There's a thin line between pragmatism and pessimism, and I may have crossed it in early 2006 when I wrote a somewhat biting op-ed piece about the perceived potential of biodiesel as an ultra-low sulfur diesel (ULSD) blending agent. 
 
 In my March Editor's Note, "Has Biodiesel Already Missed the ULSD Boat?," I pointed out that from what I heard at the 2006 National Biodiesel Conference and Expo, biodiesel was by and large not being used as a ULSD lubricity additive or a dilutor for off-spec fuel. During one session at the conference, at least three refiners said they had no plans to use biodiesel for either purpose. Focusing on that lowlight, I proceeded to question those in the industry who propagated a seemingly artificial hope. I wasn't wrong-specialty additives are still beating out biodiesel in this area-but there were some emerging positive peripherals just over the horizon that I falied to recognize. 
 
 This month, Biodiesel Magazine Staff Writer Ron Kotrba sheds light on what may be the most encouraging news about biodiesel's compatibility with ULSD. In his page 40 feature, "Are DPFs Better with Biodiesel?," Kotrba speaks with researchers who say B100 and biodiesel blends offer significant advantages over ULSD when it comes to the operational efficiency and proper functioning of diesel particulate filters. The story builds upon National Biodiesel Board CEO Joe Jobe's October "NBB In Sight" column, in which he highlighted a National Renewable Energy Laboratory (NREL) study that tested B5 and B20 blended with ULSD, with and without DPFs. What Jobe pointed out last month, and what Kotrba's story details this month, is that biodiesel helps to reduce the temperature at which particulates are burned off in the soot trap, lowering backpressures caused by a plugged DPF. 

 
 Part of the DPF's job is to alter the composition of nitric oxide in exhaust to nitrogen dioxide. That's beneficial because nitrogen dioxide is a more efficient oxidizer of particulates than air, so increasing the concentration of nitrogen dioxide via the oxidation of nitric oxide-whether that's with an oxidation catalyst upstream from a DPF or a catalyzed DPF-lowers the temperature needed to burn off the soot effectively. It appears that biodiesel enhances the "burn-off" of collected soot-a process of regeneration-and it keeps the filter from plugging and compromising vehicle performance. 
 
 B100 yields an extreme enhancement of oxidation while the effects of B20 are appreciable, too. Researchers are still trying to determine what the "threshold impact" is-or how low a biodiesel blend may be and still appreciably boost oxidation. Initial data is hopeful, though, as the NREL report concludes that biodiesel causes a significant increase in regenerate rate, even at the 5 percent blending level. 
 
 Furthermore, researchers are discovering that by lowering the temperature at which oxidation can take place, biodiesel use leads to lower fuel consumption and less engine wear. 
 
 There's a small caveat on this pile of delightful data. As Kotrba's article mentions, the polarity of biodiesel when mixed with ULSD-especially at the B20 level-has an antagonistic effect on the formation of deposits. Researchers say that if complete transesterification of the renewable fuel is not achieved, the ramifications can be pretty negative. It's one more critical reason the industry needs to be ultra-vigilant about fuel quality.

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Editor's Note

Prairie Land Co-op, a manufacturer and retailer of agricultural and fuel products, is offering B100 at its cardtrols-or unmanned gas pumps-in Ellsworth, Hubbard and Ackley, Iowa. The organization began offering B100 in June but held a promotional event in September to implement the cardtrols. This summer, diesel prices were 55 cents per gallon above biodiesel, and people were driving out of their way to get biodiesel from Prairie Land, according to Ellsworth Manager Daniel Birchmier.

Iowan co-op sells B100 at pumps

Pacific Northwest-based McCall Oil announced it now offers automated biodiesel blending at its Portland, Ore., petroleum terminal through an injection system that allows trucks to receive up to 400 gallons of fuel per minute. Drivers can select biodiesel blends from B2 to B99. The renewable fuel is stored in heated tanks with a total capacity of 60,000 gallons. The automated blending system cost about $300,000, according to McCall Oil, which is currently expanding its storage capacity to hold 500,000 gallons.

McCall Oil provides automated biodiesel blending

Through an alliance with the National Institute for Strategic Technology Acquisition and Commercialization, and the Kansas Bioscience Authority, Sunflower Electric Power Corporation (SEPC) has announced plans to develop an Integrated Bioenergy Center to be built at SEPC's 10,000-acre Holcomb Station, Kan., location. The project will add livestock facilities, an anaerobic digester, an algae reactor, a biodiesel plant and an ethanol plant to an existing coal-based power plant, according to Clare Gustin, executive manager of external affairs.

SEPC develops Integrated Bioenergy Center

BQ-9000 has gained considerable attention from biodiesel producers and marketers in North America and beyond, over the past two years. Constant scrutiny of the fuel standard has helped define and shape the volunteer quality-assurance program.
 
 At press time, there were 12 BQ-9000 accredited producers and two BQ-9000 certified marketers on board, according to Leland Tong, chairman of the National Biodiesel Accreditation Commission (NBAC). Another seven or eight biodiesel producers were in the auditing process, meaning the number of accredited producers could shoot up to 20 by early 2007. An additional six companies were pursuing BQ-9000 certified-marketer status at press time. 
 
 In early 2006, the Canadian Renewable Fuels Association endorsed BQ-9000, making it a truly North American quality assurance program. Now, Tong told Biodiesel Magazine, there's heightened international interest in the program. The NBAC has received a handful of serious information requests from Australia and Asia, including Malaysia and Indonesia. "There's a need for a worldwide certification program," Tong said, adding that the possibility of broadening the reach of BQ-9000 was under evaluation.
 
 BQ-9000 is not a program that is unfamiliar with change. In fact, it has done well by being flexible. Even in early October, revisions to BQ-9000 were on the table. In addition to clarifying certain sections of the program, Tong said the NBAC is likely to start conducting surveillance audits annually, rather than once every two years. 
 

 BQ-9000 is designed to help assure that biodiesel is meeting and maintaining the industry standard, ASTM D 6751. It makes testing easier, minimizes redundant testing throughout the production and distribution system, and serves as a fuel-tracking mechanism. It's important to note, however, that BQ-9000 is a company or process certification, not a product certification, said BQ-9000 auditor Kent Bullard. 
 
 BQ-9000 has dual appeal for producers and marketers. First, it reduces a company's liability risks by minimizing its chances of producing or distributing off-spec fuel. In turn, that provides a competitive advantage in the marketplace, Tong said. In fact, some biodiesel customers, including major government fleet managers, exclusively purchase biodiesel from certified marketers or accredited producers. 
 
 Carrying the BQ-9000 badge means little if the program is not adhered to exactingly. Tong said accredited producers and certified marketers that don't play by the book could inadvertently move off-spec fuel into the market. "The possibility always exists," he admitted. 
 
 So far, however, there have been no formal allegations of that happening-just unsubstantiated reports-and Tong said he hasn't seen any evidence to support the rumors. Nevertheless, the NBAC chairman told Biodiesel Magazine that the commission is prepared to crack down on accredited producers and certified producers if, and when, such action becomes necessary to protect the program's integrity. 
 
 That said, one biodiesel producer views BQ-9000 certification as a minimum process standard. This summer, Ag Processing Inc. (AGP) in Sergeant Bluff, Iowa, unveiled its "Gold" standard, an internal biodiesel standard that the company says exceeds the ASTM spec and BQ-9000 quality assurance standards. John Campbell, the company's senior vice president, said BQ-9000 isn't an absolute catch-all for producing ASTM-spec biodiesel, but it is a "good housekeeping, best practices" approach to quality assurance. "BQ-9000 isn't a guarantee that every day, every load is going to meet ASTM specifications," he said. "… Only the company can guarantee that."
 
 Tong said the NBAC has no problems with companies that go above and beyond BQ-9000. In fact, the commission encourages it. "There's nothing wrong with more quality control in our industry," Tong said. 
 
 For more information about BQ-9000, visit <a target="_blank" href="http://www.bq-9000.org">www.bq-9000.org</a>.

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BQ-9000 receives increased support-and scrutiny

When the federal biodiesel excise tax credit is applied, biodiesel spot prices are usually lower than diesel, but in August, adjusted rack prices followed suit-this was an anomaly. "Even when biodiesel was selling at its peak and diesel crashed, [biodiesel] got a little lower than diesel," said Greg Kary of Western Petroleum. "Not for a very long period of time though."
 
 August was the only time when the price of biodiesel has been lower than diesel. "When diesel spikes really high, biodiesel doesn't catch up as fast," Kary explained.

 
 At press time, diesel prices were between $1.80 and $1.87, and biodiesel was selling at $2.65, but the renewable fuel becomes cheaper with the blender's credit. "The racks on OPIS don't show that because they don't have trucking and throughput, and the sellers try to keep it as close to diesel as they can," Kary said. "What happens is, if biodiesel is $2.65 and diesel fuel is $1.75, [companies like Western Petroleum] are not going to encourage the sale of biodiesel because you have [to add] 15 cents freight and 15 cents throughput for every gallon. Actually your costs are over diesel fuel, so you have less incentive to sell biodiesel. The price gets a little bit higher."
 
 The price of biodiesel rises significantly in what is often a short trip between production plants and distribution terminals. "Keep in mind there is value added between the rack and the plant," Kary said. "If you're a consumer, you can't go to a plant. It just wouldn't work. You have to have handling, and you have to have blending." 
 
 However, when biodiesel prices dropped below diesel, companies like Western Petroleum started favoring biodiesel. "In August, it went crazy because [biodiesel] was $3.30 at the plant, and it was $2.70 at the rack," Kary said. "Therefore, even after your costs, it was way less. So people like us encouraged B20 blends like crazy … that made it cheaper."
 
 On Oct. 5, according to OPIS, the price of biodiesel blends ranged from $1.87 for B2 through $3.09 for B100 in Alexandria, Minn. Alexandria, Minn., is a good location point to observe the market because it is probably where most of the biodiesel is sold, Kary said. "Now what you're seeing there is that diesel is obviously lower than biodiesel because the stronger the blend, the higher the price," he said. "In August, that would have been the reverse. We would have been encouraging biodiesel."

Drivers load out their trucks at a Western Petroleum fuel terminal in Chicago.

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Biodiesel rack prices temporarily dip below petroleum

Parsons and Whittemore (P&W), a privately held company based in New York, recently announced the construction of a new 20 MMgy biodiesel refinery in Claiborne, Ala. The soy biodiesel company, Independence Renewable Energy Corporation (IREC), was created by P&W, which also owns and operates the Alabama River and Alabama Pine paper pulp mills. IREC broke ground in early October and anticipates production to begin in March 2007, according to Executive Vice President and General Manager Greg Martin.

IREC starts biodiesel plant construction in Alabama

Biocardel Vermont Inc. and Vermont Gov. Jim Douglas recently announced a proposed 4 MMgy biodiesel processing plant in Swanton, Vt., after the company received tax incentives for the project that same day, according to a press release. Currently in the permitting process, the facility is to be built and managed by Canadian firms Biocardel Inc. and Guilmax Inc. Biocardel Vermont received $534,522 in payroll and investment tax credits from the Vermont Economic Progress Council.

Vermont welcomes biodiesel project

DuPont piqued the biodiesel industry's interest when it announced expanded sustainability commitments. The company recently announced it will develop biodiesel through a partnership with Bunge North America. 
 
 Althought the partnership may have caused some buzz in the industry, the two companies aren't strangers. In 2003, they formed the Bunge DuPont Biotech Alliance, through which the companies have collaborated on soy food and nutrition products. The collaboration will now be expanded to include industrial applications, biofuels, feed and other opportunities.
 
 "We are excited about the potential of new soy products that will build on this success in the food sector, and enable us to better serve feed and industrial customers, including the growing soy biodiesel industry," said Carl Hausmann, president and CEO of Bunge North America.
 
 A DuPont statement noted that increased biodiesel production results in increased soybean meal availability, highlighting the importance of enhancing the quality of soybean meal. Therefore, DuPont said researchers at its subsidiary Pioneer Hi-Bred International Inc. are developing soybean varieties that produce soybean meal with enhanced amino acid content.
 

 Pioneer is identifying the oil content of its soybean varieties to determine the impact on biodiesel production. "Pioneer supports the expansion of the biodiesel market as a way to enhance grower income and reduce reliance on foreign energy sources," said Dean Oestreich, DuPont vice president and Pioneer general manager. "That's why we've invested the time and effort to characterize the oil content of our soybeans and other crops, and are now aggressively communicating that information to growers and the industry."

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DuPont, Bunge announce soy collaboration to include biodiesel

Researchers in Michigan are researching the possibility of growing green crops on brownfield sites. Soybeans, canola and sunflowers for biodiesel production, as well as corn and switchgrass for ethanol production, were planted this year on a two-acre former industrial dump site in Oakland County, Mich., according to Kurt Thelen, associate professor and extension specialist for Michigan State University (MSU). 
 
 The idea behind the three-year study is that land not fit for growing crops for human consumption could be used to grow feedstocks for biofuels. The first objective of the study is to see if it is possible-logistically and economically-to produce quality crops with good yields at former industrial sites, Thelen said. Secondly, researchers will scrutinize quality to make sure the biofuels produced would meet national standards. 
 
 A third objective will be to look into whether planting crops on brownfield sites offers any bioremediation, or cleans up the soil, he said. That won't be the main objective, however.
 
 The idea for the study came out of DaimlerChrysler's work on biodiesel standards, particularly for B20, according to Jim Croce, CEO of NextEnergy, a nonprofit corporation that is concentrating its efforts toward accelerating the development of Michigan's alternative energy industry. DaimlerChrysler came to NextEnergy with the idea for crop production on old industrial sites, and NextEnergy connected the company with MSU. "We need to be exploring alternatives for food-grade crops, and this is just one way to do it," Croce says. 
 
 DaimlerChrysler provided the land and installed a deer fence around the crops, according to Max Gates, spokesman for DaimlerChrysler. The company's interest in this and other biodiesel projects stems from the automaker's belief that there's a potential to sell more diesel-powered vehicles in the United States. Consequently, the company also believes it's important to maximize the energy and environmental benefits of diesel fuel by promoting increased use of biodiesel, Gates said. 
 
 At this point, biofuels crop production is not competing negatively with food production, Gates said. However, as biofuels production expands, it's important to find more efficient crop production methods. Michigan has approximately 500 brownfield sites, Thelen said. About 300 of those sites could be used to grow crops. 
 
 The study is supported by DaimlerChrysler, NextEnergy and Project GREEEN (Generating Research and Extension to meet Economic and Environmental Needs). MSU's Michigan Agricultural Experiment Station is also involved.

A combine is used to harvest canola at a former industrial dump site in Michigan.

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Thelen, associate professor and extension specialist for Michigan State University, looks at energy crops being grown on a former industrial dump site in Michigan.

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MSU researchers grow green at brownfield site

Arizona Gov. Janet Napolitano issued an executive order in September to promote energy efficiency and reduce greenhouse gas (GHG) emissions. The order establishes a statewide goal to eventually reduce Arizona's future GHG emissions to 50 percent below the year 2000 level by 2040. Recommended action plans included increasing the production and use of biodiesel and ethanol. "Developing Arizona's renewable energy sources, such as solar, biomass, biofuels, wind and geothermal will help us reach these goals," Napolitano said.

Arizona governor orders biofuels to help meet GHG goals

In an agreement with Green Earth Fuels LLC, Kinder Morgan Energy Partners LP (KMP) will construct six new biodiesel storage tanks at its Galena Park terminal in the Houston Ship Channel in Texas, adjacent to the site of Green Earth Fuels' proposed 43 MMgy biodiesel plant. Green Earth Fuels expects to start production in July 2007. It also has a biodiesel facility under development in New Orleans. KMP estimated the completion of its infrastructure expansions by spring 2008.

Green Earth Fuels to utilize Kinder Morgan terminal storage

Wisconsin may be adding more soybean-crushing facilities to make way for increased biodiesel production in the state. A feasibility study completed this fall by the Wisconsin Soybean Marketing Board determined that a soybean-processing plant in the region could successfully compete in the U.S. industry. 
 
 According to the study, Wisconsin grows enough soybeans annually to support an 80,000-bushel-per-day, or 26.4 million bushel-per-year soybean-crush facility. A plant this size would annually produce nearly 580,000 tons of soybean meal and 45 million gallons of soybean oil, the report noted. 
 
 In response to the study, at least three different soybean-crush facilities have been proposed in the state. Two of the plants are being planned in conjunction with a biodiesel facility. The other, an existing crusher, is looking to expand. 

 
 North Prairie Productions LLC (NPP) expects to start construction of a 45 MMgy biodiesel production facility in March 2007. The plant is proposed on a site adjacent to an existing rail and soybean storage terminal owned and operated by Landmark Services Cooperative. Landmark, an investor and partner in NPP, is planning a 30 million-bushel crushing facility, which would use 40 percent of the soybeans grown in Wisconsin. 
 
 "We chose that location so we could have our crusher next to us," NPP President Mike Robinson told Biodiesel Magazine. "The logistics are there, and the infrastructure is there." He noted that the biodiesel plant was sized to match the output of the crushing facility. Robinson said the crushing facility is expected to start up one year after the biodiesel facility starts production.
 
 Badger Ag Solutions LLC has proposed to build a biodiesel plant and a soybean-crushing facility in Owen. One of the investors, Ted Brussow, of Northside Elevator in Loyal, said the crushing facility will use 5,000 bushels of soybeans per day to support 2 MMgy of biodiesel production. He added that the company hopes to complete construction by fall 2007.
 
 Finally, Quality Roasting Inc. received a $97,500 grant from the state's Biobased Industry Opportunity Grant Program to more than double its capacity to produce soybean oil. Scott Rabe, grant recipient and founder of Quality Roasting, expects that by 2008, the plant will have the annual capacity for 1.5 million bushels of soybeans-enough to produce 1.4 million gallons of biodiesel.

