A new film about the planet's dwindling oil resources has been released, and although I haven't seen it, a recent article about the documentary, "A Crude Awakening: The Oil Crash," impelled me to think about the role of biodiesel in the speculative context of peak-oil-induced global upheaval.
 
 The 90-minute film tells the hypothetical story of how our civilization's addiction to oil has put the human race on a collision course with geology. The makers of the documentary ultimately come to the "startling, but logical" conclusion that "our industrial society, built on cheap and readily available oil, must be completely reimagined and overhauled." Their premise is that the world's viably retrievable oil supplies have peaked-or will soon-and the consequences will be cataclysmic. The film shows "stark images of rusting Texan and Venezuelan wells, and fuel riots in Asia and Africa," reports the U.K. news source Guardian Unlimited. "Such scenes will be repeated thousands of times around the planet in the near future, argue the film's makers, who say the world is facing changes 'more frightening than a horror movie.'"
 
 The Guardian article says the film supposes that as oil prices soar and production falters, the world will hurtle into a future of intense battles over dwindling oil supplies. "All across Asia, particularly in India and Bangladesh, farmers use diesel generators to pump water in and out of their fields," said David Strahan, author of The Last Oil Shock, in the article. "If oil prices soar, they will not be able to afford to irrigate their crops. The result could be starvation and food riots."

 
 That bleak future stands in contrast to one in which biodiesel plays an increasingly important role globally, not just as a transportation fuel but in important stationary power applications as critical as powering irrigation pumps or as discretionary as providing residual electricity at rock festivals. What's more, biodiesel can be used in distributed power and large-scale electricity generation applications. In fact, that will soon happen in Hawaii, a state that's almost totally reliant on imported oil for transportation fuels and electricity generation. Hawaiians, like some Indian farmers who depend on diesel for power, are weary from decades of utter petroleum dependency, and they're ready for change. In October, Hawaiian Electric Co., which along with its subsidiaries provides electricity to 95 percent of Hawaii's 1.2 million residents, filed an application with the Hawaii Public Utilities Commission for approval of a biodiesel supply contract for its new 110-megawatt power plant. The plant will require 5 million to 12 million gallons of locally produced biodiesel per year-not enough to significantly impact the biodiesel industry, but a significant step toward helping Hawaii to reduce its dependence on petroleum and achieve a more sustainable and self-sufficient energy future.
 
 These unheralded, incremental transitions from imported petroleum to domestic biofuels are precisely the sort of "overhauls" that the makers of "A Crude Awakening" say are necessary to prevent the outcome depicted in their film. While the threat is hypothetical, the solutions aren't. Again and again, biodiesel is part of the solution.
 
 Tom Bryan
 Editorial Director
 <a href="mailto:tbryan@bbibiofuels.com">tbryan@bbibiofuels.com</a>

Power Generation: A Small, Critical Role for Biodiesel

Editor's Note

ABS Biodiesel was given the go-ahead by the Bristol City planning department to build a biodiesel plant in southwest England, close to major oil terminals and refineries. The company will be investing over £21 million (US$43 million) in the new 24,500-square-foot facility, which will cover three acres of undeveloped land at Bristol Port. The company said the facility will be the U.K.'s largest biodiesel plant with a capacity of 225,000 tons (67 million gallons) per year and the capability of doubling that in the future. The first and second years of capacity are already sold. Construction is slated to begin before the end of the year.

U.K.'s largest biodiesel plant moves forward

Benefuel Inc. and Seymour Biofuels LLC are planning to build a 10 MMgy biodiesel plant in Seymour, Ind. The plant will showcase Benfuel's solid acid catalyst, which was developed at the National Chemical Laboratory in Pune, India. It can process cheaper feedstocks that are high in impurities, or free fatty acids, with no pretreatment or water wash. "The FFAs get converted directly into methyl esters, so it's a very efficient and compact refining process," said Benefuel CEO Rob Tripp. The groundbreaking was expected to occur in the near future, the chief executive officer said, and start-up is expected by late summer or early fall of 2008.

Benefuel, Seymour to demonstrate solid catalyst

Starting Dec. 1, Sprague Energy, a New England-based energy supplier, began issuing prices and invoicing purchased product in net temperature-adjusted gallons, rather than in gross gallons. In a letter to customers, the company explained that since petroleum products expand with heating and contract with cooling, this pricing method-prescribed by the American Petroleum Institute-is the only fair way to accurately compare prices and volumes among suppliers. The new billing structure will only take effect at terminals with the proper equipment for measuring the temperature of each load going to the rack.

Sprague changes Bioheat billing structure

UPS is adding biodiesel to its 1,600-plus vehicle "green fleet," which the company said is the largest fleet of alternatively fueled vehicles in the world. The company's biodiesel initiative will be launched with the support of a $515,000 federal grant. The funds will be used to enhance infrastructure in order to supply a 5 percent biodiesel blend to 366 ground support vehicles at the company's Louisville, Ky., airport hub, starting in 2008. The company's green fleet also uses propane and natural gas, and includes electric and hybrid electric vehicles. The UPS green fleet has logged more than 126 million miles since 2000.

UPS to add biodiesel to alternative fuel fleet

Evonik Industries AG, owner of Degussa, a specialty chemical company, announced it will build a large catalyst (sodium methylate) production facility at Evonik's industrial site in Mobile, Ala., which is expected to come on line in early 2009. The biodiesel catalyst produced at the facility will serve North American biodiesel customers. A second facility is also scheduled for production in 2010 and will be built in Brazil to serve South America.

Evonik to expand catalyst capacity

The European Biodiesel Board has threatened to file complaints to the European Commission and the World Trade Organization against the U.S. government, accusing it of illegally subsidizing U.S. biodiesel and "dumping" the product in Europe. The EBB said the subsidies-the 54-cent blender credit, in particular-are threatening the viability of the European biodiesel industry. "This competition [from B99 blends] is price-setting and is progressively disrupting the margins of European biodiesel producers," the EBB said. The board estimated that the United States could export 1 million metric tons of biodiesel to the European Union in 2007, compared with 90,000 metric tons in 2006.

EBB threatens legal action against United States

In October, PerkinElmer unveiled EcoAnalytix, a problem-solving initiative that addresses food safety, water quality and biofuels development. The biofuels platform will provide laboratories with biodiesel testing solutions, such as biodiesel gas chromatography turnkey systems, which can make sure that free and total glycerin in pure biodiesel and B2 through B20 blends adheres to ASTM D 6584 and European CEN EN 14105 specs. The platform also offers Labworks Green, a pre-configured lab management and reporting application that manages work, captures lab data and generates certificates of analysis for production plants. PerkinElmer also announced the establishment of four global application development centers in Shelton, Conn.; Seer Green, England; Shanghai, China; and Mumbai, India.

PerkinElmer launches initiative

Renewable Energy Group Inc. hosted a pair of presidential hopefuls Nov. 6 as U.S. Sens. John McCain, R-Ariz., and Hillary Clinton, D-N.Y., stumped for votes in Iowa.
 McCain attended the ribbon cutting for REG's new 60,000-square-foot headquarters in Ames. "Biodiesel spurs economic development in local communities, reduces emissions, creates a source of renewable energy and reduces our dependence on foreign oil," said REG CEO and Chairman Jeff Stroburg. "We are proud to have Senator McCain … join us for this historic day, and help educate America about the advantages of our nation's rapidly expanding biodiesel industry."
 
 Also while in Ames, McCain spoke at the 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 whom were formerly employed at a Maytag appliance production plant that recently closed. "This plant represents the investment of more than 500 Iowans who, like me, believe in the future of biodiesel," Stroburg said at the event. "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-based 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. "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. It's time for America to retake our title as the innovation nation and to launch a green energy revolution."

Sens. McCain and Clinton toured two separate REG facilities in Iowa in October.

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Presidential candidates visit biodiesel company

Bearing the name Bio Jet I, a 39-year-old jet manufactured in Czechoslovakia climbed 17,000 feet over Reno, Nev., in early October fueled on B100. The test of the L-29 military aircraft is the first known flight by a biodiesel-fueled jet.
 

 The test was conducted by Green Flight International, a promotion and marketing organization founded by Doug Rodante in 2006 to promote the adoption of environmentally friendly fuels in aviation. "It is a company based on my personal concern for the environment," Rodante said. "The goal of the company is to reduce the amount of carbon and [nitrogen oxide] emissions, and the biodiesel industry is something that does that. I know there are a lot of people out there trying to do these things, but I really feel it needs to be done a little faster with a little more urgency. That's why I think our example with the Bio Jet made a pretty fair impact so far."
 
 The L-29 military trainer was chosen because it was originally designed to operate on a variety of fuels, including petroleum diesel. Rodante said the plane's design included a fuel tank in the fuselage rather than in the wings and a fuel warmer, which helped prevent fuel gelling. Rodante and Carol Sugars piloted the craft first on jet fuel and then on gradually increasing biodiesel blends. He said there was no change in aircraft performance when using B100. "The aircraft we fly is built for the fuel instead of the fuel being modified for the aircraft," he said. "The motor we are using in the L-29 is a pretty tough engine. You can put just about anything in it, and it will run as long as the systems will support it."
 
 The next challenge for Bio Jet I will be a transcontinental flight at the end of November. The plane will fly from California to Florida, but since the plane only holds 90 minutes worth of fuel, the flight will be broken up into one-hour, 300-mile segments. Biodiesel Solutions Inc. in Sparks, Nev., will supply canola-based biodiesel at airports along the jet's route. Biodiesel Solutions also provided the biodiesel made from recycled vegetable oil used in the test flight.
 
 Rodante said the Federal Aviation Administration office in Reno helped to certify the plane for the flight. "They did require that we test some of the rubber components and are still working with us on this," he said.
 
 In 2008, Rodante plans to modify a Lear jet to run on biodiesel and make the first round-the-world flight powered by biofuels.

First flight for biodiesel

U.K.-based D1 Oils plc and Netherlands-based Keygene NV are collaborating on molecular genetics research of Jatropha curcas. Keygene's genetic fingerprinting technology is highly suitable for undertaking molecular work on a new crop because no prior genetic sequence information is required, said Henk Joos, D1 Oils plant science and agronomy director. D1 Oils has developed a modular 3 MMgy biodiesel processing unit and has 500,000 acres of jatropha planted in India, Southeast Asia and Africa.

D1 Oils, Keygene collaborate on jatropha project

Although Hawaii has encouraged renewable fuels for some time, recent reports of two new efforts are welcome. In announcing a grant award for jatropha in Hawaii, U.S. Sen. Daniel Akaka, D-Hawaii, said the state's electricity rate is more than three times the national average at 41.04 cents per kilowatt-hour. Current fuel prices are approximately $3.20 per gallon of gas and $3.50 per gallon of diesel.
 
 Early in October, Akaka's office announced that the Hawaiian County Economic Opportunity Council received a $677,000 grant to develop a business for cloning and mass cultivating jatropha seedlings, an oil-bearing feedstock for biodiesel production. The grant was awarded under the Community Economic Development Program administered by the Office of Community Services within the U.S. Department of Health and Human Services. The grant's goal is to create jobs for about 70 people in an area where the state's unemployment is highest, and produce 3 million jatropha seedlings within three years. George Yokoyama, director of the council, said it will be utilizing a tissue culture lab that has previously worked on orchids, green tea, vanilla and bamboo. "We want to come up with superior plants with more oil content," he said. Jatropha seedlings will be sold to growers and companies interested in starting jatropha plantations.
 
 Also in October, Hawaiian Electric Company Inc. filed an application with the Hawaii Public Utilities Commission for a biodiesel supply contract for its new 110-megawatt Campbell Industrial Park generating station, scheduled to open in 2009. HECO awarded an exclusive contract to Seattle-based Imperium Renewables Inc. to supply between 5 million and 12 million gallons of biodiesel per year through 2011. Terms of the deal weren't disclosed, although it does call for Imperium to give preference to locally grown feedstocks.
 
 Imperium, which opened a 100 MMgy biodiesel plant in Gray's Harbor, Wash., is in the permitting phase for a similarly sized plant on the island of Oahu, Hawaii. The company is working with local groups to determine the best feedstock in the state. Until that is determined, Imperium has pledged to import feedstocks that meet the standards established by HECO and the Natural Resources Defense Council.

Hawaii was awarded a $677,000 grant to spur jatropha development for biodiesel production.

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Biodiesel projects proceed in Hawaii

Methanol industry leaders met in Toronto to discuss the changing market for the volatile liquid in October. In its fifth year, the Methanol Forum, hosted by the Methanol Institute and Jim Jordan & Associates, focused on balance in a changing methanol world. About 140 attendees from Europe, Asia and the Americas discussed issues such as the booming Asian methanol market, methanol production from coal and biomass, and the growing role of methanol as a transportation and power generation fuel.
 
 Greg Dolan, vice president of the Methanol Institute, told Biodiesel Magazine that the methanol industry is seeing a lot of changes. "We're seeing the advent of mega methanol plants (5,000 tons per day) and the impact they're having," he said. "We're also seeing a real shift in the global market." The conference also discussed new and emerging markets for methanol, including biodiesel, an important emerging market for the methanol market, Dolan said. "We're hopeful that a lot of the demand loss from MTBE leaving the U.S. market can be made up in biodiesel production," he said. However, he said there's been some disappointment in methanol demand from biodiesel producers, which he attributed to the large gap between biodiesel production capacity and actual production. The European biodiesel industry has also seen some setbacks due to regulation changes.
 
 Biodiesel producers looking to make more renewable fuel might be interested in new methanol production methods. At the forum, Rich Mount of North Shore Energy Technologies said the same technology currently used to gasify coal into methanol can be used to gasify wood into methanol, as well. Dolan said the technology is projected to yield 165 gallons of "biomethanol" from one ton of wood compared with cellulosic ethanol technologies, which are projected to yield 60 gallons of biomass per ton. There is a lot of interest in commercializing this technology, Dolan said.
 
 The greatest shift in the market happened in China. This year, it became the largest producer and consumer of methanol. Indeed, the country is rapidly building its production capacity, according to a presentation by Mark Berggren, managing director of Methanol Market Services Asia. China produces methanol through coal gasification for several markets, including formaldehyde and acidic acid. Methanol is also an important transportation fuel. This year, China is predicted to use 1 billion gallons of methanol directly blended into gasoline, according to Dolan. Blend levels include M15, M85 and M100. "China's national development and reform commission has determined that coal-based [fuel] should be considered a strategic transportation fuel," Dolan said. "[The country is] now developing national fuel standards that would promote methanol fuel blending." He added that China is developing broader domestic markets for the fuel. Otherwise, it may start exporting coal-based methanol.

2007 Methanol Forum discusses changing markets

Rothsay Biodiesel, a 9 MMgy biodiesel plant in Montreal, Quebec, installed a distillation and evaporation system this fall for better purification of its animal-fat-derived biodiesel. "We added the system really to lower any problems with sulfur and to clean up our biodiesel to make it a water-clear product," said Alan Rickard, Rothsay Biodiesel spokesman. "We've always met [quality] specifications, but what this added was a degree of certainty around ratability for the product."

 
 Rickard told Biodiesel Magazine that the modification was conceived in early 2007 and installation of the columns began in June, followed by operations in September. He said he couldn't reveal which company provided the new setup because of confidentiality agreements, nor could he disclose the cost of the upgrade.
 
 A separate and ongoing process modification to Rothsay Biodiesel includes the more rigorous pretreatment of its feedstock. Rothsay Biodiesel is a division of renderer Rothsay, owned by Maple Leaf Foods. It uses rendered animal fats for transesterification into biodiesel. Rendered fats and greases have higher percentages of free fatty acids, which must go through an esterification process prior to conversion to reduce soap production. "It's been an ongoing process on the front-end modifications," Rickard said. "It's not as definitive as the [distillation and evaporation project], where we just built something on. We changed our actual process slightly, so we now do a pretreatment for the raw materials before they go into the system."

Rothsay Biodiesel adds D&E system

Tacoma, Wash.-based Sound Refining Inc. held a grand opening for its first in-line ratio biodiesel blending terminal in the Puget Sound region in September. The station has been operational since April, automatically mixing ultra-low sulfur diesel and soy-based biodiesel with petroleum diesel in different blend ratios, according to Sound Refining spokeswoman Bet Simpson. The terminal features a touch screen for blend requests, dye or undyed options, mechanized heating, and filtering capabilities, according to Simpson. The terminal currently has 85,000 barrels of BQ-9000 spec biodiesel available and intends to double capacity by next year. "We want to be the hub for biodiesel blending in the Northwest," Simpson said. "It allows us to introduce people to biodiesel who may not have expressed interest in it before."
 
