Over the past several weeks, Congress has begun focusing more attention on energy-related issues. The Energy, Agriculture and Tax committees are beginning to hold hearings in this arena. The National Biodiesel Board (NBB) expects to take part in some of these hearings, so this month, I would like to spend some time focusing on the industry's priority agenda before the House and Senate tax writing committees.
 
 As we have clearly seen, tax policy can have a significantly positive impact on our industry for the benefit of the entire nation. Tax policy can also have a significantly negative impact on the future of our industry. The House Ways and Means, and Senate Finance, committees have jurisdiction over many of the most critical issues likely to be considered this year that will shape our industry for years to come. The NBB is actively engaged in the industry's tax agenda through communication with these important committees. We need to ensure that legislation doesn't carry within it harmful provisions that could look positive on the outside, but actually harm biodiesel.

 
 The extension of the volumetric biodiesel tax credit-the blender's credit-is at the top of the list of issues we are working to get completed this year. Achieving our tax credit extension will take an enormous amount of work by the NBB, along with our members and stakeholders. The bad news is that most of our industry assumes that an extension of the tax credit is a forgone conclusion. A survey taken of our membership prior to the 2007 biodiesel conference indicated that 99 percent of our members believed that the tax credit would be extended this year. The good news is that we have good political conditions and a great story to tell. 
 
 We can affirmatively demonstrate all of the benefits of the biodiesel tax credit. Since the passage of the tax credit, approximately 75 plants have come online, increasing production from approximately 25 million gallons in 2004 to approximately 225 million gallons in 2006. There are 85 plants currently under construction throughout the country. The tax credit has indeed enhanced energy security by adding refinery capacity and fuel to our nation's energy supply. It has also benefited American farmers and the economy. 
 
 Continuing this credit for an extended period beyond its current sunset is good public policy and an excellent investment by the federal government. This credit will ensure a vibrant biodiesel industry that will contribute significantly to our nation's energy security, environmental stewardship, public health and economy. The additional tax revenues generated by a profitable biodiesel industry will be significantly larger than the value of the federal tax incentives provided to the industry. Assuming that the biodiesel tax credit is extended past 2008, this program would cost $3.5 billion by 2015. However, the industry will generate $8.3 billion of new revenue for the federal treasury for a positive net balance of $4.8 billion. This doesn't assume the savings generated by the reduction in farm payment programs.
 
 While biodiesel has made tremendous progress in recent years because of the tax incentive, the biodiesel industry is still in its infancy. It is where the ethanol industry was in 1982. The ethanol industry didn't achieve the success that it has today in just two short years. It takes decades for an energy industry to achieve a level of maturity and sustainability within a broader, highly unstable energy market. However, complicating our extension efforts is the ongoing effort by those seeking a broad interpretation from the Department of Treasury and Section 1346 of the Energy Policy Act of 2005 (EPAct 2005). As passed, this provision of EPAct 2005 was inexplicably intertwined with the biodiesel tax credit. A broad interpretation of the Section 1346 provision threatens our ability to secure a long-term extension of the biodiesel tax credit as it would very likely balloon the score, or cost, of the credit. 
 Further, a broad interpretation of the EPAct 2005 provision would have an unintended consequence from its original objective by providing a tax credit to entities that already have infrastructure in place. These entities would additionally threaten the sustainability of the biodiesel industry, as they will compete against our producers for the raw materials necessary to produce biodiesel.
 
 Please join us in staying alert to the interpretation of eligibility for the blender's credit. One action could be to contact your representatives and senators to warn them of what a broad interpretation of this policy could mean. Members of Congress can, in turn, contact the chairs of the Ways and Means, and Finance, committees and ask them to work with the Energy, Ag and Tax committees, and the Department of Treasury to ensure a narrow interpretation of the provision. 
 
 The biodiesel tax credit has proven to be effective in stimulating investment and rural development, benefiting domestic agriculture and job creation, and adding refining capacity to the nation's energy supply. It is imperative that this tax credit be extended in the 110th Congress, or the terrific momentum and success that has been achieved to date will be dealt a substantial setback both for the industry and the country, as a whole.

NBB In Sight

When executives from West Coast biodiesel producer Imperium Renewables first approached the producers of MTV's "Pimp My Ride" television show last fall it may have seemed like an unlikely partnership between two very different entities in very different markets. However, the outcome-an 800 horsepower biodiesel-powered 1965 Chevrolet Impala that gets 25 miles to the gallon-has proved that the two were perfectly matched.
 
 Just as it is Imperium's goal to educate American consumers about the benefits of biodiesel-especially younger drivers between 18 and 24 years old-MTV's year-long campaign, "Break The Addiction," charges young people to make everyday choices to help curb the impact of global climate change and preserve the environment. With the help of diesel engine conversions expert Jonathan Goodwin and Galpin Auto Sports in Southern California, Imperium and MTV were able to create the ideal "Green Machine" from an American classic.
 
 "This car set a new standard and even impressed me as far as what it could do and what it could achieve," said Goodwin, who owns a business that specializes in converting GMC Hummers to diesel so they can run on alternative fuels. "The owner of the car is actually a friend of mine and he had rap star and hip hop singer Dr. Dre offer $250,000 for it. I know General Motors was interested in it, as well as Galpin Auto Sports, my company SAE Energy, and Imperium was also interested in purchasing the car."
 
 The idea began with Martin Tobias, CEO of Imperium, who decided he wanted a new biodiesel-powered car but was irritated with how little selection exists in the United States and decided to try and build his dream car. "What I wanted was an American muscle car with tire-burning acceleration and all the great 1960s American muscle car stuff, but with a diesel engine in it that can run on 100 percent biodiesel," Tobias said. He proposed the idea of building the car to the "Pimp My Ride" producers, who automatically loved it.
 
 The majority of the filming for the show took place in Galpin Auto Sports' garage, but there were portions shot at Imperium's refinery in Seattle, as well as the nearby canola fields that supply the plant for its biodiesel production, Tobias said. Imperium's flagship biodiesel refinery is slated to begin producing in July in Grays Harbor, Wash. The 100 MMgy facility will be the largest biodiesel plant in the country. The episode will also feature a drag race at Pomona Raceway between the upgraded Impala and a Lamborghini. California Gov. Arnold Schwarzenegger attended the race.
 
 As a result of the project, Tobias and the Schwarzenegger have entered negotiations with Goodwin to convert their own vehicles-Tobias' brand new Cadillac Escalade EXT and a 1987 Jeep Grand Wagoneer for Gov. Schwarzenegger. Both projects are scheduled to be completed this summer. Goodwin has also received interest from the Discovery Channel, which may begin filming a television series based on the technologies developed by his company, SAE Energy.
 
 For Tobias, the partnership represents the expansion of the renewable fuels industry overall. "We hope the industry grows and adds new customers from all walks of life and this is part of our work to make that happen," Tobias said. "What the National Biodiesel Board does with the big fleets and the National Trucking Association is important, but I also think work with consumers is important as well."
 
 The Earth Day "Pimp My Ride" episode can be viewed on MTV on Sunday, April 22, at 1 p.m. ET/PT and will also air on MTV2 And MTV Tr3s.
 

 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: 1:36 p.m. CDT Friday, April 13, 2007

625-1294329681.jpg

Imperium Renewables partners with MTV's "Pimp My Ride" for special Earth Day episode

Pennsylvania's biodiesel producers are banding together to coordinate a push for in-state production incentives and fuel quality enforcement.
 
 Ben Wooten of Keystone Biofuels said the Pennsylvania Biodiesel Producers Group was recently formed to provide "one voice for biodiesel in Pennsylvania." The commonwealth has five commercial-scale biodiesel producers.
 
 Wooten said the group has met three times and is focusing on two agenda items-in-state incentives and fuel quality standards. "There is a lot of Midwest biodiesel coming in that's cheaper than we can produce at," he said. "We could level out the playing field with in-state incentives."
 	
 Focusing on fuel quality would lead to enforcement of ASTM-spec biodiesel, Wooten said. He said Keystone Biofuels is going through the BQ-9000 accreditation process. BQ-9000 is the biodiesel industry's voluntary fuel quality assurance program.
 	

 Wooten said he hopes the group will play a role in developing policy. He said there has been discussion about legislation that would require a B2 blend in Pennsylvania's diesel fuel supply. The commonwealth would join a growing list of states considering similar requirements, including Montana, New Mexico, Missouri, Oregon and Florida.
 	
 Wooten said the Pennsylvania Biodiesel Producers Group was a stakeholder in writing a B2 bill, which is expected to be introduced into the Pennsylvania General Assembly by Sen. Andrew Dinniman, who is a member of the Environmental Resources & Energy Committee.
 	
 Pennsylvania isn't the only eastern state with a newly created biodiesel group. In February, the Tennessee Biodiesel Producers Coalition was announced in Memphis, Tenn., "in order to promote the biodiesel industry, educate the public and government officials on the benefits of biodiesel, and encourage the consumption of biodiesel in the state."
 	
 Keystone Biofuels was the Pennsylvania's first commercial-scale biodiesel producer. The company has operated a 2 MMgy plant in Shiremanstown, Pa., since January 2006. The plant is in the midst of an expansion to 12 MMgy. Wooten said process equipment and tanks are expected to arrive on site by May. The project is expected to start-up by the end of July. Upon completion Keystone Biofuels will be the state's largest producer until Lake Erie Biofuels' 45 MMgy plant comes on line later this year. 
 	
 Other biodiesel producers in Pennsylvania include Biodiesel of Pennsylvania's 3.6 MMgy plant in White Deer, United Oil Co.'s 2 MMgy plant in Pittsburg, Agra Biofuels' 3 MMgy plant in Middletown and United Biofuels' 1 MMgy plant in York.
 
 Dave Nilles is Contributions Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 9:46 a.m. CDT Tuesday, April 10, 2007

Pennsylvania biodiesel producers form group

The renewable fuels standard (RFS) was signed into law as part of the Energy Policy Act of 2005. Today the U.S. EPA formally announced how the program will be implemented.	
 	
 The EPA's long-awaited announcement finalizes the national renewable fuel program. The lengthy document establishes renewable fuel standards, responsibilities of refineries and other fuel producers, a trading system and other compliance mechanisms, and recordkeeping and reporting requirements.

 	
 U.S. EPA Administrator Stephen Johnson, DOE Secretary Samuel Bodman and National Highway Safety Administrator Nicole Nason discussed the standard in a press conference in Washington, D.C. Johnson said the RFS is an important first step toward meeting President George W. Bush's plan to reduce U.S. gasoline consumption by 20 percent in the next decade.
 	
 Johnson said the program will cut petroleum use by nearly 4 billion gallons by 2012. The increase in renewable fuels will decrease greenhouse gas emissions by up to 13 million metric tons.
 	
 Bodman said that move sends a signal to private investors that government policy supports investment in the renewable fuels industry. 
 
 "The consistent commitment the federal government has shown in developing a renewable fuels industry in this country is just beginning to pay off," said Renewable Fuels Association President Bob Dinneen. "The RFS, together with incentives for renewable fuel use, are helping to develop an industry already contributing to a more sustainable energy future."
 	
 The program largely mirrors the proposed program, with some revisions reflecting continued input from stakeholders during the formal comment period.
 
 The EPA released its proposed rulemaking Sept. 22, 2006. It then took public comments to craft the final ruling.
 	
 The development of a renewable identification number (RIN) program was one of the questions that were ironed out. A RIN must be assigned by a renewable fuel producer or importer to every batch of fuel produced by a facility located in the contiguous 48 states.
 
 Information on the renewable identification numbers (RINs) can be found beginning on page 69 of the ruling: <a href="http://www.epa.gov/otaq/renewablefuels/rfs-preamble.pdf">http://www.epa.gov/otaq/renewablefuels/rfs-preamble.pdf</a>.

 
 The ruling becomes effective Sept. 1, 2007. More information, including a 350-page regulatory impact analysis and a review of public comments, is available here: <a href="http://www.epa.gov/otaq/renewablefuels/#rfs040907 ">http://www.epa.gov/otaq/renewablefuels/#rfs040907 </a>
 
 Dave Nilles is Contributions Editor for Biodiesel Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
 
 Posted: 2:30 p.m. CDT Tuesday, April 10, 2007

EPA releases final RFS implementation plans

In my March Editor's Note, I said the U.S. biodiesel industry is not as much hindered by its ability to win over consumers, engine manufacturers and automakers as it is limited by production costs, feedstocks and fuel quality concerns. My point was that the industry's goal of 5 percent market penetration by 2015-an outstanding target, by the way-should be more of a floor than a ceiling. 
 
 Assuming higher blends such as B20 will gain widespread acceptance is critical to this line of thinking, of course, and so I was glad to see that by mid-March, industry headlines started to validate my assertion. On March 21, for example, Cummins Inc. announced it had approved B20 for use in many of its engines. This was a consequential decree. After all, we're talking about an engine manufacturer that serves customers in 160 countries through 550 company-owned and independent distributor facilities, and more than 5,000 dealer locations. Keep in mind that these are not uncommon engines. No, we're talking about the distillate-sipping machines under the hoods of everything from medium- and heavy-duty trucks and motor homes to school buses, emergency vehicles, urban buses and shuttles. 
 
 Why did Cummins do it?
 
 Well, to start, there's a real groundswell of support from consumers for higher biodiesel blends, but there are concrete, technical reasons, too. Cummins decided to upgrade its previous position on the use of biodiesel-which limited the recommended use to B5-for three key reasons: 
 
 --The ASTM D 6751 specification for B100 now includes an important stability specification. 
 
 --The availability of quality fuels from BQ-9000 certified marketers and accredited producers is growing rapidly. 
 
 --Cummins has completed the necessary testing and evaluations to ensure that customers can reliably operate their equipment with confidence using high-quality B20. 
 
 That wasn't all March had in store for B20. Earlier in the month, a private B20 summit was held in Detroit. The event was hosted by NextEnergy and, according to OPIS's Ethanol & Biodiesel Information Service, attended by approximately 75 people including representatives of the National Biodiesel Board, DaimlerChrysler, Ford, General Motors, Volkswagen, Toyota, the Alliance of Automobile Manufacturers, John Deere, Cummins and Caterpillar. The purpose of the summit was to identify obstacles to biodiesel blends above 5 percent. I should note that while engine manufacturers like Cummins and New Holland have approved the use of B20, most auto manufacturers still don't cover the fuel under vehicle warranties-although DaimlerChrysler has approved the use of B20 in limited circumstances.

 
 The dialogue at the summit apparently centered around B20 emissions, effects on engines, and the improvement of fuel-quality monitoring efforts. There's already an ASTM spec for B100-and ASTM recently approved new limits for oxidative stability and other parameters-but industry leaders say regulators and automakers want the industry to approve a finished B20 standard before they cozy up to the blend. An ASTM spec for B20 is in the works, and the industry is dutifully working to develop a standard that can be universally applied to all diesel vehicles. 
 
 While serious challenges remain for B20, it is clear that acceptance of this higher blend is growing. Just recently, for example, New Mexico Gov. Bill Richardson (who was expected to sign a future state B5 mandate into law) called for a state B20 standard by 2020. These and other developments tell me the idea of biodiesel achieving a 10 percent market share by 2010 or 2015 isn't such a crazy idea after all. In fact, I'm going to go out on a limb and say it's flat out probable. 
 
 Tom Bryan
 Editorial Director
 tbryan@bbibiofuels.com

602-1294329666.jpg

Rising B20 acceptance supports notion of higher market penetration

Editor's Note

A project that added biodiesel blending capabilities to Marathon Oil Corp.'s Kramer's Lane Terminal in Louisville, Ky., has been completed, the company recently announced. The Kentucky Clean Fuels Coalition, the Kentucky Soybean Board and National Clean Cities Inc. collaborated with Marathon to attract grants that supported the installation of the new blending equipment and services. Marathon will now market B2 and B5 blends from this location. The fully automated blending system is the first of its kind in Kentucky.

Marathon offers biodiesel at Louisville terminal

The equity drive ran longer than anticipated for Raccoon Valley Bio-Diesel, a proposed 60 MMgy biodiesel plant and crude vegetable oil refinery in Storm Lake, Iowa. The company began its equity drive in December and had not completed it by the beginning of March. The offering was open only to Iowa residents. The company said it can begin construction immediately upon the conclusion of a successful equity drive and closing of debt financing.

Raccoon Valley Bio-Diesel equity drive continues

Texas-based biodiesel producer Safe Renewables Corp. and its newly acquired marketer Austin Biofuels LLC have joined forces with Midtex Oil LP, a petroleum wholesale company, to expand the availability of biodiesel to motorists in and around San Antonio by inputting additional B5 fueling pumps at area Petro Pantry convenience stores. Seventeen retail stations in the San Antonio metro area are scheduled to offer biodiesel to drivers in the upcoming weeks, said Austin Biofuels Account Manager Jaden Crawford.

