometer facility to measure emissions. "They'll be doing regular-interval oil sampling to measure changes in oil composition and will also do engine dissections," he noted. 
 
 Walz's chemistry students at MATC are also producing biodiesel on a small scale and comparing its properties to vegetable oil. He said the school's fuel lab is being revamped, and it is seeking equipment donations.
 
 MATC will get its feedstock from a variety of sources. The first batch was waste vegetable oil from a bar and grill operated by Morschauser. Walz said soybean oil will also be used, some coming from a hybrid seed project with O'Brien Farms and Great Lakes Biofuels, a B100 supplier. He added that the school cafeteria could be a source in the future.
 
 MATC received two grants for the CERET program through the National Science Foundation that funded the project, according to Walz. He and Morschauser will work with tractor pullers when school is not in session to test biodiesel in high-performance situations.

The biodiesel reactor was made for MATC by students at the University of Wisconsin-Madison.

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MATC Diesel Program Director Paul Morschauser, front left, and his students stand in front of the biodiesel reactor.

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MATC, UWM collaborate on biodiesel fuel reactor

Recently, the National Renewable Energy Laboratory (NREL) revealed results that show another way biodiesel can help enhance the performance of ultra-low-sulfur diesel (ULSD) fuels. The National Biodiesel Board (NBB) is participating in this research through support from the soybean farmer checkoff program. 
 
 As the on-highway ULSD mandate goes into effect this month, test data is demonstrating that B5 and B20 may help solve a problem for ULSD use in 2007 ceramic diesel particulate filters. It is well-known that biodiesel helps solve the lubricity problem in ULSD; now there is strong evidence that biodiesel can help make the coming after-treatment devices work better as well. 
 
 The U.S. EPA's sulfur reduction in on-road diesel fuel was implemented specifically to allow the use of particulate matter (PM) and NOx catalyst equipment that would otherwise be fouled by the sulfur in diesel fuel. However, surprising results are being discovered with the new diesel particulate filters (DPF), which will be required on all new diesel engines beginning in 2007. 

 
 The DPF filters all the particulate matter-or soot-out of the vehicle's exhaust, reducing PM emissions to well below one-tenth of today's levels. The soot trapped on the DPF is burned when the engine is operating at a high-exhaust temperature condition (high speed and load). For some engines, the exhaust never gets hot enough for soot combustion. This causes an increased "back pressure" in the engine exhaust system. The NREL/NBB study has demonstrated that when biodiesel is blended with ULSD at 5 percent or 20 percent, the required temperature for soot combustion is much lower. So, with biodiesel blends, there is less chance of the DPF plugging with soot and having to be cleaned or replaced. 
 
 Figure 1 shows the back-pressure phenomenon of ULSD represented in the blue line. B5, represented in red, reduces back pressure significantly; while B20, represented in green, reduces back pressuring even further.
 
 In addition to reducing the back pressure and lubricity issues, emissions data with the new particulate filters show further significant reductions of PM using B20. Figure 2 shows that on this engine, B20 (green) provides a 25 percent reduction in PM over ULSD without the DPF. A surprising discovery was that with the DPF in place, B20 provided an additional 67 percent reduction of PM beyond what the ULSD (blue) provided. 
 
 These findings offer dramatic opportunities for biodiesel to further enhance performance in the new diesel engines and the new ULSD fuels. The NBB and original equipment manufacturers (OEM) are gathering additional data to further confirm these findings. The NBB looks forward to continuing work with NREL and the OEMs to forge the technical path forward for the new transportation landscape.

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NREL research finds another ULSD/biodiesel benefit

NBB In Sight

In this, the "Biodiesel Properties" issue of Biodiesel Magazine, the National Biodiesel Board (NBB) would like to reiterate that high-quality fuel is the key to the industry. As the trade association for biodiesel, the NBB continues to encourage fuel testing, the best management practices and BQ-9000 participation. However, accountability rests with the producers and the distributors.
 
 The industry's production capacity and distribution infrastructure continues to rapidly increase. With explosive growth comes the challenge of maintaining fuel quality from the producer to the end user. Biodiesel stakeholders realize the importance of fuel quality and are becoming more involved in petroleum outreach. It is important to recognize that each link in the supply chain is critical. Producers and marketers must keep biodiesel and biodiesel blends on specification all the way through to the consumer. 
 
 For biodiesel manufacturers, there is no substitute for testing when it comes to ensuring quality. In fact, no product should leave the production plant that isn't accompanied by a certificate of analysis based on actual test results. All biodiesel producers should strongly consider a laboratory cross-check program like those offered by ASTM International or the Alberta Research Council. The next step, one of growing interest to consumers, is BQ-9000 accredited producer certification. Granted, this doesn't come without cost or some effort, but keeping off-spec biodiesel from entering the marketplace is critical to building consumer confidence in biodiesel. The stakes are too high to ignore these steps. 
 
 For biodiesel distributors, the "trust but verify" method is key. Partner with reputable biodiesel producers, request a certificate of analysis and periodically test retain samples. Testing samples for total and free glycerin, acid number, flash point, and water and sediment serve as a good check to help ensure that the product entering the system is meeting ASTM D 6751 specification. In addition, a marketer's ultimate responsibility lies in the ability to create biodiesel blends at the levels customers require. Regular calibration of blending equipment and blend level testing helps prevent B20 from going out the door as B30 or B2.
 

 Some testing service providers can be found in Biodiesel Magazine's annual Biodiesel Industry Directory at www.biodieselindustrydirectory.com. More information on BQ-9000 is available at www.BQ-9000.org. Fuel distributors can become certified under this voluntary quality control program, as well.
 
 Every biodiesel producer and marketer should recognize their role in helping to promote the commercial success and public acceptance of biodiesel. This requires commitment, which is critical to enjoying a successful, sustained foothold in the liquid fuels business.
 
 Leland Tong is chairman of the National Biodiesel Accreditation Commission, and Paul Nazzaro is National Biodiesel Board petroleum liaison.

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This is a test: Maintaining fuel quality throughout the supply chain

In 1995, Mike and Kathy Bryan launched BBI International thinking it would be just the two of them. Ten years later, there were 28 people in the company, as well as offices in Canada and Australia. In just the past year, as the biofuels industry has continued to grow, the company has doubled in size to nearly 60 employees. 
 
 BBI International's structure is designed on the foundation of three divisions: Project Development with an office in Denver; Media with an office in Grand Forks, N.D.; and Conference & Event Planning, located along with the corporate headquarters in Salida, Colo. BBI International continues to look for a few select qualified individuals, experienced in biofuels and biomass, including a certified conference planner, who is interested in relocating to a charming, rural town in the heart of the Rocky Mountains. For more information, visit www.ethanol-jobs.com.

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BBI seeks to expand staff

One of the nation's first biodiesel suppliers has become the latest company to embrace BQ-9000, a voluntary quality control program. World Energy recently earned the distinction of accredited producer. Recent U.S. biodiesel industry newcomer Cargill Inc. and Griffin Industries have also become accredited. To date, 12 companies are BQ-9000 accredited, with another six undergoing the process.
 
 "We are pleased to have our longstanding commitment to high quality affirmed by BQ-9000 accreditation," said Gene Gebolys, CEO of World Energy and chairman of the National Biodiesel Board's (NBB) regulatory committee. 
 
 Cargill took measures while constructing its biodiesel facilities to ensure it meets the industry standard for quality. Cargill's Iowa Falls, Iowa, location has produced biodiesel since May. The company reports 37.5 million gallons of capacity. 
 
 "We have been able to leverage our global processing and systems knowledge in our Iowa Falls biodiesel facility, ensuring that Cargill customers consistently receive biodiesel that meets ASTM D 6751 specifications," Superintendent Dan Schoenfelder said.
 Griffin Industries looks at the program as a way for its consumers to rest assured. "Our ability to further validate the consistent quality of Griffin's BioG-3000 premium biodiesel is a critical step to maintaining and building consumer confidence," said Senior Vice President Tom Griffin. 
 
 BQ-9000 is a quality assurance certification program that includes procedures for fuel production, storage, handling and management aimed at ensuring fuel quality throughout production and distribution. There are two categories: certified marketer and accredited producer. Both the NBB and the Canadian Renewable Fuels Association have adopted the program. To date, two companies are certified marketers.
 
 World Energy is headquartered in Chelsea, Mass., with additional sales offices in Georgia, Ohio and Antwerp, Belgium. Its biodiesel plant is in Lakeland, Fla. Cargill is an international provider of food, agricultural and risk management products and services. Griffin is a recycler of agricultural by-products and is located in Cold Spring, Ky. All three companies are members of the NBB.

Three biodiesel facilities earn highest quality production mark

Modern, clean-diesel engines will be a cornerstone of America's energy solutions, and clean, renewable biodiesel fuel will be critical to the success of diesel-powered vehicles in the U.S. market, said Loren Beard, senior manager of fuels for DaimlerChrysler. 

 DaimlerChrysler will continue to expand its lineup of diesel-powered vehicles in the coming months, while it broadens its programs to educate the American public on the benefits of home-grown biodiesel fuel, he added. 
 
 "Diesel will be good for America, and biodiesel makes diesel better," said Beard at the Air Quality Forum hosted by chapters of the American Lung Association and the National Biodiesel Board on Sept. 8. "Emissions of particulates-an important issue in congested urban areas-can be reduced more than 80 percent with modern, clean diesel engines running on biodiesel." 
 
 DaimlerChrysler will market five diesel-powered passenger vehicle models in the United States in 2007: a Jeep Grand Cherokee CRD sport-utility vehicle with a 3.0-liter diesel engine, a Mercedes-Benz E320 luxury sedan with a 3.0-liter engine and BlueTec emissions technology, and three new Mercedes-Benz utility vehicles (R320 CDI, ML320 CDI and GL320 CDI). In addition, the Dodge Ram pickup and Dodge Sprinter van are also equipped with diesel engines for the U.S. market. 
 
 Beard noted that diesel vehicles have significant environmental and consumer benefits compared with gasoline vehicles, including: 
 --An average of 30 percent better fuel economy 
 --Up to 20 percent less emissions of carbon dioxide, a greenhouse gas 
 --Increased performance, range and towing capability 
 --Longer life and increased resale value
 
 According to the U.S. EPA, if the United States had a light-duty fleet that was one-third diesel, the country would reduce its oil consumption by up to 1.4 million barrels of oil per day. That is equivalent to the amount of oil the United States imports daily from Saudi Arabia. 
 
 "Use of biodiesel extends the benefits of diesel technology," Beard said. "As our President and CEO Tom LaSorda has pointed out, biofuels are proof that at least part of the solution to our energy, environment and national security issues can be homegrown."

DaimlerChrysler executive: Clean diesel technology made better with biodiesel

If it hadn't been for the carpeted floor of the National Press Club in Washington, D.C., you could have heard a pin drop. Leaders of health and environmental organizations from throughout the nation listened intently to a recounted tale of an underground mine's use of pure biodiesel. The workers, accustomed to black hankies at the end of the day, found that when biodiesel powered their equipment, the hankies remained white. 
 
 It's a shining example of an immediate, visible health benefit to using cleaner burning biodiesel-one of many benefits discussed at the first Air Quality and Alternative Transportation Fuel Forum. Government officials and industry representatives joined health and environmental leaders in learning about the important role biodiesel can play in reducing harmful emissions and improving air quality and human health. The American Lung Association of the District of Columbia, American Lung Association of the Upper Midwest and American Lung Association of the Southwest hosted the Sept. 8 forum.

 
 Among the experts to address the crowd was Jonathan M. Samet, professor and chair of the Department of Epidemiology at Johns Hopkins Bloomberg School of Public Health and chairman of the National Academies of Sciences study on air particles and human health. "There is a clear correlation between proximity to traffic, and negative respiratory and cardiac effects," Samet told the crowd. "Exposure to high carbon and ozone is linked to low lung function. Higher levels of particles lead to negative effects on the cardiovascular system. Particulate matter levels are linked to increased mortality." 
 
 Robert McCormick, principal engineer at the U.S. DOE's National Renewable Energy Laboratory, presented the latest biodiesel emissions data. "There are insufficient data to say if B20 blends cause NOx, on average, to go up or down-but no change in NOx seems likely," McCormick said. He also pointed out that B20 can reduce particulate matter emissions by more than 20 percent based on heavy-duty vehicle testing, and can significantly reduce toxic compound emissions.
 
 During the forum, U.S. EPA Acting Assistant Administrator for Air and Radiation Bill Wehrum discussed the newly published proposed regulations implementing the renewable fuels standard (RFS). Passed as part of the Energy Policy Act of 2005, the RFS requires 4 billion gallons of renewable fuel usage in 2006, which will increase to at least 7.5 billion gallons by 2012. That is expected to displace almost 2 billion barrels of crude oil and reduce the outflow of dollars largely to foreign oil producers by $64.1 billion between 2005 and 2012. The proposed regulations would give refiners and other covered entities that blend biodiesel 1.5 times the base RFS credit. The adjusted credit is due to biodiesel's high energy content. 
 
 Other forum speakers included: Steve Howell of the National Biodiesel Board (NBB); Edwin Piñero, a U.S. federal environmental executive; Bailus Walker, professor of occupational and environmental medicine at Howard University and vice chairman of environmental programs for the American Lung Association of the District of Columbia; James Duffield of the USDA; Lori Stewart of the EPA; Dennis Smith of the DOE; Joe Biluck, director of operations and technology for the public schools in the Medford, N.J., township; Loren Beard of DaimlerChrysler Corporation; Paul Willits of New Holland; Rolando Andrewn of the American Lung Association of the District of Columbia; and Angela Tin of the American Lung Association of the Midwest.
 
 "The NBB was honored to participate in this first-of-its-kind forum designed specifically to examine the role of alternative transportation fuels in improving air quality," said Joe Jobe, NBB CEO. "The bottom line is that biodiesel is spreading like wildfire as more public and private fleets, government agencies, and individuals realize biodiesel's environmental and health benefits."

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National experts tout biodiesel at first-of-its-kind air quality, alternative fuel forum

Farmers now have more options-in addition to tractors and other various implements-in which to use biodiesel. Arctic Cat has just completed development of a twin-cylinder, diesel all-terrain vehicle (ATV), the first on the market. Popular on farms, these ATVs-in which Arctic Cat is encouraging the use of biodiesel blends-were being manufactured starting in September.
 
 The Arctic Cat ATV comes with a fuel tag that recommends biodiesel use of up to B20. This project marked the first time B20 had been commercially promoted in small diesel engines. The research was sponsored by the Minnesota Soybean Research and Promotion Council (MSR&PC), the Agricultural Utilization Research Institute's Center for Producer-Owned Energy and the Minnesota Corn Growers Association. B2 is now standard in Minnesota.
 
 "We're extremely pleased with the positive results of this biodiesel project, and we commend Arctic Cat for its support of this amazing fuel and its environmental benefits," said Scott Singlestad, chairman of the MSR&PC Domestic Marketing Committee and soybean farmer from Waseca, Minn. MSR&PC is a National Biodiesel Board (NBB) member.

 
 Arctic Cat was very impressed with B20, said Ole Tweet, vice president of new product development, and it offers a good selling point to farmers. "It says to them, 'Here's a vehicle for you that runs on the very stuff you grow.' That's a tremendous attribute," Tweet said. "Further, we're trying to reduce the impact of our ATVs on the environment, and we like the idea of making an ATV that could run on renewable fuel grown by farmers, some of our best customers."
 
 Arctic Cat rigorously tested Lombardini diesel-engine ATVs on emissions, sound levels, hot-start capability at air temperatures of 95 degrees Fahrenheit, and normal-life engine durability tests, which simulate five years of consumer use. The tests included winter use with a No. 1 winter blend, as well. 
 
 There were no differences in engine or component wear, and no degradation of the fuel system with B20, Tweet said. "What is significant about the test results is that there was nothing very significant," Tweet said. "Arctic Cat was very pleased with the performance of biodiesel fuel."
 
 Of course, ATVs are not just for farmers, nor are farmers the only ones using biodiesel. Volkswagen owners and school bus drivers, among others, are increasingly using various blends of biodiesel. Another ATV user is the U.S. military, which also uses biodiesel at many bases across the country. In fact, the military is the largest user of biodiesel in the United States.
 
 The 686 cubic-centimeter twin cylinder, single-overhead-cam four-stroke diesel engine provides 30 percent greater fuel mileage and extra low-end torque compared with a conventional gasoline engine. The engine runs efficiently on six forms of diesel fuel, including B20, with a glow-plug pre-heater assist for starting.
 
 Arctic Cat, www.arcticcat.com, based in Thief River Falls, Minn., makes snowmobiles and ATVs worldwide. The NBB assisted Arctic Cat to promote the B20 compatibility of its new ATV.

Arctic Cat says its new diesel ATV can run on B20.

