In an attempt to diversify biodiesel feedstocks, agri-giant Archer Daniels Midland Co., Bayer CropScience AG and Daimler AG signed a three-year memorandum of understanding in early January to jointly explore the commercial feasibility of jatropha as a feedstock for biodiesel production. The partnership intends to develop production and quality standards for jatropha-based biodiesel. 
 
 Jatropha, a tropical plant from the Euphorbia family native to Central America and naturalized in other countries such as India and Africa, is an inedible crop. A nut from the jatropha tree can yield about 30 percent more oil than other conventional agricultural crops. When mature, the tree can thrive in dry, arid climates with minimal to no water. It can also be intercropped with other plants, so it won't compete for land used for food production, thus providing farmers with an additional source of income. 
 
 Since the project is in its nascent stages, Bayer CropScience was the only party to declare a specific role in the partnership. The German-based company plans to develop and register herbicides, soil insecticides and fungicides for disease and pest control of the jatropha plants. Bayer CropScience, a subsidiary of Bayer AG, is one of the leading innovative crop science companies in the areas of crop protection, nonagricultural pest control, seeds and plant biotechnology. Where to cultivate and harvest jatropha for this project was undetermined at press time, according to Bayer CropScience spokesman Utz Klages. "Currently, [Bayer CropScience] is looking worldwide for areas where jatropha is grown, and where field trials are possible and reasonable," Klages said. 
 
 Meanwhile, Daimler AG completed a wide-ranging, five-year research project at the end of 2007, demonstrating that jatropha can be used and cultivated to obtain high-quality biodiesel. The company will continue to explore the interactions between the fuel and engine in vehicles powered by jatropha biodiesel, and mixtures of this and other fuels, a joint press release said.

 
 ADM doesn't have a role in the partnership at this time, according to company spokeswoman Beth Regan. However, its role as a biodiesel producer will allow the group to explore jatropha's potential as a viable feedstock. In addition to several plants in Europe, the Decatur, Ill.-based company currently owns and operates an 85 MMgy canola-based biodiesel plant in Velva, N.D., and holds a 49 percent share in Mid-America Biofuels LLC, a 30 MMgy soy-based plant in Mexico, Mo. "This [partnership] doesn't affect our U.S. biodiesel operations and will not have any impact on them in the short term," Regan said. 
 
 In Bayer CropScience news unrelated to the partnership, Kanawha Biodiesel LLC, a subsidiary of Emerald Biofuels LLC, received preliminary approval from the West Virginia Economic Development Authority for a 10-year, $5 million loan for a proposed biodiesel facility at the Bayer CropScience Manufacturing Industrial Park in Institute, W.V. A contract signed with Bayer CropScience calls for initial production of 30 MMgy. Proposed early last year, the project will begin construction in late January and is expected to start up in July followed by commercial shipments of product, according to Emerald Biofuels President David Drew. There is only one other biodiesel plant in the state: AC&S Inc., a 3 MMgy plant in Nitro that was slated to start production in February.

ADM, Daimler and Bayer CropScience have partnered to explore the many facets of using jatropha as a biodiesel production feedstock.

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ADM, Daimler, Bayer partner to explore jatropha

India-based technology developer Benefuel Inc. announced in early January a solid-catalyst manufacturing agreement with joint venture company Sud-Chemie AG, one of the world's largest catalyst companies. Benefuel markets its acid-based solid catalysts that have the ability to convert low-grade feedstocks-even those consisting of 100 percent free fatty acids-to high-quality biodiesel with no need for water-washing or catalyst recovery. A glycerin byproduct stream exceeding 98 percent purity is also created. Benefuel has announced plans to build a biodiesel plant that would use its catalyst to produce the renewable fuel. The company aims to reduce the environmental and economical footprints of conventional biodiesel producers with skid-mounted "micro-refineries."

Benefuel offers new solid catalyst

Nova Biosource Fuels Inc. has obtained $41 million in senior secured debt financing, including $5 million for working capital from WestLB AG's New York branch. The capital will help to finance Nova Biosource's 60 MMgy biodiesel production facility under construction in Seneca, Ill. The project is one of three in which the company is developing proprietary technology for utilizing low-cost feedstocks with high concentrations of free fatty acids. It is the first such facility to be project-financed, according to the company. Baker & McKenzie LLP represented Nova Biosource in negotiating the financial package.

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Nova Biosource secures senior debt financing

Efforts to address global climate change by regulating greenhouse gas emissions continue to increasingly impact national renewable fuel policy. 
 
 The new renewable fuels standard as part of the Energy Independence and Security Act of 2007, which now requires a minimum of 9 billion gallons of renewable fuel in 2008 and 36 billion gallons in 2022, was enacted in part to reduce greenhouse gas emissions in the transportation sector. The bill also contains specific greenhouse gas reduction goals for renewable fuels. For instance, renewable fuels produced at new biorefineries are required to reduce by at least 20 percent the lifecycle greenhouse gas emissions relative to the lifecycle emissions from gasoline and diesel. More stringent requirements are included for advanced biofuels, biomass-based diesel and cellulosic biofuel. As described below, the act's requirement to increase the corporate average fuel economy standards to 35 miles per gallon for passenger cars by 2020 will have a significant impact on renewable fuel policy in the years to come. 
 
 As Congress continues to look at further greenhouse gas regulation, much of the greenhouse gas initiatives driving renewable fuel policy are coming from the states, in particular California. 
 
 Under the Clean Air Act, states generally cannot adopt motor vehicle emissions standards. However, the act includes a special condition that allows California to adopt separate vehicle emission regulations, but only if the EPA grants the state a waiver. The act also allows other states to adopt the California standards as their own if the waiver is granted. Seventeen states had indicated that they too are interested in developing their own vehicle greenhouse gas regulations. 
 
 Over the years, California has used the special provision in the Clean Air Act to establish ambitious vehicle emission reduction programs for nitrogen oxides, particulates and other vehicle emissions. For some time, the state has also sought to implement greenhouse gas emission regulations that establish declining fleet average greenhouse gas emissions standards for passenger vehicles, beginning with 2009 model year sales. In December 2005, the California Air Resources Board wrote the U.S. EPA seeking a waiver of preemption under the Clean Air Act for its proposed vehicle greenhouse gas rules.
 

 In its letter and accompanying materials, California took the position that its greenhouse gas emission reduction proposal should be exempt from the Clean Air Act because the EPA has thus far declined to set federal standards for greenhouse gases and because of "serious air pollution problems unique to the state." 
 
 However, on Dec. 19, the same day President George W. Bush signed the Energy Independence and Security Act, the EPA announced that it was denying California's request for separate vehicle greenhouse gas regulation. In its response to Gov. Arnold Schwarzenegger, the EPA found that the state's request was far different than previous requests. Unlike emissions covered by prior requests, the EPA noted that greenhouse gases are fundamentally global in nature and contribute to the global climate change problem that "poses challenges for the entire nation and indeed the world." Unlike the emissions covered by past requests, the EPA found that greenhouse gas emissions "harm the environment in California and elsewhere regardless of where the emissions occur" . . . and that therefore the "challenge is not unique to California." Importantly, the EPA cited the Energy Independence and Security Act, including its 35-mpg CAFE standard, as a reasonable "national approach to this national challenge" and stated that a national approach was preferable to a piecemeal, state-by-state approach. 
 
 The EPA's denial of California's request is expected to have wide implications beyond California and sectors of the economy beyond transportation. California, other states and environmental groups have announced they will seek judicial review of EPA's decision not to grant California its request for waiver.
 
 Todd J. Guerrero is an attorney practicing with the Agribusiness & Energy group at Lindquist & Vennum PLLP, a leading provider of legal assistance on renewable energy projects across the country. For more information, visit <a href="mailto:www.lindquist.com">www.lindquist.com</a> or call (612) 371-3211.

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Greenhouse Gas Efforts Continue to Impact Renewable Fuel Policy

Last year was busy for biodiesel in Tennessee. New fleets started using the fuel despite rising prices, the state continued working to advance biofuels, and producers traversed the ups and downs of working within the confines of 2007's upwardly mobile soybean market. The following includes briefs of what several of these fuel sector affecters were up to in Tennessee in 2007.
 
 Many of the state's operating biodiesel producers (and a handful of projects under development) formed the Tennessee Biodiesel Producers Coalition. The first two things they accomplished were to get biodiesel defined by law in the state, and to establish a $1 million producer incentive. Both went into effect last year with the producer incentive becoming active Sept. 1. 
 
 The state of Tennessee did a number of things for biofuels last year as noted in the article "A Southern Transformation" in the February 2008 issue of Biodiesel Magazine. The items not mentioned in that article, yet worth noting, begin with the state (along with numerous partners) hosting several biofuels quality workshops. They were well attended, and producers, fuel suppliers, terminal operators and convenience store owners all got to share physical space to learn about and ask questions about biofuels. With biodiesel's significant diversity of participants in Tennessee, it was and will continue to be critically important to get more players on the same page about how to handle biodiesel and look after quality. These workshops coincided with the Tennessee Department of Agriculture Regulatory Services Administrative Manager Randy Jennings' work in 2006 and early 2007 to put biofuels testing on par with state-wide testing conducted on petroleum. The effort revealed non-spec biodiesel in a number of incidents that ended in stop-sales and product returned at both in-state producers and fuel supplier's sites. There is no question that biodiesel quality oversight and assurance took a big step in Tennessee last year.

 
 Several notable fleets began using biodiesel in 2007. In east Tennessee, what is likely to become Tennessee's single largest user of biodiesel is East Tennessee Zinc Co. Since reopening its three mines just east of Knoxville, the company has moved its entire fleet of 120 vehicles to B99.9. Another new first in Tennessee: Eastman Chemical Co. in Kingsport moved its five locomotives to B20 without problems. Also, the biggest mass transit agency in the state, Memphis Area Transit Authority, got started with a biodiesel blend, joining Knoxville Area Transit (fleet-wide B20) and Chattanooga Area Regional Transit Authority (currently in a pilot phase with four buses on B20) as mass transit agencies making the switch. In east Tennessee alone, we are tracking approximately 70 fleets that use biodiesel. The number of biodiesel-using fleets could be easily double that statewide.
 
 As one small fish in a big biofuels pond in Tennessee, I am happy to say that-although this is a time of transition and there are many speed bumps along the way-we are in a good place with all of the partnerships and cooperative relationships working to make a difference. If a wide variety of Tennesseans continue to act like agents for change, you should continue to hear about significant advances being made here.
 