 In Florida, Jacksonville-based Gate Biofuels LLC, a subsidiary of Gate Petroleum, intends to build a 1.3 million-barrel multi-biofuel blending terminal there. It would be the first of its kind in the state. The rack-loaded biofuel blending station would supply B2 and B20 blends. Initial permitting tasks are underway. Construction is expected to begin in October 2008 with operation starting by August 2010, according to Gate Biofuels President R.B. "Buzz" Hoover. The terminal "would be capable of receiving and shipping ethanol and biodiesel via rail, water and truck," he said.
 
 Approximately 500,000 of the 1.3 million barrels are allotted for general storage, including a 25,000-barrel tank for biodiesel and a 50,000-barrel tank for ethanol. The remaining 800,000 barrels are planned for additional storage by third parties. Once the terminal is operational, the company plans to exclusively offer B10 and E20 at its 44 Jacksonville retail stations, Hoover said.

Biodiesel blending capacity increases

Central Carolina Community College, which has campuses in three North Carolina counties, will become the first school in the state to offer a biofuels associate degree program.
 
 The two-year program, called "Alternative Energy Technology: Biofuels," along with related certificate programs, will start educating and training a future biofuels workforce in the fall of 2008. The school will work closely with the biofuels industry and the newly formed North Carolina Biofuels Center to determine workforce training needs, according to Andrew McMahan, CCCC biofuels coordinator. "Biofuels degree graduates will qualify for numerous positions in the industry," he said. "Employment opportunities include, but are not limited to, plant technician, plant manager, lab technician, sales manager, process coordinator or business owner."
 
 The college's Chatham County campus in Pittsboro has offered biofuels classes since 2002. Rachel Burton, a graduate of the school's sustainable agriculture and automotive mechanics programs, was the first to propose teaching a biofuels class.
 
 In early October, the North Carolina State Board of Community Colleges awarded CCCC with two BioNetwork Fund grants totaling more than $140,000, which will be used to expand biofuels courses for the degree program, as well as noncurricular biofuels education for the public.

 
 For more information, contact McMahan at (919) 542-6495, ext. 214 or <a href="mailto:amcmahan@cccc.edu">amcmahan@cccc.edu</a>.

CCCC starts biofuels program

A new study ranks the nations that are best positioned to become leading biodiesel producers. Many of the countries already well-established in the industry, such as the United States and Brazil, are among the top 10. Interestingly, Malaysia, Thailand, Colombia, Uruguay and Ghana emerged as the leading developing nations most likely to attract biodiesel investment. These countries currently export large amounts of vegetable oil for profit, and are relatively stable, safe and debt-free.
 
 "This study, while by no means exhaustive, serves to highlight the untapped opportunities present in many developing countries," wrote the study authors Matt Johnston and Tracey Holloway of the University of Wisconsin in Madison. The study, titled "A Global Comparison of National Biodiesel Production Potentials," was published in a recent issue of Environmental Science and Technology.
 
 The raw data for the study was drawn from publicly available, online sources. The researchers limited the analysis to large-volume commodity oil and fat feedstocks, and calculated the total biodiesel production potential for each feedstock and country. In addition, they estimated the production cost for the fuel. By comparing those values to a baseline price for imported biodiesel, a country's new potential profit from biodiesel processing was determined. From that, the countries with the best combination of high-volume potential and low production cost were identified and ranked.
 
 "We're not saying, 'There's all this potential out there. Go get it,'" Johnston said. "Instead, we're looking at which vegetable oil feedstocks are most likely to be affected and which countries will most likely be doing this at a large scale. That way, we can anticipate some of the impacts, as opposed to having to react after the fact."
 
 Johnston and Holloway expect the study to be useful for national governments and international organizations involved in energy planning and decision-making.
 
 Top 10 Biodiesel Production Potential Countries
 1. Malaysia
 2. Indonesia

 3. Argentina
 4. United States
 5. Brazil
 6. Netherlands
 7. Germany
 8. Philippines
 9. Belgium
 10. Spain
 Source: "A Global Comparison of National Biodiesel Production Potential," University of Wisconsin in Madison

Researchers rank developing nations for biodiesel production potential

Growing up as a child of the '70s, I heard songs about truckers-especially Jerry Reed's "East-Bound and Down," which portrays a long-haul run that faces almost impossible odds-that still inspire me. Each year, the biodiesel industry faces new and distinct challenges that seem to give us almost impossible odds. 2007 was no exception. Present and forecasted demand for biodiesel has contributed in part to high feedstock prices, a pain felt by nearly every biodiesel producer.
 
 High feedstock price is something we all saw coming. In fact, at February's National Biodiesel Conference and Expo, I gave a stark speech outlining the challenges that our industry faces. Since the conference was in San Antonio, I compared it to the seemingly impossible task of defending the Alamo. I noted that our industry was overheating and struggling financially with feedstock prices, and that market trends indicated it might not get better. Indeed, that is what happened.
 
 The National Biodiesel Board recognizes that despite all the growth we've seen, these are difficult times for biodiesel producers. We wish that every year would be prosperous for all companies. As your national trade association, we are doing everything in our power to build a solid axle for the viability of the industry over the long haul. We continue to build that axle by creating strong policy, overcoming technical barriers and increasing education.
 
 On the feedstock front, while there is little a trade association can legally do to affect prices, we can lay groundwork to help mitigate the suffering felt by biodiesel producers. We're doing that in the near term through achieving our state and federal public policy agenda, which is directly funded by NBB biodiesel producer dues. We're also taking a longer-term approach through our feedstock development program. We've implemented a three-year, $1.4 million program to:
 

 › Conduct a comprehensive review of biodiesel feedstocks and identify barriers to growth
 › Complete a research program at the Danforth Plant Science Institute to increase oil content of oilseeds
 › Provide seed money for the Center for Evergreen Energy, a biofuel think tank to advocate investment in feedstock development.
 
 An ever-changing industry needs a flexible trade association. That's why, in 2007, NBB adopted a new board structure to help ensure our ability to speak with one voice. The new structure streamlines and clarifies NBB's membership categories, guarantees more biodiesel producers seats on the governing board and envisions an increasing proportion of biodiesel producer-leaders over time. This year, our elected leaders also gathered to plan for the future. The executive committee reviewed and updated the organization's strategic plan, which provides strong direction to the staff regarding project areas. This strategic plan is a living, breathing document which evolves from the organization's mission and vision statements.
 
 Despite the roadblocks the industry faces, 2007 brought major achievements culminating from years of hard work. These accomplishments will help make biodiesel more economically viable. The NBB is proud to represent this industry and lead the positive changes that we've seen in 2007.
 
 To borrow some inspiration from Jerry Reed, "We're gonna do what they say can't be done, we've got a long way to go and a short time to get there, We're east bound, just watch ol' 'biodiesel' run."
 
 Joe Jobe
 NBB CEO

East-bound and down: load it up and truck it

NBB In Sight

In late October, the U.S. Senate Committee on Agriculture, Nutrition and Forestry approved the Food and Energy Security Act, which is the committee's version of the 2007 Farm Bill. In addition to continuing farm income protection, conservation, nutrition and rural development, the program makes investments in the future of renewable energy. The bill must now be considered by the full Senate, and was scheduled for the floor of the Senate as early as the last week of October.
 
 The energy title of the Farm Bill includes the Bioenergy Program for Advanced Biofuels, which generally continues the Commodity Credit Corp.'s Bioenergy Program. The Senate version of the program includes a handful of limits that will make it difficult for biodiesel producers to use. First, the program has been limited to $245 million for the duration of the Farm Bill. Secondly, the program is limited to new production, which means current production would likely not qualify. Finally, the program is being offset against the "small agri-biodiesel production tax credit," which allows small agri-biodiesel producers producing less than 60 MMgy to claim up to $1.5 million in income tax credit on the first 15 million gallons of production each year. The National Biodiesel Board is working with the Senate committee to improve the program.
 
 Additionally, the energy title continues the Biodiesel Education Program, which is funded at $2 million per year. The Biodiesel Education Program was originally established as part of 2002 Farm Bill and provides educational funding to support increased fuel quality measures. The program also assists the USDA and NBB in developing the acceptance of biodiesel by engine and equipment manufacturers, petroleum partners, users and the general public. For example, a recent survey done to benchmark the program's progress showed that the public's awareness of biodiesel rose from 27 percent in August 2004 to 45 percent in December 2006.
 

 As Congress continues to consider the Farm Bill, the NBB will continue working to reauthorize the CCC Bioenergy Program and modify the program's structure so that it provides maximum benefits to help biodiesel producers offset feedstock costs. Specifically, NBB will continue to advocate a program that provides support for all gallons of production, is financed by mandatory funding, and does not require biodiesel producers to choose between tax incentives and the CCC Bioenergy Program.
 
 Last, when the full Senate considers the Farm Bill, it is anticipated that the tax bill crafted by the Senate Finance Committee for consideration in tandem with the Farm Bill, the Heartland, Habitat, Harvest and Horticulture Act of 2007, will be incorporated into the Farm Bill. The 4-H Act contains a host of provisions that are of importance to the biodiesel industry, including an extension of the $1 per gallon biodiesel tax incentive through 2010.
 
 Key members of the House of Representatives and the Senate continue to work behind the scenes on an informal "energy conference." Both the House and the Senate have passed their respective versions of energy legislation, which at some point will need to be combined into one energy bill. Speaker of the House Nancy Pelosi, D-Calif., has agreed to work with Senate Majority Leader Harry Reid, D-Nev., on an informal process designed to reconcile the differences between the House and Senate energy bills and ultimately yield a single product that can be considered by both chambers and forwarded to the White House.
 
 The effort to expand the renewable fuels standard will be discussed as part of this process. NBB believes that an expanded RFS must have a renewable requirement as part of the diesel pool, and the NBB is working to include language similar to the Biodiesel Promotion and Quality Assurance Act of 2007, which was introduced as S. 1616 in the Senate and H.R. 3781 in the House of Representatives.
 
 Keystone State considering incentives
 A lack of incentives has stalled demand of Pennsylvania-produced biodiesel within the commonwealth, according to Pennsylvania biodiesel producers.At press time, those producers were hoping for help from a special legislative session held during the final few months of 2007. The National Biodiesel Board state regulatory affairs team has been working with the Pennsylvania Biodiesel Producers Group on producer incentives.
 
 The special session was held primarily at the behest of Gov. Ed Rendell to address the use-namely with requirement language-of more renewable energy in Pennsylvania. "We are optimistic that although this session was started for a Pennsylvania renewable energy initiative-a gubernatorial proposed order, which includes a mandate-it will also address incentives for production," says Ben Wootton, founding member of the Pennsylvania Biodiesel Producers Group. "We are most concerned with the type of support that will help keep pre-existing plants' doors open. We need to be on a level playing field with other nearby states that do have an incentive to produce (and whose producers) then sell their product in Pennsylvania."
 
 Wootton says Senate Bill 10 would provide a $1 per gallon incentive for Pennsylvania biodiesel producers. It would be a three-year program for ASTM D 6751 fuel, capping out at $10 million, or $4 million per facility. Wootton says he is also hopeful for a reported companion bill in the House. The Senate is Republican-run, and the House is controlled by Democrats. Wootton adds that the measure is bipartisan.
 
 The governor's proposal calls for a commonwealth-wide 2 percent biodiesel blend once Pennsylvania production capacity reaches 30 MMgy. The blend level may also be ramped up. The proposal contains support for construction of new renewable energy facilities.

 
 There are six biodiesel producers in Pennsylvania who are part of the Pennsylvania Biodiesel Producers Group. Wootton is president of Keystone Biofuels, a 2 MMgy biodiesel producer in Shiremanstown, Pa.
 
 BQ-9000 welcomes two producers
 Two new biodiesel producers-Central Iowa Energy LLC and Mid-America Biofuels-joined the BQ-9000 biodiesel quality assurance program. Renewable Energy Group Inc. announced that Central Iowa Energy earned BQ-9000 accreditation. The announcement came during a visit from Sen. Hilary Clinton, D-N.Y., who toured the Newton, Iowa, plant and shared her thoughts about biodiesel's role in addressing the nation's energy needs.
 
 "BQ-9000 accredited producer certification distinguishes Central Iowa Energy as one of the most respected biodiesel production facilities in the nation," said General Manager Derek Winkel. "Customers can be confident in knowing that when they work with (Central Iowa Energy), they are working with the very best in the nation. We were honored to have Sen. Clinton on site to share in this important recognition."
 
 Mid-America Biofuels of Mexico, Mo., also earned accreditation. The plant has a nameplate production capacity of 30 MMgy.
 
 BQ-9000 is a voluntary fuel quality assurance program adopted by the National Biodiesel Board and the Canadian Renewable Fuels Association. BQ-9000 couples the foundation of universally accepted quality management systems with the product specification ASTM D 6751. The program, which has become the premier quality designation in the industry, covers storage, sampling, testing, blending, shipping, distribution and fuel management practices. Producers and marketers are eligible to become either an accredited producer or certified marketer under BQ-9000.
 
 Feedstock focus at National Biodiesel Conference
 Nothing drives innovation like need, and as the biodiesel industry grows, honing a cost-effective and diverse feedstock supply stands out as a top challenge. The National Biodiesel Conference & Expo, Feb. 3-6 in Orlando, Fla., will address feedstock developments.

 
 Alan Weber, economic consultant to the National Biodiesel Board, will lead the conference's final general session, titled "Biodiesel: The Next Generation." What innovations in feedstock development appear on the horizon? Many view algae as biodiesel's parallel to cellulosic ethanol, but just how close is it to commercialization? A panel of experts from academia and the private sector will discuss algae and several other exciting potential sources for biodiesel as the "next generation" of biodiesel enters the vast frontier. The panel includes Jack Brown, a prominent plant scientist at the University of Idaho, who will discuss emerging feedstocks such as camelina.
 
 The conference has offered top-notch general sessions and speakers, and this year will be no different. NBB CEO Joe Jobe and long-term trends analyst Don Reynolds will open the event with by discussing the conference's theme, "Navigating a Changing Landscape." Astronaut Jim Lovell will speak about the challenges that faced space exploration and how that relates to the challenges facing the biodiesel industry.
 
 The 2008 conference tracks feature production, technical, fuel distribution, policy/regulations, markets and users, and auto and engine manufacturers. Networking events, including a golf tournament, help strike the right balance of work and play.
 
 Call (407) 586-2000 to reserve a room at the Gaylord Palms Resort & Convention Center. To ensure the discounted room rate of $220, mention "National Biodiesel Conference & Expo 2008." Reservations must be made by Jan. 3 to secure discounted rates. A one-night room deposit is required. Rooms are based on availability, so make reservations soon.
 Pre-registration ends Jan. 25, after which attendees must register on-site at a higher rate.
 
 Member profile: Innovative Northwestern retailer's tale
 Iceberg Hugger. The simple statement on a T-shirt explains one reason why Propel Biofuels was formed, and it does so in a way the public can now understand thanks to education on global warming. Propel Biofuels created the T-shirt to draw attention to the primary product-biodiesel-it helps sell to the public.
 
 Propel Biofuels recently celebrated the opening of two biodiesel retail locations. Propel sets up what it calls "clean fuel points" to sell the fuel at pre-existing fuel stations under its own stand-alone Propel canopy. Beyond offering this unique service, the NBB member-company's recent pump opening touted a special guest of honor, Sen. Maria Cantwell, D-Wash.

 
 The Seattle-based company's clean fuel points are unique, stand alone, renewable fuel stations. Propel owns and manages the sites, partnering with the retail/convenience store at which they are placed. Clean fuel points are built to make fueling with biofuels safe and convenient, in locations where drivers are demanding biodiesel. Consisting of an aboveground tank and dispenser system, the clean fuel point does not require drivers to learn new fueling habits, nor does it require station owners to disrupt operations to make biodiesel a profitable part of their business. The result is a product that complements the current fuel market.
 
 Although young (Propel was established in 2004), the company hopes its growth will continue with Washington's biodiesel industry. "I'm proud that Washington state is at the cutting edge of the growing biodiesel marketplace, but we can do more," said Cantwell, a member of the Senate Energy and Finance Committees. "That's why I'm fighting to get the landmark energy bill that we passed in the Senate recently to the President's desk. Biodiesel is part of the answer to curbing our nation's over-dependence on fossil fuels, cleaning up our air and combating climate change."
 
 In addition to the recently opened pumps in Ballard and Kenmore, Propel has plans for 15 more locations. "Convenience is critical for widespread biodiesel adoption," says Wash., Propel President and founder Rob Elam. "We have projects in Washington, Oregon and California, launching new stations in multiple markets. I expect 2008 to be a big year for public biodiesel access."
 
 Propel is showing drivers using its biodiesel pumps just how they are helping the environment, compared to burning regular diesel. CleanDrive is Propel's emissions reporting program. Individuals and businesses can measure the emission reductions and economic benefits of using clean fuels. CleanDrive is available free, enabling any customer to track his or her carbon dioxide reductions whenever they fill at Propel's growing network of pumps. By choosing to fuel at a Propel clean fuel point, drivers can decrease their contribution to greenhouse gas emissions by nearly 80 percent, contribute to improved community air quality and spend energy dollars locally, according to propelbiofuels.com.
 