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New biodiesel-approved, off-road vehicle available

Able Energy Inc. announced a joint-venture agreement with BioEnergy of America Inc. to produce and distribute biodiesel at plants to be constructed at truck stop plazas. The two companies will operate through USA Biodiesel LLC, each holding a 50 percent membership interest. "By doing this, we think we have solved one of the major problems, which is the high cost of transportation [of biodiesel]," said Gregory Frost, chairman and CEO of Able Energy. Each plant should produce 10 MMgy to15 MMgy of biodiesel when completed.

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Able Energy to produce biodiesel at truck stops

Nova Energy Holding Inc. signed two contracts within a week to supply its biodiesel facilities. On July 31, it announced a contract for procurement and fabrication of stainless steel equipment for three 60 MMgy biodiesel facilities. The $16.9 million purchase order from Mueller Field Operations Inc., a wholly owned subsidiary of Paul Mueller Company, was issued through Nova Energy's subsidiary Biosource America.
 
 On July 26, Nova Energy signed feedstock supply and biodiesel sales agreements with ConAgra Trade Group Inc. for Nova Biofuels Oklahoma LLC, a biodiesel facility to be located in Oklahoma. The multi-feedstock facility is expected to be completed in 2007.

Nova Energy contracts for feedstock, stainless steel

Argan Inc., a publicly traded holding company, signed a letter of intent to buy Gemma Power Systems, a Connecticut-based construction and engineering company involved in biodiesel, ethanol and other power energy systems. According to Argan, Gemma has projects worth approximately $200 million to be constructed in the next two years. Gemma, which will operate as a wholly owned subsidiary of Argan, is Argan's first venture into the renewable energy industry. Argan Chairman and CEO Rainer Bosselmann said Gemma was chosen for its "state-of-the-art biofuel refining technology."

Argan buys Gemma Power Systems

BBI International Media promoted Dave Nilles from staff writer to online editor for www.BiodieselMagazine.com, the Web site for Biodiesel Magazine. Nilles, a North Dakota State University graduate, is now responsible for updating Web items such as the plant lists and Web exclusives, among many other online items. In-depth information and fast-breaking news items make the Web site a complementary medium to the publication, Nilles said.

BBI Media's Nilles takes role of online editor

Former Renewable Energy Group (REG) Project Engineer Mark Vermeer accepted a new position with HTH PowerShift Group Holdings Inc. in June. Vermeer was appointed vice president of operations for PowerShift, a privately held company that provides alternative energy solutions. While with REG, Vermeer was responsible for sales, project development, site evaluations and engineer-procure-construct services. Vermeer received his Master of Business Administration degree at the University of South Dakota and a Bachelor of Science degree in civil engineering at Iowa State University.

 
 In September, Derek Winkel joined REG as general manager of Central Iowa Energy, a 30 MMgy REG biodiesel plant near Newton, Iowa. Winkel will oversee production at the facility-slated to start in spring 2007-as well as act as a liaison to the board of directors, coordinate relationships between vendors and contractors, and oversee safety and environmental regulations. He joins REG from Ethanol 2000, where he served as technical manager at the ethanol plant for five years.

REG loses project engineer, gains general manager

Iowa Gov. Tim Vilsack recently announced 11 members of the state's recently formed Renewable Fuels Infrastructure Board, created earlier this year when Iowa's biofuels policy and appropriations bills were passed. The committee is charged with expanding the state renewable fuels infrastructure by appropriating a $13 million fund over the next three years for E85 service stations, biodiesel terminal facilities and other items that make biofuels more available to Iowans.

Iowa Biofuels Infrastructure Board names appointees

The demand for scientific research often comes from the need to correct a situation. Companies that produce pharmaceuticals, for instance, are in business because people have ailments for which treatment is desired. Likewise, authorities in the biodiesel industry believe one of the most disconcerting ailments in need of treatment has been the coagulating of fuel in filters and at the bottom of tanks for too long in too many different places, which has spurred the science behind its correction. This research has little to do with biodiesel cold flow issues though. In fact, the circumstances pushing this particular aspect of fuel-quality control are much more elusive than that of cold flow. 
 
 The problem is not specific to location, either. Minnesota's statewide clogging of diesel fuel filters last winter after its B2 mandate went into effect exemplifies the problem to a degree. What happened in Washington in the winter of 2004-'05, where similar fuel-related problems occurred in ferry boats fueled by B20 crossing Puget Sound, is a good case in point, too. A lesser-known case out of Utah appears to parallel Minnesota and Washington's symptoms of troubled biodiesel. Frank Anderson of Cardwell Distributing says his company was buying B100 and blending it down to B20 for two months without incident. Once the cooler air hit in October 2005, the blender began to experience filter problems. 
 
 "We truck in our B100 from Colorado, and the samples off the trucks are crystal clear," Anderson says. "We put the B100 in a heated, insulated tank. We send our truck to the rack and buy premium diesel with [an additive] package. We then blend 20 percent onto the truck and pump it into an above-ground tank." 
 
 Anderson says samples are pulled from the truck after blending-before going into the above-ground tank-and everything still seems fine. After the fuel is pumped into Cardwell's B20 tank, however, Anderson says, "For some reason, the fuel then separates, and there is a fallout of white slime that goes to the bottom of the tank and, in the process, out to our dispenser, [where it] clogs filters there and in our customers' vehicles." He says the bottom of the tank looks like it is covered with a foam that can best be described as "spray insulation." Cardwell Distributing dealt with this issue from October 2005 well into 2006. 
 Situations of this sort lead to more than just bad press for biodiesel. Individuals in the renewable fuel research community are passionate about biodiesel and its success, and fortunately, they strive to understand the nature of a pervasive problem in order to ultimately fix it. 
 
 Dr. Randall von Wedel, principal and director of research with CytoCulture International Inc., tells Biodiesel Magazine that he recently returned from Europe, where he had an informal meeting with top scientists in Berlin to discuss problems with near-ASTM-D-6751 biodiesel fuel in the United States. The information von Wedel obtained from that insightful meeting could explain why near-spec fuel (at or slightly above particular specifications in ASTM) would cause such seemingly aggravated problems. 
 
 A Meeting of the Biodiesel Minds
 Von Wedel is a biodiesel veteran, who has been researching, testing and using biodiesel since the early 1990s. More recently, he developed a quick B100 field test, called the pHLip Test (see April 2006 Biodiesel Magazine). With his experience, even he doesn't have all the answers behind recent quality problems. "I attended the conclusion of a board of directors meeting for the German Biodiesel Quality Control Board (GBQCB)," von Wedel says. "I visited with three scientists who work for the organization." Among these three scientists was Dr. Jurgen Fischer, senior scientist with the ADM-Connemann Group. "[The GBQCB is] responsible-as we hope to be in the United States-for monitoring and enforcing quality control for biodiesel throughout the country," von Wedel tells Biodiesel Magazine. According to von Wedel, the methodology of the German program includes rigorous sampling, sample collection protocols, sample archives and testing on a regular basis. Von Wedel says while some companies apply similar rigor in the United States, others don't. 
 
 "It's actually being done in California because we're gun-shy out here," says von Wedel, who lives and works in the Golden State. "We've had so many instances where we've received railcars [with] a certificate of analysis that says this railcar meets ASTM, but the reality is when we go to look at it, the fuel is turbid, it has precipitates, and if we collect samples off the bottom, it fails." That's what prompted von Wedel's trip to Germany.

 
 Decoding a Convoluted Spec
 Precipitates have been settling out in biodiesel across the United States. Earlier this year, researchers discovered that some of those instances involved monoglycerides and diglycerides present in the fuel, indicating incomplete transesterification. Free glycerin is rarely a problem, either in the fuel or in meeting the spec. ASTM's total glycerin spec of 0.24 percent is not so widely understood though, von Wedel says. "Total glycerin is an ASTM value that is a calculated value based on measurements," he says. "It consists of four components." 
 
 First, there's the free glycerin that is supposed to settle in processing and be removed from the fuel. Simple water-washing accomplishes this. Second, if a producer achieves 96 percent to 97 percent transesterification, there are residuals that don't completely esterify, von Wedel says. "They include, first, the triglyceride, which is really just the unreacted oil or fat," he says, but those are rarely a problem either. "What comes up next are the residuals with the diglycerides, which is the same molecule (as the triglyceride) missing one fatty acid chain," von Wedel says. "You don't want that accumulating in your fuel or your engine." The third one that becomes more problematic is the monoglycerides. Monoglycerides are a problem because they are more prevalent as a contaminant in biodiesel.
 
 "Given X percentage of monoglycerides or Y percentage of monoglycerides, [lab techs] calculate how much of that is the actual glycerin portion," he says, adding that 25 percent of monoglycerides and 12 percent of diglycerides make up the glycerin backbone included in the bound glycerin spec calculations, while the connected long fatty acid chains aren't. "They do the same for the [diglycerides and the triglycerides], and the sum of those three individual numbers represents what is called 'bound glycerin.' They then take the bound glycerin and add it to the free glycerin, which should be very low, and they come up with a total number that's called 'total glycerin free and bound.' That is why you can get 96 [percent] or 97 percent transesterification and still meet the ASTM total glycerin spec of only 0.24 percent. That's the ASTM method. It's awkward, and it's a bit cumbersome. There's nothing particularly wrong with it, but it's deceiving." He says the Germans confirm this test method is still the most reliable test protocol for bound and free glycerin despite its cost and complexity.
 
 Fischer's Hypothesis: Is It a Missing Puzzle Piece?
 Monoglycerides, diglycerides and triglycerides are not water-soluble, meaning they don't go away in the wash. If near-complete transesterification hasn't occurred, then the sterols remain dissolved in B100. "If you're under ASTM, meaning you're under the limit of 0.24, you should be OK," von Wedel tells Biodiesel Magazine. 
 
 The National Biodiesel Board (NBB) says if one meets ASTM specs and achieves BQ-9000 certification to ensure that those ASTM specs are met, then the rest should fall into place. "The NBB wants to re-emphasize the importance of meeting the ASTM D 6751 spec," says NBB Technical Director Steve Howell. "Using a BQ-9000-approved company provides excellent means to help ensure that only ASTM-grade product is being used." 
 
 However, von Wedel says ASTM biodiesel "should" be OK-except when other forces come into play. "There are other molecules, other dark Darth-Vader-type creatures that inhabit the fuel," he says. The mysterious residents in biodiesel that von Wedel refers to are sterols, which are complex aromatic ring structures like cholesterol. "They are found in very low concentrations in all vegetable oils, and they can interact with traces of impurities in biodiesel," he says. 
 

 While von Wedel was in Berlin, he learned of Dr. Fischer's hypothesis, which suggests these sterols may aggregate into complexes with monoglycerides and diglycerides present in biodiesel, helping to form a precipitate that falls out of solution. "What it does is amplifies what used to be just a residual trace amount of a [monoglyceride and diglyceride], and they will suddenly form precipitates under certain conditions," von Wedel says. 
 
 He adds that moisture in the headspace of railcars shipping B100, combined with shipping time, could explain why B100 might look good leaving the plant but turbid once the biodiesel is ready for unloading. This exposure to "cool, moist air" ought not to be confused with gelling related to cold flow though. After on-spec biodiesel gels at any given temperature, it should be "reanimated" in its entirety once it warms back up. "Gelling is a reversible phenomenon," von Wedel confirms. "We're talking about a precipitate that doesn't go back into solution, which ends up clogging filters as it did in Minnesota, in Washington and, of course, here in California."
 
 Before von Wedel made the trip to Germany, he says he already knew that monoglycerides and diglycerides are hydrophilic. "This does not mean they dissolve in water, but they will interact with water," he says. Monoglycerides and diglycerides are amphoteric, meaning the alcohol "head" of the long chain likes to stay in water, while the "tail" of 18 or so carbon atoms prefer to remain in the fuel, von Wedel tells Biodiesel Magazine. 
 
 "I went over all of that with Dr. Fischer," he says. "I said that I thought the precipitates were caused by hydration. He said it could be, but it probably also means that there are traces of sterols and they all slowly form insoluble complexes that precipitate. To me, that was new insight. It was like a new paradigm in my brain." 
 
 Today's Approach: Caution Over Detection, Prevention
 "I spoke with Randall (von Wedel) about the same issue (of sterols)," says Robert McCormick, principal engineer at the National Renewable Energy Laboratory (NREL). "It's fascinating, and it fits right in with a new project we are going to be starting in the next few months. Hopefully, we will reveal if there is any truth to it."
 
 If Fischer's hypothesis turns out to be true, researchers may give more attention to sterols in biodiesel feedstocks. Proving this hypothesis may be tricky if sterols are hard to detect though. "I asked Dr. Fischer, 'How can we in America test for sterols?'" von Wedel says. Fischer's response translates into, "Sorry, but no," implying that sterols are very hard to measure.
 
 "There is little to no technical information on this," says Dr. Gary Knothe, USDA Agricultural Research Service scientist. "This is an issue now, but work is just beginning. Research will have to show if sterols aid the precipitation of [monoacylglycerols] and diacylglycerols. It could well be that just the presence of these species in greater amounts causes the problem, without one causing the other to precipitate. There may be some other aspects that are yet unknown. Again, we'll have to see what the results are." 
 
 Until the information is available, caution looks to be the best practice for producers and blenders. Higher-quality feedstocks seem to help. If a producer uses old restaurant grease as a feedstock, experts instruct the removal of all the impurities for a quality fuel. A more complete transesterification could make fuel less likely to exhibit deposits, too. "If you have correctly performed transesterification, you should not have those [monoglycerides] and diglycerides lingering around to precipitate," von Wedel says. 

 In the case of Cardwell Distributing's biodiesel issues in Utah, the company says it is still providing biodiesel to its customers. Anderson tells Biodiesel Magazine that Cardwell Distributing's biodiesel supplier has since changed its refining process, and the problems have ceased, at least for now. 
 
 Some experts say perhaps the 0.24 spec for total glycerin needs to be lowered to ensure lower total glycerin in the biofuel. Knothe disagrees on certain grounds. "Lowering this specification too much may entail problems for biodiesel lubricity when using blends like B2," he says. "Research has shown that minor components-contaminants-in biodiesel, such as [monoglycerides] and free fatty acids are essential for the lubricity of B2." The NBB's Howell was unavailable for further comment on this matter at press time.
 If sterols are difficult to detect directly, there may be an indirect method to test for them. "We know that if they are present, they will fall out of solution when the fuel gets cool and has moisture," von Wedel says. One might suspect that diluting biodiesel with diesel fuel would reduce the B100 problem, but von Wedel says blending down actually amplifies it. Remembering that the alcohol portion of monoglycerides and diglycerides are hydrophilic, he explains why dilution doesn't work. "These materials also remain more soluble in pure biodiesel, and because it's a more oxygen-rich environment, that means it's more polar," he says. "There's no oxygen in diesel fuel. Hydrocarbon molecules are hydrophobic-they don't like water. So what do you expect is going to happen to those molecules?" Monoglycerides and diglycerides are virtually predetermined to fall out of solution even more so in the presence of diesel fuel due to the nature of the molecular chemistry. Fischer's hypothesis is perhaps trace amounts of sterols amplify this phenomenon. 
 
 "The very sad thing is that, in the course of unloading biodiesel into diesel fuel to make B2 [in Minnesota], they could have exacerbated the problem," von Wedel tells Biodiesel Magazine. So, in addition to the potential role of sterols present in near-ASTM B100-exposed to moisture, cool temperatures and time-cautionary handling of the fuel could help reduce instances of precipitates settling out.
 
 Washington ferries that used B20 in 2004-'05 ran into issues with precipitates essentially gumming up large centrifuges used onboard to "filter" or isolate contaminants from the fuel before ignition. "They were buying what they thought to be ASTM fuel," von Wedel says. "It turns out that the fuel was left outside, it was put into big tanks that had moisture, and there were cool temperatures. The already-blended B20 was blasted into the hull of the ship at 300 gallons per minute. … Imagine all of the crashing of those molecules. Biodiesel has to be handled gently. Then, of course, it's diluted into diesel fuel, which is more hydrophobic. It was a perfect storm, and in retrospect, it's no wonder they had the problems that they did." Moreover, he says the amount of oxidation occurring through such forceful and overall borderline-negligent handling of the fuel is cause for concern.
 
 Monitoring Oxidation
 "I think [the industry] needs to monitor oxidation stability and oxidative degradation," McCormick tells Biodiesel Magazine. Oxidative degradation, he says, is the formation of peroxides-unlimited in ASTM specs-acids, and gums. "This needs to be prevented," McCormick says. "The best way to do this is to make sure that [the] B100 is not exposed to air at high temperatures during processing." McCormick also says including an antioxidant immediately at the point of manufacture before oxidation has a chance to start would be a good practice. "If B100 is of high-enough quality-well below the acid number standard and meeting all other standards easily-it might still go out of spec for acid pretty quickly if it is unstable," he says.
 