 Jonathan G. Overly is the founder and executive director of the East Tennessee Clean Fuels Coalition, which is part of the University of Tennessee at Knoxville Institute for a Secure and Sustainable Environment, and one of 80 U.S. DOE Clean Cities programs. Reach him at jgoverly@utk.edu or (865) 974-3625, or visit .<a href="mailto:www.ETCleanFuels.org">www.ETCleanFuels.org</a>

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Biodiesel: A 2007 Tennessee Snapshot

I'm not sure which came first, renewable diesel or green diesel, but it's likely that both alternative fuels will be competing with biodiesel on a global scale in a very short time. We think it's vital to keep Biodiesel Magazine readers informed about these contending biofuels, especially while the Energy Independence & Security Act of 2007 is being defined.

 
 Renewable diesel became a hot topic in our industry last spring when the Internal Revenue Service ruled that virtually any biomass process using heat was "thermal depolymerization," and fuels derived from such processes should be eligible for the $1-per-gallon blender's tax credit. Then, green diesel produced through hydroprocessing made headlines, and that's when many of us started scratching our heads. Sure, we could explain that biodiesel is produced through a process of transesterification-the blended reaction of triglycerides and alcohol in the presence of a catalyst at a low temperature and pressure, creating a biofuel that is one-tenth oxygen by weight. Beyond that, however, most of us were unable to succinctly explain how renewable diesel and green diesel were made, and how they stood up to biodiesel. The passage of a new 36 billion-gallon renewable fuels standard (RFS) was a wake-up call compelling us to make sense of it all. 
 
 Biomass-based diesel is one of several fuel categories defined in the RFS. A carve-out for biomass-based diesel (a subsection of the advanced biofuels category) begins at 500 million gallons in 2009 and should surpass a 1 billion-gallon floor in 2012. The bill specifically states that renewable fuel derived from coprocessing biomass with a petroleum feedstock qualifies as an advanced biofuel but not as a biomass-based diesel. 
 
 While the IRS completes its rulemaking on the RFS, experts are sounding off. One of this month's features, "Defining the Alternatives," on page 40 explores some of those 
 unanswered and questionably defined differences among biodiesel, renewable diesel and green diesel. One expert suggests that the IRS too loosely defined thermal depolymerization, while another points out a lack of understanding about the fuels' fundamental differences. Brian Appel, chief executive officer of Changing World Technologies Inc., a renewable diesel company, tell us that hydroprocessing high-cost feedstocks makes more sense than putting them through a thermal depolymerization process. 
 
 Furthermore, the story points out that some processes tagged as thermal depolymerization are actually misnamed, stand-alone, coprocessed hydroprocessing methods. The experts we talked to were also sure to mention that neither thermal depolymerization nor hydroprocessing is free from the challenges that biodiesel endures (fuel quality, input costs, etc.). 
 
 The story provides a good starting point for readers who want to better understand the differences and similarities among biodiesel rivals. Regardless of how these fuels are made-hydroprocessed, thermally depolymerized, coprocessed or pushed through a stand-alone facility-it's clear that biodiesel will go head-to-head with them in the near future. We'll let you know what to expect.

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Getting to Know the Competition

In the USDA's first oilseed production projection report of 2008, it lowered 2007-'08 production to 80 million tons, down 100,000 tons from its December 2007 projections and down 16.6 million tons from last year's record. Soybean production, in particular, was estimated at 2.6 million bushels, down 9 million bushels from last month's report, because of a slightly lower yield estimate. Unfortunately for some biodiesel producers, soybean oil prices are expected to rise to a record-high $9.90 to $10.90 per-bushel range.

USDA releases oilseed projections

In January, three plant workers and a police officer were injured in an explosion at American Ag Fuels LLC, a 7 MMgy soy-based biodiesel production plant in Defiance, Ohio. Acting Defiance Fire Chief Pete Schlosser said the explosion occurred in a remote loading facility when flammable vapors accumulated. A spark from an overhead garage door ignited the gases and caused the explosion, he said. The plant remains closed until repairs are completed.

Plant explosion injures four

Guizhou Zhongshui Energy Co., the principal project development subsidiary of a leading energy company in the Guizhou Province of southwest China, has begun operation of a $6.8 million, 20,000-tons-per-year (5 MMgy) biodiesel plant there. Initially using waste cooking oil as the feedstock, the company aims to obtain oil from the Tung tree, which contains approximately 62 percent oil similar to jatropha oil and is commonly found in southeastern China's mountainous areas, according to He Yuyuan, general manager of parent company Zhongshui Energy Development Co. Ltd.

Chinese plant considers Tung oil

The Michigan motor fuel tax break for biodiesel blends ended Dec. 31, after the state legislature failed to provide appropriations required by statute. For fuels containing at least 5 percent biodiesel, the tax increased from 12 cents per gallon (cpg) to 15 cpg. Michigan Department of Treasury spokesman Terry Stanton said discussions are underway between treasury officials and legislators to reinstate the tax break.

Michigan tax incentive ends

Brazilian state-run oil giant Petrobras SA recently started marketing more than 100 million gallons of biodiesel to satisfy Brazil's new B2 mandate, which went into effect Jan. 1. According to the company, Petrobras and its Alberto Pasquanlini Refinery subsidiary acquired the biodiesel from 15 biodiesel plants in November at the National Petroleum Agency auction. The purchase was expected to fulfill the mandate through the first half of 2008.

Petrobras to meet Brazilian B2 mandate

Earth Biofuels Inc. will purchase yellow grease from Alliance Processors Inc. for feedstock at the company's biodiesel production facility in Durant, Okla. Earth Biofuels will buy all of the yellow grease that Alliance collects at a fixed price over an initial three-month term and a following three-year term based on the current market price for yellow grease. Alliance expects to supply the plant with 267,000 to 400,000 gallons of yellow grease per month.

Earth Biofuels switches feedstock

Test runs of renewable diesel production began in mid-December at the ConocoPhillips Co. refinery in Borger, Texas, processing beef tallow from the Tyson Food Inc. plant in Amarillo, Texas, according to a ConocoPhillips spokesman. When the partnership was first announced in April, ConocoPhillips Chief Executive Officer Jim Pulva said his company would be investing $100 million over three to five years to develop the 175 MMgy facility. Tyson is also making an undisclosed amount of capital improvements to preprocess the beef tallow. Full production is expected in 2009.

Tyson, ConocoPhillips test renewable diesel process

Thar Technologies Inc. recently announced the launch of a new initiative to develop cost-effective technology for the mass production of biodiesel. The new green process will use high-pressure carbon dioxide rather than hexane, a hazardous air pollutant, to extract oil from edible and inedible oilseed feedstocks. Initial funding for the initiative was obtained through a $2 million grant from the Advanced Technology Program of the National Institute of Science and Technology.

Thar to produce biodiesel without hexane

A steady supply of affordable biodiesel is hard to come by in the Pacific Northwest. That's why Green Diesel Inc. has decided to make its own. The subsidiary of Tri-City & Olympia Railroad Co. (railroad code TCRY) in Richland, Wash., will produce biodiesel for TCRY locomotives, making it the first known railroad company to produce its own biodiesel.
 
 TCRY currently handles approximately 100 cars on its 127-mile short line and uses 500 gallons of fuel each week.
 
 Dave Samples, director of business development for TCRY, said Green Diesel has built a small research plant in Richland, capable of producing 1 MMgy. Samples said the facility could begin operating as soon as mid-April. Green Diesel General Manager Jack Farrell said the plant is designed to produce fuel in small batches. "Part of the problem that plants are having is that the industry right now is not economically feasible to handle huge, continuous-flow plants," he said. "We're not convinced that bigger is better. [We] can run 50 gallons or 50,000 gallons, it doesn't matter. I can do it once today or 10 times this week. We took a conservative approach to this. We wanted to be able to keep our expenses and up-front costs low and not gamble on the industry until our research is complete."
 
 ConAgra Foods Inc. is a client on TCRY's line and has agreed to supply Green Diesel with oil for its research plant. The company will purchase varying types of ConAgra's 26 food-grade virgin oils to test and determine what works best for its locomotives, although food-grade oil is one of the more expensive oils for biodiesel producers. "The price of oil right now is really immaterial to us because we're doing it for research," Farrell said. "My concern is finding what oil works best for us for freight operations and locomotives." After determining which process will produce a consistent end-product, Farrell said his company will consider switching to a more economical feedstock, such as waste vegetable oil.
 
 "Our real goal is to do the research and, as a result of the research, use the product in our locomotives," Samples said. "We do not have any intent to sell the biodiesel from this plant, neither through retail nor wholesale."
 
 Green Diesel recently purchased a 33-acre lot in Richland for the construction of a larger production plant. Samples is optimistic that a 15 MMgy plant in that location could be built and operational in two years.

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Railroad to make its own biodiesel

From California to Spain, algae's potential as a feedstock is slowly growing as biodiesel producers search for a low-cost alternative to virgin vegetable oils. Two companies made major announcements recently, which will affect the eventual commercialization of algae technology, while leaders in algae technology gathered in Madrid in January to discuss the state of the industry.

 
 PetroSun Inc. announced that its renewable fuel subsidiary PetroSun BioFuels Refining has entered a joint venture to build and operate a 30 MMgy biodiesel plant near Coolidge, Ariz. The plant would use algae-based oil produced at PetroSun's proposed algae farms in Arizona as a feedstock. Construction of the biodiesel plant is scheduled to begin in the third quarter of 2008. PetroSun previously announced that it will start building algae farms in several U.S. states, Mexico, Brazil and Australia in 2008. The company has also entered a feedstock supply agreement with Bio-Alternatives Inc. for up to 150 million gallons of algae oil per year. 
 
 Meanwhile, California-based Solazyme Inc. entered into a biodiesel feedstock development and testing agreement with major oil company Chevron USA Inc. Solazyme said it is currently producing thousands of gallons of algae oil. It is partnering with Chevron to accelerate the commercialization of its proprietary technology.
 
 More than 160 people from Europe, North America and South America attended the International Monographic Conference in Madrid, Spain, according to Ana Pérez with event coordinator Global Energy. Presenters included Doug Frater, president of Global Green Solutions Inc., who spoke about algae as a sustainable biodiesel feedstock. His company is teaming with Valcent Inc. to develop an algae propagation system in El Paso, Texas. Another speaker Jorge Kaloustian, president of Oil Fox Co., highlighted his company's business experience in producing biodiesel from algae oil. Oil Fox is harvesting algae in the Patagonia region of Argentina in conjunction with the government of the Chubat Province. Claudia Teixeira, a researcher with Brazil's ministry of science and technology, gave a technical and economic analysis of algae as a feedstock for biodiesel. Miguel Garcia Guerrero, a researcher with Sevilla University in Spain, discussed biofuel production from microalgae.