 Like the icebergs, at least figuratively, that's an idea people can really put their arms around.
 
 NBB launches Producers' Workgroup
 The National Biodiesel Board introduced its Producers' Workgroup, a new group formed as the result of ongoing discussions within NBB related to production issues. The industry is at a critical point, facing rapidly increasing capacity, high feedstock costs and other challenges. Chaired by Lisa Ryan of Georgia-based Alterra Bioenergy, the work group has held its first two meetings. The first was held via conference call and the second at the NBB meeting in mid-November.
 
 "I am really excited and honored to be the chair of this new, timely committee for the National Biodiesel Board," Ryan says. "I want to accurately capture and present concerns related to producers, making sure they are addressed in a way that helps the industry to meet its goals."
 

 The Producers' Workgroup is an ad hoc committee formed to address producers' industry concerns. Priority items will be moved to the full board for consideration. Some already identified focus items include integrating sustainability into the development of new feedstocks and establishing formal safety guidelines.
 
 "Producer issues have always been extremely important for the board to address, but as the industry and the NBB have grown, those issues have grown as well," says former NBB Chairman Darryl Brinkmann, who established the work group. "We want to make sure that we are doing everything we can as a trade association to serve our members well and move the industry down the right path. This will provide a constructive forum for biodiesel producers."
 
 NBB Technical and Regulatory Engineer Don Scott is the Producers' Workgroup staff contact. All NBB producer-member individuals are invited to its meetings.
 
 NBB welcomes new members
 Fredrikson and Byron P.A.-Minneapolis
 Mike Joannes-Farley, Mo.
 New Energy Fuels Inc.-Waller, Texas
 Provista Renewable Fuels Marketing-Inver Grove Heights, Minn.
 Revnova Biofuels LLC-Fairfax Station, Va.
 The Penray Companies Inc.-Wheeling, Ill.
 U.S. Biodiesel Group II LLC-San Francisco
 U.S. Canola Association-Washington, D.C.
 Vitol Inc.-Houston

 Weitz Industrial Services Group-Cedar Rapids, Iowa
 Wright Biofuels Inc.-San Jacinto, Calif.

Washington Watch: The 2007 Farm Bill

Canadian Bioenergy Corp. and Renewable Energy Group Inc. formed a joint venture in mid-October to build a 60 MMgy canola-based biodiesel plant near Edmonton, Alberta. REG will build and design the facility, which will be adjacent to a Bunge Canada oilseed crushing plant. The biodiesel facility will be owned and operated by CBE, and it is expected to pump out biodiesel that is BQ-9000 accredited by June 2009, according to Brad Albin, REG vice president of construction and technology.

REG, Canadian Bioenergy Corp. form joint venture

Engineering and technology service provider GS CleanTech Corp. recently announced that it would extract about 10 MMgy of corn oil from the distillers grains produced at Northeast Biofuels LLC, a 100 MMgy ethanol plant that is scheduled to start production by the end of the year. The corn oil will be used as a feedstock for GS CleanTech's sister company GS AgriFuels Corp., which is planning to build and operate a 10 MMgy biodiesel plant adjacent to Northeast Biofuels. "This is a very strategic project for us, and we are thrilled to bring our technology to what is on target to be the first major biorefinery in the northeastern U.S.," said David Winsness, GS CleanTech president and CEO.

GS CleanTech finds corn oil source

Britain-based fuel and lubricant testing company Kittiwake has released its new FG-K16954-KW extended-range biodiesel cloud point detector into the North American biodiesel market. This model can test cloud points between 77 and minus 4 degrees Fahrenheit, according to Kittiwake Marketing Manager Paul Froome. It can also give accurate readings of water content, density, viscosity and free fatty acid content. The new product is the sister model of the FG-K12663-KW standard model.

Kittiwake introduces new cloud point detectors

Technology developer Aspectrics Corps. launched a new biodiesel quality tester in late October dubbed the Biodiesel Quality Analyzer 1000. The instrument is pre-calibrated for several applications, including analysis of incoming raw material and end-products for contaminants like water, methanol and free fatty acids. Users simply collect samples at various times during the process and insert them into the instrument. An easy-to-use graphical interface allows the user to choose the desired application. "We've really simplified the software interface," explained Jim Yano, vice president of marketing for the company. "We're trying to get this instrument into the hands of as many small and medium facilities as possible."

Aspectrics launches biodiesel quality tester

Nova Biosource Fuels Inc. will offer up to 200 million shares of stock, according to the company's filing with the U.S. Securities and Exchange Commission. According to its prospectus, the company "may offer from time to time" common stock, preferred stock, depository shares, debt securities and warrants. In September, the company sold $55 million in convertible senior secured notes to finance its acquisition of a 10 MMgy biodiesel refinery in Clinton County, Iowa.

Nova Biosource to offer stock

In October, Des Moines, Iowa-based Green Fuels Exchange Inc. opened its Web site, www.gfex.org, for the trading of biofuels and their raw materials. GFEx is an online marketplace for producers and buyers in North America to enter into contracts for sale. There is no minimum amount required for a contract to be listed. At press time, there was one contract posted to sell biodiesel and six posted to buy the fuel. There were also 10 contracts wanting to buy biodiesel feedstocks.

GFEx trades biodiesel feedstocks

AlgoDyne Ethanol Energy Corp. has signed a letter of intent to acquire 55 percent of Canadian Green Fuels Inc. The two companies partnered in July to build and operate retail biofuels stations in western Canada. CGF recently introduced its Mopo brand of biodiesel and fuel conditioners to its line of canola- and soy-based lubricants and additives. CGF is also pursuing a joint venture with Cansource Biofuels Corp. to develop a canola-based biodiesel production facility in Mayerthorpe, Alberta.

Algodyne to acquire interest in Canadian Green Fuels

In October, Renewable Energy Group Inc. announced three new employees. Jon Scharingson was named the director of marketing. He will oversee the company's national market development strategies and its commercial-scale U.S. biodiesel production facilities. He joins REG after 17 years at Sygenta.
 
 Don Nelson was named biodiesel national sales director. He will work with private and public fleets, and the petroleum industry to introduce biodiesel into new markets; grow REG's current market share; and develop national strategies for biodiesel consumption. Previously, he was president and chief operating officer of Joseph Walker & Co. Inc.
 
 Patrick Hammen was named chief information officer. He will incorporate new technology services, software and programs at REG's headquarters and its nationwide network of biodiesel production facilities. He was previously the director of information technology at The Waldinger Corp.

REG hires three

Wayne Turner has been hired as the vice president of operations and engineering for Catilin Inc., a biodiesel technology company. He will be responsible for the daily operations of biodiesel testing and production. Turner has more than 30 years experience in the chemical manufacturing industry. Most recently, he was site manager of Dow Chemical operations in Houston. Catilin, which has developed microscopic catalysts for use in biodiesel production, expects Turner's experience to drive expanding operations and commercialization of the company.

Catilin names VP of operations/engineering

Jan Reinaas, former chairman of Norway's state-owned oil company StatoilHydro ASA, is joining Norwegian biodiesel supplier BioFuel AS as chairman of the board. BioFuel is raising US$6.5 million to finance the planting of 20,000 hectares (50,000 acres) of jatropha in Ghana. Another 288,000 hectares (712,000 acres) has been secured through a letter of intent. BioFuel said it plans to start jatropha oil production in late 2008. The goal is to produce 25,000 barrels (1 million gallons) of jatropha oil per day within eight years.

Reinaas to chair Norwegian biofuel firm

A great debate arose in 2007 as the emergence of subsidized "renewable" diesel clouded biodiesel's future as an alternative on-road fuel. The latest numbers demonstrate that 80 percent of U.S.-made biodiesel is exported out of the country, largely to Europe, because there's no "market"-no methyl-ester-specific standard-for biodiesel in the states. Many believe the only way biodiesel will find a commercial transportation-fuel market here is through government intervention: a specific national standard, exclusivity of the blender's credit, extension of the tax credit and special Farm Bill incentives for oilseed production dedicated to biodiesel manufacturing. "The future of biodiesel is going to be contingent on a couple of things," says Richard Moskowitz, vice president of regulatory affairs for the American Trucking Association. The ATA could represent a large U.S. biodiesel market if the 37,000 members the organization represents would choose to use it. "Biodiesel has to be priced the same or less than petroleum diesel-the trucking industry will change its purchasing decisions on as little as one penny a gallon. We can't afford to pay more for our fuel than our competitors are paying. With biodiesel, if we have to use certain cold-weather improvers there's a cost to that. Because of the lower energy content, if we have to burn slightly more fuel, there's a cost to that. With biodiesel there's a need for fuel filter changes ahead of regular maintenance-and there's a cost to that." Then Moskowitz mentions the infamous National Renewable Energy Laboratory quality study. "Fifty percent of the samples failed to meet spec-that has to be fixed to way less than 1 percent. We don't have those issues with petroleum diesel and we shouldn't have them with any substitute that we consider using." Moskowitz was part of a closed-door briefing in mid-October in Washington D.C., organized by Hart Energy Consulting, the International Fuel Quality Center, and the Global Biofuels Center. The meeting was called, "Can Renewable Diesel and Biodiesel Coexist?" Its purpose was to initiate healthy dialogue and educate those involved.
 
 U.S. biodiesel producers were already battling their own demons this spring when the Internal Revenue Service broadly interpreted "thermal depolymerization," a term crafted into the 2005 Energy Policy Act, to also include coprocessed "green" diesel, and Fischer Tropsch-style distillates synthesized from biomass. "Clearly there is confusion on what constitutes renewable diesel," says Brian Appel, chairman and chief executive officer of Changing World Technologies Inc. Appel was a panelist at the briefing. "There was a consensus that renewable diesel and biodiesel-and any other alternative fuel-are here to stay," he says. "There should be 1,001 ways to make a liquid fuel. I'm happy to see the effort the biodiesel industry has made and I think they'll find tremendous success in the home heating oil and industrial fuels markets." His intimation bodes poorly for biodiesel as a transportation fuel. CWT owns an 8 MMgy renewable diesel plant in Missouri that uses turkey waste in a thermal depolymerization process to make fuel for the stationary power market. "It's between a No. 2 and No. 4 fuel oil-it's got characteristics of both." Appel claims pioneer status because he was instrumental in coining the "renewable diesel" label and persuaded Congress to include the provision in the 2005 Energy Bill.
 
 Ultimately, the chief issues that have to be addressed to create a peaceful coexistence between renewable, green and biodiesels are eligibility of the tax credit and the original intentions of Congress; by what quality standards renewable diesels will be judged, and what regulatory processes must these new fuels undergo; feedstock supplies; and simply accepting there is a common goal beneath all of the political posturing and perceived threats to investments. The staunchest biodiesel supporters agree the fight can't be bio versus renewable diesel, or even alternatives versus petroleum. "At the end of the day, biodiesel and renewable diesel have to use the petroleum infrastructure," Appel points out. "We need to be careful so the oil companies are engaged in these types of fuels."
 
 Elements of Fracture
 Panelist Lisa Ryan, vice president of Alterra Bioenergy Resources Corp., which is the owner of a 15 MMgy biodiesel plant in Gordon, Ga., says she initially thought the discussion would take an "us versus them" tone. "But it was made clear this is not the case," she says. Ryan is passionate, however, about the unknowns that renewable diesel still present to the biodiesel business. "As an industry, we have had to substantiate a fuel-meaning we've had to register it with the [U.S.] EPA, we've had to go through health effects testing, we've also had to present it to the American Society of Testing and Materials, which created a special specification for biodiesel we must comply with," she says vehemently. "If they want to produce a new fuel we don't have a problem with that-whether it's renewable diesel or green diesel or anything else. We just expect them to follow suit and get the health effects testing, register it with the EPA, and let ASTM come up with a specification for their fuel against which it would be measured for quality."
 
 Michael McAdams, executive director of the Advanced Biofuels Coalition and briefing moderator, says producers of renewable diesel will complete the same due diligence undertaken by biodiesel producers. "What I don't appreciate are some individuals who are trying to protect an investment by creating some nefarious vision of competition, which may beat them out of the box down the road," he says. "It is nefarious to say that because we haven't created an individual spec for this new product-renewable diesel-it shouldn't be sold. With that nomenclature, all they're trying to do is deny the American people more volumes of cleaner renewable fuels. That's nefarious. And it's also disingenuous." The 2005 Energy Bill provision for renewable diesel stipulates the fuel must comply with section 211 of the Clean Air Act and be registered with the U.S. EPA; and the fuels have to meet ASTM D975, the diesel fuel spec, or ASTM D396, the spec for heating oil.

 
 According to a source within ASTM, this is a complicated gray area. Attempts to insert exclusionary language in D975, disallowing renewable diesel's coverage under the spec were withdrawn, but the source says there still is no explicit "inclusionary" language either. At ASTM's December meeting, subcommittee E will focus on passing B5 into D975 and likely will not discuss renewable diesel until June. Sources say by then renewable diesel producers like Neste Oil and ConocoPhillips will already have a strategy to get into D975.
 Methyl esters can easily be distinguished from petroleum by regulators checking blend levels or fuel quality, but renewable diesel is chemically identical to its petroleum blendstock. So how will those same regulators make the distinction when necessary? It is the blend ratio after all which determines how much of the $1 per gallon credit a blender will receive. With biodiesel, transesterifying a unit of oil yields the same unit of finished fuel. Coprocessors will keep records of volumetric blending but no one knows the yields they stand to produce. Carbon dating is the only way to physically identify renewable diesel from regular No. 2 fuel, but this is impractical in the marketplace. "It may look like petroleum diesel in the lab, but does it respond the same?" Ryan asks. "Are the chemicals used to process the chicken parts and purify it so it becomes a fuel-is that harmful? How do we know they're getting all the chemicals out? With biodiesel, we know because we have a spec. There's no specification for this; there has been no engine testing, to the best of my knowledge."
 
 UOP LLC, a "green" diesel process technology provider, says its fuel, which undergoes a hydrothermal conversion process, has better performance and cold-weather properties than ultra-low sulfur diesel. Susan Gross, spokeswoman for UOP says fuel produced by the company licensees would still have to go through EPA registration. UOP is building a refinery in Italy and hopes to establish a presence in the United States.
 
 Focusing on specs and registration does a disservice to everyone, according to Appel. "It's the most preposterous argument I've heard in my life," he scoffs. "No one would bring that up seriously, would they? This is the myth; this is the problem when we have a very complex fuel system." Appel says the spec issue came up a couple of years ago when agreeing on definitions of language in the Energy Bill before becoming law. "There are baseless inaccuracies regarding specifications that must be met-this hurts the entire alternative fuels industry," he says. "We are technical and can respond to facts. Emotions and politics are a bit difficult for us to respond to in regard to specifications."
 
 Manning Feraci, National Biodiesel Board vice president of federal affairs, sees things differently. "If I put a glass of biodiesel in front of you right now and said, 'That's biodiesel,' you know what it is-there's a spec for it," Feraci says. "If I put a glass of renewable diesel out there, Appel's definition, Neste's definition and others' definitions would all be different. Consumers need to know what they're getting. If that fuel starts entering the marketplace it's going to tarnish everybody."
 	
 Confusion Taxes Everyone
 Some say one of the NBB's biggest fears is the refineries that are coprocessing renewable diesel will suck monetary allocations dry. Biodiesel plants on average produce 30 MMgy or less. There are exceptions, however, such as Archer Daniels Midland Co.'s 85 MMgy biodiesel plant in Velva, N.D., or Imperium Renewables Inc.'s 100 MMgy facility in Grays Harbor, Wash. Capacity at those plants pales in comparison with oil refineries that can produce 500 MMgy easily. Funding is finite and the amount of money these companies can "suck out of the coffers is incredible," one source says. But the Senate finance committee has already adhered to a 60 MMgy-per-facility amendment, which passed 15-5 earlier this year when the Senate version of the Energy Bill was passed, McAdams says.
 
 Pointing to President George W. Bush's 2006 State of the Union address calling for 35 billion gallons of alternatives and the 36 billion gallon renewable fuels standard in work-in-progress Energy Bills, McAdams says all technologies for the production of alternatives need to be given equal footing and allowed to mature. "If the objective is to move significant quantities of high-quality alternative fuels into the marketplace as rapidly as possible-if that's the stated policy goal-then you can't give one technology by designate a dollar and ask the others to live with 50 cents. In a fuels market, 50 cents may decide whether you're in business or out, so we've advocated across the board technology neutrality, feedstock neutrality and tax parity."
 

 Some oil companies such as ConocoPhilips say animal fats from the likes of Tyson Foods Inc. will provide coprocessing feedstock, Appel says realistically animal fats are highly limited and their aggregation is difficult. "I think the argument became distorted because of the way the tax credit was going to be used by people who could compete for vegetable oils," Appel tells Biodiesel Magazine. "When you kill an animal, most of it is meat, water and blood-just a little fat. When you aggregate this material at best you're going to get a truckload or two out of a plant-150 barrels-so how are you going to get that to a refinery? It's not like soy oil that comes in tankers."
 