Wisconsin sees increased interest in soybean crushing facilities

A unique situation is taking place in Claypool, Ind., the soon-to-be home of the nation's largest soybean processing facility. Louis Dreyfus Commodities contracted G&G Hauling and Excavating Inc. to build its 80 MMgy biodiesel production facility. In the process, the construction company has become an example of just how powerful "burning the bean" can be.
 
 All of G&G's equipment-which consists mostly of Caterpillar units-runs on biodiesel-blended fuel The construction company goes through about 1,000 to 1,200 gallons of B2 per day while building the Louis Dreyfus plant, which is slated to open in September 2007.
 
 "A requirement to use biodiesel was not part of the dirt work contract," said John Meyer, site coordinator of the Louis Dreyfus Agricultural Industries LLC project. "The fact that G&G's fuel supplier for the project offered B2 was a plus."

 
 For the past two years, G&G has powered its fleet with biodiesel supplied by North Central Co-op Energy (NCC), currently the largest soy biodiesel supplier in the area. NCC stops daily at the construction site to make sure that G&G's equipment is running smoothly. So far, there hasn't been a noticeable loss in fuel economy or power, according to G&G President Cary Groninger.
 
 "We realized that it would be a win-win situation for us, the local economy and for the environment," Groninger said. "The biodiesel blends run cleaner for the environment, we continue to support our local economy, and it is less expensive than what we were purchasing before."
 
 NCC first approached the project partners with the idea of using soy biodiesel during construction, according to Belinda Puetz, director of marketing for the Indiana Soybean Board (ISB). As a member of the local community, NCC made it clear that it wasn't seeking to profit but believed that utilizing the renewable energy source was the "right thing to do," Puetz recalled.
 
 "They came up to us shortly after the groundbreaking and said, 'We know Louis Dreyfus will be producing biodiesel in the future, but we've got biodiesel here today,'" she said.
 
 The local response to the Louis Dreyfus project has been positive according to Puetz and Meyer. In business dealings, as well as personal comments from residents, "everyone seems glad we're here," Meyer said.
 
 To avoid an unfavorable reaction from the Claypool community, Puetz said that Louis Dreyfus, ISB, the local government and all other parties involved formed a partnership early on, and kept Kosciusko County residents and business-owners in the loop.

 
 "We've held farmer meetings to talk about safety issues, what ingredients are used and how biodiesel is produced," Puetz said. "We talked about what it means for agriculture and energy security in Indiana."

A billboard outside of Claypool, Ind., announces the new Louis Dreyfus biodiesel production facility.

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G&G burns biodiesel while building the plant

The Iberoamerican Ministerial Meeting on Energy Security in the Latin American Region, sponsored in part by the United Nations Industrial Development Organization, was held in late September in Montevideo, Uruguay. Representatives from over 15 countries discussed the promotion of renewable energy and fuels, specifically focusing on barriers, problem areas and potential opportunities. The two-day conference was followed by the first meeting of the Latin American Sustainable Energy Policy Initiative, aimed to advance the development and implementation of effective, sustainable energy policies and regulations in the region.

Latin America discusses renewable energy policy

The board of directors of Finland's Neste Oil Corporation met in late September to approve a strategy aimed at making the oil-refining company the world's leading biodiesel producer. President and CEO Risto Rinne declared intentions to build several biodiesel production facilities in various market areas and invest several billion euros in growth projects in the next 10 years. The company's proprietary biodiesel production technology will be utilized at Porvoo Refinery, a 51 MMgy facility in Porvoo, Finland, which is slated to start production in summer 2007.

Neste Oil sets sights on increased biodiesel production

This summer, three cities hosted biodiesel test methods training, a brainchild of Steve Howell of the National Biodiesel Board (NBB). He envisioned a training course that would teach biodiesel producers how to run test methods and where to purchase testing equipment. At his request, Magellan Midstream Partners LP, a company involved in biodiesel test methods, and Petroleum Analyzer Company (PAC), a vendor of analytical equipment, jointly developed the training course.
 
 Attendees learned what test methods are associated with the ASTM standard for biodiesel and how to obtain a representative sample. "We also covered the testing requirements associated with the BQ-9000 program and how specifications are applied downstream of the biodiesel plant," said Rod Lawrence, manager of quality and analytical services at Magellan. 
 
 Training courses were held in Houston in June; Kansas City, Mo., in July; and Minneapolis in August. Each session had between 10 and 18 attendees, which included producers, investors, academics and those from regulatory agencies. Lawrence said each training station added a different perspective to the course curriculum. For example, the Houston attendees were mostly future producers or in government, while those in Minneapolis were mostly current producers. 
 
 Consistent throughout the training was a testing commitment from the participants. "I was very pleased with the commitment of the participants to test all batches of biodiesel produced at the plant using standard test methods, and their general commitment to the notion that it's in the industry's best interest to have only high-quality biodiesel in the marketplace," Lawrence said.
 
 Magellan and PAC started the training to meet a perceived need within the industry. "The variability in test results that we saw from different laboratories last year indicated that the precision associated with the test methods needs to be improved," Lawrence said. 
 Magellan and PAC intend to conduct test method training in spring 2007, probably in Houston. The curriculum will be changed to reflect the changes to the ASTM standard, Lawrence added.

Magellan was contacted by the NBB to develop a biodiesel training course.

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Magellan, PAC host biodiesel test methods training

The USDA's Rural Development branch named recipients for Renewable Energy and Energy Efficiency Improvement Program grants totaling $17.5 million for projects in 36 states. 
 
 Established in the 2002 Farm Bill, the grant program awards money to farmers, ranchers and rural small businesses that demonstrate a financial need for projects that derive energy from wind, solar, biomass or geothermal sources; or hydrogen derived from biomass or water using wind, solar or geothermal energy sources. The funds can be used for the purchase and installation of equipment, construction and improvements, energy audits, permit fees, professional service fees, feasibility studies, business plans, and retrofitting.
 
 The majority of recipients were Nebraska-based companies, including Northeast Nebraska Biodiesel LLC (NNB). This company, comprised of seven farmers in Tekamah, Neb., was allotted $500,000-the maximum dollar amount-to produce biodiesel.
 

 "[This grant] is huge because we are starting in a new industry," said Tim Gregerson, secretary for Northeast Nebraska Biodiesel. "We are going to be the first commercial biodiesel plant in Nebraska, While we are only going to produce 5 MMgy, which is small, it is huge as far as giving us dollars to put toward getting started."
 
 The NNB was one of six projects that received funds specifically for biodiesel production. Northwood Mills LLC in Northwood, N.D., received $500,000 for biodiesel manufacturing and has plans to build a soybean crushing facility and biodiesel plant north of town. The company said it will use the money to construct a soy oil refinery along with the biodiesel plant, according to Clarence Leschied, operations manager for Northwood Mills. Both he and Paul Sproule, president of Northwood Mills, were grateful for the USDA grant.
 "The big thing is that it's a grant that comes in as equity, so it strengthens our position with shareholders and the bank, and will hopefully help us get the latest technology and build a larger facility," Lescheid said.
 
 Other biodiesel projects that received funding included: Alascanola, a canola-based biodiesel plant project in Alaska; Alabama Bioenergy LLC, a soy-based biodiesel plant project in Alabama; Global Fuels LLC, a 3 MMgy biodiesel plant project in Missouri; and Northern Biodiesel Inc., a 5 MMgy batch biodiesel plant project in New York.
 
 As part of section 9006 of the 2002 Farm Bill, the program also provides loan guarantees up to $10 million to fund up to 50 percent of eligible projects. Rural Development grant funds can be used to pay for up to 25 percent of the eligible project costs. Since the program was implemented in 2003, the USDA has provided at least $87.3 million in grants and $34.3 million in loan guarantees to 844 applicants. 
 
 The grant program complements the Bush administration's overall effort to increase America's energy independence through the development of renewable energy resources, as well as improving efficiency of existing systems, according to the USDA.

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Several receive USDA Rural Development grants

D1 Oils plc, a biodiesel producer based in the United Kingdom, acquired an idle fuel and lubricant additive facility in Bromborough, England, from a subsidiary of The Lubrizol Corporation. D1 said it intends to convert the facility to a 30 MMgy biodiesel production, storage and distribution center in 2007, and expand the facility to 60 MMgy in 2008. D1 Oils already has a 10 MMgy facility in Middlesbrough, England, for which the company signed its first major U.K. offtake contract with a division of Petroplus.

D1 Oils to retrofit English facility for biodiesel production

A white paper recently published by Peter Fässler of Sulzer Chemtech AG called attention to the ability of crude palm oil to be used in several applications by essentially fractioning, distilling and separating the oil. The paper was printed in the third-quarter issue of Sulzer Corporation's Sulzer Technical Review. Though it was titled, "Too Good to Be Used as Fuel?," Fässler contended that palm oil could indeed be used for biodiesel production, while offering other value-added revenue streams through food and oleochemical products like cosmetics. Technology from Sulzer Chemtech, such as palm oil strippers, would support and enable the separation of crude palm oil into its valuable constituents, he said.
 
 "Palm-oil-based methyl esters must be split into several different products for further processing before the palm oil can be used as biodiesel fuel," Fässler wrote. "The by-products are high-value raw materials and have their main applications in market segments other than fuels." Rising demand for palm oil, combined with fluctuating petroleum prices, have caused variation in palm oil prices this year. By fractioning the crude palm oil, Fässler said fluctuations in fuel prices could be evened out with earnings from other palm-oil fractions.
 
 Components that Fässler said could be harvested from the crude palm oil before distilling it into biodiesel include methylpalmitate, tocotrienol, carotene and phytosterol. "Pure methylpalmitate is a valuable raw product for further processing into higher alcohols," he said. "These alcohols have a wide range of applications as technical oils in cosmetics, food, pharmaceuticals, etc." Tocotrienol, which is found in high concentration in crude palm oil, is a natural source of vitamin E and a potent antioxidant. "Once further purified, it can be used, e.g., as supplements to cattle food, but also as sun blockers in cosmetic products," Fässler wrote. The other two components are carotene and phytosterol. "Phytosterol, a natural cholesterol-lowering agent used in functional food, is purified to a high degree by fractional crystallization," the report said. "All these ingredients accumulate in the heavy residue of the distillation."
 

 In an interview with Derom Bangun, executive chairman of the Indonesian Palm Oil Association, Reuters noted that Malaysia and Indonesia, the world's top palm oil producers, have each decided to set aside 6 million metric tons of palm oil per year as feedstock for the production of biodiesel. This number amounts to nearly 40 percent of the countries' crude palm oil production.

Sulzer advocates splitting palm oil

Average methanol contract prices, which had been steadily hovering at just over $1 per gallon since December 2005, jumped to $1.33 per gallon in September and $1.80 per gallon in October, according to Methanex Corp., a global producer and marketer of methanol.
 
 Greg Dolan, vice president of the Methanol Institute, told Biodiesel Magazine that prices rose drastically because two of the largest methanol plants in the world experienced unplanned outages. The plants, located in Trinidad and Equatorial Guinea, each had unexpected mechanical problems in August. "These plants supply a good deal of methanol coming into the United States," he said. Both producers claimed force majeure, which is a clause that excuses a party from liability if an unforeseen event, beyond control of the party, prevents it from performing its contractual obligations. "Once that happened, we saw a real restriction in methanol supply," Dolan said. "Under a force majeure, contract customers were given a very specific allocation, which was some percentage less than they were actually contracted for. Some consumers were buying up spot volumes when available, which became extremely limited."
 
 Dolan said both methanol facilities returned to full production by early September. At press time, they were in the process of rebuilding inventories and getting ships out to their customers. "Most observers are hopeful that the price increases that were seen in August, September and October will begin to ease as we get greater supply," he said. This unique situation could be compared to ethanol's situation earlier this summer when spot prices were over $5, Dolan said. "We have not seen [methanol] price swings of this magnitude in over a decade," he said. "This methanol price swing pales in comparison to normal ethanol price swings."
 
 Nevertheless, the price increase demonstrated how methanol impacts the biodiesel industry. Similarly, methanol producers are keenly aware of biodiesel's influence on their industry. "As one of the major feedstock suppliers to biodiesel producers, our industry is very excited about the growth potential in the biodiesel industry on a global basis," Dolan said.
 
 That growth potential is why biodiesel was a featured topic at the Methanol Institute's 2006 Methanol Forum, held Oct. 18-19 in Houston. The session on biodiesel around the world included a global outlook and discussion on biodiesel legislation. The panel received an update from the Malaysian Palm Oil Board as well as a producer's perspective from Bill Spence, CEO of Galveston Bay Biodiesel in Texas.
 
 This was the Methanol Institute's fourth annual conference. This year's theme, "Methanol's Role in the Global Energy Economy," opened the floor for discussion about the booming Asian methanol market, MTBE and clean fuels, and the potential role of M85 (85 percent methanol blended with 15 percent gasoline) as a transportation fuel. Program sessions focused on the latest issues impacting methanol, biodiesel and dimethyl-ether.

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As methanol prices rise, biodiesel industry takes notice

A new National Biodiesel Board (NBB) member recently told me that of all the challenges he faced in starting his business, producing fuel to the ASTM standard was unexpectedly the toughest. He compared it to cooking a difficult soufflé. Sometimes it comes out perfectly. Other times it doesn't. Knowing which step went wrong doesn't always come easily. 

 
 Producing on-spec fuel can be more challenging than many people realize. However, achieving the standard on every batch of biodiesel is critical to protect consumers, maintain the integrity of the nation's fuel supply and defend the reputation of biodiesel as a high-quality, high-performance fuel.
 
 Quality was the overriding theme of the 2006 National Biodiesel Conference and Expo in San Diego, Calif., with an appeal to the industry to avoid a "false start." The NBB laid out a 2006 plan for quality that included BQ-9000 as the centerpiece, coupled with strong outreach and compliance efforts. That plan has produced measurable results. 
 
 In February, four companies had been BQ-9000 approved. Now there are 14, and we expect 20 to 25 companies will be approved by the 2007 National Biodiesel Conference in San Antonio, Texas. 
 
 At our June board meeting, NBB members approved a comprehensive fuel quality policy that directs the NBB to work diligently with all state and federal agencies with authority to regulate fuel and enforce quality. The NBB also completed phase one and two of an outreach program funded by the United Soybean Board. The NBB's Weights and Measures Outreach Program has made contact with every state to engage them in monitoring fuel quality. States such as Arizona, Tennessee, Minnesota and Missouri now test biodiesel at the plant. A comprehensive database has been developed that shows the laws, regulations, testing programs and status of biodiesel-quality regulation in each state. This database is part of a new fuel-quality movement, which was launched this month on a publicly available area of the NBB's Web site. The site provides guidance on actions that can be taken by anyone who is having quality problems with biodiesel. 
 
 Additionally, the NBB has set up webinars for regional National Conference on Weights and Measures Inc. associations, the National Association of State Departments of Agriculture, and the Federation of Tax Administrators. 
 
 At the federal level, the NBB has met several times with the Internal Revenue Service (IRS), which also has authority in fuel-quality regulation. The NBB is working with the service to encourage the development of an IRS testing program that would ensure that any company applying for its IRS Form 637 producer registration-required to receive the tax credit-has the ability to produce biodiesel that meets ASTM D 6751.
 
 Naturally, fuel quality doesn't stop at the plant gates. Handlers of the fuel have a critical role to play. The NBB hosted five fuel-management seminars this fall, which covered issues such as the new ultra-low sulfur diesel (ULSD) rules, cold flow, contaminants and BQ-9000. 
 
 It is not easy for start-ups to find a process to yield that perfect soufflé every time. A quick Web search reveals that the word "soufflé" comes from the French verb "souffler," which means to "blow up." A quality product, produced every time, will prevent our industry from doing just that.

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Fuel Quality: A Recipe for Success
Part I of II

NBB In Sight

As the home heating season approaches, heating oil consumers have a new option that is cleaner-burning and domestically produced. The use of Bioheat fuel as a heating oil for home heating systems is gaining ground. 
 

 Bioheat fuel is made from a combination of biodiesel and generic heating oil, making it a superior product for the environment and the heating system's operation. The National Biodiesel Board (NBB) and National Oilheat Research Alliance (NORA) have recently trademarked the term, and launched the official logo for this product.
 
 To make Bioheat home heating oil, fuel dealers-mostly in the New England or mid-Atlantic states-blend ASTM D 6751 biodiesel with ASTM D 396 heating oil, using 2 percent to 20 percent biodiesel. Inclusion of 5 percent biodiesel in oilheat will be the overall objective of both the NBB and NORA as the market progresses.
 
 "Bioheat fuel is the beginning of a new era for oilheat," said Paul Nazzaro, NBB director of petroleum outreach. "Through the cooperative efforts of NBB and NORA, the confidence level is very high that we will continue to meet the challenges facing the energy industry. It sets a major milestone in the heating oil industry to both advance cleaner-burning biodiesel, and to introduce a truly new and improved product. Fuel dealers system-wide will be proud to offer their existing and future customers this option."
 
 The NBB secured the term "Bioheat" for use in identifying home heating oil blended with biodiesel, and sublicensed it to NORA so it can also help to broaden the use of the fuel and its identity. Both organizations will share use of the trademarked term and logo. A sublicense agreement for dealers is available on the NORA Web site, <a target="_blank" href="http://www.nora-oilheat.org">www.nora-oilheat.org</a>, on the "News" page. 
 
 "The NBB has done a terrific job of developing an identity for Bioheat heating oil," said John Huber, president of NORA. "Using this symbol will give consumers a quick read that they are using a renewable fuel to heat their home. It will give retailers a great way to connect with this product, and the marketing efforts of NORA and NBB."
 
