Posted May 30, 2007, at 10:22 a.m. CDT.
 
 With off-take agreements for its full 20 MMgy capacity, Galveston Bay Biodiesel officially opened this week in Galveston, Texas. A joint venture of BioSelect Fuels LLC (a division of Standard Renewable Energy LLC) and Chevron Technology Ventures (a division of Chevron USA), the plant is expected to undergo expansion to 110 MMgy in the future as part of BioSelect Fuels' goal of 470 MMgy of capacity by 2010.
 

 The two companies held a ribbon-cutting Tuesday with U.S. Senator Kay Bailey Hutchinson, U.S. Representatives Ron Paul and Nick Lampson, Galveston Mayor Lyda Ann Thomas, and Tobin Harvey, senior advisor with U.S. DOE in attendance.
 
 The plant will initially use soy oil as its primary feedstock with market factors determining future use. "We really see soy as a feedstock, not the feedstock," said BioSelect President Bill Spence. With the plant's location on Galveston Bay near the busy Port of Houston, the only limit to the company's choice of feedstock is what can be put on a ship.
 
 The pairing of BioSelect Fuels and Chevron Technology Ventures (which holds a 22 percent equity position in Galveston Bay Biodiesel) is advantageous to both parties, according to Spence. "The quality of the fuel-that's what attracts them," he said of Chevron Technology Ventures' stake in the company. "The second thing is that most of our guys are ex-energy industry, so they're inside the tent. It really says we understand what they want and they understand what we're trying to do.
 
 "We are the strongest biodiesel producer on technology and science," he added. "We have over 300 years refining and chemical experience and Chevron's very progressive in the renewable space."
 
 "Chevron's investment is a tangible manifestation of the company's strategy to invest in renewable energy technologies," said Donald Paul, vice president and chief technology officer at Chevron. "Biofuels are playing an increasingly important role in diversifying our nation's energy portfolio."
 
 "Chevron is setting an example for the industry by constant innovation and proactive leadership to create new energy sources, like the added domestic fuel production capacity at BioSelect, which is critical in meeting growing demand," said John Berger, chairman and CEO of BioSelect's parent company, Standard Renewable Energy.
 
 Although the opening of Galveston Bay Biodiesel is a big step for BioSelect Fuels, Spence says it's just that: a step. "We really believe we've got the technical team in place to carry our vision forward," he said. "In the U.S., the market's not really developed. We need a political effort to push that over the hump."

BioSelect and Chevron begin biodiesel production on Galveston Bay

The simple three-legged stool may not be much to look at, but judging by its mention at nearly every major renewable fuels conference in the past few years, its function is certainly popular. The primitive piece of furniture is an analogy, of course, for three entities working together to create a functioning industry. It's a common theme being expressed in regard to renewable fuels such as biodiesel.

 
 The themes comprising this industry's three-legged stool often depend on one's perspective. Several feature articles in this month's issue provide a snapshot of three such items: policy, use and distribution infrastructure. This issue also shows that the length of each leg-and the respective weight it must bear-is leveling out.
 
 Thirty years is a long time to wait for one's goals to become a reality. That's how long it's been since Jimmy Carter took office as president of the United States. As Susanne Retka Schill points out in the article <a href="http://biodieselmagazine.com/article.jsp?article_id=1614">"Groundbreaking with Presidential Proportions,"</a> Carter is finally seeing his energy policies begin to take shape. In the late 1970s, Carter said dependence on foreign oil threatened economic independence and national security. He also called for the United States to cut its imports of foreign oil in half. In February, Carter attended the groundbreaking ceremony for a 15 MMgy biodiesel plant slated to be built in his hometown of Plains, Ga. The policies Carter proposed 30 years ago are now being accepted as mainstream, and the biodiesel industry is doing its part in accomplishing those goals. "The development of alternative, environmentally responsible energy sources has been a passion of mine since I became a public servant," Carter said. 
 
 Decker Truck Line is proving the effects of biodiesel use in the real world. The Iowa-based company has been comparing B20 and neat petroleum diesel since late 2006 with its Two Million Mile Haul. Read more about it in Bryan Sims' story <a href="http://biodieselmagazine.com/article.jsp?article_id=1615">"Two Million-Mile Road Trip."</a> A similar study is being conducted in Canada to determine the cold weather impact on biodiesel in fleet use. The Alberta Biodiesel Demonstration Project will provide laboratory and on-road long-haul fleet testing data, which may impact the federal government's proposal for a nationwide renewable fuels requirement. The Canadian study provides a fine example of policy influencing biodiesel use. However, those two legs of biodiesel's three-legged stool can only be supported by the actual production and distribution of the fuel. 
 
 The questions surrounding biodiesel distribution infrastructure are steadily being answered. As shown in Ron Kotrba's profile on <a href="http://biodieselmagazine.com/article.jsp?article_id=1610">McCall Oil and Chemical,</a> the Pacific Northwest is gearing up for biodiesel production and distribution. The McCall company is setting itself up to become a leading biodiesel distributor in the state by investing capital now, before the industry ramps up production. That increase could be expedited by policy. At press time, the Oregon legislature was considering a statewide fuels standard. If passed, a B2 biodiesel requirement would take effect when instate production reaches 5 MMgy. Once instate production reaches 15 MMgy, the required blend rises to B5.

 
 Of course, the key to holding the biodiesel industry's three-legged stool together is the various cross-beams that allow the legs to support each other. Whether that is trade organizations like the National Biodiesel Board, fuel quality programs like BQ-9000, or information sources like this magazine, the key is to work together to appropriately build this industry. The end result is a sustainable biodiesel industry.
 
 In this case, the marriage of policy, use and distribution infrastructure is giving the biodiesel industry a leg to stand on.
 
 Dave Nilles
 Online Editor
 <a href="mailto:dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a>

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Leveling the Three-Legged Stool

Biodiesel producers don't want to be held hostage by the ruthless world of commodity markets. The current demand for vegetable oils across the globe is unprecedented, and fuel producers don't want to get involved in bidding wars with food processors for feedstocks. Archer Daniels Midland Co. (ADM), Cargill and Bunge have significant crush holdings in North America, and as their biodiesel businesses get off the ground, they are proving that its advantageous to control the feedstock. 
 
 These conditions have spurred the development of more crushing facilities across the country, and many involve biodiesel businesses looking to become vertically integrated. It is important to remember that soybeans and canola aren't biodiesel feedstocks-their oils are-and most refineries aren't equipped to process raw materials. However, this situation may be changing as a rush of crush operation proposals move toward the construction phase.
 
 Some of the logistics of the past have been less than ideal. A recent feasibility study for a soy crush plant in Wisconsin, performed by the Wisconsin Soybean Program (WSP), revealed some startling results. With no crush facility in the state, nearly all of Wisconsin's soybeans are shipped abroad for sale in other markets. These circumstances seem strange considering that Wisconsin is one of the leading soybean producers and its dairy cows consume an estimated 800,000 tons of soybean meal annually; hogs and pigs take in another 99,000 tons per year. Still, the state's raw soybeans are shipped out-of-state for processing, and then shipped back in the form of feed for dairy cattle. This doesn't seem to make a lot of sense considering that "Wisconsin can absorb 83 percent of the plant's soybean meal production, a rather unique situation for a soybean processor," the WSP reported.
 
 A Wisconsin soybean processing plant can expect stiff competition from existing crush facilities that sell product there, specifically ADM and CHS Inc. in Mankato, Minn.; Cargill Inc. in Cedar Rapids, Iowa; and ADM in Galesburg, Ill. The localness of such a plant, however, makes building in south-central Wisconsin attractive and could be an advantage in the marketplace as freight costs continue to increase, the WSP study concluded. "It's a funny deal," said John Belasco, board president of Landmark Services Cooperative in Evansville, Wis., which commissioned the feasibility study. "Soybeans are shipped out to Chicago for exports, and then the meal is shipped in from Minnesota or Illinois for the dairy cattle."
 
 Landmark Services is considering locating a soybean crushing facility and biodiesel plant near its Evansville facility. Despite the significant opportunity that seems to exist for a crush facility in Wisconsin, Belasco said finding investors has been a challenge. "It's going to cost $100 million to build the thing," he said, adding that investors are currently seeking a 12 percent to 15 percent return on investment "At that [construction] price, the math says we'll be looking at a 6 percent to 10 percent return." Even though the feasibility study was positive, Belasco said it might not be positive enough. "We're still looking for the right formula," he said. 

 
 Also in the upper Midwest, Northstar Bioenergy LLC, an affiliate of Johnson Oil Co. in Hallock, Minn., announced plans to build a 30 MMgy biodiesel plant that will take in canola oil from an adjacent crushing facility. Likewise, Northern Prairie EnviroFuels LLC is in the development stages of a canola crushing facility and biodiesel plant in Cavalier County, N.D., according to Project Manager Mark Luther. The facility would process 275,000 to 300,000 tons of canola in order to produce 30 MMgy of biodiesel.

Landmark Services Cooperative is looking to build a soybean crushing operation and a biodiesel plant adjacent to its existing facility in Evansville, Wis.

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Number of proposed oil crushing facilities rises

Biodiesel is on the minds of fleet operators, so the Grand Forks, N.D.-based Energy and Environmental Research Center (EERC) has been holding workshops to educate them and the general public on the benefits and challenges of using this locally grown fuel.
 
 In March, workshops were geared toward fleet operators in Rapid City and Sioux Falls, S.D., according to Kerryanne Leroux, a research engineer at the EERC. An additional workshop was held in Fargo, N.D., for the general public March 29. "The workshops were basically for education," she said. "We wanted to get the word out about biodiesel, and provide both the pros and cons associated with it. We wanted to give people information so they can make their own decisions about usage, investment or production."
 
 The primary questions that came up in the workshops had to do with quality. The industry's problems with precipitates and filter clogging continue to worry fleet owners. Leroux said one goal of the workshops was to provide straight talk about fuel quality and the proper handling of biodiesel. "There is a misunderstanding about the quality of biodiesel and trying to meet ASTM specs and verifying that producers are making fuel that meets ASTM specifications," she said.
 
 The workshops pointed out that everyone in the biodiesel supply chain-producers, blenders, retailers and consumers-has a role in making sure fuel quality is maintained through the supply chain, Leroux said. Looking for the BQ-9000 certification label is one way to make sure the blend was made with quality biodiesel.
 
 Fleet managers were also interested in the distribution of biodiesel. "They had a lot of questions about the distributors," Leroux said. "I think their main concern is, 'Can I get the fuel, and is it available in a reliable quantity?' They also wanted to know how they could check the quality, how that quality is guaranteed and what kind of changes they are going to see in performance. Fuel economy and cold flow properties were a big concern."
 
 In the workshop for the general public, interest was high, Leroux said. "People really want to support alternative energy," she said. "They want to support local economies because they know their money is going to their local community. They also are very interested in the environment because biodiesel has a net-zero carbon dioxide cycle, and biodiesel use will also greatly reduce particulate emissions, as well as sulfur emissions."
 
 The South Dakota workshops were sponsored by the South Dakota Soybean Research and Promotion Council and the EERC's Center for Biomass Utilization, which is funded by the U.S. DOE. The North Dakota workshop was sponsored by the state Department of Agriculture and the North Dakota Department of Commerce. The EERC isn't planning additional workshops at this time, but Leroux said they would certainly be open to invitations, especially in western North Dakota and Montana. 
 
 For more information, Leroux can be reached at (701) 777-5013 or <a href="mailto:kleroux@undeerc.org">kleroux@undeerc.org</a>. For information on the Center for Biomass Utilization, contact Chris Zygarlicke at (701) 777-5123 or <a href="mailto:czygarlicke@undeerc.org">czygarlicke@undeerc.org</a>.

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Fleets subject of biodiesel workshops

Canada's ruling conservative party has committed CAN$2 billion for renewable fuels in its 2007 budget. 

 
 The government also announced in the budget document its intentions to expand its renewable fuels standard (RFS) to include 2 percent renewable content in diesel and heating fuels by 2012.
 
 "Going from nothing essentially to a $2 billion commitment is tremendous," said Tyler Bjornson, vice president of corporate affairs for the Canola Council of Canada. The budget incentives combined with the RFS for diesel will help build a CAN$1 billion-per-year biodiesel business in Canada, he predicted. "Now we have to work on the details of how it's implemented," he said.
 
 The budget proposed up to $1.5 billion over seven years for an incentive to producers of renewable alternatives, such as biodiesel and ethanol. Incentive rates will be up to 10 Canadian cents per liter for renewable alternatives to gasoline and up to 20 Canadian cents per liter for renewable alternatives to diesel. The full incentives will last for three years and then decline. The incentives won't be provided when the renewable fuel industry's rates of return exceed 20 percent, and payments to individual companies will be capped.
 
 Another $500 million over seven years is proposed for Sustainable Development Technology Canada to invest in the private-sector development of next-generation renewable fuels from agricultural and wood waste.
 
 The budget includes an incentive program to retire older, high-emissions vehicles and requirements for greening the federal vehicle fleet through purchasing more flexible-fuel vehicles and renewable fuel blends. In addition, tax incentives once used to spur the development of the oil sands will be redirected to renewable fuels, allowing companies to take accelerated capital cost allowances. 
 
 The British Columbia Energy Plan has the strongest RFS in Canada. The provincial plan, announced in late February by the Ministry of Energy, Mines and Petroleum Resources, requires an average of 5 percent renewable content in diesel fuel by 2010. The provincial plan includes a CAN$25 million fund and other strategies to support the development of clean energy and energy-efficient technologies in electricity, alternative energy, transportation, and the oil and gas sectors.

Canadian budget commits $2 billion to renewable fuels

Tom Hance recently joined Gordley Associates, one of the National Biodiesel Board's policy monitoring firms in Washington, D.C. He will handle a portfolio that includes biodiesel, conservation and transportation issues. Most recently, Hance served as the federal policy director and head of the Washington (D.C.) Office for Maryland Gov. Robert Ehrlich. Prior to that, he served as chief of staff for U.S. Rep. Virgil Goode Jr., R-Va., who served on the House Agriculture and Appropriations committees. 
 
 Hance grew up on a small family farm in Calvert County, Md. He received a bachelor's degree in political science from the University of Richmond and a master's degree in government from Johns Hopkins University. 
 