Safe Renewables Corp. adds biodiesel pumps in San Antonio

British-based equipment manufacturer JCB announced that as of Jan. 1, 2007, all JCB Dieselmax engines have been approved for the use of B20. JCB is the fourth-largest manufacturer of construction equipment in the world. Dieselmax engines are used in a range of the company's construction and agricultural machinery. "This is one of a series of initiatives aimed at reducing our environmental impact," said Tim Leverton, engineering director of JCB Group.

JCB announces B20 compatibility

Alterra Bioenergy Corp. broke ground on a 15 MMgy biodiesel plant just six blocks from former President Jimmy Carter's home in Plains, Ga. Carter spoke at the groundbreaking, which included state and national industry and government representatives, along with Alterra Bioenergy's Norwegian investors. Alterra Bioenergy will produce biodiesel from regional soybean, peanut and cotton crops, as well as create a market for a new area winter crop-canola. The plant is expected to be producing by November 2007. A second phase is planned to bring it up to 30 MMgy. See this month's Plant Construction List for more information.

Alterra breaks ground in Georgia

The American Soybean Association (ASA) was pleased with President George W. Bush's recognition of biodiesel in his State of the Union address and has called for biodiesel's expanded role in the renewable fuels standard. According to the ASA, the USDA recently released an analysis indicating that for every 50 million gallons of biodiesel produced, the price of soybeans rises 1 percent. The USDA estimates 30 cents out of every bushel of soybeans is driven by the biodiesel industry.

Biodiesel drives soybean market

Methanol Institute's latest report on the worldwide use and production of biodiesel, called, "A Biodiesel Primer: Market & Public Policy Developments, Quality, Standards and Handling," provides guidance on the safe handling and use of methanol in the biodiesel manufacturing process. It also provides the latest information on biodiesel production and global issues. It is available free of charge at www.methanol.org. Methanol is a key ingredient in the production of biodiesel.

Methanol Institute releases report on biodiesel use, production

Triangle J Council of Governments (TJCOG), a North Carolina-based coalition of local governments advocating alternative transportation fuels, has received a federal grant to assist in expanding the availability of local fuels across North Carolina and neighboring states. Blue Ridge Biofuels, one of the partners in TJCOG, recently opened its third public B20 pump in Asheville, N.C., and has plans to install four more B20  pumps and three E85 pumps in the area through 2008.

Grant helps Blue Ridge to open biodiesel pump

According to a London-based Frost & Sullivan information briefing held in February, Europe's biodiesel feedstock availability won't be able to meet the 5.75 percent European Union blending targets. The briefing provided biodiesel producers, agricultural producers, technology providers and oil companies a detailed overview of the European biodiesel market. According to Robert Outram, Frost & Sullivan industry analyst and specialty chemicals specialist, all the European vegetable oil would have to be used to meet the target.

Frost & Sullivan: European biodiesel future looks bleak

Feedstock prices are putting pressure on biodiesel producers' profit margins. Spot prices for soybean oil are near 31 cents per pound in some parts of the United States, up about 8 cents from the past two years.
 
 It takes more than seven pounds of vegetable oil or fat to make a gallon of biodiesel, so an 8-cent increase in the price of soy oil amounts to a more than 50-cent increase in the cost to produce a gallon of biodiesel. The hike in feedstock prices coincided with petroleum diesel fuel prices tumbling about 50 cents per gallon, catching biodiesel manufacturers in a classic cost-price squeeze, according to Joe Jobe, president of the National Biodiesel Board (NBB). "It is painful right now," he said. "A lot of biodiesel companies are suffering."
 
 Companies are reacting to the price squeeze in different ways. Illinois biodiesel manufacturer Stepan Corporation said in its 2006 annual financial report that the company is investigating using animal fat as an alternative feedstock to soybean oil. Some companies have cut their production and are waiting for soybean oil prices to moderate. Clinton County Bio Energy in Iowa states on its Web site that the company has cut production to 40 percent "due to current crush margin economics."

 
 According to Jobe, there are still places where producers can move product. State fleets with biodiesel mandates, states like Illinois with solid tax incentives and the Bioheat heating oil market are some examples. "There is still demand out there and markets that work," he said. "Those are some less price-sensitive markets. 
 
 Markets should work themselves out soon, said Leland Tong, a consultant to the NBB. He said there are plenty of soybeans out there, but there is speculation about fewer acres being planted next year due to high corn prices. "The last time ending stocks of soybean oil was this high, the price was 14 cents a pound," he said. "You have soybean oil prices that are pretty high. That doesn't make any money for the biodiesel industry. It's squeezed out all the margins, and as a result, I think you see people not demanding soybean oil like we used to. Essentially, soybean oil has priced itself out of the market."
 
 Jobe said it is essential for Congress to implement some energy policies to help smooth out the biodiesel industry's economic roller coaster. The NBB is recommending that Congress adopt a biodiesel incentive program based on feedstock costs. Such a program was included in the 2002 Farm Bill, but it expired in 2006. The NBB is also recommending that the program be limited to domestic production and domestic feedstocks, so tropical oils such as palm oil wouldn't be included. This limitation would act much like the offsetting tariff on imported ethanol, Jobe said. "The door is open for all the world's biodiesel to come in and take advantage of our tax credit in our market," he said.
 
 The NBB is also calling for increased research into alternative feedstocks-algae, jatropha and camelina-as well as agricultural research to improve the oil content and yields of soybeans. "The plant breeders have not put as much research into the yield and oil content for soybeans like they have for corn," Jobe said. "For the foreseeable future, our major oilseed crop in the United States is going to be soybeans."
 
 <img src="/images/upload/20070409022324.jpg" alt="table 1" />

Margin pressure blunts production

Global energy firm BP announced it has chosen the University of California, Berkeley (UC Berkeley) to direct a 10-year, $500 million research effort aimed at developing new sources of energy and reducing energy consumption's impact on the environment.
 
 The university will work with the University of Illinois at Urbana-Champaign and Lawrence Berkeley National Laboratory (LBNL) on the project. The group will form the Energy Biosciences Institute (EBI) housed in dedicated facilities on each campus, with LBNL performing supporting research. Initially focusing on biofuels and road transport, the EBI is expected to perform groundbreaking research in the area of new and cleaner energy from biofuels. According to Jim Breson, EBI project manager for BP, "the program's short-term work will probably focus on renewable energy in general and biofuels in particular."
 
 BP hopes the EBI will further the basic and applied biological research relevant to energy. According to Bob Malone, chairman and president of BP America, the EBI will have a 10-year mandate to "improve and expand the production of clean, renewable energy through the integrated development of better crops, better processing technologies and new biofuels."
 
 The schools beat out five other proposals, and BP attributed the move to the scientific excellence found at LBNL and its partner schools. Both UC Berkeley and the University of Illinois' campuses will split more than 50 BP employees, who will partner with university faculty and researchers. "The University of California, Berkeley-in strategic partnership with the University of Illinois at Urbana-Champaign and Lawrence Berkeley National Laboratory-offers the highest potential for breakthrough science complemented by the ability to transfer technology effectively to BP," Breson said.
 

 LBNL and UC Berkeley are seen as leaders in research on battery, combustion, renewable energy and nuclear power, among other areas. UC Berkeley asked the University of Illinois to participate in its proposal for its research on corn breeding, and on growing, harvesting and storing crops. "The proposal from UC Berkeley and its partners was selected in large part because these institutions have excellent track records of delivering 'big science'-large and complex developments predicated on both scientific breakthroughs and engineering applications that can be deployed in the real world," Browne said. 
 
 BP sees the industry-university partnership as emblematic of future collaboration. California offered an additional $40 million incentive if BP chose the UC Berkeley campus, combined with $30 million for a lab and research facility to be shared by LBNL and UC Berkeley. Although the precise work program hasn't been determined, it should be over the next several months, according to Breson. 
 
 In addition to studying biofuels, the EBI will also be tasked with finding new ways to convert fossil fuels to energy, maximizing oil extraction in existing wells, and developing ways to store and sequester carbon that are environmentally sensitive and reduce current risks. Efforts to create better crops and processing technologies, as well as new biofuels, are potential research topics. 
 Projects for the institute will be chosen by BP in cooperation with researchers, and are still in the planning stages.

595-1294329666.jpg

BP partners for $500 million research effort

Biodiesel is helping colleges reach sustainability goals, according to the Sustainable Endowments Institute. The institute reviewed and graded campus greening practices and endowment policies at the 100 colleges and universities with the largest endowments in the United States and Canada. The subsequent report was recently released as the College Sustainability Report Card. 
 
 Schools were given a letter grade for seven categories: administration, climate change and energy, food and recycling, green building, endowment transparency, investment priorities and shareholder engagement. "This is the first time that colleges have been assessed on both campus and endowment sustainability policies," said Executive Director Mark Orlowski. 
 
 The report includes a detailed assessment of each school and a description of the school's sustainable practices-currently underway or planned. Out of 100 colleges and universities, 19 listed a biodiesel program. The most popular use for biodiesel was to fuel all or part of the campus fleets, with 10 colleges running the fuel. Harvard University in Cambridge, Mass., which earned an "A" overall, runs biodiesel in all campus shuttles. However, biodiesel use alone wasn't enough to earn schools high grades. Despite running its entire campus motor pool of 870 vehicles on biodiesel blends since 2005, the University of Nebraska-Lincoln was given a "C" for the climate change and energy category.
 
 Many of the colleges that used biodiesel in campus fleets produced their own biodiesel, as well. Nine schools listed such a project. 
 One campus reported using biodiesel in the campus boilers for heat, and two others have projects in the works. Grinnell College in Grinnell, Iowa, uses a B20 blend in its boiler, while the University of Tennessee, Martin campus has committed to fuel a new power plant exclusively with soy biodiesel. Lafayette College in Easton, Pa., has a team of faculty and students working on a project to devote the college's 200-acre farm to the production of crops for campus biofuel use in the steam plant. Three acres are already being used for this purpose.
 
 For the complete report, visit <a href="http://www.endowmentinstitute.org/sustainability">www.endowmentinstitute.org/sustainability</a>.

College Sustainability Report: Colleges use biodiesel for sustainability

The demand for domestic energy shouldn't cause the United States to lose its footing in the world export markets, according to an official from Ag Processing Inc. (AGP). Peter Mishek, AGP's manager of international trade and business development, warned soy growers that the United States needs to find the delicate balance between the production of domestic energy and the expansion of export markets at the 2007 Northern Soybean Expo & Trade Show, held Feb. 13 in Fargo, N.D.

 
 "All those piling on the biofuels bandwagon need to be wary of the road ahead," Mishek told expo attendees. He was supportive of biodiesel and discussed AGP's role in the growing industry. The company operates a recently expanded 30 MMgy biodiesel facility in Sergeant Bluff, Iowa. The Iowa plant was initially constructed in 1996. AGP is also building a 28 MMgy plant in St. Joseph, Mo., which is expected to begin production in September 2007.
 
 While AGP is heavily involved in the U.S. renewable fuels industries, it's also a leading exporter of soy products such as oil, meal and whole soybeans. The company touts itself as the largest cooperative soybean processing company in the world. "We must compete for the export market," Mishek said.
 
 He said countries such as Argentina and Chile are investing capital in soy product export terminals, which U.S. companies have already done. AGP recently completed work on a massive Port of Grays Harbor export facility expected to cut up to two days of transport time between the West Coast and other Pacific Rim countries. The project in Aberdeen, Wash., was a joint venture between AGP, the Port of Grays Harbor and the Puget Sound & Pacific Railroad. 
 
 Mishek also suggested the possibility of letting existing biodiesel and ethanol production incentives, and import tariff barriers, expire. "Let biofuels stand on its own merit," he said.
 
 John Plaza, founder of Imperium Renewables in Grays Harbor, Wash., agreed that a balance must be found between the domestic biodiesel industry and export markets. He said current soy oil prices are making it difficult for some biodiesel producers to remain competitive with diesel fuel.
 
 Imperium Renewables, a 100 MMgy biodiesel plant currently under construction, would consume nearly 4 percent of the 2006 U.S. soy crop if the facility solely relied on domestic soy oil for feedstock, Mishek said. While Imperium Renewables will rely partially on U.S. soy oil, it will also take in other oil crops-both domestic and international. "We can't expect … soybeans to be the single source (of feedstock)," Plaza said. "This has to be taken into a bigger scope that is beyond one feedstock and one product."
 
 More information on AGP's Port of Grays Harbor project is available at <a href="http://www.agpportofgraysharbor.com">www.agpportofgraysharbor.com</a>.

AGP's Terminal 2 facility is located on the Chehalis River, which empties into Grays Harbor.

596-1294329667.jpg

AGP official: Exports, energy a balancing act

Global health sciences and photonics technology producer PerkinElmer Inc. recently announced its development of four Biodiesel Gas Chromatography (GC) Turnkey Systems with analyzers for the verification of free and total glycerin in B100 to meet ASTM and European CEN Method EN 14105 standards. PerkinElmer's new GC systems, which took only four months to develop, have created a more straightforward and easier-to-operate testing measure to ensure quality in blending, according to Dave Armstrong, global segment marketing leader for hydrocarbon processing.

Biodiesel Gas Chromatography Turnkey System

604-1294329668.jpg

PerkinElmer develops tools for analyzing biodiesel quality

Kinder Morgan Energy Partners LP (KMP), whose parent company Kinder Morgan Incorporated is one of the largest midstream energy companies in North America, announced in late February an investment amounting up to $100 million at three of its U.S. terminals, a move that is expected to serve the biodiesel markets well. 

 
 Up to 54.6 million gallons (or 1.3 million barrels) of additional tankage is expected from this investment, and will assist in handling up to 336 million gallons (8 million barrels) of biodiesel refined at KMP terminals in the Houston Ship Channel, the Port of New Orleans and in New York Harbor by Green Earth Fuels LLC. "We look forward to continuing to work with producers and shippers to add incremental fee-based services and infrastructure at KMP that will help bring more renewable fuels to markets in the United States," said Jeff Armstrong, KMP terminals president.
 
 Green Earth Fuels is a biodiesel start-up company with an experienced team and big investor-owners, including Riverstone Holdings LLC, the Carlyle Group and Goldman Sachs. Construction of Green Earth Fuel's first biodiesel project has been underway since September 2006 at Kinder Morgan's Galena Park Terminal in the Houston Ship Channel. When complete, the plant will have the capacity from two separate production lines to produce 86 MMgy. Green Earth Fuels anticipates the first 43 MMgy line to be operational by July 2007, while it expects the second production line to be running as early as September. The future producer said its large Houston Ship Channel plant is feedstock-flexible. 
 
 KMP's $100 million announcement in late February followed the midstream energy company's September 2006 announcement to invest up to $195 million in storage capacity at its Galena Park and Pasadena terminals on the channel, in addition to a cross-channel pipeline to increase the connectivity of the two facilities. The two terminals are the western Gulf Coast refining community's central interchange point, consisting of 840 million gallons (20 million barrels) of total storage capacity.

Biodiesel infrastructure to get $100 million boost from Kinder Morgan

It appears that biodiesel won't be forgotten in the 2007 Farm Bill discussions, even though the Bush administration's proposed budget and the USDA Farm Bill proposals only spoke of cellulosic ethanol.
 
 At a recent House Agriculture Committee hearing, Agriculture Secretary Mike Johanns assured the audience that the 2002 Farm Bill's 9006 program "is part of our proposal." The 9006 program mandated $23 million per year for a Renewable Energy Program administered by the USDA Rural Development Agency. The agency's loans, loan guarantees and grants for farmers, ranchers and rural small businesses funded biodiesel projects, among others.
 
 Rep. Collin Peterson, chairman of the House Agriculture Committee, concurred that there would be support for biodiesel in the 2007 Farm Bill, currently being put together. "There's not just a focus on celluosic ethanol, but that's the area where, without government help, it's not going to get going," he told Biodiesel Magazine. He mentioned work being done in private industry on biodiesel. "It will make sense to complement that work with research on feedstocks beyond what we've harnessed so far," he said.
 
 The Farm Bill's initial rounds aren't about who will get what share of the Farm Bill pie, but rather how big the pie will be.
 
 The Senate and House agriculture committees were meeting with their respective budget committees to restore the Farm Bill's baseline at press time. Because of strong commodity prices, the 2002 Farm Bill expenditures ran $25 billion under projections. As a result, the baseline for the next bill was cut. Commodity programs, conservation, forestry, rural development, food stamps and nutrition, and energy all fall under the Farm Bill jurisdiction. The food stamp program uses nearly two-thirds of the total budget.
 