 As Bioheat fuel use grows, thanks in part to favorable legislation like state tax credits in New York, other developments to expand the industry continue. Bioheat fuel provides the same benefits as biodiesel: enhanced energy security, lower emissions and odor (depending on blend), and economic development. Further, Bioheat fuel use indicates a decrease in NOx emissions. 
 
 NORA was established in 2001 by an act of Congress to provide research and development, education and training, and consumer education. It is designed to benefit the oilheating industry and its consumers.

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Bioheat fuel's registered trademark makes official debut for cold season

National Biodiesel Board members Bob Metz and Ed Hegland spoke with Willie Nelson during 2006 Farm Aid, held in Camden, N.J., in September. "Not only has the American family farmer been able to feed the world, but now they can help power it as well," Nelson said. "We're searching the world over for fuel sources, while the answer has been growing in our backyard the entire time."

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Nelson visits with NBB members

Leading members of the biofuels industry in the northwestern United States have joined together to form the Northwest Biofuels Association (NWBA). The organization represents the interests of producers, distributors and retailers of biodiesel in Washington, Oregon, Idaho and Montana. Due to a growing demand for information, NWBA will focus its initial efforts on promoting the growth of the biofuels market by providing a centralized, credible information source and voice for the industry, and by helping to build the industry network. The majority of membership is held by biodiesel companies, according to Robert Grott, coordinator of the NWBA and the executive director of the Northwest Environmental Business Council. The NWBA held an exploratory meeting in May, but has not held its first official meeting yet, Grott said. For a membership application or to learn more about the NWBA, visit <a target="_blank" href="http://www.nwbiofuels.org">www.nwbiofuels.org</a>.

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Northwest biofuels industry leaders form new trade group

Registration is underway for one of the largest alternative fuel and vehicle conferences in North America. The Alternative Fuels & Vehicles Conference and Expo will take place April 1-4 in Anaheim, Calif. The national conference, presented by the Alternative Fuel Vehicle Institute (AFVI), attracts more than 1,500 key experts and end users, and educates them in the commercial adoption of alternative fuels, vehicles and advanced transportation technologies. 
 

 The program's emphasis is on alternative fuels, alternative fuel vehicles and advanced transportation technologies, vehicle emissions, and policy. Highlights will include the expanded expo, a ride-and-drive event and fleet day. The expo will represent the auto, bus, technology, engine and components, and fuel sectors, as well as governments, universities and associations.
 
 Early sponsors include Alternative Fuel Vehicle Solutions, Clean Energy Fuels, DaimlerChrysler, General Motors and the National Biodiesel Board. The conference is supported by alternative fuels industry representatives and the U.S. DOE Clean Cities program.
 
 Details, registration and sponsor/exhibiting information is available online at www.afvi.org/NationalConference2007.
 
 AFVI provides alternative fuel education and information for the automobile industry and public/private fleets. The primary business of the company is to advance the interests of original equipment manufacturers, fuel providers and their associated business partners through education, outreach and deployment. AFVI is fuel- and technology-neutral.

The Alternative Fuels & Vehicles Conference and Expo will be held in April at the Anaheim Convention Center in Anaheim, Calif.

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Alternative energy fans can begin planning for April AFVI conference

To show that biodiesel is on the fast track, the Iowa Soybean Association (ISA) sponsored Soy Biodiesel 250, an inaugural race held at Iowa Speedway in September. 
 
 "ISA stepped out of its comfort zone by sponsoring this event, but we wanted to let people know that we have a product in our own backyards that can not only reduce our dependency on foreign fuel but also boost our economy," said ISA CEO Kirk Leeds. "It turned out to be a great marriage because that product is partnered with a groundbreaking idea like the speedway, which will provide jobs and economic relief to Iowa. Really, we were on Victory Lane before the race even started."
 
 Woody Howard, driver of the No. 55 Dean Motorsports Chevrolet, won the race. He also won christening rights to Iowa Speedway's Victory Lane. 
 
 Dignitaries at the race included U.S. Sen. Charles Grassley, who also had the privilege of announcing, "Drivers, start your engines" before the start of the race. The ISA asked Grassley to perform this honored duty due to his long-time advocacy for renewable fuels. Iowa Gov. Tom Vilsack and First Lady Christie Vilsack; Iowa Secretary of Agriculture Patty Judge; U.S. Reps. Steve King, Leonard Boswell and Tom Latham; and representatives of the National Biodiesel Board also attended the race, which was broadcasted on the Speed Channel. 
 More information on the ISA can be found at <a target="_blank" href="http://www.soybiodiesel.com">www.soybiodiesel.com</a> or at <a target="_blank" href="http://www.iasoybeans.com">www.iasoybeans.com</a>.

ISA president Ray Gaesser, right, hands Woody Howard, driver of the No. 55 Dean Motorsports Chevrolet, the trophy for winning the Soy Biodiesel 250.

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Soy Biodiesel 250: A victory for all

There's a new breed of Dodge Ram pickups tackling the nation's environmental and energy challenges, and they're running on biodiesel. 

 
 Representatives from DaimlerChrysler hit the streets of St. Louis recently in the new 2007 Dodge Ram Heavy Duty diesel pickup to make an announcement. Chrysler Group will fuel every 2007 Dodge Ram diesel coming off the assembly line at the company's Fenton, Mo., plant with B5. 
 
 The Dodge Ram's B5 factory fill builds on a similar program initially implemented with the company's Jeep Liberty CRD and continued with the recently announced 2007 Jeep Grand Cherokee CRD. 
 
 "Delivering our diesel vehicles running on biodiesel is a first step in educating our customers about the advantages of this clean, renewable, American-made fuel," said Deborah Morrissett, vice president of regulatory affairs for DaimlerChrysler. "With an average of 30 percent better fuel economy and up to 20 percent reduction in carbon dioxide, modern clean diesel technology can address our fuel economy, oil dependence and environmental issues. Biodiesel can help make modern clean-diesel vehicles even better, while still offering the performance, utility and durability that consumers want." 
 
 The Dodge Ram Heavy Duty 2500/3500 series diesel pickup trucks are powered by the 5.9-liter Cummins turbo-diesel engine. Beginning in January 2007, the vehicles will be built with the new Cummins 6.7-liter turbo-diesel engine and will meet all federal and state environmental standards. 
 
 In addition to fueling each 2007 Dodge Ram diesel with B5, the company has also approved the use of B20 in the Ram for commercial, government and military fleets using fuel meeting the military's quality requirements. 
 
 The experience gained in this test program will contribute toward finalization of a nationwide standard for B20 fuel. The National Biodiesel Board (NBB) is working with DaimlerChrysler and other automakers, suppliers, fuel refiners and distributors, customers, and research organizations to develop a national B20 standard that could dramatically increase the use of this renewable fuel. 
 
 All major original engine manufacturers support B5 and lower blends, provided they are made with biodiesel meeting ASTM D 6751, the existing ASTM standard for pure biodiesel (B100). Although the use of B20 will not necessarily void most engine warranties, the NBB's goal is to have strong position statements affirming acceptance of the use of B20. Engine and auto manufacturers maintain that an approved ASTM specification for blended B20 is critical to achieve universal acceptance.

Dodge Ram leads the way in promoting use of clean, renewable biodiesel

President George W. Bush emphasized how renewable fuels, like biodiesel, can help America. He made his remarks in St. Louis at the Advancing Renewable Energy conference, hosted by the USDA and U.S. DOE in October. The DaimlerChrysler Dodge Ram B5 factory fill was announced in conjunction with that event two days earlier. 
 
 In his remarks at the event, the president said America is too dependent on foreign oil. "We've got to change our habits if we want to remain the economic leader of the world," he said.
 

 Bush also described his May 2005 visit to a biodiesel plant in Virginia. He saw soybean oil processed into American-made biodiesel that also boosted the local economy and benefited the environment. 
 
 "It makes a lot of sense for us to continue to invest in biodiesel technologies to make the production process even more efficient," Bush said at the conference. "Technology will enable us to be able to say we can grow our economy and protect our environment at the same time."

President calls for greater biodiesel use at Advancing Renewable Energy event

Supporting a drive to boost the economy and promote cleaner-burning fuels, several governors have announced state energy initiatives this year that will likely increase biodiesel availability and use. Newly created incentives, grants and tax credits will help biodiesel enhance local economies while reducing pollution.
 
 State legislation involving biodiesel is at an all-time high. The National Biodiesel Board (NBB) has monitored more than 275 pieces of biodiesel legislation in the 2006 state sessions. 
 
 Among the announced or enacted proposals in this year's sessions:
 
 --Arizona Gov. Janet Napolitano signed an executive order in September, committing the state to reduce carbon dioxide and other greenhouse gas emissions, and creating a state panel to develop a plan to achieve the goal. This includes recommendations for increasing renewable energy use, and production of biodiesel and ethanol.
 
 --California Gov. Arnold Schwarzenegger issued an executive order that, among other things, establishes a target for the state of California to produce and use a minimum of 20 percent of its biofuels within California by 2010, 40 percent by 2020 and 75 percent by 2050. Biofuels include both ethanol and biodiesel. 
 
 --Florida Gov. Jeb Bush signed the Florida Energy Act, which provides for sales tax exemptions and investment tax credits for costs associated with renewable energy technologies, including biodiesel. 
 
 --Illinois Gov. Rod Blagojevich unveiled a new plan in August that would replace 50 percent of the state's current supply of imported oil with renewable homegrown biofuels, like ethanol and biodiesel. The plan would also invest $25 million to help build five new biodiesel plants. 
 
 --Iowa Gov. Tom Vilsack signed into law in May, two renewable fuels and infrastructure bills that provide point-of-sale retailers with a 3-cent income-tax credit on each gallon of a B2 blend or higher. The legislation also establishes a renewable fuels standard requiring that 25 percent of a retailer's fuel sales be ethanol or biodiesel by 2020. 

 
 --Michigan Gov. Jennifer Granholm announced in August that the state is setting aside $250,000 to help service station owners convert gasoline pumps to alternative fuel pumps. The hope is that the grants will lead to 1,000 alternative fuel pumps installed or converted by 2008-a 20 percent increase. This is the second round of grants being made available by the state.
 
 --New York Gov. George Pataki signed several pieces of legislation related to biodiesel, including a biofuel production tax credit of 15 cents per gallon after the first 40,000 gallons are produced; elimination of all motor fuel taxes on alternative fuels; cost-share infrastructure grants for private sector gas stations to install and/or convert pumps for B20 or E85; and a residential Bioheat fuel tax credit in residential heating applications. 
 
 --Pennsylvania Gov. Edward Rendell launched a new plan in May-called the "PennSecurity Fuels Initiative"-to reduce the nation's dependence on foreign oil by replacing 900 million gallons of the state's transportation fuels over the next decade with alternative sources, such as ethanol and biodiesel. It also requires that a certain percentage of retail transportation fuel sales contain eligible fuels such as biodiesel, and it also invests in infrastructure.
 
 For more on state legislation, visit <a target="_blank" href="http://www.biodiesel.org/2006leg.htm">www.biodiesel.org/2006leg.htm</a>.

Governors, legislatures pave way for greater use of biodiesel

The National Biodiesel Board (NBB) has recognized methanol safety as a serious issue in need of educational efforts. Earlier this year, the NBB began working with Methanex, the world's largest producer of methanol, to set up a series of Web-based seminars in safety. The first of these important workshops will take place Dec. 6.
 
 The webinars will help to raise awareness about existing legal, environmental and safety requirements. It is critical that biodiesel producers are fully aware of these regulations.
 
 These free workshops will be open to NBB members and other methanol handlers. Registration will be on a first-come, first-serve basis, and a link will be provided on <a target="_blank" href="http://www.biodiesel.org">www.biodiesel.org</a>.
 

 This workshop will be repeated at the National Biodiesel Conference and Expo, held Feb. 4-7 in San Antonio, Texas. More methanol safety trainings will be offered as needed.

Seminars aim to teach methanol handling methods

On Sept. 20, Axiom Energy Ltd. opened its initial public offering (IPO) in the Australian markets. The company released 51.5 million shares at AUS$0.70 each to raise AUS$36 million and create a market value at listing of AUS$99 million. The IPO, which closed Nov. 3, will fund Axiom Energy's first Australian biodiesel facility, a 40 MMgy project based at Toll Geelong Port near Melbourne. The plant, designed by Safer Energy Group, will use palm oil and tallow as feedstocks, according to Axiom Energy Managing Director Danny Goldman.

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Axiom Energy announces Australian biodiesel IPO

In late September, Tri-State Biodiesel LLC signed a long-term biodiesel sales contract with Biofuel Brokers LLC. The contract calls for the future biodiesel producer's total output of 2.6 MMgy to be sold to Biofuel Brokers at a price indexed to petroleum. Tri-State Biodiesel plans to use recycled oils as a feedstock at a proposed plant in Red Hook, Brooklyn. The company opened its equity drive earlier in September. With the majority of funding raised through municipal bonds, the company expects to close the equity drive and begin construction in early November. Visit <a target="_blank" href="http://www.tristatebiodiesel.com">www.tristatebiodiesel.com</a> for more information.

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Tri-State Biodiesel signs sales contract, starts equity drive

Advanced Biodiesel Group North America (ABG), a wholly owned subsidiary of Australian Biodiesel Group Ltd., signed a joint venture in August with ArcLight Capital Partners LLC, an energy investment firm based on the East Coast. Under the venture, each party will contribute up to $50 million toward the development of two biodiesel facilities in the United States and one in Canada. According to ABG, each of the facilities will utilize a modular continuous transesterification process technology, replicating the design of ABG's 42 MMgy plant in Narangba, Queensland, which came on line in August.

ABG partners with ArcLight Capital Partners

Albemarle Corporation, a worldwide producer of antioxidant technology for fuels, lubricants and polymers, has launched a new program to support the biodiesel industry. The company, based in Richmond, Va., now produces five unique Ethanox-branded antioxidants that can be added to biodiesel blends in order to stabilize the fuel and prevent deposit formation in diesel engines. Albemarle has produced antioxidant technology for more than 50 years, and started working on biodiesel stabilization early last year as part of its programs in Europe, according to John McChesney, global business manager for Albemarle.

Albemarle Corporation launches new biodiesel program

Mississippi-based U.S. Sustainable Energy Corp. (USSEC) recently completed a reverse merger of Laforza Automobiles Inc., which was added to the Ludlow Energy SmallCap Index. USSEC has a patent-pending technology that converts soybeans or corn into organic fertilizer, biogas and biofuel. The biofuel has a unique molecular structure that can be used in gasoline and diesel engines, according to USSEC CEO John Rivera. The company recently named I.C. Thomasson Associates Inc. as the design/build firm for the reported $750 million plant that is currently being built in Natchez, Miss. It will reportedly produce 1.3 million gallons of biofuel per day.

USSEC acquires publicly traded company

Diesel particulate filters (DPFs) are requisite emissions hardware for on-road diesel vehicles starting with the 2007 model production year, and there's reason to think biodiesel will do well by it. 
 
 In last month's issue of Biodiesel Magazine, National Biodiesel Board (NBB) CEO Joe Jobe stated in his "NBB In Sight" column that B100 and biodiesel blends offer significant advantages-as related to operational efficiency and proper functioning of a DPF-over ultra-low sulfur diesel (ULSD) alone. Jobe cited a recent National Renewable Energy Labortory (NREL) report in which B5 and B20 blended with ULSD were tested, with and without DPFs. The study examined several different things: exhaust back pressures, temperatures, system configurations, fuel blends and "tailpipe-out" emissions. 
 
 As Jobe detailed in his column, the NREL study showed that biodiesel helps to reduce the temperature at which particulates are burned off in the soot trap, lowering back pressures caused by a plugged DPF. Furthermore, with a DPF, the B20 blend "provided an additional 67 percent reduction of PM (particulate matter) beyond what the ULSD provided (also with a DPF)," Jobe explained. The NREL report itself, called "Biodiesel Effects on Diesel Particle Filter Performance," states, "It is important to note that this additional PM reduction is only 0.0033 g/bhp-hr (grams per brake horsepower hour), a very small reduction from an already very clean engine." A DPF will trap most soot regardless of the type of fuel used, so whether it traps a hypothetical amount of 95 percent or 95.5 percent PM, the difference-while ostensibly significant-is rather inappreciable, experts say. What is significant is that biodiesel helps lower the temperature at which that trapped soot burns off.
 
 New EPA Regs, Technology
 The U.S. EPA's 2007 regulations for particulate matter and NOx require a significant lowering of each, with full NOx control being phased in from 2007 to 2010. The 2007 regs lower particulate-matter emissions (2.5 microns or larger) on new diesel vehicles from 0.1 g/bhp-hr to 0.01 g/bhp-hr, a 10-fold reduction. The 2007 regulations on NOx calls for a fraction of a vehicle manufacturer's fleet to meet full 2010 reductions from 2 g/bhp-hr to 0.2 g/bhp-hr, with that fraction increasing to 100 percent by 2010. Part of 2007's NOx-control strategy includes controlling the fuel-injection timing more accurately, increasing exhaust gas recirculation (EGR) rates, and implementing DPFs. The strategy also includes selective catalytic reduction (SCR) systems or less-refined lean NOx traps. With those regulations in mind, Penn State University (PSU) professor Andre Boehman and Cummins Inc. Technical Advisor Howard Fang help explain how ASTM-spec biodiesel can enhance the operating performance of super-sensitive DPFs. 
 