Interest in algae as a feedstock for biodiesel continues to grow as firms and researchers in North America, South America and Europe race to bring algae technology to the market.

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Algae feedstocks gain attention

The most recent agenda from the Society of Automotive Engineers' Powertrain & Fluid Systems Conference & Exhibition demonstrates how serious engineers are about studying renewable fuels and incorporating alternatives into the automotive mainstream. More than 400 people attended the conference held in Rosemount, Ill., where several technical presentations focused on biodiesel, renewable diesel and ethanol in various fashions. 
 
 According to SAE Program Engineer Colette Wright, the 2007 lineup included 27 presentations classified under "Alternative Fuels." She told Biodiesel Magazine that most of those specifically addressed alcohols, biodiesel, dimethyl ethers and natural gas. She also said there were stand-alone sessions involving engines and fuels of the future. "The program has addressed alternative fuels for at least 15 years, but of course the subjects were reflections of the industry," she said. "For instance, I pulled a program from 1996 that featured nine presentations almost exclusively on natural gas. In 2002, there were 17 presentations that included hydrogen, ethanol, methanol [and] natural gas."
 
 At the October event, DuPont Performance Elastomers presented results from a study matching up various grades of DuPont fluoroelastomers with different types of biodiesel to ascertain compatibility and recommend best-in-class offering. Speaker Eric Thomas of DuPont's elastomer division said six DuPont materials with varying compositions and fluorine contents were used in the study. All of the B100 and biodiesel blends for the study were transesterified from rapeseed oil and met SAE-designated specifications. The petroleum diesel was on-spec No. 2 ultra-low sulfur diesel. Six fuels-including B100, B20 and B5-were tested with the DuPont materials. The other three fuels were B100, B20 and B5 blended with 0.5 percent distilled water. Thomas concluded that fresh, presumably pure rapeseed methyl ester isn't aggressive toward fluoroelastomer compounds and doesn't swell the material, even conventionally formulated fluoroelastomers containing metal oxide. The study also concluded that biodiesel containing water and/or acid can be very aggressive toward conventionally formulated fluoroelastomers, causing those containing metal oxides to swell-in some cases, severely. Peroxide-cured fluoroelastomers without metal oxides were resistant to wet acidified B100 and biodiesel blends. Thomas noted that all the metal-oxide-free fluoroelastomers performed well under all conditions with all fuel blends. 
 
 Another presentation, according to an abstract submitted by Monica Larsson of Chalmers University of Technology, compared emissions from Swedish low-sulfur diesel, Fischer-Tropsch diesel synthesized from natural gas and biodiesel transesterified from rapeseed oil. Using a single-cylinder, heavy-duty engine at 25 percent and 100 percent loads, and a constant engine speed of 1,200 revolutions per minute, results showed soot emissions from Fischer-Tropsch diesel and biodiesel were up to 40 percent and 80 percent lower, respectively, compared with low-sulfur Swedish diesel. The Fischer-Tropsch diesel gave off slightly lower nitrogen oxide emissions than the Swedish diesel but the nitrogen oxide produced from biodiesel was slightly higher. Fischer-Tropsch fuel consumption matched Swedish petroleum fuel consumption, but biodiesel displayed a 10 percent increase in fuel consumption due to its lower energy content. 
 
 "For 2008, I would expect similar subjects as were given in 2007," Wright said. The deadline for 2008 abstract submissions was in February, but 2008 program information won't be available until this summer. Until then, for more information on presentations given during the 2007 meeting, visit <a href="http://www.sae.org">www.sae.org</a>.

Renewables get hefty coverage at SAE conference

Wisconsin biodiesel producer Best BioDiesel Cashton LLC, a subsidiary of Best Energies Inc., is investigating carbon credits for its fuel production technologies through an agreement with Chicago-based Carbon Green LLC and Ithaca, N.Y.-based Environmental Credit Corp. The companies wouldn't give details at press time because the related protocol is still under development. However, they did confirm that Best BioDiesel Cashton could be the first biodiesel producer to receive carbon credits, if the protocol is approved. 

 
 Last year, Carbon Green and Environmental Credit developed a protocol through the Chicago Climate Exchange that gave the first carbon credits to an ethanol producer. Corn Plus LLLP in Winnebago, Minn., received carbon credits for reducing its natural gas consumption by 52 percent through the use of a biomass-fueled fluidized bed boiler.
 
 Best BioDiesel Cashton started production in December. It expects to produce 10 MMgy from a range of feedstocks, including corn oil removed from distillers grains, a coproduct of ethanol production. The company said its proprietary technology platform will allow ethanol producers to secure additional revenue from their existing coproducts while decreasing the ethanol plants' overall greenhouse gas emissions and improving their net energy profiles.
 
 Best Biodiesel Cashton's technologies feature fast phase separation; higher efficiency; smaller, skid-mounted equipment; enhanced methanol recovery; and glycerin combustion. Best Energies is focused on developing essential technologies that will add value to all new and existing biofuel production facilities. In addition to biodiesel, the company is also developing projects using biomass pyrolysis and gasification. Its technology platforms are committed to the continued use of metrics, like carbon credits, to demonstrate the proficiency of the fuel.

Left to right: Tony Janowiec of Best Energies, Jim Murphy and Gary Lazarski of Carbon Green, and Jim Schreck of Best Energies

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Best Energies seeks carbon credits

Global biodiesel supplier World Energy Alternatives LLC and Innospec Fuel Specialties, a division of specialty chemical company Innospec Inc., recently agreed to use Innospec's new, trademarked Biostable package of fuel additives to improve the stability of World Energy's biodiesel products. "This is not just a product supply agreement," said Tom Entwistle, director of sales for Innospec Fuel Specialties. "We're trying to raise the standard of biodiesel that's introduced into the worldwide market."
 
 The agreement stems from an ASTM decision approximately a year ago that changed the oxidative stability specification for biodiesel. "In order to meet the specification, some products such as soybean oil normally need an additive," explained Mike Szady, vice president of supply at World Energy. "So we started looking around at the different additives on the market, as well as the different additive companies that were out there. The one company that came recommended very highly for its technical abilities was Innospec."
 
 At that time, Innospec was beginning to roll out an additive package specifically for improving the stability of biodiesel. Over the past year or so, the two companies have worked together to improve the package and create the Biostable line of products that World Energy will use in its biodiesel. The new additives, which come in a liquid form, act to inhibit peroxide formation, protect against metal-catalyzed oxidation and minimize the effect of gum formation from peroxide decomposition. 
 
 In the three-year agreement, Innospec will be World Energy's primary stability additive supplier for all the biodiesel the company requires it for. Although the agreement centers on oxidative stability, the two companies expect to work together on other quality issues that may be rectified through the development of additional additives, such as ones that may improve cold flow. "World Energy can educate us on their challenges, and we can provide technologies and additives based on what they're telling us," Entwistle said. "I think that's the key."

World Energy to use Innospec additive

On Jan. 22, the Florida Department of Agriculture announced 12 recipients of $25 million in grants from the "Farm to Fuel" program, which is part of the 25x'25 initiative spearheaded by state Agricultural Commissioner Charles Bronson. The is designed to spur the state's agricultural industry to produce 25 percent of Florida's energy needs by 2025. 
 
 Grant recipients included Gulf Coast Energy of Walton LLC, which was awarded $7 million for the construction and operation of biodiesel and ethanol plants in Mossy Head, Fla. Gulf Coast Energy plans to begin construction of the $62 million project in the next few months and expects to begin producing biodiesel by the end of the year. 
 
 Agri-Source Fuels was awarded $4 million to be used toward the construction of a $21 million biodiesel plant in Pensecola. Company spokeswoman Peggy Matthews said the grant will be used specifically for equipment and will benefit the project greatly. Awarded funds were matched by company President Rick Higdon, the sole financial provider for Agri-Source. Initial site work has begun on the 18 MMgy plant, which is expected to be operational by the end of the year. 
 

 Companies that received grant money are required to match the contribution with their own money or otherwise raised funds. Entities chosen for the grants are contributing more than $150 million of their own resources to these projects. "We're not looking to build our own state-funded ethanol or biodiesel plants, or completely fund other projects," said Deputy Agricultural Commissioner Jay Levenstein. "We like to be in a position where we can help out. I know from talking to some of these companies that funding like this really puts them over the top of the hill as far as being able to complete their projects."

Florida ag department provides biodiesel grants

Ribbon-cutting ceremonies were held in early January at the Paseo-Cargill Energy biodiesel plant in Kansas City, Mo. At press time, a Cargill Inc. spokesman said the plant was expected to begin production in late February or early March. More than 300 people attended the event, which was held in conjunction with the first annual meeting of the plant's majority owner Paseo Biofuels LLC.
 
 More than 650 Missouri farmers purchased shares in Paseo Biofuels, which announced the beginning of its equity drive in August 2006. The company raised $24 million and made Missouri farmers the majority owners of a joint venture with Cargill to build the 40 MMgy biodiesel plant and a 30 million-pound, food-grade glycerin refinery. The biodiesel plant will use soybean oil as the feedstock and expects to meet BQ-9000 certification. The glycerin refinery will produce U.S. Pharmacopeia-grade, 99.7 percent pure, kosher-certified glycerin. The production facilities were built adjacent to Cargill's existing soybean processing facility in Kansas City. Cargill's grain and oilseed business operates 17 oilseed processing facilities in North America.
 
 "Missouri soybean farmers took the lead in biodiesel research over a decade ago with their very own checkoff dollars," said Dale Ludwig, executive director of the Missouri Soybean Association at the ribbon cutting. "Since that initial investment, these producers have contributed to the goal of furthering biodiesel production here in Missouri with the help of a great team of legislators. New production facilities such as Paseo-Cargill Energy are helping to push Missouri to the forefront of the nation's renewable fuels industry." More than 50 percent of Missouri soybean farmers use biodiesel in their operations.

Paseo-Cargill Energy will start producing biodiesel in Kansas City, Mo., in late February or early March.