 Hance takes on responsibilities previously overseen by Mark Palmer. Palmer has moved on to the U.S. House of Representatives' Committee on Small Business. Palmer says he believes energy and agriculture will be priorities of the committee.

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Biodiesel presence in Washington, D.C., evolves

Has the Iowa biodiesel industry matured to the point where it's going to keep on growing without the state subsidy? According to Mike Tramontina, interim director of the Iowa Department of Economic Development (IDED), this is a question that has been raised among members of the IDED board of directors in recent days.
 
 On May 18, 2006, the IDED board of directors voted to pull back direct incentives to developers looking to construct dry-mill, corn-fed ethanol plants in the state. The move stopped new projects from receiving $100,000 in forgivable loans and $300,000 in zero-interest, five-year loans, but allowed them to continue receiving Iowa state income tax benefits. The reason for the change was simple: The ethanol industry in Iowa was robust, and the incentives were no longer needed.
 
 Nearly a year later, the same question has been brought up in regard to the state's biodiesel industry. "The growth of ethanol production and the use by consumers at the retail level is way ahead of biodiesel in this country," Tramontina said. "Because there were so many more ethanol plants on line and coming on line, and the equity drives and the debt raising was going seemingly so well, the board decided they would no longer put in the value-added agriculture grant and loan. So what the board has asked now a year later, 'Isn't it time to look at biodiesel in the same way we looked at ethanol plants a year ago to determine whether these [biodiesel] grants and loans … are still warranted?'"
 

 Tramontina said that although the biodiesel industry in Iowa appears to be doing just fine, it still trails the ethanol industry in sheer momentum. Not only will the status of the industry within Iowa's borders be considered by the IDED staff and board of directors, but the nature of incentives in neighboring states will likely play a role, as well. "I think that the analysis that goes to the board will take into account what neighboring states are doing," Tramontina said.
 
 Monte Shaw, executive director of the Iowa Renewable Fuels Association, agreed that competition from neighboring states should be considered before changing incentive programs for biodiesel. "If Iowa wants to be the renewable fuels capital of the world, it needs to stop pulling back support while other states … are ramping up support," he said.
 
 At its April 19 meeting, IDED staff will make recommendations on future incentives for the biodiesel industry to the board of directors.
 
 Tramontina said the continued state support of the biodiesel industry would be a positive thing until the industry can sustain itself. "We think there's value in continuing to be a leader in the industry because of the other industries that will come because of the job creation and wealth creation," he said.

Iowa ponders future of biodiesel incentives

The Northern Canola Growers Association is awaiting approval of its application to trademark the name "Biola" for biodiesel fuel that is made exclusively from canola and meets ASTM D 6751 specifications. At press time, the U.S. Trademark and Patent Office said the canola growers group should expect a decision by May, according to the association's Executive Director Barry Coleman. 
 
 The Bismarck, N.D.-based group obtained a state trademark for the name late last year and then applied for a U.S. trademark. In December, it introduced the Biola name and logo at a forum in Minot, N.D. The Northern Canola Growers represents members in North Dakota, South Dakota, Minnesota and Montana.
 
 Coincidentally, the Canola Council of Canada, based in Winnipeg, Manitoba, also applied to trademark the Biola name in the United States, believing that the Northern Canola Growers Association had only applied for a state trademark. Coleman said the trademark office denied the Canadian group's request in March after the Northern Canola Growers Association's request had been received. Therefore, the Canola Council of Canada withdrew its request. 
 
 The Biola name can be used by anyone selling canola-based biodiesel that meets the ASTM D 6751 specifications, Coleman said. "If [a gas] station wants to market it under the Biola name to show it has a higher value, it can sublicense the name from us," he added. A trademarked name will differentiate canola biodiesel in the marketplace, show its good attributes and help to sell the product, he said. 
 
 The Northern Canola Growers Association and Canola Council of Canada continue to work together to promote canola oil for food and fuel.

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Northern Canola Growers trademark 'Biola'

Eastern Europe and Russia are rich in resources, and the European Union and various multinational companies are starting to view the region as a source for biodiesel feedstocks.
 
 A biodiesel production facility in Pritzwalk, Germany, owned by European Oil Products Biodiesel AG (EOPB), is now receiving rapeseed oil from Baltic Holding Company, an oil mill in Liepaia, Latvia. "We have thereby not only expanded our raw material base, but in the future we will also be supplying biodiesel to the Baltic and in that way boost our export business," said EOPB CEO Sven Schön.

 
 Similarly, Archer Daniels Midland Co. (ADM) fully acquired Ilitchevskiy Maslo Extractionniy Zavod (IMEZ), a company that operates a sunflower-seed-crushing facility close to the port of Odessa in the Ukraine, and in March, ADM bought out former partner Risoil S.A., a Swiss sunflower seed processor. "The IMEZ facility at Illitchevsk complements our global asset base in an important origination location," said Mark Zenuk, ADM vice president and managing director for Europe and Asia. 
 
 Ukraine harvests approximately 5 million metric tons of sunflower seeds per year; its production is second only to the Russian Federation. The Ukraine government recently endorsed a Program of Diesel Biofuel Production Development, intended to promote the construction of biodiesel plants and to increase rapeseed production on farms.
 
 Feedstock or refined biodiesel may also come from Russia. Agriculture Minister Alexei Gordeyev told attendees of the International Green Week 2007 forum in Berlin, Germany, that Russia could expand growth of crops for energy production, such as rapeseed, and supply it to the European Union. "We currently have 20 million hectares (49.4 million acres) of productive arable land, which is not being used," he said, noting that Russia's potential biofuels production is comparable with that of the United States. "We are ready to offer our help to the European community as a supplier of biomass and, in the not-too-distant future, as a producer of biofuel," he said.

Russia, Eastern Europe to supply European biodiesel feestock demand

Researchers at the U.S. DOE's Oak Ridge National Laboratory (ORNL) in Tennessee have developed a special material that could eventually streamline chemical reactions and downstream processes when used as part of a solid catalyst. 
 
 Conventional biodiesel catalysts-sodium hydroxide, potassium hydroxide or sodium methylate-dissolve in a solution of excess methanol and triglycerides (oils or fats) in reaction. After transesterification, residual catalysts must be removed from the resulting biodiesel and glycerin, consuming energy, water and chemicals. Unlike conventional products, ORNL's new material for biodiesel catalysis wouldn't become homogenized within the substrate during reaction. Rather, the material would act as a fixed catalyzing agent in a reactor column through which alcohol and feedstock would flow, contact and react, eliminating added steps and costs of recovery. "We need to test the long-term stability for another six months to a year," said Chengdu Liang, research scientist with ORNL, admitting initial results weren't available at press time.
 
 Triglycerides from oils and fats can range from two to four nanometers. The special substance is "based on functionalized mesoporous carbon materials," Liang told Biodiesel Magazine. This means the pore sizes in the acid-catalyzed, carbonized material strategically range from five to 10 nanometers. The ability to produce such consistent pores "is our own invention," Liang said. "These are well-defined pore sizes." Patents on the process to make materials with such consistent pores have been issued. The carbon makes the material more resistant to corrosion, and the optimized pore sizes create the proper surface area needed for successful conversion. Liang said the average surface area per gram of ORNL's material is 400 meters. This work is led by Sheng Dai, senior research scientist and nanomaterial group leader.

Oak Ridge lab develops material for biodiesel catalysis

Safeway Inc. recently announced that it will be test-marketing a B20 blend of biodiesel in a west Seattle store. The move is part of the company's open-ended commitment to advance products and services that help its customers lead healthier lives. 
 
 "We've been looking at [biodiesel] for a long time," said Cherie Myers, director of public and government affairs. "We have customers who are interested in being greener, [and Safeway] has been part of environmental changes since [the beginning] of our company." 
 
 If successful, Safeway may consider adding biodiesel to other locations in the surrounding communities of Ballard and Roosevelt, Wash. The test is scheduled to last approximately six months. 
 
 Myers sees the full adoption of biodiesel as just one part of Safeway's current and future commitment to renewable energy, which includes wind energy that powers the stations. Also, in 2005, Safeway diverted more than a billion pounds of recyclables from waste and is one of the nation's largest renewable energy buyers. "Our belief is it is going to be positive," Myers said of the company's environmental awareness
 

 Safeway isn't the only convenience store chain that is embracing biodiesel. In South Carolina, Spinx Company Inc., which operates more than 70 stores, has 35 public pumps offering B20 blends. Greenville, S.C., alone is home to 13 biodiesel pumps, which makes the renewable fuel easy to find. "We are very proud to be able to work with our state and local governments to bring environmentally friendly fuels such as biodiesel to the Upstate," said Stewart Spinx, founder and CEO. The company's customers have also supported the decision, he said.
 
 In Idaho, Stinker Stores, which operates 11 Treasure Valley convenience stores, began offering B10 in 2006. Its decision was based on the company's successful sales of 10 percent ethanol blends that it had offered for 25 years.
 
 In Austin, Texas, 19 Shell stations have begun carrying B20, giving the city the highest availability in the nation.

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Safeway grocery chain to offer biodiesel at Seattle location

According to the latest prospective planting statistics released by the National Agricultural Statistics Service (NASS) in March, soybean acreage is expected to be down 11 percent from last year. 
 
 The report indicated that producers intend to plant 67.1 million acres of soybeans in 2007. If realized, this would be the lowest planted area since 1996. Large decreases in soybean acreage are expected across the Corn Belt, with Illinois predicted to experience the biggest decrease at 1.4 million acres from 2006. 
 
 In contrast, corn growers intend to plant 90.5 million acres of corn for all purposes in 2007, up 15 percent from 2006 and 11 percent higher than 2005. 
 
 Brad Anderson, senior vice president of Informa Economics Inc., which conducted the survey, said returns for corn are currently very attractive relative to other crops such as soybeans. "We could be producing a lot more biodiesel than we are right now if the economics were there, but the market has bid up the price of soybean oil such that the returns to biodiesel production are not very attractive," Anderson said. "I think that's going to be an ongoing issue for the industry."
 
 If the reliance on corn continues to dominate the soybean market like it has, Anderson added that the world may have to look to neighboring countries to fill the void. "To satisfy increases in world demand for soybeans, it's probably going to have to be taken care of by South America because I don't know if you can assume that the U.S. is going to be a growing soybean producer," Anderson said. 		
 
 For more information on the NASS report, go to <a href="http://www.usda.gov/nass/PUBS/TODAYRPT/pspl0307.txt">www.usda.gov/nass/PUBS/TODAYRPT/pspl0307.txt</a>.

Soybean acreage is expected to decrease 11 percent from last year because of an increase in corn acres.

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Corn acres to overtake soybeans

For a number of years, Germany has been recognized as the world leader in the international biodiesel arena, which is why recent statistics from the German biodiesel industry association Verband der Deutschen Biokraftstoffindustrie e.V. (VDB) are somewhat startling. According to VDB, German biodiesel production has declined by 30 percent to 40 percent since the beginning of 2007, following the government's decision to reduce a biofuels tax incentive at retail fuel stations in August 2006. At the same time the tax incentive was reduced, the price of fossil fuels plummeted, making it more attractive to consumers and thus edging biodiesel's price advantage. However, the European Union has mandated the use of renewable fuels in its member countries, including Germany.

 
 Many farmers who had been running their equipment on B100 are now buying diesel, but the tax on biodiesel is not all bad, said Robert Hermann, director for renewable energies and resources for Invest in Germany. His organization aids international investors looking to locate operations in Germany by providing information and council. It is funded by the Federal Ministry of Economics and Technology. "My personal perspective, which is also that of my company, is that change is not negative," Hermann said. "The tax incentive has been reduced to zero at the same time they have introduced mandatory blending, so the [BPs] and the Shells are now forced to blend biofuels with their fuel, including biodiesel."
 
 The current biodiesel fuel tax will continue to rise in stages from €0.09 to €0.45 (US 0.12 cents to US 0.5 cents) per liter by 2012. Hermann said the percentage of biodiesel required to be blended with diesel fuel will also rise within the next six years-from 6.25 percent energy content in 2009 to 8 percent in 2015.
 
 Despite the VDB's concern for biodiesel's ability to compete, Hermann said the government made the decision to implement the tax because it aims to encourage regular competition and similar prices among fuels at the pump, and because it knows biodiesel isn't going to disappear. "The growth curve may slow a little bit, but the market is there because of the mandate," Hermann said.

German biodiesel output slackens with new biofuels taxes

Over the past several months, I've touched on the fact that 2007 could be a watershed year for the biodiesel industry and that action taken in Washington, D.C., this year could set the foundation for the industry's continued growth well into the foreseeable future. There is a saying that "timing is everything." In the case of our upcoming June board meeting in Washington, D.C., and our ability to rally the industry at a very critical period for our legislative agenda, this couldn't be truer.
 
 Congress has begun its work in earnest, and the National Biodiesel Board (NBB) has been actively engaged in promoting its legislative agenda for the following:
 
 » The long-term extension of volumetric biodiesel tax credits
 
 » The inclusion of a biodiesel production incentive program and the continuation of the Biodiesel Fuel Education Grant Program in the next Farm Bill 
 
 » Critical funding for testing biodiesel blends in new diesel engine technologies 
 
 » A specific role for biodiesel to help meet the nation's energy security needs as part of a new or expanded renewable fuels standard, as well as to fight significant threats facing the industry
 

 Threats include important trade issues relative to the tax credit and the recent ruling by the Internal Revenue Service to broaden the definition of "renewable diesel." The NBB is committed to protecting the industry from these threats but must have help from the industry.
 
 The next 90 days will be a crucial period for our legislative agenda. June and July will be a very active period on the Hill in advance of Congress' annual August recess period. Leadership in both the House and Senate have indicated their desire to see energy and energy tax-related legislation on the floor of each body prior to the August recess. The chairmen of the House and Senate Agriculture committees have detailed equally aggressive schedules for their work on respective versions of a Farm Bill, while chairs of the Appropriations committees have vowed to complete action on all appropriations bills prior to the start of the new fiscal year Oct. 1. Our industry's top priorities are within these areas of jurisdiction.
 