 Instability affects the level of precipitates dropping out of the methyl ester solution. "When you oxidize the fuel, you take the double bonds that are in the soybean oil (chains) and you form an epoxide," von Wedel says. "That temporary molecule is unstable, and it will snap. When it snaps, it will either break off entirely to make a carboxylic acid, or the oxygen will reach across and find another molecule that's got a double bond, and you'll make a temporary bridge like a little link between two separate esters." Those initial bridges are the beginning formations of polymers, which also precipitate out of the fuel.
 
 While the presence of precipitates in biodiesel can speak to a number of different causes, including glyceride levels and oxidation, biodiesel fuel within or slightly above ASTM's 0.24 percent allowance for total glycerin free and bound has been determined to be a significant contributing factor of recent quality concerns nationwide. NREL's research, which McCormick says is getting ready to start, and work by others may determine in the coming months whether Fischer's hypothesis on sterols aggravating the nucleation and precipitation of monoglycerides and diglycerides irreversibly out of solution-even percentages within spec-is correct. As Knothe says, we'll have to wait and see. 
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him at rkotrba@bbibiofuels.com or (701) 746-8385.

The pHLip Test can detect B100 that is off-spec for total glycerin levels compared to an in-spec reference sample, far left, by the clarity or turbidity observed at the B100 test solution interface.

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Industry pioneer Randall von Wedel speaks at length with Biodiesel Magazine about a rather ostensibly unknown fuel quality issue-the potential role of sterols in one of the most common biodiesel problems around.

Bound by Determination

A chill permeated the entire diesel industry last December when it was discovered that an off-spec fuel had entered the blending pool in Minnesota. Fuel filters began to clog and falter. The circumstances were so severe that the Minnesota Department of Commerce issued a variance to the requirement that all diesel fuel be blended with 2 percent biodiesel. The initial variance was issued Dec. 23, 2005, and was extended through February at the request of the Minnesota Biodiesel Council and the National Biodiesel Board (NBB). 
 
 "It was devastating," says Charles Neece of FUMPA Biofuels in Redwood Falls, Minn. "Everybody was a suspect during that period of time." The suspended requirement ultimately meant that no one had to buy FUMPA's biodiesel, as the measures that backed the fuel as part of the state's blending pool were overruled. "So what was moved ended up going into the fuel oils market," Neece says. 
 
 FUMPA Biofuels is a multi-feedstock facility that sells B100 and B99.9. The company possesses a blending license but doesn't specifically market blended fuel, and 95 percent of FUMPA's product is handled by independent fuel distributors below the rack. "Probably what saved us was that we had a distributor in Ontario that had some of our product and was not having trouble," Neece says. "That information later spread back down into Minnesota and saved us; but it was [still] devastating. All Minnesota producers were suspected of producing substandard product, and each of us had to prove that our product was appropriate." 
 
 One of FUMPA's clients is Western Petroleum Company, headquartered in Eden Prairie, Minn.; it is currently one of the largest distributors of biodiesel in the United States. With over 300 railcars in biodiesel/diesel service and heated storage for over 600,000 gallons, Western Petroleum is a major position-holder at seven locations in the Magellan terminal system, and it holds an exclusive storage location in St. Paul Park, Minn. "So we were knee-deep in it," says Greg Kary of Western Petroleum. "I've talked to local transporters, and they argue that we could be 40 percent to 50 percent of the biodiesel market."
 
 Despite careful preparations made by Western Petroleum, which was fully aware of the challenges involved in the mass distribution of biodiesel, significant problems still surfaced. "We set it up pretty Cadillac-style with a lot of measures and procedures in place to make sure that the spec would not be off, or that once it was in the tanks, it wasn't going to be too thickly blended," Kary says. "We got stainless steel trucks, and everything was delivered hot. … We blew lines out … but there were still some problems that came from the fact that some off-spec product got in there, and some of those tanks at Magellan were not kept at the right temperature."
 

 Another culprit, besides an off-spec product, could have been a carrier mixing too much biodiesel with petroleum. "Have our procedures changed? I wouldn't say so much, but our carriers have," Kary says. "One thing that we've learned is to be careful who we sell to, and where the liability ends and starts."
 
 The problem is that distributors have no way of knowing at what levels their carriers blend, Kary says. "What we have found is that a lot of our customers have gone around us and gone straight to the plant, and that also scares us," he says. "Diesel [prices were] so high that guys were starting to blend [biodiesel] at really high numbers, and what happens is that it gets cold and the stuff gels." 
 
 Mike Youngerberg of the Minnesota Biodiesel Council (MBC) says that it is hard to prevent circumstances like that from occurring. "It's hard to keep people from doing what they want to do," he says. "What we can do is provide information on the qualities of B100, how to blend it properly and what the operability of high blends (over B20) is in cold weather." 
 
 Kary maintains that other factors were involved in the sub-par situation last year, in addition to the surfacing of a bad batch. "I will confirm that there was off-spec product out there, but there were other things to blame," Kary says. "It wasn't always off-spec. I'm not blaming any one thing; I'm blaming a number of things. The price went through the roof, and plants started to sell (biodiesel) to every Tom, Dick and Harry. … These are folks who do not have appropriate equipment, testing or experience."
 
 Quality Control
 When the smoke cleared and temperatures started to warm, FUMPA, Western Petroleum and other players in the Minnesota biodiesel industry began investigating how the situation occurred. The companies worked closely with the state Department Of Commerce to determine their roles and responsibilities in the effort to ensure that customers got a product that met the qualifications of ASTM D 6751, would be compliant with the U.S. EPA and would meet the requirements for the excise tax refund.
 
 The MBC says it is committed to quality control, assuring that none of the companies it represents are blamed for any other issues in the marketplace. SoyMor, obtained a 2 MMgy biodiesel plant in Glenville, Minn., BQ-9000 certification, a voluntary quality control program run by the National Biodiesel Board, and Neece says FUMPA has completed the desk audit required for accreditation and will complete a plant audit within the next week. "We fully intended to have our BQ-9000 [accreditation] before this winter for that reason," Neece says. "It's going to be necessary to make that demonstration in order to have credibility in the biodiesel marketplace this winter." 
 
 Cooperation between the biodiesel and petroleum industries is also a major aspect of quality control and the successful management of the Minnesota biodiesel program, Youngerberg says. "The petroleum industry has been watching much more closely the materials that have been coming into its terminals, and that has been a big help in assuring that what reaches the market is high quality," he says.
 

 After a thorough assessment, it was reaffirmed that biodiesel meeting ASTM D 6751 specs is adequate for sale within the state of Minnesota, but there was still room for additional safeguards. "We did add one additional test that is in review with the ASTM committees that represents a fuel cleanliness test," Neece says. "Presently, this test is being referred to as a 'cold-soak filter test.'"
 
 From now on, the producers in Minnesota will take a sample of product-300 milliliters-and refrigerate it for 16 hours. It is then warmed to room temperature; it can't be heated nor can any other artificial means be used to speed up the process of thermal equilibrium. Once it reaches room temperature, it is filtered through a specified medium and clocked. The ability of that product to pass through the filter medium determines its cleanliness. The time in the refrigerator simulates the impact cold weather has on filtration of the product in the vehicle filters. This method has been found to be a fairly accurate predictor of products that would have unacceptable fuel-quality attributes.
 
 In terms of identifying the origin of a bad batch of biodiesel, the department of commerce has decided not to release the results of its investigation to the public. "If [the department of commerce hasn't] made a disclosure, it is certainly not up to individuals to guess," says Neece, when asked if he could identify the producer of off-spec fuel. "I can tell you who it wasn't; it wasn't me. I couldn't even determine if it was an in-state entity or an out-of-state entity for sure."
 
 Blends up to B20 have sufficient cold-weather properties, but sometimes diesel fuel causes problems as well. "You can't take a summer blend No. 2 [diesel] and expect to run in cold weather with it," Neece says. A project engineer for Renewable Energy Group in Ralston, Iowa, told Biodiesel Magazine in June that Minnesota has had problems with its diesel fuel in winter months for years before biodiesel was ever a part of the equation. "You need to have a cold weather No. 2 [diesel fuel], or you need to use some blend of No. 1 that will give you properties of the base fuel appropriate for the winter weather," Neece says. "When those have been tested at terminal locations and in laboratories, everything seems to work fine."
 
 Watching and Learning
 Despite the challenges Minnesota faced last winter, it has also served as an example for other states. In March, Washington became the second state to adopt legislation that requires renewable fuels in its liquid fuels market. Senate Bill 6508 also established fuel-quality standards, created a biofuels advisory board and mandated the use of biodiesel by state agencies. 
 This will not be an easy program to implement, says Gary Wright, bio-energy coordinator for the Washington State Department of Agriculture. "We want to avoid any pitfalls we can, and of course, a way to do that is to rely on existing experience," he says.
 
 Officials in Minnesota believe the mandate forced the state into a bad situation last year, and that the proper quality control measures were not in place to adequately bring the program to market. Like Minnesota, Washington has learned that cooperation with the petroleum companies is absolutely necessary for the support of such measures. "It's the whole idea of a coordinated effort," Wright says. "There are a lot of special interests and government entities involved in this, and there are a lot of groups working together recognizing that cooperation is the key to long-term sustainability." 
 
 Officials in Washington have been at work allocating funds in a $17 million low-interest loan program to increase the state's oilseed crushing capacity. "The first thing is to put the infrastructure in place-have farmers growing the canola and have the crush capacity in place to meet needs in-state," Wright says. 
 

 At least 2 percent of diesel fuel sold annually in Washington must be biodiesel either by November 2008 or when the department of agriculture determines that feedstock grown in Washington can satisfy a 2 percent requirement. That would increase to 5 percent when the state director of agriculture determines that both in-state oilseed crushing capacity and feedstock grown in Washington can satisfy the mandate.
 
 "Right now, we are in only the most preliminary discussions and just getting cranked up for this, but I am looking forward to working with the people in Minnesota and to see how we can leverage their experience," Wright says.
 
 Nicholas Zeman is a Biodiesel Magazine staff writer. Reach him at nzeman@bbibiofuels.com or (701) 746-8385.

With a new test in place and some lessons learned the hard way, the Minnesota biodiesel program is geared for a less "devastating" winter in its sophomore season. As Washington prepares to implement a similar requirement for diesel fuel, will it learn from the North Star State's December debacle?

Remember December

In the 1970s, the U.S. EPA implemented the first standards to reduce the amount of lead in gasoline, paving the way for the use of catalytic converters in gasoline-powered vehicles. Now, three decades later, the federal agency is overseeing the practical elimination of sulfur from diesel-an action of enormous consequence not only to the nation's petroleum companies, but perhaps to the up-and-coming biodiesel industry, too. 
 
 Oct. 15 is the deadline for retail outlets that choose to sell ultra-low sulfur diesel (ULSD) to label the cleaner-burning fuel as being "in compliance" with new federal standards, according to Enesta Jones, a U.S. EPA spokeswoman. With the ULSD requirement in place, all U.S. diesel must now be 15 parts-per-million (ppm) sulfur, down significantly from what was previously allowed in "low-sulfur" diesel. 
 
 At press time, the EPA was sticking to its mid-October deadline, despite the fact that it previously extended the ULSD timeline 45 days from its original target date. 
 
 The shift from low-sulfur diesel to ULSD is a step principally being implemented for environmental purposes-less sulfur simply equates to less harmful emissions, Jones says. When the program is fully implemented, the EPA projects that it will reduce nitrogen oxide emissions by 2.6 million tons and reduce particulate matter by 110,000 tons annually. "Each year, [these emissions reductions] will prevent more than 360,000 asthma attacks, 22,000 cases of bronchitis and 8,300 premature deaths," Jones tells Biodiesel Magazine. 
 
 The environmental and human health benefits of removing 97 percent of the sulfur in diesel are indisputable, but industry experts like Rich Moskowitz, a regulatory affairs attorney for the American Trucking Associations (ATA), says the advantages of simply using ULSD are not as compelling as the pollution cuts that can be achieved with emissions-abatement technology that's compatible with the cleaner fuel. As Moskowitz explains, the real "bang for the buck" is new advanced-control emissions systems that will be installed in diesel vehicles starting in 2007. Removing the sulfur from diesel makes it possible to install exhaust gas recirculation and particulate matter traps in new diesel vehicles. These technologies don't function well in the presence of sulfur. 

 
 Biodiesel Blending
 Blending biodiesel with ULSD has been touted as a good fit for two reasons, according to Paul Nazzaro, a petroleum liaison for the National Biodiesel Board. First, biodiesel is a clean-burning renewable fuel that contains no sulfur, so it can be added to ULSD without raising the new diesel fuel's sulfur content. Second, because sulfur is a lubricant, ULSD requires additives that increase its lubricity. Biodiesel can achieve that. With those two factors in mind, Nazzaro considers the two fuels-ULSD and biodiesel-a handsome match. A lot of people thought the implementation of ULSD would cause the biodiesel industry to "fade into the background," he says, explaining that he sees the situation quite differently. "ULSD gives biodiesel legs," he says.
 
 A recent raise of diesel prices had another positive side effect, says Graham Noyes, vice president of business development for World Energy Alternatives LLC, a company that markets and produces biodiesel. High diesel prices have leveraged a very strong market demand for biodiesel. 
 
 On the other hand, the transition to ULSD has dealt some blows to the alternative fuel. "It has been a mixed picture for biodiesel," Noyes tells Biodiesel Magazine. First, storage availability has been very tight in the fuel marketplace, with some facilities maintaining dual storage for ULSD and low-sulfur diesel. That's made it more difficult to establish new storage facilities for biodiesel, Noyes says. 
 
 Besides storage problems, the transition to ULSD has also consumed the attention, and resources, of the major petroleum companies. "They are paying less attention to biodiesel than they would otherwise," Noyes explains. 
 
 Although most major petroleum companies see biodiesel and biodiesel blends as inevitably becoming part of the overall distillate mix-just as ethanol is now commonly mixed with gasoline in the United States-the ULSD switch has been a distraction. Until the transition to ULSD is more complete, major oil companies have essentially postponed any significant changes to the status quo, such as blending more biodiesel. "They're delaying any significant market participation until they finish what they have to do with ULSD," Noyes says, adding that petroleum majors should begin to more actively participate in the biodiesel market by 2007. 
 
 In the meantime, the Alliance of Automobile Manufacturers doesn't anticipate any problems integrating ULSD and biodiesel blends, says Charles Territo, a spokesman for the alliance. However, as with any major change to fuel and vehicles, it will be important to stay alert in the transition period. "We're hopeful that the new ultra-low sulfur diesel fuel, when blended with biodiesel, will prove compatible with today's diesel engines," Territo says. 
 

 Fuel Properties 
 Noyes says there's still technical work to be done to better understand the result of blending the two fuels. A significantly different refining process is used to produce ULSD, and with it comes the potential for different performance attributes, such as cold flow properties, that will have to be taken into consideration when the fuels are blended. "We need to have good technical information on how [ULSD] is going to perform, particularly with B20," Noyes says. 
 
 It's not just biodiesel-blended ULSD in question, however. The same technical information is needed on how ULSD itself will perform. Even with low-sulfur diesel, there were some differences in engine performance and which cold-flow additives worked best with diesel produced at various refineries. Noyes says those disparities will likely be greater with ULSD. 
 
 Before the Oct. 15 deadline, consumers were likely already using ULSD in their highway vehicles, even if the pumps weren't labeled as such, according to Al Mannato, fuels issues manager for the American Petroleum Institute (API). Since June 1, refiners have been required to produce at least 80 percent ULSD. However, it looks like production of ULSD is closer to 90 percent of diesel production, Mannato says. Low-sulfur diesel could be available until 2010, the deadline for all highway diesel to meet ULSD specifications. "How long that's going to last … is hard to say," he says.
 
 While ULSD can be used in diesel vehicle engines manufactured prior to the 2007 models, the new fuel's propensity to act as a solvent may have a greater impact on older motors and components. Drivers will need to be more vigilant about checking for possible fuel leaks or fuel filter clogs, Mannato says. 
 
 DaimlerChrysler, one of the world's leading manufacturers of diesel vehicles, considers the transition to ULSD positive, says Max Gates, a spokesman for the corporation. The new-generation fuel enables emissions controls to deal with particulates and nitrogen oxides. "For us, this is a great step," Gates says. "It is absolutely critical if we are going to sell more diesel [vehicles] in the [United States]. ULSD is absolutely critical."
 
 DaimlerChrysler officials have been enthusiastic about the potential to introduce greater numbers of diesel-powered passenger vehicles in the United States. In September, the automaker announced that increased usage of diesel would play a part in solving the country's fuel crisis. Diesel engines provide about 30 percent better fuel economy and 20 percent reduction in carbon dioxide emissions, Gates says. When biodiesel is added to the mix, there's even more opportunity to maximize energy and reduce emissions. 
 