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Paseo-Cargill Energy celebrates grand opening

As many of you are well aware, the European Biodiesel Board (EBB) has repeatedly called for the imposition of punitive anti-dumping and countervailing duties on U.S. biodiesel exports to Europe. The U.S. and European biodiesel industries have a long-standing tradition of working together to promote the increased production and use of biofuels as a way to reduce petroleum consumption and address critical climate change issues. It is unfortunate that the EBB is advocating a course of action that could hinder this progress, and in the interest of continued trans-Atlantic cooperation, we hope that cooler heads will prevail on this matter. 
 
 U.S. biodiesel exports are not the cause of the problems facing the European biodiesel industry. In fact, both the U.S. and European biodiesel industries are facing similar challenges. Dramatic increases in feedstock costs have created difficult market conditions for biodiesel producers. This is particularly the case with rapeseed oil, the dominant European feedstock. These facts, in tandem with policy changes adopted by European Union member states, are the main causes of the problems facing the European biodiesel industry. 
 
 It is in the mutual interests of both the U.S. and European biodiesel industries to enhance global trade in biofuels. In fact, senior EU officials have publicly noted that if Europe is to meet its goal to increase biofuels use, the EU will have to import fuels such as biodiesel. U.S.-produced biodiesel yields a 78 percent reduction in carbon lifecycle emissions and can play a constructive role in the global effort to reduce greenhouse gas emissions. 
 
 The U.S. biodiesel industry remains open to working with our counterparts in Europe to not only promote trade in biofuels, but to stop unintended abuses of existing biofuels incentives. For example, the National Biodiesel Board has strongly denounced so-called "splash-and-dash" transactions where fuel produced outside the United States is transshipped through the United States for the sole purpose of claiming the U.S. blenders' excise tax credit before being sent for final use in Europe. The NBB believes this practice may be more widespread than is being acknowledged by the EBB, and NBB is aggressively promoting efforts in Congress to end this practice. As has always been the case, we hope the EBB will recognize our genuine efforts to address this issue. 
 
 Lastly, it is also worthwhile to remember that in December, Congress passed and President George W. Bush signed H.R. 6, the Energy Independence and Security Act. This legislation, for the first time, creates a renewable requirement that will apply specifically to diesel fuel in the United States. The legislation requires the use of 500 million gallons of biomass-based diesel, which includes biodiesel, in 2009, and increases to 1 billion gallons in 2012. The 500 million gallons required in 2009 represents the entirety of the U.S. industry's production this year. As the renewable fuels standard's biomass-based diesel requirement increases, common sense dictates that increasing amounts of U.S.-produced biodiesel will be needed to meet the domestic mandate. 
 
 The U.S. and European biodiesel industries are facing many of the same challenges. We share a deeply held belief that biodiesel can play a constructive role in addressing global energy and environmental concerns. We are united in our desire to promote sustainability. In fact, our organization provided prominent roles for EBB members at our National Biodiesel Conference and Expo that was held in February. We hope the NBB and EBB can work constructively to resolve our differences and move ahead in a cooperative manner. 
 
 Magellan opens new biodiesel facility in Colorado

 Pipeline company Magellan Midstream Partners L.P. recently opened a new biodiesel blending and storage facility at a petroleum terminal in Aurora, Colo. The new biodiesel blending facility has an 84,000-gallon tank and will make biodiesel blends available to petroleum distributors.
 
 "We applaud Magellan for taking this step to include biodiesel storage and blending within this terminal," says Joe Jobe, National Biodiesel Board chief executive officer. "Developing blending infrastructure at the terminal level is critical to integrating biodiesel into the existing U.S. liquid fuel distribution system, which will greatly benefit our national energy security." 
 
 More than 40 terminals nationwide carry biodiesel. CHS Inc., a leading energy and grain-based foods company, will market and distribute the fuel from Magellan's facility. 
 
 "We are celebrating the opening of our 10th biodiesel distribution system inside one of our petroleum distribution terminals," says Don Wellendorf, Magellan chief executive officer. "We view renewable fuel distribution as a growth opportunity for our company, and we are a trailblazer in this area."
 Current Colorado biodiesel users already include Jefferson County Public Schools, Lakewood, New Belgium Brewery in Ft. Collins, Safeway and Aspen Ski Resort.
 
 "Today we are witnessing a renewable energy revolution in our state and in our nation," said U.S. Sen. Ken Salazar, who spoke at the opening ceremony. "This revolution is fueled by innovative firms like Magellan and CHS who understand that the production of clean, renewable biofuels not only strengthens America's national and environmental security, but offers an unprecedented opportunity to spur economic growth and job creation in our rural communities as well."
 
 Magellan is in the process of constructing 145,000 barrels of biodiesel storage at its terminal in New Haven, Conn. The company is also exploring transportation opportunities for biodiesel blends and is planning to transport a low-level biodiesel blend in its pipeline from Houston to Dallas early this year.
 
 Magellan Midstream Partners L.P. owns and operates the nation's longest pipeline for refined petroleum products. The company is headquartered in Tulsa, Okla. More information is available at <a href="http://www.magellanlp.com">www.magellanlp.com</a>.
 

 Manning Feraci
 NBB vice president of federal affairs

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The Need for Trans-Atlantic Cooperation

One of the nation's largest food and drug retailers is now fueling its entire U.S. truck fleet with cleaner-burning biodiesel. Safeway Inc. made the announcement recently as part of the company's Greenhouse Gas Reduction Initiative. The company will use B20, a blend of 20 percent biodiesel and 80 percent diesel, in its fleet of more than 1,000 trucks. 
 
 "We commend Safeway for showing leadership in true corporate sustainability," says Joe Jobe, chief executive officer of the National Biodiesel Board. "The company is also reducing its dependence on foreign oil and helping to stimulate a domestic energy economy. We encourage other large retailers to follow this example." 
 
 Safeway has been recognized for its dedication to using solar power, alternative fuels and construction strategies in conjunction with education to reduce carbon emissions. It also sells biodiesel at the pump at some of its stores.
 
 Safeway made the announcement with environmental and community leaders in major cities throughout the United States. In Washington, D.C., members of Congress, the U.S. EPA and representatives joined Safeway officials at a local Safeway store. The fleet-wide move to B20 is expected to reduce the company's carbon dioxide emissions by 75 million pounds annually, the equivalent of taking nearly 7,500 passenger vehicles off the road each year.
 
 "Safeway is proud to lead by example to help protect the environment," says Steve Burd, Safeway chairman, president and chief executive officer. "Using biodiesel to power our transportation fleet will prevent millions of pounds of carbon emissions from being released into the environment. Our biodiesel program is just one of many initiatives underway that will make a positive impact on the environment."
 
 In 2006 Safeway joined the Chicago Climate Exchange, the world's first voluntary, legally binding greenhouse gas emissions reduction, registry and trading program. The membership commits Safeway to reduce its carbon footprint from the base year 2000 by 390,000 tons of carbon dioxide. The company also joined the California Climate Action Registry, California's only official registry for greenhouse gas emissions reduction projects.
 
 In addition, the company is participating in the U.S. EPA's SmartWay Transportation Partnership, which commits Safeway to establishing a baseline fuel efficiency for its fleet and implementing a plan to decrease carbon emissions. Those efficiencies, which include purchasing trailers with large capacity, have saved more than 6.5 million gallons of diesel fuel and decreased carbon emissions by 73,000 tons annually. Safeway is also part of EPA's Grow & Go Partners, which promotes the benefits of renewable fuels.

All Safeway trucks will display the "Powered by Biodiesel" logo to highlight that the company has converted its entire U.S. fleet of more than 1,000 vehicles to cleaner-burning biodiesel.

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Safeway announces biodiesel use throughout fleet

Imperium Renewables Inc. recently announced a reduction of its "corporate workforce," which company spokesman John Williams said would not impact production at its 100 MMgy biodiesel plant in Grays Harbor City, Wash. "The move is part of an ongoing restructuring plan that realigns the company to address short-term challenges and ensure the company's long-term growth," he said. In December, Imperium replaced Chief Executive Officer Martin Tobias with company founder John Plaza. The company also withdrew its planned initial public offering (IPO).

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Imperium restructures staff, drops IPO

Texas-based GreenHunter Energy Inc. has begun trading shares on the American Stock Exchange under the ticker symbol "GRH," the company announced Jan. 2. GreenHunter manages a portfolio of renewable energy assets. Its subsidiary GreenHunter BioFuels Inc. recently acquired a waste oil and methanol refinery in Houston that is currently being converted into a 100 MMgy biodiesel plant. Production is expected to begin in late March. Contaminated methanol will be converted to commercial-grade fuel for resale and use in the biodiesel manufacturing process.

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GreenHunter Energy begins trading on AMEX

BioEnergy of America Inc. filed for Chapter 11 protection in January, following the loss of a major funding source for its biodiesel production plant under construction in New Jersey. According to company founder Tom Davanzo, two affiliated biodiesel plants in Denver-previously under the BioEnergy of Colorado name-have ceased operations as a result. 
 

 Those plants produced a total of 18 MMgy of soy-based fuel. The New Jersey facility was slated to produce 80 MMgy from multiple feedstocks. Davanzo said he will re-enter the biodiesel business once a bankruptcy court has settled the case.

BioEnergy of America files for bankruptcy

In early January, Australia-based biofuel development company Agri-Energy Ltd. announced the sale of its U.S. biofuels enterprises to a consortium of U.S. investors for $42.5 million. The new U.S. investment company Pangaea Technology Finance will take over Agri-Energy's biodiesel project Beatrice Biodiesel LLC, a 50 MMgy facility in Beatrice, Neb., that is slated to begin production in March, according to Chief Technical Officer David Blythe. The deal also included an adjacent 55 MMgy ethanol project currently under development, he said.

Agri-Energy sells U.S. biofuels assets

Photovac Inc. has released the MicroFID (flame ionization detector), a volatile organic compound analyzer that detects methanol leaks in biodiesel plants. The portable analyzer is operated with just one key, displaying critical data in less than three seconds. It also provides data-logging capability so that readings can be stored in the instrument and downloaded to a computer for subsequent analysis and recordkeeping purposes. The Massachusetts-based company manufactures handheld instruments for the detection of volatile organic compounds in air, soil and groundwater, among other products and services.