 There are many competing interests vying for time and limited resources in Washington, D.C., that could be devoted to our industry's needs and priorities. The NBB has committed significant resources to put in place a top-notch legislative team to be our industry's eyes, ears and advocates on a daily basis. However, it is necessary for the entire industry to be actively involved to have effectiveness in Washington, D.C. Lobbyists can only go so far. Ultimately, elected officials respond to constituents. As we enter a critical point in the legislative calendar, it is more important than ever before that each of us recommit ourselves to make certain we do everything possible to ensure our unified voice is heard on Capitol Hill. 
 
 Please make plans to attend the upcoming NBB board meeting June 18-20, and begin scheduling meetings today with your representative and senators in coordination with the NBB's Washington, D.C., office. The next three months will pose several opportunities to test our good timing. Bold, well-placed action over the next three months may mean everything to the future of the biodiesel industry. Will you answer the call?
 
 Joe Jobe
 NBB CEO

NBB In Sight

With the tremendous growth of biodiesel refining capacity and the steady demand from biodiesel consumers, the logistic strategies serving the renewable fuel's industry must be updated and streamlined. Biodiesel companies have traditionally relied on transport trucks and railcars to satisfy the nation's growing appetite for biodiesel and its blends. The million-dollar questions are: How does the industry continue to satisfy customers' supply needs when the national demand rises to 350 million gallons and beyond, and what will be required if and when biodiesel blends are to be transported on U.S. pipelines?
 
 Through continued financial support from the U.S. DOE and USDA, and the project coordination services of the National Biodiesel Board (NBB), the NBB's petroleum outreach team has worked tirelessly with national pipeline companies exploring the feasibility of moving biodiesel blends. There are approximately 200,000 miles of oil pipelines crisscrossing the United States. America relies on oil pipelines to meet its growing energy needs; therefore, the biodiesel industry may also need to rely on the pipelines to help secure a long-standing place in the national energy landscape. 
 
 Some interesting facts retrieved during the petroleum team's research indicated that shipping a gallon of gasoline from Houston to New York Harbor costs only 3 cents via pipeline. Pipelines transport more than 17 percent of all freight moved in America, yet pipelines only account for 2 percent of the country's freight bill.* In contrast, moving a 5,000- to 6,000-gallon load via truck would cost 20 cents or more per gallon, while rail would be 10 cents or more per gallon. Clearly, petroleum pipelines could help reduce the economic and efficiency disparities of various modes of liquid fuel transportation. 
 
 So, where are we? The industry's first attempt at shipping, conducted by Colonial Pipeline last summer, revealed that a B5 blend shipped from Pasadena, Texas, to Linden, N.J., demonstrated no adverse impact to the base fuel specification. All ASTM D 975 specifications were acceptable, and contained no water or sediment traces. Countrymark Co-op conducted a B5 run in Indiana on its company-owned pipeline last summer with similar positive results. B5 has been run in pipelines in Europe on a daily basis for years.
 

 These results indicated a successful pipeline movement on systems that don't carry jet fuel, which rules out Colonial Pipeline. Three important issues remain for biodiesel to be allowed on pipelines that do carry jet fuel: What level of biodiesel can be allowed in jet fuel without harming jet fuel properties, how does one measure the level, and what type of procedures are needed to ensure the level of biodiesel in jet fuel is below the limit? The NBB has agreed to work with pipeline and ASTM leadership to identify a resolution to these important questions. Several other national pipeline partners have agreed to work cooperatively with our petroleum outreach team to establish additional movements of biodiesel within their systems. They say they want to support the NBB's efforts to open the national pipeline network to efficiently and economically move biodiesel from coast to coast. The NBB feels that would help take biodiesel to that next, mainstream level. 
 
 *Source: A briefing paper from the American Petroleum Institute's Association of Oil Pipelines

The NBB's petroleum outreach team has been working with national pipeline companies to explore the feasibility of moving biodiesel blends through established pipelines.

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Improving biodiesel logistic efficiencies: Pipe dream turns to the pipeline

Drivers of a wide range of Cummins Inc. diesel engine vehicles will have added support in using biodiesel blends. Cummins has announced its approval of the use of B20 in many of its engines. The approval is for 2002 and later emissions-compliant ISX, ISM, ISL, ISC and ISB engines, including recently released 2007 products. 
 
 The engines approved for B20 are used to power a variety of vehicles including medium- and heavy-duty trucks, motor homes, school buses, fire and emergency vehicles, and urban buses and shuttles. The announcement is likely to help Cummins grow its truck engine market share by meeting consumer demand through B20 support. 
 
 "Cummins' announcement is a major milestone for diesel-equipment-maker acceptance of biodiesel," said Steve Howell, National Biodiesel Board technical director. "Cummins is among the leaders in the on-highway truck engine market. As knowledgeable consumers add 'support for B20' in their purchasing decisions for diesel vehicles, the smart companies are taking advantage of that and issuing B20 support as a way to capture this growing sentiment for using fuels we don't have to import." 
 
 Cummins decided to upgrade its previous position on the use of biodiesel fuel, which limited the recommended use to B5, for three key reasons: 
 
 » The ASTM D 6751 spec now includes an important stability specification for B100 biodiesel.
 
 » 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 fuel.
 
 "We have completed exhaustive analyses and test evaluations, which enable Cummins to provide the necessary guidance and information to our customers for the proper and successful use of this fuel in our engine," said Edward Lyford-Pike, Cummins chief engineer of advanced alternative fuel programs. "This will enable our customers to have a choice that includes renewable fuel." 

 
 The popularity and use of biodiesel fuel continues to climb. Cummins officials said the company will continue its efforts to ensure that future products will be compatible with biodiesel fuels. It will also continue to participate in industry efforts aimed at the development of consistent quality throughout the biodiesel industry.
 
 Headquartered in Columbus, Ind., Cummins serves customers in more than 160 countries through its network of 550 company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported a net income of $715 million on sales of $11.4 billion in 2006.

Cummins has approved B20 blends for use in its diesel engines, which can be found in Dodge Ram pickups and in other models.

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Cummins approves B20 for engines

Through a major move by countries most involved with biodiesel and ethanol-the United States, Europe and Brazil-and those most likely to be involved in the future-India, China, South Africa-the International Biofuels Forum has been formed. This working group for renewable fuels was announced at the United Nations in March. 
 
 The goal of the International Biofuels Forum is to bolster the acceptance and trade of biodiesel and ethanol through the sharing of information and technology, and harmonizing the standards and codes for biofuels use as much as possible among the countries. The forum would initially be established for one year and meet regularly to discuss ways to promote the sustained use and production of biofuels around the globe.
 
 "The objectives of the International Biofuels Forum have merit," said Steve Howell, technical director for the National Biodiesel Board (NBB) and chairman of the ASTM Task Force on Biodiesel Standards. "Biofuels standards around the world have developed independently of each other since they are based on the blend level used and the base petroleum fuel they are blended into. These have different standards around the world. Therefore, more harmonization of fuel makeup could result in greater biodiesel cooperation on many levels."
 
 He continued, "As we discuss ways to make biodiesel codes and standards more similar around the world, we will need to be sure they are based on performance, blend level and existing petrodiesel standards. This is critical for the U.S. biodiesel industry, as our biodiesel standard is performance-based on B20 blends and lower, and the European standards are based only on rapeseed oil biodiesel at the B100 level." 
 
 At press time, the European Union and United States were slated to hold a summit by the end of April to discuss the next steps for this group, among other topics. The NBB will be taking part in future meetings dealing with biodiesel cooperation on a more global scale.

International Biofuels Forum works toward harmonization, sustainability

Earthrace captain Pete Bethune and his crew were allowed to leave Guatemala in late March after a fatal collision involving their Earthrace biodiesel-powered vessel and a fishing boat March 18. Earthrace is a wave-piercing boat in a bid to break the world record for circumnavigating the globe. After a year-long promotional tour with the boat, the crew started the record attempt March 10 and now continues its mission despite various setbacks.
 
 The crew was detained for 10 days after the collision, which left a local fisherman missing and presumed dead, and another seriously injured. New Zealand native Bethune and crew told officials the fishing boat didn't appear on radar and didn't have the appropriate lights. A judge in Guatemala has ruled it was an accident. 
 
 Bethune met with the victims' families before the court hearing, according to an Earthrace press release. "That was a very emotional affair actually," Bethune said. "The crew's devastated, and the mind boggles about how the families feel, but they were very gracious. They had some questions about what happened on that night. I hope this gives a sense of closure to them. I'd hate to have left [Guatemala] without meeting with the families." 
 

 Bethune asked the widow of the killed fisherman in the accident if Earthrace could put his name on the boat in memory of her husband. She said her family would be honored. Bethune visited the injured man in the hospital. Earthrace's insurers have compensated the victims' families. To add to this tragedy, the Earthrace crew was unable to repair the boat while it was impounded in Guatemala, and Bethune suffered an infection from a foot injury sustained during the wait, according to the captain's Web blog on www.earthrace.net.
 
 During this time, Bethune was detained at a military base in Puerto Quetzal, and it was only after the intervention of Guatemalan President Oscar Berger that the country allowed Bethune's trial.
 
 Bethune and his crew left Guatemala on March 28. Before they left, repairs had to be made to Earthrace's second set of propellers. The first set suffered unpredictable wear and tear in the first leg of the race and had to be replaced, slowing the boat between Barbados and Panama.
 
 Further damage sustained in the collision was repaired in Mexico and San Diego before Earthrace resumed its record bid. However, mechanical problems hampered Earthrace in San Diego for several days. The team feels it has an extremely difficult challenge to get the record now, due to the amount of time lost in Guatemala, but the crew said it would do its best, according to an Earthrace press release. 
 
 Please visit <a href="http://www.earthrace.net">www.earthrace.net</a> for ways to support the ongoing record attempt. The National Biodiesel Board (NBB) is a sponsor of Earthrace, and many NBB members have supported Earthrace in various ways. For example, NBB Board member Harold Kraus, a Kansas soybean farmer, sponsored one leg of the race and was able to travel with the crew from San Diego to Hawaii.

The Earthrace boat will follow this route in its attempt to circumnavigate the globe in record time.

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Earthrace record attempt continues despite tragedy

The Wisconsin Department of Agriculture, Trade and Consumer Protection has officially created the Wisconsin Biodiesel Association. The association will focus on "increasing the availability, demand, capacity and viability of Wisconsin-produced biodiesel as an expansion of Wisconsin's bioindustry," according to a press release. It is currently accepting member applications, and interested parties can contact association President Jeff Pieterick at <a href="mailto:jpieterick@npnrg.com">jpieterick@npnrg.com</a> for more information.

Wisconsin forms biodiesel association

Plans for the Colorado Center for Biorefining and Biofuels (C2B2) were recently unveiled by the National Renewable Energy Laboratory (NREL). The collaboration of businesses, universities and NREL will conduct research to create new technologies to produce transportation fuels and other valuable products from plants with the goal of quickly commercializing the new technologies. Also involved is the Colorado Renewable Energy Collaboratory, a recently formed research association that includes the University of Colorado at Boulder, the Colorado School of Mines, Colorado State University and NREL. For more information, visit <a href="http://www.colorado.edu/che/c2b2">www.colorado.edu/che/c2b2</a>.

Colorado groups form research partnership

Peru-based Pure Biofuels recently announced plans to build its first biodiesel facility at Callao Port near Lima, Peru. The facility will have a total capacity of 52 MMgy but will consist of three 17.5 MMgy modules. The plant is scheduled to begin producing biodiesel from crude palm oil in August, according to a company press release. Polindustria has been named the general contractor for the project, and Capricorn Chemical Engineering SA will act as engineer.

Pure Biofuels to construct plant in Peru

The Toro Company announced that its entire 2008 line of diesel-powered golf course, sports fields and grounds equipment will be certified to use up to B20 and will be labeled "biodiesel ready." Models include Toro's Reelmaster, Groundsmaster, Greenmaster, Workman and Multipro product families. The company is also creating biodiesel upgrade kits to convert equipment already in production or in the field to run on biodiesel blends. Toro has been testing biodiesel blends in its equipment for the past five years.

Toro OKs biodiesel

Biodiesel@MIT-a group of students, faculty and staff that aims to install a biodiesel processor at the Massachusetts Institute of Technology (MIT)-received $25,000 through the GE/MtvU Ecomagination Challenge that will be used to turn used vegetable oil collected from campus dining facilities into biodiesel to fuel campus buses. The Ecomagination Challenge-a nationwide contest sponsored by General Electric and mtvU, MTV's 24-hour college network-encourages U.S. college students to develop new, creative ways to green their campuses.

MIT starts biodiesel use

Increasing biodiesel production in the United States is leading to a larger supply of byproducts, and Dow Chemical Company plans to use glycerin in its pursuit of sustainable chemistries. Dow is currently conducting trials with what it calls "propylene glycol renewable" (PGR), a chemical made with glycerin generated during biodiesel production. Propylene glycol has many applications, including in deicers, antifreeze and cosmetics. Dow said limited commercial quantities of PGR would be available in mid-2007.

Dow to produce propylene glycol

In a recent report from the Roberts Environmental Center, an environmental research institute at Claremont McKenna College, Cummins Inc. received a 'B' rating in overall sustainability in the industrial and farm equipment sector. The study analyzes companies' environmental footprints, and Cummins received the highest possible marks for environmental intent, environmental reporting, social intent, social reporting, and social performance, placing in the top 10 in each category. However, Cummins placed near the bottom in environmental performance. Mitsubishi Heavy Industries achieved the highest ranking overall.

Cummins receives a 'B' in environmental sustainability

Prairieland Motorsports, headquartered in Humboldt, Saskatchewan, has created the world's first jet funny car that will run solely on canola-based B100. The 2007 Chevrolet Corvette "007" is built with a J60 Pratt and Whitney jet engine. Milligan Bio-Tech, one of six Prairieland Motorsports sponsors for the car, will be supplying the biodiesel, according to Milligan Bio-Tech Business Development Manager Carl Perlinger.

World's first biodiesel jet funny car debuts

The 3,000 gallons of used vegetable oil produced monthly at the St. Regis Mohawk Tribe's Mohawk Casino in Akwesasne, N.Y., will be converted into biodiesel and used to run the tribe's maintenance vehicles. Operational start-up is set for the fall of 2007, according to Laura Weber, director of solid waste management for the tribe.