 The Lubricity Question
 The buzzword around the ULSD issue is definitely lubricity. Without lubricity additives-which include biodiesel-ULSD would be hard on diesel engines, Mannato says. Early discussions about the biodiesel industry cornering the market as a lubricity agent have died down, but are not totally muted. Biodiesel might be able to fill niche markets as a lubricity agent, Nazzaro says. In the near term, however, most industry experts say synthetic lubricity additives will dominate.

 
 Cost is one factor. Conventional lubricity additives are competitively and consistently priced, while the price of biodiesel is based on supply and demand, and is prone to greater fluctuations. To be attractive as a lubricant, biodiesel needs to be priced lower than diesel fuel, Nazzaro says. 
 
 The blend rates for chemical lubricity additives-often measured in parts per million-also come into play, Noyes says. It's generally considered easier to achieve desired ULSD lubricity levels with synthetic additives than with biodiesel. Simply stated, it takes less synthetic additive, on a gallon-for-gallon basis, to get the job done. To use biodiesel as a lubricity solution nationwide would require additional storage capacity. 
 
 Capacity is another issue. Currently, there just isn't sufficient biodiesel production to fulfill even a 1 percent blend for the entire U.S. diesel supply. "The (biodiesel) model is just not mature enough to be counted on as a lubricity agent," Nazzaro says.
 Nazzaro believes the oil industry may be willing to look at the alternative fuel more closely in the future. Consistency, quality and reliability will remain the crucial factors, the last of which, some say, would require biodiesel to be available at almost every terminal in the United States. 
 
 Visit www.BiodieselMagazine.com for more coverage of the nationwide transition to ULSD, including articles on California's advanced ULSD timeline and how the fuel has impacted diesel prices at the pump.
 
 ULSD Timeline
 U.S. refiners and importers were required to import or produce at least 80 percent ULSD for on-highway use by June 1, 2006. The amount moves to 100 percent by June 1, 2010. California refiners and importers are already required to import or produce 100 percent ULSD for on-highway use.
 
 For those between the refinery and fuel terminal, facilities that chose to carry ULSD had to meet the 15 parts per million sulfur specification by Sept. 1, 2006. All highway fuel in California must already by ULSD, as of July 15, 2006.
 
 At press time, retail outlets carrying ULSD must meet the 15 ppm sulfur specification by Oct. 15, 2006. All California retailers were required to carry ULSD by Sept. 1, 2006. The requirement affects all U.S. retailers Dec. 1, 2010.

 
 
 Holly Jessen is a Biodiesel Magazine staff writer. Reach her at hjessen@bbibiofuels.com or (701) 746-8385.

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Since the U.S. EPA began marshaling in ultra-low sulfur diesel, the biodiesel industry has been clinging to the prospect of becoming the diesel industry's near-term lubricity additive of choice. With that expectation fading, however, it now looks like America's new diesel is neither friend nor foe.

Fitting In with ULSD

"For every action, there is an equal and opposite reaction." When Sir Isaac Newton came up with the third law of motion, he was referring to forces interacting with objects. 
 
 Today, the well-known physics phrase could apply to the growth of the biofuels industry. As biodiesel and ethanol production ramps up, requiring ever-increasing feedstock supplies, it's having some profound effects on the agricultural sector-including upward pressure on prices.
 
 "We know that rapid build-up of the biofuels industry has been disruptive to those in the agricultural processing industry," says Peter Golbitz, president of Soyatech LLC. "We also know that, long term, if biofuels are going to be a major source of fuel in the U.S., then it is going to create an unprecedented demand for agricultural products."
 
 Soyatech organized Soya Summit 2006: Food and Energy for the 21st Century, where leaders from the food and fuel industries came together to exchange information on supporting both industires' continued development. The summit was held Sept. 18-20 in St. Louis, Mo. About 250 people from 18 countries attended the conference, Golbitz told Biodiesel Magazine in a telephone interview.
 
 The conference was the first of its kind, says Jacob Golbitz, director of research for HighQuest Partners and brother of Peter Golbitz. HighQuest Partners is the parent company of Soyatech. Conference-goers attended parts of the event as a group but were also devided into two separate tracks, each with relevant information on food and energy issues.
 

 The event didn't have a pro-biodiesel agenda, Peter Golbitz says. Rather, the focus was on asking the hard questions, such as how to deal with an impending marketplace disruption. "Our goal was to facilitate honest discussion," he tells Biodiesel Magazine. "… It was not a 'rah-rah' event."
 
 While technology can help expand agricultural supplies somewhat, ultimately supplies are limited. Golbitz says it's not as simple-as some on the energy side have claimed-to just grow more corn, soybeans and other biofuels feedstocks. "The reality is that just because it is a renewable resource doesn't mean it is an unlimited resource," he says. 
 
 The summit surpassed expectations, especially considering it was an inaugural event. Soyatech is already planning a second-annual gathering, which Golbitz says could be held in the United States some time in fall 2007. Worldwide interest in this topic has prompted plans for smaller regional meetings rotating through South America, Asia and Europe, he says. 
 
 Price Effects
 A former ConAgra Foods vice president of economic research was one of two general session speakers at the Soya Summit. Bill Lapp-now president of Advanced Economic Solutions, a consulting company for the food industry-spoke about recent strong increases in demand for commodities because of the ethanol and biodiesel industries. 
 
 For about 20 to 25 years, the agricultural and energy markets were fairly stable with only one- or two-year ups or downs, Lapp told Biodiesel Magazine in a telephone interview prior to the conference. Then, around January 2001, dynamic forces hit the market to change that. In the past four years, there has been global economic market growth of about 5 percent a year for a total of 20 percent, he says. 
 

 In recent history, crude oil and energy prices tripled, while prices for agricultural products stayed basically stable. That, along with support for the biofuels industry from the government, has led to dramatic growth in capacity. "Profit margins have yet to diminish despite big, big increases in the amount of investment and the amount of production," Lapp says. 
 
 While the biggest impact to the agricultural industry will fall on ethanol's shoulders, biodiesel comes into play as well. In the coming year, Lapp says there will be about a 50 percent increase in the demand of corn for ethanol, and nearly double the demand for soybean oil and other oils for biodiesel. "Now we are starting to see a tremendous boost in the demand for … corn and soybean oils, and other vegetable oils," he says. "It's starting to make an impact for supply and demand for those products, and soon will be having an impact on those prices."
 
 While markets are always dynamic, the growth of ethanol and biodiesel represents some of the biggest changes to hit the agricultural marketplace in years. Besides laying a foundation for higher prices, it has created more volatility in the market. Continued profitability of the industries will drive the potential for importing biofuels, Lapp says.
 
 Although rising commodity prices aren't necessarily bad, it is important that the industry understands the implications. "The economics will drive it where it has to go," he says. 
 
 One of the greatest unknowns is energy prices. Several analysts are concerned that the market is only one small disruption away from surpassing $100 per barrel. "There's a lot of question marks about where crude oil is going to end up-whether it's going to be $45 or $95-18 months from now," Lapp says. "That will dramatically impact the profitability of producing both ethanol and biodiesel."
 
 New Sources of Biodiesel
 During one of the energy track sessions, Eric Bowen, vice president for energy and director of biofuels for Sigma Capital Group, talked about biodiesel feedstocks. While the U.S. industry is dominated by soybeans, rapeseed is the main player in Europe, he tells Biodiesel Magazine. Bowen also included palm oil, canola, animal fats, yellow grease, jatropha and algae in his presentation. "Everyone acknowledges that with the growth the industry has seen, there's only so much of those 'traditional feedstocks' that are available, and the growth of the industry will require additional feedstocks," he says. 
 
 Biodiesel producers can use other feedstocks in their business models. However, new feedstocks pose a potential threat to the established biodiesel industry, especially when they are less expensive or have better fuel characteristics, Bowen says.

 
 As an alternative feedstock, palm oil has made the largest short-term contribution to the industry. It's the second-largest oil crop in the world, following soy oil. "Palm is already contributing a good portion of biodiesel to the European market, and we're only beginning to see palm biodiesel here in the United States," Bowen says. 
 
 Soy oil, on average, produces about 50 gallons of biodiesel an acre, while palm oil produces more than 600 gallons an acre. Soy oil is also more expensive at $400 per metric ton, compared with about $500 per metric ton for palm oil, Bowen says. In addition, the soy-oil market is dependent on the soy meal produced for animal feed. "Planting additional soya only gets you so far because the oil components won't work unless there is a market for that meal," he says. 
 
 Of course, palm oil does come with some disadvantages. Besides the political risk of supporting palm oil biodiesel production in the United States, it has a high cloud point, it is not a domestic product, and palm plantations are often under pressure for cutting down rainforests, Bowen says. 
 
 The emerging feedstock jatropha, a non-edible oil, has several positive characteristics, including 30 percent to 35 percent oil content, the ability to thrive in most soil types, drought resistance, properties that improve soil fertility and minimum management requirements. On the other hand, it hasn't been commercially grown in the past. "We really don't know what the economics and the yields are going to look like," Bowen says. 
 
 Algae is another possible next-generation biodiesel feedstock. Since the 1940s, commercial-scale algae production has been studied in the areas of food production, wastewater treatment, nutraceuticals and greenhouse gas reduction, as well as fuel, Bowen says. Though there is a lot of excitement surrounding algae, there are still production difficulties. 
 
 Impact of Government Policies 
 In one of the energy sessions, Jacob Golbitz talked about the impact of governmental policies. He also touched on a newly released report called "Biofuels 2006: Production, Supply and Reality," a HighQuest and Soyatech study of which he is the author. 
 While supply and demand are the major market forces affecting biodiesel production, governmental policies are a third player, Golbitz tells Biodiesel Magazine. Those policies may not be completely determinative of biofuels success or failure, but it's certainly of critical importance. 

 
 In the report, Golbitz projects that biofuels production will grow to more than 16 billion gallons per year by 2015, with biodiesel making up 2.15 billion gallons of the total. In all, biodiesel capacity will displace about 4 percent of the estimated diesel consumption. 
 
 A total of 62 percent of the proven reserves of light sweet crude oil, the most easily extracted and refined oil, is located in the Middle East. If Golbitz's biofuels projections are correct, biofuels production won't make an impact on the need to import oil from those locations. 
 
 With that in mind, biofuels production won't be able to make the United States close to the oft-repeated phrase "energy independent." In his report, Golbitz makes the argument that the U.S. government is pursuing biofuels production despite the fact that it knows it won't significantly impact needed energy inputs. "In absence of any kind of attractive foreign policy, we will pursue whatever domestic policy we can, regardless of how little it's actually going to help," he says. "In other words, to do something is better than doing nothing." It's a claim Golbitz can't quantify or prove. "I expect to be challenged on it," he says. 
 
 Another interesting facet of the study is the impact of government subsidies on biofuels production. With subsidies, the break-even point for biofuels production is significantly higher. "It creates an artificial possible price on soy oil or vegetable oil prices in general," Golbitz says. 
 
 Still, though many view the subsidies as a waste of taxpayer money, it's not an unprecedented level of governmental support. Using Golbitz's projections on ethanol production, over a 10-year period, a 51-cent-per-gallon subsidy could cost taxpayers $71 billion. 
 
 That's in line with other government-supported "patriotic" projects, Golbitz says. The Apollo Mission cost the equivalent of $122 billion in 2006 dollars. The interstate highway system, which was billed as a defense project, racked up $135 billion. 
 Golbitz feels the impact of biofuels will be limited without advances in cellulose-to-ethanol technologies. To reduce dependence on Middle Eastern oil, it will require technologies for non-food based fuels. 
 
 For more information on Soyatech, visit www.soyatech.com.
 
 Holly Jessen is a Biodiesel Magazine staff writer. Reach her at hjessen@bbibiofuels.com or (701) 746-8385.

Bill Lapp speaks to conference attendees about commodity prices during the general session.

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A panel discussion on 'Lessons from the World Biofuels Industry' was part of the energy track during the conference. Left to right: Jacob Golbitz, Scott Hughes, Ignace Debruyne, K. Shaine Tyson and Da

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Can the agribusiness industry stretch to accommodate the demands for global food and fuel supplies? It's definitely a hot topic. A recent conference, the Soya Summit 2006: Food and Energy for the 21st Century, brought together leaders from both industries for honest discourse about the opportunities and challenges ahead.

Sharing Renewable Resources

Some people just prefer to hear a story firsthand-look a person in the eye, shake hands and ask a few questions-before accepting it as truth. So, despite the fact that Jim Mersereau had read about ski lodges in western resort towns like Aspen, Colo., using biodiesel blends to power snowcats and other grooming vehicles, he wasn't convinced that the renewable fuel was a viable option for Cranmore Mountain Resort, the popular ski destination he manages in North Conway, N.H. 

 
 Three years ago, Mersereau's attitude shifted when, in person, he listened to Keene, N.H., Fleet Superintendent Steve Russell speak about his experiences with biodiesel. Intrigued and hungry for more information, Mersereau spoke with Russell after his presentation during a forum put on by the Granite State Clean Cities Coalition (GSCCC). The GSCCC is a group of 65 private and public organizations in New Hampshire dedicated to improving air quality through the use of cleaner-burning alternative fuels; the group has ties to the federally-funded Clean Cities Program. Through his conversation with Russell, Mersereau learned about a grant program funded by the GSCCC. That, and Russell's presentation, was enough to convince him that using biodiesel could work at Cranmore-and that going green was "the right thing to do." 
 
 When Mersereau returned to Cranmore, he shared his newfound enthusiasm for biodiesel with the resort's decision-makers. Subsequently, the company pursued, and was able to land, grant funds from the GSCCC that covered the incremental costs of the biodiesel that would be used at the resort over the course of one ski season. The funds would also help with expenses for the rental and installation of a 4,000-gallon above-ground storage tank for the renewable fuel. That winter, Cranmore became the first ski area in the East to use biodiesel in its snow-grooming fleet. Ultimately, that distinction would make the resort the subject of a case study carried out by a non-profit environmental organization. 
 
 Through in-depth interviews with Mersereau and other Cranmore personnel, Jennifer Schroeder, a case study writer for Clean Air-Cool Planet (CA-CP), an organization dedicated to finding and promoting solutions to global warming, compiled a comprehensive look at the performance of the biodiesel used in the icy North Conway climate. The results of the CA-CP report were released in September.
 
 Recipe for Success
 Mount Cranmore is situated alongside Mount Washington in North Conway, surrounded by national forest and state park acreage. With the border between Maine and New Hampshire just off to the east, North Conway is a year-round resort village that's a big draw for snow sport enthusiasts. The resort is on the southern edge of Mount Cranmore, above Mount Washington Valley. 
 
 Cranmore's 40 trails have 1,200 feet of vertical reach. Winter temperatures in North Conway average just above the single digits, but are known to dip as low as minus 29 degrees Fahrenheit, making the ski area an ideal place for a case study on the performance of biodiesel blends in frigid temperatures. 
 
 Interestingly, the study found that Cranmore Mountain experienced no difficulties with biodiesel blends-specifically B20-in three ski seasons from 2003-'06. "We used B20 that first winter and had nothing negative-no cold weather problems," Mersereau says. "Everything ran well."
 
 The resort's snow-grooming fleet is comprised of four Bombardier snowcats, three of which are powered by six-cylinder, 270-horsepower Cummins Inc. engines, and one with an 8.81-liter, 350-horsepower Caterpillar Inc. engine with a turbocharger and an air-to-air cooler. Cranmore's two John Deere diesel engine auxiliary generators were also switched over to B20; the generators are used to power the resort's ski lifts in the event of an electricity outage. Other diesel-powered equipment and vehicles, including a loader/backhoe, also became part of the resort's B20 fleet. 
 

 While it is still too soon for the resort's mechanics to bear out any long-term maintenance differences-good or bad-that may be attributable to the use of B20, the CA-CP report did note that oil filters were cleaner during oil changes and there were less fuel filter failures. Short-term, Cranmore reported no additional wear and tear, and no needed mechanical alterations or changes to any equipment in order to accommodate B20. After burning more than 60,000 gallons of the blend, it was found to be just as efficient as using straight diesel-and it proved to be just as reliable in winter conditions.
 
 According to the National Biodiesel Board, B100 gels at a slightly higher temperature than No. 1 or No. 2 diesel, but John Rymes of Rymes Propane and Oil constantly reminds committees and state representatives that conventional diesel gels in cold temperatures, as well. The proper blending of a biodiesel product plays a large part in avoiding engine failure due to gelling and clogging, and Rymes says his company's unique way of approaching biodiesel blending has contributed to the success of Cranmore's fleet. 
 
 "We look at the equation backwards," Rymes says. "We take our worst-case scenario temperatures, and we blend the product based on [that]. Most people look out and say, 'It's going to be cold. We better put this type of additive in and add extra kerosene to our product.'" 
 
 He continues, "We'll do a lab analysis on all products, including regular diesel with and without additives to come up with a product to [meet] the specifications and needs of the client. It wouldn't be crazy to hear of negative 40 [degrees Fahrenheit] on top of that ski area."
 