 The American Soybean Association has called for a biodiesel incentive payment to support continued growth of the young U.S. biodiesel industry. It also called for the continuation of the Biodiesel Education Program in the 2002 Farm Bill that awards grants to introduce truckers, health groups and many others to the benefits of biodiesel.
 

 The U.S. Canola Association urged continued funding levels for the Farm Bill baseline at the historical spending levels of the 2002 Farm Bill. It also asked to reauthorize the "Biodiesel Production Program and/or implement an energy crop incentive program."

597-1294329667.jpg

Biodiesel included in 2007 Farm Bill discussions

As the biodiesel industry continues its unprecedented growth to meet demand, it becomes more challenging to enforce fuel quality standards. For this reason, the National Biodiesel Accreditation Commission (NBAC) recently revised its BQ-9000 accreditation and certification program.
 
 In an effort to enhance the overall efficiency of the program-a voluntary quality control program that assists biodiesel producers and marketers in following strict testing procedures compliant to ASTM D-6751 specifications-over 30 revisions were outlined by the National Biodiesel Board, the governing body of the NBAC. Some of the most notable changes are two separate documents for biodiesel marketers and producers to follow, as opposed to just one that was available in the past. 
 
 Another revision involves the overall strengthening of laboratory testing and facilities, ensuring that test methods are precise and that equipment is properly maintained and used. The third major change involves increasing the amount and lengths of audits conducted in a given year. Formerly, an auditor conducted a survey of the premises and operations of a biodiesel plant in one day, resulting in a certification for two years. Now, the company will receive an initial audit after certification that will last three years, in addition to random surveillance audits every year.
 
 "There are customers who are asking for biodiesel that is produced by a BQ-9000 company or is distributed by a BQ-9000 company, and it's providing some market preferences for fuel from those types of operations," said Leland Tong, chairman of the NBAC.
 There are currently 17 accredited biodiesel producers and six certified biodiesel marketers, which account for 40 percent of the biodiesel production capacity in the United States. In addition, half of the states in the country have implemented the ASTM D-6751 specification as part of their fuel quality regulations, and an additional 13 states are either planning to accept the specification or studying it. Ten states now proactively test biodiesel or biodiesel-blended fuels.

NBB makes changes to BQ-9000 criteria

Most of the fuel problems that the Center for Diesel Research (CRD) at the University of Minnesota investigated over the course of the past winter weren't related to biodiesel, and the ones that were happened to be isolated to specific incidents in the farm community. "A large number of problems we looked at were caused by microbial or fungal contaminations in ultra-low sulfur diesel (ULSD)," said Kelly Strebig of the CRD. "Sulfur is a natural killer of biological organisms, so with that removed, there is a nontoxic environment for them to grow in." 
 
 While those fungi and microbes were clogging filters in vehicles burning ULSD-which has little to do with temperatures-petroleum fuel waxing was causing problems up north during the cold months. "A guy takes a B2 sample in a six-inch container and sets it outside overnight, and he tells me that the next morning he has two inches of crystals-that's over 30 percent of the sample," Strebig said. "That's not the biodiesel. It's petroleum fuel waxing." Petroleum-diesel fuel has a cloud point of approximately 15 degrees below Celsius (5 degrees Fahrenheit), so like methyl esters, it's susceptible to frosty environments, as well. "When we get down around 25 to 30 below, the fuel just waxes," Strebig said. 
 
 Aside from FUMPA Biofuels in Redwood Falls, Minn., which makes at least a portion of its biodiesel from animal fats, most of the biodiesel in Minnesota is made from soy oil. The National Renewable Energy Laboratory reports that on-spec biodiesel derived from vegetable oils has a cloud point of approximately minus 2 degrees Celsius (28 degrees Fahrenheit). However, off-spec fuel was blamed for last year's debacles. 
 
 Because of action and attention to details, nobody is blaming B2 on any negative fuel situations so far this year. "I would contribute that to the willingness of Minnesota producers to become BQ-9000 certified, and their adherence to that quality assurance program," said Charles Neece of FUMPA Biofuels. "I would also say that the collaboration between the Minnesota commerce and weights and measures departments working together to ensure that consumers get a quality product has been a big part of the lack of problems."
 
 The cloud point of B20, for example, is between minus 9 degrees Celsius (16 degrees Fahrenheit) and minus 11 degrees Celsius (12 degrees Fahrenheit). Educating blenders and terminals to be aware of these conditions so that they can provide the proper blend ratios to their customers is something the Minnesota biodiesel industry has been focusing on.

Cloud point issues scarce in Minnesota this winter

Trying to get biodiesel to 13 ports across the globe was expected to be the biggest hurdle for the Earthrace team in its attempt to break the 1998 circumnavigation record of 74 days, 20 hours and 58 minutes in a B100-powered wave-piercing ship. As it turned out, fuel was the least of the crew's concerns.
 

 Just seven days into its attempt to break the record for circumnavigating the globe by sea, Earthrace's trip was put in jeopardy after a trio of setbacks. After leaving Barbados on March 10, the Earthrace crew experienced problems with the 78-foot trimaran's carbon propellers. Damage to the blades forced the crew to slow from 24 knots to 12 knots en route to port in Colon, Panama. After replacing the propeller blades in Panama, the crew continued on its journey only to face another problem: a hairline crack on a heat exchanger in the starboard engine. The crew was able to enact a temporary solution and ran the ship on its port engine alone, planning to make permanent repairs at a later stop in Acapulco, Mexico.
 
 Making it to Acapulco is now in question following an incident off the shore of Guatemala in the Pacific Ocean. According to a press release from Earthrace, on March 17 the ship was involved in a collision with a small fiberglass fishing skiff. One man aboard the skiff is missing and presumed drowned while another man was seriously injured. A third occupant of the skiff received minor injuries in the collision. No one aboard Earthrace was injured, but upon return to Guatemala with the injured fishermen, the biodiesel-powered boat and crew were escorted into Puerto Quetzal, Guatemala, and placed under military guard while the incident was investigated.

The Earthrace vessel took off in March, but ran into some problems and is stalled in Guatemala.

598-1294329667.jpg

Earthrace attempt in question

Thrill-seeking auto junkie Tom Holm has a knack for "souping up" vehicles. For the past 20 years, he has been featured on TV shows and promotional tours showcasing his work. As environmental concerns associated with traditional fuels and their effects begin to grow, Holm became conflicted, he told Biodiesel Magazine.
 
 After three years of sponsorship from General Motors (GM) for his Outdoor Life Network television series Adventure Highway, in which Holm customized GM sport utility vehicles and then drove to exotic destinations for adventure sport activities, he realized that he wanted to dedicate his career to the research of renewable fuels for his vehicles, a vision he calls EcoTrek.
 
 "We were building these big gas guzzlers to go to the Redwood forest and beautiful ocean destinations," Holm said. "I felt like we needed to do something that incorporated different fuel technology, alternative fuels or hybrids."
 
 Holm re-approached GM to ask for its support in building a biodiesel-fueled Hummer H2, the epitome of evil gas-guzzling vehicles, Holm said. While GM did offer him a discount on the H2 sale price, it said installing a diesel engine was "impossible," Holm recalled. It took a lot of work and a lot of his own funds-$160,000 to be exact-but Holm, along with a talented team of experts, was able to build the first-ever biodiesel-compatible EcoTrek Hummer H2.
 
 With the help of specialist Jonathan Goodwin and Pacific Performance Engineering (PPE), Holm modified the H2 by dropping in a Duramax LBZ diesel engine, which increased the vehicle's horsepower to 660 and bumped the fuel efficiency up from eight to 10 miles per gallon to 16 to 18 miles per gallon. To make room for the new engine, Holm gave the H2 a nine-inch lift with 22-inch wheels and 37 1/2-inch tires. Plus, the team reprogrammed the engine and added an air intake system, a PPE programmer and a Borla stainless steel exhaust system. By the time they were done, the H2's gas mileage had been bumped up to 23 miles per gallon under normal highway driving conditions.
 
 Holm's work in customizing renewable fuel vehicles has started a movement. Rick Wagoner, chairman and CEO of GM, announced in February that all vehicles in the Hummer 2010 model year will be renewable-fuel compatible, including an H2 with a Duramax diesel engine and a V8 E85 Hummer H3. MTV's television show Pimp My Ride has also approached Holm, and a segment dedicated to his customized vehicles is "in the works," he said.

GM contracts EcoTrek to develop biodiesel Hummer H2s

The year 2007 marks the 15th anniversary of the National Biodiesel Board (NBB), though it may have been called something different in 1992. At its founding, the organization promoting biodiesel was called the National SoyDiesel Development Board, as farmers initiated the research in biodiesel made from soy oil.
 
 However, farmers had a vision that biodiesel would come to require additional, varied feedstocks. So, the board consisting primarily of farmers voted on a name-and policy-change to encompass all feedstocks that could make up biodiesel. The NBB was born and since then has radically grown.
 
 From its modest beginnings of approximately 10 members, all of which were state soybean associations, the NBB now has over 400 voting companies, associate-member companies and individuals. Members range from farm groups to biodiesel producers to technology providers and petroleum companies.

 
 Other accomplishments have included:
 --Passage of the blenders' tax credit for biodiesel, as well as other state and national laws
 
 --The creation of National Biodiesel Day in 2002	
 
 --Establishment of the National Biodiesel Conference in 2004, which grows in size annually 
 
 --The creation of the Web site www.biodiesel.org, which has helped establish the NBB as the best source for credible biodiesel information 
 
 --Establishment of the BQ-9000 voluntary quality control program, which has rapidly grown in participation during the past two years
 
 --The creation of a Washington, D.C., office in 2006, which spearheads lobbying efforts on behalf of the biodiesel industry.

Happy anniversary to us: NBB celebrates 15 years

American Society for Testing and Materials (ASTM) International recently published ASTM D 6751-07, the new blend stock specification for B100. This new ASTM number and new parameters supersede all other versions of D 6751, including the D 6751-06b that was published in January for only a short time. 
 
 D 6751-07 includes the changes made to D 6751-06b: the addition of a three-hour induction period stability test and the use of EN 14538 as the referee method measurement of calcium per milligram and sodium per kilogram. It also features: 
 
 --The removal of Footnote A of Table 1, which used to allow the buyer and seller to agree on different limits 

 
 --The formal allowance of the option to use the automatic cloud point testing method (D 5773) 
 
 --Changing the scope of the standard to make D 6751 a generic blending stock, not just a blending stock for D 975 (i.e., on- or off-road fuel) 
 
 The industry desired these changes in order to push forward with the formal acceptance of up to B5 in both D 975 on- and off-road diesel fuel, up to B5 in D 396 home heating fuel, and the proposed B6 to B20 finished fuel standard. These are all at various stages of the ASTM balloting process. 
 
 "We are hopeful these blended fuel ballots can get through the rigorous ASTM ballot voting system by the end of 2007," said Steve Howell, chairman of the ASTM Task Force on Biodiesel Standards and the National Biodiesel Board technical director. "However, if it takes more research to get them through the official approval process, we are committed to do whatever is needed for the end result of new blend specifications."

ASTM publishes latest changes for B100 spec: ASTM D 6751-07

States around the country have picked up the pace in addressing biodiesel policy. Policy-makers are considering everything from mandates to production incentives to tax exemptions and credits that encourage the growth of the industry.
 
 At press time, at least 11 states were considering some form of requirement legislation-or mandate-that would require either a certain percentage of diesel sold in a state to be biodiesel or that all diesel fuel sold in a state contain a minimum of B2. Many states are adding language that would increase the B2 blend to B5 after a designated period. These states include Florida, Connecticut, Missouri, California, Oregon, Mississippi, Arkansas, Nebraska, Montana and New Mexico. 
 
 Some states' proposals, such as Missouri and New Mexico, simply require by a specific date that all diesel fuel sold at retail stations contain at least 2 percent or 5 percent biodiesel by volume. In some cases, it increases to 5 percent by volume at a later date. Similar to what occurred in some states last year, state legislatures such as Maryland are leaning toward establishing a task force, or study committee, to research mandates further before turning them into law. Other states have chosen to tie their requirements to in-state or regional feedstock production.
 
 Oregon, for example, has proposed legislation similar to what passed in Washington in 2006. It would require all diesel fuel sold in the state to contain a minimum of 2 percent biodiesel by volume when the production of biodiesel in this state from Pacific Northwest feedstocks reaches a level of at least 5 million gallons on an annualized basis for at least three months. (The Pacific Northwest includes Oregon, Washington, Idaho and Montana.) The requirement increases to 5 percent biodiesel by volume when production levels reach at least 15 million gallons on an annualized basis.
 
 Oregon's mandate legislation has a unique twist in that it coincides with the city of Portland's biodiesel mandate that passed in 2006. That city ordinance, effective July 1, 2007, requires all diesel fuel sold by fuel distributors or resellers to fuel retailers, nonretail dealers or wholesale purchaser-consumers to contain a minimum blend of B5. Beginning Aug. 15, 2007, it requires all diesel fuel sold by fuel retailers, dispensed by nonretail dealers or purchased by wholesale purchaser-consumers to contain a minimum blend of B5. In 2010, the required blend level increases to B10.
 

 A big state with big biodiesel hopes
 California is also considering a series of bills that would encourage biodiesel use there. Sen. Dean Florez, D-Shafter, introduced a package of legislation in early January that was making its way through the state Senate at press time. SB70 would define biodiesel as a fuel, not an additive, and would implement regulation on meeting the ASTM spec. SB71 would mandate the use of biodiesel in state-owned, diesel-powered vehicles. SB72 would require the use of biodiesel fuel in school buses throughout the state. SB73 would create a tax credit to stimulate the production of biodiesel in California. SB74 would exempt biodiesel fuels from state sales and excise taxes. SB75 would mandate that the state only purchase diesel-powered vehicles that come with a warranty on the engine, something the diesel manufacturing industry has resisted. SB76 would establish the California Biodiesel Investment Account, which would offer incentives such as grant money to local governments, farmers and research agencies to build fueling stations, grow feedstock crops and develop new biodiesel technologies. Hearings on most of these bills were to take place in late March.
 
 Many other states are also looking at ways to encourage biodiesel use and production through a variety of tax incentives, grants and loans. For example, Florida Gov. Charlie Crist asked the state legislature for $68 million in funding incentives for Florida-based biodiesel and ethanol projects. Arkansas's legislature wants to provide grant money as part of a $20 million biodiesel incentive bill to Arkansas companies willing to build the equipment necessary to crush soybeans into oil for biodiesel production. The bill, proposed by House Speaker Benny Petrus, D-Stuttgart, would offer grants to companies wanting to build such equipment. It would also provide the state Department of Agriculture with $16 million to distribute to companies that make biodiesel fuel from soybeans or ethanol from wood products. Several states, such as Connecticut and Tennessee, have proposals to exempt the state's diesel tax for the portion of biodiesel in the blend. In Tennessee, for example, that would work out to 17 cents per gallon for B100 and roughly 4 cents per gallon for B20.
 
 Label legislation
 Several states are considering the issue of labeling pumps that dispense biodiesel. Some states are pursuing options in line with the recommendations of the National Conference of Weights and Measures that would require labels for pumps dispensing biodiesel blends between B6 and B20. In most cases, pumps dispensing fuel containing less than 5 percent of biodiesel by volume wouldn't be required to be labeled. A few states, such as Arizona, have proposals that would require biodiesel and biodiesel blends be identified by the capital letter B followed by the numerical value representing the volume percentage of biodiesel fuel, regardless of the blend level. 
 
 It is likely that many of these proposals will become law in some form by the end of this year. The year 2007 promises to be yet another active time for the biodiesel industry.

2007 to be a bumper crop year for biodiesel legislation

Manufacturers, policy-makers, regulators and biodiesel industry representatives met in March at a biodiesel summit to identify and remove barriers to the widespread acceptance of up to B20 biodiesel blends by engine and vehicle manufacturers. DaimlerChrysler, a sponsor of the B20 Summit, challenged the group to come up with a viable fuel standard for the B20 finished blend.
 
 "Biodiesel represents a huge opportunity to address some of our nation's toughest energy, environmental and economic challenges," said Deborah Morrissett, DaimlerChrysler's vice president of regulatory affairs. "We know this is the right thing to do, so the goal now is to develop a national B20 standard that can be universally applied to all diesel vehicles, both on-road and in production, to confidently support higher blends of biodiesel, such as B20." 
 
 A major step toward full B20 support is the finalization of a defined B20 American Society for Testing and Materials (ASTM) International specification. The ASTM B20 specification moved closer to reality in recent months when the group approved new limits in ASTM D 6751, the existing standard for pure (B100) biodiesel, oxidation stability and other parameters needed for 2007-2010 diesel engines. "The B100 standard has been designed so that it is protective of B20 and lower blends, but regulators need us to approve a finished standard to hold people to, and engine-makers need something they can design to," said Steve Howell, National Biodiesel Board (NBB) technical director and chairman of the ASTM Task Force on biodiesel standards. 
 Attendees of the multi-industry B20 Summit met at the NextEnergy Center, Michigan's alternative and renewable energy business incubator, located in Detroit's TechTown district.