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Photovac offers methanol leak detector

Mission Biofuels India, a subsidiary of biodiesel developer Mission Biofuels Ltd., announced in January that it signed an agreement with an Indian district-controlled entity for long-term and exclusive access to jatropha seeds from already-planted land and land that will be planted over the next three years. Mission Biofuels currently operates a 100,000-metric-tons-per-year (approximately 30 MMgy) biodiesel facility in Malaysia and is building an adjacent 250,000-metric-tons-per-year (approximately 75 MMgy) plant. Both plants will initially use crude palm oil as a feedstock, which will ultimately change to jatropha oil.

Mission Biofuels currently operates this 100,000-metric-tons-per-year (approximately 30 MMgy) biodiesel facility in Malaysia.

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Mission Biofuels signs jatropha contracts

Robert-James Sales Inc., a stainless steel piping distributor, has assembled a new management team. James Bokor Jr. has been appointed president of the company. He will replace his father James Bokor Sr., who remains chairman of the board of directors. Joseph McIntosh was promoted from vice president of finance to treasurer. Jeffrey Parrish was named the company's national sales manager, and Scott Hughes will assist him as sales manager.

From left to right: Sales Manager Scott Hughes, President James Bokor Jr., National Sales Manager Jeffrey Parrish and Treasurer Joseph McIntosh

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Robert-James Sales names management team

SGS North America Inc. recently appointed Howie Nelson as the company's business development manager for alternative fuels. He will be managing a cross-divisional effort to provide services-construction verification, mechanical integrity inspections and systems, inbound grain grading and weighing, product testing, outsourced laboratory services, and International Standards Organization certifications-to the renewable fuels industry.

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SGS names alternative fuels manager

China Clean Energy Inc. recently announced it would expand its board of directors from three to nine members. One of those newly created positions will be filled by company Chief Financial Officer Gary Zhao. Having served as CFO since November 2006, he is responsible for the company's overall financial planning and control, U.S. Securities and Exchange Commission filings, and corporate finance. The company is publicly traded over the counter under the symbol CCGY.

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China Clean Energy appoints new board member

The new Energy Bill signed in December didn't extend the $1-per-gallon blender's credit for bio and renewable diesel producers, nor did it address what some characterize as a loophole in the tax laws as interpreted by the Internal Revenue Service in 2007 giving eligibility of the full credit to petroleum refiners planning to coprocess biomass in their existing refining infrastructures. It did provide a renewable fuels standard large enough for many alternative diesels, including a 1 billion-gallon biodiesel-specific mandate by 2012. 
 
 Unsure of how the future may unfold for the various second-generation alternative diesels, the following is a basic look at what some of them are and how they are produced. 
 
 "In a world where every molecule counts, one of the fascinating things that the average person doesn't understand or appreciate is that these guys are making different molecules," says Michael McAdams, executive director of the Advanced Biofuels Coalition, referring to renewable diesel fuels made from emerging second-generation processes. "This is why biodiesel has its own specification-it's a completely different compound than diesel fuel. There are no oxygen molecules attached to some of these fuels produced from second-generation processes. They are just fundamentally, physically and chemically different than biodiesel. With that, it gives them advantages that biodiesel doesn't share chemically." McAdams is an advocate of technology and feedstock neutrality, and tax parity in the governmental subsidization of renewable fuels. "If you make a renewable diesel that is chemically identical to D975, and you go through the certification process with the U.S. EPA and the agency finds that the molecule is the same as what's found in petroleum diesel fuel, then they're going to certify the fuel and they've done their job-they've done the molecular composition job and they've done the job of public health and safety, which is the requirement, which would allow the fuel to be sold." 
 
 Biodiesel, or fatty acid methyl esters (FAME), is produced from vegetable oils or animal fats through a process of transesterification, and are mono alkyl esters of long-chain fatty acids. Oils and fats are comprised of triglycerides-three fatty acid molecules connected to a glycerol molecule. Transesterification occurs when triglycerides are mixed and reacted with alcohol in the presence of a catalyst such as sodium or potassium hydroxide at relatively low temperatures and pressures. The three fatty acid molecules detach from their common glycerol molecule after which each fatty acid combines with an alcohol molecule to form FAME. Unlike petroleum diesel and many other "alternative" diesel fuels, biodiesel contains oxygen-10 percent by weight.
 
 Renewable Diesel: Thermal Depolymerization 
 Brian Appel, chief executive officer of Changing World Technologies Inc., tells Biodiesel Magazine he helped craft the term "thermal depolymerization" into the 2005 Energy Bill to describe the process through which renewable diesel is made. The phrase comes from words used in a patent written by Illinois microbiologist P.T. Baskis. The IRS's interpretive ruling last spring said virtually any biomass process using heat was thermal depolymerization and therefore those renewable fuels were eligible for the $1-per-gallon blender's tax credit, which some think was tailored specifically for biodiesel. 
 
 "As a chemical engineer the term 'thermal depolymerization' means something more specific to me," says National Renewable Energy Laboratory Principal Engineer Robert McCormick. "In particular, to me it means a chemical process driven exclusively by heat and pressure without the use of a catalyst." This process is considered identical or at least very similar to pyrolysis and can be done in the presence of steam, which could be called hydrothermal processing-still a form of thermal depolymerization. 
 
 Appel, whose company uses a thermal depolymerization process to convert turkey guts and waste into renewable fuel oil, says "As one of the pioneers of the renewable diesel provision [in the 2005 Energy Bill], my opinion is that the tax support was intended for technologies that dealt with waste." With thermal depolymerization, waste materials are heated up to make char and oil. According to an NREL document describing different alternative fuels and their production processes, temperatures typically needed for conversion range from 570 to 660 degrees Fahrenheit, under a pressure range of 100 to 170 atmospheres. Reaction times are 15 to 30 minutes. "My understanding is that thermal depolymerization could be conducted at even lower pressures, but may require even higher temperatures-like 570 degrees Celsius (more than 1,000 F)," McCormick says. "At the same pressure it should require a much higher temperature for thermal as opposed to catalytic" processing as used in green-diesel production discussed below. 
 

 The char byproduct from thermal depolymerization can be used for processing while the oil may be further refined or sold into the industrial heating or stationary power markets, where CWT's 8 MMgy of renewable diesel is bound. Experts say the oil is similar to pyrolysis oil or bio-oil. Appel, says CWT's fuel has characteristics of No. 2 and No. 4. "What we firmly believe is that you need to work the stationary fuels markets before you engage in meeting the quality required for transportation fuels," he says. Experts agree with Appel's approach to using waste materials and assert there is no point in using vegetable oils or animal fats in the process of thermal depolymerization-including hydrothermal (steam and heat) processing. Rather, hydroprocessing would be a more sensible use of higher-priced fats and oils for conversion to second-generation biofuels. 
 
 Green Diesel: Hydroprocessing
 Many alternative diesel fuels dubbed "renewable diesel" are not or will not be produced using a chemical engineer's definition of the term thermal depolymerization, but rather through stand-alone or coprocessed hydroprocessing. The name "green diesel" has been coined for hydroprocessed fuel and connotes a specific production process. "Hydroprocessing in my opinion means something very specific, which is hydrogenation conducted on molybdenum- or tungsten-sulfide-based catalysts supported on alumina and promoted with cobalt or nickel," McCormick says. "In hydroprocessing, the goal is to catalyze reactions that use hydrogen to primarily remove sulfur [in petroleum refining] but also to remove nitrogen and oxygen." Typically, hydroprocessing requires temperatures between 600 to 700 degrees F with a lower pressure range than used for thermal depolymerization, 40 to 100 atmospheres. Reaction times vary from 10 to 60 minutes, according to NREL documents. But green diesel production requires the use of expensive, sensitive and tricky catalysts. One source tells Biodiesel Magazine that certain green-diesel technologies "are not without their catalyst problems." 
 
 ConocoPhillips Co., UOP LLC and Neste Oil are all making their debut into green diesel production (or providing technology in the case of UOP) through coprocessing at petroleum refineries or intended free-standing biorefineries. While plans for independent green-diesel production plants are advancing, oil refiners find the Neste-style add-on attractive on many levels. When fats act as dedicated feeds and are processed alone, the boiling range of the finished fuel is very narrow, and it has no aromatic hydrocarbons or sulfur, which are regulated by the EPA. Petroleum diesel aromatic content is typically 20 percent to 30 percent. Hydroprocessed green diesel possesses a cetane number of 90 to 100. These properties give the fuel good ignition and emissions characteristics. And the lack of aromatics and sulfur accompanied by a high cetane number make green diesel a premium blend-stock that could save refiners and blenders money. "If you coprocess fat with petroleum in hydroprocessing you impart some of these properties in proportion to the amount of fat included in the feedstock," McCormick says. "If not done properly there can be residual feedstock, partly converted feedstock, and any impurity present in the feedstock will be present in the product-just like with biodiesel. Green diesel may have some advantages when it's done right-but it has to be done right." 
 
 <img src="/images/upload/20080211024541.jpg" alt="" />
 Diagram of UOP's efforts in green fuels production
 
 Sources say ConocoPhillips is working with a company on an isomerization process to branch the hydrocarbons, thereby improving cold flow performance of its fuel. Neste plans to use palm oil in a mega refinery-sized Malaysian plant using its own catalytic isomerization process. Branching of the fuel molecules does however lower the fuel's cetane number, green-diesel tech provider UOP states in a corporate document. "[Green diesel] is produced as a high-cetane, straight-chain paraffin but its cold-flow properties can be adjusted by the appropriate level of isomerization," according to the document. "The product cetane number can reach as high as 80 or 90." The minimum cetane requirement for U.S. diesel is 40. Depending on the feedstock, the cetane number of biodiesel averages near 50. 
 
 UOP has a "dog in the fight" so its data is not objective, says McCormick, but a life cycle analysis done by the company's Tom Kalnes and Terry Marker, along with Michigan Technological University's David Shonnard, conclude that fossil energy consumption over the life cycle of green diesel is reduced by 84 percent to 90 percent when made from soybean oil or palm oil, respectively. To achieve these reductions the study indicates the hydrogen needed to facilitate catalysis must come from the soy or palm byproducts from the production process rather than from fossil fuels. "Thus, green diesel has the potential to displace more petroleum resources per energy content in the fuel compared to biodiesel," the three authors wrote. "Larger reductions in greenhouse gas emissions for green diesel relative to biodiesel were predicted by this study for soybean feedstocks, but lack of verifiable data on palm oil prevented any conclusions to be made for this feedstock." Sources privy to preliminary results of a new study expected to be released later this year say data show promising reductions in greenhouse gas emissions for green diesel hydroprocessed from soy-but the study shows greenhouse gas reductions from soy-derived biodiesel are even greater. 
 