 There's interrelatedness among all inputs, treatments and outputs with a diesel system. Among other things, timing and fuel affect combustion and alter cylinder-out emissions. Those emissions, in turn, affect DPF performance that adjusts NOx content and ultimately NOx abatement equipment. "The particulate filter will [also] alter the composition of the NOx that is in the exhaust," says Boehman, who studies and teaches fuel science and material science engineering. "These catalyzed diesel particulate filters-part of their function is to oxidize the nitric oxide (NO) to nitrogen dioxide (NO2)." He says this is beneficial because NO2 is a more efficient oxidizer of particulates than air, so increasing the concentration of NO2 via the oxidation of NO-whether that's with an oxidation catalyst upstream from a DPF or a catalyzed DPF-lowers the temperature needed to burn off the soot effectively. However, if the soot is completely burned, the NO to NO2 shift in the DPF will create more NO2 downstream, affecting the NOx-control system or the concentration of NOx in tailpipe-out emissions. 
 
 DPFs have been in development for years. Many different companies are developing their own system schematics-cordierite or silicon carbide structure, catalyzed or non-catalyzed with an "oxy-cat" upstream-but they all aim to trap soot without hindering the operation of the vehicle through too much exhaust backpressure, which interferes with the combustion process by disallowing chamber exhaust to exit freely from the cylinders.
 
 Diesel engines don't produce a lot of heat, leaving the exhaust rather cool compared to gasoline-engine exhaust. Therefore, to burn off these collected soot particles in the DPF, other factors must come into play. For example, these particles may be disposed of by including a biodiesel blend, a fuel-borne catalyst, an oxidation catalyst or some other mechanism to increase the temperature of the exhaust, lower the temperature at which the soot burns off, or both. This burn-off of the collected soot is called "regeneration," and it keeps the filter from plugging and compromising vehicle performance. 
 
 How Biodiesel Lowers Regen Temps 
 Boehman is also director of the Diesel Combustion and Emissions Laboratory at PSU. "I'm a mechanical engineer by training," he says. "I've been working on cars in some way or another since I was five." Boehman presented at the 2006 National Biodiesel Conference and Expo in San Diego, where he detailed how biodiesel can benefit the functioning of DPFs. Since the conference in early February, NREL published its aforementioned report, part of ongoing research between NREL, the Engine Manufacturers Association and the NBB. This summer, Boehman and his colleagues published "Examination of the Oxidation Behavior of Biodiesel Soot," a somewhat revised version of the material he presented at the February conference. However, it was actually an earlier study on soot and regeneration-published by Boehman and company in 2005-that was the basis for the one that followed this past summer. "They kind of flow together because the observations in the particulate filter study let us dig deeper and deeper to get the source of the difference for the biodiesel-derived soot," he says. "So those two studies are … bookends of a line of inquiry really. They are observations that are part of a stream of work that continues, for which we've gotten some new funding to continue just recently."
 
 Boehman says what he observes in the lab is the propensity of biodiesel soot to oxidize in air. "We consistently saw faster rates of oxidation [and] a lower temperature required for oxidation to begin if we had biodiesel present," he says. "Then we got into trying to figure out what it was about [biodiesel] soot particles-the primary particles-making up this aggregate that was different." 
 
 According to his tests, B100 gave an extreme enhancement of oxidation while the effects of B20 were appreciable, too. "We haven't gone and looked at what a threshold impact is," Boehman says. "We haven't had funding for a project where that was the objective." By "threshold," Boehman refers to how much biodiesel is needed in a blend (B2, B5, etc.) to effectively lower the balance-point temperature. According to NREL, the balance-point temperature is the DPF inlet temperature at which the rate of particle oxidation equals that of the soot collection. The "Conclusions, Recommendations and Future Work" section of NREL's report states, "Filter regeneration rate measurements indicate that biodiesel causes a significant increase in regenerate rate, even at the 5 percent blending level." 
 
 Fang, who has recently worked with NREL on this subject, gives Biodiesel Magazine some quantitative data on biodiesel and temperatures for DPF functioning. "The balance-point temperature can be lowered by 45 [degrees Celsius] for B20 and 110 [degrees Celsius] for B100," he says. "That's substantial. If you can lower the balance-point temperature, you can lower some fuel [consumption]. It's a fuel economy issue. You can easily burn. You can lower the frequency of the burn process. So it generates some benefits for the engine operations." 

 
 With this data in hand, Boehman and his research team have now set out to examine why biodiesel soot structure gives this benefit of enhanced oxidative reactivity by using various characterization techniques in the lab: X-ray diffraction to look at the material's crystallinity; Rama spectroscopy to look at its defects and graphitic character; Fourier transform infrared spectroscopy for examining the presence of oxygen at the surface of the soot particles; and high-resolution electron spectroscopy to look at the nanostructure of the particles. "What we found is that the structure and the oxygen functionality both play a significant role in enhancing the oxidation," Boehman says. "There was something really unique about the B100 particles. They tended to just open up and oxidize like mad." 
 
 He compares the properties of biodiesel soot to a wall made of brick and mortar. "It appears that what happens initially is you start to oxidize an outer layer off the particles, and then you kind of attack the mortar and oxidize that amorphous (unstructured) carbon that binds the sort of plates of aromatic material." The inner structure of the soot is referred to as "graphene" layers, which are bound by the amorphous carbon. So the soot binder is burned off, making the "platelets of aromatic material" very mobile. "These plates-graphene layers-rearrange themselves into very long-range ordered structures," Boehman says. "All of that seems to be changed by initially having these oxygen groups on the edges of the particles, which opens them up to oxidation and then they burn more easily … quicker. That's the bottom line-it has significant implications for operating a particulate filter." 
 
 Cognizant of Concerns 
 "Biodiesel is a truly renewable fuel source, the benefits of which I don't need to repeat," Fang says. "But there remain some challenges." He encourages fuel quality; specifically, he refers to the need for complete transesterification to produce quality biodiesel and minimize deposits. The polarity of biodiesel when mixed with ULSD has an antagonistic effect on the formation of deposits-most notably at the B20 level-causing a jump in deposit formation at B20 relative to the supposed linearity between B1 and B100. Also, deposits may foul increasingly pressurized and sensitive fuel injectors, which will affect the fuel spray into the cylinder, subsequently altering the emissions profile of the exhaust to be treated by advanced emissions control systems. 
 
 Researchers from NREL, PSU, Cummins and many other institutions continue to study the relationship between these advanced systems and biodiesel blends. The increasing sensitivity of emissions aftertreatment systems, engine technology, injector pressures and emissions regulations all lead experts to believe that, when blended with ULSD and combusted in diesel vehicles of model years 2007 and up, biodiesel fuel quality is more important now than ever before. 
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him at <a href=mailto:"rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 746-8385.

A Cummins engine gears up for testing in PSU’s Diesel Combustion and Emissions Lab.

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As emissions regulations tighten for new on-road U.S. diesel vehicles, B100 and biodiesel blends can boost the efficiency of advanced emissions control systems-albeit with a few critical issues to keep in mind.

Enhancing the Burn

In the renewable fuels business, "blending" is a word used to describe the mixing of fuels-biodiesel with diesel, ethanol with gasoline-but as one U.S. company is demonstrating, it's not just fuels that can be blended, but industries themselves. 

 
 Indeed, GS CleanTech Corp. saw the potential for synergies between the ethanol and biodiesel industries, and developed technology to capitalize on it. According to Kevin Kreisler, chairman and CEO of the majority-owned publicly traded company, GS CleanTech offers a commercial pathway to create additional ethanol plant revenue through the extraction of a relatively novel biodiesel production feedstock-corn oil. 
 
 Formerly known as Veridium Corp., GS CleanTech is the process engineering technology transfer arm of GreenShift Corp., which has its corporate offices in New York. GreenShift has made a name for itself in the renewable fuels business by aggressively developing clean technologies and supporting and companies that facilitate the efficient use of natural resources. The young corporation has already acquired about a dozen technologies that fit the plan, and one of those is GS CleanTech's trademarked Corn Oil Extraction System. The technology removes the fat, or corn oil, from a dry-mill ethanol plant's "thin stillage"-the precursor to the distillers grains coproduct produced in the ethanol distillation process. This material is heated and spun in a centrifuge to pull out the corn oil. With nearly all of the oil removed, a more protein-concentrated form of distillers grains is produced. 
 
 While conventional ethanol production methods produce about ethanol, 18 pounds of distillers dried grains (DDG) and 18 pounds of carbon dioxide, from one bushel (approximately 54 pounds) of corn, GS CleanTech's Corn Oil Extraction System can pull out two pounds of corn oil from that same bushel of feedstock, leaving behind 16 pounds of a higher-protein animal feed, Kreisler says.
 
 Here's the rub. GS CleanTech sets up contracts to buy the corn oil from ethanol plants that use its extraction technology. In turn, the plans to funnel the oil into its own processing venture. According to recent company statements, the company aims to generate $14 million to $18 million in annual revenue from selling corn oil produced at U.S. ethanol plants. "Our plans moving forward are to remain relentlessly focused on deploying our integrated multi-fuel technology … in the ethanol production industry," Kreisler tells Biodiesel Magazine. 
 
 Practically Pairing
 Ethanol producers using the system could increase their annual revenues by 3.5 percent, Kreisler says. Currently, DDG is only worth about 3.5 cents per pound, Kreisler says. The 2 pounds of corn oil that can be extracted from the 18 pounds of DDG produced from a bushel of corn can bring in 12 cents to 17 cents per pound. A typical 50 MMgy ethanol plant will be able to produce 3 MMgy of corn oil, valued at an estimated $2.7 million to $3.8 million. The ethanol producer would also benefit from the lower operating costs of drying smaller amounts of distillers grains, in turn lowering plant emissions, Kreisler says. 
 
 The extraction system can be installed at an ethanol plant with minimal permitting or infrastructure alterations. Compared with corn fractionation, for example, there are significantly lower capital costs and no design changes needed, Kreisler says. "We can literally plug and play into existing or new production with little, if any, upset to ongoing routine operations," he says. 
 

 GS CleanTech offers ethanol producers a couple of options. An ethanol plant could simply purchase the process technology and equipment outright and sell its oil for going market prices, or it could opt to have GS CleanTech finance and build a turnkey oil extraction system on-site in exchange for the rights to purchase the plant's oil at a discount. 
 
 GS CleanTech plans to sell the corn oil to its sister company, GS AgriFuels, which is in the process of developing three biodiesel plants to process the corn oil. 
 
 This summer, Cornell Capital Partners invested about $22 million in GreenShift and two of its subsidiaries, GS CleanTech and GS AgriFuels, according to Troy Rillo, managing director of Cornell Capital Partners. Part of that investment will be used to build one of the biodiesel production facilities being developed by GS AgriFuels. The company has a "heavy interest" in investing in the renewable energy and clean technology processes that GreenShift companies have to offer, Rillo says. Cornell Capital Partners' investment in GreenShift allows it to be involved in the corn-to-ethanol market and the biodiesel market. 
 
 GS AgriFuels' corn oil-based biodiesel production facilities will be small-scale modular plants, with production starting at 5 MMgy to 10 MMgy and later ramping up to 30 MMgy to 40 MMgy. The plants will be built in Memphis, Tenn., and within and around New York. 
 GS AgriFuels will be the first company to use corn oil for biodiesel production of any magnitude, and it's committed to producing a high-quality, consistent product that meets the ASTM specification for biodiesel. Kreisler admits that converting corn oil to biodiesel comes with certain process and economic challenges. However, a considerable amount of research and development has led company officials to believe no major obstacle stands in their way. "We're already there for corn oil biodiesel," Kreisler says. 
 
 It's not enough for the company to produce biodiesel that just meets the ASTM D 6751 spec; it wants to exceed the perimeters. The company is refining some aspects of the process design that will be implemented at future GS AgriFuels facilities. These changes may include some process tweaks and additions, Kreisler says. Like most other U.S. producers and future producers, the company maintains as part of its governing philosophy that producing the highest quality, most consistent biodiesel product is critical to market growth and sustainability. 
 
 Efficiency is also important to GS AgriFuels, and that's prompted the company to focus on collocating future biodiesel plants with ethanol plants. Kreisler envisions a day when a 50 MMgy ethanol plant, with the GS CleanTech's proprietary Corn Oil Extraction System, can produce 3 MMgy of biodiesel from corn oil produced on-site, and then sell the biofuel locally. "I just think it makes for a more holistic, more efficient, more compelling economic model than putting it on a truck, a railcar or barge, and transporting it half a country away or half a state away for production … ," he says. 
 
 In addition to its plans to develop production facilities, GS AgriFuels announced in mid-October that it has an agreement in place to purchase 100 percent of the stock of NextGen Fuel Inc., a company that produces modular continuous-flow biodiesel process equipment that can handle multiple feedstocks, according to a press release. 
 
 Successful Sign-Up 

 After more than a year and a half of work, GS CleanTech's plan to bring its patent-pending Corn Oil Extraction System to the ethanol industry is starting to pay off. The company has signed agreements with seven ethanol plants and one animal processing facility. In total, these agreements represent the capacity to extract 22.5 MMgy of biodiesel feedstocks, Kreisler says. 
 
 In October, the company announced the installation of the first stage of its extraction system at Little Sioux Corn Processors LP, a 52 MMgy ethanol plant in Marcus, Iowa. Also, Glacial Lakes Energy LLC, a 47 MMgy plant in Watertown, S.D., had a portion of the GS CleanTech system in place at press time. Three other ethanol facilities, each with capacities in the 40 MMgy to 50 MMgy range, have also signed up. Corn Oil Extraction Systems are currently being built for Adkins Energy LLC in Lena, Ill., and Utica Energy LLC in Oshkosh, Wis., while the system for a third ethanol plant, Golden Grain Energy LLC in Mason City, Iowa, should be under construction in the first quarter of 2007. In addition, a producer with an ethanol project under construction in Illinois has also agreed to work with GS CleanTech. The confidential contract calls for eight extraction systems to be installed in 2007 and 2008 for a total of about 12 MMgy of corn oil extraction. Additional details about the project were unavailable at press time. 
 
 Corn oil isn't the only feedstock that GS CleanTech plans to use at its biodiesel production facilities. An Arkansas-based poultry processing facility has executed an agreement with GS CleanTech to use its technology to extract 1.5 MMgy of animal fat from the sludge coming out of a wastewater treatment facility, Kreisler says. In the past, the animal processing facility paid to have the wastewater taken away for a fertilizer application. "We can reduce their disposal costs by roughly 80 percent," he says. 
 
 GS CleanTech continues to be on the lookout for more biodiesel feedstock sources, Kreisler says. 
 
 There are several possibilities within the ethanol industry for extracting corn oil for biodiesel production, according to David Winsness, president and COO of GS CleanTech and a co-inventor of the Corn Oil Extraction System. Out of the more than 5 billion gallons of ethanol currently produced in the United States, 4 billion is from corn dry mills. In all, there's about 350 MMgy of corn oil not currently being recovered from those dry-mill facilities, Winsness says. 
 
 The company's predominant focus is on the corn-to-ethanol industry, Kreisler explains. However, it is open to other options as well, such as additional animal processing facilities. 
 
 Another possible target is industrial wastewater transfer stations and municipal sewage treatment facilities. Without any development necessary, GS CleanTech extraction technology could be used to extract yellow, brown and black grease at these facilities, even though they are "somewhat nastier from a processing standpoint," Kreisler says. 
 
 There are also additional technologies that GS CleanTech wants to bring to market. Gasification of distillers grains to create syngas, is one, Kreisler says. Using about 20 percent to 25 percent of its defatted distillers grains, a 50 MMgy ethanol plant can produce enough heat and power on-site to take the plant off the power grid. The remaining 75 percent of the syngas from DDG can be used to create additional biomass or biomass-derived synthetic diesel. 
 
 For more information, check out GS CleanTech's Web site at <a target="_blank" href="http://www.gs-cleantech.com">www.gs-cleantech.com</a> or GreenShift's Web site at <a target="_blank" href="http://www.greenshift.com">www.greenshift.com</a>. 

 
 Holly Jessen is a Biodiesel Magazine staff writer. Reach her at <a href=mailto:"hjessen@bbibiofuels.com">hjessen@bbibiofuels.com</a> or (701) 746-8385.

This is the base design for the GS CleanTech Corn Oil Extraction System.

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An additional pretreatment step was recently added to the GS CleanTech Corn Oil Extraction System. The extra step helps to bump up yields for a 50 MMgy ethanol plant from 1 MMgy to 1.5 MMgy.

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Recognizing crossover synergies, New York-based GS CleanTech is tapping the U.S. ethanol industry for corn oil that it plans to route into biodiesel production. It has already got a handful of ethanol producers on board and three biodiesel plants in the works.

The Matchmaker

The 2006 World Biofuels Symposium (WBS) in Beijing featured a tour of an ethanol plant and attracted a number of large, multi-national companies seemingly linked more to enzymes and fuel alcohol than vegetable oils and methyl esters. But there was a palpable biodiesel buzz at this international meeting-and it really got people talking. 
 
 Organized by BBI International, Tsinghua University in Beijing; China National Cereals, Oils and Foodstuffs Corp.; and the Minnesota Department of Agriculture, the second annual WBS was well-attended-more than 225 people participated-and offered a mix of technology- and policy-oriented biofuels presentations on ethanol and biodiesel. The event was, of course, international in scope, and many attendees were reportedly eager for information about the growth of the U.S. biodiesel industry. 
 
 Sharing the U.S. Experience 
 On behalf of U.S. biodiesel producers, United Soybean Board Director Jim Call told the international audience that increased domestic soybean production, a trend toward lower oil- and animal-fat laden human diets, and growing world competition in the vegetable oil markets have been a boon to biodiesel in the United States. Primarily, though, high crude oil prices-and resultant high diesel prices-as well as effective federal policy, are driving the U.S. industry's remarkable expansion, he said. 
 
