Seashore mallow could fill a niche as a biodiesel feedstock as the plant's architecture and oil yield are similar to soybeans. Perhaps even more appealing, is that the plant thrives in salty soils where nothing else will grow. In fact, the plant can be irrigated with saltwater.
 
 Seashore mallow or Kosteletzkya virginica is found in the wild, scattered throughout coastal marshlands, says Jack Gallagher a University of Delaware marine biologist. "We've been working with the plant for a long time," he says. Over the years, as Gallagher has studied salt marsh ecology and wetland restoration, he's explored uses for the different plants that grow in these conditions. His work has led to the cultivation of Delaware salt-tolerant forages in the Persian Gulf. In China, the salt-tolerant plants identified by Gallagher's team are used in land reclamation work where the mallow draws salt from newly drained soils. The mallow flourishes as rainfall continues to leach salt from the soil until another salt-tolerant crop like cotton can grow, followed finally by soybeans and corn.
 
 Gallagher expects seashore mallow to serve an opposite function along the Atlantic coast from Delaware south to the Gulf of Mexico. Each year as the sea level rises, high spring tides and storm tides flood more low-lying lands, eventually killing all of the vegetation. "Nothing grows there," he says. "It's a dead zone." Developing a salt-tolerant crop would benefit the farmers who can no longer farm this land, and at the same time control nutrient runoff. "If our long-term strategy is to retreat from the sea as it rises, [seashore mallow] provides an intermediate buffer zone that can keep nutrient runoff from getting into the estuary," he says. "As [the land] reverts to salt marshes, the economics go from being farmland to a nursery growing marine organisms for fish and crabs and the like." Yet another application would be growing seashore mallow on the saline soils dredged from harbors, providing an economic return and a much more attractive ground cover than the invasive weeds that currently sprout there, according to Joseph James, CEO and president of the Corporation for Economic Opportunity in South Carolina, who is collaborating with Gallagher in promoting the crop.
 
 Grown Like Soybeans
 At the University of Delaware's College of Marine Studies, seashore mallow was initially evaluated as a potential food or feed crop, Gallagher says. Analysis showed that the oil is similar to cottonseed oil as cotton is a relative of seashore mallow. Flour from the plant's high-protein meal was used to make bread and the meal made an acceptable feed for laboratory animals, he says. About three years ago when biofuels production started to take off, the Delaware team targeted biodiesel as a potential use.
 

 Although seashore mallow thrives in marshes the plant can also be grown much like soybeans, Gallagher says. A farmer in Lewes, Del., planted 2.5 acres of the crop, using sorghum plates in a conventional corn planter. The spherical seeds are similar in size to wheat kernels. Weeds took over the plot the first year and it had to be replanted the following spring. "We didn't irrigate it with salt water," Gallagher explains with a chuckle. "Salt water kills the weeds." In the first year, a single shoot per plant crown emerged. "In the second year we've gotten four to seven stems that come up per crown," he says. "By July it was a solid field with no rows visible." One plant in a small research plot, which was dubbed Fat Boy, developed 44 stems, demonstrating the crop's potential for higher yields. The Delaware researchers don't know how long the perennial plant can thrive in a large plot, but the preliminary small-plot work indicates that a 10-year life span is possible. While seed heads don't shatter readily, there may be just enough shattering for the plant to reseed itself and maintain a stand, Gallagher says.
 
 Seashore mallow can grow to about 5 feet tall under fresh-water conditions and 2 feet in salt water. The shorter plants are more like soybeans, which is an important consideration for farmers who want to use their existing equipment to plant and harvest the crop, Gallagher says.
 
 Dry conditions during the growing season allowed the researchers to observe the crop's drought tolerance. "We had about 8 inches of rain in the 20-some weeks until [harvest]," he recalls. The seashore mallow grew quite vigorously while nearby dryland corn yields suffered. The perennial plant's three-eighths inch diameter roots burrow down more than 30 inches into the soil to draw on soil moisture, which gives it an advantage over more shallow-rooted annuals, Gallagher explains.
 
 The 2.5 acre seashore mallow plot was harvested in late September and yielded about 13 bushels per acre. "Had our plot been [in an area] where we could have used salt water for irrigation the yield would have been closer to 20," Gallagher says. Dryland soybean crops in the area are expected to average 24 bushels per acre. "Had the nearby soybeans been irrigated with salt water the yield would have been close to zero," he says. "I'm always apologetic about the yield, but my wife reminds me that 20 bushels [of seashore mallow] is infinitely better than no yield for soybeans on salt." Yet, the economics have to be favorable to get farmers to accept it as a crop, he adds. A comparison of the oil content of seashore mallow and other oilseeds puts the crops on a more even playing field. Initial analysis shows that seashore mallow produces 15 percent to 20 percent oil compared with soybeans at 18 percent to 20 percent and cottonseed at 18 percent. The fatty acid composition is similar to that of cottonseed oil and the meal yields 20 percent protein and 5 percent gum. The woody stems may also have the potential as a feedstock for cellulosic ethanol. Seashore mallow has been collected from 14 other locations in the Southeast, which show promising variations that will be useful in a breeding program, he adds.
 
 Exploring Commercialization
 Gallagher is putting together a multi-state team and applying for funding from the USDA. The team needs to raise $1 million, including the university's match, to conduct studies during the next two years and move their research to commercial scale. The team is made up of a chicken producer who will analyze the meal in feed rations, a soybean crusher who will assess oil extraction methods, biodiesel producers who will evaluate the oil, and farmers in Delaware, Maryland and South Carolina who will conduct farm-scale production trials. Other cooperators include Delaware's Geological Survey and the Corporation for Economic Opportunity. James, who serves as chair of the biofeedstock committee for the South Carolina Biomass Council, also invited North Carolina cooperators to join the project.
 
 James envisions seashore mallow will serve as one of several feedstocks for small-scale biodiesel plants. "Unlike ethanol, biodiesel is a fuel that can be made in smaller batches," he says. Big refineries make sense in the Midwest where there are huge acreages of soybeans and corn. "In other parts of the country, we aren't going to have access to huge areas of contiguous crops," James says. "We'll have to have biodiesel technology that can use multiple feedstocks."
 
 One question that needs to be answered is: How much salt-impacted land is there along the nation's coastline? Gallagher assumed the information would be readily available. "It was shocking to me when I tried to come up with the numbers," Gallagher says. "We have projections for a meter rise in tides, but if we go to find out what's being affected the best we can do is go to the county agents and get their estimates." One county in Maryland estimates 3,000 acres have been impacted by the salt water and another county reported 500 acres, he says. The county extension agents get their information from farmers who come to them wondering what they can grow on a field where salt-tolerant alfalfa has died out. "I see this as a very interesting opportunity," James says. "Part of our research is to get more accurate estimates of the acreage being impacted. One of our challenges is to learn where those locations are and how much there is."
 
 Future of Saline Agriculture

 Dennis Bushnell a chief scientist at NASA's Langley Research Center has long advocated halophytes or salt-tolerant plants as a biomass source. "I have been trying to sell halophytes for biomass for more than a decade," he says, "[There was] no interest until oil went to more than $60 a barrel." While seashore mallow is a good prospect, there are 250 halophytes with potential uses, he says. Bushnell points out that 44 percent of the planet's land mass is considered wasteland and about half of that land could be productive if water was available. Many of those areas are close to salt-water sources such as oceans or underground aquifers. Seawater/saline agriculture could significantly address global warming, food and fuel issues. "I have never seen anything (including electronics and information technology) move as rapidly as biofuels," he says.
 	
 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.

Gallagher and fellow researchers inspect a field of ripening seashore mallow.

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A Delaware research effort is focused on producing biodiesel from seashore mallow. The pink-flowering perennial resembles a soybean plant, and its seeds produce about the same amount of oil. Unlike soybeans, the plants can be grown in salty soil, which makes them a perfect fit for production in shoreline areas impacted by rising sea levels and high tides.

The Saltwater Soybean

While the federal blender's credit has been a boon to U.S. biodiesel production, the ethanol-centric renewable fuels standard (RFS) has done little or nothing to augment biodiesel demand. That's why, for some time now, industry advocates have been lobbying for a biodiesel-specific RFS that creates autonomous value for the renewable fuel.
 

 A bill introduced in the U.S. Senate earlier this year calls for the nation's petroleum companies to purchase and blend 1.25 billion gallons of biodiesel by 2012. Just before press time, a companion bill was introduced in the House that would require 450 million gallons of "biobased diesel" to be used in the national diesel pool in 2008, gradually increasing to 1.25 billion gallons in 2012. The bill, titled "The Biodiesel Promotion and Quality Assurance Act of 2007," would allow any biobased diesel to qualify, as long as the fuel is derived from plant or animal matter, is registered through the U.S. EPA and meets ASTM standards. The bill doesn't exclude renewable diesel from eligibility. Rather, it calls for 80 percent of the requirement to be comprised of biodiesel, leaving 250 MMgy open to ConocoPhillips, Syntroleum Corp. and other companies moving forward with renewable diesel production plans.
 
 The bill's sponsors believe an 80/20 balance offers a reasonable path forward, and allows biodiesel and renewable diesel to coexist. However, the rift between biodiesel purists and renewable diesel stakeholders has been intense enough to expect dissent on both sides. Some biodiesel advocates might not be pleased to see the door left partially open for renewable diesel. Likewise, some renewable diesel advocates might think 250 MMgy is equivalent to being tossed legislative table scraps. At any rate, legislating a floor for U.S. biodiesel demand is a step in the right direction for an industry that is able and eager to extend America's diesel supply, but currently hamstrung from doing it.
 
 While extending the federal biodiesel tax incentive through 2010 remains vitally important, pairing the blender's credit with a biobased diesel RFS would begin to establish a sense of cooperation between biodiesel and renewable diesel, getting this industry headed in the right direction.
 
 Tom Bryan
 Editorial Director
 <a href="mailto:tbryan@bbibiofuels.com">tbryan@bbibiofuels.com</a>

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Editor's Note

Houston-based GreenHunter BioFuels Inc., a subsidiary of GreenHunter Energy Inc., acquired a 1,500-barrel-per-day methanol distillation system from Channel Refining Corp. earlier this year, refurbished it within six months and restarted operation in September, the company announced. Designed to distill off-spec methanol to 99.85 percent purity or better, the unit is part of GreenHunter's 105 MMgy biodiesel facility slated for completion in early 2008. The plant expects to use only 20 percent of the methanol system's available capacity; third-party methanol will also be distilled.

Methanol distillery on line in Texas

Biodiesel New Zealand, which currently produces 264,000 gallons of biodiesel annually from used cooking oil in Christchurch, New Zealand, is contracting farmers to grow rapeseed in a research trial that would examine the crop's potential as a biodiesel feedstock. In August, the company asked South Island arable farmers to grow 1,500 hectares (3,700 acres) of rapeseed, and by October, it had signed contracts for areas between eight and 75 hectares (20 and 185 acres). Initial planting began in September, and research will begin in the fall of 2008.

New Zealand company contracts rapeseed feedstock

In late summer, legendary Landing Ship Tank (LST) 325 from World War II, fueled by B11, made its annual one-month voyage along the Illinois River. Home-ported in Evansville, Ind., the authentic LST 325 departed Aug. 13 and returned home Sept. 10, logging approximately 1,100 total miles, according to LST captain Bob Jornlin. The biodiesel was donated by the Illinois Soybean Association, Illinois Corn Growers Association and Growmark Inc. In 2006, the ship ran successfully on B3, and it is expected to use B20 next year, Jornlin said.

B11 powers warship

The Indiana Soybean Alliance (ISA) recently unveiled a grant program aimed to spur the blending of soy-based biodiesel. Currently, only four Indiana fuel terminals offer biodiesel. The new program will funnel soybean checkoff funds to terminal operators invested in converting their equipment for biodiesel blending. "If a terminal is willing to make a commitment to sell biodiesel for a certain period of time, we want to help make that happen," said ISA Biofuels Director Mark Walters.

ISA to boost biodiesel availability

Alabama Biodiesel Corp in Moundville, Ala., was charged with discharging oil and grease into the Black Warrior River in a lawsuit filed by environmental group Black Warrior Riverkeeper in late August. The group has petitioned the U.S. District Court under the Clean Water Act to cease the violations and assess a civil penalty against Alabama Biodiesel, which could be as large as $32,500 per violation. Alabama Biodiesel became the state's first biodiesel plant when it started production in 2005.

Lawsuit targets biodiesel producer

Kentucky House Bill 1, signed by Gov. Ernie Fletcher on Aug. 30, creates new incentives for renewable fuels production in the Bluegrass State. The U.S. DOE's Energy Efficiency and Renewable Energy (EERE) department said the bill expands the state's current $1-per-gallon tax credit to include renewable diesel. Also, the cap on the total tax credit was increased from $1.5 million to $5 million in 2008 and further increased to $10 million in 2009.

Kentucky expands biofuels incentives

Two USDA Agricultural Research Service scientists have found biodiesel to be effective as a nontoxic, contact herbicide in turf grasses. Steve Vaughn and Ronald Holser mixed biodiesel from several oilseed sources at 1 percent and 2 percent levels with a nonionic surfactant and water, and found that the mixture injured or killed several broadleaf weeds without harming perennial ryegrass. While these results are promising, Holser indicated that additional testing and registration with the U.S. EPA would be required prior to commercialization.

Biodiesel could act as herbicide

The Institute of Science and Technology (IUCT), a Spanish biotechnology research center, is developing technology to make biodiesel from glycerin, which it calls IUCT-S50 or second-generation biodiesel. IUCT spent seven years researching biodiesel and glycerin technologies, "reaching more than €7 million ($9.9 million) between the direct cost of the project, the pre-existence know-how needed to obtain the current results and the pre-industrial development," said the IUCT in September. The firm states pre-industrial development will be complete in nine to 18 months.

Spanish center develops biodiesel from glycerin

Despite hardships in the U.S. biodiesel production industry, a recent index compiled by Ernst & Young Global Ltd. concluded that the United States is the No. 1 country for biofuels investment.
 
 The quarterly report, called "Biofuels Country Attractiveness Indices," ranked the attractiveness of the top 15 countries for investment in renewable fuels. It compiled one index for biodiesel, one for ethanol and one combining the two. In the second quarter of 2007, France, Brazil, Germany and Spain rounded out the top five in the biodiesel index. In the first quarter 2007 report, Germany was ranked No. 1, while the United States and France were tied for second.
 
 Jonathan Johns, head of renewable energy at Ernst & Young, said the number of biodiesel projects under development was one reason the United States scored so high. "[The United States] has … the world's largest project pipeline for biodiesel, which should produce 450 million gallons by 2008, compared with 136.5 million gallons in 2006," he said.

 
 Legislation also was taken into account. "Recently proposed legislation would require U.S. refineries to blend a mandatory minimum of 1.25 billion gallons of biodiesel per year by 2012, and although it's not passed, it sends a very positive message to investors about future demand for biofuels in the United States," Johns said.
 