 With the help of the GSCCC, Cranmore rented a non-heated, above-ground fuel storage tank. At that time, it was thought that B20 or any other blend of biodiesel not stored indoors or in underground tanks would become more viscous. With no problems experienced storing the fuel in the above-ground tank, the project helped to demonstrate that if the appropriate specifications were set by the consumer, there is no harm in storing the fuel just as petroleum is stored, according to the CA-CP study.
 
 Schroeder found in her study that not only did Cranmore's snow-grooming fleet operate as effectively with B20 as it had with diesel, but B20 use also led to noticeable air-quality improvements, according to Cranmore employees. Schroeder calculated that by reducing the amount of petroleum used by 12,000 gallons, the resort achieved a 10 percent reduction in lung-clogging particulate emissions, a 20 percent reduction in sulfur dioxide emissions and a reduction in carbon dioxide emissions of more than 100 tons. "[While] burning diesel, your eyes can water, it stinks and it's awful," Mersereau says. "When running biodiesel, that goes away. You can tell the engines are running cleaner. People used to get headaches just working on them and starting them up in the garage. It doesn't smell like diesel fuel anymore."
 
 The Cost of Transition
 According to Mersereau, one reason for the resort's initial reluctance to substitute conventional diesel with a biodiesel blend was the increased cost of the renewable fuel. When the Cranmore project began, the cost differential was roughly 44 cents per gallon. At that time, there were no commercial blenders in New Hampshire, so a significant portion of the GSCCC grant money was eaten up on shipping biodiesel from out of state. 
 
 Renting and positioning an above-ground biodiesel storage tank at the resort cost approximately $7,000. According to the study, Cranmore had made significant commitments in that first year, but after all the preparation, only half a ski season remained to actually run the snowcats on B20-not nearly enough time to properly measure the fuel's performance. The following season, Cranmore approached the GSCCC with a second proposal that requested grant money for a second season-enough to cover the cost of purchasing the storage tank-on the condition that Cranmore would cover incremental costs and continue to use B20 on its own for a subsequent two years. The GSCCC agreed. 

 
 Today, with the U.S. renewable fuels boom in full stride, several fuel distributors in the region-mainstay petroleum distributors and biodiesel newcomers alike-have begun offering biodiesel in New England. There are six suppliers in New Hampshire alone, including Rymes Propane & Oil, according to Rebecca Ohler, director of GSCCC. For the past two ski seasons, Rymes Propane & Oil has supplied Cranmore with its biodiesel, bringing it in via railcar. The cost differential has also decreased significantly from the original 44 cents per gallon to less than 20 cents per gallon (as of January 2006), Mersereau says. "It's not that much of a difference in cost (over diesel), and if we can make the environment better and don't have to make any adjustments to our machines, then why not?" he says. "I just can't say enough good things about it."
 
 Carving a New Path
 Mersereau was so pleased with the performance of B20 that Cranmore is now looking at other ways to utilize biodiesel. "I can't ever see us not using [biodiesel]," he says, explaining that the resort is currently looking at the possibility of using bioheat.
 Ohler sees the Cranmore project as a true success story, and she is proud of the role the GSCCC has played in making biodiesel a little more mainstream in New Hampshire. In fact, there are multiple ski areas in New England that have followed Cranmore's lead and switched to biodiesel blends, Ohler says, citing examples like Vermont's Sugarbush and Smuggler's Notch resorts. 
 
 Now, the work carries on. While it's rewarding to see biodiesel use begin to proliferate in New Hampshire, Ohler and her GSCCC colleagues continue to give and facilitate presentations similar to the one that caught Mersereau's ear three years ago. "There are more reasons for people to consider [biodiesel], and so much research has been done in the past few years," Ohler says. "We don't think everyone knows all they need to know about it."
 
 CA-CP is currently working on four additional case studies detailing other entities in New Hampshire that are using, or have used, biodiesel. The new case studies include the city of Keene Oyster River Biofuel Initiative; the New Hampshire Department of Transportation; and Rymes Propane & Oil. According to CA-CP Communications Manager Bill Burtis, the organization plans to release the majority of its study findings within a year.
 
 Lindsey Irwin is a Biodiesel Magazine staff writer. Reach her at lirwin@bbibiofuels.com or (701) 746-8385.

Mersereau stands on the tracks of a Bombardier snowcat powered by B20.

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Walls and Austin with a Clean Cities “Powered by Biodiesel” sign.

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Michael Walls, assistant commissioner of the New Hampshire Department of Environmental Services, left, stands with U.S. Rep. Jeb Bradley, R-N.H., and Ted Austin, former Cranmore Mountain Resort genera

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For the past two ski seasons, Rymes Propane & Oil has supplied Cranmore Mountain Resort, a popular New Hampshire ski destination, with B20 for its snow-grooming fleet. Despite sometimes grueling winter conditions, the blend performed flawlessly, according to an independent report.

Conquering the Cold

"Market growth" is a term often associated with big business and commercial principles typically seen as dissimilar to, or in direct conflict with, environmental protection and conservation. Apply this term to biodiesel, however, and its context becomes instantly appropriate-and in sync with protecting the unspoiled nature and rich history of America's national parks. 

 
 Truth be told, maintaining clean air, land and water is serious business for the U.S. National Park Service (NPS). Not only does the NPS provide for the safety and enjoyment to the millions of people who visit the parks each year, but it also protects these fragile ecosystems and their inhabitants from the harmful pollutants emitted, spewed and spilled inside park boundaries every day. It's up to the stewards of these lands to enforce and encourage conservation, emissions abatement and, increasingly, the use of clean-burning fuels like biodiesel. Last year alone, the NPS used almost 84,000 gallons of biodiesel. That's market growth all right, but it sure didn't happen overnight. 
 
 Yellowstone National Park, which stretches across the intersecting borders of Idaho, Montana and Wyoming, is widely considered the first national park to utilize biodiesel in significant volume and applications, having started doing so about a decade ago. Biodiesel blends were being used and evaluated in the park at a time when the renewable fuel was hardly known outside research and agriculture circles-years before a coast-to-coast industry had surfaced and quality standards had been promulgated. 
 
 Yellowstone began its foray into the renewable realm with one diesel-powered vehicle, a tank full of pure canola-based biodiesel and an environmental challenge to reduce air pollution in one of the most beautiful spots on Earth. The pioneering efforts of Yellowstone have paid off. According to statistics obtained from the state of Montana, Yellowstone now reduces its carbon dioxide emissions by 500 tons annually by using biodiesel blends. This trailblazing effort has paved the way for the 50-plus national parks now using the clean fuel. 
 
 Good First Impressions 
 On Sept. 12, at the U.S. DOE's Central Regional Clean Cities Workshop in Moran, Wyo., the United Soybean Board (USB) recognized the NPS for its 10-plus successful years of biodiesel use. Guest panelists featured USB Director Chuck Myers, Yellowstone National Park Environmental Manager Jim Evanoff and Clean Cities Projects Manager Ernie Oakes. 
 
 According to Evanoff, Yellowstone's initial purchases of biodiesel in 1995 and 1996 were from the University of Idaho in Moscow, which was involved in researching the bourgeoning fuel. The university often made its biodiesel out of either canola or mustard seed, as it still does. "We have seen quite a few changes in the quality of the fuel, which was one of the major concerns in the beginning of the program," Evanoff tells Biodiesel Magazine. "That's one of the reasons we started with just one truck running on pure B100-to do the ultimate tests of the fuel instead of [using] B20, where there might be other conditions or contaminants that might enter into the whole program." 
 
 Since that time, fuel quality concerns from biodiesel advocates and opponents alike-including producers, blenders, retailers and consumers-have led to improved quality control standards and programs, and brought the issue to the forefront of an industry on the rise. "We think it's very important for producers to ensure the quality of their biodiesel by joining the BQ-9000 certification program," Myers says, speaking to the importance of product control measures and how soybean checkoff dollars managed by the USB help fund the leading quality assurance program in North America-BQ-9000. 
 
 For Yellowstone, Evanoff says, achieving success with biodiesel blends is accomplished by forging a solid relationship with a fuel distributor that's as passionate and dedicated to the renewable fuel as the end user. 
 

 A National (Parks) Trend
 "When we started with that one truck 10 years ago-and it's still running on 100 percent canola [biodiesel]-we envisioned that a decade later, we'd have created niche markets within the region and in the surrounding states," Evanoff says. "That has pretty much come to fruition. We now have five public biodiesel pumps within the greater Yellowstone area, and we've seen a ripple effect on biodiesel being accepted by other national parks."
 
 According to NPS Environmental Leadership Program Coordinator Shawn Norton, the NPS is a decentralized organization under which seven "eco-regional" offices are established (Alaska Area Region, Pacific West Region, Intermountain Region, Midwest Region, Northeast Region, National Capital Region, and Southeast Region). The actual number of national parks using biodiesel is unknown, Norton says, explaining that the use of biodiesel in national parks is growing so fast that it's difficult to maintain a current database of parks using the renewable fuel. "We're in the process of updating our Web site and database," he tells Biodiesel Magazine. "I can say there are at least 50, maybe up to 75, national parks currently using biodiesel in more than 1,000 different diesel applications-everything from snowplows, utility vehicles, loaders, garbage compactors and sweepers … every application you could imagine, really." 
 
 The NPS would prefer to see more parks using a B20 blend rather than fewer parks using high blends or B100. "It's a lower blending percentage, sure, but the NPS would use much more biodiesel overall," Norton says. "We believe B20 is the highest blend level that'll breed success in the NPS. It's practical, and it's affordable." However, higher concentrations of biodiesel are used in those national parks fortunate enough to not have cold weather concerns. Evanoff says the Channel Islands National Park, off the coast of Ventura, Calif., powers all of its ranger boats with B100, and the Everglades National Park in Florida is running some of its boats on B100. He also says the heating systems, which keep the facilities at Mount Rainier National Park temperate, run on B50. 
 
 All Aboard
 There have been several different ways biodiesel has been promoted for use in national parks, but as of yet, there is no NPS-wide mandate to do so. "The NPS is considering putting out a director's memorandum for every park," Norton tells Biodiesel Magazine. Until then, however, the NPS will continue doing what it has been doing to increase biodiesel's presence in the parks system, and successfully so. 
 
 Much of the work to get parks on board has been done on the ground, in partnership with the USB, Norton says. "The USB helped get the word out on this early," he says. It's been a helpful, strategic relationship. In addition, the NPS has held several workshops promoting the use of biodiesel, already having staged 10 "greening" workshops across the United States, Norton says. "At each [workshop], we'd bring in experts and strongly emphasize biodiesel use," he says, adding that NPS personnel are highly engaged in resource protection and willing to take measures to protect U.S. parks without being compelled by directives. 
 
 Norton talks of how Glacier National Park in Montana began using biodiesel. The park's former manager wanted to begin using B20 in its diesel fleet and utility applications, but the staff was hesitant. "His staff didn't want it," Norton says. "It's a harsh climate up there, and there were concerns about how the fuel would perform." Regardless of what his staff thought, the now-resigned park manager felt that using B20-effectively reducing petroleum consumption by 20 percent at the park, in addition to emitting less pollutants in the air-would be beneficial and remain consistent with what Glacier National Park stands for. The park manager ordered B20 and began using it without telling his staff. Months went by without incident, and at a staff meeting, the manager asked a series of questions: "How have the vehicles been running? Have you noticed any difference? Have there been any mechanical issues?" His staff replied that everything was operating just fine. Norton says the park manager then told them they'd been using B20 for months, after which Glacier National Park staffers never thought of biodiesel the same way they used to. The park has been using the green diesel ever since. 
 
 Biodiesel is also being used in Alaska-one of the harshest climates on the planet. Tim Hudson, who previously held Evanoff's position at Yellowstone, is now in "The Last Frontier," not only using biodiesel there but pushing for ways to use Alaska's wealth of oily fish waste as a biodiesel production feedstock, Norton says. 

 
 Another well-known national park that's found success in using alternative fuels is Kentucky's Mammoth Cave National Park. "We started using biodiesel back in the late '90s, I believe," says Vickie Carson, public information officer with Mammoth Cave. "We had explored using ethanol in Mammoth Cave's gas-vehicle fleet … and then afterwards, biodiesel came into the picture. It really seemed like a good idea, especially because no retrofitting of the vehicles was needed. That was a big plus. Also, we wanted to be a good example."
 
 She says the air quality in that region can be poor on some days. "The park is a Class I area," she tells Biodiesel Magazine. Under the Clean Air Act, the U.S. EPA designates national parks over 6,000 acres and national wilderness areas-those in existence as of Aug. 7, 1977-as Class I. "This means the air quality of the park is not supposed to be degraded," Carson says. "Air quality affects water quality-they're all related." 
 
 The dynamic water system, of which Mammoth Cave is a part, represents nature in all its complexities and frailties combined. Carson says among the myriad of vehicles and other applications that run on biodiesel blends, the biggest consumers of the fuel at the park are ferries that cross the Green River. The Green River is a tributary of the Ohio River, which is a major tributary of the grand Mississippi River. Keeping the air around and the water within Mammoth Cave clean is motivation enough to use biodiesel blends. "We've got nothing but good things to say about biodiesel," Carson says.
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him at rkotrba@bbibiofuels.com or (701) 746-8385.

Evanoff fuels a truck with biodiesel at the Mammoth Hot Springs in October 1995. Evanoff helped Yellowstone National Park become the first national park to use biodiesel.

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Evanoff says some people were concerned that grizzly bears in Yellowstone National Park might be attracted to the pleasant odor of biodiesel emissions. The concern proved false when bears in captivity

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Following the lead of Yellowstone National Park, more than 50 national parks, from Kentucky to Alaska, are now using biodiesel blends and B100. It's a story that's been a decade in the making.

National Park Power

Biodiesel plants may employ varying technologies, feedstocks and ownership structures, but all projects require one common and important input: money. Your biodiesel project will not succeed if you don't secure funding, both for financing initial start-up and construction costs, as well as ongoing working capital needs. 
 
 Your project-financing package will likely involve millions of dollars, and your lender's loan documents will reflect the size and complexity of this significant transaction. Typically, a loan agreement will govern the basic terms of the credit facilities, including conditions to funding, loan covenants, and your representations and warranties. You will need to engage legal counsel experienced in complex financial transactions to assist you with the negotiation of the loan documents and to provide the necessary legal opinions required by your lender.
 
 Typical conditions to debt funding include:
 --Delivery of a real estate title insurance commitment, ensuring your lender a first mortgage on all of your real estate
 

 --Confirmation that no other party has a prior security interest in, or lien against, any of your assets
 
 --Proof of authorization of the transaction by the appropriate people (usually your board of directors)
 
 --Delivery of legal opinions regarding enforceability of the loan agreements, authorization of the transaction, conflicts with applicable law and other agreements, receipt of required permits and governmental authorizations, and other matters
 
 --Payment of lender's fees and costs related to the transaction, including an origination fee and other lender fees, title insurance fees, uniform commercial code (UCC) search fees, your lender's legal fees, and other costs
 
 --Delivery of a survey of the property; copies of required permits (assigned to the lender to the extent possible); copies of significant contracts, including the construction contracts; and proof of required insurance coverage
 
 --Delivery of collateral assignments of each significant contract to the lender
 
 In addition, construction loan advances will be further conditioned on disbursement through an acceptable disbursing agent (often the title insurance company) to ensure that no mechanic's liens attach to the project real estate. Revolving (or working capital) loan advances will typically be further conditioned on the satisfaction of a borrowing base formula that factors in the value of your working capital assets (inventory and accounts receivable).
 
 Typical loan covenants include:
 
 --Periodic delivery of financial information-usually quarterly or monthly interim financial statements and annually audited financial statements, as well as certain production and progress reports

 
 --Satisfaction of certain financial requirements, such as an appropriate debt service coverage ratio, debt-to-equity ratio, tangible net worth ratio and others
 
 Your lender will expect you to include certain representations in the loan covenant and warrant that these representations are true. These representations and warranties will involve your entity's legal status, authorization of the transaction, other agreements and obligations, and various other factual matters. You will want to carefully review these representations and warranties with your legal counsel. 
 
 Working through the financing process can be challenging, but nonetheless, it is an important component of your project's success. 
 
 Ron Vaske is a partner in the Financial Institutions and Commercial Lending Practice Group of Lindquist & Vennum PLLP, a leading provider of legal assistance on bioenergy project finance throughout the country. He can be reached at (612) 371-3211.

Financing Your Biodiesel Project:
Complex Project? Wait Until You See the Loan Agreement

Legal Perspectives

It is quite clear that methanol is the choice of monohydric alcohol for biodiesel production. In spite of methanol pricing sitting at essentially the second-highest level in history at just over $1 per gallon as the base contract barge price for approximately 420,000-gallon orders FOB U.S. Gulf Coast, methanol is the economic choice for biodiesel.
 