 Specifically, the extension of the federal biodiesel excise tax credit in 2005, as well as complementary state incentives, have propelled the industry forward. Likewise, the support of the worlds' major automakers-DaimlerChrysler, in particular-has been a step in the right direction for the once fledgling industry. Call pointed out the significance of DaimlerChrysler's decision to factory fill certain vehicle models with B5 and approving its Dodge Ram pickup trucks for B20 use in fleet applications. He also informed the crowd that iconic American tractor maker John Deere is factory filling diesel-powered machinery-including tractors, combines and self-propelled sprayers-with B2. In addition, Call talked about the marked increase in the number of U.S. filling stations offering biodiesel blends. 
 

 With several new U.S. biodiesel plants scheduled to come on line in 2007-there were 33 U.S. facilities under construction at press time-the United States will have a capacity to produce 1.6 billion gallons of biodiesel per year by 2008, Call told the international audience. Meanwhile, experts continue to uncover enhanced possibilities for the fuel. Research and development trends include genetic manipulation of plant oils to achieve higher oil content and improved cold-flow properties. At the same time, Call said, biodiesel process technology advancements are continually being achieved by U.S. producers. 
 
 Small, Challenged Market in Australia 
 Like the United States, Australia is a gasoline-powered nation-and not a very populous one at that. Therefore, while ethanol has a great deal of promise in the Land Down Under, the potential market for biodiesel is both small and constrained, according to Bill Elliot, director of BBI Biofuels Australia and a speaker at this year's WBS. 
 
 Elliot said Australia is unlikely to keep pace with the global rise of biodiesel production and use. The nation consumes 15 billion liters (4 billion gallons) of diesel annually-a rather small market in itself-and the Australian federal government has been reluctant to take the necessary steps to implement effective biofuels legislation, Elliot said. Additionally, the Australian biodiesel market is handicapped by the fact that only 10 percent of current diesel suppliers in the nation are required to pay the full fuels tax of AUS$0.38 per liter (US$0.20 per gallon).
 
 Europe Stills Leads 
 Compared to nations like Australia, where biodiesel is as exotic as the nation's wildlife, Europe is light years ahead in production, use and consumer acceptance of the renewable fuel. And even though the U.S. biodiesel industry is experiencing exponential growth, it still lags behind Europe, where diesel vehicles rule the roads. 
 
 Will Thurmond, author of "Biodiesel 2020: A Global Market Survey," wasn't able to attend the 2006 WBS, but his report helps put the global biodiesel picture in context. His Houston-based company, Emerging Markets Online, began researching alternative energy markets for its clients a few years ago. Today, Thurmond keeps a close eye on the rising global biodiesel market, and he's impressed with what he sees. In particular, he's interested in "where it started and where it's going" worldwide. 
 
 France has a nationwide B5 mandate and B100 use is widely accepted in Germany, Thurmond tells Biodiesel Magazine. He says Germany currently has more than 1,800 biodiesel fueling stations and last year produced 80 percent of all the biodiesel in Europe. In 2005, Germany produced 1.7 million tons (460 million gallons) of biodiesel, France produced 492,000 tons (135 million gallons), Italy produced 396,000 tons (108 million gallons) and the Czech Republic and Poland were close behind with 133,000 (36 million gallons) and 100,000 metric tons (27 million gallons), respectively, Thurmond's report reveals. 

 
 Germany has an advanced biodiesel infrastructure rooted in a framework of cooperation among government, farmers' unions, and refinery and distribution companies. Thurmond says other nations would do well to learn from its example. "Germany is the model China, Brazil and India are going to follow, which is a massively centralized government enterprise [that involves] farmers, the oil and gas refineries, and distribution outlets in one program," he says.
 
 Will Biodiesel Be Big for China?
 Although ethanol is the most high-profile renewable transportation fuel in China, the nation is one of the biggest diesel users in the world, consuming approximately 60 million to how it should look: 70 million tons (16.5 billion to 19 billion gallons) per year, according to Thurmond's report. Production of biodiesel, however, has not yet caught up with the country's appetite for diesel. In 2004, China produced only 60,000 tons (16 million gallons) of biodiesel, which is less than 1 percent of the country's total diesel production in the previous year, according to Thurmond. The gap between fuel production and consumption is growing, and any country in this situation has a serious energy security dilemma and must diversify its energy supplies, Thurmond says.
 
 The Chinese government is encouraging-if not pushing-the production and use of biofuels in order to meet its mounting transportation fuel needs. It's ethanol ambitions are taking flight, but a lack of available plant oils is hindering the proliferation of biodiesel. China doesn't have enough arable land resources available to produce the crops commonly used to produce biodiesel: soybeans, rapeseed, palm and castor beans, for example. 
 
 In fact, China is already the world's No. 1 importer of vegetable oil, according to Zongbao Zhao, a professor at China's Dalian Institute of Chemical Physics. Despite this fact, China is making advances. Last year, the country increased biodiesel production to somewhere between 100,000 and 200,000 metric tons (30 million and 60 million gallons); under current biofuels development policies, the country is expected to increase its biodiesel production to 2 million tons per year (540 MMgy) by 2010, according to Thurmond's report. The federal government of China is expected to release a new implementation plan for the biofuels component of its 2006-'10 planning period by the end the year, Thurmond says. 
 
 With vegetable oils in tight supply, 80 percent of China's biodiesel is currently made from recycled waste oil from restaurants. Mark Soutter, an analyst for BBI International and an attendee of the 2006 WBS, recalls speaking with a Chinese citizen at the conference who owns and operates a small biodiesel production facility in southern China that uses duck fat as its principal feedstock. Duck fat is easy to obtain and has a low value as a recycled fat because it tends to have an undesireable flavor, Soutter explains. 
 
 The country also has successfully used human sewage as a biodiesel feedstock. "China has made some pretty major advances in terms of recycling human sewage into biodiesel," Thurmond says, explaining that metro buses have been powered with a fuel derived from the unsavory raw material. 
 
 According to Zhao, the key to China's biodiesel industry lies with the use of innovative triacylglycerol resources. Zhao and his biomass conversion team have begun looking at the use of microbial oil in place of vegetable oils or animal fats for biodiesel production. In addition, the Huazhong University of Science and Technology is researching the use of lipases-enzymes that catalyze, or initiate, the hydrolysis of monoglycerides, diglycerides and triglycerides to glycerol and fatty acids-to make biodiesel. 
 

 Like the work Zhao is undertaking, other novel biodiesel production technologies emerging in China are still in the research and development stages. Thurmond says few, if any, novel processes have been ramped up to commercial scale. "Since it's such a new market for biodiesel, finding the kind of data that can be useful for forecasts was very difficult, but putting together the argument for the use of biofuels was not," he says.
 
 For more information about the WBS, visit <a target="_blank" href="http://www.worldbiofuelssymposium.com">www.worldbiofuelssymposium.com</a> or contact <a href=mailto:"conferences@bbibiofuels.com">conferences@bbibiofuels.com</a> 
 
 Lindsey Irwin is a Biodiesel Magazine staff writer. Reach her at <a href=mailto:"lirwin@bbibiofuels.com">lirwin@bbibiofuels.com</a> or (701) 746-8385.

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Biodiesel generally takes a backseat to ethanol in China, but it apparently had show-stealing allure at the 2006 World Biofuels Symposium in Beijing. With a keen eye on the renewable fuel's proliferation in Europe and the United States, the world's fastest-growing economic power wants to go big with biodiesel-if it can overcome some serious feedstock constraints.

Borderless Biodiesel

When it comes to the stuff of transesterification, methanol is widely considered the most cost-effective, readily available chemical compound for the job. However, that doesn't change the fact that this well-known alcohol is a volatile, flammable liquid. When handled wrong-or left in too high a concentration in biodiesel-this liquid can be anything from problematic to outright dangerous. That's why specifications are in place to limit its volume to an exact percentage in biodiesel. If that limit is exceeded even slightly, the renewable fuel is deemed off-spec and is technically not salable. 
 

 The specification protocol used to keep methanol in check-the ASTM D 92 Pensky-Marten closed-cup flashpoint test-requires that biodiesel not ignite at 130 degrees Celsius (266 degrees Fahrenheit) or lower. The flashpoint of a chemical is the lowest temperature at which a flame will propagate through the vapor of a combustible material to its liquid surface. In other words, it's the minimum temperature at which the liquid produces a sufficient concentration of vapor above it to form an ignitable mixture with air. Note, however, that the ignition source doesn't have to be an open flame. Heat alone will do the trick. 
 
 With these facts in mind, it's not difficult to understand why the process of recovering methanol is critical to producing high-quality biodiesel. In a typical biodiesel plant, there are three main components of a methanol recovery system: a still, a distillation column and a condenser. "If your distillation system is improperly designed, you won't get enough methanol out," says Rocky Costello, head of the Redondo Beach, Calif.-based engineering firm R.C. Costello and Associates. "If you don't get enough methanol out, you won't meet the flashpoint test." 
 
 In Costello's estimation, each biodiesel plant disaster in the past year-there have been a few reported-has been related to methanol. While not all methanol-related accidents are related to methanol recovery, the process of recouping the chemical can be hairy. 
 
 In a conventional biodiesel process, methanol is recovered through assorted distillation techniques (see "Some Distillation Basics" on page 60). Experts say safety is a guiding principle in biodiesel distillation system design and operation. "You're dealing with a very flammable substance, and you're heating it up," says George Hawranika, a process engineer at SRS Engineering in Murrietta, Calif., a designer of distillation systems. "We make sure we have multiple levels of safety and watchdog provisions in our program that monitor multiple sequences. If something goes out of balance, we shut the plant down and inform the operator."
 
 There are essentially two pathways for methanol recovery after the unfinished biofuel exits a reactor where vegetable oils, waste greases or animal fats are transformed into methyl esters: a "wet method" and a "dry method." In the dry method, methanol is distilled straight out of the methyl esters using "ion exchange" technology-a chemical reaction involving the exchange of hydrated ions-or an adsorbent. In the wet method, the methyl esters are "water washed," and the resultant wastewater stream is distilled (in either a batch or continuous process) for methanol recovery. 
 	
 Continuous Versus Batch 
 The size of an operation generally influences the selection between batch and continuous distillation options. In large facilities, economics favor continuous systems. "I think the largest batch distillation system I have ever seen is probably about 20,000 gallons," Costello says. 
 
 Continuous processes run 24 hours a day, seven days a week (not including scheduled and unplanned shutdowns), unremittingly feeding raw biodiesel in through the side of a fractionation column, taking methanol off the top and leaving marketable fuel on the bottom. "Obviously, the more you run [a facility], and the fewer problems you have, the more money you make because you have more production," Costello says. 
 
 Batch systems are usually less capital-intensive than continuous systems but require round-the-clock human operation. On the other hand, continuous systems are generally not amenable to frequent starts and stops. Doing so can cause "unsteady state" conditions that can result in off-spec product. On start-up, a continuous column may not produce ASTM-quality biodiesel until the column reaches a steady state. In other words, all column variables including temperatures, pressures, liquid levels and flow rates should remain constant to produce high-quality fuel. 

 
 In a batch-type operation, there is much more operator intervention required, Hawranika says. "On a continuous basis, on the other hand, we have a complete [programmable logic controller] control, where we regulate the entire plant function and keep it within a certain spec much better than [operators can achieve manually]. Very little labor is required on a continuous system because the results are far more accurate."
 
 Batch distillation, however, is very forgiving. This can have its own advantages, Costello says. "If the methanol content in the still is too high at the end of a batch, it is simply run through the still again to remove the residual methanol." Similarly, it is possible for a continuous process to temporarily make product with too much methanol in it. However, once the problem is detected via flashpoint testing, the product would be rerouted back to the distillation column. 
 
 Hotter or Higher? 
 Inside a distillation column, or tower, "reflux" liquid continuously provides cooling and condensation of up-flowing vapors. This action heightens efficiency. Reflux liquid is the portion of the condensed overhead liquid from a distillation tower. Maintaining reflux takes energy in the form of heat. Steam is the preferred mode of heat delivery for this process because it is widely considered safer and more efficient than electrical heat. If electrical heat is used, it requires explosion-proofing. "On large systems, steam is our main choice, but we can use hot oil systems or electrical systems, as well," Hawranika says. "When you get into larger systems, the electrical energy requirement gets way too high for most plant applications." 
 
 The more reflux provided, the more effectively a distillation column can separate materials with different boiling temperatures. High reflux levels require high heat, however, and high heat requires high energy costs. There's a caveat next to that rule, though. Costello says producers are able to use less reflux-and subsequently less heat-by using a taller distillation column for the same degree of separation. "There's always a trade-off of operating costs versus installed costs," Costello says. "A taller, more expensive column has lower energy cost, and a shorter, less expensive column has higher energy costs." 
 
 Hawranika says the company's design principles allow for the recovery of nearly 30 percent more methanol than some other systems. "There are companies that are expecting only a 65 percent to 70 percent methanol recovery from that biodiesel stream," he says. "That's good,but if you can get 99.5 percent out, that's twice as good. That's one advantage of what we're offering, and yes, there's a lot more design [that goes] into it. There's a lot more money that's invested on our end to conduct chemical simulations [that] provide us with the facts … and we build to that." 
 
 Nicholas Zeman is a Biodiesel Magazine staff writer. Reach him at <a href=mailto:"nzeman@bbibiofuels.com">nzeman@bbibiofuels.com</a> or (701) 746-8385.

Recycling excess methanol used in the transesterification reaction is a vital function for almost all biodiesel producers. Increasingly, dated distillation techniques are being replaced by more advanced systems.

Reflux and Recovery

Long Island, N.Y., not far from the City that Never Sleeps, is the perfect location for a man who says he barely rests two hours a night, earned his first master's degree at age 17 and developed a system to turn an urban environmental problem into a green solution. This prodigy is David Butler, an entrepreneur, pragmatist and self-proclaimed problem-solver. Butler is also CEO of North American BioFuels Co. (NABFC), which he founded in 2005 after developing his own process of taking in brown grease-a waste stream no one seemed to want until recently-and putting out ASTM-spec biodiesel. 

 
 A ribbon-cutting ceremony for NABFC's expanded pilot plant-now at 1 MMgy-took place in late August at the Russell Reid wastewater management facility in Bohemia, N.Y. Now, the motivated company, with what seems to be an equally ambitious leader, seeks to take this model and build on it-literally. The pilot-scale biodiesel system is portable, self-contained and ready to interlink with identical systems for scaling up, sizing down or completely removing the plant altogether. 
 
 At press time in mid-October, NABFC eagerly awaited the results of a bid process to locate its first commercial-scale production outfit at a major treatment facility in southern New Jersey. "We have great expectations that we'll be chosen," says Alan Ellenbogen, executive vice president of NABFC. He says he believes this hopeful site is the fourth- or fifth-largest sewage treatment plant in New Jersey, a state that's home to more than 8 million people. The future story of NABFC will be one to follow, and the tale of its inception is no less.
 
 One Man's Waste … 
 Butler tells Biodiesel Magazine he's "been in the entrepreneurial sector" since he was a teenager. Through private and military contract work, he's been a sort of professional troubleshooter most of his working life. "I'm a problem solver," he says with clear self-assurance. 
 
 Two-and-a-half years ago, he started looking into viable alternative energy systems-solar, wind and biomass. "Biomass seemed the most reliable," he says. Technically, he's right. The sun doesn't always shine and the wind doesn't always blow, but experts say biomass, in all of nature's forms, is rarely in short supply. Moreover, a population of "on-the-go" Americans bent on greasy spoons and fast-food binging is bound to produce an overabundance of waste greases in need of a depository, oftentimes at a cost. Once Butler began contemplating various feedstocks for biodiesel production-and given his proximity to one of the most densely-populated areas in the United States-using the large, burdensome stocks of readily available brown and black greases seemed to be a wise choice. "We started an R&D program to look at the chemical and technical aspects," Butler says. "We spent two years developing our process."
 
 Restaurants, diners, fast food joints-they all produce and attempt to trap their brown-grease waste stream, which can come from burgers, etc., but isn't to be confused with French fry grease. Trap grease pumped from food service establishments is hauled off by companies like Russell Reid for a fee, after which it gets dewatered and disposed of by incineration mostly. "There's been a struggle to get rid of grease trap waste since the beginning of time," says Gary Weiner, president of Russell Reid, a waste disposal company serving New Jersey, New York, Pennsylvania and Delaware. Unfortunately, grease trap service intervals aren't always scheduled when they're needed, and some of that grease escapes into the sewer system where it collects, causing backups and overflows. This is referred to as black grease. "Black grease is the least desirable," Weiner says. "It collects at the heads of treatment plants ... " and is normally removed from the 24-inch pipes with a combo sewer Jet-Vac. 

 
 Weiner tells Biodiesel Magazine how he first heard about Butler, NABFC and the biofuel company's progressive plans. "Representatives from NABFC approached our people on Long Island," he says. "In doing their research on brown grease treatment, [Butler and associates] wanted to know who the players were and how its treatment was handled on the Island of Long." 
 
 That's how NABFC identified Russell Reid. "As a company, we are about responsible wastewater management," Weiner says. "We're clean through and through. We're as progressive as the next guy, and we're very interested in alternative fuels. … I found out a long time ago that brown grease contained 12,000 Btus per pound. Then, the opportunity arose for this aggressive approach." Russell Reid holds 1,800 active food service accounts, a fact that helped seal the deal for Butler and NABFC. 
 
 A Self-Powered 'Roach Motel'
 Moving from R&D to production, Ellenbogen says NABFC has generated a "better box" to convert these predictably unpredictable feedstocks to biodiesel. These waste-grease feedstocks have free fatty acid (FFA) contents all over the board, oftentimes in excess of 50 percent. "The pilot plant operating now uses brown grease," he says. If this New Jersey facility col-location bid is accepted, however, NABFC will use black and brown greases there. 
 