 In contrast, Ernst & Young said Germany's biodiesel industry is struggling and its production plants are operating at 50 percent capacity. "Germany was once the shining light for investors, buoyed by its exemption on excise duty for all biofuels," Johns said. "However, stepped tax increases on biofuels … rising [feedstock] prices and cheaper imports are reducing the commercial viability of biofuels."
 
 Lurgi PSI Inc., a Memphis-based biodiesel construction firm that conducts business in the United States and Germany, has seen several factors affect the industry in both countries. Vaughan Farrie, Lurgi sales and marketing director, and his German associate Christian Faber told Biodiesel Magazine those factors include the food-versus-fuel debate, the increase cost of feedstocks and the increase in construction costs.
 
 U.S. biodiesel producers and those developing new projects may disagree with the positive angle that Ernst & Young's indices offer compared with what is actually occurring in the U.S. biodiesel industry. However, Farrie said the smaller, newer start-up companies will struggle most with financial support for their projects. "There will be another period of significant expansion and growth, but it will come from a fewer number of companies building more plants," Farrie said.
 
 Faber said the situation is similar in Germany. "The smaller plants of 3 MMgy or less are dying off," he said. As for plants running at 50 percent capacity, he said fixing that situation will be complicated because biofuels regulations and subsidies have to be generalized for the entire European Union. "There are two different types of markets for producers," Faber said. "There's the B5 blend market and the B100 market. The tax benefits for B100 have been reduced, and the production facilities can't jump right into the B5 market, partly because of long-term sales contracts."
 
 Pursuing "second-generation" biodiesel projects will drive investments in the future, Farrie said. "There will be a period of incremental changes where plants are squeezing the very most out of conversion methods today, and then they will start to step into new technologies." These new technologies, which include feedstocks such as algae, may be risky and expensive, but some may take the risks and foot the bill to realize the next era of biofuels, which could keep the investment atmosphere in America fertile.
 
 For a copy of the Ernst & Young Biofuels Country Attractiveness Indices, visit <a href="http://www.ey.com/global/content.nsf/International/Oil_Gas_Renewable_Energy" target="_blank">www.ey.com/global/content.nsf/International/Oil_Gas_Renewable_Energy</a>.

Ernst & Young: U.S. ideal for biofuels investments

Pure Biofuels Corp. announced in September the closing of a $30 million round of private financing intended to complete the construction of a "52.5 MMgy biodiesel production facility" at the Port of Callao in Lima, Peru.

 
 The financing consisted of "a $10 million convertible note and a $20 million secured credit facility," according to the company. Pure Biofuels CEO Luis Goyzueta later confirmed the funding came from a large East Coast private equity fund. The company will also use the financing to complete the expansion of InterPacific Oil, an existing biodiesel plant in Peru that Pure Biofuels acquired in May. The expansion from 7 MMgy to 10 MMgy is expected to be complete by the end of November.
 
 Construction of the Callao Port refinery commenced in June and is expected to be complete in the first quarter of 2008. Once completed, the facility will test its process lines for a month, followed by a three-month ramp-up to full production. The continuous-flow process was designed by Argentina-based Capricorn Chemical Engineering. The facility is near the La Pampilla Refinery, Peru's largest oil refinery.
 
 The combined capacity of 62 MMgy will make Pure Biofuels one of the largest biodiesel producers in South America, according to the company. In addition to its expansion underway in Peru, Goyzueta said the company has plans for additional expansion into Argentina and other South American markets.
 
 The biodiesel plants will use crude palm oil for feedstock-at least initially. The company has secured 60,000 hectares (148,263 acres) in central Peru for the development of palm plantations. Jatropha and canola are also being considered. "Once fully planted and producing, the 60,000 hectares will be able to supply 300,000 metric tons of crude palm oil per year, roughly two times our requirements," Goyzueta said. "We're very confident in our plans to provide 100 percent of our own feedstock. We think other producers will realize the security that this structure provides a company like ours, and we expect to see others following our lead."
 
 The plantation was previously an illegally harvested rainforest that is now considered degraded land, according to Goyzueta. "The local government is very excited about our plans for developing a plantation there, along with the extracting facility to turn the feedstock into oil," he said. "We'll be employing thousands of workers. We're fortunate to be near proper infrastructure that will allow us to transport our oil cost-effectively to Callao, where we'll have a blending facility process the finished product before selling it to licensed distributors."
 
 Pure Biofuels is based in both Los Angeles and Lima. It was founded in 2006 for the purpose of investing in the Latin American renewable fuels industry. Peru is one of several countries considering a biofuels mandate. "Most of Latin America is energy dependent," Goyzueta said. "That, combined with the region's huge agricultural potential, makes Latin America a natural area of focus for our company's growth."

Construction of Pure Biofuels' biodiesel plant in Lima, Peru, is underway.

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Pure Biofuels secures financing for Peruvian biodiesel plant

California's aggressive push to increase the use of biodiesel and reduce greenhouse gas (GHG) emissions has been greatly accelerated, thanks to proposals introduced by state legislators in September. The California Biodiesel Alliance (CBA) has also been formed to promote the renewable fuel.
 
 State Sen. Dean Florez, D-Shafter, proposed Senate Bill (SB) 70, which calls for the establishment of blending standards for biodiesel and renewable diesel fuels, including the proper display of blend levels on retail dispenser pumps. The proposed bill would also permit school districts, and local and state government agencies to use up to a 20 percent blend in their vehicles. Under provisions of the bill, biodiesel and renewable diesel must meet the following standards:
 
 › Biodiesel used as a blendstock must meet the most recent version of American Standard for Testing Materials (ASTM) spec D 6751.
 › Finished blends of B99 and below must meet ASTM D 975 specifications.

 › Renewable diesel must meet U.S. EPA requirements for fuels and fuel additives.
 › Renewable diesel used as a blendstock must meet the most recent version of ASTM D 975.
 
 State Sen. Christine Kehoe, D-San Diego, has proposed SB 210. This bill puts the state's Low Carbon Fuel Standard (LCFS), which charges the California Air Resources Board (CARB) with adopting statewide regulations that would reduce GHG emissions to 1990 levels (10 percent) by Jan. 1, 2020, into statute. The proposed standard would apply to all refiners, blenders, producers and importers of transportation fuels.
 
 State Assembly Member Ted Lieu, D-El Segundo, proposed Assembly Bill 236, which states that by July 1, 2009, a vehicle capable of using alternative fuels is required to use those fuels unless they aren't readily available or if other factors exist that may prevent their use. 
 
 The CBA was publicly launched in September to strengthen the state's overall awareness and use of biodiesel. The nonprofit organization is comprised of biodiesel feedstock suppliers, producers, marketers and distributors, technology providers, fuel retailers, consumers, and advocates. According to CBA Chairman Eric Bowen, who is also president of Tellurian Biodiesel, the CBA will continue collaborative work with the National Biodiesel Board, state legislators and other biodiesel entities in California. "We're trying to gather more people under our tent and make a more high-profile effort of the whole push to promote biodiesel in California," Bowen said.

California lays groundwork for biodiesel

During a half-hour interview broadcast on <a href="http://www.youtube.com" target="_blank">www.youtube.com</a>, Biodiesel Industries Inc. (BDI) founder Russ Teall alluded to research BDI is conducting in the Westlands Water District in California's Central Valley, where canola planting on selenium-contaminated land has resulted in bioremediation of the soil while providing a biodiesel feedstock on marginal lands.
 
 Extended irrigation with salt water has reduced toxic levels of selenium, a sodium-based nutrient vital to humans and animals in trace amounts. As essential as selenium is, the substance can be fatal in higher doses, which is why land in the Westlands Water District is no longer used for food crops. "They've closed it down," Teall said in the interview. "There's no water available to it anymore. It's virtually valueless land."
 
 Because the land had no value, it was a good place to test canola as a bioremediation crop. "We started growing canola on it and found that the canola actually takes the selenium out of the soil, and it ends up in the meal when they crush the feed," Teall said. The oil can be used for biodiesel production, and if levels of selenium in the meal are still too high to be safe, it can be blended with meal lacking the nutrient for synthesis into a nutritious animal feed.
 
 The USDA Agricultural Research Service (ARS) has been studying the issue and is researching selenium-rich feed for livestock. "In the United States, selenium deficiency is typically a bigger problem than selenium toxicity," said ARS soil scientist Gary Banuelos. "Ranchers in selenium-poor regions either inject their animals with the mineral or add selenium supplements to feed." Banuelos said his studies showed that canola absorbed approximately half of the selenium in the soil to a depth of two feet in the Central Valley.
 

 Where there's canola, there is always the risk of the persistent flea beetle, which can quickly destroy seedlings not long after emergence from the soil, according to the Canola Council of Canada. Canola seedlings grown during hot, dry weather conditions are more susceptible to destruction by flea beetle feeding, which could be a problem in the Westlands Water District. Teall wouldn't make additional comments on the subject.

Canola offers bioremediation for contaminated lands

In August, the North Carolina Solar Center hosted a handful of Bioheat heating oil seminars in North Carolina as part of a three-year project to educate people about the benefits of using biodiesel and Bioheat.
 
 Nearly 100 people attended the meetings held in Asheville, Boone, Charlotte, Greensboro and Raleigh. Brian Gerhart, chief operating officer of Amerigreen Biofuels Inc. in Manheim, Pa., led the discussions on marketing, operations and quality control of Bioheat and biodiesel. "It is really encouraging to see this many dealers who are interested in finding ways to improve North Carolina's oil heat market," said event organizer Bryan Roy.
 
 In addition, the solar center developed a brochure to introduce the benefits of Bioheat. The full-color publication is available at no charge to fuel distributors and consumers, and can be ordered at <a href="http://www.cleantransportation.org" target="_blank">www.cleantransportation.org</a> or by calling (919) 513-0852.
 
 The solar center's three-year biodiesel marketing program began last year with a billboard project. In partnership with the North Carolina Outdoor Advertising Association, 41 billboards across North Carolina touted the benefits of biodiesel. This year, the second year of the program, focused on Bioheat market analysis and educational Web site development, in addition to the workshops and brochure. The third year of the program will involve a biodiesel bus wrap campaign that touts four Es of biodiesel: ease of use, environmental benefits, emissions reductions and local economic growth.

Bioheat workshops educate East Coast

Minnesota has long been known as the "Land of 10,000 Lakes." In light of the state's renewable energy goals, that nickname could be replaced with the "Land of Renewable Energy Opportunity." Minnesota was the first state in the nation to implement a statewide E10 mandate, and in 2005 it enacted the country's first B2 mandate, both of which are currently in effect. Minnesota is now poised to reaffirm its leadership role by pumping up the biodiesel sector.
 
 In early August during a speech at Farmfest '07 in Redwood County, Minn., Gov. Tim Pawlenty announced a plan requiring the state to increase its biodiesel mandate incrementally from B2 to B20 by 2015-a tenfold increase in eight years. The governor's proposal calls for Minnesota to move to B5 by 2008, B10 by 2011, B15 by 2013 and B20 by 2015. "This is a state that has courageous legislators and administrators," says Ralph Groschen, agriculture and marketing specialist for the Minnesota Department of Agriculture. In addition, "the private sector has been able to step up and hit the ball and the farmers are very supportive. It's just been a very good environment for something like this to happen."
 
 The B20 proposal comes on the heels of the state's E20 by 2013 mandate, which was introduced in 2005. The ethanol mandate requires quite a bit of work, however, as the state must get approval from the U.S. EPA. Nevertheless, the mandates fit in nicely with Minnesota's initiative that 25 percent of all of Minnesota's energy, including fuel, come from renewable sources by 2025. Pawlenty intends to introduce the B20 mandate to the legislature next year.
 
 In addition to his state role, as chairman of the National Governors Association (NGA), Pawlenty is in a position to spread his renewable energy advocacy to other states. In fact, he and Kansas Gov. Kathleen Sebelius launched the Securing a Clean Energy Future initiative to promote clean energy policies across the nation. The initiative is being led by a task force of governors representing a cross-section of the country. One of its duties is to promote nonpetroleum based fuels. According to the NGA, the initiative is "the first bipartisan, governor-led effort of such magnitude to address critical energy issues."
 

 Meanwhile, in Minnesota, Pawlenty has charged the Minnesota Biodiesel Task Force (MBTF) to promote and educate biodiesel producers and consumers and develop details for the proposed B20 mandate. The MBTF would present its recommendations to the Next Generation (NextGen) Energy Board where it will be thoroughly vetted and considered for legislative action. Established in 2003, the MBTF was formed to help the state carry out its B2 mandate in the fall of 2005 and to ensure a smooth introduction of biodiesel into the marketplace. The MBTF is comprised of representatives from fleet industries, petroleum marketers and farm cooperatives who work with the National Biodiesel Board (NBB), the American Lung Association, biodiesel producers and the Minnesota Department of Commerce Weights and Measures Division. The NextGen board was created as part of the Next Generation Energy Act, which was enacted in 2007. The act is designed to allow the state to meet energy savings goals, strengthen community-based energy development and reduce greenhouse gas. The NextGen board's role is to develop biofuels policies and to make recommendations to the Minnesota Legislature on how the state can efficiently achieve energy independence, sustain agricultural and natural resources and support the rural economy.
 
 Quality Considerations
 The MBTF plans to take a meticulous approach with regard to biodiesel quality, blending standards and performance in consumer vehicles, especially during the state's cold winters. "We want to be very certain that the quality meets the needs of what we have to have here in order to make this work," says Lance Peterson, president of the Minnesota Soybean Growers Association (MSGA), a member of the MBTF and a proponent of Pawlenty's plan. "We cannot have a situation come to the forefront where quality would be creating problems statewide." Minnesota has some experience dealing with biodiesel quality issues as its B2 mandate got off to a shaky start. In late 2005, state officials suspended the law requiring a 2 percent blend amid reports of filter clogging. Semi-truck drivers were hit especially hard and claimed that B2 cost them thousands of dollars in ruined equipment and lost productivity. Initial testing indicated an overabundance of glycerin in some B100 base stocks. To remedy the situation, the Minnesota Department of Commerce Weights and Measures Division granted a total of three waivers for the mandate to flush out the off-spec fuel.
 
 Kelly Strebig, research engineer at the University of Minnesota's Center for Diesel Research (CRD), maintains that most complaints regarding B2 weren't associated with biodiesel. "A large number of problems we looked at were caused by microbial or fungal contaminations in ultra low sulfur diesel," Strebig told Biodiesel Magazine in April. "Sulfur is a natural killer of biological organisms, so with that removed there is a nontoxic environment for them to grow in." Good tank maintenance, especially for seasonal biodiesel users such as farmers and construction companies, is required to avoid such complications in the future. As far as the fuel waxing, which was causing problems in the northern areas of the country in the winter months, Strebig pointed out that petroleum diesel has a cloud point of approximately 5 degrees Fahrenheit. "When we get down around 25 to 30 below, the fuel just waxes," he said.
 