 
 Participants identified several other areas that need additional study and funding to bolster full B20 support, including: 
 
 --Long-term effects of B20 on emissions control and aftertreatment devices
 
 --Long-term engine durability testing 
 
 --Greater fuel-quality monitoring efforts to ensure fuel standards are being met
 
 All major original equipment manufacturers (OEMs) support B5 and lower blends, provided they are made with biodiesel meeting ASTM D 6751, the existing ASTM standard for B100. Use of blends higher than B5 won't necessarily void existing warranties. A growing number of OEMs are also recommending that users purchase biodiesel from BQ-9000 certified companies. BQ-9000 is the biodiesel industry's quality program for biodiesel producers and marketers.
 
 DaimlerChrysler was the first auto manufacturer to approve the use of B20 by government, military and commercial fleet customers in its 2007 model year Dodge Ram pickup truck. New Holland has also approved the use of B20 in all of its equipment using New Holland engines, becoming the first OEM to announce full formal support for B20 in the engines it produces.
 
 At the 2007 National Biodiesel Conference & Expo, OEM activity included a ride-and-drive with Volkswagen (a major conference sponsor), General Motors (GM) and DaimlerChrysler products, along with GM's announcement of a special equipment option on the 6.6-liter Duramax engine for B20 capability. Also, Morrissett announced special pricing on biodiesel blend-capable products available to NBB members and their employees. Details are to follow. See pages 44-59 for more National Biodiesel Conference coverage.

Biodiesel summit sets goals for biodiesel research

U.S. Sens. Blanche Lincoln, D-Ark., and Norm Coleman, R-Minn., introduced legislation in March to extend the federal excise tax credit and income tax credit for biodiesel to 2017. If adopted, the legislation would continue the era of growth in the biodiesel industry that similar Lincoln-sponsored legislation launched when the American JOBS Creation Act became law in 2004. 
 

 "Our American agricultural producers and domestic companies have demonstrated their commitment to energy independence through the production of renewable fuels like biodiesel," Lincoln said. "It's time for Congress to follow its initial work and make the necessary investment for continued progress and development. I look forward to working with advocates of alternative energy sources, like the National Biodiesel Board, toward our shared goal of promoting greater production of renewable fuels."

Lincoln, Coleman introduce bill to extend tax incentive to 2017

Visit <a href="http://www.bq-9000.org">www.bq-9000.org</a> or contact the National Biodiesel Board's Anne Klempke at (800) 841-5849 or aklempke@biodiesel.org to register for a course at the following locations:
 
 --April 12-Kansas City, Mo. 
 
 --May 3-Charlotte, N.C. 
 
 --June 14-Seattle	
 
 --July 12-Winnipeg, Manitoba
 
 --August 16-Boston
 
 --October 18-Las Vegas

BQ-9000 workshops announced

Blue Sun Biodiesel LLC recently merged with two companies in separate agreements. Ares Corporation and Blue Sun formed a joint venture, Ares Blue Sun Development LLC, which will be a collaboration of engineering and process technology with the goal of building biodiesel production facilities. Through its operating company SunFuels Inc., Blue Sun also announced an agreement to merge with M-Wave Inc. in the second quarter of 2007. Upon closing, M-Wave will change its name to Blue Sun Holdings Inc. and will remain a publicly traded company.

603-1294329668.jpg

Blue Sun Biodiesel performs mergers

Bismarck, N.D., engineering firm Kadrmas, Lee & Jackson (KL&J) has announced it is developing biodiesel business "units" for farmers under the trade name Tall Grass BioIndustries. KL&J plans to offer North Dakota residents investment opportunities in various local projects that employ a collocation philosophy. The soybean crushing/biodiesel facilities will be built next to existing grain elevators, which will share operating responsibilities, including the purchase, cleaning and storage of soybeans.

Kadrmas, Lee & Jackson creates Tall Grass BioIndustries

Titan Environmental, a division of the Kingspan Group PLC, has introduced a line of biodiesel storage and dispensing tanks certified to hold up to 30 percent biodiesel.

 
 The Titan BioMaster 30 series of tanks is suitable for dispensing B30 in accordance with British Standard BS EN 14124 and DIN 51606. A choice of four capacities and five models are available. Capacities range from 1,300 to 5,000 liters (343 to 1,320 gallons). The tanks are made of thermoplastic and are equipped with a choice of electric pumps that can operate on 12 volts DC to 230 volts AC. An automatic nozzle with a four-meter hose is standard.
 
 The BioMaster 30 series is distributed by Tank Depot at <a href="http://www.tankdepot.co.uk">www.tankdepot.co.uk</a>. Prices start at 1,487 British pounds, plus value-added tax.

Titan launches biodiesel tank line

Ecco Energy Corp. announced the formation of Ecco Biofuels to focus on the production, distribution and manufacturing of biofuels. The new company will manufacture small-scale biodiesel plants with 5 MMgy to 10 MMgy capacities using variable feedstocks, retaining ownership stakes in some, said an Ecco Energy spokesman. Ecco Biofuels will also distribute, but not manufacture, ethanol. Ecco Energy is a Texas-based independent oil and gas exploration and production company with production along the Texas and Louisiana Gulf Coast region.

605-1294329669.jpg

Ecco Energy forms biofuels subsidiary

Shell New Zealand and Argent Energy New Zealand Ltd. have signed a letter of intent in preparation for meeting New Zealand's mandated introduction of biofuels by 2008. Argent operates a large-scale biodiesel plant in Scotland, and Shell is the world's largest distributor of biofuels. Argent plans to build a plant that will process 75,000 metric tons of raw material per year, producing 85 million liters (22 MMgy) of biodiesel. The feedstock will be animal fat from meat-processing waste.

606-1294329669.jpg

607-1294329669.jpg

Shell, Argent Energy team up to meet New Zealand's biofuel goal

Industrial Nanotech Inc. announced a purchase order from JatroDiesel for its thermally insulating, anti-corrosion coating to be employed in biodiesel refineries. Nansulate is a patented product line of water-based insulation coatings containing nanotechnology-based materials that provide thermal insulation, lead abatement, corrosion protection and mold-resistant technologies. Applied to holding tanks and pipes in biorefineries, Nansulate reduces energy consumption and is effective through temperature extremes of minus 40 degrees Fahrenheit to 400 degrees Fahrenheit, according to Industrial Nanotech.

Industrial Nanotech enters biodiesel industry

Degussa Corporation has announced the appointment of Bernard Murphy as sales manager in the company's Building Blocks business unit in Parsippany, N.J. He will be responsible for the sales of antioxidants and alkoxides in the biodiesel industry. Murphy started his career at Degussa in the Building Blocks unit in 2000. Degussa, a multinational chemical manufacturer based in Dusseldorf, Germany, produces specialty chemicals and has been involved in biodiesel since the beginning of commercial production in the 1990s.

608-1294329670.jpg

Degussa Building Blocks names sales manager

Wayne Wajciechowski has joined Wanzek Construction Inc. as senior vice president of operations. Wajciechowski has more than 30 years of experience in the engineering and construction trades, and has been active in the biofuels industry for 11 years as director of project management at Delta-T Corp.

Wajciechowski joins Wanzek Construction

Imperium Renewables Inc. recently announced the hiring of former World Energy Alternatives executive Graham Noyes as its new vice president of sales and business development. Imperium Renewables wholly owns Seattle Biodiesel LLC, a 5 MMgy biodiesel plant, and is constructing a second, larger plant in Grays Harbor, Wash., which is expected to produce 100 MMgy and be operational in mid-2007. Noyes earned his bachelor's degree from the University of Virginia and has a law degree from the University of California, Davis School of Law.

609-1294329670.jpg

Imperium hires former World Energy executive

Indiana-based Countrymark Co-op, the state's foremost distributor and producer of premium soy-based biodiesel fuels, has appointed Belinda Puetz to its newly created brand manager position. Puetz previously served as project coordinator for the Indiana Soybean Alliance's biodiesel programs and more recently as program advisor for the Indiana Corn Marketing Council's ethanol projects. She is also a member of the Indiana Corn Growers Association. Puetz will be responsible for coordinating the development and implementation of Countrymark's brand strategy.

610-1294329673.jpg

Countrymark Co-op hires brand manager

Gary Crook has been named CFO of Better Biodiesel Inc. by its board of directors. In his 25-year career, Crook has served as CFO and controller in public, foreign and privately held companies in the business services, healthcare and retail segments. He is a partner in the Salt Lake City practice Tatum LLC, and is a director and chairman of the audit committee for Q Comm International Inc.

Better Biodiesel hires new CFO

When National Biodiesel Board (NBB) CEO Joe Jobe took the stage to welcome nearly 4,000 biodiesel producers, suppliers and supporters to the state of Texas for the fourth annual Biodiesel Conference & Expo, he dressed the part. "Porter Wagner was having a garage sale, so I thought I'd get into the Texas spirit a bit," he said. It was no accident that the conference was held in the "Lone Star State" as it has the most biodiesel plants and it is the largest biodiesel market in the nation. Not to mention, that in 1863 a battle for Texas independence was fought about 600 yards away from the Henry B. Gonzalez Convention Center in San Antonio, where the conference was held. "Now here we are 171 years later, this fledgling little biodiesel industry, with all our colorful characters, our many stories of persistence and courage and patriotism in our little battle for energy independence," Jobe said. "But in case you didn't notice, our little battle is getting bigger."
 
 To emphasize his point, Jobe announced the NBB's new long-term goal to replace 5 percent of the U.S. diesel market with biodiesel by 2015. Supplementing 5 percent of the 40 billion gallons of on-road diesel would require the production of about 2 billion gallons of biodiesel. That would be a 10-fold increase in production levels in less than 10 years, Jobe said. The 5x'15 is an expansion of the NBB's previous goal of producing 1 billion gallons by 2015. "But then during the subsequent 12-month-period, you guys constructed more than half-a-billion gallons of additional plant capacity, and another couple billion are reportedly in the works," Jobe said. As a result, sales in that time frame tripled from 75 million gallons to about 225 million gallons. "Those kind of expansion numbers demanded that we reexamine our 1 billion by 2015 goal," he said. "For those who might think that 5 percent is not big enough to be relevant, in 2005, the United States refined 1.85 billion gallons of diesel fuel from the crude we imported from Iraq." 
 
 Jobe pointed out that the 5x'15 goal would replace about one-fourth of the diesel fuel that the United States refines from the crude oil imported from the entire Persian Gulf region. "That would make a real difference for energy security," he said.
 
 In order for the biodiesel industry to reach the new goal, Jobe outlined four government policy objectives for the 110th Congress, hence the theme of this year's conference "Government Policy." The top priority is the extension of the biodiesel tax credit, which is already being addressed on Capitol Hill. Reps. Kenny Hulshof, R-Mo., and Earl Pomeroy, D-N.D., introduced bipartisan legislation to make the biodiesel tax credit permanent in the opening days of the congressional session.
 
 The NBB is also targeting the Farm Bill. "We will be calling on you in the coming months to reach out to your congressmen to support [Agriculture Committee] Chairman Collin Peterson (D-Minn.), so he can ensure that the energy title includes meaningful things for biodiesel," Jobe said. The NBB supports an extension and modification of the bioenergy program, which provides an incentive for biofuels producers. The NBB will also seek an extension and expansion of the biodiesel education program.
 

 Another issue that the biodiesel industry needs to address is the definition of renewable diesel. "This is a stark example of why government policy matters," Jobe said. "A few powerful oil and gas interests have been applying enormous political pressure to get a broad interpretation of thermal depolymerization and a broad interpretation of the tax credit. The federal government would pay them $1 per gallon for each gallon of palm oil, for example, they could import into their refineries in the Gulf. They are going around Capitol Hill right now convincing people that biodiesel is a thing of the past. What they have is new-generation biodiesel." Jobe argued that such a subsidy for traditional petroleum refiners wouldn't stimulate investment in new plant capacity. It also wouldn't add to the fuel supply, add jobs to the economy, stimulate rural development, nor would it benefit domestic agriculture. "It will cause the federal government to take money from U.S. taxpayers and give it to some of the richest private companies in the world, so that they can put a stranglehold on the raw material supplies of the biodiesel industry," he said.
 
 A fourth priority for the NBB is to develop an Alternative Diesel Standard as part of a joint initiative with the American Trucking Association (ATA). "The ATA is very concerned about the proliferation of state biodiesel blend requirements, but they're willing to strongly support a national biodiesel requirement," Jobe said.
 
 In order to face these challenges, Jobe said the NBB's decision to open an office in Washington, D.C., was a necessity. The NBB is also launching a Political Action Committee (PAC). If every one of the NBB's 400 members could raise an average of $1,000 from among their supporters each year, "we could have a $400,000 PAC," Jobe said. "That would be a respectable-sized size PAC, even by Washington, D.C., standards."
 
 Finally, Jobe urged NBB members to speak with a unified voice. "We will not be effective as a grassroots movement if everyone goes around saying different things," he said. "Public policy matters, and if we expect to effect public policy, we have to be unified in our message."
 
 Enter the Policy-makers
 No conference with "Government Policy" as its theme would be complete without a visit from a few influential lawmakers. As members of the U.S. House of Representatives and a rock band, Peterson, Hulshof, Thaddeus McCotter, R-Mich., and Dave Wheldon, R-Fla., served double duty at the event. 
 
 As The Second Amendments band, the congressmen entertained during halftime of the Super Bowl party on Sunday. The next day, they participated in a panel discussion revealing their vision for the nation's energy future. 
 
 Gene Gebolys, president of World Energy Alternatives and NBB Regulatory Committee chairman was the panel moderator. He praised President George W. Bush for proposing to reduce gasoline usage by 20 percent in the next 10 years. Obstacles will need to be overcome to meet the goals being set by our nation's leaders, Gebolys said. Strong industries are built on strong businesses, and biodiesel business profitability remains a function of agricultural and petroleum prices, and government policies.
 
 He asked the panel about the likelihood of a tax incentive policy being passed this year. With the control in Congress changing from Republican to Democratic, the tax incentive bill's future is an unknown, Hulshof said. He and Pomeroy introduced HR 196, which would make the biodiesel tax incentive permanent. Achieving support for renewable fuel legislation will be an education process, and he urged attendees to participate in the process by contacting their representatives. 

 
 "The good thing is that the best cheerleader we have is the president of the United States, a Texas oilman who has been a very enthusiastic supporter of all biofuels," said Hulshof, who farms in southeast Missouri. "If we can get this extension or permanence through the House and Senate, obviously he will sign it."
 
 Peterson, who is chairman of the House Agricultural Committee and has a lead role in shaping the country's agricultural policy, agreed that Americans want renewable fuels legislation. "We are going to write a very significant energy title that's going to move us to new horizons, and getting the tax credits made permanent is critical," he said. He cautioned that there is much work to be done in areas of infrastructure and transportation. One of the big problems is getting the resources necessary to enact the right kind of policy, he said. Congress can start putting that policy together once they know how much they will have to spend, he added. There are other sectors that will be competing with energy for funding. Clearly the bioenergy program has been successful and the congressmen want to extend it, but people want more money for things like conservation and the milk program, which was terminated, he said. "It's going to be a big fight," Peterson said. "We need you to help explain to your members of Congress that the Ag Committee and the Farm Bill need new resources. The first fight will be to get it into the budget." 
 
 Although the panelists weren't able to answer Gebolys' question definitively, they were all well-aware of their constituents' desires regarding renewable fuels. The American people want to decrease dependence on foreign fuels and energies, panelists agreed. Weldon, who was just back from the campaign trail, said statements such as, "We need to stop getting our oil from the 'Mideast' and start getting our energy from the Midwest," always drew huge applause. The "600-pound gorilla" driving public policy is public opinion, he said. The public wants to have homegrown American energy sources. His Florida constituents want to end fuel imports from the Middle East and Venezuela, Weldon said. They see the connection between what Venezuelan President Hugo Chavez is doing to undermine democracy in South America and his access to U.S. dollars, and they look at the long-term picture. 
 
 McCotter agreed. "We have to defend regimes that are not necessarily friendly to the United States," he said. "Dollars spent on fossil fuels or sent to the Middle East may be used to undermine interests of the United States. Having renewable energies at home is a matter of securing our prosperity and our national liberties." 
 