 Ellenbogen says NABFC's proprietary conversion unit is an entirely automated, continuous batch system. "We take a roach-motel approach," Butler adds, indicating that the grease goes in and it's not seen again until exiting as biodiesel and its by-products. 
 
 Russell Reid trucks haul the grease on-site, where it then goes into the fractionation tank where solids are removed, followed by a centrifugal decanting process to dewater the greasy solution. NABFC randomly tests its incoming feedstocks to check for contaminants that shouldn't be in the grease, like used motor oil for instance. He says the fractionated, dewatered grease then goes to a custom acid stripping process. NABFC wouldn't detail the specifics of the process, other than saying it consists of two conversion phases. "We implement a non-sodium based system," Butler says. "Without sodium, the wastewater is cleaner. We also use low temperatures-around 120 degrees [Fahrenheit]-and low atmospheric pressures." Butler also says the proprietary reaction system is made of high-density polyurethane rather than steel. 

 
 With potassium sulfate (K2SO4) as by-product, it would appear that NABFC's two-phase process involves sulfuric-acid-catalyzed esterification, followed by potassium hydroxide base transesterification. The sulfuric acid of step one reacts with the potassium base of step two to produce K2SO4. NABFC has five patents approved or still pending, Ellenbogen says, all of which are related to the physical design and chemical processing of the precarious feedstocks. 
 
 Ellenbogen says NABFC is "paranoid" about quality and routinely contracts an inspectorate lab to test its fuel; considering the feedstock it's using and the industry's charge to step up quality control, it's no wonder. Although Butler says his company's pilot plant in Bohemia produces on-spec biodiesel now, this wasn't always the case. "Initially, there were problems with total glycerin, but we dropped that by doing a combination of [adjustments]," he says. NABFC also has a lab on-site in Bohemia, where testing incoming and outbound products is performed routinely. 
 
 A small portion of the biodiesel produced in NABFC's system is used to power the generation of its own combined heat and power system. The pilot uses a 273-kilowatt Detroit Diesel generator and 30-kilowatt micro-turbines at 408 volts, which produce 159,000 Btus of usable heat, Butler tells Biodiesel Magazine. Butler says the Detroit Diesel generator consumes about 3.3 gallons of biodiesel per hour of operation. The pilot plant's max production capacity is 6,250 gallons per day but is only producing roughly half of that amount now. 
 
 Build-Out Ready
 NABFC isn't interested in becoming a technology provider to the industry. It wants to be a major biodiesel producer. Future site agreements-as the one in New Jersey for which the company awaits the go-ahead-will open doors for further production capacity. NABFC's portable units are helping to realize this ambition. One of the stipulations to locating at the site of a wastewater treatment facility is that the system used to produce biodiesel is able to be moved off-site quickly, Ellenbogen says. The systems are pre-built in a controlled environment off-site where all the necessary components are fit inside sea-land cargo containers. Once NABFC brings a unit to its destination all that remains is linking up connections. From there, only a button needs to be pushed for complete automation. If the Jersey site comes through, Butler says NABFC will be producing 10 MMgy there-10 sea-land containers-for around $3.5 million in build costs. 
 
 "You hear about these plants coming on line with 40 MMgy capacities," Ellenbogen says. "We would like to build four or five smaller [10 MMgy] plants in the Northeast, for example." Ellenbogen says Long Island Biofuel currently markets NABFC's biodiesel and coproducts, and that New England demand for home heating oil is a significant market. "They have extensively tested our biodiesel and other products in commercial on-road, home heating and additionally in the construction industry's applications with our glycerin," he tells Biodiesel Magazine. "They are very professional and knowledgeable folks, who market our biodiesel on Long Island. We also sell the water released during our process, which in our case is not salt water but [potassium sulfate] water used by sod farms on Long Island as fertilizer."
 
 Weiner says although Russell Reid doesn't have a direct investment in the waste-to-biodiesel conversion technology, his company finds value in its relationship with NABFC. "Our partnership is one of serious interest ultimately to see to what extent there will be more 'fruit' down the line," Weiner says. "They are an aggressive partner, the pilot's running with success … I don't see any reason why the relationship can't progress, especially because biodiesel seems to be in such short supply. The waste business struggled for years over how to dispose of this organic material, and it's promising to see this industrial and environmental change with what used to be considered a nuisance. The tide is definitely turning." 
 

 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him at <a href=mailto:"rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 746-8385.

A cargo container houses NABFC’s system, which features high-density polyurethane tanks and push-button automation.

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Butler speaks from the podium at NABFC's August 2006 ribbon-cutting ceremony in Bohemia, N.Y., located on Long Island.

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North American BioFuels sees brown grease through green-tinted glasses. The company recently expanded its biodiesel pilot plant on Long Island. Now, its sights are set on cornering the brown and black grease markets on the populous East Coast.

Food Waste to Fuel Tanks

Biodiesel project founders and initial board members are confronted early on with the issue of who is going to manage the project. After all, most board members are passive investors or independent altogether. While they oversee development and implementation of the business plan, as well as raising capital, initial directors are not necessarily involved (nor should they be) in the day-to-day operations. Undertaking a biodiesel project is a daunting task that requires competent and dedicated personnel, who will essentially "live" the project during its start-up phase. An important question that the project founders and board must consider is whether to hire a project manager as an employee of the start-up business or as an independent contractor -at least through fundraising and initial commercial operation.
 
 Hiring an independent contractor, or classifying an employee as such, may save the company money and may also create a more flexible situation than hiring an employee to perform the same work. As the biodiesel company gets off the ground, it will need someone with broad knowledge and project management skills. It is important, however, that workers are properly classified as employees, or independent contractors, because a number of state and federal employment and tax laws govern an employer's legal obligations depending on this classification.
 
 Some of the legal obligations that employers face with respect to employees, but not independent contractors, include: 
 
 --Federal income tax withholding
 
 --Federal Insurance Contributions Act (FICA) tax withholding for employees and payment of the employer portion of FICA
 
 --Payment of federal and state unemployment taxes

 
 --Mandatory overtime and minimum wages 
 
 --Payment of premiums required under state workers' compensation laws
 
 --Guaranteeing protections under the Employee Retirement Income Security Act, the Labor Management Relations Act, Title VII and the Americans with Disabilities Act
 
 Employers can be subject to penalties, often harsh, if employees are misclassified as independent contractors. Historically, the Internal Revenue Service (IRS) has used a "20-factor test" to determine the status of workers. The IRS recently changed its approach to determining worker classification by looking at how the worker performs the task for which he or she is engaged, how the business aspects of the worker's activities are conducted and how the parties perceive their relationship.
 
 Factors that the IRS considers important indicators of employee-versus-independent-contractor status include:
 
 --Fixed hours of work-Independent contractors set their own work hours, while employees' hours are determined by the employer.
 
 --Use of assistants-An independent contractor hires, directs and pays for his or her own assistants, and supplies his or her own materials. 
 
 --Payment of expenses-If an employer pays expenses directly (as opposed to the worker seeking reimbursement of expenses), this typically means the worker has the right to regulate and direct business activities, indicating employee status.
 

 --Right to discharge-If the employee can discharge the worker at any given time, this suggests employee status. An independent contractor can't be dismissed (without legal liability) unless the contract specifications are not met.
 
 --Right to quit-An independent contractor may be liable for failure to perform according to contractual terms, while an employee may quit at any time without liability.
 
 While not all of the factors indicated above must be present in any given situation and no single factor is controlling, they can serve as a guideline as the new company defines the project-manager role.
 
 Nancy Flury and Todd Guerrero are partners in the law firm Lindquist & Vennum PLLP, a leading provider of legal assistance on renewable energy projects across the United States. Flury limits her practice to employment-related issues. Guerrero is a member of the firm's Agribusiness & Energy Group, and works with biodiesel clients throughout the country. For more information, visit <a target="_blank" href="http://www.lindquist.com">www.lindquist.com</a> or call (612) 371-3211.
 
 Note: This article is only a general summary for informational purposes and does not constitute legal advice. Consult a qualified and experienced legal advisor for your specific situation or particular questions.

Project Manager-Employee or Independent Contractor?

Legal Perspective

Even though the U.S. biodiesel industry is experiencing record growth-with a recent tripling of production capacity-the European Union's (EU) biodiesel industry remains eight to 10 times its size. 
 
 There are many factors that have contributed to the proliferation of biodiesel in the EU as compared to the United States, including a larger percentage of diesel vehicles (i.e., 40 percent of passenger vehicles in Germany run on diesel as compared to 1 percent in the United States), commitments to reducing greenhouse gases under the Kyoto Protocol, and the introduction of aggressive tax incentives for the renewable fuel. As industry participants and government policy-makers in the United States come together to create an environment in which the biodiesel industry can continue to grow, Europe's experience with biodiesel continues to serve as a model for U.S. policymakers to look to.

 
 In May 2003, a European Parliament directive set a non-binding target of 5.75 percent biofuels, calculated on the basis of energy content of petroleum-based transportation fuels placed on EU markets by Dec. 31, 2010. 
 
 Under the EU system, each country develops its own implementing legislation. While there are current discussions concerning Germany's generous excise tax break for biodiesel-and some questions surrounding the direction the EU will take after 2010-there's no doubt that the consistency of Germany's tax and agricultural policies have been a cornerstone of the rapid development of its biodiesel industry. As recently stated by Stefan Schreiber, head of Cargill's biodiesel operations in Germany, "For Cargill and other businesses, it is important to have a stable regulatory policy, as it is otherwise very difficult to make these long-term investment decisions." 
 
 At current prices for oil, the demand for biodiesel in the United States is primarily driven by tax incentives and legislation. For the biodiesel industry to grow on a sustainable basis, it will be necessary for federal policies to be consistent over time. In other words, they must avoid the "yo-yo" effect of tax incentives coming in and going out. When our developer clients try to raise money for biodiesel projects, they must evaluate the current tax policy and make an educated guess about whether the tax incentives will be extended beyond their present term. This tends to limit their ability to raise debt to fund their projects. Accordingly, biodiesel industry leaders should work closely with government policy-makers to ensure the development of a sound and consistent policy toward the industry, setting a framework conducive for long-term investments.
 
 As 2010 rapidly approaches, the EU will be assessing the progress, or lack thereof, by the member states in reaching the 5.75 percent target for biofuels. Member states, such as Germany, will also be considering their own programs targeted at increasing biofuels production. For example, Germany's total exemption from the excise tax on fuel for biofuels is set to expire in 2009. In addition, Germany may embark on a different policy path as it considers a bill that is due to become law Jan. 1, 2007. This bill would require the petroleum industry to place a certain proportion of its fuel sales on the market in the form of pure biofuels or biofuels blends. With these measures, Germany's leaders believe it can reach the EU target of 5.75 percent by 2010.
 
 The prospects for the biodiesel industry are bright. Major oil companies have shown some interest, and the product has been well-received in parts of the country where it is available. There is a growing focus on renewable energy and reducing greenhouse gases in the United States, which should help to broaden the support for the biodiesel industry. With a sound tax and policy framework, the biodiesel industry can continue to grow and contribute to America's energy security. 
 
 Robert H. Edwards Jr. is a partner in Hunton & Williams LLP's Energy and Project Finance practice. Reach him at <a href=mailto:"redwards@hunton.com">redwards@hunton.com</a> or (202) 955-1548.

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409-1294329528.jpg

The U.S. Industry Can Still Look to Europe for Lessons

Talking Point

Ten years after opening its first biodiesel plant, <a target="_blank" href="http://www.agp.com/">Ag Processing Inc.</a> (AGP) has started work on its second facility. AGP broke ground in mid-October on a 28 MMgy biodiesel plant in St. Joseph, Mo.

 
 Construction on the facility is underway, according to AGP spokesman Jim Rodenburg. The plant is expected to begin operation in fall 2007. AGP is providing process design for the project while Peoria, Ill.-based <a target="_blank" href="http://www.mwcontractors.com/">M&W Contractors Inc.</a> is the general contractor.
 
 AGP is also nearing completion of an expansion project at its Sergeant Bluff, Iowa, biodiesel facility, which began production in 1996. The plant is being expanded to 27 MMgy. Rodenburg said the project is on schedule to start-up in early 2007.
 
 AGP announced the St. Joseph project in February. It will be located at AGP's industrial site where the cooperative operates a soybean crushing plant and a vegetable oil refinery. In November 2005, AGP announced it would expand and upgrade the St. Joseph soy processing plant. The investment includes installation of new processing equipment, additional soybean storage capacity, expanded rail siding and upgrades to the truck unloading facilities. The project is expected to increase crush capacity to 120,000 bushels per day.
 
 AGP markets its biodiesel under the trademarked <a target="_blank" href="http://www.soygold.com/">SoyGold</a> brand. The cooperative is also a <a target="_blank" href="http://www.bq-9000.org">BQ-9000</a> accredited producer. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program.

 
 Ag Processing Inc.
 Location: St. Joseph, Missouri
 Design/builder: Ag Processing Inc./M&W Contractors Inc.
 Capacity: 28 MMgy
 Feedstock: soy oil
 Biodiesel marketer: Ag Processing Inc.
 Start of construction: October 2006
 Target completion date: fall 2007
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

 
 Posted: 10:47 a.m. CST Monday, November 13, 2006

AGP breaks ground on a biodiesel plant in St. Joseph, Mo.

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AGP breaks ground on second biodiesel plant

An Iowa trucking company is giving B20 biodiesel a real-world test. Fort Dodge-based <a target="_blank" href="http://www.deckercompanies.com">Decker Truck Line Inc.</a> is partnering with the <a target="_blank" href="http://www.nbb.org">National Biodiesel Board</a> and the <a target="_blank" href="http://www.iasoybeans.com">Iowa Soybean Association</a> (ISA) to determine the effects of biodiesel compared to conventional diesel fuel over the course of 2 million miles in the next two years.
 
 The study is already underway, according to Dale Decker, Decker's industry and government relations director. The company is running B20 in three 2006 engines on a dedicated route to Chicago. Three control trucks are being used for comparison. Decker said he hopes to expand the program to 10 trucks within the next few months.
 
 Decker Truck Line has 750 vehicles that transport throughout the continental United States and several bordering Canadian provinces.
 

 Ralston, Iowa-based <a target="_blank" href="http://www.regfuel.com">Renewable Energy Group</a> is providing fuel for the test. The company has several partner biodiesel plants throughout Iowa and southern Minnesota. Vehicles used in the test will be refueled at Decker's Fort Dodge location. Decker said he hopes the program will expand the availability of B20 at the retail level.
 
 <a target="_blank" href="http://www.cat.com">Caterpillar Inc.</a> will help gather technical information as well as analysis of the use of B20 in the engines. Decker said routine oil samples will be sent to Caterpillar as part of the project. ISA Director of Market Development Grant Kimberley said Caterpillar is expected to tear down the engines at the study's conclusion to determine the effects of B20.
 
 The USDA and <a target="_blank" href="http://www.iccc.cc.ia.us">Iowa Central Community College</a> in Fort Dodge have also partnered to support the study and collect data. Information will be collected on mileage, engine maintenance cost and practices, as well as visual emissions. 
 
 While similar tests have been conducted, this is expected to be the first to use B20 with ultra low sulfur diesel in 2007 model engines.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

 
 Posted: 1:51 p.m. CST Monday, November 13, 2006

Iowa trucking company giving biodiesel an on-road test

A Maryland company is seeking a buyer for a Mississippi biodiesel operation that has been idle for more than a year. <a target="_blank" href="http://www.equitypartnersinc.com">Equity Partners Inc.</a> is seeking a buyer for Biodiesel of Mississippi Inc.'s (BMI) plant in Nettleton, Miss.
 
 BMI operated the facility for approximately nine consecutive months before ceasing operations in the first quarter of 2005, according to Equity Partners' Ken Mann. The company filed Chapter 11 bankruptcy in February 2006.
 
 At press time, Equity Partners was in the process of re-opening the plant to allow for site visits by potential bidders. The plant is capable of producing 60,000 gallons of biodiesel per day using two 40,000-gallon batch reaction tanks, according to an Equity Partners release. The facility's 3.9-acre site also includes two grain storage bins, a grain elevator and truck scales. 
 
 Based in Pasadena, Md., Equity Partners provides investment banking services exclusively for businesses operating in Chapter 11 or suffering from financial distress. Mann said BMI has received a stalking horse bid, which is an initial bid on a bankrupt company's assets. This bid method allows the distressed company to avoid low bids on its assets. 
 
 Once the stalking horse bid is made, other potential buyers may submit competing bids for the bankrupt company's assets. Mann said he expects a court hearing Friday to establish the bid procedure for the project. Bidding is expected to begin in January on the plant.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com ">dnilles@bbibiofuels.com</a>or (701) 373-0636.

 
 Posted: 11:27 a.m. CST Tuesday, November 14, 2006

Buyer wanted for idle Mississippi biodiesel plant

The United Soybean Board (USB) is seeking nominations for its annual Outstanding Achievement Award and Excellence in New Uses Award.
 
 The Outstanding Achievement Award is the highest award recognition bestowed by USB. This is given to an individual, organization or group that has made an outstanding positive impact on the soybean industry and the soybean checkoff.
 
 The USB Excellence Award is a rotating award that recognizes outstanding achievement in five categories: communications, domestic marketing, international marketing, new uses and production research. One excellence award recipient is recognized annually. This year USB will present an award for Excellence in New Uses.
 
 Awards will be presented at the 2007 Commodity Classic in Tampa, Fla. Nominations are due Nov. 30.
 