 Nevertheless, the situation in Minnesota prompted the biodiesel industry to step up its focus on fuel quality. In June 2006, the NBB approved a comprehensive fuel quality policy. One issue the NBB is up against is that in the absence of federal quality standards for biodiesel and biodiesel blends, each state regulates the fuels differently. Recently, the board vowed to work diligently with state officials to track their efforts to adopt the ASTM D6751 fuel quality standard. "I think as we went around the state and listened to the folks who had concerns about [quality standards] in the past and talked with plants, we have a handle on the filter clogging." says Kristen Weeks-Duncanson, chairwoman of the MBTF. "We beefed up our BQ-9000 program and the certificate of analysis programs that the plants have instated. Inspections for specifications have been greatly enhanced." The NBB credits its voluntary BQ-9000 program for emphasizing the importance of producing fuel that meets ASTM specifications. Currently, 19 biodiesel producers are BQ-9000 accredited and produce fuel that meets ASTM D6751 specifications, including all three biodiesel production plants in Minnesota. Strebig doesn't think using B20 will be an issue as far as quality is concerned because some companies in the Minneapolis area are already using the biodiesel blend in their equipment with no problems. State officials, however, are cautiously optimistic about original equipment manufacturers (OEM) specifications when B15 and B20 are used in passenger vehicles. "We can make B20 work and it has worked," Strebig says. "I am concerned about vehicle warranties. Not all diesel engines and not all vehicle manufacturers extend their warranty coverage to B20. We certainly have to be sensitive to that issue."
 
 The MBTF intends to approach and evaluate B20 questions and concerns as they surface from the general public, biodiesel organizations and state officials. "The goal of meeting B20 is certainly workable, but probably the biggest thing is that it takes a high level of management when moving from B2 to B20," Peterson says. "It's probably going to require a very strong effort in the area of education and communication, and that's something we're strongly promoting." To prevent any potential complications regarding the use of B20, Weeks-Duncanson emphasizes that residents must take the initiative to learn about biofuels. "We all have different components that we need to be educated about," she says. "Fact-finding and awareness is a big portion of how this is going to move together swiftly and smoothly." Chuck Neece, director of research and development for the Farmers Union Marketing & Processing Association (FUMPA), says a calculated approach is the best way to meet the B20 mandate. FUMPA constructed the state's first biodiesel facility in the winter of 2004, a 3 MMgy soy-based biodiesel plant in Redwood Falls. "It's kind of like eating an elephant," Neece says. "You have to identify where you're going to start and take the easiest pieces first."
 
 Economic Advantage

 Minnesota's biodiesel mandate is driven in part by a desire to boost the rural economy. Biodiesel and ethanol production has led to the creation of nearly 16,000 jobs and generates about $4 billion in total economic activity statewide each year. The MDA reports that renewable fuels production has led to a 13 percent increase in demand for the state's soybean crop and 31 percent expansion of instate soybean processing. Biodiesel production benefits farmers because it increases the demand for soybeans, Peterson says. Pawlenty's B20 proposal should be viewed not only as an economic benefit for rural economies but also as a way to reduce the country's dependence on imported fuel, Groschen says. "I think B20 is a way to continue to work toward larger and larger replacement of imported fossil fuels with domestic renewable fuel production," he says. "That's the ultimate goal."
 
 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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Minnesota diesel consumers may be filling up with B20 regularly in 2015.

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Minnesota Gov. Tim Pawlenty's proposal to implement a statewide B20 standard by 2015 didn't surprise residents as they were the first to fuel up with E10. Biodiesel Magazine talks to organizations tasked with meeting the state's aggressive renewable fuel mandates.

Minnesota Raises the Bar

Better Biodiesel Inc., a 3 MMgy biodiesel plant in Spanish Fork, Utah, was featured on an episode of the History Channel's Boneyard series in September. The company was part of an episode titled "Biowaste," which examined the processing of biological waste products into useful material. The theme of the show was how environmental nuisances are transformed into useful assets. Better Biodiesel uses beef tallow and vegetable oils to make its biodiesel.
 
 The episode also featured the processing of municipal sewage into fertilizer; ConAgra's process of using thermal depolymerization to convert turkey organs, bones and feathers from its processing plant waste into oil; a company called Enviroboard that makes fiberboard out of straw; and Shellpro, a company that makes a wide variety of products out of walnut and other nut shells.
 
 The episode will be available on DVD at the History Channel Web site (<a href="http://www.history.com" target="_blank">www.history.com</a>) and will also be available for viewing on <a href="http://www.betterbiodiesel.com" target="_blank">www.betterbiodiesel.com</a>.

 
 This wasn't the History Channel's only program featuring biodiesel. In June, Modern Marvels aired an episode called "Truck Stops." Country singer and biodiesel booster Willie Nelson was interviewed about "one of the most unique truck stops in the United States and the revolutionary fuel it sells." The "Truck Stops" episode is also available on DVD from the History Channel.
 
 Modern Marvels also aired an episode examining the legacy of George Washington Carver. Carver discovered many new uses for oilseed crops and promoted the use of oils as fuel, along with automotive pioneer Henry Ford. Another episode profiled Lovecraft Biofuels, a West Coast diesel auto conversion company.
 
 Boneyard follows the dismantling of various items and their unusual afterlife. It has examined the recycling of everything from massive oil tankers to passenger cars to Cold War-era cruise missiles.

Biodiesel featured on the History Channel

In mid-September, Norwegian oil and gas company Statoil ASA and Brazilian oil company Petrobras signed a memorandum of understanding to explore the development and production of biofuels.
 
 Although the companies presently have several partnership agreements in place in Brazil, Angola, Nigeria and the Gulf of Mexico-including a technology partnership for oil drilling, exploration and sub-sea operations-the new, long-term collaboration involves the joint pursuit of biofuel ventures. The two companies intend to cooperate on technology research and development for biodiesel manufacturing, as well as ethanol production from lignocellulose in Brazil and internationally. "Statoil and Petrobras have high international growth ambitions," said Helge Lund, Statoil president and CEO. "The agreement opens new strategic opportunities to achieve our goals. Through a partnership with Petrobras, we will gain new experience from one of the world's most well-developed biofuel markets."
 
 In addition, the memorandum includes measures to guarantee the sustainability of biofuel production by assessing the socio-environmental impact of production. "Both companies emphasize responsible behavior, which safeguards society and the environment, as well as [the creation of] value for the community at large," Lund said.
 
 After Statoil signed the agreement with Petrobras, it merged with Norweigan hydrogen generator manufacturer Norsk Hydro ASA, a change officially made Oct. 1. The two entities created StatoilHydro, an energy group of 31,000 employees in 40 countries. Lund will continue to hold his CEO responsibilities.

Statoil, Petrobras partner for biodiesel manufacturing

While the Farm Bill and the Energy Bill are being discussed on Capitol Hill, the National Biodiesel Board (NBB) reported $633,000 spent on lobbying efforts during the first half of 2007. The report was issued to comply with a lobbying disclosure act.
 
 "As biodiesel becomes more integrated into our nation's long-term energy strategy, our need to expand our presence in Washington, D.C., became apparent," said NBB Chief Executive Officer Joe Jobe. "Our lobbying efforts will ensure that our industry's voice is heard and that the NBB is well-positioned to address the challenges facing the biodiesel industry."
 
 Other biodiesel-related companies that reported lobbying dollars included biodiesel producer Imperium Renewables Inc. ($160,000 spent on renewable energy policy and Farm Bill reauthorization), and algae developer Greenfuel Technologies Corp. ($20,000 spent on energy tax bills). Agribusiness firms Cargill Inc. ($160,000) and Archer Daniels Midland Co. ($440,000) are more difficult to gauge because of the large number of interests each company has in addition to biodiesel issues. Tyson Foods Inc. also allocated $550,000 to lobbying efforts for renewable diesel issues and the Farm Bill, along with a wide array of other issues.
 

 In contrast, several petroleum companies spent $18.4 million in the same six months, including BP America Inc. ($2.06 million), Chevron Corp. ($4.08 million), ConocoPhillips Co. ($2.24 million), Exxon Mobil Corp. ($6.44 million), Marathon Oil Co. ($2.01 million) and Shell Oil ($1.56 million). The disclosures for the oil companies' lobbying activities reflect their widespread interests that extend beyond renewable fuels issues to international trade issues, marine bills and numerous other topics.
 
 The U.S. Senate's Office of Public Records Web site (<a href="http://www.sopr.senate.gov" target="_blank">www.sopr.senate.gov</a>) explains lobbying laws and gives public access to the disclosure reports. The Center for Responsive Politics uses the Senate records to compile industry totals and report total expenditures for organizations contracting with multiple lobbying firms (<a href="http://www.opensecrets.org" target="_blank">www.opensecrets.org</a>).

Biodiesel lobbying dwarfed by oil industry

Growing up in mid-Missouri farm country, one of my father's favorite sayings went something like this: "Most everything in our economy starts in the soil and ends up as money." Naively, I took that information and pursued an agricultural economics degree with a minor in agronomy. What he forgot to tell me was that economists are plagued with the reputation of being individuals who will know tomorrow why the things they predicted yesterday didn't happen today.
 
 In the spirit of having multiple answers to an issue, I would like to tackle a subject that is on everyone's mind in our industry-raw materials supply and pricing-and attempt to shed some light on it. All are aware of the current strain on margins due to raw material values, and there is no shortage of contributing factors.
 
 Let's begin with U.S. commodity acreage. In 2006, U.S. farmers harvested 74.6 million acres of soybeans. One year later, harvest is estimated at 63.2 million acres, down 11.4 million acres. Corn prices, spurred in part by developments on the ethanol policy front and tremendous growth in dry-grind capacity, rose significantly, and farmers made the economic decision to plant more acres of corn in their rotation.
 
 It's easy to get lost in numbers. Without getting into supply and demand balance sheets, let's take a look at this impact. The expected yield in 2007 has been projected at 41.4 bushels per acre. Thus, the loss of soybean acres will result in 472 million fewer bushels in the vegetable oil supply chain. This is almost 5.4 billion pounds of oil, or the equivalent of more than 700 million gallons of potential biodiesel, that was not grown this year in the United States. Analysts and traders feel the market is trying to anticipate potential vegetable oil shortages in the future and that biodiesel has extended the market's horizon.
 
 Many point to the tremendous stocks of U.S. soybean oil and contemplate how prices have reached such high levels. However, the United States is only one part of the global fats and oils equation. In the Sept. 21 issue of Oil World, it was noted that, "the prospective decline in world production of 10 oilseeds by around 13 million metric tons is unprecedented." The authors also projected that, "within only one year all the surplus stocks in soybeans and other oilseeds will have disappeared."
 
 Other factors that have impacted the bull market for fats and oils and should not be discounted include the current value of the U.S. dollar, global biodiesel capacity, crude oil petroleum prices and global demand for edible oils. A unique aspect of the U.S. food industry's demand for vegetable oils is that it tends to grow from year-to-year, despite high prices. When trying to understand this inelastic vegetable oil demand, I often think about my daughter's seemingly insatiable appetite for french fries and the food industry's uncanny ability to pass higher prices on to the consumer.

 
 The future for vegetable oil supplies and pricing is also not clear. Historically, farmers have made planting decisions based on a price spread between corn and soybeans. Current pricing would suggest more soybean acres may be anticipated in 2008. However, this prediction may be tempered due to competition from other crops such as wheat, which are in short global supply. Also, some think that the optimism in corn yield potential will continue to excite producers and keep the pendulum swinging toward corn acreage.
 
 A silver lining, if there is one, is that the current situation is sending plenty of signals to the market to invest in new technologies and methods to increase raw material supplies. New oilseed acreage is anticipated from crops such as canola and camelina. Investment in algae is significant and filled with potential, and investors continue to evaluate the opportunity to generate corn oil from dry-grind facilities. The list for potential avenues to generate raw materials is not short. However, we must remain realistic relative to the amount of time required to fully benefit from these investments.
 
 In a February 2006 article for Biodiesel Magazine, I penned, "… modest growth in biodiesel demand will cause upward pressure on vegetable oil prices. Reality is that raw material availability could become a natural brake for significant future growth." The article resulted in an inbox full of e-mails from parties that thought I was pessimistic regarding the industry's future growth. I also received feedback suggesting I was too optimistic on the potential for additional near-term gains from soybean breeding. Interestingly enough, no one thought I was on target.
 
 While many global and domestic factors are playing into the current pricing scenario for biodiesel raw materials supplies, the result is the same-tight margins. Since biodiesel demand is just one factor in the overall supply and demand structure for fats and oils, successful biodiesel companies will need to incorporate all of these facets into their procurement strategies.
 
 Alan Weber
 Vice President of Marc-IV Consulting
 NBB Economic Advisor

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The art of feedstock prediction: Understanding the push and pull

NBB In Sight

Capt. Jim Lovell's stoically articulated five-word message, "Houston, we have a problem," is now part of the American lexicon. The problem was the explosion of the Apollo 13 spacecraft's oxygen system-a malfunction that seemingly doomed the NASA team. Lovell and his crew modified the lunar module into an effective lifeboat to safely return to Earth. As captain, he was instantly transformed into a national hero and received the nation's most distinguished honors.
 
 Lovell will share his story with the biodiesel industry, which also faces daunting challenges. He will present the keynote address during the National Biodiesel Conference & Expo, Feb. 3-6, 2008, in Orlando, Fla. His story is a testament to the essential elements of turning failure into success: quick and well-reasoned thinking, meticulous attention to every detail, courage and the spirit of teamwork.

 
 To take advantage of discounted registration, sign up for remaining exhibit space and book limited Gaylord Palms resort rooms, visit <a href="http://www.biodieselconference.org/2008" target="_blank">www.biodieselconference.org/2008</a>.
 
 NBB hopes for chilly response to hotline
 A new biodiesel troubleshooting helpline is available through the National Biodiesel Board (NBB), but the organization hopes for low caller turnout. The Biodiesel Troubleshooting Helpline will help resolve issues or assist with potential biodiesel-related problems that aren't resolved through normal channels. The helpline number is (800) 929-3437 and made possible through funding provided by the United Soybean Board.
 
 The year-round resource models the hotline that was put in place by the Minnesota Biodiesel Council to address issues possibly related to biodiesel blends when a statewide B2 requirement took effect. End users and fleets should first contact their fuel distributor if they think there is an issue related to the use of biodiesel blends. Biodiesel blend distributors should then contact their biodiesel supplier. If additional assistance or expertise is needed, the Biodiesel Troubleshooting Helpline's expert staff will help users and distributors get to the bottom of any issues surrounding the use of biodiesel blends in the field.
 