Mohawk Casino to convert waste oil to biodiesel

Pekin, Ill.-based Aventine Renewable Energy Inc. recently announced that it's adding biodiesel marketing to its list of services. Investor Relations Director Les Nelson said Aventine signed its first contract with Gilman, Ill.-based Incobrasa Industries Ltd. and that other contracts were being negotiated, as well. "Our name isn't Aventine Ethanol," Nelson pointed out. "It's Aventine Renewable Energy." He said the expansion into biodiesel was a natural step for the company.

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Aventine begins to market biodiesel

New Jersey-based AgriFuel Co. acquired interest in two biodiesel plants recently. AgriFuel now owns 45 percent equity in United BioFuels Inc. in York, Pa., with an option to increase its stake to 60 percent. It also gained a 52.5 percent stake in Buffalo Biodiesel Inc. in Tonawanda, N.Y., with an option to buy the remaining stock. In addition, the company is close to finalizing a purchase of a Midwestern biodiesel producer, said AgriFuel Co. President Dylan Remley.

AgriFuel acquires interest in biodiesel plants

The Oak Ridge, Tenn.-based Oak Ridge Center for Advanced Studies (ORCAS), an economic development organization endorsed by the state, has created a Web site for individuals looking to pursue small-scale biodiesel business ventures. According to ORCAS Director Paul Gilman, the newly created Web site features information including how to make biodiesel, how to properly interact with the Internal Revenue Service and other helpful links for users to follow. The Web site can be found at <a href="http://orcas.orau.org/resources/biodiesel">http://orcas.orau.org/resources/biodiesel</a>.

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ORCAS provides service to small-scale biodiesel producers

U.S. BioTec Inc.-a publicly traded company dedicated to the production of profitable, biodegradable, nontoxic and noncarcinogenic products for agriculture-announced plans to enter the biodiesel industry through the acquisition of Biofuels of Tennessee. U.S. BioTec had investigated the possibility of buying a petroleum refinery, but due diligence management and consultants agreed a biofuel company would be a better fit. Biofuels of Tennessee has confirmed the deal to purchase its 10 MMgy production facility and U.S. BioTec's intention to increase production to 14 MMgy.

U.S. BioTec aims to acquire Biofuels of Tennessee

National Tribology Services announced it has changed its name to Bently Tribology Services. The company-with laboratories in Peabody, Mass., and Minden, Nev,.-tests lubricants, petroleum and biobased fuels, synthetic machine fluids, and coolants to provide clients with information to support maintenance, quality control and reliability decisions. Additional offerings, a greater international presence, and the Bently name familiarity in power generation and petrochemical industries spurred the decision, according to General Manager Dan Walsh.

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National Tribology Services changes name

Kansas City, Mo., was given the Oxygen Award 2007 at the Alternative Fuels & Vehicles 2007 conference in April. Kansas City was recently ranked by SustainLane as the No. 3 city in the United States that uses alternative fuels, which it has done since 1996. In addition to the use of compressed natural gas vehicles in various departments, the city's water department began using biodiesel in more than 900 diesel-powered vehicles. The city also collaborates on alternative fuels research and development with the University of Missouri-Columbia and the Midwest Research Institute.

Larry Hagman, left, and Annalloyd Thomason of the Alternative Fuel Vehicle Institute, right, present Kansas City (Mo.) Fleet Superintendent Sam Swearngin with the Oxygen Award 2007.

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Kansas City recognized for alternative fuel use

Boston-based World Energy has expanded its domestic and international staff. Jerry Petak was hired as director of commodities and risk management. Petak has 35 years of experience in sales, procurement, product development and management of feedstocks for agriculturally based products. Previously, he was a managing editor for Jacobsen Publishing Company.
 
 Bob Markisello was hired as director of manufacturing. Markisello has 30 years management experience in the chemicals, concrete repair and coatings industry. Previously, he was a plant manager in the corporate safety department of Imperial Chemical Industries.
 
 Marco Jeronimus was named European sales manager. He previously worked at Vinmar International, a petrochemical trading company. Brendan Marsua was also named marine operations coordinator.

World Energy expands staff

Midland Manufacturing, a division of OPW Fluid Transfer Group and a global leader in railroad tank car safety valves and equipment, named Vladimir Tsimberg as supply chain manager, effective April 2. He is responsible for materials, purchasing, and shipping and receiving, in addition to the integration of Midland's supply chain with its ongoing lean manufacturing initiatives. Previously, Tsimberg worked for Senior Flexonics.

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Midland names supply chain manager

Donald E. Trimbur has joined Solazyme, an algal biotechnology company, as its senior director of biofuel development. He previously spent 13 years with Genencor International Inc. as head of its protein science research group. Trimbur is a metabolic engineer and microbiologist with more than 20 years of experience in the field.

Trimbur joins Solazyme

Oregon is brimming with biofuels activity and McCall Oil and Chemical Corp. is positioned to be the state's premier distributor. Portland-Oregon's largest city-is home to more than a half-million people and is surrounded by millions more. It's also on the verge of implementing a citywide renewable fuels standard (RFS) that requires all retail diesel fuel sold in the city to be B5. The fuels standard goes into effect this fall, according to Tomas Endicott, cofounder and managing partner of Sequential Biofuels, a biodiesel marketer based in Eugene, Ore. While a citywide retail B5 mandate in Portland may not amount to serious volume, there's more. 
 
 The Oregon state legislature is in the midst of pushing through a progressive bill seeking to establish biofuels standards for both ethanol and biodiesel-one that's been years in the making. When instate biodiesel production reaches 5 MMgy, part one of the two-part mandate would go into effect, requiring B2 in all diesel fuel sold throughout Oregon. That 5 MMgy of biodiesel must come from regional sources in Washington, Oregon and Montana. Part two would entail increasing the B2 mandate to B5 when instate production of biodiesel reaches 15 MMgy. 

 
 "I've been involved in developing this legislation since 2002," Endicott says, noting that he's worked with the governor's office and state legislators to get this bill off the ground and into the law books. At press time, the House had already passed the legislation. Its fate now lies in the hands of the Senate. "We're all confident the Senate will pass it and the governor will sign it," he tells Biodiesel Magazine. If expectations are realized and the statewide RFS becomes law, the phase-one B2 mandate alone would create the demand for 15 MMgy of biodiesel in the state; the phase-two B5 requirement would raise the volume of biodiesel needed to 35 MMgy. 
 
 "Portland terminals distribute 70 percent of Oregon's fuel supply," Endicott says. The city has approximately seven terminals handling that majority share. "McCall Oil and Chemical is probably the only diesel-only terminal in Portland-maybe all of Oregon," he says. It's also the only Portland-based terminal to injection-blend biodiesel. 
 
 McCall History and Presence
 "McCall started in 1938 as a service station, which grew into a heating oil [distributing] company," McCall Oil CEO Jim Charriere says. "At one time, it was the largest heating oil company on the West Coast, with around 35 million gallons in heating oil home deliveries." In 1974, McCall Oil began construction on its Portland terminal on the Willamette River, which flows into the Columbia River and out to the Pacific Ocean. Portland is an inland deep-water port that is able to handle large Pana max ships. Also, the terminal has access to the Olympic Pipeline, which runs through a 300-mile corridor from Ferndale, Wash., to Portland. "Our terminal is on an 18-acre site, and we have a million barrels (42 million gallons) of storage capacity, three-quarters of which is heated," Charriere says. 
 
 McCall's Portland terminal has a high volume of heated storage because of its asphalt business, something that has developed and become one of its primary functions. "Asphalt is the very viscous oil that makes up 6 percent of what you see when you look at roads but represents 50 percent of the cost," Charriere says. Asphalt is sold hot-350 degrees Fahrenheit-and requires a source of heat for proper storage. "Heat's not a problem here … We have two natural gas boilers," Charriere says. Excess heat from the boilers is routed to other tanks in the terminal, providing enough warmth to store B100 at 50 degrees Fahrenheit, which helps avoid gelling. 
 
 McCall hasn't carried biodiesel for long. Its decision to start was intertwined with many things: the state-created demand on the horizon, the terminal's preexisting heating capacity and the installation of an injection blending system for dye-something used at many terminals, but rarely for biodiesel blending. "With the changes in diesel fuel specifications, we had to make changes to our load rack," Charriere says. "We were already putting in an injection system for dye injection of lubrication and conductivity additives." The two injection systems are similar. 
 
 Another driver behind the decision to begin blending biodiesel was the state tax credits available to expand alternative fuels infrastructure. It's a 35 percent credit spread out over five years: 10 percent for each of the first two years, followed by 5 percent per year for the remaining three years. All things considered, the opportunity to begin blending biodiesel-and blending it accurately-was too good to pass up. 
 

 The precision provided by injection blending, also referred to as ratio or proportional blending, is said to be far superior to that of splash blending, yet the latter is still the most common blending method. "When we decided to install this system, most blenders practiced splash blending-where they put the diesel fuel in the tank and splash some biodiesel on top, then drive it around and hope it all mixes up," Charriere says. "With our automated blending system, we can blend anything from B2 to B99 at 400 gallons per minute." 
 
 The unit is an Accuload model. "The driver pulls up, swipes their card [and] chooses their product whether that's on-road biodiesel, dyed ultra-low sulfur biodiesel [blend], or higher sulfur-dyed biodiesel [blends]," Charriere says. Ted McCall, whose grandfather started the company and who is currently vice president of environmental and risk management, says the resellers who use McCall Oil's automated blending system are very pleased. "They appreciate what we have in place," McCall says. "It's very user-friendly." 
 
 Sequential Supplier
 McCall's B100 is supplied by biodiesel marketer Sequential Biofuels, which also has a stake in SeQuential-Pacific Biodiesel, Salem, Ore.-based plant designed and built by Pacific Biodiesel. The facility is capable of using multiple feedstocks, much of which is waste cooking oil from the surrounding regions. Endicott says the plant will expand to 5 MMgy beginning in late summer or early fall. If all goes according to expectations with the measure now in the state Senate, the expansion would trigger the B2 mandate once completed. As a marketer, Sequential Biofuels penetrates Pacific Northwest markets. It has 30 sites in Oregon alone offering B20 or B99. 
 
 With the expected mandates already in the pipeline, Endicott tells Biodiesel Magazine that the other petroleum distributors, terminals and majors ought to be concerned about equipping themselves with the means to blend biodiesel. "Absolutely they should be concerned," Endicott says. "We need the ability to distribute B5 here in Portland by the fall." One of the attributes that attracted his company to McCall Oil, the only terminal Sequential works with, was that it was a family-owned business. "Also, they were more accessible than the Chevrons, the Shells and the Conoco Phillips," he says. "Through biodiesel we had a connection. We had our production facility on line already, and supplying to McCall was an efficient way to get biodiesel into the distribution chain in Portland." 
 
 Biodiesel at the McCall terminal in Portland is housed in one large storage tank with the capacity to hold 10,000 barrels (420,000 gallons), or two smaller 700-barrel (30,000-gallon) tanks. "This allows us to receive product in one tank and test it to assure product quality while shipping out of another one," Charriere says. 
 
 This family-owned terminal has been of interest to major players in the fuel industry. They are looking to McCall Oil's automated biodiesel injection-blending system and heated storage configuration for insight on establishing the wherewithal to do the same. Even some of the big biodiesel producers are interested in working with McCall Oil. "Cargill has been calling us direct," McCall says. "Other big [biodiesel] suppliers are interested in working with us, too." Moreover, biodiesel blend sales have been picking up steadily for McCall Oil since the terminal began carrying tailor-blended biodiesel. "We move a lot of B5 and B20," he says. 
 
 Major oil companies with terminals in Portland, like Conoco Phillips and Kinder Morgan Inc., have been involved with city officials and logistics experts for months to determine what would be the best approach to implement the citywide B5 mandate. Charriere tells Biodiesel Magazine that "it's flattering" to have the majors peering into his company's setup for ideas. Speaking to McCall Oil's longevity and string of accomplishments through nearly 70 years of operations, he says, "I would say it's because of our ability to remain nimble in the marketplace."
 
 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.

The Accuload III biodiesel injection blending unit--the only one used for proportional biodiesel blending in Portland as of March--operates with push-button ease.

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McCall's Portland terminal has the capacity to store 42 million gallons of fuel.

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McCall's terminal in Portland is ready to help satisfy the city's new B5 mandate, which goes into effect this fall.

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Biodiesel Magazine talks with an enterprising Portland, Ore., blender, family-owned McCall Oil and Chemical, about staying ahead of the biodiesel distribution curve in the Pacific Northwest.

Portland's Progressive Terminal

Biodiesel's acceptance in some areas of Texas has been tenuous due to the requirements of the Texas Low Emission Diesel (TxLED) program implemented in October 2005. Two years ago, the Texas Commission on Environmental Quality (TCEQ) set out to combat nitrogen oxide (NOx) in the state's densely populated 110-county eastern region, including the metropolitan areas of Houston, Dallas-Fort Worth, Austin and San Antonio. TxLED was developed to be a regulatory standard for diesel fuel that would reduce smog and its associated health problems. The result was the requirement that all fuel sold in those areas contain a minimum cetane number of 48 and an aromatic hydrocarbon cap of 10 percent by volume. Biodiesel meets these requirements, but because it's blended with diesel fuel, the TCEQ chose to categorize it as an additive, thus rendering its high cetane number and low aromatic content irrelevant. 

 
 The TCEQ's decision to ban the sale of biodiesel was based on data gathered by the U.S. EPA from stationary engine dynamometer tests conducted in the 1990s that showed biodiesel slightly increased NOx emissions. The test results have caused consternation among biodiesel proponents who argue that recent research more accurately profiles biodiesel's emissions. In late 2006, Robert McCormick, a scientist with the National Renewable Energy Laboratory, released a technical report indicating that B20's NOx output is similar to that of diesel fuel when chassis dynamometers were used. McCormick used chassis dynamometers because some experts consider it a better representation of real-world duty cycles and loads of certain diesel applications, such as transit or school buses as opposed to long-haul tractor trailers. Shortly after TxLED was implemented, the TCEQ placed a stay of execution on the TxLED mandate to give the U.S. EPA, TCEQ and the Biodiesel Coalition of Texas (BCOT) a chance to work toward finding a solution for the state's biodiesel dilemma. In December 2006, the stay was extended for another year because there had not yet been a TxLED approved fuel additive to help reduce NOx emissions-that is until recently. 
 