 For more information and a nomination form, visit <a target="_blank" href="http://www.unitedsoybean.org">www.unitedsoybean.org</a>.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

 
 Posted: 2:47 p.m. CST Tuesday, November 14, 2006

United Soybean Board seeking award nominees

Leaders of the U.S.'s "Big Three" automakers told President George W. Bush they are willing to make half of their fleets flexible fuel capable by 2012. Leaders from Ford, General Motors and DaimlerChrysler met with Bush for about an hour Tuesday to discuss energy security, health care, trade imbalance and the rising costs of vehicle production materials.
 
 The automakers said they are willing to increase the use of renewable fuels and ready to make half of their annual vehicle production capable of running on E85 or biodiesel by 2012. "We told the President we support his and Congress' call for the continued development and use of renewable fuels as part of lessening America's dependence on imported oil," said a <a target="_blank" href="http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=30349">joint statement</a> from Chrysler Group President and CEO Tom LaSorda, Ford Motor Co. President and CEO Alan Mullaly and General Motors Chairman and CEO Rick Wagoner. 
 
 In June, the "Big Three" agreed collectively to double annual production of vehicles capable of running on renewable fuels to 2 million cars and trucks by 2010. However, Tuesday's joint statement added "any vehicle production increase must be accompanied by continuing incentives that encourage the manufacture, distribution and availability of renewable fuels and the production of flexible fuel vehicles."
 
 There are more than 5 million FFVs in the United States today. More information on E85-capable vehicles and E85 refueling stations is available at the National Ethanol Vehicle Coalition's <a target="_blank" href="http://www.e85fuel.com/index.php">Web site</a>.
 
 The group also affirmed its support of the <a target="_blank" href="http://www.25x25.org/">"25 by '25" initiative</a>, an effort financed by the Energy Future Coalition and supported by agriculture and forestry groups to get 25 percent of the nation's energy from renewable fuels by 2025.

 
 "Obviously, as these automobile manufacturers begin to incorporate new technologies that will enable us to power our cars in different ways, it will make it easier for me to be able to tell the American people we're using less foreign oil," Bush said. "And that's in our economic interests, as well as in our national security interests."
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 10:47 a.m. CST Wednesday, November 15, 2006

President meets with 'Big Three' automakers

Construction is expected to begin early next year on another large-scale biodiesel plant in Washington State. <a target="_blank" href="http://www.wabiodiesel.com/">Washington Biodiesel</a> is planning a 36 MMgy plant being near Warden, Wash., which is located in southeast Washington just south of Interstate 90.
 
 The biodiesel plant will be built simultaneously with a canola crushing facility. <a target="_blank" href="http://www.mckinstry.com">McKinstry Inc.</a>, which has offices in Washington and Oregon, will be building the biodiesel plant using a process design provided by <a target="_blank" href="http://www.lurgi.com">Lurgi PSI</a>. Minneapolis, Minn.-based <a target="_blank" href="http://www.crowniron.com">Crown Iron Works</a> is providing the crushing technology and equipment.

 
 Both facilities will be built adjacent an existing grain elevator, according to Jeff Stevens, Washington Biodiesel's chief technology officer. He said the elevator site, which will be expanded, provides grain storage and rail access. A <a target="_blank" href="http://www.cbrr.com">Columbia Basin Railroad</a> short line serves the site.
 
 Stevens said the biodiesel plant will use canola oil as feedstock. He said he expects much of the canola to be initially sourced from Canada until local sources are developed. <a target="_blank" href="http://www.chsinc.com">CHS Inc.</a> will source the plant's canola and provide marketing for the fuel and canola meal. <a target="_blank" href="http://www.usbioenergy.net">U.S. BioEnergy</a> will market the fuel in a joint venture with CHS. Last week the companies announced <a target="_blank" href="http://www.provistafuels.com">Provista</a>, an ethanol and biodiesel marketing joint venture. CHS acquired a 50 percent interest in U.S. BioEnergy's ethanol marketing business in March 2006.
 
 The permitting process is underway for the Warden plant, according to Stevens. He said start-up is anticipated for first quarter 2008.

 
 Washington Biodiesel is being developed on the heels of another large-scale plant breaking ground in the state. In October, Imperium Renewables began full-scale work on a 100 MMgy plant in Grays Harbor, Wash. The plant is expected to be the nation's largest when it begins production in June 2007.
 
 Washington currently has one commercial-scale biodiesel producer. Imperium Renewables-owned Seattle Biodiesel produces 5 MMgy in Seattle, Wash.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 2:09 p.m. CST Thursday, November 16, 2006

Another Washington plant readying for construction

Case IH upped the ante on biodiesel use in its equipment Thursday. The Wisconsin-based agriculture equipment manufacturer approved the use of B20 in most of its engines. Case already warrants the use of B5 in all of its engines.
 
 The company also said it was conducting field tests to determine the performance levels of higher biodiesel blends, including B100. In addition, Case said when approved supplies are available, every engine powering Case IH equipment globally will be factory-filled with biodiesel blends.
 

 "One hundred percent factory fill of a biodiesel blend is the next logical step in the process of embracing biodiesel," said Randy Baker, president of Case IH North America. "Adding to demand for soybeans while producing the crop is the type of strategy our customers like to pursue. It's good environmental stewardship, and it's good business."
 
 Case was the second diesel-powered equipment manufacturer to announce an increased biodiesel presence this month. On Nov. 1, Kubota Tractor Corp. announced a global Kubota decision to approve the use of B5 in some of its diesel-powered vehicles. 
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 10:53 a.m. CST Friday, November 17, 2006

Case IH announced Nov. 16 it approves the use of B20 in most of its engines.

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Case IH approves higher blends of biodiesel

Iowa continues to sprout large-scale biodiesel projects. The state's sixth biodiesel plant of at least 30 MMgy in capacity is expected to begin construction before the end of the year. Northern Bio Energy is planning to begin site work in December on a 30 MMgy plant near Estherville, Iowa.
 
 Ron Hickman, CEO of Ames, Iowa's <a target="_blank" href="http://www.ellerdevelopments.com/">Eller Developments</a>, said a business plan is complete for the project, which will be located on a 62-acre site located along a Union Pacific rail line adjacent to the city's industrial park. He said a groundbreaking is expected in the next 30 days. Construction is expected to be complete in early 2008, Hickman said.

 
 Eller Developments is a land development company that specializes in residential and retail projects. The company became a majority owner of the biodiesel project this fall, according to Hickman. He said the company purchased the project from the original group of 13 members. That group still has a minority ownership stake in the project.
 
 Hickman said Eller will be its own general contractor for the plant. <a target="_blank" href="http://www.crowniron.com">Crown Iron Works</a> will provide the process technology. Hickman said the 62-acre site will give the company "plenty of room to expand or install new technology."
 
 Located in northwest Iowa near the Minnesota border, Estherville is near several soy crush plants, Hickman said. He said the biodiesel plant will use soy oil initially, but be multi-feedstock capable. FC Stone will procure soy oil for the plant.
 
 There are five large-scale biodiesel plants under construction in Iowa with several more under development. Western Dubuque Biodiesel is a 30 MMgy plant going up near Farley. East Fork Biodiesel LLC is building a 60 MMgy plant in near Algona. Central Iowa Energy is building a 30 MMgy plant near Newton. Iowa Renewable Energy is building a 30 MMgy plant near Washington, and Freedom Fuels is working on a 30 MMgy plant in Mason City.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

 
 Posted: 11:14 a.m. CST Monday, November 20, 2006

Iowa biodiesel plant nearing construction

A recent <a target="_blank" href="http://www.energyfuturecoalition.org/pubs/RAND.pdf">study</a> released by a nonprofit research organization may give policy makers a financial reason to pursue policies boosting renewable energy, according to a Washington, D.C.-based public policy group. The Energy Future Coalition said findings by Rand Corp.'s study show that using 25 percent renewable energy by 2025 won't result in higher energy prices.
 
 The Energy Future Coalition promotes the 25 by '25 Initiative, which aims for a goal of 25 percent of the United State's energy being renewable by 2025. The coalition commissioned the study conducted by Rand Corp., a nonprofit research group that provides analysis on challenges facing the international private and public sectors. The report assessed the impact on U.S. energy expenditures of producing 25 percent of U.S. electric power and motor vehicle transportation fuels from renewable resources by 2025.
 
 David Gardiner, a senior advisor for the coalition, said the study shows that achieving renewable energy by 2025 is achievable, practical and saves money. "We think the results are going to be surprising for policy makers, the public and others that believe the old conventional wisdom that renewable energy doesn't accomplish much and is too costly," he said.
 
 The Rand study conducted 1,500 analyses using energy demand and supply projections prepared by the U.S. Energy Information Administration. "Renewable energy is shown in the simulations to lower total energy expenditures in virtually all cases in which all current energy price and technology cost trends continue," the report said.
 
 The analysis also found that renewable energy could produce 25 percent of U.S. electric power and motor vehicle fuels by 2025 at no additional cost to the economy, as long as renewable technology continues to improve at least 20 percent in the next 20 years relative to fossil fuel technologies, according to an Energy Future Coalition release.
 
 The group also said meeting interim goals, such as 10 percent renewable energy by 2015, would help ease the transition. The report said a lack of distribution infrastructure is a significant barrier to the increased use of ethanol.
 

 "25 by '25 has enormous applications for both national security and global warming," said Reid Detchon, the coalition's executive director. "Rand found that 25 by '25 will cut petroleum consumption by 2.5 million barrels a day and eliminate 1 billion tons of carbon dioxide emissions every year-all at little or no additional cost."
 
 Gardiner said the coalition is developing an implementation plan, which he hopes will lead to new policies at the state and federal level. He said the plan is slated for an early 2007 release. "Renewable energy, including biofuels, can play a much larger role in America's energy policy," Gardiner said.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 1:56 p.m. CST Monday, November 20, 2006

Policy group says study shows biofuels are affordable and achievable

A unique Michigan project will convert a hazardous waste treatment facility into a plant capable of producing biodiesel.
 
 Steve DiMaggio, CEO of Inkster, Mich.-based Advanced Resource Recovery LLC (ARR), is developing a 10 MMgy biodiesel plant called Advanced Biofuels LLC. The biodiesel plant, which is an addition to ARR's industrial waste recycling and treatment capabilities, will utilize existing infrastructure at the facility just outside of Detroit. 
 
 The move to biodiesel is a result of the loss of major manufacturing facilities that supplied ARR with waste. "Our industry is changing," DiMaggio said. "Much of the Midwest manufacturing has left the area."

 
 The existing facility treats liquid manufacturing waste. For example, DiMaggio said he obtains an oil emulsion from General Motors. ARR then separates the water, oil and solids. The oil is resold to companies such as asphalt manufacturers and the wastewater is treated at an on-site treatment plant. The remaining solids are pressed and put in a landfill.
 
 DiMaggio said the volume of liquid waste has dropped to the point where biodiesel became a viable venture. "Biodiesel happened to fit in perfectly," he said, referring to his plant's infrastructure.
 
 Equipment is being purchased for the project, DiMaggio said. He said he expects to start construction in spring of 2007 and have the plant operational by November 2007. The plant will use soy oil as feedstock.
 
 DiMaggio said the plant will be built and designed in-house, adding that engineering is underway. The biggest change in infrastructure will be to safely handle methanol, which is a flammable alcohol used to produce biodiesel.
 
 The project received $1.9 million in financial help from the state's 2006 <a target="_blank" href="http://www.michigan.org/medc/ttc/21stCentury/?m=14;1">21st Century Jobs Fund</a>. "A facility that was once part of a dying industry can be recycled to bring jobs, community revitalization and environmental stewardship to the 21st century," ARR's proposal said.
 
 The 21st Century Jobs Fund is a $2 billion, 10-year initiative administered by the Michigan Economic Development Corp. to accelerate the diversification of Michigan's economy. The commercialization component of the initiative devotes approximately $800 million for competitive-edge technologies in the targeted sectors of life sciences, alternative energy, advanced automotive materials and manufacturing and homeland security/defense.
 
 Michigan currently has two operating biodiesel plants. Ag Solutions Inc. produces 5 MMgy near Gladstone, and Michigan Biodiesel LLC completed work on its 10 MMgy plant in Bangor earlier this month. There are several projects under development.
 

 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 2:55 p.m. CST Tuesday, November 21, 2006

Michigan project to 'green' waste facility

Another biodiesel-invested company announced plans to boost capacity at its oilseed crush facilities. <a target="_blank" href="http://www.admworld.com">Archer Daniels Midland Co.</a> announced late yesterday it is planning to increase its North American oilseed crushing capacity through expansions at oilseed crushing plants in the United States and Canada. The move is partially spurred by the burgeoning demand for soy oil by the biodiesel industry.
 
 ADM joins <a target="_blank" href="http://www.bungenorthamerica.com">Bunge North America</a>, the North American operating arm of Bunge Ltd., which announced in October an expansion of its soybean processing plant in Council Bluffs, Iowa. The facility will have an annual crush capacity of nearly 77 million bushels upon completion in fall 2008. Carl Hausmann, president and CEO of Bunge North America, said the decision to expand was made in part by the growing biodiesel industry.
 

 ADM's expansions, which are scheduled to be completed in mid-2008, will support the company's two North American biodiesel facilities in Mexico, Mo., and Velva, N.D. ADM is building an 85 MMgy biodiesel plant in Velva, N.D., which is expected to start-up in April 2007. The company also has a stake in Mid-America Biofuels, a 30 MMgy plant that recently began production in Mexico, Mo. The plant was built by Crown Iron Works and ADM.
 
 "Expanding our crush capacity will enable us to meet the increased demands for vegetable oil and oilseed proteins, driven by the world's growing need for energy and food," said Scott Fredericksen, president of ADM's North American Oilseed Processing.
 
 Five of ADM's soybean crushing plants will be expanded in Quincy, Ill., Frankfort, Ind., Mexico, Mo., Fremont, Neb., and Des Moines, Iowa. Two canola crushing plants will be expanded in Velva, N.D., and Lloydminster, Alberta, Canada.
 
 Bunge and Biodiesel Investment Group LLC announced the creation of Biofuels Company of America, a joint venture to build a 45 MMgy biodiesel plant adjacent to Bunge's soy processing facility in Danville, Ill.
 		
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 

 Posted: 11:56 a.m. CST Tuesday, November 28, 2006

ADM announces plans to expand crush capacity

A start-up company spearheaded by executives from <a target="_blank" href="http://www.biorefining.com">Biorefining Inc.</a> announced plans Monday to build three 30 MMgy biodiesel plants in Minnesota and Illinois.
 
 Biorefining Inc. has a 10 percent equity stake in <a target="_blank" href="http://www.argusbiofuels.com">Argus Biofuels LLC</a>, according to CEO Wes Hayne. Hayne and COO Thom Menie also hold executive management positions with Biorefining Inc., a Golden Valley, Minn.-based biotechnology company that developed a "biomilling process," designed as a front-end addition to ethanol plants. The process reduces the corn kernel to its basic components prior to the ethanol process.
 
 "The development of biodiesel is tracking a lot in the same way ethanol developed, but on an explosive timeline," Hayne said. "I think we're in one of the most exciting areas for energy development right now."
 
 Hayne and Menie are joined by Vice President of Engineering Niles Hushka and CFO Peter Vezmar. Hushka is the CEO of <a target="_blank" href="http://www.kljeng.com/">Kadrmas Lee & Jackson Solutions Company</a>, a Bismarck, N.D.-based firm building Magic City Biodiesel LLC, a 30 MMgy biodiesel plant in Minot, N.D. Hayne said Kadrmas Lee & Jackson will build the biodiesel facilities.

 
 Hayne said he expects to have the first plant operational by the first quarter of 2008. The plants will use multiple feedstocks.
 
 An Argus press release said the company will take advantage of economic incentives such as Job Opportunity Building Zones and tax increment financing zones, which are tax-free development programs promoting economic development in Minnesota and Illinois.
 
 Minnesota has three large-scale biodiesel plants in operation. FUMPA Biofuels produces 3 MMgy in Redwood Falls. Minnesota Soybean Processors operates a 30 MMgy plant in Brewster, and SoyMor has a 30 MMgy plant in Glenville. Stepan Co. operates Illinois' largest biodiesel plant, a 21 MMgy facility near Joliet.
 
 Argus Biofuels' Web site, www.argusbiofuels.com, is expected to launch the first week of December.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 8:23 a.m. CST Wednesday, November 29, 2006

Minnesota start-up company announces biodiesel plans

Construction has started on another Indiana biodiesel plant. <a target="_blank" href="http://www.e-biofuels.com">E-Biofuels LLC</a>, which held a ceremonial groundbreaking Nov. 1, is conducting site work on what will eventually be a 25 MMgy biodiesel facility, according to CEO Chad Ducey. 

 
 Brothers Craig and Chad Ducey are managing partners of the company. In 2004, the pair created <a target="_blank" href="http://www.werksmanagement.com">Werks Management</a>, an engineering services company. Chad Ducey said the idea for a biodiesel plant came after working on the permitting and environmental work for Integrity Biofuels, a 10 MMgy biodiesel plant near Morristown, Ind. "We were able to work with one of the first biodiesel facilities in Indiana, which really prompted our interest in this great industry," he said.
 
 Construction on the Middletown plant began in mid-November, according to Ducey. He said he expects foundation work to begin soon. Ryerson Construction is building the facility using e-Biofuels' in-house design. 
 
 The plant, which is located on a six-acre site on the west edge of Middletown, is expected to start-up in April 2007. The process and storage tanks will be housed in a 28,000-square foot steel building, Ducey said.
 
 E-Biofuels will market its own biodiesel, Ducey said. The facility will start-up with soy oil as feedstock but other sources may be used once operational.
 