 McCotter is also confident that automobile manufacturers understand that renewable fuels and alternative energy will be the key to employment and prosperity in the Great Lakes area. There is no longer the tension between renewable fuels and the manufacturing community, especially the auto industry, he said. He noted that the Ford Motor Company is working toward hybrid vehicles. "If we continue down this path in Michigan and America, renewable fuels will do in the 21st century what we did for the automobile industry in the 20th century," he said. 
 
 Energy: The Issue of Today
 To round out its "Government Policy" theme, the NBB invited Mary Matalin and James Carville to give their views on the industry and the upcoming presidential election lineup.
 
 Every married couple has their differences, but there aren't many husband and wife duos who publicly reveal their polarities in the national political arena as do Mary Matalin and James Carville. 
 

 Known as the "Ragin' Cajun," Carville is a Democrat who served as chief campaign strategist for the Bill Clinton/Al Gore presidential campaign in 1992 and is one of America's best-known political consultants. Matalin formerly served as assistant to President Bush and counselor to Vice President Dick Chaney. Despite their opposing political viewpoints, they agreed that biodiesel is good for America's energy future.
 
 "What you are advocating is not just good policy-it's good politics," Carville said of biodiesel. "This is something people understand on a visceral level."
 
 In a press conference following the general session presentation, which included their predictions for the upcoming presidential campaign and general views on America's energy future, Matalin emphasized the power of people to make change happen in this country. With issues such as biodiesel, which has garnered a rare popularity among the American public, it gets the attention of those in Washington, D.C., she said. Although Carville believes that biodiesel is still not as largely on the radar of most political decision-makers, he agreed that there is bipartisan support and that it's going to be an important issue moving forward. Usually when an advocacy group asks politicians to do something it's difficult because there are sacrifices that have to be made in the process, Carville explained. In the case of biodiesel, however, politicians are asked to do something for an issue that is wildly popular.
 
 Matalin predicted that alongside healthcare, energy would be the biggest domestic issue in the 2008 presidential election. "This is the right time and the right decision that combines all the people's needs," Matalin said of the common cry for a clean, renewable and sustainable way to have a stable energy system. "When people want something as bad as they want progress in the energy sector, they will get it," Matalin said. "The system works." 
 
 Susanne Retka Schill, Jan Tellmann and Lindsey Irwin are Biodiesel Magazine staff writers. They can be reached at <a href="mailto:sretkaschill@bbibiofuels.com">sretkaschill@bbibiofuels.com</a>, <a href="mailto:jtellmann@bbibiofuels.com">jtellmann@bbibiofuels.com</a> and <a href="mailto:lirwin@bbibiofuels.com">lirwin@bbibiofuels.com</a> or (701) 746-8385.

Joe Jobe announced the NBB's new goal of replacing 5 percent of the U.S. diesel market with biodiesel by 2015 at the 2007 National Biodiesel Conference & Expo in San Antonio.

611-1294329674.jpg

Left to right: U.S. Reps. Peterson and Hulshof, Gebolys of the NBB, and Reps. Weldon and McCotter discussed the federal government's role in the renewable fuel industry. 

612-1294329674.jpg

613-1294329675.jpg

614-1294329676.jpg

In the shadow of the Alamo where brave defenders of Texas desperately fought to hold their ground against insurmountable odds, supporters of the biodiesel industry gathered for the National Biodiesel Conference & Expo. Although their struggle isn't as legendary nor their sacrifices as ultimate, a great deal of effort has been exerted by many to move the biodiesel industry to its current production level.

NBB Raises the Bar

While thermal depolymerization may not be in the biodiesel industry's common vernacular, a series of announcements Monday did their part in pushing it there.

 	
 On Monday, <a href="http://www.conocophillips.com">ConocoPhillips</a> and Tyson Foods jointly announced a strategic alliance that will use Tyson beef, pork and poultry by-product fats to create a diesel-like fuel through thermal depolymerization production technology in ConocoPhillips' crude oil refineries. ConocoPhillips has already developed the proprietary technology at its Whitegate Refinery in Cork, Ireland, where the company has commercially produced the fuel using soy oil since late 2006.
 	
 On the same day as the announcement, the <a href="http://www.biodiesel.org">National Biodiesel Board</a> (NBB) issued a statement regarding a recent Internal Revenue Service ruling that allows fuel produced through thermal depolymerization at conventional petroleum refineries to be eligible for the $1 per gallon renewable diesel fuel tax credit. The biodiesel tax credit was signed into law as part of the Energy Policy Act of 2005. "Certain powerful oil companies have managed to get the government to expand the definition of a separate provision that was added into the biodiesel tax credit law late in the legislative process," Jobe said in a release. "It's our belief that this credit was developed to help a specific emerging technology, and not to further subsidize existing petroleum refineries."
 	
 Jobe said the IRS interpretation will allow existing refinery capacity to be used to create "renewable diesel" that will obtain the $1 credit. "It's been our information that this can be done with existing refinery capacity and most likely will be done with existing refinery capacity," Jobe said at a Monday afternoon press conference. "In that case, it is literally not adding a single gallon of diesel fuel to the fuel supply."
 	
 ConocoPhillips said it will begin necessary capital expenditures to enable it to produce the fuel at several of its refineries. Production is expected to eventually ramp up to as much as 175 MMgy per year. "Production is expected to begin in late calendar year 2007, ramping up through spring 2009," said Tyson President and CEO Richard Bond.
 	
 Tyson said it will make capital improvements in the summer of 2007 to begin pre-processing animal fat from some of its North American rendering facilities.
 

 NBB Regulatory Director Scott Hughes said that under the eligibility requirements for the renewable diesel tax credit, the producer must demonstrate that the fuel meets the registration requirements of the U.S. EPA's Clean Air Act and the ASTM standard for diesel fuel and/or heating oil.
 	
 ConocoPhillips said the finished product will meet all federal standards for ultra low sulfur diesel. The animal fats will be processed with hydrocarbon feedstocks to produce the fuel. Thermal depolymerization uses pressure and heat to reduce organic materials into crude oil.
 
 Jobe said the NBB supports the development of second- or next-generation renewable fuels. However, he said he opposes the benefit of a tax credit if it doesn't result in additional fuel capacity. "There is nothing next-generation about subsidizing 30-year-old refinery equipment," Jobe said.
 
 Jobe also fielded a question about whether legislative action could be taken to eliminate the IRS ruling. "We have gotten some indication that there is a feeling that perhaps this provision has gone to a point that it was never intended," Jobe said.
 	
 "The renewable diesel guidance issued by the (U.S. Department of) Treasury will allow integrated oil companies to subsidize their oil refining operations with a tax incentive that was enacted to encourage the growth of a domestic renewable fuels industry," Jobe said. "Treasury's decision to expand the definition of renewable diesel will have a negative impact on the biodiesel industry's ongoing efforts to reduce our dependence on foreign oil."
 
 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: 9:28 a.m. CDT Tuesday, April 17, 2007

NBB responds to ConocoPhillips and Tyson announcement

Consumers may not care about the parts per million of sodium or percentage of bound glycerin that was in the biodiesel that went into the B5 or B20 they just filled up with. However, if a consumer's vehicle suffers from a clogged filter or excessive engine wear, they won't care that it was one batch of off-spec fuel that caused the problem. It will be a biodiesel problem that they will solve by never buying the renewable fuel again. So, it's little wonder that many of the presentations at the National Biodiesel Conference & Expo held in February in San Antonio dealt with ASTM quality standards for biodiesel and how producers can meet those standards. 
 
 In October 2006, the National Renewable Energy Laboratory (NREL) released a report showing that out of 32 biodiesel samples collected nationally, half failed to meet ASTM quality requirements. NREL Principal Engineer Robert McCormick says that doesn't mean half of the biodiesel being produced in the United States is off-spec, but it indicates that there is a potentially serious problem in the industry. "I think it's safe to say that an unacceptably large fraction of the biodiesel on the market is failing to meet spec," says McCormick, who was one of the presenters at the conference.
 
 Biodiesel manufacturers need to know what can go wrong in their manufacturing processes and how that can lead to impurities in the finished product. "Manufacturers have to test their products, and they have to know what they're doing in terms of purifying what I term the 'crude biodiesel' that comes out of the transesterification reaction," McCormick says. "There's not just one approach to doing this. There are probably three or four main ideas on how you go about doing this. Any one of them will get you to a quality product if you're doing it right, but they have to take measurements and test every batch."

 
 ASTM International, formerly the American Society for Testing and Materials, is a voluntary standards organization that develops specifications for everything from steel girders to children's pajamas. Biodiesel producers and marketers are primarily concerned with two standards-ASTM D 975, which covers diesel fuels and may soon include biodiesel blends up to B5, and ASTM D 6751, which sets the minimum standards for B100. ASTM is also considering creating a specification that would cover biodiesel blends from B6 to B20, says Steve Westbrook, chairman of Subcommittee E of the ASTM Committee D02 on Petroleum Products and Lubricants.
 
 Subcommittee E works on specific standards for biodiesel and blends. Current practice just assumes that on-spec diesel and biodiesel can be blended. "There is no written spec for what a B5 or a B6 to B20 [blend] should be," Westbrook says. "The unwritten accepted procedure is that if you take diesel that meets 975 and biodiesel that meets 6751 and blend them together, the resulting blend is a legal fuel. But that's not really a position that the ASTM subcommittee is willing to live with."
 
 Subcommittee E has put the proposed standards for blends of B5 or less and B6 to B20 on hold pending more research into problems with precipitation above the cloud point of the fuels. "Further action is waiting on some studies on low-temperature concerns," Westbrook says. "Once that task force is done, it will make some recommendations, and we'll proceed from there." The task force is scheduled to make its recommendations at the subcommittee's June meeting, he adds.
 
 Legal Issues
 "It's important to meet the spec for a whole list of reasons," McCormick says. "Users who get B20 and even B2 that is made from out-of-spec fuel are going to have operational problems. Even if the producers don't say it, consumers are going to assume the biodiesel meets the ASTM spec. By selling out-of-spec biodiesel, you are really committing fraud." 
 
 The ASTM D 6751 standard is more than just an assurance that consumers get the product they think they're buying. Engine manufacturers rely on the standards to develop their fuel recommendations for vehicles. The U.S. EPA bases air pollution requirements on vehicles using standard fuels and works to keep nonstandard fuels out of the market. 
 
 "Biodiesel that meets the ASTM spec is registered with the EPA as a fuel, and has undergone significant emissions and health effects testing as part of that registration," McCormick says. "Biodiesel that fails to meet that spec isn't included in that registration, so it's not a legal fuel. [The] EPA will come after you if they find you're not selling ASTM-spec fuel. We are aware that [the] EPA is preparing to begin and test to enforce the spec. They're not doing it now, but they're going to be doing it this year."
 
 Finally, biodiesel incentive programs based on tax credits are regulated by the Internal Revenue Service (IRS), and only ASTM D 6751 biodiesel qualifies for those tax credits. "So if someone is selling out-of-spec biodiesel, they're committing tax fraud," McCormick says. "The IRS is already actively enforcing the spec. If you're failing the spec, they're not going to give you a second chance. They're going to padlock your plant."
 

 Start Your Engines
 Standards are also necessary to provide engine manufacturers with a consistent fuel that they can test and evaluate for use in their products, says Roger Gault of the Engine Manufacturers Association. "We need a viable standard that can be used by engine manufacturers to qualify their products and define for their customers the impact of the use of biodiesel fuels," Gault says. "It's a daunting task to figure out what's acceptable." 
 
 Engine manufactuers are concerned about the variability between biodiesel and other products marketed as alternative fuels and even between biodiesel from different manufacturers, and the different blends of these fuels, Gault says. "Even with the standards, there is still a pretty fair variety of product in that mix," he says. "There is a wide variety of blend levels and a wide variety of interactions with everything under the sun." Most engine manufacturers are comfortable with blends up to B5, Gault says. More work on both the quality standards and the processes to meet those standards has to be done before higher biodiesel blends will be accepted. "The real question is: At what level of blend do you need a stand-alone specification?" he says. "We've taken the approach so far, that up to B5 the applicable petroleum diesel fuel standards are viable and acceptable, given that the B100 meets its requirements. But we think once you get above B5 that becomes problematic."
 
 Outstanding issues with biodiesel standards that remain to be addressed from the perspective of engine manufacturers include: oxidation stability-peroxides, acids and insoluble precipitates; microbial growth; water separator performance; materials compatibility of both plastics and metals; and temperature-related problems, including cold flow and precipitates, Gault says. 
 
 Quality First
 Achieving and maintaining quality production is critical to the biodiesel industry, says Paul Hoar of Agrifuels LLC, a contractor with the National Biodiesel Board. "The engine manufacturers are trying to be supportive, but until a reasonable number [of biodiesel producers] meet the specifications, they may say they can't support the use of biodiesel above, say, a B5" he says. "Or in the worst case, they might not endorse biodiesel at all."
 
 Hoar says biodiesel producers should strongly consider participating in the BQ-9000 or a similar quality assurance program. BQ-9000 is not a quality standard, but it's a program managed by the National Biodiesel Accreditation Commission (NBAC) to ensure that producers take the steps necessary to produce a product that consistently meets the applicable specifications. "The idea is, if they follow the procedures outlined in BQ-9000, it increases the likelihood substantially that when the fuel reaches the consumer it will meet the standards of ASTM D 6751," he says.
 
 BQ-9000 certificates of analysis follow the products through the marketing system, Hoar says. This will become more important as government regulators step up their enforcement of biodiesel quality standards. "What's interesting in the legislation is that there is a presumed liability through the chain of custody depending on where the noncompliance is found," he says. "Everyone back up to the producer that owns and handles the fuel in the chain of custody is presumed liable. They have to prove they have a quality management system and [that] when the fuel reached their location, it was good to use in their process, they handled it properly, and they passed it downstream in the chain and it was [ASTM D] 6751 at that time. If they don't have a quality management system to fall back on to actually prove that, they could be liable for significant penalties that both the EPA and IRS can enforce." 
 
 Jerry W. Kram is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:jkram@bbibiofuels.com">jkram@bbibiofuels.com</a> or (701) 746-8385.

618-1294329677.jpg

Meeting ASTM specifications for biodiesel may become even more like a stamp of approval. Producers who allow off-spec biodiesel into the market could not only jeopardize their reputations, but they could also run afoul of the U.S. EPA and the Internal Revenue Service. With an unacceptably high number of biodiesel samples not meeting ASTM standards in a recent survey, the entire industry could be on the receiving end of a consumer backlash that could take decades to recover from.

ASTM has Real-World Consequences

The one issue that could keep biodiesel from becoming more widely accepted is inconsistent fuel quality. The situation is exacerbated by the lack of federal regulations. That requires each state to decide for itself how to handle fuel quality concerns. Randy Jennings, regulatory services administrative manager for the Tennessee Department of Agriculture (DOA), was one of the speakers at the National Biodiesel Conference & Expo in February and later talked to Biodiesel Magazine about how his state is tackling the task of delivering high-quality fuel to consumers.

 
 The Tennessee DOA has been in charge of regulating the state's fuel quality for nearly 17 years and has seen refined petroleum fuel quality violation rates drop from 10 percent in fiscal year 1990 to between 2 percent and 3 percent during fiscal years 1992 through 2006. While petroleum fuel quality seems to have found its baseline in Tennessee, biodiesel has settled into a range of its own-a 40 percent failure rate.
 
 The Tennessee DOA began testing and regulating biodiesel in December 2005. In the past 14 months, it has found that while the failure rate remains relatively steady, the actual quality of the fuel is getting more consistent, Jennings says. "When you look at this number of 40 percent of the blend stock samples that have failed, you have to understand that many of those samples are coming from the same source," he says.Oftentimes, they're repeat samples from the same facility, so it's not like 40 percent of all the fuel out there at one time is bad. Most of the violations are coming from smaller producers in the state that might not have the advantage of technical expertise or may be limited by the start-up costs of the latest technologies, he says. A failed sample results in a stop sale order, and subsequent tests are administered until fuel quality is up to specifications for sale to the public.
 
 The DOA and biodiesel producers in the state of Tennessee have made big strides in the past 14 months, Jennings says. "The department is moving from more of a monitoring mode to a full regulatory mode at the moment," he says. "When we first started testing biodiesel we were moving into a new area, as well. We were running tests that we weren't familiar with. Even though we were using a contract laboratory, we were working with data with some very low limits, and some of the methods were new enough that they didn't even have precision statements in there." Consequently, as biodiesel producers honed their craft so did the DOA. Rather than acting upon its authority to impose civil fines for loads of biodiesel in violation of state standards, which are based on ASTM D 6751 specifications, the DOA simply issued stop sales on off-spec biodiesel and worked with producers to bring production in line with regulations. This was the key to getting the industry off the ground, and also one of the reasons for the high percentage of failed samples, Jennings says.
 