 Compliance Option
 In early March, the TCEQ did something it had never done before. It issued its first certification for a biodiesel fuel additive that is proven to reduce NOx emissions levels of B20 and lower blends to within TxLED standards. Oryxe Energy International Inc. of Irvine, Calif., a fuel-performance additive producer, successfully developed Oryxe LED for Biodiesel. The additive is a specialized version of its TxLED additive for regular petroleum diesel that was approved by the TCEQ in 2005 for blending to reduce NOx emissions. The new biodiesel-specific additive was run at a slightly higher treat rate to cut out any increase in NOx from the biodiesel portion of the fuel, Oryxe Chairman and CEO James Cleary says. In addition to reducing NOx, the additive has reduced particulate matter by 28 percent, total hydrocarbons by 17.5 percent and carbon monoxide by 19 percent beyond the required TxLED levels. Like biodiesel, Oryxe's additive is biodegradable and nontoxic. "We are concerned-like a lot of people in Texas-with the NOx question, which is the whole basis for the TxLED program to begin with," Cleary says. "We think our additive is a very cost-effective victory for everybody to remove NOx from the table as a discussion." 
 
 Oryxe was started in 2001 by Fred Jordan and his son Chris. At that time, Fred Jordan had more than 25 years experience with research and development in the field of combustion science. From the beginning, Oryxe's mission has been to improve the health of the environment through the use of innovative additive technologies for fossil fuel producers that result in cleaner, more efficient fuels. The first patents that Oryxe received were for products that can be blended with petroleum diesel, but the focus on developing additives for renewable fuels, such as biodiesel has also been a company goal. 
 
 Oryxe LED for biodiesel is injected at the load point at the same time the biodiesel is flowing from the biodiesel tank into trucks. It's basically instantaneous with no time lost adding an extra step in the blending process, Cleary says. The cost of Oryxe's product is confidential but a biodiesel blend can be treated "literally for pennies on the gallon," he says.
 
 In order to gain approval for Oryxe's biodiesel fuel additive, the company presented a protocol to the TCEQ and suggested methods for testing. Research was conducted at the University of West Virginia's (UWV) National Center for Alternative Transportation Fuels, Engines and Emissions. First, a reference fuel was tested and an emissions profile was compiled. Then the Oryxe candidate fuel containing the biodiesel additive was tested and the two emission profiles were compared. All research was supervised by a TCEQ-selected individual and a results report was prepared by UWV scientists, which was sent to the TCEQ and the EPA for final approval, Cleary says. Once successful, Oryxe was issued a certification.
 
 The certification was not only monumental for Oryxe, but also for the TxLED program, says Morris Brown, leader of the TCEQ Air Quality Planning and Monitoring Team. There are other formulations in the approval pipeline, but Oryxe was the first and is the only TCEQ-approved formulation at this time, he says. "This is a kind of milestone for our program to finally have a biodiesel formulation approved for B20 or less," Morris says. As far as what effect this additive will have in December when the stay of execution expires, that's up to TCEQ commissioners, Morris says. A number of things could happen. "This basically means that now there is an option for compliance in the TxLED program for biodiesel producers outside of the alternative emission reduction plan provisions," he says.
 
 Issues Remain

 Despite all of the seemingly rosy characteristics of Oryxe's new product, the additive hasn't received a warm welcome from Texas-based biodiesel producers. Many are still crossing their fingers in hopes that either the TCEQ will reverse its decision about biodiesel blends or that the Texas legislature will intervene. Then there are others who aren't really concerned about the possibility of having to additize. "We'll cross that bridge when we come to it," one producer tells Biodiesel Magazine. In the meantime, there could be adverse effects on the state's economy if biodiesel blend sales become illegal in the 110 counties affected by the TxLED standard. Some biodiesel producers say they would simply sell to out-of-state customers rather than be forced to blend additives with their fuel. 
 
 Kelly King, marketing and communications director for Pacific Biodiesel, says that would be contrary to the company's strategy of building plants near its end users, which are typically in the same state, if not in the same community. Pacific Biodiesel operates a 2 MMgy plant in Carl's Corner, Texas, about 60 miles southwest of Dallas. "It's unfortunate that we are spending our time on additives that address the issue of a potential small increase in one type of emission," King says. "The real issue is the need for an acceptance and better understanding of the benefits of sustainably produced biodiesel." 
 
 In order to continue the growth of the biodiesel industry in east Texas, two things have to happen: a continuation of the Texas Biofuel Producer's Incentive and coordination between the EPA and the TCEQ, King says. That would eliminate concerns that Texas will be the first state in the nation to force additives on the biodiesel market, which would greatly inhibit the growth of the industry. It's the cost associated with additives that would put the price per gallon of biodiesel at a disadvantage compared with petroleum diesel, King says. 
 
 The BCOT also believes there are other avenues for biodiesel to take besides forced additizing, but as a representative organization of the biodiesel producers in the state its first and foremost goal is to ensure that biodiesel can be used under the TxLED program, says Jenny Ligums, BCOT vice president of external affairs. Currently, the BCOT is working with the TCEQ and the National Biodiesel Board to try to help TCEQ gain comfort with biodiesel and its properties as a fuel, Ligums says. At the urging of the BCOT, the TCEQ will consider the results of a collaborative biodiesel testing effort that is currently underway between the EPA and the U.S. DOE, Morris says. Although he's unsure how far along the project is, it was expected to take anywhere between 18 and 24 months to complete. The TCEQ has also received a proposal from the BCOT to extend the expiration date of the alternative emission reduction plan, which is up for consideration for adoption May 9, Morris says.
 
 While the future of Oryxe's additive with Texas producers is unsure, the city of Dallas became the company's first customer not more than a month after oryxe LED for Biodiesel was certified. The city's fleet already runs on vegetable-oil-based biodiesel, but city officials decided to take it a step further because of the ozone pollution problem in north Texas, according to Ramiro Lopez, who oversees fuel and environmental services for the Department of Equipment and Building Services in Dallas. The biodiesel additive has also attracted interest from other states, Cleary says. "We've heard from the California Air Resources Board and we've done some work in the state of California," he says. Within the United States, Cleary says he has received calls from entities in the Midwest, East and South, as well as a request for proposals for competitive business bids in a number of places around the world. Most of the international interest originates in places where there is a preponderance of diesel-powered cars-Latin America, Asia, the Asian subcontinent and India.
 
 Meanwhile, deep in the heart of Texas, the work to determine a conclusive stance on biodiesel continues. "We believe in the quality and the properties of the fuel," Ligums says. "We believe there are many paths forward and additives are one of them. Obviously, we don't believe that we need to additize the fuel at this point, but we are working through the data."
 
 Lindsey Irwin is an Biodiesel Magazine staff writer. Reach her at <a href="mailto:lirwin@bbibiofuels.com">lirwin@bbibiofuels.com</a> or (701) 746-8385.

Ron Lukasiewicz, senior consulting analytical chemist for Oryxe Energy International Inc., works with biodiesel that contains the company's NOx-reducing additive.

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Oryxe Energy President Kevin McGlensey, right, tours the company's Pasadena, Texas, plant where the company produces its fuel additives.

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Texas producers face the possibility that biodiesel sales in parts of the state will become illegal. With the second stay of execution on the Texas Low Emission Diesel program set to expire in December, an additive that meets current requirements for 20 percent biodiesel blends and lower got a Texas-sized thumbs up. However, concerns over the extra cost and time it takes to use the additive could be a hindrance.

Additive Adjustment

Houston has a problem. It's growing faster than the rest of the United States, but it lacks the production capacity to provide its population with power under the stringent pollution guidelines set by the federal Clean Air Act.

 
 According to the Greater Houston Partnership, which oversees economic development in the Houston metropolitan area, the population grew 17.5 percent between the 2000 census and mid-2006. Local population growth was approximately 825,000 for the area, resulting in a total population of 5.5 million as of July 2006.
 
 Meanwhile, Houston has had a serious air quality problem for years. It's been in competition with Los Angeles since 1999 to lead the nation in having the most polluted air, as defined by the number of days each city violates federal smog standards.
 
 In 1990, the eight counties that make up the Houston metropolitan area were classified as a nonattainment area-geographic regions that fail to meet the national ambient air quality standards (NAAQS) set by the U.S. EPA under the Clean Air Act. The region was classified as being a moderate nonattainment area for ground-level ozone under the eight-hour standard in 2005 and was given a maximum attainment date of June 15, 2010. According to the Texas Commission on Environmental Quality, attainment in the area is especially challenging due to the complex ozone formation chemistry and unique weather patterns in the area.
 
 The city has implemented several measures to comply with its plan to reach attainment. Among these, it decommissioned three large power plants that resulted in taking more than 10,000 megawatts (MW) off the grid, according to Biofuels Power Corp. COO Ken Crimmins. To make up for its power deficit, Houston must import electricity from other areas. To provide power for one day in the summer, which is when demand is the highest, the city must import 3,000 MW per hour, he says. During nonpeak months, like January, it still imports 900 MW per hour. 
 
 Electricity consumption per capita is higher in Texas than in other areas of the United States, in part because of its intense use of air conditioners. Typically, 1 MW will service 1,000 homes on average, but in Texas the average is closer to 500 homes, according to Dottie Roark, communications manager for the Electric Reliability Council of Texas Inc., which operates the electric grid and manages the deregulated market for 75 percent of the state. On hot summer days, 1 MW may only power 200 homes, but in normal conditions it probably powers between 500 and 700 homes, she says. 
 
 Part of the solution for Houston may lie in local power generation from renewable sources. That's where Crimmins comes in. In mid-February, Biofuels Power Corp., which is registered with the Public Utilities Commission as a renewable energy source, first sent electricity into the grid from its biodiesel-powered generating plant in Oak Ridge North, a suburb of Houston. Its sister company, Safe Renewables Corp., provides all of the biodiesel used in the plant. Safe Renewables has the capacity to produce 18 MMgy of biodiesel from multiple feedstocks, such as soy oil, cottonseed oil, canola oil and animal fats. It is located just two miles from the Biofuels Power facility.
 
 The power facility has the capacity to produce approximately 5 MW of electricity using three used diesel Caterpillar generators that act as a single source of power. At full load, they use 72 gallons of biodiesel per MW hour. An interesting feature is that waste heat from the generators is used to keep the fuel tank warm and prevent with: the biodiesel from gelling. The company is experimenting with various additives to decrease emissions and increase efficiency. "We hope to get down to 60 gallons per megawatt hour," Crimmins says.
 
 He plans to run the engines all summer as long as the price is right. Because of the cost of biodiesel in relation to electricity, however, there is a point at which it isn't efficient to run the generators. "If you can sell [biodiesel] for $2.90 on the open market, why would you convert it to electricity and sell it for less?" Crimmins says.
 

 Diesel-based electric power has always been more expensive, says Bob Webb, general counsel for Biofuels Power. "Where you're able to compete is when the price of electricity is high," he says. "A few hot days per year could provide all the money you need for the whole year." 
 
 Electricity prices vary by the hour. It can't be stored or moved. Thus, Biofuels Power finds its market during peak hours, when the city demands all the electricity that can be made. "We only make power from 6 a.m. to 5 p.m. when the price is higher than our fuel costs," Crimmins says. 
 
 Selling biodiesel as electricity solves the distribution problem, Crimmins says. Many places are not equipped to sell biodiesel as a liquid fuel, but everybody can accept electricity. 
 
 However, there is one problematic aspect of using biodiesel in Houston, and that's the potential increase of nitrogen oxide (NOx) emissions, which are primarily responsible for the formation of ground-level ozone. Study results have not consistently proven that biodiesel increases NOx, but any increase in NOx is unacceptable in Houston. Therefore, Biofuels Power has invested significant time to research this subject. It partnered with the Houston Advanced Research Center (HARC) to form the Southwest Biofuels Initiative. Together, they have tested emissions and feedstocks. HARC provided an independent evaluation to support issuance of an air permit. 
 
 Finding a New Market
 Biofuels Power has its roots in defense contracting, Webb says. Defense contractor Texoga Technology was interested in biodiesel for use as a military fuel because the fuel's high flashpoint makes it safer to use in combat situations. The company built a biodiesel plant and called it Safe Fuels Inc. The plant has since been expanded from 10 MMgy to 18 MMgy, and the name was changed to Safe Renewables Corp.
 
 The company researched uses for biodiesel outside of motor vehicles, and electrical generation became an obvious choice. Crimmins says he has been working on this project for four years. "It wasn't all engineering hurdles," he says. "We had a prospectus floating for five months until we got anyone to fund it." 
 
 Webb says most diesel-powered stationary engines can't be used in the Houston area because of nonattainment issues, and the expense to remove all the pollutants from petroleum diesel is not cost effective. Thus, a lot of companies have switched to natural gas engines. "If we can use B100, we could meet the more stringent air guidelines and be able to continue to use stationary diesel engines," he says. "In Houston, there are roughly 500 megawatts of diesel-generating capacity. They all have trouble meeting new clean air guidelines."
 
 The beauty of this project is that the engines used to produce electricity have already been built-and built to last. "Diesel engines last forever," Webb says. He adds that the older engines, which are available and in working order, are better suited to use biodiesel because they are less complicated and adjust to the new fuel more easily. The deployment of biodiesel can put these generators back into commission in nonattainment areas. "We can eliminate through biodiesel most of the pollution," Webb says. "The one we can't eliminate-NOx-we can control."

 
 For these reasons, Webb says expansion plans are concentrated on producing electricity in areas where there are significant air quality problems. Immediate expansion plans are already in the construction phase. The company purchased a used 10 mw General Electric turbine from Elgin Air Force Base in Florida. The turbine was shipped to the Safe Renewables plant by rail and at press time was being assembled within the biodiesel plant. Crimmins expects to have it hooked up to the grid by August. 
 
 The turbine, which Crimmins compared with a jet engine, was built to run on multiple fuels. The benefits of the turbine is that it was half the cost of the generators, is more reliable and offers more power from a smaller package. The only drawback is that it uses more fuel. Whereas the generators require 72 gallons per hour, the turbine uses 109 gallons per hour. 
 
 The turbine was also a good deal for Biofuels Power because its size allowed for a shorter permitting process. Permits for most stationary power sources are issued at two levels in Texas. Because Biofuels Power's turbine would produce 10 MW or less and the pollution would be under statutory rates, the plant would fall under standard permit requirements within the jurisdiction of the state. If not, the process could take significantly more time.
 