 The NBB's intention in launching the troubleshooting helpline is to be proactive and help ensure consumers have a good experience. Again, the troubleshooting helpline is for potential problems thought to be caused by biodiesel blend use. For general biodiesel questions, call the NBB office at (800) 841-5849. To locate biodiesel pumps, call the Biodiesel Hotline at (866) BIODIESEL.
 
 FCStone offers hedging webinar
 Commodity risk management firm FCStone and <a href="http://allthingsbiodiesel.com" target="_blank">AllThingsBiodiesel.com</a> have partnered to offer NBB members an online workshop titled "Capital Requirements of Various Hedge Structures." FCStone is a member of the National Biodiesel Board (NBB).

 
 FCStone will offer insight into the dynamic commodity market. The presentation will offer information on current and forward market conditions, and the evolution of alternative feedstocks. More topics will be announced as the agenda develops. Registration for the Nov. 29 workshop is available at the Members Only section of the NBB Web site. For more information, contact Doug Whitehead at (800) 841-5849.
 
 Commerce department leads Asian trade mission
 A government-sponsored trade mission aims to match participating U.S. companies with opportunities in fast-growing markets abroad, where American clean technology goods and services can provide much-needed energy while improving the environment.
 
 The U.S. Department of Commerce's International Trade Administration will lead the Clean Energy Trade Mission to Beijing, Guangzhou and Hong Kong, China, as well as Calcutta and Bangalore, India, in January 2008.
 
 Assistant Secretary of Commerce David Bohigian, who will lead the mission, said energy security, the environment and U.S. industry will all benefit from the commercial exchange. "China and India are the world's fastest-growing major markets, and both countries are investing heavily in clean energy to fuel their economies," he said.
 
 The mission will target a broad range of clean energy technologies such as renewable energy, biofuels, energy efficiency, clean coal and distributed generation.
 
 On May 31, President George W. Bush announced an effort by 2012 to develop and implement the Global-15 framework, within the context of the United Nations Framework Convention on Climate Change while advancing the Asia-Pacific Partnership on Clean Development and Climate (APP). The APP is a public-private partnership in which member countries-the United States, China, India, Japan, Australia and South Korea-work together to facilitate commercial deployment of technologies that reduce greenhouse gas emissions and enhance energy security.
 
 For additional information on the Clean Energy Trade Mission, visit <a href="http://www.export.gov/cleanenergymission" target="_blank">www.export.gov/cleanenergymission</a>.

 
 NBB board meeting slated for mid-November
 Since this is a time when the support and involvement of National Biodiesel Board (NBB) members is most crucial to the industry, all NBB members are encouraged to attend the NBB board meeting, Nov. 12-14, 2007, in Washington, D.C.
 
 The meeting will include governing board elections, which are now run under new bylaws that more accurately reflect today's many aspects of the biodiesel industry. Committees will also hold their regular meetings, with the addition of a trade committee meeting. The committees will consider proposed resolutions as input into the board's annual resolutions process, which will be conducted at the meeting.
 
 As always, members are encouraged to visit their representatives and senators. Capitol Hill visit time is scheduled Nov. 14 from 10 a.m. to 1 p.m. Hill visits are critical with significant pending legislation affecting biodiesel. The legislative team at NBB can assist with setting up visits, as needed.
 
 Take advantage of the opportunity to share your voice in the industry, visit with legislators and network with fellow members. For more information and to register, visit <a href="http://www.biodiesel.org/meetings/091707.shtm" target="_blank">www.biodiesel.org/meetings/091707.shtm</a>.
 
 NBB shares biodiesel information with health officials
 The National Biodiesel Board (NBB) and the American Lung Association (ALA) of Illinois shared information about biodiesel's health benefits with the Association of Occupational Health Professionals (AOHP) at the organization's annual meeting Sept. 26-28 in Savannah, Ga. More than 300 health advisors from across the nation attended the conference. Many represented medical centers and quickly recognized the potential for biodiesel to be used in their fleets and facilities.
 

 The annual meeting also created an opportunity for NBB, with the support of the United Soybean Board, to demonstrate biodiesel's benefits to southeastern region motor coach operators who had previously received negative information about biodiesel. The president of the South Carolina Motor Coach Association agreed to use B20 in the tour bus that provided transportation for AOHP attendees. After using the B20, he praised the cleanliness of biodiesel and documented that he had no performance issues. NBB member Carolina Polymers LLC provided the biodiesel for the demonstration that reached AOHP and motor coach operators.
 
 Member profile: Alterra's presidential prowess
 Alterra, a Georgia-based biodiesel manufacturer, launched its second biodiesel plant with former President Jimmy Carter helping break ground in February 2007. On Aug. 30, the company commissioned Alterra Bioenergy of Middle Georgia, Gordon, Ga., a 15 MMgy plant that will employ 20 people. Company officials expect their first plant, a 30 MMgy facility in Plains, Ga., to provide about 35 jobs when it begins production by the first quarter of 2008.
 
 Company officials said that Carter was part of the inspiration for starting a plant in Plains-the President's hometown-as he is a longtime proponent of renewable energy. Anticipated expansion of the two projects will raise annual production capacity to 45 MMgy and distribution capacity to 100 MMgy, officials said.
 
 Currently, Alterra's main feedstock is soy oil, but company officials say it may make some of its biodiesel from different sources of feedstock including peanuts grown on Carter's farm.
 
 Alterra is a biodiesel producer and distributor headquartered in Macon, Ga. Its business model includes sourcing biofuels from company-owned and operated production plants, and purchasing fuel from other biofuels producers in the United States. Funded in part by Norwegian investors, Alterra representatives said they want to maintain domestic and global business relationships in biofuel procurement. They also said they plan to evaluate ethanol, gasification, crushing and pelletizing opportunities in the southeastern United States.
 
 In June, Alterra CEO Wayne Johnson and Vice President Lisa Ryan, and Christian Langaard of Euro-Latin Capital joined retired U.S. Army General Norman Schwarzkopf in the studio for "World Business Review," which aired on CNBC.
 
 Visit <a href="http://www.alterrabioenergy.com" target="_blank">www.alterrabioenergy.com</a> for more information.

 
 Senate committee approves biodiesel measures
 The National Biodiesel Board (NBB) applauded the Senate Finance Committee for approving the Heartland, Habitat, Harvest and Horticulture (4-H) Act of 2007 by a 17-to-4 vote. The measure contained energy tax provisions vital to the biodiesel industry's continued integration into the domestic energy supply.
 
 The 4-H Act contains an extension of the federal biodiesel tax incentive, which expires Dec. 31, 2008. Given the important role the credit plays in helping biodiesel compete with conventional diesel fuel, extension of the biodiesel tax incentive is a top NBB priority. The agriculture tax package approved by the Senate Finance Committee extends the credit through Dec. 31, 2010. The measure also extends the Biodiesel Small Producer Tax Credit through Dec. 31, 2012.
 
 "Extension of the biodiesel tax incentive is vital to our industry," said NBB CEO Joe Jobe. "The U.S. biodiesel industry appreciates the Senate Finance Committee's leadership in recognizing the valuable role biodiesel can play in reducing our dependence on foreign oil in an environmentally friendly way. Extending the biodiesel tax incentive as included in this bill will support the growth of a stable biodiesel industry and allow American biodiesel producers to compete for global demand while ensuring that only quality fuel is sold in the U.S. market."
 
 REG Inc. achieves dual BQ-9000 status
 The list of elite companies attaining the highest level of quality certifications in producing and marketing biodiesel has grown again. Renewable Energy Group Inc. (REG) earned the status of certified marketer from the National Biodiesel Accreditation Committee (NBAC). The company already held the distinction of accredited producer under BQ-9000.
 
 "We want to ensure that every gallon of high-quality biodiesel that leaves one of our production facilities is handled properly all the way to the fuel tank of a school bus, commercial truck, tractor or diesel vehicle," REG CEO Jeff Stroburg said.
 
 BQ-9000 is a voluntary fuel quality assurance program adopted by the National Biodiesel Board and the Canadian Renewable Fuels Association. The program couples universally accepted quality management systems with the biodiesel product specification ASTM D 6751 for production (accredited producer) and marketing (certified marketer). The other two companies with dual certification-holding both accredited producer and certified marketer status-are Peter Cremer North America and FUMPA Biofuels.
 

 In another honor, REG Inc. was named one of the nation's fastest growing private companies by Inc. magazine. It was singled out as the first biodiesel company to make the Inc. 500 list, and is the seventh-fastest growing energy company nationwide, according to a recent issue. REG offers a variety of plant and marketing services, and markets SoyPower brand biodiesel.
 
 More information on REG is available at <a href="http://www.regfuel.com" target="_blank">www.regfuel.com</a>. More information on BQ-9000 is available at <a href="http://www.bq-9000.org" target="_blank">www.bq-9000.org</a>.
 
 NBB welcomes new members
 Alamo Biodiesel Inc.-San Antonio, Texas
 C-Mobility Advertising Inc.-Aventura, Fla.
 Glencore Ltd.-Stamford, Conn.
 Green Valley Bio-Diesel LLC-Sunnyside, Wash.
 Kinder Morgan Energy Partners LP-Houston, Texas
 Nova Biosource Fuels Inc.-Houston, Texas

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Lovell to speak at National Biodiesel Conference

Laidig Systems Inc. is adding a second story to the company's office building in Mishawaka, Wis. Spurred by the expansion of Laidig's engineering department, the addition will also house the company's growing project management, customer service and construction teams. The expansion will allow Laidig to incorporate engineering of larger silo reclaimers, European Potentially Explosive Atmosphere standards and electrical control systems. Laidig Systems designs, markets, builds, and services bulk storage and reclaim systems.

Laidig is adding a second story to its office building in Mishawaka, Wis.

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Laidig Systems expands headquarters

Just two months after sales of its trademarked ShockWave Power Reactors (SPR) surpassed 300 MMgy of capacity, Advanced Biofuel Solutions (ABS) told Biodiesel Magazine its capacity was quickly approaching 400 MMgy. The SPR, manufactured by Hydro Dynamics Inc., drives the biodiesel transesterification reaction to completion in seconds, can be used in a continuous or batch system, and allows for feedstock flexibility. "In the past few weeks, we've been busy with potential projects that are larger in scope than any announced in the United States thus far," said ABS President Tom McGurk. The company's clients include biodiesel producers Memphis Biofuels and U.S. Biofuels.

ABS approaches milestone

Amelot Holdings Inc. and Utah-based Pan-Am Biofuels Inc. have entered a joint venture to develop a 2,000-acre jatropha plantation in Guanacaste, Costa Rica. The proposed plantation, expected to be fully operational next year, would produce 3 MMgy of crude jatropha for the production of biodiesel, making it the largest jatropha plantation of its kind in Central America. According to Pan-Am Biofuels President Joseph Black, biodiesel would be refined and initially marketed within the country. For more information about the joint venture, visit <a href="http://www.panamabiofuelscorp.com" target="_blank">www.panambiofuelscorp.com</a>.

Amelot Holdings, Pan-Am Biofuels form jatropha partnership

Blackmer, a Dover Resources company, has added a biodiesel-compatible fluorocarbon (FKM) U-Cup O-ring option to its TX/TXD series of sliding vane pumps with piston air valves. Blackmer introduced its piston air valves in February 2006 to replace the double-diaphragm air valve in its pumps used in the truck transport industry, according to the company. The FKM option, which replaces traditional Buna elastomers, is recommended for use on transfer pumps used in biodiesel applications. Piston air valve kits are interchangeable with diaphragm air valves. The kits bolt directly to the TXD relief valve, or pumps may be factory ordered with the FKM option.

Blackmer makes biodiesel friendly pump

Medical Discoveries Inc. (MDI), a California-based drug developer, recently sloughed its prior operations and acquired Global Clean Energy Holdings LLC, a jatropha oil developer. MDI, which plans to change its name to reflect the change, will initially focus its operations on commercializing jatropha oil for biodiesel production. In its first step as a renewable fuels company, MDI submitted a proposal to the U.S. DOE in late September for a four-year, $42 million project to construct a self-contained jatropha plantation, and a biodiesel and synthetic diesel refinery in the United States.

Medical company enters biodiesel arena

John Eustermann has become the principal attorney in the Boise office of Stoel Rives, a full service U.S. business law firm that recently formed a renewable energy group. He joins Stoel Rives after practicing with Holland and Hart LLC, also of Boise. Eustermann has worked in corporate transactions for 10 years, five of which were focused on the renewable energy industry. He received his Juris Doctor degree from the University of Puget Sound Law School and a Master in Business Administration degree from the University of Notre Dame.

Eustermann joins Stoel Rives

Gordon Quaiattini has been appointed president of the Canadian Renewable Fuels Association (CRFA) to replace Kory Teneycke, who served as executive director for four years. Teneycke joined the Conservative government in Ottawa as director of the Conservative Resource Group. Quaiattini joins the CRFA from Ottawa-based Wellington Strategy Group, where he was lead counsel for biofuels clients. "I am thrilled to be taking on this new responsibility within the CRFA and building on the successes that were achieved by all the members under Kory's leadership," Quaiattini said.

CRFA leadership changes

In September, German yellow-grease-to-biodiesel producer Petrotec AG named Michael Fiedler-Panajotopoulos to its newly created position of director of sales and marketing. He will head the company's biodiesel sales in Europe, following his most recent work for BP in London. Petrotec also appointed its Chief Operating Officer (COO) Bernd Wasserrab to the company's management board. Wasserrab, who became COO in September, is in charge of setting up the company's international organization and managing its operating activities.

Two take positions at Petrotec

Diesel prices are high but vegetable oil prices are even higher. That's the dilemma that biodiesel producers are facing as the industry's capacity has caught up with the feedstock supply. From canola in Canada, to camelina in Montana to jatropha in Mexico and palm oil in Malaysia, biodiesel producers are looking for new, economical sources of fatty acids that can be converted into biodiesel.

 
 One promising new source is algae. Many companies and universities are working to unlock the potential of these single-celled plants, which can contain up to 50 percent oil by weight and double their numbers in a single day. (See "<a href="http://www.biodieselmagazine.com/article.jsp?article_id=1502" target="_blank">Algae on the Edge</a>" in the March 2007 Biodiesel Magazine) Nearly all of these projects are still in the development stages, however, and won't be attempting a commercial-scale project until late 2008 or 2009.
 
 One firm, however, has broken from the pack and is selling commercial-scale algae systems. AlgaeLink N.V. is a subsidiary of BioKing B.V., a manufacturer of biodiesel production equipment based in the Netherlands. The company began selling its AlgaeLink photobioreactor system in the third quarter of 2007. BioKing was started about five years ago, says Hans van de Ven, the company's president and CEO. The company started development of the AlgaeLink system almost immediately. "There was testing, testing, testing and testing," van de Ven says. "[The testing] involved our engineering department and our biotech department. We spent quite a lot of money in this whole process. We started selling the units when we were sure we had everything under control and our years of testing showed us the right numbers."
 