 "We were trying to give the industry a chance to get their act together and to get a better hold on what they were doing at the production level," he says. "At this point, we are moving into more of a regulatory mode."
 
 Although the DOA can and occasionally does impose fines for off-spec fuel, the department's major role is keeping the off-spec fuel out of consumers' fuel tanks, Jennings says. The quickest way to stunt a burgeoning biodiesel market is to erode the consumers' trust in the product. In that sense, Jennings considers Tennessee's program a success.
 
 "The anecdotal testimony I'm hearing is that a lot of the marketers that are interested in blending are requesting documentation," Jennings says. They want biodiesel that has been sampled and tested by the state of Tennessee and is found to be in compliance. "I think they have a lot of confidence when they see that we've put our seal of approval on a batch of fuel from this marketer," he says.
 
 <img src="/images/upload/20070409022642.jpg" alt="Figure 1" />
 
 Crunching the Numbers

 According to the National Biodiesel Board, Tennessee is one of 12 states proactively testing biodiesel samples for quality. In fact, only 27 states apply ASTM D 6751 standards to B100, and 14 have incorporated ASTM D 975 (the standard petroleum diesel specification) to blended biodiesel. Some states take measures to address out-of-spec fuel after they receive a complaint, while others have no testing and regulatory authority at all. Each state deals with out-of-spec fuel differently because there are no federal fuel regulations. Federal biodiesel regulations aren't anticipated anytime soon, and there doesn't seem to be any consensus regarding who, when and how states test biodiesel. In Tennessee, for instance, the DOA tests B100 samples randomly before the product is blended and moved to market. The state contracts with an outside laboratory to test the biodiesel. If a violation turns up, the DOA is also the entity in charge of applying penalties. Across the border in Virginia, however, the Department of Product and Industry Standards regulates biodiesel and only tests the blended product when a complaint is filed. Virginia tests the product in a state laboratory.
 
 Biodiesel specifications also vary from state to state. In North Carolina, blended biodiesel is tested in B1 to B5 and B6 to B19 categories, and must meet ASTM D 975 specifications. The state hasn't adopted the ASTM D 6751 specification for B100, however. In Wisconsin, the Department of Commerce enforces ASTM D 975 for B1 to B5 and ASTM D 6751 for B100, but the state has no specification for biodiesel blends from 6 percent to 20 percent. Then there's Ohio, where biodiesel is not currently considered a fuel.
 
 The lack of a national standard has raised concerns that biodiesel could become a "boutique fuel," with a wide variety of standards that would keep the price of the fuel high and its market penetration low. Jennings says this shouldn't be the case. "From a B100 blend stock perspective, I don't think that the different methods that states have adopted to regulate the product will cause the material to be a boutique fuel, because all states that are involved are using [ASTM] D 6751 as the standard, even if they are not performing full specification testing," he says. "That means that all producers in states that regulate biodiesel, or that ship to states that regulate, must work to produce an ASTM-compliant product."
 
 The tangle of regulations and jurisdictions can be confusing, but as more and more states start utilizing biodiesel, a more standardized approach could emerge. Tennessee's approach would make a good model for other states with emerging biodiesel markets, Jennings says.
 
 "I think that if the regulatory agency wants to establish good will with this new emerging industry-if they want to see biodiesel production grow and flourish-they need to reach out to the industry and regulate it in a manner that will not allow off-spec material to move," Jennings says. "But [the state] has to do it in a proactive way, establishing a good working relationship with the industry to encourage those plants to work out their problems and continue to produce biodiesel and alternative fuels in their states."
 
 Now that the National Biodiesel Board has set its goal that 5 percent of the on-road diesel market be biodiesel by 2015 (approximately 2 billion gallons per year), ironing out fuel quality issues won't just be something that's done in a laboratory. It will also need to be addressed in capitols across the country. 
 
 Michael Shirek is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:mshirek@bbibiofuels.com">mshirek@bbibiofuels.com</a> or (701) 746-8385.

619-1294329678.jpg

Until federal regulations are established, the burden of ensuring biodiesel quality rests at the state level. Individual states have to meet the growing use of the fuel with their own regulations, which has led to inconsistent standards and testing methods across the nation. Although 27 states have accepted the ASTM D 6751 standard for B100 and 14 have applied ASTM D 975 specifications to blended biodiesel, only 12 states proactively test biodiesel samples for quality before the fuel goes to market.

Shining Examples

"We are a year late on opening this biodiesel plant," read a January update on the Web site of Piedmont Biofuels, a 1 MMgy biodiesel production facility and cooperative in Pittsboro, N.C. "One of our major miscalculations has been the speed of permitting."

 
 Stories of permitting mishaps are partly the reason why this aspect of plant development is approached with apprehension. Registration, permitting and zoning are not just one process, but many processes that must be timed correctly and coordinated with project engineering and financing. In fact, even though Piedmont is a small producer, and likely falls under less arduous regulatory procedures than a plant that would use more water and emit more pollutants, it still lists 25 approval processes that it had to go through in order to legally produce biodiesel. 
 
 Piedmont listed its permits on its Web site in hopes that its experience would help others. "We would say that permits are a small percentage of the tuition we have paid along the way, and that anyone wanting to save a fortune on their biodiesel endeavors should give us a call," the Web site read. Piedmont noted that it had been repeatedly contacted on the subject.
 
 Biodiesel plant developers are seeking advice on permitting beyond North Carolina, however, which is why the Registration, Permitting and Zoning session was one of the best attended at the National Biodiesel Conference & Expo in San Antonio. The session featured perspectives from an official at a state department of environmental quality, an environmental permitting consultant and a director from a company with multiple biodiesel plants.
 
 One of the issues with permitting is that there's no standard checklist. What permits a biodiesel plant must acquire and what regulations it must abide by depend on the size of the plant and the location. One person who attended the session voiced a concern that many others agreed with. "I wake up in the middle of the night scared that we're missing some permit that we need to be applying for," he said. 
 
 <img src="/images/upload/20070409022922.jpg" alt="Figure 1" />
 
 One of the first steps in the permitting process is to contact all of the federal, state and local regulatory agencies early and often, Brad Albin, director of plant sales and construction for Renewable Energy Group (REG) told session attendees. "At least have some of those early discussions, and every time you drive by their office you want to stop by and say hi," he said. Albin's presentation detailed many of the permits and reviews that most biodiesel production facilities must go through (see graphic below). 
 
 "It's very important to have a sense of urgency on these things and get them done early on in the process," Albin said. By getting them done early and performing due diligence, which he said is becoming increasingly severe, potential problems can be identified before they become costs. For example, Albin suggested thorough testing when it comes to the well water permits. "If you make mistakes on this end, you're going to spend a lot of money that you didn't have to, or you'll find out that in your budget, you didn't have a lot of the money that you needed," he said.
 
 Albin recommended having a realistic project timeline, resource requirements and budget. Meeting regulations and laws, which Albin said isn't an option, will save money by avoiding delays and fines, thus keeping the project on time and on budget. 

 
 Regulators also suggest that project leaders be organized and have most questions answered before a permit is applied for, said Howard Haines, bioenergy program manager at the Montana Department of Environmental Quality. "It really helps if you have a clear knowledge of exactly what you want to do," he said. "Most of the time, there's a spot that fits that. Air and water folks really need to know where you're putting your plant before you start making big plans."
 
 Additionally, Haines recommended having a plan for other details, such as the storage, handling and disposal of methanol and other hazardous air pollutants (HAPs), glycerol, wastewater, as well as any odor issues. Haines recognized that variables can crop up in any plan while the financing and permitting are being sorted out. Thus, he recommended being honest with the regulatory agencies about the limits and options of one's business plan. It's also important to identify key actions in case of various unknowns. 
 
 Sometimes, problems with permitting may stem from a lack of experience on the part of the local regulatory agencies. "The good news is, all the regulations to make biodiesel are there," Haines said. "The bad news is they're all for large plants (over 30 MMgy). There hasn't been enough time since the idea of making biodiesel on a small scale for the local regulators to come up with a process." 
 
 Haines described the permitting process almost as if it's a marketing or education campaign. "You need to talk to the local folks who know all the regulations," he suggested. "You're going to have to explain it to them because they may not understand." Don't assume anything and write down everything, he said. 
 
 Albin agreed. "Don't believe anything until you get it in writing," he said. "A lot of these folks will tell you anything you want to hear-not because they're trying to be mean, but sometimes because they just don't know."
 
 Those at Piedmont Biofuels can commiserate. "Since biodiesel is still relatively new, it tends to require a regulatory education every time, and regulators who are unsure have a tendency to pass you along to the next agency," the Web site read. "Communication from one level of government to the next tends to be slow, which means getting permits tends to bog [the project] down."
 
 Though some regulators may need to be educated about the biodiesel process, they can also be one of the best sources of information on the process. "You don't have to reinvent the wheel," Haines said. "Know where to get help. The one thing I would really recommend is to contact the fire marshal."
 
 The education campaign must also be brought to the public. Some suggested starting dialogue with community groups before the first permit has been applied for. "When people start hearing about alcohols and acids and bases, normally people and reporters don't know what to think about that, and they can definitely impact public opinion and the local officials," Haines said. "Be sure you know how to address the press and make sure they can get as full a story as possible."
 

 Usually, permits must be acquired and reviews completed before ground is broken, or in the case of an operating permit, before production commences, Albin said. The navigation of all of these processes can be facilitated with the aid of experienced consultants. "Pick consultants who know what they're doing and have done biodiesel in the past," Albin said. Another suggestion is to hire a local permitting expert. "They know the local regulations," an audience member said. "More importantly, they know the guys to pull permits from. It helps in terms of speed and accuracy."
 
 Environmental consultants, such as Peter DeRossi of the environmental and engineering consulting firm Foth & Van Dyke and Associates Inc., can help with the important and complicated permits involving air quality and pollution control. DeRossi's job is to identify and obtain the necessary environmental permits. The air quality and pollution control permits stem from the federal Clean Air Act requirements. "As biodiesel facilities become larger, it's more likely that they will encounter the plethora of federal air quality regulations that would cover both hazardous air pollutants and traditional air pollutants," DeRossi said.
 
 Biodiesel facilities must control emissions from methanol and hexane, if applicable, which are classified as federal HAPs. "These materials are quite volatile, and they will want to escape from any number of locations," DeRossi said, citing transfer operations, tank emissions, equipment leaks and process emissions as possible locations. A 45 MMgy plant is likely to be considered a major source, and often a company will be assumed to be a major source unless proven otherwise with data, he said. Thresholds that determine if a facility is a major source vary by location and the surrounding businesses. The location may also have different attainment levels for different pollutants. Whether it's considered a major or minor source of emissions, a construction air permit must be acquired before construction starts on a new facility or the expansion of an existing facility, DeRossi said.
 
 There are several other federal environmental regulations that biodiesel facilities must comply with, which an environmental permitting expert can navigate. DeRossi recommended involving technical and legal expertise early in the project planning, and ensuring that these consultants work closely with the process technology supplier.
 
 Permitting is not about luck, Albin said. "It's finding the right people to work with, a lot of hard work and attention to detail," he said. 
 
 Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:amcelroy@bbibiofuels.com">amcelroy@bbibiofuels.com</a> or (701) 746-8385.

620-1294329679.jpg

The complicated and overlapping process of obtaining the proper permits to build and operate a biodiesel plant can be confusing at best. To make the process more manageable some projects rely on regulatory professionals, who can offer experience, foresight and perspective to avoid costly delays and fines.

Permit Pending

Eastman Chemical Company has been making food-grade antioxidants for various consumer markets for many years. The company recently adapted this experience to develop BioExtend 30, a new oxidative stability system for biodiesel fuel. The new product was unveiled in February at this year's National Biodiesel Conference & Expo in San Antonio. 

 
 Founded in 1920, the Kingsport, Tenn.-based Eastman employs nearly 11,000 people worldwide and had a 2006 sales mark near $7.5 billion. The chemical conglomerate's leaders on this fuel-stability project were Bill Sade business development manager, and Sharon Cline, technical associate. Both work for the company's performance chemicals and intermediates business organization. They talked with Biodiesel Magazine in February, about their innovative work to improve the quality of biodiesel fuel. Both career chemists, Sade and Cline relied on their backgrounds for the development of BioExtend. They were also backed by Eastman's more than 50 years of antioxidant expertise. "We have been able to leverage our long history of supplying innovative antioxidants across an extensive range of markets-from cosmetics and personal care to food, oils and fats," Sade says 
 
 The processes responsible for oil and butter rancidity also occur with biodiesel. In other words, the fuel can spoil. Ultimately, fuel degradation and polymer formation can clog fuel filters, and create damaging engine deposits and residues. Therefore, oxidative stability is ultimately a fuel-quality issue, and specs are in place, which assure that biodiesel plants produce fuel with a reliable shelf life. 
 
 The BioExtend 30 platform is a full-service antioxidant solution in which each fuel sample is evaluated individually along with the logistical demands of each biodiesel producer. Eastman's laboratories are well-equipped with Oil Stability Index (OSI) testing equipment, which can be used to analyze fuel and determine exactly what dosage will be required by a particular fuel sample to maintain stability. The OSI test is commonly used by the biodiesel industry to measure the susceptibility of a particular fuel sample to oxidation. "Every case is different," Cline says. "We can select the stability [that] different producers require." 
 
 <img src="/images/upload/20070409023037.jpg" alt="Figure 1" />
 
 As BQ-9000 certification becomes increasingly necessary for existing or would-be producers to assure a trusted and respected place in the market, most biodiesel producers will need antioxidant solutions. "As BQ-9000 certification becomes expected, most producers will recognize the need for antioxidants to meet the fuel stability requirements," Cline says. 
 
 Dual Functionality
 BioExtend is a combination of 30 percent mono-tert-butylhydroquinone (MTBHQ), a powerful antioxidant with an effective chelating agent. The synergistic effect achieved in the inhibition of oxidation is greater than the sum of the two effects alone, Eastman says. "This is the first antioxidant system with dual functionality, meaning that it attacks both the primary and secondary phases of degradation," Cline says. The metal chelator in the Eastman system hinders not only the propagation, but also the initiation phase of degradation. 

 
 The oxidation process consists of three phases: an initiation phase, in which the free radicals are formed; a propagation phase, where the free radicals react with oxygen to produce peroxides that attack other fat molecules; and a termination phase, in which stable decomposition products are formed. 
 
 A free radical is an atom or group of atoms with at least one unpaired electron. The process of oxidation occurs when an oxygen molecule loses an electron and stabilizes itself by stealing an electron from a nearby molecule. Antioxidants interrupt oxidative decomposition by reacting with fat radicals to form a stable molecular group, which is less susceptible to oxygen. 
 
 Biodiesel contains molecules that can easily lose an electron. The process of oxidation occurs when a hydrogen atom is lost to form a free radical. Because of their unique structure, antioxidants further stabilize the free radical and are less prone to react with oxygen to form a perioxiradical. This is all a part of the cycle. The perioxiradical then attacks another fat molecule, and the cycle continues. Oxidation, however, can't be prevented-only slowed-and no antioxidant treatment can "fix" fuel that has already decomposed. 
 
 Even with Eastman's past experience, there were some challenges involved in adapting its antioxidant platform for the biodiesel market. "Since some of the food-grade products weren't soluble in diesel fuel, some modifications were required," Cline says. But their efforts were successful, and the resulting product is different than other antioxidant treatment systems.
 
 Most antioxidant solutions use biodiesel as a solvent, which means that the additive is dissolved in the fuel. However, Eastman designed a unique solvent matrix that brings the two active ingredients-the antioxidant and metal chelator-into solution. "Chelating agents bind metal ions, making them unavailable for catalyzing the initiation phase, thus slowing the oxidization process," according to Eastman. 
 
 BioExtend's solvent system is designed for use in extremely cold temperatures. It prevents separation from the antioxidant and remains liquid at temperatures below minus 25 degrees Fahrenheit. When asked what solvent was employed in the BioExtend system, Sade says that he wasn't at liberty to discuss the chemical specifics of the product because the material is proprietary. "We have a patent pending, and we need to have some intellectual property protection in place before we can talk about that," he says. 
 
 Biodiesel producers don't need any special equipment or capabilities on-site to introduce BioExtend into their fuel. "It comes [to the producer] readily miscible and mixable, so there is no need to dissolve it," Cline says, adding that all of the attributes that make the additive easy to use were considered in the research and development stages of commercialization. "We have delivered a solvent matrix with a low viscosity that facilitates ease in mixing," Sade says. 
 