 Biofuels Power also plans to add a heat recovery unit at the Safe Renewables site. "After we find suitable heat use, we can use combined heat and power, and make additional electricity," Webb says. "We'll probably be using steam in the manufacture of biodiesel. That will give us two different kinds of plants using biodiesel in two different markets." The 20 MW steam unit will be a base-load plant that can use anything that's renewable, Crimmins explains. "We'll make steam in the boiler and make electricity," he says.
 
 The expansion doesn't stop there. Crimmins would like to expand the company's Houston operations even further. He also sees numerous opportunities for this technology as a supplement for windmills. Other states are also being considered; states like Alaska and Hawaii, where the electricity comes primarily from diesel fuel, could benefit from switching their power supply to biodiesel. 
 
 Of course, much of the future plans are dependent on proven success and funding. "We're working with partners to show we can ramp up and get off the imported oil pipe," Crimmins says.
 
 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.

Biofuels Power can produce up to 5 megawatts of electricity using these three Caterpillar generators that run exclusively on biodiesel produced by Safe Renewables.

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This substation converts electricity produced by Biofuels Power from medium-to high-voltage so it can be connected to the electrical grid and distributed on a high-tension distribution voltage line.

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The Houston area demands 3,000 more megawatts of electricity per hour than its local power plants can provide, and its nonattainment status won't allow for more plants to be built. Biofuels Power Corporation has a solution to Houston's power shortage, and it smells a lot like biodiesel.

Electricity By the Gallons

The competition to develop feasible processes that produce high-quality biodiesel is fierce. Dozens of companies are looking to license their proprietary technology to ambitious developers around the world. As the industry continues to grow, it has attracted interest from many different sectors of the industrial world, including chemical manufacturing firms like Rohm and Haas. 

 
 The international specialty chemical maker has developed a biodiesel purification system that can reduce a plant's power and water usage. Marketed through San Rafael, Calif.-based Greenline Industries, Rohm and Haas' Amberlite BDIODRY technology is a simple ion exchange purification process that minimizes biodiesel losses and facilitates methanol recovery. Greenline's process design is the first in the industry to use ion resin technology for washing biodiesel, which was the basis for the partnership between Rohm and Haas, and Greenline Industries. "We sought out a partner to provide us with a waterless solution for washing biodiesel," Greenline Industries Cofounder and Vice President of technical development Jacques Sinoncelli says. "We found one in Rohm and Haas." 
 
 Rohm and Haas, with annual sales revenue of more than $8 billion, has a portfolio that includes producing chemicals for everything from paints and ceramics to laundry detergent and hair care products. The company has been developing resin technologies for more than 60 years and was able to leverage this knowledge to create a waterless process design for the biodiesel industry. "We have a wide range of technologies and a depth of experience in polymers, so we are excited to apply it to biodiesel, which is very hot right now," says Mark Vandersall technical manager for Philadelphia-based Rohm and Haas. "We've been able to hook up with Greenline to get this technology to the marketplace." Amberlite BD10DRY is composed of polymeric beads, which contains functional groups that can purify, separate or enrich substances from the treated liquid-biodiesel. In other words, the active ion material on the Amberlite attracts the unwanted material in the biodiesel.
 
 Greenline has 27 biodiesel plants under contract, including Patriot Biofuels in Stuttgart, Ark., and Global Alternative Fuels LLC in El Paso, Texas. The 23 plants Greenline sold in 2006, all using the Rohm and Haas Waterless Ion Resin system, represent over 190 million gallons of capacity, the company states. "We're excited to have this technology being installed all around the world," says Jon Fedders of Rohm and Haas.
 
 A Lighter Load
 Greenline and Rohm and Haas aren't just interested in building new plants. The companies are armed with a myriad of services to integrate their process into existing facilities, as well. "We offer a retrofit for plants that might want to convert to a waterless system," Sinoncelli says. The system offers technical and economic advantages over other wash or purification methods by lightening the load for distillation, he says. Distillation is often used as a means to purify biodiesel, as well as recover methanol at the back end of a plant. The use of ion resin instead of a water wash does intercede in taking away the largest amount of the fuel that needs to be cooked. In addition, distillation is the most power-intensive aspect of biodiesel production and subsequently the most costly. "If you can alleviate the load, you lessen the cost," Sinoncelli says. "Of course, you still need distillation for methanol recovery."
 
 The Amberlite system operates much like coffee brewing. The crude biodiesel runs over the polymeric beads, which contain chemical groups designed to remove soaps, excess glycerol and other impurities, thus "washing" the fuel so that it will meet even the most stringent international standards. The biodiesel fuel enters the percolator and trickles down through the cylinder of Amberlite. A chemical reaction then renders the unwanted materials neutral, and they cling to Amberlite's beads as the pure fuel exits the cylinder. 
 
 An ion resin purification system decreases the amount of water that's used but doesn't eliminate it. It should be noted that even if a facility uses a dry procedure to wash the fuel, it still needs water for the cooling tower, and it needs makeup water, which is pumped through the system during "utility blowdowns" to prevent the accumulation of minerals in the equipment. In addition, every biodiesel plant needs water to run its boilers. Water quality also affects usage. The harder the water in a particular area, the more a biodiesel plant will probably need to flush through its system.
 
 While a biodiesel plant uses less water than an ethanol plant, it's still an issue, especially during the permitting stages. "Greenline saves you the time and the hassle of not having to explain to municipalities or agricultural producers in the area that you would have to use 4 million to 5 million gallons of water from their supply," Sinoncelli says. "In addition, you have much lower operating costs and no water treatment plant."
 

 For producers who might be interested in converting their operations, Rohm and Haas will evaluate the technical and economic advantages of implementing the ion-exchange technology. "This is one of the ways that Greenline benefits from its partnership with Rohm and Haas," Greenline CEO Ted Lavoie says. 
 
 Implementing this technology is not a major undertaking, Sinoncelli says. The process has a small footprint and can easily be integrated into any standard biodiesel production process. A feed pipe for the stream that needs to be purified, a column and a pipe to remove the finished fuel is all the equipment that's needed to convert to the Amberlite system. "A column configuration is the most common mode of application for these types of resins," Vandersall says. "The simplicity of the system makes Amberlite easily incorporated into an existing plant." In addition, Greenline says it has eliminated the need for centrifuges, which require a significant amount of maintenance. "We have one of the most reliable plant designs out there," Sinoncelli says. "Our plants have backups on every system."
 
 Amberlite needs to be replaced at regular intervals after the catalyst has been lost, but that can be done without having to shut down the process, Sinoncelli says. Amberlite should be replaced at the rate of about a one metric ton for every 300,000 gallons of biodiesel processed. Once its lifespan is over, it is neutral and nontoxic. "There are different ways to dispose of the resins, and we are looking at ways to use it as a Btu fuel source," Vandersall says. "The spent resin can be used to fire asphalt or cement kilns." Rohm and Haas has an entire research program focused on developing new applications for the spent resin. "We have the opportunity to benefit from Rohm and Haas' research and development excellence," Lavoie says. "We consider Rohm and Haas to be one of our leveraging partnerships that allow us to bring some of the most efficient and innovative solutions to the biodiesel marketplace."
 
 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.

Greenline Industries says it sold 23 plants in 2006, all using the Rohm and Haas Waterless Ion Resin system, that represent more than 190 MMgy of production capacity.

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Scaled-up standards require even the minutest traces of soap, catalyst and glycerol to be removed from biodiesel. It seems only natural that a partnership between a company that produces chemicals that boost the cleaning power of laundry detergents and a biodiesel producer has resulted in a solution.

Waterless Washing Machine

Alterra Bioenergy Holdings Corp. stands apart from the pack for reasons other than the fact that it has the backing of a former U.S. president and is building a plant in his hometown. The company bypassed the major contractors and process designers to design and build its own plants-something you might expect from a seasoned biodiesel producer, not a brand new company. Its financial backing is unique, as well, involving Norwegian investors with links to South America. 
 
 CEO and founder Wayne Johnson, a Macon, Ga., native, is the man behind Alterra's inimitable background. Now in his mid-50s, Johnson worked for a number of years as a senior executive for Visa. He was introduced to Argentina by the people who own Master Card, and he started a bank that became the largest Argentine bank to issue credit cards.
 
 When he started looking for new opportunities he was initially drawn to the hot ethanol market. "I always look for something that satisfies a fundamental need," Johnson says. "I saw that ethanol was being aggressively pursued, but I found the whole biodiesel development effort in the United States was lagging significantly behind and just needed capital investment." 

 
 The connections he made in Argentina resulted in the development of an investor group that Johnson is pleased with. "There is a large amount of capital that these folks have made available for the development of the business and to make it grow. We will be producing biodiesel fuel, selling blended fuel and we're doing our own plant development and design, and our own marketing." 
 
 Johnson officially organized Alterra Bioenergy Holdings Corp. with headquarters in Macon, Ga., in October 2006 and the company broke ground on its first plant in December that same year. The 15 mmgy biodiesel plant is currently under construction in Gordon, Ga., and is called Alterra Bioeners of Middle Georgia.
 
 In late February, Alterra held a groundbreaking ceremony for its second plant, a 30 MMgy plant at Plains, Ga., which will be called Alterra Bioenergy of Plains. Both companies are subsidiaries of Alterra Bioenergy Holdings Corp.
 
 The former president was actively involved in the meetings with Alterra's investors, Johnson says. "When President Carter lends his influence to something it really captures the attention," he says. "He was excited about us doing this for two reasons. It brought a meaningful business to Plains, which he's very protective of and very supportive of. Also, he likes it because it furthers what he said when he was president: 'We all need to be striving for energy independence.'"
 
 The wide publicity surrounding the groundbreaking because of Carter's involvement resulted in many new contacts for Alterra. The company already has plans to expand the Gordon and Plains facilities, and to build larger plants at two other unnamed locations, Johnson says. Alterra is also completing negotiations to acquire an Argentine biodiesel plant and boost that facility's production from 3 MMgy to 15 MMgy. Johnson says his goal is to have 200 MMgy of biodiesel production capacity by the end of 2008 through building and acquiring plants, and partnering with others.
 
 Christian Langaard is one of the Norwegian partners involved in Alterra. He is president of Euro-Latin Capital, a corporate financial advisory firm with headquarters in Uruguay, and offices elsewhere in South America and Europe. The company also manages private equity funds in South America. In the past 18 months, Euro-Latin Capital has made a concentrated effort with its cornerstone investors to study biofuels, according to Langaard. "We believe biodiesel is particularly interesting," he says. "We think it's an underdeveloped market, he says. "The biodiesel entry cost isn't enormous, but you need to be involved where you can get the raw materials. Argentina, Brazil and the United States together have about 90 percent of the world soybean production."
 
 Feedstock Flexible
 Soybeans aren't the only feedstock that Alterra is considering. The company may use palm oil if it makes sense, and it may build port facilities if it's advantageous, Langaard says. The availability of a variety of feedstocks was one factor that persuaded Alterra to build plants in the southeastern United States. "One of the beauties of Georgia is that it has an ample supply of soybean oil, cottonseed oil, peanut oil and even potentially canola oil," he says. 
 

 Alterra will initially produce biodiesel from soybean oil crushed at Georgia's two soybean crushing facilities; one is 100 miles from Plains and the other is 250 miles away. "We're starting with soybeans while looking at alternative feedstocks, particularly the ones of South America-jatropha or castor oil," Johnson says. "One of the things we'll be doing at Plains is looking at cottonseed oil, peanut oil and also canola as a winter crop. The Southeast is well-known for its chicken fat, as well." 
 
 Peanut oil is generally considered too expensive to be used as a feedstock for biodiesel, compared with soybean oil, but Johnson says there are new varieties being developed that may make it more economically feasible. Peanut farmers' planting decisions are based primarily on federal programs, Johnson explains. As big producers of cotton, Georgia growers welcome a new use for cottonseed, which was once crushed for oil but now is used primarily as livestock feed. Cottonseed has a chemical issue when used as a biodiesel feedstock, which is being studied at the University of Georgia, Johnson says. 
 
 Canola may be a promising new crop for the area. Georgia was briefly the nation's largest producer of canola in the 1990s, but farmers dropped it when markets didn't develop. Canola can boost farmers' bottom lines because it can be double cropped, which means it can be grown as a winter crop, followed by a summer-season crop planted after the canola is harvested.
 
 Locating plants and sizing them according to the availability of feedstocks and the potential market are major parts of Alterra's business strategy, Johnson says. "In October 2006, I went in search of where I was going to do this and concluded that Georgia was a good place," Johnson says. Not only is it a center of oil crops, but the state uses 2 billion gallons of diesel fuel and has a very small amount of biodiesel being produced either in Georgia or in the whole of the southeastern United States.
 
 Taking advantage of the initial publicity, Alterra is already selling blended fuel by purchasing biodiesel elsewhere until its own plants are operational. The Gordon plant is expected to come on line early this fall with the Plains plant following a couple of months later. Carter's involvement is appreciated, Langaard says. "Carter has helped us by putting us on the map," he says. "To establish a new company is one thing. Establishing recognition and credibility sometimes takes longer." 
 
 Investor Backing
 The desire to enter the market quickly was the major reason behind Alterra's decision to design and build its own plants. "It tremendously reduces our lead time and saves a lot of money," Johnson explains. "When we made the decision to do this, we went out to the large integrators and each had a backlog of projects. We're not inventing anything. We're not taking any speculative risk. The equipment we've selected we know works." 
 
 "Wayne's assembled a fabulous team of engineers and chemists that have experience in building biodiesel plants," Langaard says. We learned from a Euro-Latin biofuels project in Argentina. "We spent a lot of time negotiating," he explains. "They want to sell you a turnkey project. We may buy the centrifuge system or the ethanol recovery unit from the Rolls Royce, but we don't need Rolls Royce to pave the road or build the building." Langaard says they're also willing to buy some used components, such as stainless steel tanks, without compromising quality.
 
 Euro-Latin Capital, Olympia Holding AS of Norway, Next Business Development Group of Argentina and Johnson are the four investors in Alterra Bioenergy Holdings Corp. In order to accelerate growth, they may bring in a second round of investors or even go public, Langaard says. "I think that Alterra has very committed shareholders," he says. "We have a very respectable businessman running an investment vehicle from Norway who is committed to the region, and we have a very committed manager in Wayne, who is very visionary and has put together a fantastic project. Euro-Latin and Olympia Holding are willing to fund the growth. Now that we have a very powerful endorsement from President Carter and we have very powerful investors from Norway that can show they're committed to financial growth, it takes away the doubts of sustainability."