 <center><img src="/images/upload/20071101050757.jpg"></center>
 The AlgaeLink photo bioreactor system is scalable for producing from 1 to 100 dry-weight tons of biomass per day.
 
 It was no coincidence that the company was the first to market a commercial system, van de Ven says. "Someone needed to be first," he says. "We have put at least four years of work into our system. We have put a great deal of money into it and have had engineers and biologists working on it all over the world. We are ready to sell commercial plants. A lot of people over the Internet have been ripped off by people who promised a lot and nothing happened. We have a very good name in the industry and we would like to keep it like that."
 
 Photo Finish

 Research conducted by the U.S. Department of Energy's Aquatic Species Program from the 1970s to the 1990s showed that many species of algae had the potential to produce sufficient quantities of oil to be economical feedstocks for biodiesel production. However, the most efficient method of raising algae-in open, racetrack-style ponds-was prone to contamination from undesirable algae species, and a lot of water was wasted through evaporation. Closed systems called photobioreactors didn't have the contamination and evaporation problems, but were expensive and experienced engineering problems.
 
 AlgaeLink is a closed system consisting of clear tubes 36 meters (118 feet) long and 64 centimeters (25 inches) in diameter. The tubes are connected to a pumping station where two pumps regulate nutrient and acidity levels in the system. A water pump maintains a gentle circulation of water and algae through the photobioreactor. A harvest pump moves fluid to a filter system that removes the algae for processing.
 
 The company sells AlgaeLink units in capacities ranging from a plant that produces 1 ton of dry-weight biomass per day to its largest facility that will produce 100 tons of dry-weight biomass per day. The company insists that its customers install the demonstration plant to start with so AlgaeKing can customize the mix of algae species and nutrients for the climatic conditions and water quality of the plant's location. A demonstration plant produces between 2 and 4 kilograms of dry-weight biomass per day. "We will only sell large equipment after we place a test unit on the premises for the client," van de Ven says. "We will monitor that plant on our computer system in the Netherlands. After between four and six months of monitoring we can make the design that will match what the customer is looking for in his particular area."
 
 The price of the test unit is refunded if the client decides to buy a larger unit after the monitoring period, he adds. "If someone wants to put up money to buy a 100-ton plant, we won't sell it to them," van de Ven says. "We want to make sure that the customer gets what he is looking for. We can't just get the system and the algae and have success with it. That's not how it works."
 
 The demonstration unit costs €69,000 (US $98,000), which includes six months of technical support and monitoring by AlgaeLink. The production units range in cost from €580,000 (US $821,000) for the one-ton-per-day model to €10 million (US $14 million) for the 100-ton-per-day model. This cost doesn't include equipment for centrifuging and drying the algae paste or extraction equipment to separate the oil. The prices are calculated on a per project basis, according to the company's price list. "We have four years of experience and know that it's really workable, it's profitable, but you need to have the right numbers," Van de Ven says. The company doesn't guarantee a specific cost of production due to variations in climate and other factors. That is another reason it insists that its customers install a demonstration system before investing in a larger capacity plant. "It depends on so many factors," van de Van says. "For example, in our demo plant in the Netherlands, the oil costs us no more than 5 cents (euro or US 7 cents) a liter. But that is a demo plant without automatic dryers and everything. Now that it's winter in the Netherlands the cost will go up because we need to keep the water hot to keep it from freezing. But if you are in the right location and buy the right equipment you can produce your oil very inexpensively."
 
 Van de Ven says AlgaeLink has already sold and is in the process of installing many of the demonstration plants. "In fact, [recently] a customer bought two of them for two different countries," he says. "Everybody is interested in them. They come to the Netherlands, they see the process. They see the results we get from our two demonstration plants in the Netherlands and Portugal. So they already know what they are buying when they buy the demo plant." Van de Ven says the company is working with customers from the United States, Russia, Kazakhstan, Australia and Malaysia.
 
 <center><img src="/images/upload/20071101050752.jpg"></center>
 
 Advances
 Van de Ven describes some the advances that allow AlgaeLink to make its systems more economical. One of the most important was a patented system that allows the company to ship the material for its photobioreactors as flat sheets that can be formed into tubes on-site. This lowers transportation costs considerably, he says. The company has also incorporated sophisticated sensors and computer controls that allow each unit to be monitored from anywhere in the world. "We have our own computer system designs and have written our own software," van de Ven says. "We are making our own sensors. They don't exist in the world and are not for sale anywhere even if you pay a million. They are not on the market."

 
 Another advance is a cleaning system that is incorporated into the unit. That means the unit doesn't have to be shut down to remove algae that builds up on the internal sides of the tubes. The cleaning system in combination with the extensive monitoring allows the algae cultures to be maintained for long periods without crashing.
 
 One of the challenges with algae systems is when the algae density is high, light will only penetrate a few centimeters into the culture. This usually prevents closed systems that use large tubes such as AlgaeLink from obtaining high efficiencies. Van de Ven says his company has patented a method for overcoming this handicap, but didn't describe it. "We are waiting on the patents and that takes a long time," he says. "We have a unique system and that's the reason nobody else can offer it. They don't know how to do it."
 
 The company ships the demonstration plant with a mix of 10 species of algae. AlgaeLink is studying at least 16 species of algae for its suitability for oil production in different climates. AlgaeLink isn't limited to growing algae for biofuels feedstocks, van de Ven adds. Other species of algae are grown for the nutritional and pharmaceutical industries, and those species are perfectly happy in an AlgaeLink photobioreactor, he says. "I have a customer now who wants to burn (biomass) in his plants," van de Ven says. "He wants fiber and 2 percent oil in the algae. We have a lot of customers with different needs. We have another customer in the Middle East who wants to grow Spirulina (a nutritional supplement) and wants nothing to do with oil or biodiesel. So every reactor is unique to each customer." AlgaeLinks' preferred algae works well, van de Ven says, but the company is always on the lookout for an improved species. "We say we have very good algae," he says. "But there are many, many algae out there. Maybe in five years we'll find a better one. But for now, we have algae that fit every person. If they are looking for [biomass], if they are looking for oil, we have the right one. If they are the best one out there, we don't know. But we have to start somewhere."
 
 Fuel School
 BioKing offers a two-day algae production course in the Netherlands for €1,800 (US $2,547). The course covers the basics of algae biology and production. It includes time at the AlgaeLink test facility to see algae harvested, dried and the oil extracted.
 
 AlgaeLink has published one of the first analyses of algae oil and its suitability for biodiesel production on its Web site at <a href="http://algaelink.com/algae_biodiesel_lab_analysis.htm" target="_blank">algaelink.com/algae_biodiesel_lab_analysis.htm</a>. Because the wide range of algae species differ in the oils they produce, van de Ven cautions that this analysis may not be typical, but he thought it was important that the industry have some solid numbers to examine. "That is only one algae, but we put it on the Web site because nobody else in the world can give you specs on biodiesel from algae oil," van de Ven says. "It's just one species of algae, if a customer needs another algae, he will get the specs from the algae he is looking for. We are very careful about how much analysis we will put on the Internet because that has taken many years and a lot of money. We just put something there to show the people some algae."
 
 The algae oil is highly unsaturated, with high levels of Omega 3 and Omega 6 fatty acids. It is low in phosphorus, which the company says means the raw oil doesn't need to be degummed. The iodine value is slightly higher than specifications call for, so it will need to be blended with a small amount of a feedstock with a lower iodine value. Because of the high level of Omega 3 and Omega 6 oils, additives that are readily available on the market need to be added to improve the biodiesel's oxidative stability to meet standard quality specifications. Values for ester content; copper corrosion; monoglycerides, diglycerides and triglycerides; and free and total glycerol in biodiesel made from crude algae oil were all within specifications.
 

 For those who are skeptical about the practicality of algae as a biofuels feedstock, van de Ven has a challenge, "I say, come over to our company. Look at the records we have, the data we have for the past years," he says. "It is a computerized system and we cannot manipulate it. It shows what we've done, day by day, at our plant in the Netherlands and in the plant we just built down in Portugal. It surprises a lot of people when they see it."
 
 Jerry W. Kram is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:jkram@bbibiofuels.com">jkram@bbibiofuels.com</a> or (701) 746-8385.

The biodiesel industry is facing a feedstock crisis and desperately looking for alternatives. Even the best alternatives to virgin vegetable oil could take years to develop. Or will they? A Dutch firm with ties to the biodiesel industry is the first to market an industrial-scale algae photobioreactor that may provide a solution to oil-hungry producers.

Supersized Algae Bioreactors

At the 2007 National Biodiesel Conference, Arctic Cat Inc., the Thief River Falls, Minn., manufacturer of snowmobiles and all-terrain vehicles (ATVs), presented a product it had just started marketing: the 700 Super Duty Diesel ATV. With a glow-plug preheater assist for starting, it's evident that the 4-by-4 is designed for cold-weather performance. What could be better for biodiesel's reputation as a winter fuel than an endorsement from a company that makes cold-weather machines?
 
 Because this unit is the first and only diesel-powered ATV available on the commercial market, Arctic Cat had to go through a rigorous period of testing and development. First, the company had to incorporate a diesel engine, which is usually big and heavy, that would be small enough and light enough for an ATV. Also, because Arctic Cat planned to market the vehicle to the military, it had to ensure that it could perform admirably in harsh conditions using a number of different fuels, including biodiesel. Arctic Cat's promotion of diesel-powered ATVs, which are approved for B20 use, is good news for biodiesel and should make skeptics more comfortable with wintertime use of the fuel.
 
 As Arctic Cat was testing its new product, it discovered that the renewable fuel burned cleaner than conventional diesel and had added lubricity. Even in cold-start testing procedures, the company actually found an increase in revolutions per minute (rpm). "We expected that this was because of the added lubricity biodiesel provides," says Craig Kennedy, an engineer for Artic Cat who was involved in the development of the diesel ATV. "It did carry more rpms and performed similarly to No.1 diesel, in regard to cold running."
 
 The positive results generated by Arctic Cat's testing were contrary to some of the information the company received when it began working with biodiesel. Over the past year or two, the quality of methyl esters has increased significantly, Kennedy says. Some of the initial inconsistencies in quality could have caused some of the bad assessments of biodiesel, he adds. Lombardini USA Inc., a diesel engine manufacturer in Duluth, Ga., provided Arctic Cat with some data from its own tests with biodiesel that contained less than glowing recommendations. "Our results were quite positive," Kennedy says. "Our vehicle was less affected in terms of power and fuel consumption, than we initially expected."
 

 The 700 Diesel ATV is equipped with a 686 cubic centimeters (cc) (0.6 liter), inline-two-cylinder diesel made by Lombardini. The LDW 702 diesel engine features a 3,600-rpm redline that is usually used in stationary applications. In the Arctic Cat ATV, the engine's fuel is supplied by a Bosch indirect-injection mechanical system. The 145-pound unit is rated at 17.81 horsepower and 30 pound-foot of torque. At 823 pounds, the whole ATV weighs about 110 pounds more than the 700 cubic centimeters gasoline version, has an impressive 1,050-pound towing capacity and comes standard with a 2-inch receiver hitch.
 
 On-Farm Use
 Arctic Cat tested the new ATV on biodiesel, with help from Minnesota's Agricultural Utilization Research Institute (AURI), and the Minnesota Soybean Growers Association (MSGA). Michael Sparby, project development director of AURI's office in Morris, Minn., says that because of the strong recreational vehicle manufacturing presence in Minnesota, he made a cold call to Thief River Falls on behalf of biodiesel, and as it happened, Arctic Cat was developing the 700 Super Duty. "The military and European markets were the impetus for the development of this unit," Sparby says. Because farmers are major users of ATVs, they were a target customer for the Artic Cat product as well. Europeans are considered a major market for the ATVs because diesel-powered vehicles are more common in Europe than in the United States. "That's absolutely right," Kennedy says. "In Europe, the ability to rely on one fuel source is extremely important. It costs huge amounts of money to have gasoline on the farm, sometimes as high as $8-per-gallon. Diesel fuel also has a huge bonus potential because its fuel mileage performance is 32 percent greater than gasoline."
 
 MSGA and AURI's missions are to identify projects and find new uses for agricultural products. Both believe that cold weather shouldn't stand in the way of customers relying on biodiesel in the winter months. Mike Youngerberg, a spokesman for MSGA, says that there are issues with the use of conventional diesel fuel from Maine to Montana during cold snaps. Nevertheless, biodiesel has received undeserved blame for fuel gelling problems when traditional diesel has had problems for many, many years. Also, undesirable microbes can flourish in ultra low sulfur diesel, so biodiesel may have been a scapegoat for problems with that new petroleum product as well. "There were plenty of people with all kinds of opinions," Kennedy says. "There were a number of people around [Thief River Falls] in the ag community who felt like some of the early stuff maybe wasn't up to snuff." This year however, there has been no talk of fuel quality issues so farmers shouldn't be worried about using biodiesel in their equipment. 
 
 For on-farm use, ATVs have become a staple. The Florida Cooperative Extension Service reports that by the mid-1980s the ATV was finding several different uses on the farm. In many operations it proved to be an efficient and economical substitute for pickups, horses, tractors and walking. "It's one of those things you can't figure out how you managed without it once you got one," says Jim Brown, an Iowa farmer who runs an operation about 90 miles northwest of Des Moines. While his ATV is gasoline powered, Brown uses biodiesel in his tractors and trucks. "Anything that uses renewable resources we should be using," says Brown of Artic Cat's new ATV. "We should be doing everything we can to promote ourselves." While he can't be sure where all of his crops end up, Brown says his soybeans probably go to Western Iowa Energy LLC, in Wall Lake, Iowa. "It just makes sense to use our own products," he says.
 
 ATVs can now be found on all types of farms, and in the forest. Specifically, the ATV is ideally suited for use with Arctic Cat's line of SPEEDPoint farming and landscaping attachments, making the machine highly functional and versatile across a broad range of applications. ATVs are used to check on crops and livestock, inspect and repair irrigation systems and fence lines, supervise field crews, herd livestock, mark timber, seed, fertilize and apply chemicals, mow grass, move dirt and transport things from here to there and back again. The uses are unlimited. "We use them to check cows, get out to the tractors, or ride a quarter mile so we don't have to start the pickups … for all kinds of things," Brown says. "Plus we have four boys who love to ride them."
 
 Farmers are buying the new diesel-powered ATV and are impressed with its performance, Arctic Cat says. "There's been nothing but rave reviews for this product," Youngerberg says. "It's an extremely small market for biodiesel, but one that should not be ignored. The farmers, who grow the soybeans to make biodiesel, should be using the fuel on the farm too."
 
 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.

Lombardini's LDW 702 diesel engine generates 30 pounds per foot of torque, has 17.82 horsepower and weighs 145 pounds.