 The biodiesel industry is facing double competition for its feedstock: increased prices from its own consumption of vegetable oils and secondary competition from renewable or green diesel coprocessors. Sources say these refineries prefer to buy boatloads and tankers full of palm oil rather than truckloads of highly limited animal fats, and may do so where logistics allow. "But for renewable diesel, the main feedstock was to be waste," Appel asserts. "These were going to be smaller distributed fuel production facilities that don't compete with biodiesel. We take rancid, nasty material and biodiesel takes pure vegetable oil. Now what's happened is coprocessors are trying to take vegetable oils and I think that's wrong. I think everyone knows it's wrong. And I don't think you can hide behind the energy security curtain and do everything in the name of energy security. We cannot afford to watch biodiesel and the original intent of these renewable diesel plants be injured by a broad interpretation of the tax code. We need to ask what the original intent of these types of credits was."
 
 Proponents of free-standing biodiesel and renewable diesel production facilities are united in strong opposition to green diesel coprocessors cashing in on "their" credit. Feraci says the NBB's position is consistent with legislation proposed by Rep. Lloyd Doggett, D-Texas. "If you are a free-standing renewable diesel producer you continue to get the $1 per gallon credit. If it's biomass that's coprocessed with petroleum, that doesn't qualify. There's a distinction there. If someone is doing free-standing renewable diesel they've built a different mousetrap, and the market will evolve that way no matter what happens." Free-standing facilities stimulate the economy and add refining capacity. Coprocessors argue capital is expended on their end too (handling and storage), and their refinery carbon footprint shrinks even if their refining capacity remains the same.
 
 As the battle rages, one can't help wonder why it's still difficult for biodiesel producers to compete economically with conventional diesel when petroleum crude oil hit record highs of $93 a barrel this fall. Speaking on behalf of the ATA, Muskowitz says, "I'm trying to support the biodiesel industry-it's just very difficult with the economics being what they are, and the operational challenges being what they are."
 
 Ron Kotrba is a Biodiesel Magazine senior staff writer. Reach him at <a href="mailto:rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 746-8385.

Alterra Bioenergy Resources Corp. owns a 15 MMgy methyl ester conversion facility in Gordon, Ga.

862-1294329867.jpg

Those fighting for one renewable fuel may be wasting energy and creating a no-win situation. Representatives from all sides of the renewable diesel issue speak with Biodiesel Magazine about perceptions shaping the future coexistence of alternative diesel fuels.

Divided We Fall

2007 marked the opening of four of the largest biodiesel plants in the United States. The 100 MMgy multifeedstock behemoth Imperium Renewables Inc.'s Imperium Grays Harbor plant in Washington state led the way followed closely by Archer Daniels Midland Co.'s 85 MMgy canola oil plant in North Dakota, an 80 MMgy soy oil plant in Indiana built by Louis Dreyfus Corp. and Green Earth Fuels LLC's 86 MMgy Texas plant, which processes multiple feedstocks. An additional eight plants with at least a 30 MMgy capacity came on line this year. Of these 12 plants, half use soybean oil as their sole feedstock while the others process alternative virgin oils, animal fats, recycled vegetable oil or yellow grease. "The worldwide biodiesel industry is starting to grow up," says Daniel Parker, president and CEO of Parker, Messana & Associates Inc., an engineering consulting firm based in Washington. "Our feedstock operational and distribution economics are warranting more and more large-scale production facilities capable of serving global markets with biodiesel made from multiple feedstocks," says Parker, who spoke at BBI International's Biofuels Workshop and Trade Show: Western Region in Portland, Ore., in October.

 
 Grant Kimberley, director of market development for the Iowa Soybean Association, says this is a normal trend for manufacturing because-it's a lot less expensive to build larger plants as the cost can be spread out over a larger capacity. "Economy-of-scale is the name of the game and that's why a lot of companies are building these bigger plants after running the numbers," Kimberley says. "If you're going to be in the business, you might as well be in the business in a way that's as commercial and economical as you can be."
 
 Building bigger allows for the installation of technologies and processes that aren't cost effective on a small scale. Energy savings systems can be integrated more effectively in larger plants and there are greater opportunities for recovery and utilization of byproducts and for synergistic pairings, Parker says. "Pairing a biodiesel plant with an ethanol plant or other types of facilities takes advantage of synergies of energy and materials between the plants as well as the availability of financing," he explains. "More and more, financiers are asking for larger facilities. They want to see a larger scale of production."
 
 For Imperium Renewable's founder and President John Plaza, making the jump in scale was a no-brainer. "We certainly are the first to build an industrial-scale biodiesel facility on a port that has tri-modal access to the U.S," he says. But more to the point, "our business model is differentiated enough that it really required scale to make it viable." The bottom line is that the company built the facility because of anticipated demand, Plaza says. A renewable fuels standard signed into law by Washington Gov. Christine Gregoire, requires at least 2 percent of the state's total diesel sales be biodiesel by Nov. 30, 2008. Furthermore, the company developed proprietary processes that have been improved at Imperium's original facility, Seattle Biodiesel, that give the company an advantage in the market. "We have a different technology than traditional biodiesel production facilities," Plaza says. "We consider this a next-generation biodiesel plant." The technology allows for the simultaneous processing of multiple virgin oil feedstocks and eliminates the need for a water wash. According to Plaza, the fuel contains nondetectable levels of glycerin, nondetectable levels of methanol and water content of 50 parts per million or less. "We create an extremely high-quality biodiesel that far exceeds ASTM and European standards," he says. "That really puts it on the same quality standard as petroleum."
 
 Even with feedstock prices on the rise, Plaza and Imperium are looking to the future. "Efficiencies of scale apply to everything we do as a society so I think that in the future 100 MMgy facilities will be small in comparison to what they're going to be." Although he was not at liberty to discuss the company's future plans at press time, according to the most recent amendment to Imperium's registration statement with the U.S. Securities and Exchange Commission, when the company goes public it will use $230 million of the net proceeds from the offering to finance, develop and construct three new 100 MMgy biodiesel facilities in Hawaii, Pennsylvania and Argentina respectively. "We've seen biodiesel demand remaining high and feel confident that it will remain high for the foreseeable future," Plaza says.
 
 It's the deeper pockets of these large-scale facilities that allow them to surf the more volatile seas of feedstock prices, Parker says. These companies are able to deliver larger volumes and are able to roll up volume contracts. "Large plants are showing good viability partly because of their ability to do the financial management and hedge their feedstock prices," he says.
 
 In addition, smaller plants that have the ability to take a lot of variability in feedstock prices are surviving especially when they are located close to the supply. "Where we're seeing a lot of issues now is with the middle-of-the-road plants that are tied to a single feedstock, in particular virgin oil type feedstocks," Parker explains. "These facilities are not able to control pricing. They don't have the volume to secure those large-volume contracts and lock those prices in."
 
 Market Mayhem
 It's not just the middle-of-the-road plants that are hurting. "The dramatic rise in feedstock prices is the market's attempt to stabilize and ration the amount of usage to make sure all the markets that are currently served by these feedstocks get served," Kimberley explains. In response, some biodiesel plants are producing below their potential capacity and even plants capable of processing multiple feedstocks are cutting back production. "Now that the demand has gone up so far so fast, it's pulled soybean and other perceived higher-quality feedstocks higher and in turn it's pulling everything else [feedstocks that have historically been cheap] higher too," Kimberley explains. Compared with soybean oil, which comprises the vast majority of the vegetable oil used and grown in the United States, the volume of alternative feedstocks is relatively small, and when the plants that can handle these alternate virgin oils or animal fats switched, prices rose. "The pool they had to pull from was not big in the first place so all of a sudden that shot those prices up," Kimberley explains. "Now the market is pricing all these feedstocks closer together so it's hard to make the switch and make money."
 

 Reducing capacity should provide time for the market to adjust and prices to eventually drop thereby allowing for another expansion of the industry and for the cyclical nature of this commodity business to continue. To ease the side effects of this vicious circle will be technology advances that improve crop yields and/or the efficiency of the biodiesel production process.
 
 One of the advances to aid in the latter will be the development of a solid catalyst, Parker says. "Every conventional plant at this point is using a homogeneous catalyst but we're all hoping that the heterogeneous catalyst will be developed." At least two companies have made strides in this direction. One, Catilin Inc., a startup created to commercialize nano-sized spheres for the catalyzed production of biodiesel from numerous feedstocks, was featured in "Nano-Style Biodiesel Production" in the October 2007 Biodiesel Magazine. A second company called Benefuel Inc., recently announced it would build the world's first industrial-scale biodiesel plant leveraging the company's solid acid catalyst for the conversion of vegetable oils and animal fats to biodiesel.
 
 The solid catalyst, which was developed at the National Chemical Laboratory in Pune, India, can process cheaper feedstocks that are high in impurities called free fatty acids with no pretreatment. "The FFA get converted directly into methyl esters so it's a very efficient and compact refining process," Benefuel Chief Executive Officer Rob Tripp says.
 
 The main reaction takes place in a fixed-bed reactor packed with millions of pieces of the catalyst, which are each about one-eighth of an inch long. Methanol and feedstock are pushed through the vertical column and the surface area of the catalyst creates the reaction that forms the methyl esters, which come out at the end of the column. "When you limit the process to those two ingredients [plus the catalyst] everything else is much cleaner and more pure," Tripp says. Because no caustic or liquid catalyst is left in the fuel stream after the reaction takes place, the requirement to wash the biodiesel is eliminated, which saves money and simplifies the process. Additionally, the quality of the glycerin is higher. "We can expect our glycerin to be at 98 percent or higher," Tripp says. "We're working toward a pharmaceutical-grade glycerin." Alternatively, Benefuel has the technology for converting glycerin into an oxygenate, which can be blended with biodiesel to improve its cold-weather characteristics.
 
 The technology is not limited to methanol as the alcohol reactant in the transesterification reaction; longer-chain alcohols like ethanol can also be used. These alcohols can be used to convert triglycerides into an oil or biolubricant. "That's where we're unique in the market," Tripp says. "We have a compelling technology platform because we don't just improve biodiesel, we're creating a new market for lubricants and a new market for oxygenates."
 
 Benefuel has tested the technology at a pilot-scale plant in India and has teamed with an investment company, Seymour BioFuels LLC, to build a 10 MMgy plant in Seymour, Ind. The collaborators will break ground soon, Tripp says, and startup is expected by late summer or early fall of 2008. Although the technology can easily be scaled by increasing the size of the reactor and subsequently the amount of catalyst in the reactor bed, Tripp likes the model of small, local biodiesel plants scattered across the country. "The large centralized model works in certain locations," he says. "But there's a good opportunity for this distributed model where you take advantage of the distributed nature of feedstocks and make it work to your advantage." That model might be a good fit for current market conditions, Kimberley says. "I think the pace of this rapid expansion is going to slow and I don't think we're going to see a lot of 100 MMgy or 60 MMgy plants being built from this point forward over the next year or two," he says. "I think over the next five to 10 years we'll see more of those being built." That said, Kimberley cautions that it's difficult to make predictions about trends for an industry that's so young. "A lot of people predict what will happen in the future by looking at the past and that gives you trends, it's hard to do that when you don't have much to look back on."
 
 Jessica Ebert is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:jebert@bbibiofuels.com">jebert@bbibiofuels.com</a> or (701) 746-8385.

According to Biodiesel Magazine's plant construction list, 148 biodiesel plants are operating in the United States with an annual capacity of 1.75 billion gallons per year. The plants produce an average 11.8 MMgy. In contrast, the average size of the 28 plants under construction and three existing plants being expanded is 26 MMgy. As feedstock prices rise, will a trend toward bigger plants continue?

The Bigger, the Better?

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Solix Biofuels Inc. is seeking to build a demonstration-scale algae production facility in Fort Collins, Colo., in 2008.

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AlgaeLink, a subsidiary of Dutch biodiesel equipment manufacturer BioKing, was first to market with a commercial scale photobioreactor.

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Natural Fuel plans to use jatropha oil and palm oil at its new 540 MMgy biodiesel plant in Singapore.

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Jatropha and algae show promise as alternative biodiesel feedstocks because they don't compete with crop acres and are purportedly high yielding. The "gold rush" mentality developing around them raises questions about when and if they will be ready for commercial production.

Feedstock Frenzy

Early in the year, the National Biodiesel Board determined that the most pressing issue for the industry in 2007 was public policy. More than quality, distribution or new markets, the NBB believed policy was the issue that would most impact the vitality of the industry. Indeed, 2007 was a big year for policy, with the Farm Bill and Energy Bill being worked and reworked the entire year.

 
 With the prospect of these landmark bills ahead, the NBB chose government policy as its theme for the National Biodiesel Conference in February. "The reason we chose government policy as the theme is because clearly we are a policy-driven industry," NBB Chief Executive Officer Joe Jobe said in his opening remarks. "This next session of Congress and the government policy objectives we achieve or fail to achieve will set the course for this industry for the next quarter century-both on the federal level and on the state level."
 
 The focus on policy was, in some ways, a result of the successes seen in the ethanol industry. Jobe pointed to the ethanol industry's roller coaster of boom and bust cycles over the years. "Where it is today is pretty remarkable due in part to the public policy effectiveness of that industry," he said.
 
 Many industry representatives agree with this philosophy. "The U.S. biodiesel industry is at a critical juncture where federal tax and energy policy determines the extent to which it grows or remains a niche, regional fuel industry," Craig Breitbach, director of biodiesel producer Western Dubuque Biodiesel, said in a statement before the U.S. House Small Business Subcommittee on Contracting and Technology. "For a viable U.S. biodiesel industry to thrive, federal policy must provide a framework that is conducive to the growth of the industry." The hearing was held in September to examine small business renewable energy tax incentive possibilities.
 
 To help influence policy challenges the industry has identified, the NBB opened an office in Washington, D.C., last year. This year, it doubled its legislative staff when it hired Manning Feraci as vice president of federal affairs who joined Scott Hughes, director of government affairs. Jobe said it was important to open this office in order to give biodiesel a presence in the nation's capital. "The biodiesel industry has always relied on the American Soybean Association to advocate for biodiesel in Washington," he said. "We've relied on a couple of tried-and-true tools to get the job done-most notably the political clout of American soybean farmers-and the efforts of a few prominent industry leaders. … We still need those champions but we have more work to do now so we have to get more of our people engaged in the grassroots effort."
 
 "We have a large, diverse industry with a very broad constituency," Jobe continued. "And that diversity is a strength if we can tap into it. So far we haven't. … Let our diversity be our strength, not our weakness in our public policy efforts." With that, he announced the formation of the National Biodiesel Political Action Committee to bring a unified voice to Capitol Hill and promote the industry's public policy priorities. According to the Center for Responsive Politics, a PAC is organized for the purpose of raising and spending money to elect and defeat candidates. Most PACs represent business, labor or ideological interests. After six months of operation, the biodiesel PAC had contributed $6,000 to federal candidates, which was distributed between House Democratic candidates Collin Peterson of Minnesota and Charles Rangel of New York and Senate Democratic candidate Max Baucus of Montana.
 
 Policy Initiatives
 At the National Biodiesel Conference, Jobe outlined the NBB's government policy objectives for the next two years. His four-item agenda included an extension of the biodiesel tax credit, focus on the energy title of the Farm Bill, disallowing the tax credit for renewable diesel and an alternative diesel standard. Other industry issues that have since been identified are maintaining the Commodity Credit Corporation Bioenergy Program and an expanded renewable fuels standard with a specific amount carved out for biodiesel.
 
 Jobe identified the extension of the $1 per gallon biodiesel blender's tax incentive as the industry's top priority. The incentive is set to expire on Dec. 31, 2008. Breitbach told the House subcommittee that "enactment of the federal blender's credit by Congress in 2004 has provided a fundamental building block on which the industry has grown." He said the credit has stimulated investment in the industry and, most importantly, allows the fuel to be marketed economically.
 

 Several pieces of legislation were proposed throughout the year to renew the incentive. It saw progress when it was added to the House version of the Energy Bill. House Resolution 3221, the Renewable Energy and Energy Conservation Tax Act of 2007, was passed in August with the addendum of a section that would amend the Internal Revenue Service code of 1986 to provide tax incentives for the production of renewable energy and energy conservation. The provision extends the credit for biodiesel, as well as renewable diesel, until Dec. 31, 2010. This was both a victory and defeat for biodiesel interests. The extension was not permanent, as many had hoped it would be, but it does give the industry more time under the current system. Additionally, the inclusion of renewable diesel within the tax incentive was a blow. Jobe has come down harshly on current renewable diesel policy. "Folks, this is a stark example of why government policy matters," he said at the conference in February. "A few powerful oil and gas interests have been applying enormous political pressure to get a broad interpretation of this credit, so that it could be given to petroleum refiners when they blend a small amount of biomass into their petroleum input stream and run it through their conventional petroleum refinery process. This would amount to an enormous subsidy of existing petroleum refinery capacity. This is just extraordinarily bad policy on so many levels."
 