 The FOB Gulf Coast barge price is the basis in establishing railcar and truck pricing for biodiesel plants all over the United States and Canada. Simply take the barge price and add an upcharge to cover the expense and handling of a 7,500-gallon truck or a 29,000-gallon railcar versus a 420,000-gallon barge. Then add the freight cost in getting from the ocean marine terminal to the consumer's location. Of course, there are additional methods of delivery incorporating inland terminals and river barge movements, which would add terminal and throughput costs plus the truck freight from the inland terminals to the customer. 
 
 The base price for methanol is quite high today compared with the 40- to 80-cent-per-gallon range from 1999 to 2004. The barge price rose over $1.50 per gallon in early 1995 when there was a perceived shortage of methanol caused by the large MTBE requirement for reformulated gasoline under the Clean Air Act of 1990. This past August, the Gulf Coast contract barge price was $1.03 per gallon, and it is poised to go higher in September and beyond.
 
 Why Is Pricing Relatively High?

 Very simply, the supply and demand balances of a global commodity, alcohol, will dictate pricing if raw material costs don't. Today, the global supply/demand balances are very tight. Methanol production has essentially closed down in North America, and supply comes from locations where there is much cheaper natural gas, the raw material needed to produce methanol. This will remain the case until, and if, liquefied natural gas (LNG) begins moving around the world in cryogenic ships, which could possibly affect the placement of future methanol facilities.
 
 The price of methanol remains at a high level with global supply/demand balances tight around the world for the following reasons:
 
 --An acceleration in the closure of high-cost plants in both North America and Europe
 
 --The lengthening of time from a methanol plant's initial concept to actual start-up and the continuous production available to the global market
 
 --New "mega" methanol plants have a larger, and sometimes more negative, impact on global availability when they are shut down unexpectedly, which can lower the "effective capacity" of the global plants close to 87 percent, which is below the heretofore-used figure of 90 percent of the plant's nameplate capacity
 
 --Huge capacity additions in China are creating an equally huge increase in demand for methanol as a future vehicle fuel to partially solve the growing energy crisis in China.
 
 There is little doubt in anyone's mind that this country no longer calls its own shots when it comes to methanol production. Rather, the United States is part of the much larger global supply and demand for methanol. In spite of the new growth for methanol in biodiesel and the current strong demand going into other derivatives, the loss of most of the MTBE market and no new derivative plants planned for the future means modest growth at best for methanol in the United States. With only two new global plants scheduled for completion in Iran and Oman between now and early 2009, reliable supply and an infrastructure to move methanol from plants around the world through marine terminals to biodiesel plants in the United States should be the key part of any analysis by a new consumer. Our effort at Vitusa Products is to help educate the biodiesel market as much as we can so that each new methanol consumer can make the best decision for their plant or requirement. 
 
 The Safe Handling of Methanol
 In addition, and of greater importance, Vitusa Products desires to help drive forward the education process of the Biodiesel industry and its personnel in the safe handling and storage of methanol. It is a hazardous chemical and it requires great care to avoid accidents. As part of this continuing process, the following information is only the beginning to the Safety and Handling of Methanol. Every new biodiesel plant should have a tireless effort to learn about methanol and obtain all the information that they can about its proper handling and storage.

 
 Methanol Safety & Handling
 &bull; Establish comprehensive handling procedures and a storage and handling system that assures the safe receipt and transfer of methanol. This would include clearly labeled tanks, pipes and hoses. Dedicated transfer systems should be used, if at all possible, to avoid cleaning and potential contamination. All areas must be secure from unauthorized access.
 
 &bull; Storage tanks should be at least mild steel as copper alloys, zinc, aluminum or plastic are not acceptable. Plastics can be used for short term storage but are not recommended for long term storage due to the potential for deterioration. All containers and transfer systems must be designed in accordance with proper engineering standards and in compliance with all legislative requirements.
 
 &bull; Dikes should be used with storage tanks to reduce fire risk and larger spills.
 
 &bull; Storage tanks should have control devices including but not limited to level gauges, vents and pressure release valves. Vapor recovery may also be necessary depending on local codes.
 
 &bull; Ventilation systems in all confined areas are necessary if airborne concentrations could reach explosive limits. Use only spark free equipment.
 
 &bull; Proper grounding of trucks or railcars and storage tanks is necessary with carbide tipped clamps. Use dip tube filling to minimize static electricity.
 
 &bull; Piping should be mild steel without screwed connections. Non-ferous materials are not acceptable. Temporary rubber hoses used for unloading should have an internal wire for strength and electrical continuity.

 
 &bull; All pumps and motors should be rated for methanol service under local and national codes and must be grounded.
 
 &bull; Vapor from storage tanks should be controlled using pressure vacuum relief valves, flames arresters or vacuum breakers. Inert gas, such as, dry nitrogen, can be used to prevent vapor spaces. Overflow pipes are not recommended. Painting tanks white will reduce heat and vapor losses.
 
 &bull; Establish storage tank cleaning and maintenance procedures following all local regulations. The following suggestions are for general guidance and they should initiate a more complete and rigid guideline:
 --Partially fill and flush the tank 3-4 times with water.
 --Open top and bottom manways for natural ventilation. On large tanks, install air moving devices.
 --Tank or vessel must test "gas free". Before entry, check for safe oxygen and combustible levels.
 --When unattended, manways should be blocked to prevent entry by unauthorized personnel.
 --No one should enter any confined space without a safety watch in place.
 --At least two escape routes should be provided from all storage and handling areas.
 
 &bull; All personnel involved with the handling of methanol should be aware of its hazards including, but not limited to, the following:
 Flash Point--
 54 degrees Fahrenheit (12 degrees Celsius) Closed
 60.1 degrees Fahrenheit (15.6 degrees Celsius) Open

 
 Flammable Limits--
 6.0 (V/V) percent lower
 36.5 (V/V) percent upper
 
 Exposure Limits--
 TLV-TWA 262 mg. m³ (200 PPM)
 TLV-STEL 328 mg. m³ (250 PPM) 
 Since human exposure can occur by inhalation, ingestion or absorption, personal protective equipment (PPE) should be used. Adequate ventilation is necessary and should mechanical means be used, only spark proof fans should be used. 
 
 &bull; All personnel should possess a thorough knowledge of the properties of methanol, symptoms of methanol poisoning, first aid, fire safety and the protection of the environment.
 
 W.L. Lewis is vice president of Sales and Methanol Market Manager for Vitusa Products Inc. He can be reached at blewis@vitusaproducts.com or (704) 364-3007.

Methanol: The Alcohol of Choice for Biodiesel

Talking Point

State renewable fuel mandates should be preempted in order to implement the requirements of the federal renewable fuels standard (RFS), according to the National Petrochemical & Refiners Association (NPRA). The petrochemical industry's trade association feels new state mandates should be examined by the U.S. EPA for their impact on the fuel production or distribution systems.
 
 The NPRA's comments were part of testimony heard this morning in Chicago at a public hearing held to discuss the EPA's proposed rules for implementing the RFS, which was signed into law as part of the Energy Policy Act of 2005. The RFS creates a floor of 7.5 billion gallons of renewable fuel use in the United States by 2012. The EPA introduced its proposed implementation Sept. 7. The <a target="_blank" href="http://www.epa.gov/otaq/renewablefuels/renewablefuel-nprm.pdf">239-page proposal</a> provides full details of the registration, recordkeeping and reporting requirements needed to implement the RFS.

 
 "Congress did not anticipate the proliferation of new state ethanol and biodiesel mandates when it passed the Energy Policy Act of 2005," Charles Drevna, executive vice president for the NPRA, told the EPA. "Neither Congress nor the Administration should take a pass on considering the potentially serious impacts of politically popular, but economically and environmentally questionable, state ethanol or biodiesel mandates."
 
 The RFS is projected to cut up to 3.9 billion gallons of petroleum use and 14 million tons of greenhouse gas emissions, according to the EPA. On average, the cost increase in renewable fuel is expected to range from 1 cent per gallon to 3 cents per gallon of gasoline, the proposed ruling said. The EPA also projects up to 9.9 billion gallons of biofuels will be produced annually in the United States by 2012.	
 
 Drevna concluded his testimony by saying the NPRA is committed to a smooth implementation of the RFS, and urged the EPA to "finalize the RFS program rules as soon as possible, while remaining faithful to the core principles developed and supported by all stakeholders."
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 2:47 p.m. CDT Friday, October 13, 2006

NPRA weighs in on proposed RFS implementation

In preparation for a U.S. EPA deadline, employees of Chief Petroleum Co. were going from pump to pump Oct. 13, replacing labels that said low sulfur diesel with labels that said ultra low sulfur diesel (ULSD)."(ULSD) was available, it was actually coming out of the nozzles, but today we've been going along and labeling the pumps," said Rich O'Connell, controller for Chief Petroleum. 
 
 ULSD is the new reality for diesel-powered highway vehicles in the United States. Low sulfur diesel, which has a maximum 500 parts per million (ppm) of sulfur, is being phased out in favor of ULSD's 15 ppm, according to EPA spokesman John Millett.
 
 As of Oct. 15, a U.S. EPA deadline kicks in requiring retailers that have chosen to sell the fuel to label it accordingly. Apart from the new labels, consumers won't notice anything different, Millett said. In fact, most of them were already filling up with ULSD without even knowing it. 

 
 Since June 1, 80 percent of the diesel fuel refineries import or refine has been required to be ULSD. With 2.4 million barrels of ULSD being produced daily, that's actually ahead of the EPA's requirement schedule. "Refineries are going beyond the required production levels for producing ULSD," Millett said. "Ninety percent of all highway diesel is now ULSD."
 
 The requirement that all diesel fuel meet ULSD specifications doesn't kick in until Dec. 1, 2010, making the next four years a transition period. That's something there has been confusion over. However, due to the large amounts of ULSD already being produced it's already an essentially unavoidable reality for retailers, Millett said. 
 
 O'Connell confirmed that. Supplies of low sulfur diesel just aren't available, at least in his area. Chief Petroleum is based in Colorado Springs, Colo.
 
 Suppliers don't want to ship 500 ppm fuel by pipeline for fear of contaminating 15 ppm fuel, O'Connell said. There's also not enough storage to keep separate supplies of both fuels on hand, he added. "You have a choice, of course, to market it or not market it, but in this part of the world it's pretty much all ULSD," he said. 
 
 Chief Petroleum sells diesel at five "card lock" locations in Colorado Springs, Colo., Card lock locations are automated service stations without attendants or a convenience store. Customers have had questions about ULSD. "There seems to be a lot of confusion and a lot of fear," O'Connell said. 
 
 The biggest concern is the loss of lubricity due to the removal of sulfur from diesel. There are concerns that the low lubricity of ULSD will cause engine troubles, he said. However, potential problems were staved off by a federal mandate that requires lubricity additives be added to diesel fuel. 
 
 The EPA is excited about the switch to ULSD due to the expected health and environmental benefits, Millett said. The agency estimates that when the switch to ULSD is finalized, it will reduce nitrogen oxide emissions by 2.6 million tons and reduce particulate matter by 110,000 tons annually.
 
 Overall, the switch to ULSD has gone well. "It's been a very smooth transition," Millett said. 
 

 For more information, visit <a target="_blank" href="http://www.epa.gov/cleandiesel">http://www.epa.gov/cleandiesel</a>. 
 
 Holly Jessen is a Biodiesel Magazine staff writer. Reach her at hjessen@bbibiofuels.com or (701) 746-8385.
 
 Posted: 4:45 p.m. CDT Friday, October 13, 2006

363-1294329482.jpg

Retailer prepared for ULSD deadline

Questions are being raised as to how biofuels and its feedstocks fit in as they take a more prominent role on the world's stage. An international trade policy group is offering its recommendations for how biofuels should be treated.

 
 The <a target="_blank" href="http://www.agritrade.org/index.html">International Food & Agricultural Trade Policy Council </a>(IPC) is releasing a paper on international biofuels trade issues Oct. 27 in Washington, D.C. Members of the <a target="_blank" href="http://www.reeep.org/">Renewable Energy and International Law Project </a>partnered on the publication.
 
 The paper will discuss how international trade rules apply to the biofuels sector, according to IPC. Items include whether biofuels and their feedstocks should be classified as agricultural, industrial or environmental goods. It also discusses which WTO rules apply to government mandates and support policies to promote the production of biofuels.
 
 University of Michigan Professor Robert Howse will discuss the paper's main findings. He is the principal trade expert for the Renewable Energy and International Law Project.
 
 Opening remarks are expected from Robert Simon, minority staff director for the Senate Energy and Natural Resources Committee. The following will also provide commentary of the paper's findings:
 
 --Weber Amaral, CEO of the Brazilian Biofuels Program and senior scientist with International Plant Genetic Resources Institute
 --Carl Hausmann, CEO and President of Bunge North America
 --Angelos Pangratis, deputy head of delegation for the European Commission

 --Eric Sievers, senior associate with Baker & McKenzie's Biofuels Group, and Renewable Energy and International Law Project
 
 IPC members span the globe and include Hausmann, ADM Chairman Allen Andreas and Cargill Senior Vice President Robbin Johnson. The paper was supported by the United Nations Foundation and the German Marshall Fund.
 
 More information on the event is available <a target="_blank" href="http://www.agritrade.org/Events/Biofuels%20Launch_Invite.pdf">here</a>.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 3:47 p.m. CDT Thursday, October 19, 2006

Trade policy groups to discuss WTO biofuels issues

Jason Masters and Bob Bechtold are planning on turning one form of renewable energy into another. The duo is developing a biodiesel project in western New York that will obtain some of its power from a nearby wind turbine.
 
 <a target="_blank" href="http://www.northernbiodiesel.com">Northern Biodiesel</a> recently purchased a former lumber warehouse adjacent to Bechtold's plastic injection molding company, <a target="_blank" href="http://www.harbec.com">Harbec Plastics Inc.</a> The property, located in Ontario, N.Y., will be turned into a 7.5 MMgy biodiesel plant, according to Masters. 

 
 A 250-kilowatt wind turbine provides approximately one-third of Harbec's annual electricity needs. When the facility isn't operating, the excess power is sold back into the power grid, according to Masters. Harbec also produces a significant amount of waste heat that will be used in the biodiesel production process. "We'll be piping that to our facility for process heat," Masters said.
 
 Masters said construction on the biodiesel plant will begin upon financial close. "We're in the negotiation round of closing all of our loans," he said. 
 
 Masters is targeting early December for construction. Start-up is expected six months later. The former lumber warehouse requires significant infrastructure improvements beyond tying in the facility to Harbec's power supply, Masters said.
 
 The plant's equipment is already purchased. Masters said the facility will use an in-house design that combines a continuous flow and batch-style production method. 
 
 The biodiesel plant will initially operate on a shift basis, producing 1.5 MMgy to 2 MMgy. Depending on demand, production can be ramped up to 7.5 MMgy while operating 24 hours per day, 288 days per year. The plant will use waste vegetable oil, canola oil and soy oil as feedstock.
 
 Masters said much of the biodiesel will be targeted toward the Rochester area of New York. Ontario is 20 minutes east of Rochester along the Lake Ontario shoreline. A biodiesel marketer has not been finalized.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 

 Posted: 1:41 p.m. CDT Friday, October 20, 2006

New York biodiesel plant to use renewable power

ASTM International continues to tweak its specifications regarding biodiesel blends. The latest updates are expected to alleviate concerns over biodiesel compatibility in diesel exhaust after-treatment systems being used to meet 2007 U.S. EPA diesel emissions standards.
 
 The new standard, D 6751-06a, adds limits on calcium and magnesium, which can be introduced during the biodiesel production process. The specification was approved at a June meeting of the ASTM Petroleum Products and Lubricants D02 committee. It was released earlier this month. The change addresses the potential effects of small levels of calcium and magnesium on diesel particulate traps, which are being introduced on diesel vehicles to reduce emissions.
 
 "Engine manufacturers were concerned that even very small amounts of minor compounds could build up in particulate traps and eventually cause the traps to clog," said Steve Howell, the National Biodiesel Board's technical director and chairman of the ASTM Task Force on biodiesel standards. "The new ASTM specification addresses these concerns and demonstrates the industry's eagerness to work with manufacturers to ensure compatibility between the equipment and the fuel."
 
 Earlier this year changes to the specification were made to limit sodium and potassium in biodiesel. Both elements are commonly found in biodiesel production catalysts.
 
 Although D 6751-06a covers B100, it is expected to ensure blends up to B20 will be compatible with future emissions technology. A subcommittee vote on ASTM B20 is expected in December, according to the National Biodiesel Board. Depending on the results, final approval for biodiesel blend specifications could come as early as spring 2007.
 
 ASTM International is the successor to the American Society for Testing and Materials.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 

 Posted: 11:24 a.m. CDT Wednesday, October 25, 2006

ASTM updates biodiesel specification

A farmer-owned biodiesel project in northeast Nebraska is putting federal funds to good use. <a target="_blank" href="http://biodieselnebraska.com/">Northeast Nebraska Biodiesel LLC</a> is moving ahead with construction following receipt of a $300,000 USDA value-added producer grant. The funding is for working capital expenses.
 