841-1294329850.jpg

Arctic Cat's 700 Diesel Super Duty ATV, shown here in red, is selling well in Europe and is useful in many on-farm applications.

842-1294329851.jpg

All-terrain vehicles have served off-road needs on the farm for years. Now a new product from Arctic Cat Inc. will give farmers the opportunity to fuel these workhorses with biodiesel produced from the soybeans they grow. It also gives the renewable fuel an opportunity to prove its worth to small-engine manufacturers.

Small-Engine Ingenuity

Web exclusive posted Nov. 1, 2007, at 4:20 p.m. CDT

 
 In late October U.S. EPA published "Guidance for Biodiesel Producers and Biodiesel Blenders/Users," which spells out preliminary actions EPA will take addressing biodiesel quality, harmonization of standards and enforcement activities. In the document, EPA states emissions results from its 2002 study, which indicate slightly higher levels of NOx emissions, remains controversial. "EPA has recently shown experimentally that this impact [of increased NOx emissions] is proportional to test cycle and load," the document states. 
 
 "EPA also plans to increase enforcement efforts to ensure that biodiesel producers are complying with EPA's standards, in particular ensuring that all biodiesel meets ASTM D6751," the agency states. "For biodiesel registered since 2002, any biodiesel that does not meet the version of ASTM D6751 in effect at the time of registration will be considered an unregistered fuel subject to the penalty provisions in 40 CFR 79.8 (civil penalties of up to $32,500 per day per violation). … EPA regulations ... also provide authority to EPA inspectors … to enter the premises of any fuel manufacturer, importer, carrier or distributor and make inspections, take samples, obtain information and records, and conduct test to determine compliance…" 
 
 On the Web:
 <a href="http://www.epa.gov/otaq/renewablefuels/420b07019.pdf" target="_blank">www.epa.gov/otaq/renewablefuels/420b07019.pdf</a>

EPA gives "Guidance" for biodiesel producers

Usually when a local governmental entity announces that it will be using biodiesel blends in its fleets, biodiesel advocates cheer. These announcements often represent biodiesel's first entry into a given market, and they give the fuel legitimacy to other consumers in the area. When governmental entities prefer products that haven't been proven in the market, such as biobased products and renewable fuels, they can drive the market and elevate the industry.
 
 One market that could use some elevation is the California renewable fuels market. The entire state has the capacity to produce about 46 MMgy and has another 3 MMgy under construction. Biodiesel has been somewhat forgotten in favor of ethanol, according to John McKinsey, an associate at the Sacramento, Calif., office of law firm Stoel Rives LLP. He explains that ethanol replaced methyl tertiary butyl ether last year as the agent used to reduce gasoline emissions, as required by the state implementation plan to comply with the Clean Air Act.
 
 Biodiesel is just starting to receive recognition for its potential contribution to emissions reductions. This year, the California Department of Transportation (CalTrans) conducted a six-month pilot project to determine the feasibility of using B20 in its fleets, comprised of 4,500 trucks and construction vehicles. Biodiesel is also being reviewed by the California Air Resources Board, which is required by the state's Global Warming Solutions Act to reduce carbon dioxide emissions to 1990 levels by 2020.
 
 One governmental sector of California, however, doesn't buy into biodiesel's air emission claims. The South Coast Air Quality Maintenance District (AQMD) is charged with developing and implementing strategies to meet air quality standards within the South Coast Air Basin, an area that includes the city of Los Angeles and portions of the surrounding counties. The basin is the only area in the United States classified by the U.S. EPA as an extreme nonattainment area for ozone. It is one of only five areas designated as a serious nonattainment area for small particulate matter.
 

 Biodiesel has had a tough time being accepted for use in nonattainment areas. There is still a concern that it contributes to air pollution-at least as far as nitrogen oxides (NOx) are concerned. In nonattainment areas, NOx is especially a concern as many believe it contributes to the formation of smog. "The primary issue for this region is the potential for an increase in nitrogen oxide emissions," says AQMD spokeswoman Tina Cherry. "We have the worst air quality in the nation, and biodiesel can increase NOx emissions, which would hinder-not help-our air pollution problem."
 
 The basin's extreme nonattainment status has prompted efforts to reduce diesel use in general, according to McKinsey. He explains that diesel wasn't heavily regulated in California until it was identified as a carcinogen a couple of years ago. "That changed everything," he says. "California had to limit diesel exhaust. Air districts are trying to reduce emissions further."
 
 Since at least 70 percent of pollution in the basin comes from mobile sources, Cherry says the AQMD has taken steps to reduce emissions, especially from motor vehicles and engines that run on diesel fuel. In 2000, the AQMD enacted six fleet rules that require operators of various fleets (15 or more vehicles), such as street sweepers, garbage trucks and airport shuttles, to buy vehicles meeting specified emissions standards, or to buy vehicles having alternative-fuel engines, when adding to their fleets. In this case, "alternative-fuel engines" use compressed or liquefied natural gas, liquefied petroleum gas (propane), methanol, electricity or fuel cells. Hybrid electric and dual-fuel technologies that use diesel fuel are not considered alternative-fuel technologies for the purposes of the rule.
 
 The fleet rules apply to fleet vehicle purchases only, not to vehicles that may already exist in a fleet. "If a fleet wants to add a vehicle to its fleet or replace a vehicle in its fleet, they have to do so with the cleanest vehicle available, which happens to be alternative fuel natural gas," Cherry says.
 
 Fleets may use biodiesel if they choose to in any diesel vehicles in their fleet. The AQMD doesn't have the authority to regulate the type of fuel used in vehicles in the region; right now it only has authority to set guidelines for the purchase of new vehicles in certain fleets. Additionally, she says the number of vehicles under consideration isn't large enough to consider the fleet rules as a barrier to the use of biodiesel in the South Coast region. "There are thousands of other diesel sources in the region, especially the trucks used in moving goods throughout the region, that our fleet rules do not apply to," she says.
 
 While this may be true, the AQMD fleet rules do cover a large number of vehicles. As a result of the rules, the region's fleets have already added more than 6,000 heavy-duty vehicles powered by natural gas and other alternative fuels, according to the AQMD.
 
 Fleet Rules go to Court
 The potential for this kind of impact led the Engine Manufacturers Association (EMA) to file suit in U.S. District Court in 2000, claiming the rules were pre-empted because they violated 209(a) of the federal Clean Air Act. Pre-emption means that the federal law precludes the state from enacting laws on the same subject. The Western States Petroleum Association intervened in the case on behalf of EMA. The case has traveled up and down the judicial system, even making a stop in the Supreme Court in 2004.
 
 Most recently, the U.S. 9th Circuit Court of Appeals issued an opinion on the case and upheld virtually all applications of the fleet rules. The plaintiffs, the EMA and the Western States Petroleum Association, said the fleet rules are pre-empted by the Clean Air Act because they were an effort to control new motor vehicle emissions, and not merely proprietary actions of the state as a typical market participant.

 
 The decision upheld a previous ruling by the district court that the fleet rules as applied to state and local governments are not pre-empted by the federal Clean Air Act due to market participation considerations. However, in the case of purchases made by other entities, such as federal government entities and private fleets, the court remanded the case back to the lower court. "The central question presented in this appeal is whether the Clean Air Act pre-empts the fleet rules insofar as they apply to state and local government entities," reads the opinion of the court, written by 9th Circuit Judge William Fletcher. "The market participant doctrine distinguishes between a state's role as a regulator, on the one hand, and its role as a market participant, on the other. Actions taken by a state or its subdivision as a market participant are generally protected from federal pre-emption."
 
 This decision is the first time that the "market participant doctrine" was applied to the Clean Air Act. "Under the market participant doctrine, when government agencies, such as AQMD, purchase goods and contract for services, their actions are not subject to pre-emption by federal statutes, such as the federal Clean Air Act," the AQMD explains. "Further, as the court held in this case, the market participant doctrine applies not just when agencies seek to obtain the best price for goods and services, but also when they seek to further other goals, such as reducing or preventing air pollution."
 
 The decision matters to the biodiesel industry because it could serve as a precedent for other local governments to prefer fuels or technologies in the name of air quality. "What just happened is really about air quality-it's a case that's affirming [the AQMD's] ability to do more to fight air emissions," McKinsey tells Biodiesel Magazine. "Right now what this case stands for is that local government can do more to take control of emissions and can do more to regulate the character of the fuel being used and how it's being used within their local areas despite the Clean Air Act."
 
 EMA President Jed Mandel doesn't anticipate that this ruling will result in many local governments following the AQMD's lead. "Government and private sector entities have always been able to specify through the procurement process the specifications for their vehicles, so we do not see this ruling as having a wide-ranging impact," he says. "For our part, EMA will continue to advocate on behalf of truly clean technologies to ensure that all fleet owners have access to the widest range of clean vehicle options available." The error he sees in both the decision and in the fleet rule itself is that it restricts the flexibility of local governments to make local purchasing decisions, and it is based on old standards. "There is a significant irony inherent in the 9th Circuit's ruling," Mandel says. "Its net effect is to allow AQMD to bar state and local agencies from purchasing the cleanest available heavy-duty, on-highway vehicles. Today's new heavy-duty diesel vehicles emit particulate matter levels that are at the limit of detection and are essentially equivalent to zero. These vehicles also operate with NOx emissions that are 80 percent cleaner than when the fleet rules were adopted, and those emissions will be reduced to near-zero levels by 2010."
 
 He continues, "When AQMD adopted the fleet rules in 2000, it did so with a specific assurance that the ban on diesel technology would be lifted if diesel could be shown to be clean. Today's clean diesels meet the criteria of more than a 71 percent reduction in particulate matter and a 54 percent reduction in NOx emissions that the AQMD Board established, but still the AQMD has failed to lift the ban on the purchase of the cleanest and most efficient heavy-duty on-highway vehicles available. The Court decision essentially upholds obsolete regulations on local governments."
 
 Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:amcelroyamcelroy@bbibiofuels.com or (701) 746-8385.

Seventy percent of pollution in the Los Angeles area comes from mobile sources.

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The 9th U.S. Circuit Court of Appeals ruled that publicly funded fleets in southern California can be required to buy low-polluting vehicles that run on compressed natural gas or other alternative fuels. Should the biodiesel industry be concerned about a possible precedent?

Court Snubs Clean Diesel Technology

The Effect of Minor Components on Cloud Point and Filterability

A Comprehensive Analysis of Biodiesel

As global warming moves onto the domestic and international agendas, and the U.S. government pursues its "Twenty in Ten" initiative to reduce carbon emissions and reliance on foreign imports, the United States is certain to remain a world leader in the production and use of biofuels. While the relatively small number of diesel vehicles in the United States currently presents limited opportunities for biodiesel, such vehicles are far more prevalent in Europe, providing a much greater biodiesel platform.
 
 Biodiesel is produced through a chemical process called transesterification, where glycerin is separated from the fat or vegetable oil, leaving behind methyl esters and glycerin, which is detrimental to engines but valuable in soap manufacturing. To be considered "fuel-grade," biodiesel must be produced to strict industry standards in order to guarantee proper performance. Only biodiesel that meets ASTM D 6751 and is legally registered with the U.S. EPA can be sold and distributed as a legal motor fuel.

 
 Unlike traditional diesel fuel, biodiesel offers considerable advantages, especially in terms of environmental benefits. B100 typically produces 60 percent less net carbon dioxide emissions than petroleum-derived diesel fuel.
 
 Biodiesel clearly offers environmental, commercial and performance benefits that are only beginning to be realized. However, it should be emphasized that the fuel's performance heavily depends on the purity of the final product and the complete absence of particulates or contaminants.
 
 The industry is answering the call by implementing programs designed to enhance fuel quality. BQ-9000 is a voluntary quality assurance program that includes procedures for fuel storage, handling and management with the goal of ensuring fuel quality throughout the biodiesel distribution system. Impure fuel may degrade engine oil, corrode fuel injectors with water and catalyst, block fuel injectors with soaps and glycerin, and cause seal failure due to methanol.
 
 There are two generally accepted methods to filter and purify biodiesel: wet and dry washing. The more traditional wet washing method is widely used to remove excess contaminants and leftover production chemicals from biodiesel. In this process a fine water mist is sprayed over the fuel. The fuel's impurities are removed as the water settles to the bottom of the tank. However, the inclusion of additional water to the process offers many disadvantages, including increased cost and production time.
 
 Conversely, dry washing replaces water with a magnesium silicate powder to neutralize fluid contaminants. An example is The Dallas Group of America Inc.'s trademarked Magnesol XL. The dry wash process offers myriad advantages over the wet wash system and is quickly becoming the method of choice among biodiesel producers for several reasons.
 
 First, the dry wash process decreases production time. With biodiesel becoming increasingly attractive to end users because of its environmental and cost-saving advantages, producers are looking at streamlining production to cope with growing demand. Dry washed biodiesel can be ready for use in a few hours and is significantly quicker to produce than wet-washed fuel.
 
 The dry wash process can also lower costs. In addition to the ever-increasing cost of water and the significant expense of water removal equipment, disposal of effluent water is often the single largest cost during production. Environmental agencies are vigorously pursuing illegal disposal of effluent waste. Hefty fines and imminent closure await those found breaking the law.
 
 Less space is required to conduct the dry wash process. Settling is the key to effective water removal. Numerous large wash tanks and additional water settling tanks are usually required in the wet wash process. Plant space can be used more effectively with dry washing.
 

 The dry wash process creates high-quality fuel. Since water isn't added in the dry wash process, it's possible to achieve less than 500 parts per million (ppm) water content in accordance with ASTM D 6751. In wet washing, the fuel's water content is usually more than 1,000 ppm, making it expensive, difficult and time-consuming to effectively remove.
 
 Another advantage to the dry wash process is magnesium silicate can be reused. Magnesol used in the dry wash process has commercial use as compost and an animal feed additive. It also holds fuel source potential.
 
 As with any growing industry, biodiesel production technologies continue to evolve. A variation of the dry wash process uses resin instead of magnesium silicate. However, this system is vulnerable and open to premature exhaustion; the resin doesn't produce the same yield of "clean" biofuel as the magnesium silicate procedure. Some resin manufacturers claim that a kilogram of resin will clean between 900 and 1,600 liters of biodiesel, but it's actually closer to 250 to 380 liters.
 
 Companies considering a switch from wet wash to dry wash equipment may be surprised to learn it's possible. Many wet washing tanks can be relatively quickly and cost-effectively retrofitted to a dry wash system.
 
 Schroeder Industries, a Leetsdale, Pa.-based filtration and fluid conditioning products provider, was recently selected as the exclusive U.S. distributor for UK-based Filtertechnik's line of dry wash purification products. Filtertechnik's system works on a proven method of removing production residues and soaps from fatty acid methyl esters, which is derived from vegetable oil feedstock through its absorption in magnesium silicate compound.
 