 A bill introduced in May by Rep. Lloyd Doggett, D-Texas, would have disallowed the credit for renewable diesel in the case of fuel coproduced with petroleum, natural gas or coal feedstocks. However, after being referred to a committee, there was no further action on the bill.
 
 At press time, the tax credit extension for both biodiesel and renewable diesel was not a done deal. The Energy Bill still had not made it to a conference committee. The House and the Senate each passed comprehensive energy bills this summer, but the bills differed dramatically. A major component in the Senate version would expand the RFS to 15 billion gallons by 2015 and 36 billion gallons by 2022. The House version doesn't not include an RFS provision. Efforts to proceed with a conference committee have been thwarted by procedural hurdles. The latest came in the form of a hold that was placed on discussion of the bill by Sen. Kay Bailey Hutchison, R-Texas, who opposed the RFS provision.
 
 If the Energy Bill makes it through the conference committee, President Bush has threatened to veto it. Regarding the RFS, the Bush administration has said it prefers a standard comparable to that proposed by the president in his 2007 State of the Union address. The "20 in 10" proposal called for a reduction of gasoline by 20 percent within 10 years. The proposal included the implementation of an alternative fuels standard of 35 billion gallons by 2017. The alternative fuels standard would include sources such as corn ethanol, cellulosic ethanol, biodiesel, methanol, butanol, hydrogen, and alternative fuels such as coal-to-liquids. As written, the fuel standard in the Senate's Energy Bill remains specific to renewable fuels. It is unclear if this difference would be a factor that would influence a veto, as there are other provisions within the bill more likely to push a veto.
 
 An expanded RFS was a big issue this year in Congress. The aforementioned RFS expansion was included in the Senate Energy Bill, H.R. 6, and is one of the items up for negotiations in the conference committee. Because the conference committee was stalled in October, Sens. Barack Obama, D-Ill., and Tom Harkin, D-Iowa, introduced Senate Bill 2202 to immediately update the current RFS to require the production of 18 billion gallons of renewable fuels by 2016 including 3 billion gallons of advanced biofuels, such as cellulosic ethanol. The legislation would implement the RFS requirements that were included in the Energy Bill passed by the Senate in June. Meanwhile, Sen. Pete Domenici, R-N.M., filed an amendment to the Farm Bill calling for a 36 billion gallon RFS by 2022. At press time, none of the latest RFS proposals had been debated.
 
 If an RFS does pass, it isn't likely to include provisions that require a specific inclusion of biodiesel. The Senate Energy Bill that requires an RFS doesn't change the current practice, in which ethanol makes up the majority of the blended fuel. This is an issue of concern to the biodiesel industry. "In order to ensure a viable domestic market for biodiesel, Congress must enact a biodiesel-specific requirement as part of the RFS," Breitbach said. "Absent a biodiesel RFS, domestic producers will suffer. The Energy Policy Act of 2005 created a renewable fuels standard, which has encouraged the use of renewables in vehicle motor fuel. Although biodiesel qualifies for the RFS, it has not functioned as a stable floor for the diesel pool market." The industry will be nowhere without a domestic market, he said.
 
 Finally, the NBB identified the energy title within the Farm Bill as a top policy priority for 2007. In February, Jobe said the biodiesel industry would seek an extension and modification of the old bioenergy program to include a smaller production incentive on all gallons that will help stimulate domestic production. The other priority was an extension and expansion of the Biodiesel Education Program.
 
 At press time, the Senate had stalled debate on the Farm Bill, or Farm, Nutrition, and Bioenergy Act of 2007, H.R. 2419. As it came out of the Senate committee, the bill contained strong support for biofuels. The bill reauthorizes the Biodiesel Education Program and provides $2 million per year in mandatory funding. The NBB's other request regarding the bioenergy program was also answered. The bill reinstates the CCC Bioenergy Program, which expired in 2006 and provides assistance to biofuels producers for the purchase of feedstocks. According to the bill, "The Secretary is required to base the payment rate on biofuels production, feedstock prices, and net nonrenewable energy content of the fuel. This will benefit those purchasing feedstocks for cellulosic biofuels and biodiesel. The program is not available to those claiming a biofuels production tax credit. $245 million in mandatory funding is provided over the life of the bill." Breitbach said the CCC Bioenergy Program helps producers offset feedstock costs, a policy objective that is timely and relevant given dramatic increases in feedstock prices.
 
 Unfortunately, the issues that were present in February are far from resolved as 2007 comes to a close. It will take continued commitment to foster collaborative solutions within biodiesel policy. "It is all of our responsibilities to come together for our common goals," Jobe said. "Let's come together to embrace the public policy objectives that are needed to take us into the future, and truly help change the way our country uses energy." Jobe's rallying cry at the biodiesel conference in February still holds true in December.

 
 Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:amcelroy@bbibiofuels.com">amcelroy@bbibiofuels.com</a> or (701) 746-8385.

Jobe spoke about the importance of governmental policy at the National Biodiesel Conference in February.

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In 2007, the biodiesel industry identified policy as the key to industry longevity. After months of lobbying and still no resolution from Congress on the Energy Bill and the Farm Bill, the industry will likely need to maintain its focus on policy.

Industry Pins Hopes on Policy

The rapid development of the global biodiesel industry has been closely observed by countries interested in stimulating economic growth, improving the environment and reducing dependency on imported oil. According to a report published by global information service company Fuji Keizai USA in early October, "the global biodiesel market is estimated to reach 37 billion gallons by 2016 growing at an average annual rate of 42 percent." The report predicted that Europe would continue to dominate for the next decade, followed by the United States.
 
 Within in the next year, government incentives, local mandates and investors in countries like Brazil, Argentina, Indonesia, Thailand and Malaysia will enable some of them to participate in the bourgeoning global biodiesel sector, according to a report released in mid-October by the Nelson Institute's Center for Sustainability and the Global Environment at the University of Wisconsin-Madison. SAGE doctoral candidates Matt Johnston and Tracey Halloway ranked 226 countries according to their potential to produce large volumes of biodiesel, while maintaining low production costs. The doctoral students conducted the report to find out if developing countries that grow and export significant amounts of vegetable oil have considered or have the ability to refine it into biodiesel. Johnston was encouraged to conduct the study after he and his wife visited the remote island of Fiji about three years ago. The locals there rely primarily on imported petroleum diesel to run their generators. The fuel is transported by boat at a cost of more than $20 per gallon. At the same time, the Fijians were processing coconut oil on the island and exporting the raw oil to the mainland. Johnston wondered why they couldn't produce their own fuel using the raw coconut oil, and what other countries possess this kind of potential.
 
 Overall, the study ranked Malaysia, Thailand, Colombia, Uruguay and Ghana as the countries most likely to attractbiodiesel investments, not only because of their strong agricultural industries, but also their relative safety and stability, lack of debt, and availability of biodiesel feedstocks such as soy, palm or jatropha oil. "[The report] is a global study from a national perspective," Johnston tells Biodiesel Magazine. "My focus was originally on the development aspects, and to address if biofuels could be used as a development resource for these countries. I think it's a very realistic assessment in terms of a country looking at itself."
 
 <center><img src="/images/upload/20071128120037.jpg">
 Biodiesel Capacity Production, Europe vs. U.S</center>

 
 Johnston and Halloway's findings also included the usual suspects. The United States and Brazil, both top soybean producers, and several European nations including Belgium, Germany, the Netherlands and Spain were in the top 10 for volume potential.
 
 In late 2007, the National Biodiesel Board pegged U.S. production capacity at 1.85 billion gallons with 80 projects being constructed and scheduled for completion within the next 18 months. Although Europe currently dominates the biodiesel market, the industry is plagued by high oil prices(as are U.S. producers) and government policies that aren't supportive. Producers there also contend that subsidized U.S. imports are undercutting their prices. Biodiesel Magazine took a closer look at the situation in Europe and the United Kingdom.
 
 Europe
 A report released by the European Biodiesel Board, an organization committed to promoting the production and use of biodiesel, pegged total capacity in 2007 in Europe at 11.2 million metric tons (3.3 billion gallons) with 185 facilities in full operation and another 58 under construction. The increase in capacity is intended to help meet the European Commission's target of blending 5.75 percent biofuels by 2010.
 
 The European biodiesel industry could be stalled, however, as producers are reeling from high feedstock prices. They also claim subsidized U.S. imports have devalued domestically produced biodiesel and eroded their operating margins. The EBB, which represents European biodiesel producers, is considering legal action along with intervention from the EU and the World Trade Organization. "The subsidized B99 exports from the U.S. are not only damaging the European biodiesel industry, but it's an issue that's damaging biodiesel worldwide exiting the U.S.," EBB Secretary General Raffaello Garofalo says. "A number of plants have slowed down production and a lot of those plants are suffering because of the effects of the subsidized B99 imports from the U.S. If nothing changes in the U.S., the conclusion will be that legal action must be undertaken."
 
 <center><img src="/images/upload/20071128120043.jpg">
 European Biodiesel Capacity</center>
 
 The extent of damage, if any, caused by U.S. imports is yet to be determined. In the meantime, there are other issues causing tighter production margins. For example, Germany's largest biodiesel producer, Petrotec, temporarily suspended production until the end of this year citing poor market conditions. The company says the German government's decision to start taxing biodiesel in August 2007 is a prime factor. Germany's renewable fuels trade association estimates that plants in the country are operating at only 40 percent to 50 percent production capacity because of the tax and subsidized B99 imports. Germany is the largest biodiesel producer in Europe with capacity expected to increase to a record 5 million metric tons (1.5 billion gallons) at the end of this year. "The market is going to develop, but the question is if small-scale producers will be able to participate, and clearly it will be difficult for them to do so," says Uwe Fritsche, coordinator for the Energy and Climate Division at Oeko-Institute for Applied Ecology in Darmstadt, Germany. "It's more or less that consolidation will be inevitable and take out the smaller scale producers."
 

 Subsidized biodiesel imports are also being blamed for poor market conditions in the United Kingdom. Middlesbrough, England-based biodiesel producer D1 Oils PLC scrapped its plan to increase refining capacity in the United Kingdom from 142,000 metric tons (157,000 tons) to 320,000 (353,000) by the end of 2008 due to the "asymmetrical trading regime" being practiced by the United States, according to D1 spokesman Graham Prince. "The market is pretty challenging here," Prince says, noting that other producers like Biofuels Corp. saw its production plummet as a result of the unfair trade and was delisted from the London Stock Exchange earlier this year. "We think this is something that needs to be sorted out by the EU and the U.S. in terms of getting a level playing field on subsidies. We want to see subsidized B99 [imports] stopped and get us back to a level where we can be competitive again."
 
 <center><img src="/images/upload/20071128120208.jpg"></center>
 
 D1 has a biodiesel plant in Middlesbrough with a capacity to produce 42,000 metric tons (46,000 tons) of biodiesel and a second site in Bromborough, England, which, when fully operational, would produce 100,000 metric tons (110,000 tons). However, D1 slowed the timetable for commissioning the first 50,000 metric tons (55,000 tons) of capacity at its Bromborough site from the end of 2007 to the first half of 2008. "If you're a refiner [in the UK] you're in a difficult situation particularly if you're sitting on 200,000 to 250,000 metric tons (220,000 to 276,000 tons) per year capacity," Graham says. "We've built out capacity very cautiously. I wouldn't say we're typical of the industry. We face the same challenges, but we're always starting at a different place and aiming for a different place."
 
 Despite poor market conditions, D1 expects that the situation will be temporary. The company can be more flexible than other producers because it can use the smaller modular nature of its refineries to take in off-spec biodiesel from other producers Additionally, D1's long-term future shows promise as it is developing an alternative feedstock. Earlier this summer, D1 established a joint venture with oil company BP to accelerate the planting of jatropha, an inedible oilseed. Under terms of the agreement, the new company D1-BP Fuel Crops has invested about $160 million over the next five years to plant 1 million hectares (2.5 million acres) of jatropha in India, South Africa and Southeast Asia. According to Graham, the company aims to import the first commercial volumes of jatropha oil to northern Europe by early next year. "The whole thing is gradually building momentum now," he says. "We're very pleased with where it's going."
 
 While producers in Europe and the United Kingdom struggle, the future looks brighter in one South American country.
 
 Argentina
 Argentina, where high volumes of soybean and sunflowers are produced, is considered a potential hotbed for the production of biofuels. The country has three key resources that make investors lunge for their calculators: inexpensive land, cheap labor and abundant soybeans.
 
 As the world's third-largest soybean producer, Argentina's oil crushing industry is the most efficient in the world. It has a crushing capacity of about 160,000 metric tons (176,000 tons) per day. In 2007, biodiesel production is estimated at 200 million liters (53 million gallons), according to a report issued by the USDA Foreign Agricultural Service. The report also indicates that production in 2008 is forecast to surpass 800 million liters (200 million gallons). More than 20 proposed biodiesel projects are expected to come on line. If those projects are completed, production could exceed 2 billion liters (528 million gallons) by 2010, which would position Argentina among the world's largest biodiesel producers and exporters. Following Brazil's lead, Argentina recently passed a law mandating that all gasoline and diesel sold in the domestic market contain at least 5 percent ethanol and biodiesel by 2010. However, the local market is not attractive because it's highly regulated and many key components including company quotas and prices have not been clarified. That has prompted the country to export more than 90 percent of its production. "It is feasible [to achieve the proposed mandate] if we give the right incentives and if we actually improve the investment climate in general," says Daniel Saslavsky, a representative of Argentina's Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC), an Argentinean public policy "think tank" headquartered in Buenos Aires. "I think Argentina will be able to cope with it at its current stage of development."
 
 One challenge the country has to overcome in order for the biodiesel industry to grow is its lack of technical components necessary to apply the transesterfication process in its operations. In addition, clarifying its nationwide biofuels standards and production incentives would be in order to foster domestic production and consumption. "There is a lot of interest because there is a lot of potential in this sector," Saslavsky says. "We have to continue to improve the law in order to give the right incentives to producers to be able to invest in the long term. The way that the law is set right now, it's somewhat ambiguous."

 
 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.

In 2007, Europe and the United States were the leading biodiesel producers. Heading into 2008, Biodiesel Magazine takes a look at which countries are struggling and which show potential.

Biodiesel: A Global Perspective

Last year, a way to connect the ethanol and biodiesel industries was revealed when it was determined that biodiesel could be a value-added product for ethanol plants through corn oil extraction technology. This year, researchers at Rice University in Houston have discovered yet another link. This new concept is centered on a technology that converts glycerin, a byproduct of biodiesel production, into ethanol.
 
 Ramon Gonzalez and Syed Shams Yazdani have identified the metabolic processes and conditions that allow a known strain of Escherichia coli to convert glycerin into ethanol through an anaerobic fermentation process. Gonzalez is currently the William Akers assistant professor in chemical and biomolecular engineering at Rice University, and Yazdani is a postdoctoral research associate.
 
 In a comparison of feedstock and operating costs, Gonzalez found that ethanol from glycerol is 39 cents cheaper to produce than ethanol from corn. Feedstock costs per gallon were 53 cents for corn, versus 30 cents for glycerol. Per gallon operating costs were 52 cents for corn and just 36 cents for glycerol. "The main reason for the difference in costs is that there is no preprocessing," Gonzalez says. In feedstock operations, the corn must be ground and cooked, and the sugar extracted. "It is a process that is both capital and process intensive," he says. "You need to work all the way from the corn grain until you get sugar, and then you start fermentation." Meanwhile, glycerin doesn't require those steps because it comes preprocessed. This means no enzymes to buy and less equipment.
 
 The implications of this research are so promising that the process may be commercialized before cellulosic ethanol. Gonzalez partnered with Paul Campbell, who researches, develops and markets blends of microbes for industrial, agricultural and environmental purposes, to form Glycos Biotechnologies Inc. The company, which was funded by Houston-based venture capital fund DFJ Mercury, expects to complete its pilot plant in early 2008. "Once we have the pilot running and working properly, [commercialization] is a matter of months," Gonzalez says, noting that the pilot plant is being designed to be one step away from a commercial-scale plant. Gonzalez couldn't say how big the pilot plant will be, but he says it would be capable of fermenting at least 10,000 liters (2,641 gallons). Glycos Biotechnologies will not develop and sell the technology, Gonzalez says. Instead, the company plans to form partnerships with those already in the biodiesel, glycerin and ethanol industries, he says. The company's Houston location lends itself well to working with biodiesel producers, as there are several in the region.
 
 Gonzalez says this process could be collocated with either an ethanol or biodiesel facility, and there are advantages to each. If collocated with a biodiesel plant, costs to transport glycerin would be saved. At least initially, this will be the most likely deployment of the company's technology.