 	
 Susanne Retka Schill is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:sretkaschill@bbibiofuels.com">sretkaschill@bbibiofuels.com</a> or (701) 746-8385.

Carter, left, was actively involved in bringing Alterra Bioenergy to Plains, Ga. Alterra CEO and founder Johnson said the former president's backing attracted a lot of positive attention.

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From left: Gonzalo Pulit of Next Business Development Group, Langaard of Euro-Latin Capital, Carter, Haakon Korsgaard of Olympia Holding AS Wayne and Johnson.

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Former President Jimmy Carter not only wielded a shovel at Alterra Bioenergy's groundbreaking ceremony in Plains, Ga., he was also instrumental in attracting the company to his hometown. Newcomer Alterra Bioenergy has ambitious plans to become a major player in the region's biodiesel market.

Groundbreaking with Presidential Proportions

Biodiesel has been tested extensively in laboratory environments to evaluate its specific properties related to viscosity and lubricity when applied to truck engines within the fleet industry. Unfortunately, the testing procedures are performed in controlled environments.
 
 "They can try to limit the variables all they want but it's still a laboratory," says Dale Decker, industry and government relations director for Decker Truck Line Inc. (DTL). The Fort Dodge, Iowa-based company has a venerable reputation in the fleet industry with more than 700 trucks and over 1,400 trailers, with nine terminals in five states. DTL trucks travel throughout the United States and southern Canada. 
 
 Decker, a third-generation trucker in the family-owned business, discovered biodiesel several years ago. The more he learned about it, the more he wanted to learn how to apply the biofuel to see if it would benefit his company. Eventually, he found a way to align his interests in biodiesel with the fleet industry by conducting one of the nation's first comprehensive on-road fuel studies. The test is designed to help substantiate the performance of soybean-based B20 versus petroleum-based diesel and to provide verifiable information to the fleet industry. 
 
 The study, dubbed the Two Million Mile Haul was announced in October 2006, and as of March, the trucks had accumulated 350,000 miles. A total of 20 trucks are participating in the study-10 using soybean-based B20 (the variable group) and 10 running on regular petroleum diesel (the control group). The two-year study calls for the trucks to travel 2 million miles. 
 
 All of the trucks are over-the-road Class 8 models, each is carrying the same freight, traversing identical round-trip routes from either Fort Dodge to Minneapolis or Fort Dodge to Chicago. To minimize driver-to-driver variability, the company switches drivers to different trucks from the control group and the variable group. The only remaining variable is the type of fuel that's being used.
 
 In order for the study to reach its peak potential, DTL chose reliable partners to help meet its goal of releasing plausible information-a crucial component of the test. With that in mind, the company assembled a team of experts from the technical, scientific, mechanical and industrial fields to assess and evaluate data gathered during the real-world experiment.

 
 The company partnered with the Iowa Soybean Association (ISA), the National Biodiesel Board (NBB), the USDA, Iowa Central Community College (ICCC), Caterpillar Inc. and Renewable Energy Group (REG). All partnering entities play active roles in the collaborative effort initiated by DTL.
 
 The trucks that DTL is using in the study are Caterpillar-powered Peterbilt 379, 388 and 389 tractors with mostly flatbed trucks. The trucks are running on either Caterpillar's C13 or C15 2006-'07 engines built to U.S. EPA 2007 emissions standards. Caterpillar is tasked with gathering technical information periodically throughout the study and analyzing the effects that B20 has on the trucks. The Peoria, Ill.-based company is examining all the oil samples that DTL collects from its trucks and is checking for metals, wear and other free radicals that would impede performance during the study. Decker says he's optimistic that the new Caterpillar engines will sustain optimal performance while running on B20 compared with petroleum diesel during the test. "With having to run on ULSD (ultra-low sulfur diesel), there's so much less lubricity, which is ridiculous," Decker says. "Even a B2 blend of biodiesel brings the lubricity back up like 60 percent. With the ULSD, you actually exceed the recommended wear scar, but by using biodiesel, you almost cut your wear scars in half." 
 
 Throughout the winter months, the DTL trucks have had no significant performance issues due to the fuel usage. DTL attributes this to the NBB's extensive work in finding high-quality fuel that is properly handled and treated to help biodiesel perform in cold weather conditions. So far, conclusions during the study include: cleaner engine oil, a positive impact on engine wear, decreased maintenance due to increased lubricity and no cold weather issues despite the frigid temperatures that hovered over the Midwest during the winter months. 
 
 Tom Verry, director of outreach and development for the NBB, says the study is welcomed by the fleet industry. "It's something [those in the fleet industry] all have been waiting to see," he says. "Now we'll have something to show them. We really appreciate DTL's leadership in this, and we're glad to be a part of it."
 
 REG is supplying the B20 fuel for the test. The company, based in Ralston, Iowa, builds and manages biodiesel plants and procures feedstocks for third parties and markets the end product. REG also has several partner biodiesel plants throughout Iowa and southern Minnesota. 
 
 "Our staff has been involved with the DTL team, the ICCC team, and the education and hands-on health of blending the B20 fuel for the haul," says REG Communications Specialist Alicia Clancy. "We also help arrange the availability so that they can get our product along the routes so that the test can be run more efficiently."
 
 DTL did experience some fuel filter clogging issues due to the self-blending of the fuel, as opposed to using professionally blended fuel. Decker noted this should help other fleet companies and independent truckers avoid the same drawback. Decker emphasized that this pitfall is being addressed.
 
 Grant Kimberley, director of market development for the ISA, assumed the role of coordinator and facilitator for the project. He says that many trucking companies, independent truckers, government agencies and other original equipment manufacturers will value DTL's accurate findings once the test is concluded. "The trucking industry wants to see data from real-world applications," Kimberley says. "While the laboratory data is necessary and very good and important, for some of these commercial fleets that's not enough. [The fleet industry] would like to see it proven in real-world applications, and this is one of those applications where it is very significant."
 

 The project wouldn't have been possible without financial support. The USDA's rural development branch is interested in helping to fund and promote the project, but funding hadn't been finalized at press time. Due to ethical and confidential issues, Decker couldn't disclose any further details in regard to the USDA's possible financial involvement.
 
 An Organized Approach
 For Decker, the goal of this comprehensive on-road study is simple-to provide the fleet market with a solid base for making sound decisions when using biodiesel in their trucks. "The main thing is we need to get credible information out there to the people [of the fleet industry and media], and not just the rumors or false information that has been circulating in the market," he says. "We're going to get [the information] out there and tell people what we're actually finding. Once people get our truthful and accurate information from our test to make a decision, it's a no-brainer."
 
 DTL collects data from its trucks through a complex Qualcomm satellite system and sends it on to ICCC to be configured and analyzed. The university is responsible for collecting the quantifiable data while stabilizing factors related to miles per gallon, total miles accumulated, average speed, maximum speed and idle time, along with cost analysis, engine maintenance and visual emissions, according to Don Heck, program coordinator for the biotechnology and biofuels technology programs at ICCC. Heck will disseminate the appropriate information most likely through a trade journal when the demonstration is complete. 
 
 Currently, Heck is conducting several tests related to different commercial formulations of additives. One of them in particular, he explains, is administrating a "plug-point test"-a type of cold-flow test that determines at what temperatures different blends of fuels crystallize at the point where the fuel filter can't draw fuel through it any longer. Determining minute details of this nature will deliver positive and long-lasting results that people in the fleet industry can rely on, Heck says. "By the end of the study, we want to come up with some sort of protocol that essentially says we found these additives mixed at these concentrations under these temperatures are going to give you the best results," Heck says. "There are a lot of variables. We're just taking a systematic approach to try and work out some of those issues." While data has fluctuated due to substantial driver-to-driver variability and extensive idle time during winter months, test results are within the margin of error, Heck says. Official results on mileage and efficiency will not be made available to the public until the Two Million Mile Haul is over. 
 
 In order to keep fleet executives, independent truckers and truck media abreast of the most current and up-to-date information DTL, ICCC and the ISA have created a Web site that features blogs, questionnaires and surveys for those interested in the progression of the test. "It's just important to demonstrate to the trucking industry that biodiesel can work and that, along the way, we can collect some more data and hopefully compile the results using biodiesel," Kimberley says.
 
 For more information on the Two Million Mile Haul, visit <a href="http://www.2millionmilehaul.com">www.2millionmilehaul.com</a>.
 
 Bryan Sims is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:bsims@bbibiofuels.com">bsims@bbibiofuels.com</a> or (701) 746-8385.

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Heck, standing, and a colleague examine data from DTL's Two Million Mile Haul demonstration experiment.

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When asked if they use biodiesel in their trucks, most fleet managers and over-the-road drivers will say that they want to use the renewable fuel, but they haven't seen enough evidence that proves the fuel is good for their engines. Decker Truck Line Inc. has taken the lead in that department, pioneering the nation's first comprehensive on-road study.

Two Million-Mile Road Trip

Biodiesel developers know the importance of a strong relationship with lenders, but a property loss or business interruption due to fire, natural disaster, equipment breakdown, employee negligence or any other factor can quickly strain even the healthiest of lender-borrower relationships. Even if the loss is insured, questions often arise as to who gets to share in the insurance proceeds. 

 
 Simply ensuring that the lender is named in the policy may not give the lender, or the borrower, the protection it desires. It is also unwise to place too much significance on the titles, captions or nomenclature used in the policy. Insurers offer different options for giving lenders a right to share in the payment of insurance proceeds in the event of a loss of secured property. Mortgage clauses, loss payable clauses and-to a lesser extent-additional insured endorsements are commonplace in business property insurance policies. While the different options can provide flexibility, interpreting them can be a source of confusion and frustration. 
 
 For example, a mortgage clause generally states that the mortgagee, or lender, has the right to payment of insurance proceeds in the event of a loss of the mortgaged property. However, mortgage clauses take different forms. Under what is typically referred to as a "simple" or "open" mortgage clause, the lender's right to receive payment of the policy proceeds is derivative of the insured's rights and obligations under the policy. The mortgagee is simply an appointee to receive the insurance proceeds. Therefore, any act or negligence by the insured that negates coverage for the insured will also negate recovery by the mortgagee. 
 
 In contrast is the "standard," "union" or "New York" mortgage clause. In addition to entitling the lender to payment of the insurance proceeds, the standard mortgage clause also states that the lender's right to receive payment shall not be defeated by any act or neglect of the borrower. This type of mortgage clause creates a separate contract between the lender and the insurer, and gives the mortgagee rights that are independent of, and may be greater than, the insured. For instance, even if an insured's failure to file proof of loss in a timely manner precludes it from recovering under the policy, the insured's failure may not preclude payment of the insurance proceeds to a mortgagee named in a standard mortgage clause. 
 
 Life is no less complicated for lenders given the title of "loss payee" or "additional insured" in the borrower's insurance policy. Loss payable clauses entitle a named loss payee to payment of the insurance proceeds in the event of a loss of covered property in which it has an interest. As with mortgage clauses, loss payable clauses can take different forms. The traditional loss payee clause makes the loss payee's right to payment subject to the insured's fulfillment of all policy conditions and requirements. Insurers may also offer the option of a "lender loss payable endorsement." This form of loss payable clause is akin to a standard mortgage clause in that it states that the loss payee's right to payment won't be negated by the act or neglect of the insured. 
 
 Additional insured endorsements are evolving creatures in the property insurance context. Depending on the language of the particular endorsement, an additional insured can have rights and responsibilities that fall somewhere within the range between a traditional loss payee and a mortgagee protected by a standard mortgage clause. 
 
 As always, the particular rights, privileges and protections afforded by a given policy are dictated by the particular terms of that policy and the circumstances of the parties. Lenders and borrowers should take care to review the terms of their particular policies to try to understand what they are purchasing and what the relationship between the insured, its lender and the insurer will be in the event of a loss of covered property. 
 
 Christopher Lynch is a partner with Lindquist & Vennum, a leading provider of legal assistance on biofuels projects nationwide. For additional information, contact him at (612) 371-3512 or <a href="mailtoclynch@lindquist.com">clynch@lindquist.com</a>.

 
 This article is only a general summary for informational purposes and does not constitute legal advice. Consult a qualified and experienced legal advisor for your specific situation or particular questions.

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Protecting the Hand That Feeds You: Will Your Insurance Policy Protect You and Your Lender?

In 2006, our organization-the Wisconsin Bio Industry Alliance (WBIA)-was formed as an outgrowth of several biofuel initiatives, including the Wisconsin Ethanol Producers Association and Gov. Jim Doyle's Consortium on Biobased Industry. Wisconsin's ethanol producers came to the realization that there is a great deal of value in developing an organization that would be able to promote and grow not just the state's ethanol industry, but all aspects of the biobased industry-biofuels, biopower and bioproducts.
 
 The WBIA is a membership organization that is represented by every facet of the biobased industry. The founding members consist of the state's five ethanol producers: Ace Ethanol, Badger State Ethanol, Western Wisconsin Renewable Energy, United Wisconsin Grain Producers and Utica Energy, as well as Didion Milling, which is currently constructing an ethanol plant. Sanimax, which recently started biodiesel production, and Best Energies, which is currently building a biodiesel plant, are also founding members.
 
 Other members of the WBIA include law firms, co-ops, trade organizations, contractors, agricultural corporations and other groups that have a vested interest in the success of the biobased industry.
 
 By bringing all of the appropriate players to the table, the WBIA is working to grow Wisconsin's bbiobased industry; educate the public, media and legislators about the benefits of biofuels; and work with other organizations to develop new, promising technologies for biofuel production.
 
 We are proud to say that a tremendous amount of growth in this industry has occurred in a very short period of time. Though the year is still young, 2007 has seen Wisconsin take some giant leaps forward in the biobased industry's development-particularly in the biodiesel arena.
 
 Prior to this year, Wisconsin's biodiesel producers were producing a combined total of around 5 MMgy. There were no large-scale, dedicated commercial biodiesel facilities anywhere in the state. That has all changed in 2007.
 