 Schroeder's line of biofuel products employs purification units fitted with a laser particle counter to measure performance and provide users with a continuous detailed analysis of the particulate contamination and moisture content of the biodiesel. Customers can view results in real-time and store them in order to document batch cleanliness. This is particularly helpful to producers making fuel to ASTM D 6751 specification.
 
 Regardless of which purification system is used, monitoring the contamination levels in the biodiesel is highly advisable. The measurement-and ultimately the removal-of particulates is crucial to maintaining engine life. When fuel is dirty, it quickly advances equipment wear and tear.
 
 Biodiesel offers a wide range of benefits that makes it a highly viable alternative fuel source for the foreseeable future. The fuel's quality rests in large part on the purity and cleanliness of the final product.
 
 Jonathan Dugan is a product specialist with Schroeder Industries LLC, a fluid conditioning technology company based in Leetsdale, Pa. Reach him at (800) 722-4810.

 
 The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biodiesel Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

A Dry Wash Approach to Biodiesel Purification

Sealless magnetic drive pumps and the biodiesel industry share an important common denominator-a safer, cleaner environment. By eliminating the rotating mechanical seal of traditional centrifugal pumps, sealless magnetic drive pumps eliminate the possibility of fluid leaks and for potentially harmful chemicals to escape. There is a host of other compelling reasons to consider the use of centrifugal sealless magnetic drive pumps in the biodiesel production process. Technology developments, years of application experience and an ever-widening acceptance of the equipment has resulted in a reliable, cost-effective application. Sealless magnetic drive pumps offer advantages for a number of the toughest, hard-to-seal chemical applications in the biodiesel production process.
 
 Historically, sealless pumps have been used to avoid fugitive emissions and provide a safety element in the handling of volatile or hazardous chemicals. Paramount to the sealless design is that no dynamic shaft seal is required to contain the pumped fluid. Rather, a stationary containment shell is used to isolate the pumpage from the ambient environment. This is possible because power is transmitted across the stationary shell through magnetic lines of flux, which induce rotation of the impeller shaft. Thus, sealless magnetic drive pumps are able to avoid the normal leakage that is a fundamental byproduct of any mechanical face seal.
 
 Because these pumps operate "emission free," they have been excluded from the fugitive monitoring requirements of the Clean Air Act as it applies to pumps handling volatile and hazardous air pollutants. This makes them an ideal choice for regulated services like methanol and hydrochloric acid. In fact, sealless pumps can be used anywhere that American National Standards Institute (ANSI) sealed pumps with double-seals or explosion-proof motors are in place.
 
 Reliability, Low Maintenance
 A number of operational benefits go hand-in-hand with the use of sealless pumps. Many users find that sealless pumps are more reliable than sealed units. Numerous studies show that shaft seals are the principal cause of failure in chemical process pumps. One such study of more than 1,250 operating pumps (and more than 2,500 installed pumps), showed that approximately 50 percent of the primary-failure causes were the result of leaking seals. In another study, a major chemical manufacturer concluded that its pump repairs were 30 percent to 60 percent less costly or less frequent with magnetic drive pump designs than with chemical-duty pumps featuring multiple seals.
 
 Not only are the pumps more reliable, but the overall lifecycle cost is reduced when maintenance costs are factored. Many users have cited low maintenance as the one component that swayed a decision toward the sealless offering.
 

 When to Use a Sealless Pump
 An evaluation of the pumped liquid is the first major decision point in considering the use of a sealless pump. For example, volatile fluids have vapor pressure characteristics that result in a change from a liquid to vapor state at atmospheric pressure. Even when working properly, mechanical seals can be a source of fugitive emissions when volatile liquids are involved. Of course, volatility is not the only criterion for assessing the viability of sealless pumps. Toxicity, flammability and corrosiveness must also be considered. In addition, extreme temperature service and liquids that are sensitive to changes in temperature are good candidates for sealless pumps. This includes liquids that have low melting or freezing points (as with many acids), and liquids that experience crystallization during temperature changes or when in contact with air (e.g., caustics). Crystallization can occur as the liquid leaks across a conventional seal face or when air is drawn into the pump.
 
 Typical sealless pump services cover a broad range of fluids that include acids, alkalis, salts, esters, hydrocarbons, monomers, polymers, alcohols, ethers, halogens, nitrogen or sulfur compounds and even some extreme water conditions. In biodiesel production, there are a number of applicable duties. On the front-end of the process, where the feedstocks are pretreated and refined, sealless pumps handle hot oils and fatty acids, and are ideal in deodorizer service.
 
 Improved Safety
 In the biodiesel-making process, methanol (CH3OH) is used in a 1:10 ratio with the feedstock oil and a catalyst. Methanol is flammable, explosive and presents known health risks. Methanol flames are almost invisible, presenting the risk of plant personnel unknowingly walking into an active methanol fire. Sodium methylate (NaOCH3, also known as sodium methoxide), the most commonly used catalyst in commercial biodiesel production, is flammable, explosive, and corrosive to eyes, skin and the respiratory tract. It is potentially lethal if inhaled or ingested in amounts as low as 30 milliliters. A 25 percent sodium methylate solution is also highly hygroscopic and may react violently in contact with water. It is imperative that the product does not come into contact with air or water. Reaction of sodium methylate with moisture or solvents emits heat, which presents an additional fire hazard. Alternative catalysts used in biodiesel-namely sodium hydroxide (NaOH) or potassium hydroxide (KOH)-crystallize in the presence of air and can be difficult to seal. Because of that tendency, these services also lend themselves well to sealless pumps.
 
 On the back-end of the process, the crude glycerin generated in the transesterification reaction is recovered and goes through a neutralization step. The glycerin contains unused catalyst and soaps that are neutralized with an acid -generally sulfuric acid or hydrochloric acid-and sent to storage as crude glycerin. From there, upgrading to high-purity or pharmaceutical-grade glycerin also requires the addition of an acid such as hydrochloric acid. These corrosive services generally demand the use of higher alloy metallurgies. Non-metallic magnetic drive pumps provide an ideal cost-effective, sealless solution for these services.
 
 Green Solutions for a Growing Industry

 Sealless centrifugal pumps are a valuable asset in the arsenal of today's biodiesel production plants. The fact that they completely eliminate leaks complements increasingly strict environmental and safety objectives. This also aligns well with the "green" reputation that biodiesel already enjoys. In addition, the added reliability sealless magnetic drive pumps offer can improve and enhance the biodiesel production process. The pumps should not only be considered for new installations, since numerous conversion opportunities exist for the retrofit of existing, poorly performing pumps. Standard ANSI dimensions facilitate this process and make it a cost-effective alternative.
 
 There will continue to be a need for mechanically sealed pumps that operate outside of the hydraulic capabilities of sealless equipment. However, inside that performance envelope, there are numerous motivations, including reduced environmental impact, improved safety and reliability, to encourage sealless technology.
 
 Bob Wilson is the biofuels area sales manager for Sundyne Corp. Reach him at <a href="mailto:rwilson@sundyne.com">rwilson@sundyne.com</a> or (704) 847-5070. Jill Slager is a strategic market analyst for Sundyne Corp. Reach her at <a href="mailto:jaslager@sundyne.com">jaslager@sundyne.com</a>.
 
 The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biodiesel Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

Powder coat paint makes the pump casings resistant to scratches and corrosion.

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The sealless magnetic drive pump impeller and internal magnet are encased in plastic, using a patented application process.

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The Advantages of Sealless Magnetic Drive Pumps

Headquartered in Othello, Wash., with its biodiesel plant situated in nearby Creston, Columbia Bioenergy is the blossoming brainchild of two livestock farmers-Brad Lyons and John Graff. Neither Lyons, general manager, nor Graff, chief operating officer, really ever had the "dream" of building a biodiesel plant. They both stumbled into it during the first few months of 2005.
 

 "Both of us were in the feed business," Graff says. "Feed is built on proteins and part of our business was protein-based. (Lyons) has always had an interest in alternative energy and I needed a way to get rid of excess oil. We always knew biodiesel would play a part of it, we just thought someone else would be doing this part of the business plan. When others wouldn't or couldn't, it just kind of morphed and evolved into our own biodiesel production."
 
 Today, the two are not stumbling at all. In fact, they are just hitting their stride by constructing one of the first biodiesel plants in the northwestern United States. Columbia Bioenergy's plant sits in the growing biodiesel market of the Pacific Northwest, but boasts a healthy production volume of 8 MMgy to 10 MMgy of biodiesel. The company markets to the tri-state area of Washington, Oregon and Idaho, and could expand to its permitted capacity of 16 MMgy as the market catches up.
 
 Lyons and Graff said they spent a great deal of time trying to construct the most efficient and productive plant design possible. In fact, they slept on cots at the plant for many nights during the initial construction phases. Needless to say, they met their share of hurdles.
 
 "We started experimenting and trying new things along with doing the research," Lyons says. "(Graff's) background, and mine as well, is in farming. As a farmer, I've made a lot of my own equipment. Through the process of trial-and-error we set up a successful process. Each time we do a batch, we'd completely tear everything apart and then rearrange it, put it all back together and then do it again. So we probably had five or six different plant designs or flow systems."
 
 Once they were sure that their process would work and be efficient enough to profitably produce biodiesel, the two approached some investors so that the plant could reach the next stage of development. Along with Lyons and Graff, Columbia Bioenergy is owned by Bob Boersma, and Gary and Micah Trautman. Boersma and the Trautmans bring unique skill sets to the group. With a background in transportation, Boersma handles all of the company's transportation and logistics duties, while the Trautmans handle the company's finances and risk management.
 
 Properly Equipped
 Columbia Bioenergy has grown through hard work and dedication. However, Lyons and Graff admit that they experienced some early struggles, but eventually succeeded with a little help from some key people and the right equipment.
 
 "During that trial-and-error, one of the first obstacles we encountered was with pumps," Lyons says. "Biodiesel manufacturing is essentially a combination of pumps, tanks and pipes. Finding the right pumps was always a challenge."
 
 After trying several types of pumps for different applications throughout the production process, the two eventually turned to an expert. Portland, Ore.-based Northwest Pump & Equipment has been a leader in that region for petroleum-related service, so the crossover to biodiesel production-related service was somewhat of a natural move. At its Spokane, Wash., branch office, Rick Fuqua has been working with biodiesel systems for some time and is considered a resident expert in that area.

 
 "We've worked with Rick Fuqua at Northwest Pump from the beginning, trying to source and locate pumps and other components," Lyons says. "We'd call him for any little problem we had and he's truly been a great asset for us in perfecting our pumping systems."
 
 Within the facility, Columbia Bioenergy relies on Blackmer XL and ProVane pumps for its most important applications and, as Lyons and Graff point out, the Blackmer pumps have performed above expectations. Headquartered in Grand Rapids, Mich., Blackmer is a manufacturer of positive displacement sliding vane and centrifugal pump technologies that are used by many producers of biodiesel throughout the world.
 
 "We live and die by this Blackmer pump," Graff says. "One of the most difficult aspects in the production of biodiesel is the alcohol recovery. That's where we have Blackmer's pump in really what would be considered an unfavorable pumping environment. We tried other pumps for the alcohol recovery, but none stood up to the Blackmer ProVane's ability to perform under a vacuum and pressure."
 
 Lyons adds, "Actually, everything in here is an unfavorable pumping environment. These pumps have to operate against high suction, then on the other side it's got to have some pressure to it. You have to handle low pH and high pH ingredients and a solvent, and just to make it all more difficult, you have high temperatures, as well. So there are very few difficult applications that you would not see a Blackmer pump in around here."
 
 Columbia Bioenergy specs its pumps out for the correct elastomers so that the seals can properly contain biodiesel. Since this process has been in place, the company has not experienced any seal failures.
 
 "The pump is the heart of every biodiesel operation, so another key reason we use Blackmer pumps is that they are easy to maintain," Graff says. "If a Blackmer pump happens to go down it won't affect us that much. Due to its ability to remain connected to the piping while being serviced, it only takes about 15 minutes or so to replace the vanes in a Blackmer pump and get them back on line. However, I must point out that these pumps aren't in need of too much attention as opposed to other pumps we've used in the past." 
 
 Leading the way
 Columbia Bioenergy has ensured its product is exceeding industry standards. The company invested in a gas chromatograph in order to properly test its finished product. Results have shown that the total percent of glycerin (both free and bound) in its finished B100 is normally about 0.16 percent, even though approved B100 can have 0.24 percent.
 

 Columbia Bioenergy has been working hand-in-hand with its local Department of Ecology office for the state of Washington. Since the company developed one of the first plants in the area, the Department of Ecology office has been learning how to regulate Columbia Bioenergy.
 
 Columbia is not only pioneering its own biodiesel process, but also assisting with laying the groundwork for biodiesel regulations for the Northwestern United States.
 
 "Since we're the first plant around, we want to set the bar pretty high," noted Lyons. "We have zero emissions here at the plant. We not only have full recovery of our own alcohol, but we also process other people's byproducts that they can't deal with. It's actually a profit stream for us as well."
 
 Like many pioneers in the biodiesel industry, Columbia Bioenergy is looking forward to the day when the United States is less reliant on foreign oil.
 
 "We're excited about our role in lessening the supplies of traditional fuels," Graff says. "The ability to supply those finite resources is changing things and one of the biggest things it's changing is public policy. We have the ability to do more domestically than importing more with the technology available today. But from our standpoint, for every gallon of biodiesel we can make here, we can keep those dollars here and that's what's important to me."
 
 Darren Wight is a freelance writer based in Knoxville, Ill. For more information on Blackmer ProVane or XL pumps, contact Jim Becker at <a href="mailto:becker@blackmer.com">becker@blackmer.com</a> or (616) 475-9390.
 
 The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biodiesel Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

Lyons, left, and Graff stand in front of tanks, pipes and the yellow Blackmer ProVane motor speed vane pump.

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Graff, left, and Lyons review results of a gas chromatograph test.

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Graff, left, Fuqua, center, and Lyons stand in front of two of Columbia Bioenergy's holding tanks.

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A Northwest Development

Under the 1980 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, commonly known as Superfund), a party may be held liable for cleanup of hazardous substances at a property it owns or operates. Parties are sometimes liable even if they did not own or operate the property at the time contamination occurred. Because of the potential for liability, biodiesel developers need to perform some level of environmental due diligence before acquiring title.

 
 The U.S. EPA's All Appropriate Inquiry (AAI) rule1, which took effect in November 2006, contains a set of standards and guidelines that addresses the interplay between buyers' environmental due diligence and the ability to qualify for certain kinds of safe-harbor protection, such as the "innocent buyer" status. The rule also contains provisions for parties receiving EPA grants to conduct characterizations or assessments of former commercial and industrial properties.
 
 To qualify for certain CERCLA safe-harbor liability defenses and protections, prospective purchasers must complete Phase I site assessments (which evaluate environmental liabilities associated with property sales and purchases) in accordance with the AAI rule. In most instances, compared to the prior rule, the AAI rule broadens the site assessment's scope of inquiry. The following are some of the AAI requirements2 and their impacts on users of Phase I assessments.
 