 
 Glycerol is the principal component of glycerin, a clear, odorless, viscous liquid. It is found in animal fats, vegetable oils or petrochemical feedstocks, and is derived through soap production and the transesterification process, in which fatty acids and alcohol are mixed. Although glycerin has more than 1,000 uses, including many applications as an ingredient or processing aid in cosmetics, toiletries, personal care, drugs and food products, it is typically used in a highly refined and purified form. Refined glycerin is mostly pure glycerol, with the salt, methanol and free fatty acids removed.
 
 The rapid growth of the biodiesel industry changed the glycerin market. In fact, it was cited as the reason that Dow Chemical Co., which produced synthetic glycerin, exited the glycerin production business in North America in 2006. "The increased supply of glycerin in North America due to biodiesel production, which caused prices to drop, was a factor in that decision," says Catherine Maxey, business public affairs director for Dow Chemical. "However, we continue to produce synthetic glycerin in Europe for sales into specialized markets such as pharmaceutical, personal care and food applications, among others, where high quality is the major requirement. The high purity at constant quality levels of Dow's synthetic glycerin presents distinct advantages over natural glycerin in these specialized end applications."
 
 Maxey's point about glycerin quality is important when considering the market for the biodiesel byproduct. Biodiesel production yields unrefined glycerin. Biodiesel producers will usually then boil the glycerin to recover the methanol. This results in what is called crude glycerin, which is the form of glycerin most biodiesel producers sell. "[In most commercial applications], the quality of the glycerin must be high," Gonzalez says. "It can't be the nasty thing that comes out of biodiesel plants. If you use a feedstock that is not pure oil in biodiesel production, the glycerin is not very nice." His technology, however can use the "nasty" glycerin-both unrefined and crude.
 
 The Process
 Gonzalez became interested in glycerol while he was an assistant professor at Iowa State University in Ames. His initial research philosophy was to develop a microbial fermentation process for converting a low-cost, high-carbon feedstock into something with a higher value-not necessarily ethanol. Glycerol was targeted as the carbon source because it is the byproduct of an established and growing industry.
 
 Gonzalez and Yazdani coauthored a report entitled "Anaerboic fermentation of glycerol: a path to economic viability for the biofuels industry," which was printed in Current Opinion in Biotechnology. According to the report, glycerol is competitive with sugar used in the production of chemicals and fuels via microbial fermentation at its current price, which ranges from 5 to 10 cents per pound. Additionally, glycerol has yield advantages over sugar due to the highly reduced nature of carbon atoms. "One pound of sugar gives you a half-pound of ethanol and a half-pound of useless carbon dioxide," Gonzalez explains. "On the other hand, one pound of glycerol gives you a half-pound of ethanol and a half-pound of formic acid. Since formic acid is as valuable as ethanol, and also has a fuel value (in fuel cells), the use of glycerol as a carbon source doubles the overall product yield."
 
 Once glycerin's advantages as a feedstock were established, Gonzalez set forth to find a product. "Once we decided on glycerol, we had to see what we could do with it," Gonzalez says. He knew it could be fermented, and indeed, that it could be fermented into ethanol. This is not the first time that glycerin has been successfully fermented into ethanol. It was first done in 1877, using fungi as the agent. In his report, Gonzalez says many microorganisms are able to metabolize glycerol in the presence of external electron acceptors, but few are able to do so fermentatively. Gonzalez discovered one microorganism that could-E. coli. In previous studies, researchers had been unable to successfully convert glycerol to ethanol with the bacteria. "The major find is that we found conditions that enable a native, nonpathogenic strain of E. coli to [ferment glycerol to ethanol] without oxygen," Gonzalez says. "We don't need to do much genetic engineering to have ethanol as the main product."
 
 Initially, the researchers didn't engineer the genetics at all, and focused instead on finding the appropriate environment that would allow a wild-type, common, nonpathogenic strain of E. coli to ferment glycerol. "The key is not the type of strain, but rather the fact that we were able to create an appropriate environment," Gonzalez says. The environmental conditions include an acidic pH, avoiding accumulation of fermentation gas hydrogen and appropriate medium composition. With the right environment, ethanol is the primary product from glycerol fermentation with E. coli. "Since we have that fermentation already going, now we can tweak or engineer the E. coli to produce items beyond ethanol," Gonzalez says. Currently, Glycos Biotechnologies is focusing on commercializing the technology to produce ethanol, with the coproducts being formic acid and hydrogen. "The value of formic acid is higher than ethanol," Gonzalez says. It can make hydrogen, and it's also being researched for use in fuel cells. Glycos Biotechnologies is also developing microbial platforms which will convert glycerin into other high-value chemicals. Eventually, Gonzalez says he would like to produce succinic acid, a four-carbon molecule that can be converted into a variety of high-value biobased chemicals or materials. "If you take all the glycerin and turn it into succinic acid, you make much more money than with ethanol," he says. However, the market is still right for ethanol. "What I have found is that producing ethanol from glycerin is appealing for a lot of people in the biodiesel industry because there is a market for ethanol," Gonzalez says. "There might be a product of higher value, but that product may not have an established market and there's a lot of risk in that."
 

 Even if this technology takes off, it's limited by the growth of the biodiesel industry, an industry that is struggling under the weight of high feedstock prices. There is certainly an oversupply of crude glycerin with respect to today's market, but not enough to satisfy the demand for ethanol on its own. The production of 1 million gallons of biodiesel generates about 100,000 gallons of crude glycerin. According to Biodiesel Magazine's plant construction list, the biodiesel industry has built the capacity to produce 1.68 billion gallons of biodiesel, and thus 168 million gallons of crude glycerin. Since the conversion rate of glycerol to ethanol is about 1 to 0.5, approximately 84 million gallons of ethanol would be produced in a year if all available crude glycerin from biodiesel production were converted into ethanol. An equal amount of formic acid can also be generated in the process.
 
 More significant than the amount of ethanol produced is where it would be produced. This technology could bring ethanol to regions that were previously less accessible. Biodiesel production facilities, which are not as dependent on being close to feedstock sources as ethanol facilities, are disbursed throughout North America along coasts and in major port locations-usually close to population centers. For example, neither Texas nor New Jersey has any ethanol facilities in operation, but they do have 150 MMgy and 74 MMgy of biodiesel production capacity, respectively. Converting crude glycerin to ethanol could supply locally produced ethanol to markets like Houston, San Francisco and Las Vegas.
 
 Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:amcelroy@bbibiofuels.com">amcelroy@bbibiofuels.com</a> or (701) 746-8385.

Crude glycerin is a low-value byproduct of the growing biodiesel industry. But one company, Glycos Biotechnologies Inc., sees potential for the product as a feedstock for ethanol production.

Research Reveals New Biofuels Link

Q: Renewable fuels, including biodiesel, have really become popular in Congress in the past couple years. Can you explain why support for the industry is building steam on the Hill?
 A: Renewable fuels hold tremendous potential to reduce America's dangerous dependence on imported oil, grow local economies, reduce harmful greenhouse gas emissions and provide new markets for farmers. These are win-win-win solutions.
 
 I coauthored the original renewable fuels standard that was included in the Energy Policy Act of 2005. It called for the production of 7.5 billion gallons of renewable fuel annually by 2012. We are now on pace to exceed that goal as soon as next year.

 
 It is important to continue to find ways to reduce the oil we use in our daily lives. In America, we use 25 percent of the world's oil. We import over 60 percent of that oil-much of it from hostile parts of the world. Many in Congress feel that America will remain vulnerable if we continue to depend on Saudi Arabia, Nigeria, Iran, Venezuela and others to feed our energy appetite. Renewable fuels are an important way to help satisfy our energy demand.
 
 Q: What challenges do you feel the industry will face in the future?
 A: The largest challenge facing renewable fuels in the immediate future is ensuring that we have the proper infrastructure.
 
 For example, we have more than 16,000 flexible-fuel vehicles on the road in North Dakota but only 23 E85 pumps. Likewise, there are only 11 biodiesel pumps in the state. We have been successful in our efforts to boost production of renewable fuels, but at the same time, we need to make sure drivers have access to them.
 
 The renewable fuels industry will be heading for a cliff if we don't find a way to get renewable fuels to the consumer. I introduced legislation earlier this year, called the Security and Fuel Efficiency (SAFE) Energy Act of 2007, which requires automakers to manufacturer flex-fuel vehicles, and creates greater incentives and requirements for service stations to install renewable fuels pumps.
 
 Q: What is the purpose of SAFE Energy Act (S. 875)?
 A: The SAFE Energy Act is a comprehensive approach to reducing America's dependence on foreign oil. I recognize there is no "silver bullet" to solving our energy crisis. We can't dig and drill our way out of our current energy crisis-that's a strategy I call "yesterday forever." Conservation alone is not the only answer, either. The SAFE Act is a balanced energy policy that reduces the amount of oil we use in our economy.
 
 The SAFE Act includes four parts: 1) gradual increases in vehicle efficiency standards, 2) expansion of the production and use of renewable fuels, 3) access to oil and gas reserves in the eastern Gulf of Mexico, and 4) enhancement of international diplomatic alliances for energy security.
 

 I worked with the Energy Security Leadership Council, a group of senior business executives and retired military commanders, to develop this balanced energy strategy. It will help to ensure that the generations that follow aren't left vulnerable by a reliance on foreign oil.
 
 Q: The Senate passed the Clean Energy Act earlier this year. How did that come about? Any debates/concerns?
 A: The Senate passed the Clean Energy Act in June to address rising energy prices and our growing addiction to imported oil. This bill represents the work of four Senate committees. Each passed strong bipartisan bills that were packaged into the Clean Energy Act.
 
 The Clean Energy Act includes many provisions that were controversial but long overdue, including increases in vehicle efficiency standards that haven't changed in more than 20 years. I was pleased that three of the four key pieces of my SAFE Energy Act were included in the bill that passed the Senate, including increases in vehicle efficiency standards, expanded production of renewable fuels and enhanced energy diplomacy. The bill was sent to the House of Representatives, and those congressmen have passed it, as well.
 
 Q: As one of the original authors of the Energy Policy Act of 2005, would you say it has worked as intended thus far? Do you feel there is room to expand that legislation?
 A: The Energy Policy Act of 2005 was a boost to the renewable fuels industry, and the Clean Energy Act expands on that. The renewable fuels standard I mentioned earlier will be expanded nearly sevenfold to 36 billion gallons by 2022. The bill requires the Secretary of Energy to submit a report to Congress on the U.S. DOE's efforts to implement 5 percent biodiesel into the current diesel pool. The bill authorizes further study and testing of engine durability using biodiesel, and uniform labeling of certified blends of biodiesel.
 
 Where we have room to grow is in providing more robust, long-term incentives for renewables. The Senate Finance Committee developed a package of tax incentives that included a two-year extension of the $1-per-gallon credit for biodiesel and also extends for four years the small biodiesel producer credit of 10 cents per gallon on the first 15 million gallons of production. Unfortunately, even these short-term extensions included in this incentives package didn't receive enough votes to pass as a part of the Clean Energy Act. However, we are determined to bring this legislation up later this year to provide greater incentives for renewable energy.
 
 Q: You have an energy plan for North Dakota. Do you think this is something that other states could implement as well, tailored to their own resources?
 A: I believe a coherent energy plan is important for any state to have, and that's why my goal has been to create an Energy Corridor in North Dakota. The state has a vast and diverse portfolio of energy resources, and the development of those resources will help our state's economy and our nation by leading us toward energy independence.

 
 North Dakota is the Saudi Arabia of wind. We have tremendous coal and oil reserves. We produce canola and soybeans to be used as feedstock for biodiesel, along with corn and other biomass that can be converted into ethanol. No state has greater potential than North Dakota to provide significant amounts of energy to meet our country's growing demand.
 
 Q: Often the oil and renewable fuels industries are pitted against each other. Do you feel the two could work together to benefit everyone?
 A: We will always use our fossil fuels. That is a fact. The question is how we use them. We also need to work together to develop our renewable fuels industry.
 
 Yes, we need to dig some. Yes, we need to drill. Fossil fuels will always be a part of our energy portfolio. We also need to understand that renewable energy is no longer some sort of sideshow. Renewable energy is a significant part of our energy portfolio, and if we do not exercise it in a way that benefits our energy supply and helps us to address the climate change issues we confront, then we have fallen short.
 
 This was one of the themes of the Great Plains Energy Expo that I hosted in late October in Bismarck, N.D. I organized this to bring all the major players together-both from the fossil fuels and renewable industries-to discuss our energy future and how to harness it to benefit our state and our nation.
 
 In fact, we have already found some ways for the oil industry and renewables to work together. We blend renewable fuels with oil to create ethanol and biodiesel. Renewable fuels producers produce carbon dioxide that could be captured, shipped to oil fields, and fed into the ground in a process that enhances oil recovery and sequesters the greenhouse gas.
 
 Our country's demand for energy is growing very rapidly, and I believe there is enough room for both industries to succeed.
 
 Q: What other renewable fuels do you see becoming major energy players in the future?

 A: Fuel that comes from biomass or cellulose holds tremendous potential for this country. The renewable fuels standard included in the Senate version of the Clean Energy Act contained a provision that mandates the production and use of 21 billion gallons of non-starch, or biomass-derived, fuel between 2015 and 2022. This country has rich biomass resources like wood chips, crop residues and waste, switchgrass, and many others that can be utilized without significantly impacting traditional farmland.
 
 Ultimately, we must continue to develop all forms of renewable energy. I have funded a project in North Dakota that uses wind power to separate hydrogen from water through electrolysis. Vehicles that run on hydrogen, for example, get twice the power and efficiency to the wheel, and emit water vapor out the tailpipe.
 
 These renewable fuels provide income for our farmers. They help protect the environment and reduce the need to import oil from nations that want to harm us. It is critical that we develop our renewable fuels, and I'm going to keep working to make sure we do so.
 
 Jessica Sobolik is the Managing Editor for Biodiesel Magazine. Reach her at <a href="mailto:jsobolik@bbibiofuels.com">jsobolik@bbibiofuels.com</a> or (701) 373-0636.

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U.S. Sen. Byron Dorgan, D-N.D., is part of a growing group in Congress that is interested in and excited about the potential benefits of renewable fuels in the United States. Here, he shares some of his ideas and plans with Biodiesel Magazine.

Biofuels on the Hill

Many U.S. biodiesel companies see enormous potential in selling their biodiesel plants and equipment to overseas customers. What they often fail to see are the legal risks and challenges of developing biodiesel projects in foreign countries. There are, of course, many legal challenges to conducting business operations abroad. It can be especially true for companies involved in biodiesel projects.
 
 Many factors affect overseas business ventures. The first is foreign government approvals. Unlike the United States, foreign governments often regulate the sale of biodiesel plants in their countries. In some countries, the project's customer must be a government agency or an entity affiliated with the government. In others, the customer must be examined and approved by that country's government before it may purchase a biodiesel plant or biodiesel equipment. Some countries even require that the contract between the U.S. company and its foreign customer be reviewed and approved by the appropriate ministry of the foreign government before the contract may become effective. Still others require that the biodiesel plant or equipment be approved by the foreign government before equipment importation or plant construction begins.
 
 Several U.S. laws make it illegal for an American company or any of its foreign suppliers, subcontractors or representatives to make any payment or give anything else of value to any agency or official of a foreign government in order to gain approval for a business project overseas. Most notable among these is the U.S. Foreign Corrupt Practices Act, which imposes monetary penalties on U.S. companies and imprisonment of their officers who violate it. A U.S. biodiesel company can become liable under the act for payments and gifts made by its foreign suppliers, subcontractors or representatives to foreign government officials or agencies that may be involved in approving the U.S. company's business dealings in the foreign country. Therefore, it is important that the U.S. biodiesel company know about and control the actions of its foreign suppliers, subcontractors and representatives. The U.S. biodiesel company that remains ignorant of these actions does so at its peril. It may find that it has unknowingly and inadvertently violated the act, thereby subjecting the company to fines and its officers to jail time in the United States.

 
 As with many products shipped overseas, a foreign government may assess a customs duty or tariff on biodiesel equipment that crosses its borders before it will release the equipment to the foreign customer. The customs duty or tariff is typically a percentage of the purchase price of the piece of equipment that the foreign customer has purchased from the U.S. biodiesel company. It is the responsibility of the customer to pay the customs duty or tariff in order to obtain the equipment from the foreign government.
 
 However, in some countries, simply paying the customs duty or tariff is not enough. In certain instances, the foreign customer may be required to apply for and receive an import license from its government before the government will release the equipment. The application process for an import license can be costly and time-consuming, depending on the customs laws of the country into which the biodiesel equipment is to be imported. In any case, the U.S. biodiesel company must determine whether its foreign customer will require an import license to import its equipment, and if so, how long it will take to obtain one. Otherwise, the U.S. company will be unable to establish a meaningful delivery schedule for its foreign customer.
 