 Ron Kotrba is a Biodiesel Magazine senior writer. Reach him at <a href="mailto:rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 738-4962.

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Biodiesel Magazine takes a look at the various alternative diesel fuels emerging and how they are produced.

Defining the Alternatives

High drama defined two weeks in early December when some 11,000 government officials, environmentalists, industry lobbyists and journalists met in Bali, Indonesia, for the launch of negotiations on a climate change deal for a post-Kyoto Protocol world. Emotions welled and spilled over into tears, boos, hissing, insults and threats. Most of these were directed at, or in response to, the obstructionist positions taken by U.S. delegates to the United Nations Climate Change Conference. However, as tempers flared and the last minutes of the summit ticked away, the United States made a turnaround that secured the adoption of what is being dubbed the Bali Roadmap.

 
 The tension at the summit was said to be palpable; the culmination of a year marked by reports and conferences that brought an increasing urgency for action to mitigate the most devastating effects of climate change. "It was a very intense atmosphere with constant debates," says Oliver Schaefer, policy director for the European Renewable Energy Council, an umbrella group for Europe's renewable energy industry. "Everybody was aware that this was a really important meeting; that we could be somewhere where a decisive decision was made for future generations."	
 
 The summit came fast on the heels of the release of the final installment of the Intergovernmental Panel on Climate Change's Fourth Assessment Report and a U.N. event for heads of state and other top officials to advance the global agenda on climate change, which was held at U.N. headquarters in New York City. At this one-day, high-level event, Rajendra Pachauri, chairman of the IPCC, which recently won the Nobel Prize for its work, reviewed the panel's report. "To start with, let me say that we, the human race, have substantially altered the Earth's atmosphere," he said. "Adaptation alone will not do. We need to bring about mitigation actions to start in the short term even when benefits may arrive in a few decades." 
 
 This is the first report in the IPCC's nearly 20-year history that asserts with more than 90 percent certainty that greenhouse gases, carbon dioxide in particular, are rising as a result of human activities and that these gases are the main cause of the planet's recent warming. Without action to curb emissions, millions of people will be affected by weather extremes such as longer droughts, heavier precipitation, more severe storms, rising sea levels, floods and heat waves. According to a consensus document signed by more than 200 scientists and released at the Bali conference, to stave off the worst of these effects, global emissions must peak and decline in the next 10 to 15 years and ultimately must be reduced by at least 50 percent below 1990 levels by the year 2050. 
 
 "A large part of the solution is available to us today, what we need is political will," said Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change at a pre-conference press briefing in Bali. "I sense an incredible growing international awareness of the importance of climate change and recognition among the general public that politicians need to come to grips with this issue," he said. "Millions of people around the world will be focusing their attention on what will be the response of the politicians to that very clear message given to them by the scientific community." 
 
 How Do Biofuels Fit In?
 Although biofuels didn't play a significant role in the plenary sessions of the conference, the specialized workshops and side events were littered with speakers representing the interest of the biofuels industry. "We went there to talk about renewables as much as possible and to make people aware of renewables ranging from wind to solar to biofuels," Schaefer explains. "If you were there you would realize that the awareness about any kind of renewable sources is not very high. People tend to talk more about nuclear and clean coal and carbon sequestration." In past negotiations, Schaefer says, the nuclear and coal industries were strongly represented. "They pushed themselves into people's brains so now we're trying to counter that a little bit," he says.
 
 In addition to injecting new ideas into the mix in Bali, biofuels supporters had to contend with the concerns of certain green groups about the social and environmental costs of producing biofuels. "As in most public debates, on the one side biofuels are blessed for being a solution to security, supply and climate goals," Schaefer says. "On the other hand, they are seen by many environmentalists as something terrible." 
 
 In a survey released by The World Conservation Union midway through the Bali talks, of 1,000 climate decision makers and influencers surveyed from across 105 countries, first-generation biofuels from agricultural crops were found to be the least likely of 18 technologies to play a significant role in lowering overall carbon levels in the atmosphere. Topping the list were solar, wind, co-generation and wave energy technologies. Coming in at a respectable No. 7 was second-generation biofuels from waste residues.
 

 This distinction between first- and second-generation biofuels and between sustainably and unsustainably grown feedstocks is one that D1 Oils plc, the UK-based biodiesel producer brought to the forefront at the Bali talks in a call for nongovernmental organizations (NGOs) to stop their generic condemnation of the global biodiesel industry. "Environmental and development NGOs are right to be critical of soya and palm that are produced unsustainably in areas such as Brazil and Indonesia," said Karl Watkin, founder and nonexecutive director of D1 Oils. "Because these attacks don't differentiate the sustainable biofuel crops like jatropha from the less sustainable like soya and palm, the NGO campaigns are undermining the industry as a whole."
 
 Efforts to gain support for sustainably produced biofuels will be critical as the world moves toward negotiating a successor to the Kyoto Protocol. "Although biofuels haven't played a major role in the Kyoto Protocol yet, if we see the ambitious goals and the ambitious actions that are necessary to effectively fight climate change you will see that there is a much broader portfolio of technologies and resources necessary to meet these challenges," Schaefer says. "I see a greater role for biofuels within any kind of framework if the framework is going to be serious and ambitious." 
 
 The Road Ahead
 These are the same words that de Boer used to describe the efforts in Bali. "In terms of the future, Bali has delivered what it needed to deliver, a very ambitious agenda going forward," he said in a closing briefing. "What I'm especially pleased about is the fact that that road forward is ambitious, that it is transparent and that it's flexible."
 
 Although the Bali summit was never intended to set firm greenhouse gas reduction goals, the final text of the Bali agreement did recognize that "deep cuts in global emissions" were needed and that developed nations need to consider "quantified" reductions while developing countries need to consider "mitigation actions." In the end though, the roadmap paves the way for more talks over the next two years starting in April and concluding in Copenhagen in late 2009 where a new accord will be negotiated. 
 	
 
 Jessica Ebert is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:jebert@bbibiofuels.com">jebert@bbibiofuels.com</a> or (701) 738-4962.

Residents of Tanjung Benoa village, Bali, Indonesia, delegates and local Red Cross volunteers plant mangroves to help stop coastal erosion in the village.

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With the end of the first commitment period under the Kyoto Protocol just four years away, representatives from more than 180 countries recently met in Nusa Dua, Indonesia, on the island of Bali, to agree on a new path toward the adoption of a second-generation protocol. Included in this group were biofuels industry spokespeople.

Biofuels at Bali

The lawsuit, filed in December 2007 in a Texas court, reads like a bitter divorce, rather than a contractual disagreement. Chevron is accused of abandonment during the honeymoon phase of the marriage. Plaintiff BioSelect Galveston Bay claims its reliance on Chevron's assurance of participation in several rounds of financing to build and expand its biodiesel plant led it to forego seeking other financial suitors when Chevron got cold feet. Chevron counters that participation in each round of financing was voluntary, not mandatory, and that no such reliance should have been put on a minority partner. In marital parlance, Chevron was a groomsman, not the groom, and therefore doesn't have to pay alimony.

 
 The lawsuit centers around a venture capital strategy called "pay to play." Galveston Bay, a six-month-old biodiesel plant, claims that it shelved plans for a proposed expansion when Chevron withheld financial backing. Galveston Bay claims in the lawsuit that Chevron's initial investment and subsequent overtures lured venture capitalists into a "very attractive investment," but then Chevron balked when asked to participate in crucial rounds of recapitalization to expand the plant, "much to the surprise and detriment to the partnership."
 
 Publicity surrounding the lawsuit nearly equals the publicity garnered in 2005 when Chevron's alternative energy subsidiary, Chevron Technology Ventures, became a minority investor in the 20 MMgy biodiesel facility that had immediate plans for expanding capacity to 100 MMgy. The lawsuit accuses Chevron of burnishing its green image through the good will generated by the "extensive media coverage." Chevron valued that publicity at $30 million. "We made significant investments to help the start-up of the [Galveston Bay] 
 venture," says CTV spokesman Russell Johnson. "We think the investments played a constructive and material role in the venture's launch."
 
 Stature may be the heart of the lawsuit, aside from the dicey nature of the financing mechanism, a product of the dot-com tech wreck a decade ago.
 
 The Lawsuit and the Litigants
 Standard Renewable Energy Group LLC is a Houston-based builder, operator and investor of renewable energy companies. SREG partnered with affiliate BioSelect Fuels, a developer and operator of biodiesel plants, to erect the Galveston Bay facility. The partnership was known as Galveston Bay Biodiesel. Plans were to refine soybeans and other agricultural oilseed crops into biodiesel. Galveston Bay had an option to sell B100 or blended fuel that would serve marine, trucking, industrial and commercial markets in the Galveston and Houston areas. 
 
 In December 2005, Chevron and CTV took a 22 percent minority stake in the venture. They are named as defendants, along with R.E. Zalesky, vice president in charge of biofuels at the subsidiary. Chevron, the second-largest U.S. oil and gas company, publicized its participation extensively as part of its growing green portfolio. "This investment is another example of how Chevron takes a proactive, practical approach toward the development of emerging energy sources," Chevron Vice President and Chief Technology Officer Don Paul said in 2006. "We believe biofuels are a component of the diversification of the fuel supply to meet future energy demand."
 
 Although they are not now parties to the suit, other investors include Contango Capital Management, Mobius Risk Group LLC, Sultex LLC, Galveston Bay Biodiesel Management LLC and Beaver Creek Fund Ltd.
 
 Construction on the biodiesel plant was plagued by mishaps, technological issues, management changes and costly delays, necessitating subsequent rounds of financing. 

 
 Nevertheless, on May 29, 2007, all the players, politicians and other dignitaries convened at a ribbon cutting to laud the facility as the "greening of Galveston."
 
 By Aug. 1, 2007, when another round of recapitalization was necessary to infuse more money into the plant, Chevron delayed, then declined to participate, the complaint states, adding that Chevron "never explain[ed] their misleading decision to abandon the partnership at a critical time."
 
 An amended complaint filed in January 2008, asserts that Chevron told Galveston Bay it would "not let you fail," but that's essentially what happened.
 
 Unpaid creditors, mostly the contractors and construction workers who built the plant, filed liens worth more than $6 million by the fall of 2007. In early 2008, Chevron received a $15 million lifeline from an unnamed financier, and was able to settle the construction liens for $2.2 million.
 