 Indiana had two biodiesel plants begin producing fuel this year. Evergreen Renewables is a 5 MMgy plant located in Hammond. Integrity Biofuels is a 10 MMgy plant near Morristown. The state will also be home to one of the nation's largest biodiesel plants when Louis Dreyfus Agricultural Industries LLC completes its 80 MMgy plant in Claypool. That project is slated to start-up in October 2007.
 
 e-Biofuels LLC-Middletown, Indiana
 Design/builder: Ryerson Construction/e-Biofuels LLC
 Capacity: 25 MMgy
 Feedstock: soy oil

 Biodiesel marketer: e-Biofuels LLC
 Start of construction: November 2006
 Target completion date: April 2007
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 8:58 a.m. CST Wednesday, November 29, 2006

E-Biofuels building Indiana plant

A new Michigan committee charged with developing the state's alternative fuels industries met for the first time today in Lansing, Mich. The 26-member <a target="_blank" href="http://www.renewablefuelscommission.org">Michigan Renewable Fuels Commission</a> was created by Gov. Jennifer Granholm to discuss the opportunities, challenges and recent successes in the state.

 
 Few details were immediately available following the meeting, although the group is expected to create a roadmap for the state to increase the research and production of ethanol, biodiesel and other alternative fuels. The committee is chaired by Michigan Department of Agriculture Director Mitch Irwin. Members also include Steven Chester, director of Michigan's Department of Environmental Quality, NextEnergy CEO James Croce, Great Lakes Ethanol LLC Chairman Jeff Ehlert, and Ag Solutions Inc. President Dick VandeVusse.
 
 Great Lakes Ethanol is a 57 MMgy ethanol plant under construction in Riga, Mich. The project is owned by Midwest Grain Processors LLC, which operates a 100 MMgy plant in Lakota, Iowa. Ag Solutions Inc. is a 5 MMgy biodiesel plant that opened earlier this year in Gladstone, Mich.
 
 The commission was created earlier this year as part of a seven-bill alternative fuels package Granholm signed into law.
 
 "We are determined to make Michigan a leader when it comes to produce both alternative fuels and the technologies that harness them," Granholm said. "This new industry will produce tens of thousands of good paying jobs, and we want to see those jobs in Michigan."
 
 Another northern state is developing a group focusing on ethanol. On Nov. 2, Minnesota Agriculture Commissioner Gene Hugoson called for a working group to focus on cellulosic ethanol. The group will include industry and government officials to address the challenges and chart a course for Minnesota cellulosic ethanol production. "Minnesota has the resources, the energy and the experience to lead the nation in this new and promising technology," Hugoson said. "Just as we have done with ethanol from corn, we can continue to lead the nation toward the next generation of homegrown, renewable energy."
 	
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

 
 Posted: 3:25 p.m. CST Thursday, November 30, 2006

Michigan governor pushes renewable fuels

<a target="_blank" href="http://www.bungenorthamerica.com">Bunge North America</a> continues to make its presence felt in the biodiesel industry. The company has been extremely active in the industry this year, including construction on its Danville, Ill., biodiesel plant.
 
 A ceremonial groundbreaking for the plant was held Nov. 3, according to the Illinois Soybean Association. A Bunge spokeswoman told BiodieselMagazine.com that work on the project has commenced. The 45 MMgy plant is expected to start up in the first quarter of 2008.
 
 The project is a joint venture, called Biofuels Company of America LLC, between Bunge North America and Memphis, Tenn.-based Biodiesel Investment Group LLC. Bunge North America is the North American operating arm of Bunge Limited.
 
 The Biodiesel Investment Group announced Sept. 21 a $5 million equity interest investment by Dallas-based biodiesel producer and distributor Earth Biofuels Inc. The Bunge spokeswoman didn't disclose if Earth Biofuels will be marketing the Danville plant's biodiesel.
 
 The facility is located adjacent to Bunge's soy crushing and corn milling plants. "Bunge already has a strong presence in Danville and we look forward to solidifying a long-term local market for soybean producers in the region with the construction of this plant," said Larry Clarke, senior vice president and general manager of Bunge Oilseed Processing.
 
 Bunge is supplying the 30 million bushels of soybeans needed annually for the project. 
 

 This year Bunge jumped into biodiesel in a big way. In August the company announced it made a minority investment in and entered into a strategic relationship with Ralston, Iowa-based Renewable Energy Group Inc. (REG) for the production of biodiesel. As part of the relationship, Bunge will supply raw material, risk management and logistics expertise to REG, which intends to collocate biodiesel facilities with Bunge oilseed processing facilities.
 
 Bunge's Oilseed Processing Division operates crushers in Danville, Council Bluffs, Iowa, Cairo, Ill., Decatur, Ala., Emporia, Kan., Marks, Miss., Marion, Ohio, Decatur, Ind., and Morristown, Ind. Upon completion of its expansion, the Council Bluffs plant will be one of the nation's largest oilseed crush facilities.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 1:48 p.m. CST Friday December 1, 2006

Construction underway on Bunge's Illinois plant

A grand opening was held today for the first of <a target="_blank" href="http://www.bioeasi.com">Energy Alternative Solutions Inc.'s</a> (EASI) seven planned California biodiesel plants. The Watsonville, Calif.-based company hailed the opening of its 1 MMgy plant in Gonzales.
 

 Kahului, Hawaii-based <a target="_blank" href="http://www.biodiesel.com">Pacific Biodiesel</a> began construction on the plant in October. EASI President and CEO Richard Gillis told BiodieselMagazine.com in November that the plant will be scaled up to 3 MMgy after it begins production in January 2007. 
 
 The $1.3 million, 10,000-square foot plant will use a combination of virgin vegetable oils and recycled cooking oil as feedstock. "We want to create a community-based, closed-loop system in which we draw upon local, renewable resources such as crops and restaurant oil to produce biofuel for the local community," Gillis said.
 
 EASI is privately held and was founded in March 2006. Gillis said the company intends to distribute its fuel through local distributors including <a target="_blank" href="http://www.coastoil.com/coast-about.html">Coast Oil Co. LLC</a>.
 
 EASI's corporate fact sheet indicates the company is planning at least six more plants in the next five years with a combined capacity of 25 MMgy. The company's next project is being planned in Watsonville, Calif.
 
 Imperial Western Products is the California's largest biodiesel producer, with an 8 MMgy plant in Coachella, Calif. Imperial is also the state's only <a target="_blank" href="http://www.bq-9000.org">BQ-9000</a> accredited producer. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program.

 
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 4:15 p.m. CST Friday December 1, 2006

EASI holds grand opening for California plant

Extreme sports and biodiesel-the two don't appear to have much in common, but for experienced kayakers Seth Warren and Tyler Bradt, they go hand in hand. The two founded the Biofuels Education Coalition in 2004 after touring Africa on a kayaking expedition and decided to use their celebrity status within the international whitewater community for something positive.
 
 Since March 2006 Warren and Bradt have traveled across Canada and the United States from the northern-most tip of North America, across the Mexican border and into Central America in a 100 percent biodiesel-compatible fire truck. They've stopped along the way at schools and universities to give speeches and demonstrations of the benefits of biofuels, as well as explore. "We're going surfing and kayaking and skateboarding," Warren said. "This whole trip we are using action sports to draw and appeal to youth."
 
 Through what they have coined the Oil + Water Project, Warren and Bradt have had the opportunity to educate young adults about the practicality of producing biofuels, such as biodiesel, using locally grown crops and resources. They have been speaking to environment, science and technology students at universities, and will continue heading south using different local oil feedstocks to fill their truck until they reach Southern Chile and Argentina, as well as the end of their 13-month tour in April 2007.
 
 "Up in Alaska we used a bunch of salmon oil-a by-product from the fishing industry," Warren said. "The idea is to use as much native plants and animals from the different areas we go to."

 
 Since crossing the Mexican border, the truck has been fueled mostly by pig lard, Warren said. As of Nov. 20, Warren and Bradt had traveled approximately 28,000 miles without using a drop of petroleum product.
 
 The two designed a system for their demonstration vehicle that can run off of several feedstocks, and the truck can travel up to 2,000 miles before needing to refuel the 180-gallon storage compartments. The system features an on-board vegetable oil seed press, a large Plexiglas demonstration window, a video presentation table, and a rooftop two-room tent cooled by solar panel-powered air conditioning.
 
 Warren said the most interesting thing he has learned has been the contrast between biodiesel usages in different countries. For example, in Guatemala they found one small biodiesel refinery started by college students.
 
 In Honduras, biodiesel is available at the pump because a former attempt at developing vegetable oil and soap industries has produced plentiful feedstock from African palm plants, Warren said. A biodiesel pilot project was created as a means to utilize the palm, and the fuel is being used in the public transportation sector, he said. 
 
 Warren and Bradt also met with the Minister of Environment in El Salvador, who has interest in pursuing alternative fuels.
 
 After completing their trip in April 2007, Warren and Bradt plan to finish a biodiesel documentary they have been filming for presentation at the 2008 National Biodiesel Conference, as well as begin planning the next route for the Oil + Water Project. In the future, the two want to incorporate all alternative energy sources into their curriculum. "Our No. 1 goal is just to show as many people about this fuel as possible," Warren said. "They just haven't been educated about it."
 
 To follow the Oil + Water Project south of the border, visit <a target="_blank" href="http://www.oilandwaterproject.org/blog">www.oilandwaterproject.org/blog</a>. 
 

 Lindsey Irwin is a Biodiesel Magazine staff writer. Reach her at <a href=mailto:"lirwin@bbibiofuels.com">lirwin@bbibiofuels.com</a> or (701) 746-8385.
 
 Posted: 1:35 p.m. CST Monday December 4, 2006

412-1294329532.jpg

Biofuels Education Coalition's project raises awareness

The <a target="_blank" href="http://www.unitedsoybean.org">United Soybean Board</a> (USB) announced new officers today while laying out priorities for its nearly $43 million soy checkoff budget for the upcoming year.
 
 Ensuring biodiesel quality was near the top of the list of priorities discussed during this week's USB meetings, according to Vice Chairman Ike Boudreaux. "Every time the topic of biodiesel was discussed, quality was the subject," he said. 
 
 The USB's annual meeting, held this week in St. Louis, Mo., was preceded by two soybean industry strategic planning sessions. A Connections meeting focused on emerging issues in the next three to five years. Soy 2020 was a vision session to define success for the soybean industry in the year 2020. "This is a changing industry," said Chairman Eric Niemann. "We have the opportunity to look out to the year 2020 and see where we're headed and direct our resources in the best possible way."

 
 Niemann emphasized the importance of biodiesel quality and the BQ-9000 program, which is the biodiesel industry's voluntary fuel quality assurance program. A USB survey found that nearly 50 percent of its soybean farmers use biodiesel in farm equipment.
 
 The group discussed the global oilseeds market. U.S. producers exported approximately 1.2 billion bushels of soybeans in the past year, Niemann said. "Looking to the biofuels market, it's not just happening (in the United States)," he said. "A biofuels facility opens, on average, once every day somewhere in the world."
 
 Opening global trade markets with China and India will be priorities for 2007, the USB said. In 2006 U.S. soybean farmers partnered with Paraguay, Argentina and Brazil to work on reverse marketing efforts in India. 
 
 Trans fats are becoming another significant issue to soybean farmers. On Tuesday the New York City Board of Health voted unanimously to require its restaurants to remove artificial trans fat over the next 18 months. Boudreaux said soy farmers planted approximately 1 million acres of low linolenic soybeans in 2006. 
 
 In September, Bunge and DuPont announced they are planning to increase their supply of low linolenic soybean oil to the food industry as a result of growing demand for trans fat alternatives. "Will we be able to fill that demand that is out there?" Boudreaux said. "It was a challenge, but I think we are addressing that issue."
 
 Meeting soy demand may be more difficult in 2007 as farmers increase corn acreage as corn prices rise. Niemann recognized the potential for fewer soy acres, but said that record supplies are being carried into 2007.
 
 Other new USB members include Secretary Chuck Friedrich and Treasurer Kent Gronlie. USB consists of 64 farmer-directors who oversee the investments of the soybean checkoff on behalf of all U.S. soybean farmers.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636. 

 
 Posted: 9:17 a.m. CST Thursday December 7, 2006

USB lays out '07 priorities

Support appears to be growing for a10 percent Canadian renewable fuels standard (RFS), according to several speakers at the opening day of the 3rd Annual <a target="_blank" href="http://www.canadianrenewablefuelssummit.com">Canadian Renewable Fuels Summit</a> (CRFS) in Banff Springs, Alberta. Saskatchewan Premier Lorne Calvert said the "timing is right" for expansion of the Canadian renewable fuels industry.
 
 In addition, Calvert said the country should have separate use requirements for biodiesel and ethanol. He said his province is pushing for a national 10 percent renewable fuels standard by 2010. He also said there should be a 2 percent biodiesel requirement by 2010, which would increase to 5 percent by 2015. "It is vital that the national government set separate national targets for ethanol and biodiesel," Calvert said. "A single biofuels mandate could be captured by ethanol alone … We believe it is important to set both targets."
 
 In June, the Saskatchewan Biodiesel Development Task Force released a report that recommended a federal renewable fuels strategy with a biodiesel target of 2 percent by 2010 and 5 percent by 2015. Clay Serby, deputy premier of Saskatchewan, told Biodiesel Magazine in July that his province is lobbying for a 10 percent standard. 
 
 Several CRFS speakers voiced support for a 5 percent RFS, but Calvert and Lionel LaBelle, president of the Saskatchewan Ethanol Development Council, said the goal should be 10 percent. LaBelle said the development of a renewable fuels industry would help farmers, which received the worst net farm income in the history of Western Canada the past three years. He said 86 percent of the nation's farmland is located in the region.
 
 LaBelle also said Canada should mirror U.S. support programs, such as the now defunct Commodity Credit Corp.'s Bioenergy Program. The U.S. RFS calls for 7.5 billion gallons of renewable fuel by 2012. ICM Inc. President Dave Vander Griend said the United States is on pace for 8.2 billion gallons of ethanol capacity by the end of 2007. He said that production level would consume approximately 30 percent of the nation's corn crop.
 
 Calvert said any incentive program should put an emphasis on farmer-owned facilities. He said his province would award a CAN15-cent-per-liter credit to fuel distributors that purchase at least 30 percent of their ethanol from farmer-owned facilities.
 Calvert also said Saskatchewan should use renewable energy to meet one third of its energy requirements by 2030. "That's our vision," Calvert said. "It's ambitious, but in my opinion it's possible. We're serious about renewable energy and renewable fuels, as we should be."

 
 Canada has eight operating ethanol plants with 615 MMly (162 MMgy) capacity. Two additional plants with 215 MMly (57 MMgy) of capacity are under construction. Terra Grain Fuels is also in the initial stages of building a 150 MMly (40 MMgy) wheat-fed ethanol plant near Belle Plaine, Saskatchewan.
 
 Canada has two large-scale biodiesel plants. Biox Corp. operates a 16 MMly (4 MMgy) plant in Hamilton, Ontario. Rothsay Biodiesel operates a 35 MMly (9 MMgy) plant in Quebec.
 
 Plans are in place to expand crush capacity in the country. Two projects are slated for Yorkton, Saskatchewan. In September, Louis Dreyfus announced plans to build a canola crush facility. A second company, James Richardson International, also announced in September plans to build a canola crush facility in Yorkton. Barb Isman, president of the Canola Council of Canada, said 3 million metric tons of additional canola crush capacity was announced this year. Canada's 2006 canola crop is estimated at 9.1 million metric tons.
 
 Dave Nilles is Online Editor for Biodiesel Magazine. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.
 
 Posted: 8:15 p.m. CST Monday, December 11, 2006

413-1294329533.jpg

414-1294329534.jpg

415-1294329534.jpg

Support growing for 10 percent Canadian RFS

The <a target="_blank" href="http://www.northerncanola.com/">Northern Canola Growers Association</a> (NCGA) unveiled its new campaign yesterday to differentiate canola-based biodiesel from methyl esters of a different variety. At the NCGA's Canola Biodiesel Forum on Dec. 13 in Minot, N.D., executive director Barry Coleman announced it has trademarked the name Biola Fuels, hoping canola biodiesel producers and distributors will latch onto it and sublicense for use. Why? Biodiesel made from canola is known for its stability and good performance in cold weather. Capitalizing on these beneficial properties, NCGA anticipates this move to be a marketing success for everyone involved, from the U.S. and Canadian canola farmers down to the fuel's end-users. Interested parties should contact the Northern Canola Growers Association for more information. 

 
 
 Ron Kotrba is a Biodiesel Magazine staff writer. Reach him at <a href=mailto:"rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 746-8385.
 
 Posted: 8:55 a.m. CST Thursday, December 14, 2006

November 2006

Business Briefs

Northwest biofuels industry leaders form new trade group

Axiom Energy announces Australian biodiesel IPO

Tri-State Biodiesel signs sales contract, starts equity drive

ABG partners with ArcLight Capital Partners

Albemarle Corporation launches new biodiesel program

USSEC acquires publicly traded company

Columns

Editor's Note

NBB In Sight

Legal Perspective

Talking Point

Featured

Enhancing the Burn

The Matchmaker

Borderless Biodiesel

Reflux and Recovery

Food Waste to Fuel Tanks

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

Business Briefs

Northwest biofuels industry leaders form new trade group

Axiom Energy announces Australian biodiesel IPO

Tri-State Biodiesel signs sales contract, starts equity drive

ABG partners with ArcLight Capital Partners

Albemarle Corporation launches new biodiesel program

USSEC acquires publicly traded company

Columns

Editor's Note

NBB In Sight

Legal Perspective

Talking Point

Featured

Enhancing the Burn

The Matchmaker

Borderless Biodiesel

Reflux and Recovery

Food Waste to Fuel Tanks

November 2006