 Many U.S. companies believe that if they have protected their intellectual property rights in the United States by obtaining patent and trademark approval for their equipment from the U.S. Patent and Trademark Office, then their intellectual property rights are protected overseas. This is not the case. The U.S. biodiesel company that ships its equipment to a foreign country must assess the risk that someone in that country, perhaps even its own customer, may try to steal the company's designs, technology, know-how, company or product name, and seek intellectual property protection in the foreign country. The U.S. biodiesel company should seriously consider filing patent and trademark applications in the foreign country before shipping its equipment there in order to prevent such theft. Failure to do so could result in the U.S. company's intellectual property being pirated and "knocked off." In such instances, the U.S. company may find that another foreign company is offering to build biodiesel plants and sell biodiesel equipment using the U.S. company's designs, technology and know-how.
 
 The U.S. biodiesel company that agrees to build a biodiesel plant in a foreign country must abide by all of the laws of that country during the construction, installation, operation and maintenance of the plant. This includes, for example, complying with the foreign country's laws regarding 1) sending Americans to the site to work on the project (including obtaining the appropriate visas for the Americans to enter and work in the foreign country), 2) hiring and paying local employees to work on the installation and operation of the plant, 3) paying any taxes assessed by the foreign country on the U.S. biodiesel company in connection with the project, and 4) complying with the foreign country's environmental laws regarding the operation and maintenance of biodiesel plants. The U.S. biodiesel company must learn about all of the foreign country's laws that are applicable to biodiesel plants before it embarks upon a biodiesel project in that country.
 
 A U.S. biodiesel company assumes that it will be paid without government interference for the biodiesel projects that it develops and the equipment it sells in the United States. In some foreign countries, however, a customer is not entitled to make payments abroad without prior authorization from its government. This means that a foreign customer must sometimes apply for and receive approval from its country's monetary authorities before it can make payments to the U.S. biodiesel company. In some instances, it may take weeks or months for the foreign monetary authorities to grant approval for the customer to remit payment to the United States. The U.S. biodiesel company must investigate whether the foreign customer's country has such restrictions on the payment of funds overseas. If it does, the company must assess the risk that it might not be paid for the project without undue delay.
 
 A dispute between the U.S. biodiesel company and its foreign customer may have frightening consequences for the U.S. company. The company may be required to appear in a foreign country's court under a legal system that it does not understand. Or the U.S. company may have to participate in arbitration proceedings in front of a foreign country's arbitration tribunal.
 
 However, the consequences of such a dispute need not be scary. A well-drafted contract between the U.S. biodiesel company and its foreign customer that addresses foreign dispute resolution can often serve to mitigate such dire results. Most foreign countries' laws will allow the foreign customer to select a neutral location for the resolution of disputes or will provide for special procedures that ensure the rights of the U.S. biodiesel company in a foreign trial. The U.S. biodiesel company must become acquainted with the options provided by the foreign country's laws in the event of a dispute with its foreign customer.
 
 The legal landscape of developing biodiesel projects and selling biodiesel equipment overseas can be fraught with pitfalls and mine fields. However, understanding the risks and challenges involved is essential to avoiding problems and to successfully concluding projects that are beneficial to both the U.S. biodiesel company and its foreign customer.
 

 Richard Weiner is an international biodiesel lawyer in the energy law department of Fredrikson & Byron P.A., a leading law firm assisting energy clients. Reach Weiner at <a href="mailto:rweiner@fredlaw.com">rweiner@fredlaw.com</a> or (612) 492-7009.
 
 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).

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Risks and Challenges for Overseas Biodiesel Projects

In recent years, sodium methylate has become the catalyst of choice for many biodiesel producers around the world. The benefits of using sodium methylate as a catalyst include higher biodiesel yield, lower purification costs and more consistent quality than what can be achieved using caustic soda (sodium hydroxide) or caustic potash (potassium hydroxide).
 
 As U.S. biodiesel production levels rise above 250 MMgy, the industry is driving hundreds of millions of gallons of feedstock, catalyst and finished biodiesel to be shipped, handled and stored across the United States. The health of employees and the continued success of the industry require that this be done as safely and efficiently as possible. If handled improperly, many of the products and materials used in the day-to-day operation of a biodiesel facility can be harmful to people, property and the environment.
 
 We all want employees to go home from work as healthy as when they arrived in the morning. This applies to everyone from office personnel to plant operators who handle hazardous chemicals and oversee dangerous production processes. Safety must always be "top of mind" for anyone working in a manufacturing environment.
 
 Sodium methylate's safety and handling guidelines are a mixture between those for methanol and caustic soda. Sodium methylate has been safely used for decades in the manufacture of pharmaceuticals, food ingredients and crop protection agents. It has proven to be a very effective catalyst for biodiesel, but like methanol, it is classified as a hazardous material and, like caustic soda, it is corrosive. Therefore, it requires specific attention to handling and storage.

 
 <center><img src="/images/upload/20071129015234.jpg"></center>
 
 Packaging and Storage
 When purchasing any chemical, it is important to ensure that the product is shipped and stored in a safe, approved container. For sodium methylate, the three best options are isotainers or bulk tank trucks, steel drums with non-removable heads and totes composed of polyethylene bladders surrounded by steel cages.
 
 Drums and totes should be stored in a dry, well-ventilated area, protected from heat and direct sunlight. Partial containers should be blanketed with nitrogen to avoid moisture exposure, and empty containers should not be reused. Drums and totes should not be heated. If heating is necessary to allow emptying, the drum should be equipped with a pressure relief valve and the temperature of the heating device should be controlled. Any released vapors should be properly vented to a scrubber or vapor destruction system.
 
 Isotainers or bulk trucks are most appropriate when sodium methylate demand is greater than 45,000 pounds per month. Closed systems are best for transferring sodium methylate to a storage tank. The isotainer manway should never be opened during unloading, as this can introduce moisture and cold air. Moisture decreases the quality of the product and cold air can cause the product to precipitate out of solution in methanol. Ideally, a nitrogen purge line should be connected to the isotainer to blanket the methylate and replace the volume of sodium methylate solution being pumped from the isotainer. While adding nitrogen to this system, handlers should adhere to the pressure limitations of the isotainer. Use of a pressure relief device set for the rated pressure of the isotainer would prevent vessel rupture.
 
 Introducing moisture into the sodium methylate feed system can decrease product purity and increase the chance of corrosion over time in carbon steel systems, especially in heated storage tanks. Stainless steel storage tanks are recommended. If carbon steel tanks are used, an annual preventive maintenance program should be implemented to check for corrosion, especially near heating devices. Storage tanks should be vented according to local, state and federal regulations. Note that the vents should prevent entry of oxygen, carbon dioxide and moisture into the vessel. A constant purge of dry nitrogen is recommended. Vapors emanating from storage tanks should be controlled in compliance with site air permits.
 
 Finally, all isotainers delivered to a facility should arrive with security seals on the valves and fittings. If a seal is missing or broken or the seal number does not match the number on the shipping papers, the supplier should be contacted prior to unloading.
 
 Time spent learning safe handling practices and improving safety measures are good investments in the health of employees and the stability of a business. Sodium methylate suppliers are an excellent resource to draw on for safety information and suggestions.
 

 A good checklist for safe handling should include the following:
 › Sodium methylate should be stored and transported in a closed, dry system.
 
 › Sodium methylate should not come into contact with water, acids or acid-forming substances.
 
 › The area in which sodium methylate is stored must be rated for handling of flammables, and sources of ignition should be avoided.
 
 › A vapor recovery system should be in place to control vapors or mists.
 
 › Proper personal protection equipment includes neoprene gloves and boots, coveralls, goggles and a face shield. The personal protection equipment should be worn whenever the possibility exists for direct contact with the material. Contact with the eyes, skin and respiratory tract should be avoided.
 
 › Liquid solutions are flammable and corrosive.
 
 › Vapors are heavier than air and may travel along the ground or floor to a distant source of ignition, causing a flash back. 
 
 › Only non-sparking and non-static tools should be used. All equipment should be grounded.

 
 › Eye wash stations and safety showers should be readily accessible.
 
 BASF, Responsible Care
 As the world's leading chemical company, BASF Corp. has a strong commitment to responsible care. BASF conducts business and operates facilities in a safe and environmentally responsible fashion. The company also supports its customers and suppliers to ensure the safe and environmentally sound handling of its products, and minimize the impact of its operations on society and the environment during production, storage, transport, use and disposal of its products.
 
 To obtain more information about the BASF portfolio of catalysts for biodiesel, visit www.basf.com/alcoholates. For more information about environmental health and safety at BASF, visit <a href="www.basf.com/alcoholates/the_lab.html" target="_blank">www.basf.com/alcoholates/the_lab.html</a>, or contact BASF Technical Manager Bill Atkins at <a href="mailto:william.atkins@basf.com">william.atkins@basf.com</a> or (724) 538-1204.
 
 Mike Schulz is a product manager for BASF Corp. Reach him at <a href="mailto:mike.schulz@basf.com">mike.schulz@basf.com</a> or (724) 538-1362.

 
 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).

An operator at BASF's German plant fills an isotainer of sodium methylate.

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An isotainer truck carrying sodium methylate unloads at an unloading station.

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Handling Sodium Methylate Safely

A range of factors impacts the success or failure of an ethanol plant or company. While commodity prices and construction cost fluctuations, international market developments and an unpredictable future affects every plant, it's the human element that oftentimes determines business viability. Ultimately, the board of directors is responsible for success. Two approaches-strategic and operational thinking-are most often used by boards of directors to plan and react to various situations and map a path forward.
 
 Until the beginning of the 21st century, boards of directors acted either formally or informally-most of the time with a great deal of latitude. However, the new century was ushered in with sweeping new legislation that caused unprecedented change for boards.
 
 Within the hallmarks of the Sarbanes-Oxley Act of 2002 was the clear direction of the formal actions to be taken by boards of directors. The groundbreaking legislation resulted in many boards being required to closely monitor company activities. Consequently, time spent on strategic planning diminished. In the Heidrick and Struggles 10th Annual Corporate Board Effectiveness Study, which was conducted from 2006 to 2007, 768 directors from approximately 2,000 of the largest publicly traded companies in the United States responded that they'd been hampered by the same dilemma. "As a large majority [84 percent] of respondents reported, recent governance reforms have resulted in boards spending more time on monitoring and less on strategy," the study notes. "Yet this has occurred at a time when new competitive pressures are pushing directors back to their traditional role as strategic advisors."
 
 Simply put, boards need to think and plan strategically because it is at the very core of effective board governance. Board directors need to think and plan strategically because they are leading organizations through one of the most turbulent periods of change in history. This leadership imperative reinforces the legislative changes, administrative details and programmatic implementation.
 
 Comparing Issues: Operational and Strategic Thinking in the Ethanol Industry
 Operational
 › Marketing programs

 › Financial performance
 › Tactical problems/issues
 › Customer requests/feedback
 › Staffing requirements
 › People problems
 › Interdepartmental cooperation/difficulties
 › Price changes
 › Cost and budget items
 
 Strategic
 › Competition in food versus fuel
 › Strategic competitor moves (low cost imports from developing countries)
 › Technological developments in alternative renewable fuels
 › Distribution expenses (e.g., high retrofit costs)
 › Mergers and ownership changes
 › Investor and farmer boards (lack of governance and leadership baseline)

 › Impact of governmental regulations
 › Use of strategic resources (e.g., water)
 › Placement of new plants (e.g., cogeneration distance from customer)
 
 Defining the Differences
 While strategic and operational planning both offer beneficial aspects, there are some key differences that should be understood. Strategic planning is the formal process of defining the requirements for delivering high payoff results, and for identifying what, and how, to get from current realities to future ones that add value to the organization. It is not rigid nor lockstep, but rather a self-correcting set of defining requirements and relationships for stating "what is" in terms of results, and moving ever closer to "what should be" the results and payoffs.
 
 Several key questions must be answered during strategic planning. They include:
 › What profound shifts are, or will, influence the future?
 › What is our direction and response to these shifts?
 › How will we describe our desired results in measurable terms?
 › What are the best ways and means to get there? 
 › How will we measure progress and success?
 › How will we revise as required?
 
 Several requirements must be considered during strategic planning. Strategic planning develops, creates and records-at minimum-the following results to be accomplished:

 › An ideal (mega) vision for the organization
 › An organizational (macro) mission or purpose 
 › Strategic objectives for achieving high payoff results at the mega level 
 › Tactical objectives for delivering results at the macro level
 › Operational objectives for delivering results at the micro level 
 › Needs assessment based priorities for the mega, macro and micro levels. (These define the gaps in results and the costs to meet the needs, as compared to the costs to ignore the gaps.)
 
 Operational or tactical-level thinking and planning deals with how to make systems, people and processes more efficient and effective. Organizational effectiveness means performing similar activities better than rivals perform them.
 
 Operational thinking is measured. The "productivity frontier" constitutes the sum of all existing best practices at any given time. The frontier is the maximum value that a company delivering a product or service can create at a given cost, using the best technology, skills, management techniques and purchased inputs.
 
 The strategic agenda is the right place for defining a unique position, making clear trade-offs and tightening fit. It demands discipline and continuity; distraction and compromise are its enemy.
 
 In contrast, the operational agenda involves continual improvement and constant change. Failure to do this will result in failure, even with a good strategy in place. Flexibility and relentless effort are required to achieve best practices.
 
 A Board's 'Top 10' Strategic Thinker Checklist

 › Synthesize research, experience and future outlooks to create the big picture
 › Use 21st century contexts to ensure your organization is current 
 › Became familiar with what customers need and want
 › Remain aware of what competitors are doing in the marketplace
 › Challenge obsolete or restrictive ways of thinking and working
 › Create new paradigms to replace outmoded ones
 › Evaluate the benefits, risks and future implications of your own and others' ideas
 › Focus on the future and visualize possibilities
 › Ask the senior management team what they see as barriers to performance, quality and customer service
 › Probe beneath the surface; uncover underlying assumptions and key questions about them.
 
 Organizations need people who think both strategically and operationally. It is the board's role to think strategically and oversee the strategic plan. The board employs "strategic intelligence" that synthesizes research, experience and future outlooks to create the big picture.
 
 Tracy E. Houston, M.A., is a senior consultant in governance with Summit Point Consulting. Reach her at <a href="mailto:tracy.houston@summitpointconsulting.com">tracy.houston@summitpointconsulting.com</a> or (303) 721-3219.

 
 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).

Strategic Versus Operational Thinking at the Board Level

Most employers use employee handbooks to manage their workforce. Properly drafted and implemented employee handbooks can serve as a vital tool for communicating employment policies, establishing and guiding expectations, and fostering consistency in management. Improperly drafted or incorrectly used handbooks, however, may expose employers to substantial legal liability.
 
 Some items to consider when drafting and implementing an employee handbook are:
 
 Contractual disclaimer: Under certain state laws, an employee handbook can constitute a contract between the company and its employees. To prevent the formation of a contract, every employee handbook should contain a prominent disclaimer indicating that the handbook's policies and procedures are intended to serve as a guideline to the company's policies and procedures, and do not establish any contractual obligations. Each handbook should also contain an acknowledgment or form for an employee's signature to verify receipt of the handbook. This form serves as evidence that an employee has received and reviewed the employee handbook, and can be critical in defending against employment-related claims.
 
 Employment-at-will: Employee handbooks should contain an explicit at-will employment statement indicating that either the employee or employer may terminate the employment relationship at any time, with or without cause and with or without notice. Without an explicit employment-at-will statement, an employer may be subject to potential claims by employees regarding a promise of employment for a particular length of time or termination based on steps contained in a progressive discipline policy. To promote discretion and flexibility in the disciplinary process, employers should also eliminate any language that can be construed as progressive discipline.
 

 Confidentiality provisions: The District of Columbia Court of Appeals recently invalidated a confidentiality provision in an employee handbook based on a determination that the provision violated the National Labor Relations Act by potentially restricting employees' protected rights to discuss the terms and conditions of their employment. Employers with handbooks containing confidentiality provisions should review the lawfulness of the provision with their legal counsel to ensure that it does not run afoul of the NLRA.
 
 Communications and computer-use policies: Employees frequently threaten to bring legal claims against their employer for violation of privacy based on an employer's monitoring of phone, e-mail or Internet usage. To avoid such claims, employers should develop a handbook policy explicitly informing employees that they should have no expectation of privacy in any property owned by the company, and that the employer may monitor e-mail, voicemail and other communications systems.
 
 Family and Medical Leave Act: The FMLA applies to employers with 50 or more employees. It requires covered employers to permit eligible employees a total of 12 workweeks of unpaid family and medical leave during a 12-month period to care for a newborn or newly placed adopted or foster child; a parent, child or spouse with a serious health condition; or a personal serious health condition. Federal regulations relating to the act specifically require that if an employer has an employee handbook, the FMLA policy must be included.
 