 Nebraska State Director Scott Blehm presented the funds in a Tuesday ceremony in Lincoln, Neb. Northeast Nebraska Biodiesel was one of more than 150 projects throughout Nebraska receiving $38 million in USDA funding.
 
 The biodiesel plant is being built near Scribner, Neb., which is located on U.S. Highway 275 approximately 65 miles northwest of Omaha. The facility will be on a 2.5-acre lot adjacent to a soy crush facility operated by Nebraska Soybean Processing. The biodiesel plant will source soy oil from the processing facility for its feedstock, according to Robert Byrnes, technical consultant from <a target="_blank" href="http://www.nebraskarenewableenergysystems.com/">Nebraska Renewable Energy Systems</a>.
 
 Iowa-based <a target="_blank" href="http://www.technocheminc.com/">TechnoChem International Inc.</a> is designing and assembling the facility off-site. "We're doing site preparations," Byrnes said. "Equipment should be arriving in about a month."
 

 TechnoChem is also building the Tri-City Energy project in Keokuk, Iowa. That plant was expected to begin producing 5 MMgy later this month.
 
 Northeast Nebraska Biodiesel's plant will be capable of producing 5 MMgy, although initial production is expected to be approximately 2 MMgy, according to the company's Web site. The biodiesel plant may also include a glycerin purification system designed by TechnoChem.
 
 The motivation behind Northeast Nebraska Biodiesel was simple, according to Byrnes. "There was no biodiesel production in Nebraska," he said. "And there are plenty of soybeans."
 
 Nebraska doesn't have any commercial-scale biodiesel producers. However, Beatrice Biodiesel LLC, a 50 MMgy project near Beatrice, Neb., broke ground last month and is expected to start-up next fall.
 
 Northeast Nebraska Biodiesel LLC
 Location: Scribner, Nebraska
 Design/builder: TechnoChem International Inc.
 Capacity: 5 MMgy
 Feedstock: soy oil
 Biodiesel marketer: undeclared
 Start of construction: September 2006
 Target start-up date: February 2007
 

 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 1:16 p.m. CDT Wednesday, October 25, 2006

Nebraska's second biodiesel plant begins construction

A ceremony is planned later today to celebrate construction of what will be the nation's largest biodiesel facility. <a target="_blank" href="http://www.imperiumrenewables.com/">Imperium Renewables</a> has begun major construction on its $60 million, 100 MMgy biodiesel plant in Grays Harbor, Wash. 
 
 Initial site work on the 12.5-acre greenfield site began in September, according to Imperium Renewables President John Plaza. The 540,000 square foot plant is expected to be finished in May 2007 with production starting in June, Plaza told BiodieselMagazine.com.
 
 The plant will be the largest of its kind in the United States. Archer Daniels Midland Company's 85 MMgy North Dakota plant is expected to start-up in spring 2007. 
 
 Concrete is being poured for the Grays Harbor plant's tank farm, which can store up to 24 million gallons of biodiesel, feedstock and methanol. Longview, Wash.-based <a target="_blank" href="http://www.jhkelly.com/home/home.html">JH Kelly</a> is building the facility. The company is also the general contractor on Cascade Grain Products LLC, a 108 MMgy ethanol plant under construction in Clatskanie, Ore.

 
 The biodiesel facility will incorporate proprietary advanced technology, techniques and processes developed and improved at its current facility, Seattle Biodiesel, according to a release. Imperium wholly owns Seattle Biodiesel, a 5 MMgy plant that was the first commercial biodiesel facility in Washington.
 
 Plaza said the plant's feedstocks will be sourced from a variety of locations. Although he said he intends to primarily use in-state feedstock, soy oil may be shipped from the Midwest. The plant may also use imported Canadian canola oil and Malaysian palm oil.
 
 The biodiesel will be marketed along the West Coast, Plaza said. "We sized the plant due to what we perceive as demand on the West Coast," Plaza said. "We wanted to size it appropriately to satisfy the demand with quantity, quality and accessibility."
 
 Washington provides a built-in biodiesel demand. The state's <a target="_blank" href="http://www.leg.wa.gov/pub/billinfo/2005-06/Pdf/Bills/Session%20Law%202006/6508-S.SL.pdf">renewable fuels standard</a> was signed by Gov. Christine Gregoire in March. The standard will create demand for approximately 20 MMgy of biodiesel per year, according to Plaza. 
 
 The plant is expected to have capacity to replace up to 10 percent of the state's diesel supply, according to a release. Imperium Renewables subsidiary Imperium Services will market the plant's fuel.
 
 Grays Harbor is located along Washington's Pacific Coast. Plaza said affordable land and accessibility were keys to building the plant there. Biodiesel and feedstock can be barged or railed to and from the site. The plant is located on a short line railroad accessed by the Union Pacific and BNSF Railways.
 
 Imperium Grays Harbor

 Location: Grays Harbor, Washington
 Design/builder: Imperium Renewables/JH Kelly
 Capacity: 100 MMgy
 Feedstock: multi-feedstock
 Biodiesel marketer: Imperium Services
 Start of construction: September 2006
 Target completion date: June 2007
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 11:39 a.m. CDT Friday, October 27, 2006

Imperium Renewables celebrates construction start

A New York biodiesel start-up company expects to begin construction on its first production facility before the end of the year. <a target="_blank" href="http://www.tristatebiodiesel.com/">Tri-State Biodiesel</a> CEO Brent Baker said his company plans to begin construction on a 5 MMgy facility by December along the waterfront in Brooklyn, N.Y.

 
 Tri-State held an investment forum and equity drive in mid-September for the project, which Baker said is in the midst of financial close. The plant will initially produce 2.5 MMgy of biodiesel, with plans to double capacity in its second year of production.
 
 <a target="_blank" href="http://www.biodiesel.com/">Pacific Biodiesel</a> is tabbed to build the facility, which will use locally collected waste vegetable oil as feedstock. It would be the first of several urban plants for Tri-State, Baker said. "We want to move quickly and build many smaller urban biodiesel processing facilities," Baker said.
 
 The company vision is to build a national company focused on the urban recycled oils market. "That's where we are," Baker said. "Immediately upon building the first facility we hope to go into the urban markets."
 
 Baker said he hopes to begin construction in December and start production by July 2007. He said they've finished a phase one environmental study and site surveys. Baker said Tri-State has applied for building permits and signed a 20-year lease in a Brooklyn industrial park. 
 
 Tri-State will provide its own oil collection service via a truck fleet. Baker said he expects to have the potential to collect waste oil from 200 to 300 restaurants by the end of November. 
 
 Baker said a marketing agreement has been signed with <a target="_blank" href="http://www.biofuelbrokers.com/">Biofuel Brokers</a>. He also said Tri-State is licensed to sell its own fuel. 
 	

 Tri-State Biodiesel
 Location: Brooklyn, New York
 Design/builder: Pacific Biodiesel 
 Capacity: 5 MMgy
 Feedstock: waste vegetable oil
 Biodiesel marketer: Biofuel Brokers
 Target groundbreaking: December 2006
 Target start-up date: July 2007
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 2:47 p.m. CST Monday, October 30, 2006

Tri-State's New York plant to convert waste oil to biodiesel

Houston Biodiesel LLC, a subsidiary of <a target="_blank" href="http://www.tecxomresources.com">TexCom Inc.</a>, is moving closer to construction on its planned 35 MMgy biodiesel plant in Seabrook, Texas. The company announced yesterday it had signed an EPC contract with Memphis, Tenn.-based Lurgi PSI to engineer and build the facility.

 
 The plant's groundbreaking is expected within 45 days as Lurgi finalizes engineering and procurement of equipment, according to TexCom's Bill Pettinati. Construction is expected to take 14 months, making the plant operational by January 2008. 
 
 The facility will be located on Galveston Bay at <a target="_blank" href="http://www.lbctt.com/">LBC Houston LP</a>'s bulk liquids terminal. The terminal has more than 3.7 million barrels of liquids storage capacity and is located near the Houston Ship Channel, which provides easy access to water, rail and truck shipping. The biodiesel plant will primarily use domestically produced soy oil as feedstock, but has the flexibility to accept other feedstocks, according to Pettinati.
 
 TexCom announced in September an agreement with Overland Park, Kan.-based <a target="_blank" href="http://www.lansingtradegroup.com">Lansing Trade Group</a> to provide risk management, logistics and feedstock origination services for the biodiesel plant. <a target="_blank" href="http://www.lansingethanolservices.com">Lansing Ethanol </a>will market the plant's biodiesel. Lansing Trade Group formed Lansing Ethanol Services in March 2006 to market renewable fuels. The agreements run for four years from completion of construction.
 
 TexCom also said in September it had teamed with <a target="_blank" href="http://www.usregroup.com">U.S. Renewables Group</a> as an equity partner on the Seabrook plant. 

 
 Pettinati said the plant will also be capable of blending biodiesel. LBC's Houston terminal includes the capability to store conventional petroleum diesel, allowing TexCom to blend and market various biodiesel blends. "One of the things that attracted us to the site was existing infrastructure," Pettinati said.
 
 TexCom also plans to build additional facilities in the south central United States. "We have completed an involved pre-finance underwriting and contracting process that we expect will allow TexCom to proceed more quickly for development of our subsequent biodiesel projects at other sites," said TexCom CEO Louis Ross.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 10:10 a.m. CST Tuesday, October 31, 2006

Lurgi signs agreement for Texas biodiesel plant

Missouri's largest biodiesel plant is expected to start-up within a month. A ceremonial grand opening celebration was held last week for Mid-America Biofuels LLC, and the plant is in the final run-up to production, according to General Manager Cliff Smith.
 
 "It's going well," Smith said. "We always want to be further along, but things have gone well as we've moved forward."
 
 The 30 MMgy biodiesel facility is partly owned by <a target="_blank" href="http://www.admworld.com">Archer Daniels Midland Co.</a> (ADM). It's the agri-business company's first U.S. biodiesel project. More than 400 farmers are also invested in the plant, which is located adjacent to an ADM soybean crushing facility. The project will use soy oil as its primary feedstock.

 
 Mid-America Biofuels is a joint venture of Biofuels LLC, a farmer-owned biodiesel business based in Jefferson City, Mo., Ray-Carroll County Grain Growers, MFA Oil Co. and ADM.
 
 ADM acted as general contractor on the project, according to Smith. ADM is also building an 85 MMgy biodiesel plant in Velva, N.D. that is expected to begin production next spring. The company operates several biodiesel facilities in Europe. 
 
 Minneapolis-based <a target="_blank" href="http://www.crowniron.com">Crown Iron Works</a> provided the process design for the Mexico plant. The project began construction in October 2005.
 
 U.S. Rep Ken Hulshof, Gov. Matt Blunt and U.S. Sens Kit Bond and Jim Talent attended the grand opening. "Missouri has a wonderful group of legislators who recognize the importance of renewable fuels," said Dale Ludwig, executive director of the <a target="_blank" href="http://www.mosoy.org">Missouri Soybean Association</a>. "They've helped make the (Mid-America Biofuels) dream become a reality."
 
 Missouri's next large biodiesel project, <a target="_blank" href="http://www.prairieprideinc.us">Prairie Pride Inc.</a>, is beginning initial dirt work near Nevada, Mo. The 30 MMgy project held a ceremonial groundbreaking in August. 

 
 What is expected to be the state's largest biodiesel plant is nearing the start of construction in Kansas City. Paseo Cargill Energy is moving ahead on a 40 MMgy project built adjacent to a Cargill soybean processing facility. The plant will be jointly owned by Cargill and Paseo Biofuels LLC, a group composed of Missouri soybean farmers and the Missouri Soybean Association.
 
 There are several other biodiesel projects under development in the state, according to the Missouri Soybean Association.
 
 Mid-America Biofuels LLC
 Location: Mexico, Missouri
 Design/builder: Crown Iron Works/Archer Daniels Midland Co.
 Capacity: 30 MMgy
 Feedstock: soy oil
 Biodiesel marketer: Mid-America Biofuels LLC
 Start of construction: October 2005
 Start-up date: November 2006
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

 
 Posted: 4:05 p.m. CST Tuesday, October 31, 2006

Officials celebrate the grand opening of Missouri's largest biodiesel plant with a ribbon cutting.

369-1294329483.jpg

370-1294329485.jpg

Missouri's largest biodiesel plant nears start-up

Construction is underway on what will upon completion be Alabama's largest biodiesel plant. Independence Renewable Energy Corp. (IREC) will be a 40 MMgy plant upon completion in March 2007, according to spokeswoman Peggy Jaye.
 
 Rye Brook, N.Y.-based Parsons & Whittemore is building the plant in Claiborne, Ala., near its Alabama River Pulp Co. mill along the Alabama River. Claiborne is in southwest Alabama. 
 
 The existing paper mill manufactures bleached pulp and paper products.
 
 Parsons & Whittemore is also providing engineering for the biodiesel plant. Site excavation is complete and foundation has been poured for the process building. Equipment has been ordered and steel is being erected for the facility, Jaye told BiodieselMagazine.com. 
 
 The plant was initially announced at 20 MMgy, but has since been scaled to 40 MMgy nameplate capacity. Alabama Gov. Bob Riley attended a ceremonial groundbreaking for the $15 million project in early October.
 
 Soy oil will be the facility's primary feedstock, but Jaye said the plant will be flexible to handle other sources. The plant is expected to annually use the oil produced from more than 27 million bushels of soybeans.
 
 IREC will be working with local distributors to market and distribute the biodiesel, Jaye said.

 
 <a target="_blank" href="http://www.alabamabiodieselcorp.com/">Alabama Biodiesel Corp. </a>is currently the state's largest biodiesel producer with more than 10 MMgy capacity. Another proposed plant, a 4 MMgy project near Athens, Ala., was announced in early October.
 
 Independence Renewable Energy Corp.
 Location: Claiborne, Alabama
 Design/builder: Parsons & Whittemore
 Capacity: 40 MMgy
 Feedstock: soy oil
 Biodiesel marketer: undeclared
 Start of construction: October 2006
 Target start-up date: March 2007
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

 
 Posted: 11:01 a.m. CST Wednesday, November 1, 2006

Officials, including Alabama Gov. Bob Riley (third from right) celebrate the groundbreaking for IREC.

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Alabama's largest biodiesel plant under construction

Kingsport, Tenn.-based <a target="_blank" href="http://www.eastman.com">Eastman Chemical Co.</a> today announced it has completed the sale of its wholly owned subsidiary, Eastman SE Inc., to FutureFuel Corp. Included in the sale are Eastman's Batesville, Ark., manufacturing facility and its related assets and product lines that had been a part of the company's performance chemicals and intermediates segment.
 
 The sale is for a purchase price of $75 million plus an earn-out based on biodiesel sales over the next three years, according to Eastman. The manufacturing facility produces specialty chemicals and chemical intermediates used in detergents, pharmaceuticals, food additives, paints, coatings, fibers and herbicides. It was also the first biodiesel producer in Arkansas when it opened in fall 2005. The plant initially produced 3 MMgy but expanded to 18 MMgy earlier this year, according to Gary McDonald, Eastman SE's manager of administration.
 
 A message left with FutureFuel Corp, formerly Viceroy Acquisition Corp., went unreturned at press time. However, the company previously said it plans to aggressively expand biodiesel production at the site. 
 
 In July 2006 Eastman announced plans to sell the site because the growth opportunities didn't fit with the company's focus of driving growth in its core businesses. "This divestiture is expected to result in a better alignment of Eastman's resources with our strategy," said Jim Rogers, president of Eastman Chemical and head of the chemicals and fibers business group. "And we believe that FutureFuel Chemical Company is positioned well to explore the unique growth opportunities available to the site."
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 

 Posted: 12:55 p.m. CST Wednesday, November 1, 2006

Eastman Chemical completes sale of Arkansas biodiesel plant

Idaho's first biodiesel plant is shipping fuel. Blue Sky Biodiesel LLC has finished retrofitting a fruit packaging building in an industrial park in New Plymouth, Idaho. The project is the first commercial-scale project in the state.
 
 Blue Sky Project Engineer Scott Burn said the first load of biodiesel was actually shipped Sept. 8, but the plant has been finalizing start-up through October. The plant is capable of producing 12 MMgy of biodiesel, which is larger than what was initially planned prior to a July fire that halted construction and killed one worker.
 
 The project features an in-house design capable of converting multiple feedstocks. The plant is currently using Midwest-based soy oil as feedstock, but plans call for locally produced canola oil. 
 
 Blue Sky Biodiesel is marketing its own biodiesel, Burn said. While several loads of fuel have been shipped to Utah and Oregon, much of the fuel is sold to retail stations in Idaho. 
 
 In September, 11 Stinker gas stations in southwestern Idaho began pumping biodiesel blends after upgrading pumps and equipment through a $124,000 grant from the U.S. DOE and the Idaho Department of Water Resources.
 