 Environmental practices: Phase I assessments must be performed by qualified environmental professionals (EPs), who must hold a specified license and/or have a defined level of higher education and experience.
 
 Required activities: The EP must interview not only a property's current owner and occupants, but one or more of the past owners, occupants, tenants, operators, or current or past employees, as well as neighboring or nearby property owners or occupants. They must review historical sources of information dating to the first developed use of the property. The EPA must also review federal, state, tribal and local governmental records and environmental-cleanup liens against the property. The increased level of inquiry may give rise to issues of confidentiality for both the prospective buyer and the seller.

 
 Shelf life: Only reports prepared within the preceding 12 months meet AAI requirements. Certain aspects of the report, such as those involving records review, site visits, interviews and environmental liens (that are more than six months old) must be updated before report submittal.
 
 Written reports: The AAI requires Phase I results to be documented in a written report, which must be signed by the EP and include his or her qualifications and a statement that the all appropriate inquiries were conducted in accordance with the requirements of the final AAI rule.
 
 Time and cost: Phase I assessments that comply with the AAI generally take longer to complete and cost more than Phase I assessments under the previous rules. Because the increased cost is justifiable mainly when the purchaser expects to be able to qualify as an "innocent buyer" or for other safe harbor, buyers should weigh the benefit of this cost if safe harbor is not available. For example, in a recent transaction, an assessment revealed the former presence of a dry cleaner and a gas station near an available piece of property. If prepared in accordance with the AAI rule, the Phase I would have called for additional water sampling and monitoring. Because of significant time pressure, the client ultimately decided that paying for a reduced-standard-of-inquiry Phase I, plus environmental insurance, was more economical and much faster than undertaking the full review required by the AAI. It is expected that the AAI rule will result in more buyers undertaking this kind of analysis.
 
 Craig Kepler is a partner in the real estate practice group at Lindquist & Vennum PLLP, a leading provider of legal assistance on biofuels projects throughout the country. For more information visit <a href="http://www.lindquist.com" target="_blank">www.lindquist.com</a> or contact Kepler at (612) 371-3544.

 
 1. See Final Rule, 40 Code of Federal Regulations Part 312, Standards and Practices for All Appropriate Inquiries, 70 Federal Register 66069 (Nov. 1, 2005).
 
 2. See the EPA Web site at <a href="http://www.epa.gov/swerosps/bf/regneg.htm" target="_blank">www.epa.gov/swerosps/bf/regneg.htm</a> for additional information. The EPA summarized AAI rule requirements in the publication titled "Comparison of the Final All Appropriate Inquiries Standard and the ASTM E1527-00 Environmental Site Assessment Standard" (EPA-560-F-05-242, October 2005), available through the referenced Web site.

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Environmental Due Diligence: The 'All Appropriate Inquiry' Rule

For the past decade, I've been privileged to represent the National Biodiesel Board (NBB) as its petroleum liaison, conveying vital information of assistance to refiners, distributors, and pipeline and terminal operators anxious to understand how best to become involved in the emerging biodiesel industry. I recognized from the first day that no matter how green, renewable or attractive biodiesel was, petroleum organizations throughout the supply chain would be asking "what's in it for us," in much the same way as ordinary consumers.
 
 Biodiesel producers and marketers, and petroleum participants and organizations that support these collaborating industries, need to pause and reflect on how well-developed the biodiesel industry has become and how far it needs to go to become a truly viable business.
 
 Biodiesel has its own quality specification, ASTM D 6751, which is constantly monitored for improvement. The fuel has passed Tier I and II health effects testing, boasts robust production capacities, excited legislators nationwide to generate multiple bills encouraging biodiesel usage, and earned the attention of petroleum organizations. Does the petroleum industry still have reservations as to biodiesel's future? Of course, but through education they pursue the facts to resolve those concerns.
 
 After recognizing biodiesel's milestones, where is the industry and what will it take to truly get it on the map? To make biodiesel a long-term business opportunity, attention must be shifted to several critical issues including ensuring the fuel meets ASTM standards, access to a pricing benchmark to increase buyer and seller confidence, and a breakthrough transportation mode to optimize nationwide distribution costs.
 
 Petroleum organizations have additional areas of concern including a potential extension of the biodiesel blenders credit, the impact of renewable diesel, the complexities of the Renewable Identification Number tracking system, pump labeling and how best to conform with the demands of the renewable fuel standard. Amidst the noise of the petroleum grapevine, which often transfers recycled information, exists a silver lining-the facts. However, one must ask for assistance to secure the correct information.
 

 The NBB has a clear vision for the national petroleum landscape and has created programs directed toward each element of the supply chain. Through grassroots educational seminars, webinars and panel participation at national conferences, the NBB has made educational material widely available for interested parties.
 
 Try testing your biodiesel acumen by answering the "million dollar" question. According to the NBB, there are 165 plants nationwide with a production capacity of 1.85 billion gallons, and another 80 plants under development with a capacity of 1.38 billion gallons. With 245 plants touting a production capacity of 3.23 billion gallons to meet a projected 300 million to 400 million gallons of demand, where has all the biodiesel gone? Why is it not readily available everywhere? Why isn't it in your neighboring terminal or local fuel depot?
 
 Before taking that next step into the exciting world of biodiesel, begin with the power of knowledge, which is clearly the most potent tool a petroleum organization has in its arsenal. Building an industry from the inside out starts with an informed you. For more information on NBB's petroleum outreach program, contact the the NBB at (800) 841-5849 or <a href="http://www.biodiesel.org" target="_blank">www.biodiesel.org</a>.
 
 Paul Nazzaro is president of Advanced Fuel Solutions Inc., which has served as the NBB's petroleum liaison since 1996. He is responsible for developing and implementing a far-reaching communications program that conveys biodiesel information to refiners, distributors, and pipeline and terminal operators. Reach Nazzaro at <a href="mailto:paulsr@fuelsolution.com">paulsr@fuelsolution.com</a> or (978) 664-5923.

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Building a sustainable biodiesel industry

Talking Point

Web exclusive posted Nov. 5, 2007, at 12:42 p.m. CST
 
 Biodiesel and America's energy security will be in the spotlight Tuesday as presidential candidates John McCain and Hillary Clinton stump for votes at facilities of the Renewable Energy Group in Iowa. McCain will be present for the ribbon cutting at REG's new 60,000 sq. ft. headquarters at 416 S Bell Ave. in Ames at 8:30 a.m. At 11 a.m., Clinton will tour the Central Iowa Energy, LLC., in Newton. REG manages the 30 MMgy biodiesel production plant. Clinton will speak on issues of the country's energy security following the tour.

Biodiesel a stop on campaign trails

News release posted Nov. 5, 2007, at 4:02 p.m. CST

 
 Des Moines – Today, renewable fuels leaders from across Iowa called on US Senators Tom Harkin, Chuck Grassley and all presidential candidates in the US Senate to support expansion of the Farm Credit System's lending authority to expand their ability to lend to ethanol and biodiesel plants across the state. 
 
 The text of the letter is below:
 
 "The renewable fuels industry understands the struggles and the difficulties of expanding this industry and maintaining its profitability through changing economic times. The current economic environment is challenging to say the least. The rising input cost and increasing commoditization of ethanol and biodiesel create increasingly smaller margins for the industry. With these facts in mind we ask that you consider supporting Georgia Senator Saxby Chambliss's amendment to the Farm Bill that will expand Farm Credit's lending authority to renewable fuels facilities. 
 
 Farm Credit has been operating for over 90 years in the area of agricultural lending. They understand the challenges and variables in agriculture. Because of that experience, Farm Credit has the ability and capacity to construct loans that account for the variables in the industry. Furthermore, as the size and cost of construction for new plants continues to rise, lenders that are able to take a leadership role in providing financing become fewer and fewer. Farm Credit's experience and ability to structure credit that meets the industry's needs makes them a competitive source of financing to which we need continued access. 
 
 Under current regulations, in order for Farm Credit to lend to a start-up ethanol or bio-diesel plant, 50% of the plant must be farmer owned. This requirement was reasonable in the early days of the renewable fuels industry when 25 and 30 million gallon plants were being built. Today, however, the industry standard for ethanol plants is 120 million gallons at a cost of approximately $200 million per plant making it impossible to achieve 50% farmer ownership. This trend is also evident in biodiesel plant construction. Thus, the industry could potentially lose an important financing option. 
 
 The rise of the ethanol and biodiesel industries in Iowa has had a significant, positive impact on farmers and rural communities in Iowa. As our country looks to decrease its dependence on foreign sources of energy, the ethanol and biodiesel industry have a tremendous role to play. 
 
 We ask that you please support this change to the Farm Credit System. We strongly believe it is important for Iowa farmers and the renewable fuel industry.
 
 Thank you for your consideration."

Renewable Fuels Industry Leaders Call for Expansion of Farm Credit Lending Authority

Web exclusive posted Nov. 7, 2007, at 4:35 p.m. CST

 
 Renewable Energy Group Inc. (REG) was host to a pair of presidential hopefuls Tuesday as John McCain and Hillary Clinton stumped for votes in Iowa.
 
 McCain attended the ribbon cutting for REG's new headquarters in Ames. McCain joined company and economic development officials for the official opening of 60,000 sq. ft. facility. "Biodiesel spurs economic development in local communities, reduces emissions, creates a source of renewable energy and reduces our dependence on foreign oil," explains REG CEO and Chairman Jeff Stroburg. "We are proud to have Senators McCain and Clinton join us for this historic day, and to help educate America about the advantages of our nation's rapidly expanding biodiesel industry."
 
 McCain spoke Monday at a "Growing the Bioeconomy" conference at Iowa State University where he reaffirmed his opposition of subsidies for renewable fuels. He said his administration would pursue market based strategies for promoting biofuels using carbon emission credits. "This approach will build the business case for alternatives to oil such as ethanol," McCain said. "It will promote the conservation and diversification of energy to include alcohol fuels made from corn, sugar, switchgrass and many other sources; fuel cells; biodiesel derived from waste products; natural gas; and other technologies. These are all promising and available alternatives to oil, and I'll encourage the development of infrastructure and the market growth necessary for these products to compete, and let consumers choose the winners. I've never known an American entrepreneur worthy of the name who wouldn't rather compete for sales than subsidies. I have great faith that many residents of this great state share that same confidence in our unmatched ability to compete anywhere with anyone."
 
 Clinton toured Central Iowa Energy LLC, a 30 MMgy biodiesel production facility managed by REG in Newton. The facility employs 28 people, two thirds of which were formerly employed at Maytag appliance production plant that recently closed. "Senator Clinton and I just finished touring the state-of-the-art plant you saw on your way in today," Stroburg said in his introduction of the Senator. "This plant represents the investment of more than 500 Iowans who, like me, believe in the future of biodiesel. Renewable Energy Group, Inc. is proud to partner with Central Iowa Energy to create high quality biodiesel and high quality jobs right here in central Iowa. Senator, you've been a strong advocate for biodiesel and renewable energy and we thank you for your commitment."
 
 Clinton outlined her biofuels agenda, stating her desire to see production of corn ethanol, cellulosic ethanol, biodiesel and other biofuels increase to 36 billion gallons by 2022 and 60 billion gallons by 2030. Her plan combines tax incentives, research, infrastructure investments and incentives for farmers to grow energy crops to reach these ambitious goals. "Our nation's dependence on foreign oil places our economy at risk, our security in jeopardy, and our planet in peril," Clinton said. "But I believe we can transform the way we use and produce energy - and create at least 5 million jobs in new green industries. Renewables like biodiesel can be the fuel for a brighter future. And when I'm president, they'll also fuel a 21st century green economy that helps us end our dependence on foreign oil and begin addressing the climate crisis. It's time for America to retake our title as the innovation nation and to launch a green energy revolution."

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REG plays host to presidential candidates

Web exclusive posted Nov. 15, 2007, at 12:56 p.m. CST
 
 Wellington Financial LP, a privately held specialty finance firm, assisted in the closing of $14 million in debt financing for BIOX Corp., Canada's largest multi-feedstock producer of biodiesel fuel. Participants in the financing deal included VenturaLink LP and other existing BIOX investors. Goodmans LLP and McCarthy Tetrault LLP provided legal advice for this transaction.
 
 "BIOX is a tremendous Canadian technology company with the opportunity to exploit its capacity to convert a broad range of feedstock from around the world," said Jim Whitaker, managing partner at VentureLink.
 

 Headquartered in Oakville, Ontario, BIOX is the owner of the patented BIOX Process, originally developed by Dr. David Boocock at the University of Toronto. The proprietary process converts a wide variety of inputs for biodiesel production. BIOX currently owns and operates a 60 MMgy biodiesel facility in Hamilton, Ontario where animal fats are used as the primary feedstock.
 
 "BIOX's patented process positions it to be the low-cost producer of biodiesel in the market," said Mark McQueen, president and CEO at Wellington Financial. Wellington Financial has led more than $115 million of transactions, making it the most active fund of its kind in Canada. "We are excited to be partnering with BIOX by providing them the true growth capital that will enable them to bring production levels at their existing facility up to full capacity and help pave the way to the next step of significant expansion."
 
 BIOX has also expressed interest in expanding to other attractive markets based on factors such as the recent federal regulation requiring a blend of 2 percent renewable fuel content in all diesel fuel sold in Canada by no later than 2012.
 
 On the Web
 <a href="http://www.bioxcorp.com" target="_blank">www.bioxcorp.com</a>

Canada's BIOX Corp. receives $14 million in financing

Web exclusive posted Nov. 20, 2007, at 10:46 a.m. CST
 
 Omaha, Neb.-based Ag Processing Inc. (AGP), a farmer-owned cooperative engaged in the procurement, processing, marketing and transportation of grains and grain products, has declined another takeover attempt by Ag Processors Alliance LLC (APA), a company formed exclusively for the capture of AGP. This was not the first time AGP's board of directors has encountered such an unsolicited offer by APA. In August, the board unanimously rejected APA's first letter of intent to take over AGP.
 
 "AGP's Board of Directors and management staff maintain a constant and open dialogue with member-owners and there has been no interest expressed in selling the company," said Brad Davis, president and chairman of the AGP board of directors. "AGP continually reinvests in our core business and our members have expressed support for the strategic direction of their cooperative. This hostile attempt is not in the best interest of AGP, our cooperative members or their business operations either today or in the future. After review, the unsolicited bid was soundly rejected by the AGP board of directors and we do not intend to have any discussions with this newly-formed group."
 
 AGP is the world's largest cooperative soybean processor and a leading vegetable oil refiner in the United States. AGP is owned by local Midwestern and regional cooperatives representing farmers from 16 states throughout the nation.

 
 On the Web
 <a href=http://www.agp.com" target="_blank">www.agp.com</a>

November 2007

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Business Briefs

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