 Fair Labor Standards Act overtime requirements: The FLSA requires payment of overtime for nonexempt employees at a rate of 1.5 times the employee's regular rate of pay for all hours worked in excess of 40 during a one-week pay period. Employers should note that certain state overtime requirements may be more protective of employees and require payment of overtime under additional circumstances. Employers should ensure that employee handbooks accurately reflect both state and federal overtime payment requirements.
 
 Harassment and discrimination policy: All employee handbooks should include a policy prohibiting harassment and discrimination on the basis of any protected category under state, federal or local law. A properly drafted harassment-and-discrimination policy is one of the best defenses an employer has against a discrimination or harassment claim. Protected-class status can vary by state and locality.

 
 Marnie DeWall represents clients in all areas of employment law at Lindquist & Vennum PLLP, a leading provider of legal assistance on renewable energy projects. For more information, contact DeWall at (612) 371-2401 or visit <a href="http://www.lindquist.com" target="_blank">www.lindquist.com</a>.

Employee Handbooks: Traps for the Unwary

2007 brought some of the best and worst of times to this burgeoning biofuels industry, and as with any evolving sector, more turbulence undoubtedly lies ahead. However, with those ups and downs come invaluable experience. For many of the serious issues that the biodiesel industry is forced to grapple with, we have largely been in a reactive, rather than proactive, posture. Though some of the reasons for that are understandable, we must do all we can now to shift from our heels to our proverbial toes if we are to re-establish solid footing in 2008.
 
 We have a rare opportunity to proactively re-package and re-message this industry's vision and goals. It is a window to engage and discuss how a sustainable biodiesel model might offer a long-term solution to some of the problems driving the global biofuel discussion and congressional concerns. Those following the global biofuel dialogue and policy formation are aware that two topics preface any substantive biofuels discussion: carbon balance and food versus fuel.
 
 This isn't just a "green" issue; it is a business reality that will only become more prevalent. There may be domestic distaste in the prioritization of those issues, but it will not change the global market reality or political framework in which we are operating. I'd offer that, as an industry, we might be well-served to aggressively get in front of this discussion with bold statements on a sustainable industry model that we support and for which we strive. Along with sustainable feedstock practices, biodiesel features some of the best carbon and energy balance for any liquid fuel-a message that might make a very timely and well-received centerpiece for the political dialogue of 2008.
 
 Though many intensely argue that we will always (and should) be rooted in a "Big Ag" commodity trading platform, in order to have real long-term viability we must make an aggressive and public movement toward a sustainable model built on a non-food, low-input, distributed and low-carbon basis. This model is taking root on the front lines, but it needs time and real support to mature. We must assertively set the course now for a sustainable model of the future.
 
 The movement toward such a new fuel-based model is understandably unpopular among some who are making great profit in the status quo of inflated commodity prices and trade hedging. This is the elephant in the room at nearly every National Biodiesel Board meeting. Failure to openly and honestly engage the situation only perpetuates quiet hostility between new-generation "feedstock neutral" biodiesel producers and the established presence of traditional feedstock and "Big Ag" commodity interests. My hope is that those interests will begin to recognize that they will be better served in the long run by viewing the potential of this industry as something more than just a demand mechanism to increase commodity feedstock prices. We ultimately win or lose this game together, and there is strong synergy in cooperation.
 
 The biodiesel industry has an opportunity to collectively step out in front of the sustainability and food-versus-fuel issues with bold messaging and vision. The industry will undoubtedly survive the tough times and be stronger for it, but we must work together to get back on our toes and be willing to proactively adapt and evolve to the shifting landscape we now face.
 

 Jake Stewart is the vice president of strategic development for Organic Fuels, a Texas-based biodiesel producer and distributor. He is also the vice chairman of the National Biodiesel Board's technical committee. Reach Stewart at (512) 287-1765

Talking Point

Web exclusive posted Dec. 4, 2007, at 9:21 a.m. CST
 
 Wisconsin-based biodiesel producer Best Energies Inc. has come to a carbon credit agreement for its renewable fuel production and technology. According to a news release from Carbon Green LLC and Environmental Credit Corp. (ECC), Best Energies subsidiary Best Biodiesel Cashton LLC will work with Carbon Green and ECC on the related protocol development needed to make the agreement work.
 
 Best Biodiesel Cashton is an 8 MMgy facility at Cashton, Wis., that can use crude corn oil in its process to produce biodiesel. The advantage to this development, according to the company, is that ethanol producers will be able to create additional revenue from their use of corn and also reduce the plant's overall greenhouse gas emissions and improve its net energy profile.
 
 Specific details of the agreement have not been released.

Best Energies developing carbon credits system

Web exclusive posted Dec. 4, 2007, at 12:44 p.m. CST
 
 A new industry report released today details the measures necessary to implement a large-scale carbon capture and storage (CCS) system in Canada. The proposed system is the country's single largest greenhouse gass reduction opportunity with the potential to reduce carbon dioxide emissions by 20 million tones annually-the equivalent of removing four million cars from the road.
 
 The report, entitled "Carbon Capture and Storage: A Canadian Environmental Superpower Opportunity", was prepared by the ICO2N group of companies. ICO2N represents a cross-section of leading Canadian industrial companies, which are committed to helping Canada meet its climate change goals while supporting economic growth.

 
 The approach outlined in the ICO2N report allows Canada to address the global climate change challenge while continuing to use its extensive coal reserves for power generation and permits continued growth in petroleum-based energy production with lower CO2 intensity.
 
 "The growing public awareness of the climate change challenge is translating into a strong desire for more information on solutions and technologies like CCS," said Stephen Kaufman, chair of the ICO2N steering committee. "This report is designed to create greater public awareness of CCS and the significant role we believe it should play as part of Canada's climate change response."
 
 Copies of the report and supporting materials are available online at <a href="http://www.ico2n.com" target="_blank">www.ico2n.com</a>.

Plan for major reduction of Canadian CO2 emissions outlined in industry report

Web exclusive posted Dec. 5, 2007, at 8:53 a.m. CST

 
 Renewable Energy Group Inc. and its partner East Fork Biodiesel LLC held a ribbon-cutting Nov. 30 for their 60 MMgy plant located in Algona, Iowa. The plant is the largest biodiesel facility in Iowa, and the 14th plant to come online in the state. It is also the fifth largest plant in the United States.
 
 According to REG President Nile Ramsbottom, "Demand is growing nationally for biodiesel." In 2006, REG marketed 78 million gallons of fuel, which constituted 27 percent of all biodiesel sold nationally. With the addition of East Fork Biodiesel, REG's production capacity rises to 222 MMgy.

Nile Ramsbottom address the crowd at East Fork Biodiesel LLC.

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East Fork Biodiesel LLC plant opens

Web exclusive posted Dec. 6, 2007, at 5:28 p.m. CST
 
 The U.S. House of Representatives passed an energy bill Thursday that would increase the RFS to 36 billion gallons by 2022 while reducing the ethanol tax credit by 5 cents per gallon by 2009. Although the bill faces a threatened veto by President Bush and the Senate has yet to pass a companion bill, the House passed the bill by a 235-181 margin. The Senate is set to vote on similar legislation Saturday.
 
 Other provisions in the bill include an increase in the corporate average fuel economy standard to 35 miles per gallon by 2020, a 15 percent renewable energy standard by 2020 and would repeal some tax incentives to oil and natural gas producers. The $21 billion tax incentive reduction would help fund the bill.

House passes energy bill

Web exclusive posted Dec. 18, 2007, at 11:56 a.m. CST
 
 Building on the successes of previous international renewable energy conferences-the first in Bonn, Germany, in 2004, and the second in Beijing, China, in 2005-the 2008 Washington International Renewable Energy Conference will be the third installment of a global ministerial-level conference series.
 
 WIREC 2008 will be held at the Washington Convention Center in Washington, D.C., on March 4-6. The event will also include a business conference. According to Jim Brownlee, USDA spokesman for WIREC, 2,000 people from more than 80 countries are expected to attend the ministerial portion, and an additional 3,000 are estimated to attend the business conference and trade show. The American Council on Renewable Energy is the lead organizer of the event, but the U.S. government is in charge of the ministerial portion.
 

 Three years have passed since the Beijing show, and Brownlee said the U.S. government wondered why. "It's not like the Olympics, where you know it will be held every four years," he said. "The renewable energy world is not so organized. There wasn't another country that stepped forward to host it until the United States did." At press time, the speakers list hadn't been released.
 
 The 2008 WIREC will focus on four themes: renewable energy market adoption and deployment, renewable energy development financing, technical research and development, and agriculture and rural development. One hundred official side events are scheduled, as well. "The U.S. government is obviously excited about the potential of renewable energy related to climate change and reducing greenhouse gases," Brownlee said. "[The] 2008 WIREC is the best opportunity for the best minds in the world to come together in one place to try and make some headway."

Washington, D.C., to host 2008 international WIREC event

Web exclusive posted Dec. 20, 2007, at 4:16 p.m. CST
 
 President Bush Wednesday morning signed into law the Energy Independence and Security Act of 2007 (H.R. 6), paving the way for changes in the way America uses energy. The U.S. House of Representatives passed the energy bill Tuesday that will increase the renewable fuels standard (RFS) to 36 billion gallons by 2022. The bill is a companion measure to one passed in the Senate last week and includes similar provisions, such as an increase in the corporate average fuel economy standard to 35 miles per gallon by 2020. The Senate passed its version of the bill 86-8 with Democratic leadership withdrawing provisions that would roll back tax incentives to oil companies after President Bush threatened a veto of the bill.
 
 <center><img src="http://www.ethanolproducer.com/images/upload/20071220041611.jpg">
 RFS provisions in the energy bill. (Source: Renewable Fuels Association)</center>
 
 The bill includes language aimed at renewable fuels in general and carves out only 1 billion gallons in its RFS for what it calls "biomass-based diesel." As the mandates progress through the years between 2008 and 2022, biodiesel tops out with its 1 billion gallon mandate but is included in what the bill calls "advanced biofuel." Under the Energy Independence and Security Act of 2007, the federal government will mandate the use of 9 billion gallons of "conventional biofuel" (starch-based ethanol) in 2008 and increase that standard incrementally to 12 billion gallons by 2010 and 15 billion gallons in the years 2015 through 2022 inclusive. "Cellulosic biofuel" (primarily cellulosic ethanol) mandates begin at 100 million gallons in 2010 and slowly progress to 1 billion gallons in 2012 and 7 billion gallons by 2018. In 2022, the mandate will reach its peak at 16 billion gallons of cellulosic biofuel. An "advanced biofuel" mandate that includes those fuels in the cellulosic biofuel category reaches 2 billion gallons in 2012, 9 billion gallons in 2017 and 21 billion gallons in 2022. After reaching its 1 billion gallon mandate, biodiesel will count toward the advanced biofuel mandate.
 
 National Biodiesel Board CEO Joe Jobe said the new RFS will help biodiesel more than the previous version, which provided a production floor for ethanol. "In addition to the expansion of the volumes, the most extraordinary piece in the new RFS was bringing into it the diesel fuel pool," Jobe said. "It's no longer just a gasoline market that biodiesel can sort of participate in with the credit-trading program."
 
 The RFS helps answer one of what Jobe said is the biodiesel industry's top three priorities, which include an extension of the blenders' tax incentive, an RFS and a Commodity Credit Corp. Bioenergy Program extension in the Farm Bill that would provide additional incentives to help offset high feedstock costs. "In terms of going through this year, the most difficult of those top three has been getting inclusion of provisions in the RFS that work for biodiesel," Jobe told Biodiesel Magazine.

 
 Jobe says the energy bill should bring confidence and stability into the industry. "We've got dramatic instability primarily due to unstable interplay with commodities and energy prices," Jobe said. "A big part of that is speculation in commodity markets."
 
 Renewable Energy Group Inc. (REG), a biodiesel producer and marketer, worked in conjunction with the NBB and many other biodiesel producers to lobby Congress on the energy bill, according to Sara Taylor. Taylor, who is the executive director of corporate affairs for REG, said it was an excellent team effort. "What we learned as an industry is it's really important to speak with one voice," she said. "The NBB and a lot of the major producers did a good job working together so that both the House and the Senate understood the importance of the legislation to this industry. It was important to have a team to help federally advocate on behalf of the biodiesel industry."
 
 Taylor said the bill is a terrific start. "It provides a guaranteed market and gives certainty to investors and the marketplace," she said. "This is an important catalyst to jumpstart the industry domestically." Especially important for the biodiesel industry is the section that increases the minimal renewable requirement in the diesel pool from 500 MMgy in 2009 to 1 billion gallons in 2012. Additionally, biodiesel qualifies as an advanced biofuel, which Congress required should make up 600 million gallons of the renewable fuel pool in 2009. "[The biodiesel requirement] is a floor, not a ceiling," Taylor said. "If there is robust growth in the biodiesel industry and less competition because other technologies haven't come on line yet, then the impact of biodiesel could actually be much higher. We have a very solid guarantee and an opportunity to do even better."
 
 Clayton McMartin, president of Clean Fuels Clearinghouse, said the new RFS adds significant value to the current Renewable Identification Number system. "The big thing is that up until now, RINs had been seen as a necessary evil," McMartin said. "Starting today, there is a new value being established."
 
 McMartin said the new RFS won't impact the current RINs system of tracking gallons of renewable fuel. "The EPA put together the system in anticipation of this bill," he said. "They already distinguished between cellulosic ethanol and other fuels." The new RFS carries significant ramifications for the development of a cellulosic ethanol industry. "That's the new gold rush," McMartin said. McMartin said his company is developing a RINs exchange platform that will be launched in mid- to late January 2008.
 
 Although many in and around the biodiesel industry are pleased with the energy bill, some were hoping it would go farther. "We were disappointed the biodiesel tax exemption didn't make it into the energy bill," said John Hoffman, president of the American Soybean Association. "That's the reason the biodiesel industry has taken off in the last three years." The carve-out for biodiesel in the RFS is a positive development, he said. "That will provide incentives and assurances for the biodiesel industry as it looks to the future." He expects language to extend the biodiesel tax exemption will be introduced into tax legislation in the Senate finance committee. "In light of $3 diesel fuel and $90 to $100 per barrel crude oil prices, the time is right for the RFS and the time is right for extending the biodiesel tax credit. We are confident that Congress will do the right thing." The biodiesel tax credit didn't make it into the energy bill, but it did make it into the Senate's farm bill. Whether it is included in the bill that comes out of conference committee is yet to be determined.
 
 The long-term effects of the bill are yet to be determined, but Tom Sidley, senior managing director principal for Aequitas Capital Management said the energy bill is a positive step. "We continue to seen some interesting technologies in pretreatment processes and in alternative feedstocks and so forth," he said. "We continue to think at least the biodiesel sector continues to be very exciting long term. It certainly has a lot of short-term problems. We're seeing that in some of our investments and trying to figure out how long does it take to continue to fund in to losing plants until the market turns and where the opportunity is going to lie. Certainly this Bill makes us feel better about the industry.
 
 "We would've liked to have seen more. I think we'll see it more in the first of the year. All of these projects have long planning and permitting horizons so the more stability that we can bring to the industry the better."
 

 Visit <a href="http://www.biodieselmagazine.com">Biodiesel Magazine</a> for further industry reaction to the 2007 energy bill.

December 2007

Business Briefs

D1 Oils, Keygene collaborate on jatropha project

REG, Canadian Bioenergy Corp. form joint venture

GS CleanTech finds corn oil source

Kittiwake introduces new cloud point detectors

Aspectrics launches biodiesel quality tester

Nova Biosource to offer stock

GFEx trades biodiesel feedstocks

Algodyne to acquire interest in Canadian Green Fuels

REG hires three

Catilin names VP of operations/engineering

Reinaas to chair Norwegian biofuel firm

Columns

Editor's Note

NBB In Sight

Talking Point

Featured

Divided We Fall

The Bigger, the Better?

Feedstock Frenzy

Industry Pins Hopes on Policy

Biodiesel: A Global Perspective

Research Reveals New Biofuels Link

Biofuels on the Hill

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

Business Briefs

D1 Oils, Keygene collaborate on jatropha project

REG, Canadian Bioenergy Corp. form joint venture

GS CleanTech finds corn oil source

Kittiwake introduces new cloud point detectors

Aspectrics launches biodiesel quality tester

Nova Biosource to offer stock

GFEx trades biodiesel feedstocks

Algodyne to acquire interest in Canadian Green Fuels

REG hires three

Catilin names VP of operations/engineering

Reinaas to chair Norwegian biofuel firm

Columns

Editor's Note

NBB In Sight

Talking Point

Featured

Divided We Fall

The Bigger, the Better?

Feedstock Frenzy

Industry Pins Hopes on Policy

Biodiesel: A Global Perspective

Research Reveals New Biofuels Link

Biofuels on the Hill

December 2007