 The state's Department of Water Resources has overseen a B20 funding program since 2002, according to John Crockett. The Idaho B20 Biodiesel Project is designed to provide a public demonstration of the use of B20 for both fleet and individual vehicle users, in order to develop a B20 consumer market in Idaho. 
 
 Funded by a grant from the U.S. DOE and the Community Planning Association of Southwest Idaho, the money is used to decrease the price difference between petroleum and biodiesel blends.
 
 Crockett said some of the original funding is still being used to promote biodiesel use throughout the state. 
 

 Blue Sky Biodiesel LLC
 Location: New Plymouth, Idaho
 Design/builder: Blue Sky Biodiesel
 Capacity: 12 MMgy
 Feedstock: multi-feedstock
 Biodiesel marketer: Blue Sky Biodiesel
 Start of construction: April 2006
 Start-up date: October 2006
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 2:46 p.m. CST Wednesday, November 1, 2006

Idaho plant producing biodiesel

<a target="_blank" href="http://www.verasun.com">VeraSun Energy</a> is planning on adding another renewable fuel to its portfolio. The nation's second-largest ethanol producer announced plans today for a biodiesel facility that will produce fuel from oil extracted from distillers grains.

 
 The Brookings, S.D.-based company said it's evaluating locations for a 30 MMgy biodiesel plant with plans to commence construction in 2007 and begin production in 2008. <a target="_blank" href="http://www.lurgipsi.com">Lurgi PSI</a> has been contracted for design and engineering services. Minneapolis-based <a target="_blank" href="http://www.crowniron.com">Crown Iron Works</a> is tabbed to supply corn oil extraction equipment.
 
 VeraSun's plans call for removing corn oil from distillers grains. The oil would then be used as biodiesel feedstock. "This opportunity is a natural extension to our business and is consistent with our objective to be a leader in the production of renewable fuels," said Don Endres, VeraSun chairman and CEO. "This technology is particularly strategic to VeraSun because it allows us to extend our large and low-cost producer strategy from ethanol to include biodiesel."
 
 VeraSun has applied for a provisional patent application with the U.S. Patent Office for the production process. In 2005, VeraSun detailed <a target="_blank" href="http://www.ethanolproducer.com/article.jsp?article_id=96&q=bridging%20the%20biofuels%20divide&category_id=27">similar plans</a> to produce biodiesel from corn oil at the <a target="_blank" href="http://www.fuelethanolworkshop.com">International Fuel Ethanol Workshop & Expo</a>. The initial plans called for a group of partner ethanol plants to install corn oil extraction technology and ship corn oil to a centrally located biodiesel facility. 

 
 VeraSun has operating ethanol plants in Aurora, S.D., and Fort Dodge, Iowa, with a combined capacity of 230 MMgy. A third plant is under construction in Charles City, Iowa. Two more facilities are being planned in Welcome, Minn., and Hartley, Iowa. Upon completion of the new factilities, VeraSun will have an annual production capacity of approximately 560 MMgy.
 
 "We have been conducting research and development in the biodiesel area for years, testing and evaluating various technologies," said Matt Janes, VeraSun's vice president of technology. "We're confident this process will allow for large-scale, low-cost and high-quality biodiesel production."
 
 Another company is planning a similar project. <a target="_blank" href="http://www.greenshift.com">GS CleanTech</a> is installing corn oil extraction systems at multiple ethanol plants. In early October the company said the first of two stages of installation was complete at Little Sioux Corn Processors LLC in Marcus, Iowa.
 
 According to the company, GS CleanTech's patent-pending corn oil extraction technology intercepts the stillage flow in the evaporation stage prior to drying the distillers grains. The stillage has a concentrated syrup-like consistency after evaporation. GS CleanTech heats the concentrated stillage and then uses advanced centrifuge technology to spin crude corn oil out of the heated concentrated stillage. The crude corn oil is then routed to storage for use as a raw material for biodiesel production.
 
 GS CleanTech subsidiary GS Agrifuels Corp. announced in September plans for an integrated multi-feedstock, multi-fuels production facility in Memphis, Tenn. Construction on the project was expected to begin later this year. The plant is expected to have 10 MMgy of biodiesel capacity and 5 MMgy of ethanol, methanol and/or biomass-derived synthetic diesel capacity.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

 
 Posted: 9:45 a.m. CST Friday, November 3, 2006

VeraSun Energy unveils biodiesel production plans

The former Eastman Chemical Co. biodiesel plant in Batesville, Ark., is expected to undergo yet another expansion, its new owner announced. FutureFuel Chemical Co. is planning to more than double capacity at the 24 MMgy facility by the end of next year.
 
 FutureFuel Chemical Company was created from the sale of Eastman's Arkansas operations. FutureFuel's acquisition of the plant was finalized Tuesday. On July 24 Eastman Chemical announced it had entered an agreement to sell its Arkansas facility and related business to St. Louis-based Viceroy Acquisition Corp., now renamed FutureFuel Corp.
 
 "This acquisition brings a combination of talented people and excellent, but under utilized, facilities," according to Future Fuel Corp. CEO Lee Mikles. "We plan to use this combination of assets to aggressively grow the biofuels production capabilities at the Arkansas site."
 
 The company intends to renovate the existing chemical manufacturing facilities to expand its biodiesel production. The project includes adding bulk raw material, and finished product storage and handling facilities to accommodate the increased production.
 
 FutureFuel Chemical Co. President and COO Randy Powell said the plant is expected to reach 40 MMgy of capacity by spring 2007. "We anticipate significant increases beyond the 40 million gallon capacity by late next year," he said. 
 
 The Batesville biodiesel plant began producing 3 MMgy of biodiesel in October 2005 and is a BQ-9000 accredited producer. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program. The plant has been scaled up in stages to its current capacity.
 
 The 2,200-acre Batesville complex manufactures a range of specialty chemicals used in detergents, agricultural products, paints and coatings, and others. By early 2007 FutureFuel also plans to produce wood pellets from for use in residential and light commercial wood stoves. 
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.

 
 Posted: 10:47 a.m. CST Friday, November 3, 2006

FutureFuel plans to expand newly acquired Arkansas plant

Despite its increasing presence on the world market, international biofuels trade issues haven't been adequately discussed, according to the <a target="_blank" href="http://www.agritrade.org/Publications/wto_biofuels.html">International Food and Agricultural Trade Policy Council</a> (IPC). The group suggests governments and international trade groups such as the World Trade Organization (WTO) begin working together to ensure a smooth transition for biofuels into world trade markets.
 
 In late October the IPC launched a paper discussing the factors limiting international biofuels trade. Robert Howse, a University of Michigan law professor, was the lead author and discussed the findings. He said the uncertainty over biofuels classification risks stunting growth in trade even as global demand for biofuels is rising. Many governments are mandating the use of biofuels. "In a number of cases it's hard to imagine those mandates can be met with domestic sourcing of renewables," Howse said. "The issue becomes, how do you liberalize market access in order to give the possibility to use imports?"
 
 Howse said part of the issue in liberalizing market access is classification of the fuels. Ethanol and biodiesel are currently referred to as agricultural or industrial products. "That's one of the major areas on clarity," Howse said. "You don't have specific clarifications for biofuels in internationally accepted tariff classifications."
 
 Howse also said government measures to protect domestic biofuel production, including tax incentives, high tariffs and subsidies, is affecting the fuel's availability on the world market. A greater clarity about subsidy notification requirements and a closer look at potential cross-subsidization of by-products associated with biofuel production is useful, given the uncertainty of whether WTO rules for agricultural or industrial products are applicable, the paper concluded.
 
 Another issue that may affect the international trade of biofuels is sustainability. Howse said some European countries are beginning to consider requiring that imported biofuels be derived from sustainable feedstocks.
 
 Howse urged more detailed analyses on the issues in the future. He said the paper was the first step in opening up the discussion. "The response has been kind of a wake-up call that, in fact, the way these markets are going, trade and trade barriers are going to be a very big part of the picture in the future," Howse said.
 

 He said biofuels trade hasn't been discussed before because it is a relatively new market and energy issues are typically tied to national security, making some stakeholders shy away from discussing the topic. "Once you get past that threshold, you can have trade negotiations that are explicitly targeted to biofuels," Howse said.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 11:39 a.m. CST Monday, November 6, 2006

Global biofuels trade hindered by lack of classification, policy group says

A unique biodiesel project under development in Nevada is being touted as the world's first geothermal-powered and heated biodiesel plant. <a target="_blank" href="http://www.infinifuel.com">Infinifuel Biodiesel</a> is expected to harness process steam and power from an existing geothermal plant in Wabuska, Nev.
 
 The existing geothermal power plant features two production wells and seven power production units creating more than five megawatts of electricity, according to Infinifuel. The power plant will provide two megawatts of electricity and 220-degree Fahrenheit steam to the biodiesel facility, which is nearing completion, according to Infinifuel's Claude Sapp. 
 
 The project has been under development for almost a year, Sapp said. The 5 MMgy plant's design and construction has been conducted in-house. The facility has 17 stainless steel tanks housed in and around a 5,000-square-foot building. The plant will use two biodiesel reactors with 22,000 gallons per day of capacity. Sapp said production capacity may be expanded beyond the 5 MMgy.
 
 Sapp said he expects the biodiesel plant to start production in first quarter 2007 using waste vegetable oil and virgin oils from locally grown oilseed crops, according to Sapp. An on-site oilseed crush unit is expected to produce feedstock for the facility.

 
 Another feature unique to the 300-acre site is algae ponds, which could one day allow algae to be used as feedstock.
 
 Sapp said Infinifuel will market its own biodiesel. He said contracts are in place with local fleets and public transit vehicles.
 
 Wabuska is located in west-central Nevada, approximately 50 miles east of Carson City. The plant site is located on U.S. Highway 95A. A Union Pacific rail line runs one-half mile from the plant. Sapp said a rail spur servicing the facility is possible.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 1:39 p.m. CST Tuesday, November 7, 2006

Nevada biodiesel project to harness geothermal energy

While the renewable fuels industries have noticeably grown, 2006 may be a landmark year. For the first time, more than 4 billion gallons of fuel ethanol capacity is under construction in the United States and Canada. Meanwhile, U.S. biodiesel production is expected to triple 2005 totals.
 
 According to monthly statistics complied by <a target="_blank" href="http://www.ethanolproducer.com">Ethanol Producer Magazine</a>, there is now more than 4 billion gallons of ethanol capacity being built or expanded in the United States and Canada. If that capacity comes online as expected within the next 18 months it would top the entire 2005 U.S. production total of approximately 3.5 billion gallons.

 
 The <a target="_blank" href="http://www.ethanolrfa.org">Renewable Fuels Association</a> announced last week that the U.S. ethanol industry is on track to increase production by more than <a target="_blank" href="http://www.ethanolrfa.org/media/press/rfa/view.php?id=903">20 percent</a> in 2006 compared to 2005. With 109 ethanol plants operating in the United States and an additional 52 under construction, the industry is on pace to more than surpass the 7.5 billion gallons of renewable fuels required by 2012 as part of last year's energy bill.
 
 The ethanol industry set another monthly production record in August. Energy Information Administration data showed that U.S. ethanol producers were averaging 329,000 barrels per day of production in August. For the first eight months of 2006, ethanol production is averaging 305,000 barrels per day, which means production should reach more than 4.7 billion gallons this year.
 
 Ethanol demand also remained strong, approaching the record demand set in June 2006. August demand for ethanol averaged 385,000 barrels per day. 
 
 Meanwhile, the <a target="_blank" href="http://www.nbb.org">National Biodiesel Board</a> (NBB) said biodiesel production could triple 2005 totals in the United States this year. NBB CEO Joe Jobe said in an Oct. 31 release that U.S. production could reach as much as 250 million gallons in 2006. He credited a high amount of <a target="_blank" href="http://www.biodiesel.org/resources/PR_supporting_docs/20060926_State_Legislation-Current.pdf">activity in state legislatures</a> to boosting the amount of production, which was estimated at 75 million gallons in 2005.

 
 The industry isn't expected to slow down in 2007 with several large-scale projects either planned or under construction. Imperium Renewables recently broke ground in Grays Harbor, Wash., on a 100 MMgy plant that would be the nation's largest upon completion. 
 
 Nova Biosource Fuels Inc. has also announced plans for 60 MMgy plants in Oklahoma and Illinois. There are at least 50 biodiesel plants under construction in the United States and Canada.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 8:49 a.m. CST Wednesday, November 8, 2006

U.S. biofuels industries expanding rapidly

2006 could be a record-setting year for soybeans in the United States. The USDA is forecasting 3.2 billion bushels of soybean production this year, which would be the largest U.S. crop on record. 
 
 The projection is up slightly from October and 5 percent above 2005. Yields are expected to average 43 bushels per acre, which would be equal to last year's record high yield.
 
 Soybean prices also went up. The U.S. season-average soybean price for 2006-'07 is projected at $5.40 to $6.40 per bushel, up 50 cents from the previous estimates. Soy oil prices are projected at 24 to 28 cents per pound, up 1 cent on both ends of the range.
 
 Global oilseed production is projected at a record 392.5 million tons, up 2.1 million tons from last month's projections.

 
 The USDA's corn production forecast dropped 1 percent from last month to 10.7 billion bushels. The projection is 3 percent lower than 2005. Yields are expected to average 151.2 bushels per acre, which would be higher than last year. If realized, the yield would be the second largest on record, behind 2004. 
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 10:53 a.m. CST Thursday, November 9, 2006

Soybeans set to break records

Iowa is about to add another biodiesel plant to its growing roster of producers. <a target="_blank" href="http://www.tri-cityenergy.com">Tri-City Energy</a> is expected to begin production later this month in the Mississippi River town of Keokuk, Iowa.
 
 The 5 MMgy facility is slated to begin producing biodiesel Nov. 17, according to Al Moander, Tri-City's sales and marketing manager. The plant, which began construction in January, is currently undergoing start-up testing and final improvements such as installing pipe and tank insulation. Moander said he expects it will take a week to get the plant fully on line. "Then we'll find out what kind of product we've got," he said. "We've got high expectations."
 
 The Tri-City plant is housed in a former General Mills wheat processing facility built in the 1930s. Moander said the biodiesel plant includes a "fully equipped lab" capable of conducting all tests required to determine ASTM compliance. 
 

 The 5 MMgy plant is the first of a four-phase project in Keokuk. The second and third phases consist of a 30 MMgy biodiesel plant and 25 million bushel per year soy crush facility along the Keokuk waterfront. Groundbreaking could occur as soon as later this month on the 30 MMgy plant, according to Moander. Both projects are expected to become operational in fall 2007.
 
 The fourth phase of the project would convert the 5 MMgy to utilize animal fats and greases as feedstock. The plant could also be used as an R&D facility. "We can look to the future with this plant," Moander said.
 
 Another Tri-City-affiliated biodiesel project is in the permitting stages. Lion Energy is a proposed 15 MMgy plant in Altoona, Iowa. It would be built by <a target="_blank" href="http://www.tcenergy.com/">TC Energy</a>, a joint venture between Tri-City Energy developers, equipment supplier Technochem International and oil extraction equipment manufacturer Insta-Pro International. The venture, which will build and ship turnkey biodiesel plants from a Keokuk facility, was <a target="_blank" href="http://www.biodieselmagazine.com/article.jsp?article_id=1150">formally announced</a> in August with plans to build up to 10 biodiesel plants in and around Iowa.
 
 Plant: Tri-City Energy-Keokuk, Iowa
 Design/builder: Tri-City Energy/Technochem International
 Capacity: 5 MMgy
 Feedstock: soy oil

 Biodiesel marketer: Tri-City Energy
 Start of construction: January 2006
 Start-up date: November 2006
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 11:48 a.m. CST Thursday, November 9, 2006

October 2006

Business Briefs

BBI seeks to expand staff

Able Energy to produce biodiesel at truck stops

Nova Energy contracts for feedstock, stainless steel

Argan buys Gemma Power Systems

BBI Media's Nilles takes role of online editor

REG loses project engineer, gains general manager

Iowa Biofuels Infrastructure Board names appointees

Columns

Editor's Note

NBB In Sight

Legal Perspectives

Talking Point

Featured

Bound by Determination

Remember December

Fitting In with ULSD

Sharing Renewable Resources

Conquering the Cold

National Park Power

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

Business Briefs

BBI seeks to expand staff

Able Energy to produce biodiesel at truck stops

Nova Energy contracts for feedstock, stainless steel

Argan buys Gemma Power Systems

BBI Media's Nilles takes role of online editor

REG loses project engineer, gains general manager

Iowa Biofuels Infrastructure Board names appointees

Columns

Editor's Note

NBB In Sight

Legal Perspectives

Talking Point

Featured

Bound by Determination

Remember December

Fitting In with ULSD

Sharing Renewable Resources

Conquering the Cold

National Park Power

October 2006