 Chevron, invoking a clause in the partnership agreement, filed a petition for binding arbitration on Nov. 30, 2007. The lawsuit followed a week later, seeking to litigate the matter rather than resolve it through alternative dispute resolution.
 
 Galveston Bay "is simply one element of our company's broad portfolio of alternative energy investments," Johnson says. "Chevron is committed to biofiuels as a long-term business strategy." He adds that "CTV has met all of its contractual obligations with respect to the project, and any suggestion to the contrary is inaccurate."
 Most of the biodiesel Galveston Bay produced headed for Europe instead of local outlets, the lawsuit states.
 
 Down Round Financing With a Pay to Play Option
 When cash-starved dot coms needed an influx of money in 2000, they used bridge loans to tide them over. The alternative was going out of business. Pay to play was born. In traditional venture capital financing each successive round of financing comes at a higher valuation than the one preceding it, allowing early investors to demonstrate progress to their own backers. It also theoretically provided increasing incentives for the founding patrons to stay in the game. Dot coms deemed promising but unable to meet their financial goals hoped to benefit from the largesse of subsequent investors who provided these bridge loans.

 
 Initially the early stage investors viewed this practice as one that legitimized and bolstered their capital investment. It gave the start-ups new life, weary investors a shot in the arm, and propelled shaky companies to the next level of development. The financing mechanism caught on, even though the dot coms died, and by 2003 it was fairly common in venture capital circles. It has become a hallmark of gold rush economic cycles when a hot ticket investment turns ice cold.
 
 The down round is the opposite: investors purchase stock at a lower valuation. It's risky, like a high-stakes poker game, and frequently results in litigation. Poker players ante up money just to see what the other player is holding, at the risk of losing everything.
 
 In theory with pay to play, new stock is offered in exchange for the new financing. It dilutes all of the shares just by adding to the pot, but the investors get a smaller share of a bigger pot. In practice it often operates like a Ponzi scheme in reverse. Original investors, if they chose not to participate in the later rounds of financing, face adverse consequences such as having their stock values diminished or converted to lower-value stocks. Sometimes their original investments became worthless. The new investors are brought in at a lower valuation than the value the founders placed on the company at the embryonic stages. 
 
 That is what Chevron alleges happened here. The plaintiffs' attorneys say the oil giant ponied up $100,000 for an initial 4.9 percent interest. When more financing was necessary, Chevron threw $3.5 million into the pot, giving it a 22 percent share. It also extended a loan of $5.1 million, the attorneys say. But when recapitalization was necessary later, Chevron folded. Galveston Bay looked to European financiers to arrange stopgap debt financing. 
 
 "The transaction would effectively eliminate CTV's equity position," the plaintiffs alleged Chevron indicated in its refusal to participate. As a result, the lawsuit alleges, "an opportunity to lock in lower soybean oil prices came and went because no funds were available." Third-party funding sources then declined to get into the game.
 
 "Ongoing investment decisions are dynamic and based on many different factors," CTV's Johnson says. "Each investment decision was based on individual investment offerings or requests for funds. The parties' agreements specifically state that the partners are not obligated to make any further contributions."
 
 Galveston Bay's dreams of becoming one of the largest biodiesel plants in the United States died. The $15 million influx will enable it to expand its capacity to 30 MMgy or 40 MMgy, but 100 MMgy is out of reach for now. The plaintiffs are seeking unspecified damages, but have also requested punitive damages because of the alleged deceptive nature of the fraud accusations.
 
 Small Greenbacks, Big Green Headaches

 Chevron's $3.6 million investment is small potatoes in the overall scheme of the company. In early 2008, Chevron announced record profits for fourth quarter 2007. Although it did not provide specifics, it earned $3.72 billion the previous quarter.
 
 "There is increasing pressure on all companies, but especially oil companies, to go 'green,' i.e., to cultivate, encourage, and grow more environmentally friendly businesses," the amended petition states. "Chevron's investment in the biodiesel plant garnered extensive positive publicity for Chevron."
 
 Court filings indicate that Todd Sullivan, president of BioSelect Fuels, John Berger, CEO of Contango, Standard Renewables and Sullivan family members invested $1.5 million in June 2007 relying on Chevron's assurances of staying in the game.
 
 The amended petition stated that Chevron "never intended to do anything more for the project, aside from enjoying the favorable publicity that resulted from being associated with it." When Chevron became noncommittal in the recapitalization efforts, it knowingly undermined Galveston Bay's hopes for success, the lawsuit alleges. "Nevertheless, publicly Chevron continued to brag about its commitment to biodiesel as one of several alternative fuels, and its commitment to Galveston Bay Biodiesel in particular," the amended petition alleges.
 
 Johnson declined to comment on whether Galveston Bay was a poor investment choice, or whether a volatile biodiesel economy has soured Chevron temporarily on future ventures. "In addition to biodiesel, Chevron is funding research into cellulosic ethanol, hydrogen, ultraclean diesel and other forms of emerging energy," Johnson says. "In all, we expect to spend more than $2.5 billion between 2007 and 2009 on alternative and renewable energy technologies as well as energy efficiency."
 
 Chevron maintains that contractually, the parties agreed to arbitrate any disagreements. Johnson says the fraud allegations are simply a way for the plaintiffs to circumvent the arbitration provisions and air the grievances in a public forum. It's the marital equivalent of bypassing couples counseling and going on "Dr. Phil." 
 
 The saga will continue through the court system as the partners are left to wonder if this marriage of convenience was nothing more than a shotgun wedding that spawned a fatherless child. 
 	
 Sarah Smith is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:ssmith@bbibiofuels.com">ssmith@bbibiofuels.com</a> or (701) 663-5002.

Chevron Corp.'s relatively small investment in a Texas biodiesel plant is turning into a public relations nightmare. The oil giant and its renewable fuels subsidiary are accused of fraud and negligent misrepresentation. But the real wounds have been inflicted outside the courtroom where Chevron stands accused of entering the biodiesel venture to "greenwash" its image.

Irreconcilable Differences:Chevron v. Galveston Bay

Sky-high soy oil prices and a lackluster biodiesel market have made for thin or negative margins the past several months. It's difficult to get a firm handle on the biodiesel industry's situation because published data on biodiesel is as slim as the margins. It's widely known that biodiesel production is running at a fraction of capacity but, there's no government entity that officially tracks production numbers and can provide a definitive number. Leeland Tong, who manages the production capacity charts for the National Biodiesel Board's Web site gets his information by calling biodiesel producers. He was updating the information prior to the NBB's conference in Orlando, Fla., in early February. "We have 172 plants with 2.21 billion gallons of production capacity. There are 54 plants under construction and three expansions," he says. "Because of the margins, I've taken 12 plants off the list that are no longer in business. There's another 15 to 20 still in business, but only producing fuel when they get an order." From the NBB's information, Tong says estimated actual production is in the 450 MMgy range, or about 20 percent of capacity. That number is in line with the USDA projections for soybean oil use for methyl esters, a category added to its supply and demand reports this past year. USDA's Jan. 11 report that sent commodity markets to new highs didn't change the projection of 3.8 billion pounds (500 million gallons) of soybean oil to be used for biodiesel from the 2007-'08 crop, which is 18 percent of total estimated U.S. soybean oil production. To make the analysis even more difficult, while industry observers assume many plants are exporting biodiesel into the European market, actual exports are hard to verify because biodiesel export figures are lumped together with other products in the Department of Commerce export codes. In comparison, feedstock markets are much more transparent, although with the current volatility, forecasting future trends is difficult. Even getting a firm handle on biodiesel's break-even cost can be a challenge. 

 
 "Being such a small and new industry, everything is a moving target," says Jeff Coombe, a technical analyst for BBI International's project development division. "There's not one break-even price that all agree upon where you can say, this is it, this is the way it's been and what it will be going forward." By Coombe's latest calculations, feedstock cost accounts for 88 percent of the total biodiesel cost of production. A study published by the Center for Agricultural and Rural Development at Iowa State University in May calculated that feedstock costs comprise 85 percent of total operating costs, based on surveys of several 30 MMgy plants in production. Coombe points out that a couple of years ago when biodiesel was selling for $2.50 per gallon, 25 cents per pound was considered the break-even price for feedstocks. At the beginning of this year, biodiesel was selling for $4.25, which Coombe says would translate into a maximum feedstock break-even price of about 43 cents per pound for soy oil. Prices in January were well above that break-even cost, however. Once the USDA adjusted its supply and demand projections in its Jan. 11 report, commodity markets began soaring again with soybean oil futures topping 55 cents per pound in the days that followed, and soybeans pushing through the 35-year-old record of $12.50 per bushel. 
 
 "It's a very difficult and challenging environment we're in," says Gary Haer, vice president of sales and marketing for the Renewable Energy Group Inc. As vice president of the NBB governing board executive committee, he was charged with speaking about the industry's prospects at the National Biodiesel Conference in Orlando. "Feedstock costs are high and ever increasing," he says. "Finding markets is challenging and finding profitable markets is very challenging." There are several markets for biodiesel, he adds, although all are dampened by current conditions. "People use biodiesel for a variety of reasons-some for regulatory compliance for renewable fuels standards and some because of air quality benefits and regulations regarding air quality," Haer says. "Some use it for patriotic reasons feeling it is good to keep energy dollars in the United States. Also, there are world markets at play." The biodiesel industry is optimistic that the heating oil market will be good for biodiesel, although that market can't be easily tapped with the current pricing situation. "This is a short-term hiccup," Haer adds. "This is not anything unusual in any business or industry or business cycle. You run into rough spots as an industry moves forward. "
 
 Ralph Groschen, agricultural marketing specialist with the Minnesota Department of Agriculture, agrees new industries have to expect ups and downs, recalling the early days of the ethanol industry. "Minnesota started with ethanol in the mid '80s. There were a lot of bumps in the road, but today most of our farmers are happy with their investments, and ethanol is competitive in the market place," he says. "We started with biodiesel a few years ago and have overcome some problems. I'm sure we will be confronted with others." 
 <center>
 Long-Term Break-Even Feedstock Prices ($/lb)
 <img src="/images/upload/20080211030931.jpg" alt="" />
 The Iowa State University working paper calculated the break-even feedstock prices for oil over a range of biodiesel prices, assuming a blend of 70 percent soybean oil and 30 percent animal fats. The break-even feedstock cost is reported for the operating margin (OM), earnings before interest and taxes (EBIT), earnings before taxes (EBT) and net income (NI). In the first week of January, prices were quoted at $0.485 cents for soybean oil and $0.2375 for animal fats. A 70-30 blend would give a blended price of $0.4107 per pound.
 SOURCE: IOWA STATE UNIVERSITY</center>
 
 Groschen is an advocate for farmer-owned facilities as a strategy to meet the inevitable gyrations of new industries. "A farmer is looking at his own feedstock, his own produce," he says. "He's going into it for the long haul. When crop prices are down, his investment in a biodiesel or ethanol plant gives a return, if crop prices go up, he's making money because his crop is worth more than the year before and he can afford to take a hit on the [biofuels] side." 
 