 In January, Best Energies began construction of an 8 MMgy biodiesel facility in Cashton. In late March, North Prairie Productions broke ground on a 45 MMgy plant in Evansville, which will be the largest biodiesel plant in the state when completed.
 
 In early April, Sanimax began producing biodiesel from beef fat. The 20 MMgy plant is the state's first dedicated commercial facility, which will be fully operational in late June. Midwest Biofuel, which uses soy oil as its primary input, also began production at its 10 MMgy plant in Clinton.
 

 By the end of 2007, Wisconsin will have gone from having essentially no biodiesel production to producing 80 MMgy. This growth is expected to continue into 2008, as several Wisconsin companies, including Renew Energy and North American Biodiesel, are planning to develop facilities in the near future.
 
 The growth of biodiesel in Wisconsin is indicative of the growth that is occurring nationwide in this industry. As the biodiesel industry continues to gain momentum and develop, the WBIA will be working to educate consumers, opinion leaders, elected officials and members of the media about the benefits of biodiesel, and advocate for the fuel playing a larger role in fulfilling Wisconsin's energy needs.
 
 For more information about the Wisconsin Bio Industry Alliance, or to find out how to join, please visit the WBIA Web site at <a href="http://www.wisconsinbioindustry.com">www.wisconsinbioindustry.com</a>.
 
 Joshua Morby is the executive director of the Wisconsin Bio Industry Alliance. Reach him at <a href="mailto:info@wisconsionbioindustry.com">info@wisconsinbioindustry.com</a>.

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Talking Point

Citing its unknown effect on the state's budget, Montana Gov. Brian Schweitzer vetoed a biodiesel tax incentive bill Tuesday, May 8. The bill (HB 822) didn't pass with a two-thirds majority and it's not likely that Schweitzer's veto will be overridden.
 
 According to Schweitzer, his reason for vetoing the bill was that the Montana Legislature has yet to pass a state budget for 2008-2009 and that the bill's estimated $3 million price tag would have an undetermined impact on the state's bottom line.
 
 HB 822 would give an annual tax credit of up to $500 to consumers who purchase biodiesel from producers, distributors or retailers from 2008 through 2013. For individuals, the tax credit could be used toward individual income tax. Businesses with fewer than 16 employees could use the credit in conjunction with deductions for fuel used by the business while corporations could apply the credit toward corporate license tax liability.
 
 Another biodiesel bill (SB 432) failed to make it to Schweitzer's desk after passing the Senate by a vote of 35-15, but failing to make it to the House floor after being stopped in the House Transportation Committee. That bill would have mandated biodiesel use in the state, beginning with a B2 requirement and evolving to B5 as biodiesel refining production in the state allows.
 
 Schweitzer plans to hold a special legislative session to give the state's governing body to pass a budget and resolve issues resulting from the budget.

Montana biodiesel bill dies at governor's desk

The U.S. Department of State has announced that it will host the Washington International Renewable Energy Conference (WIREC 2008) in March 2008. Secretary of State Condoleezza Rice made the announcement May 1 in Washington, D.C.
 
 WIREC 2008 will be the third renewable energy event to bring together world leaders at the ministerial level. Goals of the event include:
 
 ­› Advancing energy security, climate change, air quality and sustainable development goals, including agriculture and rural development.
 
 › Demonstrating global leadership in renewable energy research, policy development, technology innovation, commercialization and deployment.

 
 › Fostering industry and government collaboration to help solve global energy challenges.
 
 "Access to clean, reliable and affordable energy is a key foreign policy objective of this administration," Secretary Rice wrote in a letter to Michael T. Eckhart, president of the American Council On Renewable Energy. "The Department of State looks forward to hosting in March 2008 the minsterial-level Washington International Renewable Energy Conference. WIREC 2008 is an important opportunity for government officials and other leaders to show their commitment to renewable energy and to discuss how renewable energy advances our shared goals for climate, sustainable development and energy security."
 
 The Department of State will be assisted in hosting the event by the U.S. Department of Energy, U.S. Department of Agriculture, Environmental Protection Agency, U.S. Agency for International Development, U.S. Department of Interior and the U.S. Department of Commerce.

State Department to host WIREC 2008

Gulf Hydrocarbon has announced the addition of dyed red biodiesel to its product line at IFL terminal in Houston, Texas. The dye red is automatically blended into biodiesel at the loading rack in the terminal, mixed according to IRS protocol using a mechanical injection system to insert the dye red into the biodiesel. The dye red biodiesel is used off-road by construction companies, ranchers, farmers, and standby generators, marine and drilling industries because of its non-taxable incentive provided by the US government. The cost of dye red biodiesel is comparable to diesel and current pricing can be found through OPIS or DTN.
 
 "Dye red presents a wonderful non-taxable option for farmers, ranchers, off-road equipment haulers to better manage their logistics costs," said Scott Hughes, director of governmental affairs for the National Biodiesel Board. "The tax incentives will continue to help develop the biodiesel industry and preserve our natural resources. Gulf Hydrocarbon is truly a pioneer in the industry by providing this product at the pump in their terminals." 
 
 Gulf Hydrocarbon is currently offering dye red biodiesel to Louisiana and Texas distributors that sell the product to farmers. Distributors in the Louisiana and Texas area include O'Roarke Petroleum Products, Talen's Marine and Temple Oil Company.

Gulf Hydrocarbon offering dye red biodiesel

DuPont has announced it has reached an agreement with InChem Corp. to produce sodium methylate, a catalyst used in the production of biodiesel. The chemical will be produced using sodium from DuPont, which is the lone supplier of sodium methylate produced in North America. In response to growing demand for the product from the biodiesel industry, DuPont is also planning to expand production of sodium methylate, adding at least two production locations in the United States.
 
 "With demand for biodiesel fuel increasing in the United States, producers will require greater quantities of this compound," DuPont Chemical Solutions Enterprise Global Business Manager Ken Hilk said. "This agreement, based on a long-term commitment, is one element of a DuPont initiative to expand the sodium methylate supply and an example of our commitment to provide unique solutions for the biofuels industry."
 
 DuPont sodium methylate is available in solutions of 25 percent and 30 percent. More information is available at <a href="http://www.dupont.com/sodium">www.dupont.com/sodium</a>.

DuPont to expand production of sodium methylate

State officials were in Newton, Iowa, Tuesday to celebrate the opening of the state's 10th biodiesel plant. The event marked the beginning of operations at the 30 MMgy plant belonging to Central Iowa Energy LLC (CIE). The plant will produce biodiesel primarily from soy oil and will also generate about 3 MMgy of glycerin.
 

 Renewable Energy Group (REG) constructed the facility for CIE and will also manage the plant and market its products. REG is currently constructing two more 30 MMgy plants in Iowa-in Farley and Washington-with the plants expected to come on line later in 2007.
 
 "This is a proud day for our company as well as the people of Newton," CIE Chairman Jim Johnston said. "We have worked hard the past two years to make the dream of this facility a reality and we know this is only the beginning. The future is very bright for renewable fuels and for everyone whose lives will be touched by this tremendous facility."

Central Iowa Energy opens Iowa's 10th biodiesel plant

The National Fish and Wildlife Foundation (NFWF) and Budweiser have teamed up to offer a $100,000 Renewable Energy and Wildlife Conservation Research Prize. The new prize is an extension of Budweiser's Conservation Scholarship Program, currently in its seventh year, and will be awarded to a single project that promotes new technologies or practices that help make renewable energy a practical alternative while considering wildlife and their natural habitats.
 
 "This Renewable Energy and Wildlife Conservation Research Prize is another great example of how Budweiser and the National Fish and Wildlife Foundation are working together to improve our environment by ensuring wildlife and their habitats are protected when developing renewable energy technologies," said Jeff Trandahl, NFWF executive director. "We look forward to reviewing the many innovative proposals that this new program will generate."
 
 More information about and an application for the Budweiser Renewable Energy and Wildlife Conservation Research Prize can be found at <a href="http://www.nfwf.org/budscholarship">www.nfwf.org/budscholarship</a>. Application deadline is June 29, 2007.

NFWF and Budweiser announce renewable energy prize

California-based Pure Biofuels has announced a binding letter of intent to acquire the biodiesel division of Peru's largest and longest running biodiesel producer, Interpacific Oil SAC. Interpacific currently has a capacity of 7.2 MMgy and was Peru's first commercial biodiesel producer when it began production in 2002. Pure Biofuels currently has its own biodiesel plant under construction in Callao, Peru, and excepts it to go on line in the fourth quarter of this year.

 
 Terms of the deal include a $6.3 million price tag for Interpacific, of which $700,000 will be cash and $5.6 million will be in Pure Biofuels common stock with a warrant to purchase 2.925 million shares of Pure Biofuels common stock.
 
 "We are very excited to announce the acquisition of Interpacific Oil's biodiesel business in a transaction that means so much to our company," said Pure Biofuels CEO Luis Goyzueta. "This is a company that I know well-it's where I come from. Running Interpacific's biodiesel facility for the last five years prepared me for the launch of Pure Biofuels. Now, bringing these two operations under our umbrella and operating at its current stage of profitability is a great privilege. It strengthens Pure's position in the marketplace-and ultimately, it provides an earlier opportunity to fill the demand from our custmers."

Pure Biofuels to acquire Peru's largest biodiesel producer

Biodiesel Industries Inc., NextEnergy and DaimlerChrysler broke ground Tuesday on a new biodiesel research, development and production facility in Detroit that will be the sixth such project for Biodiesel Industries.
 
 "This pioneering project brings together a diverse group of major industry players, such as NextEnergy and DaimlerChrysler, for the common goal of biodiesel advancement and implementation," Biodiesel Industries President and Founder Russell Teall said. "Our new facility will have the capacity to produce 10 million gallons per year of biodiesel using a full spectrum of feedstocks, including crude, refined and recycled vegetable oils and animal fats."
 
 "Detroit is the perfect location for us to build our newest facility," said JJ Rothgery, chairman of the board for Biodiesel Industries. "This is the center of the automotive universe and that is where we want to be. Coupled with the involvement of NextEnergy, DaimlerChrysler and other major automotive manufacturers and suppliers, we look forward to working together to set the standards for biodiesel production and use."
 
 More information about Biodiesel Industries can be found at <a href="http://www.biodieselindustries.com">www.biodieselindustries.com</a>.

Biodiesel Industries breaks ground in Detroit

Taking its cue from ideas presented by the Energy Future Coalition, last week the House Agriculture Committee passed a non-binding resolution calling for 25 percent of the country's energy to come from renewable sources by 2025.
 
 Introduced by Minnesota Democrat Collin Peterson, H. ConRes 25 moves on to the House Energy and Resource committees for consideration. A companion bill (S. ConRes 3) is also moving forward in Senate committees.
 
 "There are many bills out there introduced by members of Congress who want to cash in on the rush to support renewable energy production," Peterson said. "However, we must be careful in our review of these proposals because some of them would cause more problems than they would solve for these growing industries.
 

 "The 25 by '25 resolution is a statement of our commitment to support the development of renewable energy sources," Peterson added. "I believe that we can not only meet, but exceed the goal of 25 percent by 2025."

House Ag Committee passes non-binding biofuels resolution

Although the production capacity seems huge-320 MMgy-Clifford Cowles says his company already has off-take agreements for the entire capacity. Situated on the southern branch of the Elizabeth River, Virginia Point Biodiesel is a $532 million investment in the nation's energy future.
 
 Bakersfield, Calif.-based SE-Energy Technology's plant in Chesapeake, Va., will begin construction this summer with a completion date in early 2008. According to Cowles, principal owner of SE-Energy Technology, the 320 MMgy capacity is just one of many unique features the plant will feature. Patented technologies that can create a batch of biodiesel in 3.6 minutes with 0.007 total glycerin using 25 percent less methanol than other processes will be a key component of the process, but it won't be the first step.
 
 Cowles says another key innovation is the plant's feedstock. SE-Energy Technology has invented a machine that will harvest jatropha in Mexico, avoiding domestic feedstock shortages and price spikes for edible oils.
 
 "Jatropha is poisonous to eat, and so is not in competition as a food source as [are] so many other oils used for renewable energy production," Cowles says. On top of that, jatropha grows in arid climates on land not especially suitable for agriculture. It also yields more oil per acre than traditional oil crops such as soybeans and canola. Cowles says SE-Energy Technology's harvesting advancements make jatropha oil a feasible feedstock in the United States.
 
 "SE-Energy is heavily involved in reviving American Farms and has invented a mechanical jatropha picker that yields 30 times cheaper harvesting costs that makes jatropha viable in many arid areas of the U.S.," Cowles says.
 
 Cowles says the Chesapeake location is ideal for the plant because it is within a two-day drive of two-thirds of the U.S. population and is on the doorstep of several U.S. Navy installations. Although the manufacture of biodiesel is an industrial process, Cowles says SE-Energy Technology's no water in, no water out process is clean and safe.
 
 "Our plant is the equivalent of having a salad oil factory in your backyard," Cowles says.
 
 Posted May 25, 2007, at 9:31 a.m.

The 320 MMgy Virginia Point Biodiesel plant will be the largest in the U.S. when it opens in early 2008.

May 2007

Business Briefs

Aventine begins to market biodiesel

AgriFuel acquires interest in biodiesel plants

ORCAS provides service to small-scale biodiesel producers

U.S. BioTec aims to acquire Biofuels of Tennessee

National Tribology Services changes name

Kansas City recognized for alternative fuel use

World Energy expands staff

Midland names supply chain manager

Trimbur joins Solazyme

Columns

Leveling the Three-Legged Stool

Featured

Portland's Progressive Terminal

Additive Adjustment

Electricity By the Gallons

Waterless Washing Machine

Groundbreaking with Presidential Proportions

Two Million-Mile Road Trip

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

Business Briefs

Aventine begins to market biodiesel

AgriFuel acquires interest in biodiesel plants

ORCAS provides service to small-scale biodiesel producers

U.S. BioTec aims to acquire Biofuels of Tennessee

National Tribology Services changes name

Kansas City recognized for alternative fuel use

World Energy expands staff

Midland names supply chain manager

Trimbur joins Solazyme

Columns

Leveling the Three-Legged Stool

Featured

Portland's Progressive Terminal

Additive Adjustment

Electricity By the Gallons

Waterless Washing Machine

Groundbreaking with Presidential Proportions

Two Million-Mile Road Trip

May 2007