 <img src="/images/upload/20070409023227.jpg" alt="Figure 2" />
 

 Every Case Is Different
 The idiosyncrasies inherent in the multitudinous biodiesel-refining processes affect the level of BioExtend that the fuel would need to guarantee oxidative stability. Specifically, distillation, which is often used to "finish" the fuel in the refining process as well as recover glycerin, strips vegetable oil of many of its natural antioxidants. In that case, producers might need additional levels of BioExtend. "Those distilled products are, however, very amenable to BioExtend," Cline says. "Even all soy biodiesel is not the same. Soybeans grown in different parts of the country have different levels of trace metals contained in them that ultimately affect oxidative stability." Each case must be evaluated individually, Cline says. "We can't provide the same amount of product to every soy producer just because it's soy," she says, adding that BioExtend has been tested in a variety of samples made from different feedstocks including soybean, rapeseed, palm, cottonseed and sunflowers, which have all "yielded excellent stability results." 
 
 In Europe, biodiesel is required to have an OSI of at least six hours by the time it reaches consumers. That said, it is also important to mention that the OSI can change over the course of the fuel's lifecycle, which involves the travel time between the plant and the pump. So, an OSI of nine or higher might be needed by the biodiesel producer to ensure that the consumer-required six-hour standard is met. In January, the United States implemented an OSI standard of three hours. The ASTM standard for biodiesel was also updated and published in January. 
 
 A variety of factors can affect the dosage level of BioExtend in refined biodiesel shipments. "First of all, it could be related to use," Sade says. Whether the product is sold into transportation, marine or heating oil markets are variables that need to be kept in mind when calculating stability requirements. Distance also must be considered, he says. "For example, if North American companies plan on exporting biodiesel to European markets, those producers are going to need more transit time," Sade says. "That is one of the benefits of BioExtend." 
 
 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.

Fuel storage practices are critical to ensuring a quality supply, and because biodiesel can degrade rapidly through oxidation, the shelf life of the fuel is viewed as a weakness. However, a new product from Eastman Chemical Company is now available that may be the most developed additive technology to date for increasing oxidative stability.

A Full-Service Package

In late 2003, a small biodiesel company named Seattle Biodiesel LLC was founded by John Plaza, a man who just wasn't satisfied with the overall approach most biodiesel producers were taking in establishing their industry nearly four years ago. To the vexation of Plaza and other like-minded individuals, the model at the core of his discontent has since become the most widely reproduced in the industry. "Most renewable fuels production is a branch off of an agricultural company growing or purchasing agricultural commodities already," Plaza says. "We, on the other hand, have no loyalty to any one agricultural commodity, or to any particular crusher. We're not seeking to expand market opportunities for something that's already being grown." In fact, Plaza sees that plan as a fundamental limiting factor for long-term biodiesel industry growth-the world over. "I started this company as an energy company," he says. "We're not connected to the vertical integration of any particular feedstock development like some of those big international ag companies." 
 
 Others in the biodiesel business echo his sentiments. One executive, whose job is strategic development for another large-volume biodiesel company, tells Biodiesel Magazine that the community of producers making this renewable fuel must come to a decision. "Those in this industry, need to ask themselves, 'Are we going to be a commodity-driven industry or are we going to be one that focuses on producing clean-burning transportation energy and be feedstock neutral?'" the source says. Those behind Seattle Biodiesel clearly asked themselves this question a long time ago. "Our desire was-and still is-to produce energy and, in doing so care for the environment," Plaza says. He wants to be profitable too, but he says $60-per-barrel crude oil and high soy oil prices can make it hard to compete. Imperium Renewables Inc., which was formed by Plaza and his associates in 2005, now wholly owns the successful Seattle-based plant. This move allowed company leaders to roll out their emergent counterculture business philosophy on a grand scale.
 

 Early Formation
 Through negotiations and a general contracting agreement with Sabyr Contractors, the building of Seattle Biodiesel began in 2004. The refinery, modestly sized at 5 MMgy, rails soy oil from the Midwest to the far-off reaches of the Pacific Northwest. "When I started more than three years ago, the state of Washington had more use of biodiesel per capita than any other state in the nation, yet there wasn't an ounce of oilseeds grown in the state," Plaza says. "Washington is always going to be in the position where they either have to import the majority of their feedstock or fuel." Seattle Biodiesel imports its soy oil from Cargill Inc. in Iowa, which makes it a destination plant because it is situated where the market demand is rather than where the feedstock is grown. 
 
 In early 2005, the Seattle-based facility was operational. Plaza says the technology developed and now in use at the plant is unlike conventional biodiesel refining; and was developed in-house. "Technologically, nothing out there being used was appropriate for what I wanted," Plaza says. "It was all based on old ideas. Traditional biodiesel production just wasn't for us. We needed a less capital-intense, faster, better, cheaper way-something that would resonate well with the investment community." 
 
 Sabyr Contractors entered into an agreement with the progressive leaders of Seattle Biodiesel to develop the company's first base-line technology. "Sabyr Contractors and JH Kelly have been involved with us since early on, and they've been great," Plaza says. After some adjustments and a learning period, Seattle Biodiesel began hiring its own engineering staff. "Now 20 percent of our employees are chemical, mechanical or electrical engineers," he says. The company offered little to no information on its proprietary process technology outside of saying, "Our reaction is different than most." Nevertheless, the company announced March 5 that Seattle Biodiesel had achieved BQ-9000 certification, a status it hopes to reach with all of its production facilities. 
 
 In the fall of 2006, Imperium Renewables broke ground on a massive 100 MMgy facility in Grays Harbor, Wash. The plant is nearing completion with an anticipated July 2007 commissioning. The Grays Harbor project is strategically modeled in many ways after Seattle Biodiesel, which essentially performed as a de facto pilot plant for the company's future work. 
 
 Resonating Well with Investors
 "We have the best strategy in the United States," says Imperium Renewables CEO Martin Tobias, who attributes this strategy to his company's recent successes in attracting serious investment dollars. Fundraising for the Grays Harbor plant began in late 2005, followed by the Series A round financing that successfully closed in 2006. That money is being used to build the Grays Harbor plant for only 63 cents per gallon of construction costs, or $63 million. "Our ability to construct at such a low cost was very interesting to the investment community," Plaza says. 
 
 The interest became even more apparent as Imperium Renewables wrapped up its Series B round fundraising in late February. On the heels of announcing that the Grays Harbor plant would start up this July, Imperium Renewables closed a $214 million investment package, $113 million of which was raised in private equity investments. The other $101 million is under loan managed by lead arranger Societe Generale Corporate & Investment Banking. Venture capital firms Nth Power and Technology Partners have each invested in Imperium Renewables during all three funding rounds. The company says the $214 million deal is thought to be the biggest financing package in U.S. biodiesel history. 

 
 "It was exciting when we were oversubscribed and we were able to pick our own investors for not only their financial abilities, but also their strategic value," Plaza tells Biodiesel Magazine. Investors interest is in large part attributable to Imperium Renewables' sound business plan. No company would risk such large amounts of investment capital were the subject of that investment not sound, Tobias says. "We raised $240 million, which says we were able to prove to our investors we have a great strategy," he says. "Our technology, our better location strategy, the fact that we're not stuck to U.S. feedstock availability issues, and that we're building our refineries closer to the customer. It's a destination strategy." The $214 million gives Imperium Renewables the ability to build at least three more massive refineries in the United States-and beyond. 
 
 Destination: Earth
 While Seattle Biodiesel brings in soy oil from the Midwest, the Grays Harbor plant will need considerably more feedstock. About half will continue to be soy oil but the remaining will come from other sources-some local, some international. Along with soy, Imperium Renewables is arranging to import palm oil-not because the company necessarily likes it but because it feels it has to. "Look, this is going to be the largest refinery in the country," Tobias says, speaking of Grays Harbor and its huge demand on waning soy and vegetable oil supplies. 
 
 Natural Selection Farms has recently entered into an agreement with Imperium Renewables to supply the Washington-based biodiesel producer with up to 1 MMgy of canola oil as a supplement-albeit a small appendage-to its overall nameplate requirement from the combined production of the Grays Harbor and Seattle facilities. "The issue here is that we have a 100 MMgy refinery, and we have an arrangement with the largest canola producer in Washington state," Tobias tells Biodiesel Magazine. "That's more than just a trade relationship … but if we're going to make biodiesel big, we need to have access to worldwide feedstock markets. We'll use some palm. Canadian canola-we'll buy some of that as well. We're willing to buy up all the canola grown in Washington, Oregon and Idaho, too." 
 
 While part of Imperium Renewables' strategy as an energy company is not being confined to feedstock markets by being destination oriented, it's also not limiting where on Earth it determines those final product-destination markets to be. The $214 million the company recently arranged in equity and loans will be used to fund production facilities on the island of Oahu, Hawaii, in the northeastern United States and in Argentina. "In Argentina, we've hired an in-country manager, and we've narrowed the location down to three sites," Tobias says. "The site selection in Argentina won't be final until the second quarter of this year." Argentina has a law in place mandating 5 percent biofuels use by 2010, creating a market for companies like Imperium Renewables to satisfy.
 
 Along with its unique and proprietary technology, destination market approach, international plans and feedstock neutrality or "feedstock agnostic," as Plaza says, the logistics strategy implemented by Imperium Renewables was also a big selling point for investors. Tobias says the company owns its own railcars and barges, helping to control the transportation costs of doing business. Its plants' strategic coastal locales so far have only added to these logistical efficiencies. 
 
 Together, all of the contributing attributes to Imperium Renewables' overarching business philosophy have convinced those who control the strings of rather large purses in the financial community that this is indeed a sound company in which to invest beaucoup capital. The anticipated success of Imperium Renewables' current and upcoming projects in Washington, Hawaii, New England and Argentina will be used as motivation to corral even more investment in this company, whose outspoken dissociation with vertical integration contributes to a growing industry counterculture-one in which the financial community appears to have faith. 
 
 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.

John Plaza, left, founder and president of Imperium Renewables, and CEO Martin Tobias share an aggressive approach to biodiesel production'for their company and the industry as a whole.

621-1294329679.jpg

July 2007 is the anticipated start-up date at the Grays Harbor biodiesel plant, a model Imperium Renewables anticipates rolling out internationally. 

622-1294329680.jpg

There is something to be said about a company's overall business plan when it alone justifies how one of the largest investment arrangements in biodiesel history was recently finalized. Imperium Renewables is the name, energy production is its game.

Growing an Industry Counterculture

Biodiesel use has been rapidly growing in the United States due to high crude oil prices and the desire to reduce the country's dependence on foreign oil while improving the environment and providing value-added opportunities for American agricultural products like soybean oil. Biodiesel has an approved ASTM specification for B100-ASTM D 6751-intended for use in blends with petroleum diesel up to B20. The use of B20 and lower blends made with D 6751 grade B100 has been largely trouble-free since the onset of the biodiesel industry in North America over a decade ago. Over the past 12 to 18 months, there have been a few isolated reports of unexpected filter clogging with B20 blends made with biodiesel meeting D 6751, even though the cold-flow properties (i.e., cloud point, cold filter plugging point) of the B20 would not indicate filter-clogging potential. Archer Daniels Midland Co. (ADM) has significant technical expertise in the chemistry of oils and fats, as well as experience with biodiesel in Europe, and is in the process of building biodiesel plants in the United States. Through its European and U.S. biodiesel experience, ADM has developed knowledge and know-how that can explain one possible root cause for infrequent incidents of filter clogging. As a result, ADM has identified corrective processing actions and potential test methods that can be used to control the phenomenon. Sterol Glucosides Sterol glucosides (SGs) occur naturally in vegetable oils and fats in the acylated form (see Figure 1). In this form, acylated SGs are very soluble in vegetable oil. During the biodiesel conversion process, they are converted to nonacylated SGs. ADM has found the presence of SGs (not to be confused with free sterols) in biodiesel samples and has determined that these SGs may contribute to flowability problems in biodiesel and biodiesel blends. Due to the high melting point of SGs 240 degrees Celsius (464 degrees Fahrenheit) and its insolubility in biodiesel or diesel fuel, SGs can essentially be considered "dispersed fine solid particles" in biodiesel. These dispersed SG particles may also promote the crystallization of other compounds. <img src="http://biodieselmagazine.com/email-images/Process-biodiesel-figure1-0407.jpg" alt="Figure 1" align="left" />Unlike monoglycerides or saturated methyl esters, SGs can't be simply heated to allow them to pass through a blocked diesel filter into a combustion chamber for burning. Even at relatively low levels (35 parts per million or higher), sterol glucosides may promote the formation of aggregates in biodiesel, exacerbating problems caused by saturated monoglycerides and other known cold-crystallizing components. The presence of SGs at double-digit parts per million (ppm) levels may cause the formation of a cloud-like haze in biodiesel, even at room temperatures. Under the microscope, the cloud-like substance appears as agglomerates of various sizes composed of discrete particles of 10 to 15 microns. While various SG compounds in vegetable oils and fats-and the biodiesel produced from it-are known, its impact on biodiesel hasn't been widely studied. In fact, the presence of some free sterols and tocopherols in finished biodiesel have been shown to act as natural antioxidants. In previous studies and testing in the United States, there have been only positive reports of enhanced storage life with biodiesel containing minor levels of these soluble-free sterols and tocopherols. However, SGs differ from free sterols and tocopherols in their solubility in biodiesel. From previous U.S. experiences, there have been no reported negative impacts of SGs in the ASTM D 6751 properties designed to address low-level compounds that might cause fuel system clogging or engine performance problems such as viscosity, cloud point, carbon residue, or water and sediment, as these tests are not sensitive enough to detect ppm levels of SGs. In published literature, there are few references to the SG content of natural oils and fats, and almost no information exists on their levels in finished biodiesel. Depending on processing methods for soybean oil, the SG content in soybean oil can be higher than in other vegetable oils. Crude soybean oil may contain about 2,300 ppm SGs, while crude oils from corn and sunflowers contain only about 500 ppm and 300 ppm, respectively. Palm oil may contain SG levels similar to soy oil. The refining process for vegetable oils-or the pre- and post-processing done in biodiesel operations-may reduce SG levels to the point where it isn't problematic, even when the B100 is used as a pure fuel. If SGs are present at high enough levels and have sufficient residence time, however, it is likely they will settle to the bottom of storage vessels. Cold temperatures can accelerate this phenomenon, as well as increase the likelihood of SGs acting as possible seed crystals for developing of larger agglomerates, which may not have occurred otherwise. The agglomerates will also likely settle to the bottom of storage vessels. This potential settling effect may serve to "hide" the filter-clogging potential of SGs and SG-related aggregates, as the aggregates may sit undisturbed in the bottom of a tank. These two factors-the reduction of SG by normal biodiesel processing or by natural settling-probably explain why SG-related issues haven't been widely observed in the United States to date. A nonscientific sampling of commercial biodiesel has shown SG levels ranging from 0 to 100 ppm. Removing SGs from Biodiesel A sample of commercial soybean biodiesel (containing 68 ppm sterol glucosides) was subjected to the so-called "filter blocking tendency test" (FBT)-ASTM Method D 2068, "Standard Test Method for Filter Blocking Tendency of Distillate Fuel Oils"-at 20 degrees Celsius (68 degrees Fahrenheit) through a 1.6 micron filter. This FBT test is especially sensitive to the presence of minute levels of particulate matter in a sample, even above the cloud point of the sample. Various biodiesel samples have failed the FBT test, even though no SGs were present. The commercial soybean-based biodiesel containing 68 ppm SG measured high (poor) on the FBT test, yielding an FBT value of 15.03 (the maximum value that can be obtained with this test). After passing the biodiesel sample (1,000 grams) through a bed of 5 grams of diatomaceous earth, the sample gave low FBT test results with a value of 1.01, having a sterol glucoside content of 20 ppm. It should be noted that SG in biodiesel from vegetable sources may also be removed by other means. Selective Removal Specific removal of SGs from biodiesel can be achieved without altering of the contents of monoacylglycerols (MAG), diacylglycerols (DAG) and triacylglycerols (TAG). MAGs, DAGs and TAGs are unreacted or partially reacted oils and fats from the biodiesel process. They are limited in the ASTM specification for biodiesel because they can cause problems with injector coking, emissions and stability. Commercial soybean-based biodiesel (555 grams) was treated by slurrying the soybean biodiesel with 5 grams of diatomaceous earth at 25 degrees Celsius (77 degrees Fahrenheit), stirring the slurry for 10 minutes at 500 revolutions per minute, and filtering the slurry through a 0.95-centimeter bed of diatomaceous earth on a 4 cm diameter Schleicher &amp; Schuell "White Ribbon Filter" paper (Grade 598/2: 4-12 micron retention/Sargent Welch Scientific Co., Buffalo Grove, Ill.). The filtration was carried out at room temperature and the filtrate was analyzed to measure the FBT and the contents of MAG, DAG and TAG in the untreated and treated biodiesel (see Table 1). <img src="http://biodieselmagazine.com/email-images/Process-biodiesel-figure2-0407.jpg" alt="Table 1" width="375" align="left" /> Although the content of MAG, DAG and TAG was virtually unchanged by the filtration treatment at 25 degrees, the FBT value was greatly affected. The untreated biodiesel failed the FBT test by reaching the maximum pressure increase possible in the FBT test after only 20 milliliters had passed through the FBT filter, but the treated biodiesel had an excellent FBT value. Thus, the improvement of FBT wasn't dependent on the removal of the MAG, DAG and TAG. Confirming Filter-Blocking Role Biodiesel containing 22 ppm SG was obtained by treating commercial-grade biodiesel. Purified SGs (10, 30 and 50 ppm) were added to the treated biodiesel to produce biodiesel of various SG contents, which were subjected to the FBT test at 25 degrees Celsius (see Table 2). The purified SGs were added in such a manner to ensure homogeneity. <img src="http://biodieselmagazine.com/email-images/Process-biodiesel-figure3-0407.jpg" alt="Table 2" width="375" align="right" />As the level of SG was increased, the FBT values increased, with the 72 ppm SG sample reaching the highest value that the test permits. This confirms that an SG presence at high enough levels could potentially cause filter problems on a dispensing pump or vehicle. Conclusions The presence of SG in biodiesel may cause filter blockage at temperatures above the cloud point. Cold temperatures are likely to exacerbate the negative impact of the presence of SG in both pure biodiesel and biodiesel blends. Biodiesel having reduced levels of SG can be obtained by filtering biodiesel through diatomaceous earth. The contribution of SG to filter blocking should be considered in addressing filter problems with biodiesel and biodiesel blends, and it may be necessary to put an appropriate filter blocking test or particulate measurement into practice. The FBT test is an especially sensitive test. Current efforts to include a particulate matter specification within ASTM should take the potential presence of SG into consideration. The foregoing experimental results were supplied by ADM as part of its patent-pending biodiesel purification technology. In order to promote the welfare of the biodiesel industry in North America, ADM intends to provide licenses for this technology on a royalty-free basis. Additional background information was provided by arc-IV Consulting Inc. 1.Dunn, R. "Cold Weather Properties and Performance of Biodiesel" in The Biodiesel Handbook, Knothe, Van Gerpen and Krahl, eds; 2005, AOCS Press, Champaign, Ill.

The Role of Sterol Glucosides on Filter Plugging

Enzymes, specialized proteins that act as very specific catalysts to speed chemical reactions, have been used to make foods and beverages since ancient times. However, the modern era of industrial enzymes began in the 1890s when Jokichi Takamine patented a fungal amylase-an enzyme that breaks down starches-for producing potable alcohol. 
 
 Since then, enzymes have been shown to reduce costs through more efficient processing, the replacement of harsh or toxic chemicals, and the reduction of energy and water use. This realization has dramatically increased the use of enzymes for processing raw materials from plants and animals (see Table 1) and has led to new or improved products. 
 

 <img src="/images/upload/20070409023803.jpg" alt="Table 1" />
 
 Enzymes that work under mild reaction conditions can certainly be a benefit to manufacturing, but what about industrial processes, like pulp and paper production or vegetable oil processing? These processes operate under extreme temperatures and pH levels that aren't compatible with typical enzyme functions. 
 
 Robust specialty enzymes optimized to perform under industrial process conditions are needed in these cases. Some products have already been commercialized that do just that. As an example, Diversa Corporation's trademarked Ultra-Thin alpha-amylase used for producing fuel ethanol from starch, can more effectively reduce viscosity of high dry-solid corn mashes, and performs effectively under the extreme temperatures and pH levels found in the dry-mill process. 
 
 Where are the Enzymes for Biofuels?
 The alpha-amylase contained in Ultra-Thin is actually a chimera of three alpha-amylase proteins. The genes encoding the three parent alpha-amylase were recovered from samples containing hyperthermophilic bacteria, including samples harvested close to a hydrothermal vent or black smoker two miles beneath the Atlantic Ocean by the unmanned submersible Alvin. More than a dozen novel alpha-amylase genes were discovered, and the properties of the best three were combined using a proprietary technology to produce a robust alpha-amylase with an effective mode of action that functions from pH 4 to 6 at temperatures up to 107 degrees Celsius (224 degrees Fahrenheit). This enzyme enables great flexibility in use in the ethanol dry-mill. 
 
 Broad access to microbial diversity was utilized in a similar fashion to discover the active component of Diversa's trademarked Purifine product in a soil sample collected from Texas farmland. The Purifine enzyme product was designed to increase oil yield and reduce chemical usage when refining vegetable oils for biodiesel and food applications. 
 
 Oil Degumming for Biodiesel
 Degumming is considered essential for purifying vegetable oils and producing a quality feedstock for biodiesel. Degumming removes contaminated phospholipids (phosphorus-containing lipids composed of diacylglycerol-a phosphate group-and a simple organic molecule) contained in crude vegetable oils and lowers the phosphorus content of the oil to less than 10 parts per million (ppm). The names and chemical structures of these phospholipids are shown in Figure 1. 
 
 <img src="/images/upload/20070409023838.jpg" alt="Figure 1" />

 
 In current degumming processes, the phospholipids are removed from crude oil by efficiently mixing a small volume of water with the oil. The majority of the phospholipids form a gummy mass that is removed by centrifugation. Phosphoric acid or citric acid is added to the oil to help remove residual phospholipids that aren't removed in water alone. 
 
 A New Approach to Enzymatic Degumming 
 The Purifine enzyme product provides a novel approach for removing oil phospholipids and also improves the efficiency of oil recovery without requiring major changes to conventional processing conditions. 
 
 The active component of the Purifine product is a phospholipase C (PLC) enzyme. Purifine enzymes operate in a low-water environment to quickly hydrolyze up to 70 percent of the phospholipids contained in crude vegetable oil and releases a product-1,2-diacylglycerol oil-that is much like the neutral oil or triacylglycerol that makes up the bulk of the oil. This product of the Purifine enzyme reaction remains in the oil, contributing to an increase in oil yield during subsequent refining. The other product of the Purifine enzyme reaction, the phosphorus-containing component, goes into the water (gum fraction) and is removed by centrifugation.
 
 Phospholipases, and in particular phospholipase A enzymes, have been used in vegetable oil refining previously as processing aids. However, the novel aspect of the Purifine enzyme degumming reaction is the hydrolysis of the major phospholipids and the creation of a product that boosts oil yield. Since conventional degumming only removes intact phospholipids, which act as emulsifiers and entrain neutral oil in the gum, additional oil losses result. Because the Purifine enzyme reduces the concentration of these emulsifiers (Figure 3), oil yield is enhanced both by reducing entrainment of oil in the gum and by producing 1,2-diacylglycerol in the oil. 
 
 <img src="/images/upload/20070409024057.jpg" alt="Figure 3" />
 
 Optimal Degumming Conditions Boost Yield 
 Purifine enzymes are used to increase yield during the refining of many plant oils, including canola and rapeseed oils. However, Purifine enzymes provide the greatest benefits when used during the degumming of soybean oil because of the high levels of phospholipids present in soy oil that can be hydrolyzed by the enzyme. Crude soybean oil typically contains 1 percent to 2.4 percent phospholipids (400-1,000 ppm). Purifine enzymes hydrolyze up to 70 percent of the total phospholipids, resulting in an increase in total oil yield ranging from 0.90 percent (400 ppm crude) to 2.1 percent (1,000 ppm crude). These yield gains can be obtained with minimal process changes to current chemical refining, as shown in Figure 2. Following enzymatic hydrolysis of the major phospholipids, the oil may be further processed using the standard chemical refining process to remove the residual phospholipids and the free fatty acids. 
 

 <img src="/images/upload/20070409023928.jpg" alt="Figure 2" />
 
 Assuming an average 1.5 percent yield increase for a typical soybean oil processing facility operating at 500 metric tons of soybean oil per day, the use of Purifine enzymes can result in a total yield increase of over 2,500 metric tons per year (or approximately $1.4 million, assuming an oil price of $550 per metric ton). Minimal changes are needed to implement Purifine enzymes in a conventional refining process. In a typical soybean processing facility, a yield increase worth more than $1 million per year should be feasible. 
 
 Broad access to biodiversity combined with the use of powerful protein optimization techniques have led to the development of robust specialty enzymes that perform efficiently under the harsh conditions often present in many industrial processes. Specialty enzymes can improve the economics of traditional processes by increasing throughput, improving overall yield and reducing costly waste streams. In addition, continuing advances in our ability to tailor the specificity and performance of enzymes will lead to the development of new processes-for example the efficient and economical conversion of cellulosic biomass to liquid fuel and other valuable products. 
 
 Nelson Barton, PhD., is director of product development at Diversa Corporation. Reach him at (800) 523-2990 or <a href="mailto:nbarton@diversa.com">nbarton@diversa.com</a>.

The Right Enzymes Can Boost a Better Biodiesel Yield

Our firm is regularly engaged in providing advice and counsel regarding the financing of biodiesel facilities. Compliance with state and federal securities laws is an important consideration that project developers must be aware of in financing biodiesel projects. 
 
 Intended to protect investors, federal and state securities laws apply whenever a project offers and sells securities to raise money for the business. The category of "securities" generally includes corporate stock, units issued by a limited liability company and many debt instruments. The basic requirement of both the federal and state securities laws is that a company intending to offer and sell its securities must either register its securities with the U.S. Securities and Exchange Commission (SEC) and state authorities in the states where the securities will be offered or fit within an exemption from registration. 
 
 Registered Offering
 The registration process can take several months and involve significant effort from all members of the project team. Therefore companies will generally try to fit within one of the exemptions from securities registration. However, the benefit of registration is that the project can seek investment from an unlimited number of investors in those states where the offering has been registered, including unlimited numbers of non-accredited investors (accredited investors are generally individuals with more than $1 million in net worth or more than $200,000 in annual income). A registered offering also provides more flexibility in a project's ability to reach investors through advertisements, radio pronouncements, etc. 
 
 In the registration process, the company will work with its attorney and accountants to prepare a prospectus that describes, among other things, the business, the terms of the shares or units to be sold to investors, and the risks of investing in the project. That document will then be filed with the SEC and the appropriate state officials for their review and comments. Only after responding to their comments by modifying the prospectus will the project be authorized to actually accept investment. Detailed requirements governing what one must disclose about a project may restrict the project's ability to include projections of anticipated financial results. 

 
 Intrastate 
 Another alternative is provided by the intrastate exemption from federal securities registration. Under that exemption, it isn't necessary to register your offering with the SEC if the offering is conducted entirely within the state where the business is located and all of the investors are residents of that state. However, it may be necessary to register with the securities officials in that state, which is a process that is expected to be less expensive and time-consuming than registering with the SEC. These intrastate offerings can involve public advertising within the state where the business is located and, depending on the particular state rules, may also include projections of expected financial results. 
 
 Private Placement
 A private placement offering is another regularly used alternative in biofuels projects that is generally less expensive and time consuming, provided the project can raise the investment from a smaller group. An offering that doesn't involve public advertising and in which securities are sold to fewer than 35 nonaccredited investors is exempt from the registration requirements of the SEC. A private placement offering isn't reviewed by the SEC, but is simply prepared by the project team. Private placement offerings can also include projections, although that step should be taken with caution. 
 
 Regardless of whether the offering is registered or exempt, it is important that the project disclose all material information to the prospective investors, and otherwise comply with all applicable federal and state securities laws.
 
 Todd Guerrero is a member of the Agribusiness & Energy Practice Group of Lindquist & Vennum PLLP, a leading provider of legal assistance on biofuels projects throughout the country. For more information, visit <a href="http://www.lindquist.com">www.lindquist.com</a> or call (612) 371-3211.

623-1294329681.jpg

Legal Perspective

Clif Bar & Co., a manufacturer of all-natural and organic energy and nutrition food and drinks, has announced that its field marketing team has brought eight biodiesel-powered pickup trucks into its fleet. The eight new Dodge Ram 2500 turbo diesel trucks will replace gasoline-powered vehicles and reduce the fleet's carbon dioxide (CO2) emissions by an estimated 40 percent-about 60,000 pounds of CO2 per year.

 
 Gary Erickson, owner and founder of the company, already drives biodiesel-fueled vehicles for personal use and said the company's move was a natural one. "We're always looking for ways to reduce our ecological footprint-it's one of our bottom lines," he said. "We're using as many organic ingredients as possible in our food, reducing waste in our packaging, greening our office space and reducing our impact on global warming by helping build wind farms and planting trees. The use of biodiesel is another important step in our ongoing journey to operate a sustainable business."
 
 "Clif Bar has been researching alternative fuels for a few years now," said Bryan Cole, Clif Bar's director of field experience. In fact, the company has been utilizing biodiesel since October 2006 when it switched to B100-fueled trucks to transport products between its bakery and distribution center. Clif Bar also uses biodiesel to fuel the truck that transports its company-sponsored LUNA Chix professional women's mountain bike team across the United States.
 
 The field marketing fleet's eight biodiesel-fueled trucks will be driven by the company's field marketing managers in Boston, Chicago, Los Angeles, San Diego and Arizona, Colorado, northern California, the Pacific Northwest, and Texas. Those eight vehicles are expected to travel more than 120,000 miles a year, bringing the company's products and environmental messages to events ranging from sports, music, lifestyle and green events in those regions.
 
 "Right now, its ease of adaptability and availability make biodiesel a great fuel choice for our field marketing team," Cole said. "While we recognize that biofuels are just one step on our path towards sustainability, we hope we can inspire consumers and other companies to help protect the planet by sharing our experiences and exploration of alternative fuels."
 
 <center><img src="/images/upload/20070426034609.JPG">
 This Dodge Ram 2500 turbo diesel is one of eight in Clif Bar's field marketing fleet that runs on biodiesel.</center>

Clif Bar expands use of biodiesel

Soyatech LLC, publisher of the annual Soya & Oilseed Bluebook, has launched its newly enhanced website at <a href="http://www.soyatech.com">www.soyatech.com</a>. The new site includes free access to Soyatech's industry database, soya and oilseed facts, a calendar of industry events, sign-up information for free subscriptions to Soya & Oilseed Bluebook Online Edition, Soya & Oilseed Bluebook Print Edition, Soyatech eNews Daily, and Soyatech eNews Weekly, and online ordering capabilities for published materials.

 
 Soyatech General Manager and Marketing Director M. Denis Hill noted that although the new site was only recently launched, it's been in the works for quite some time. "This project has been in planning, design and development for more than a year," he said. "The Soyatech team has dedicated many hours to making the new site more functional and we belive our current users as well as those new to the site will be pleased with its robust content and ease of use."
 
 Featured sections at the site include the online edition of the company's bluebook and a searchable listing of producers, processors, suppliers and vendors to the soybean and oilseed industries. The facts section of the site includes an encyclopedia of information on soy and oilseed, including growing, processing and product use.
 
 For more information, visit Soyatech's website at <a href="http://www.soyatech.com">www.soyatech.com</a>.

April 2007

Business Briefs

PerkinElmer develops tools for analyzing biodiesel quality

Blue Sun Biodiesel performs mergers

Kadrmas, Lee & Jackson creates Tall Grass BioIndustries

Titan launches biodiesel tank line

Ecco Energy forms biofuels subsidiary

Shell, Argent Energy team up to meet New Zealand's biofuel goal

Industrial Nanotech enters biodiesel industry

Degussa Building Blocks names sales manager

Wajciechowski joins Wanzek Construction

Imperium hires former World Energy executive

Countrymark Co-op hires brand manager

Better Biodiesel hires new CFO

Columns

NBB In Sight

Editor's Note

Legal Perspective

Featured

NBB Raises the Bar

ASTM has Real-World Consequences

Shining Examples

Permit Pending

A Full-Service Package

Growing an Industry Counterculture

Contributions

The Role of Sterol Glucosides on Filter Plugging

April 2007.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

PerkinElmer develops tools for analyzing biodiesel quality

Blue Sun Biodiesel performs mergers

Kadrmas, Lee & Jackson creates Tall Grass BioIndustries

Titan launches biodiesel tank line

Ecco Energy forms biofuels subsidiary

Shell, Argent Energy team up to meet New Zealand's biofuel goal

Industrial Nanotech enters biodiesel industry

Degussa Building Blocks names sales manager

Wajciechowski joins Wanzek Construction

Imperium hires former World Energy executive

Countrymark Co-op hires brand manager

Better Biodiesel hires new CFO

Columns

NBB In Sight

Editor's Note

Legal Perspective

Featured

NBB Raises the Bar

ASTM has Real-World Consequences

Shining Examples

Permit Pending

A Full-Service Package

Growing an Industry Counterculture

Contributions

The Role of Sterol Glucosides on Filter Plugging

April 2007