 The farmer-owned strategy is well-known, but in the face of poor returns for biodiesel for many months, Chad Hart, head of the biorenewables policy division of the Center for Agricultural and Rural Development at Iowa State University, wonders what the future holds. "If biodiesel has been riding on narrow margins for some time, why did we build up all this capacity?" he asks. Hart posed the question to several companies and found that the vegetable oil crushers and marketers see biodiesel as an alternative market. "They have biodiesel plants sitting there and if the margins look good, they'll go to biodiesel, if not they'll go to the vegetable oil market," he explains. Not being tied to a single market is a big advantage for a vegetable oil crusher, he points out. "If the [soybean oil] food market goes south on the trans-fat issue, biodiesel might be a market to hold value in the oil, he says," However, he adds that diversification was stressed more than concerns about market erosion from health concerns with soybean oil's trans fatty acid content.

 
 While vertical integration is considered a strategy for enduring tough times, Haer warns that it isn't a guarantee. "There are economic advantages to integrated facilities, but at the end of the day that may not be enough in the highly competitive environment and market that we're in today," he says. "It's important to have a strong business plan and a strong strategy, more important than if you are situated next to a crushing facility or located at a port facility."
 
 Looking ahead, Brad Saville, professor of chemical engineering at the University of Toronto, has examined the feasibility of new biodiesel projects as an associate with BBI International's project development division. "Even though it's a challenging environment, we're seeing various scenarios where biodiesel is still profitable," he says. "If you look at different types of feedstocks, there are more supplies of the oilseeds themselves than of oil. There's a lot of competition for oilseeds among the crushers and a lot of oilseed supplies, particularly in Canada." For some producers it means rethinking proposals to consider adding crushing facilities, which in turn increases the minimum size of an economically feasible plant to a 15 MMgy to 20 MMgy of capacity, Saville says. A crushing facility also adds the need to develop marketing capacity for the protein meal coproduct.
 
 Haer also sees opportunity for the future of biodiesel. "There is increasing and supported demand. Engine manufacturers are supportive and [the NBB is] working to develop specs to enable them to feel comfortable with higher blends. There are a lot of positive developments. There's research on alternative feedstocks. We've had public policy support with the new Energy Bill and the renewable fuels standard for biodiesel. Those are long-term benefits and positives," he says. "Certainly we're feeling some pain right now as an industry, but the future is still bright, and personally I'm very optimistic for biodiesel as a business." 
 
 Susanne Retka Schill is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:sretkaschill@bbibiofuels.com">sretkaschill@bbibiofuels.com</a> or (701) 738-4962.

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Thin margins have been dogging biodiesel producers for months, causing many to wonder just how much they can endure before profits go south.

Walking a Tightrope

The energy in biodiesel is typically released by combustion, or more simply, by burning it. The combustion of biodiesel runs engines that propel cars and trucks, power industrial equipment or generate electricity. Diesel engines are more efficient than other internal combustion engines, but they still waste a lot of energy as heat and, if not tuned properly, can emit particulates and other pollutants. One alternative for converting biodiesel and other biofuels into useful energy is a technology once almost exclusively associated with the space program, but is rapidly finding more uses in everyday life-the fuel cell.
 
 Fuel cells capture electricity from chemical reactions, somewhat like a battery. Unlike a battery, fuel cells run off a fuel-hydrogen-and oxygen from the air, and can produce electricity as long as the hydrogen is flowing. Fuel cells are nearly silent and don't produce any exhaust except water. Fuel cells are also efficient at turning chemical energy into electrical energy, says Patricia Irving, president, chief executive officer and founder of Innovatek Inc. "Fuel cells have been receiving a lot of attention because they are more efficient than conventional technology," Irving says. "Fuel cells operate differently than internal combustion engines and therefore do not have those efficiency losses."

 
 The downside of fuel cells is that until recently, they were expensive. This limited their use to specialized applications, such as powering space craft including the shuttle and the International Space Station. However, with research and innovative manufacturing techniques the price of fuel cells has fallen to the point where they are competitive in many applications including replacing batteries in back-up power systems. "Fuel cells are being used all over right now," Irving says. "They could be used more than they are now if a source of hydrogen could be made more available. They are being used now, but they have many, many, many more potential markets in the future."
 
 Fueling the cells, however, remains problematic. Hydrogen must be stored at high pressure to be economical, and is explosive when released. Most hydrogen is also manufactured from natural gas, meaning that ultimately it's not a carbon-neutral fuel. 
 
 One way to solve the problem of transporting and storing hydrogen is to make it on the spot. The process for making hydrogen is fairly straightforward. A hydrocarbon is heated with steam at high pressure and temperature to form hydrogen and carbon dioxide, a process called steam reforming. Usually this is done in large production plants. "What Innovatek has done is scale that plant-that large plant-down to something that is actually portable," Irving says.
 
 Innovatek's device is called the InnovaGen fuel processor. It uses microscopic channels and proprietary catalysts to continuously produce hydrogen from a variety of hydrocarbon sources. "Rather than natural gas, which is something we can also use, we have been focusing on liquid fuels," Irving says. "That includes things like biodiesel, vegetable oil and other renewables."
 
 The fuel processor works by combining two feeds, one of a hydrocarbon and the other of water, in a catalytic reactor. "We use microtechnology to scale down the system into something that can be held in your hand, and produce hydrogen that can be fed directly into the fuel cell," Irving says. "Rather than using a huge plant that produces hydrogen that is compressed into cylinders, our device can be integrated directly into the fuel cell as a component of an overall system."
 
 Using renewable sources of hydrogen makes the technology more environmentally friendly. "Depending on where the hydrogen gas comes from, over its life cycle the system still may produce pollutant gases," Irving says. "That's where biodiesel comes in. Innovatek's main philosophy is sustainability. We have been in business for 10 years now and that was our goal from the start. That goal of sustainability requires renewables. Our future objective is to see our reformers used with renewable fuels like vegetable oils and biodiesel."	
 Fuel cells can operate at many different scales, from portable devices to equipment that's large enough to power an industrial facility. Irving says the InnovaGen can provide fuel for just about any size application, but the company is focused on smaller applications. "The focus of our work has been more in the range of 1 kilowatt to about 50 kilowatts," Irving says. "Because of our microchannel technology our competitive advantage is in applications that require small footprints or portability. We can scale up in much the way computers now scale up, by adding to the number of microchips rather than making the unit bigger and bigger. We just add more microchannels to scale up the system."
 
 By using liquid fuels, the fuel processor makes fuel cells practical in places far from the plants that produce commercial compressed hydrogen. "Getting hydrogen to the point of use is an issue," Irving says. "Right now that is done by using trucks to haul the compressed gas cylinders. With a liquid fuel like biodiesel, the fuel can be transported using our existing infrastructure just like gasoline and diesel fuel." Irving adds that liquid fuels have a much higher energy density than a compressed gas such as hydrogen, that is, the same volume of biodiesel can generate more electricity than a similar volume of hydrogen. A higher energy density means that the transportation costs for the fuel to generate a given amount of electricity are lower.
 
 Even among liquid fuels there are significant differences that favor biofuels, Irving says. Fossil fuels such as gasoline and diesel fuel contain impurities that can degrade the catalyst in the fuel processor. The main culprit in catalyst degradation is sulfur. Biodiesel contains lower levels of sulfur than even ultra-low sulfur diesel. "For us, using biodiesel is less challenging," Irving says. "We love working with renewable fuels. Our catalyst works better with biodiesel than with regular fossil-based diesel fuel." Biodiesel is also nontoxic, she adds, so that even in the event of a spill the clean up is simpler than cleaning up fossil-based diesel.

 
 A growing market for fuel cell technology is as back-up power for vital facilities such as hospitals. Generators running on diesel engines can be loud and release noxious fumes, while fuel cells are silent and odorless, Irving says. Another potential market is the military. Innovatek has been working to adapt its fuel processor to work with jet fuel (JP-8). "We have been encouraging the Navy, which funded us, to develop a reformer for JP-8, to very seriously consider biofuels as one of their sources of fuels," Irving says. "They are moving in that direction. So the Navy is seriously looking at converting some of its operations to biodiesel fuel." 
 
 Innovatek has been using biodiesel provided by Imperium Renewables Inc. Both companies are based in Washington state. Irving sees a bright future for the combination of renewable fuels and high technology, especially if the biodiesel industry can wean itself from feedstocks that have food uses. "I think it is crucial for the biodiesel industry to realize that they have to move beyond soybeans," she says. "Soy can be one of the sources, but the industry needs to move beyond that in order for the markets to be viable." n 
 
 Jerry W. Kram is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:jkram@bbibiofuels.com">jkram@bbibiofuels.com</a> or (701) 738-4962.

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Innovatek's fuel processor is small enough to fit in one's hand, allowing the manufacture of biodiesel-based fuel cells that can be scaled from portable to industrial sizes.

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Biodiesel is packed with power. Burning it in an engine is just one way of extracting its energy. Washington-based Innovatek Inc. has come up with an alternative to get at biodiesel's energy-a hand-sized processor that could make biodiesel a hot commodity in the electricity generation market.

Power Without the Burn

What began as a byproduct of the Industrial Revolution-fashioning polished-steel plows that allowed pioneer farmers to cut clean furrows through sticky Midwest prairie soil in the late 1800s-has evolved into a multi-billion dollar industry for two of the world's leading agricultural and construction equipment manufacturers: John Deere and CNH Global. Fast-forward to 2008, where the hype surrounding renewable fuels and energy in mainstream America has created a proverbial bandwagon for people who are interested in decreasing the country's dependence on foreign oil to hop on. Undeterred, John Deere and CNH haven't gotten on the bandwagon; they backed up to it and have literally been pulling it along.
 
 New Holland and Case IH (International Harvester), which along with CNH Global are owned by Fiat Group, an automobile and engine manufacturer based in Turin, Italy, have extended recommendations for use of B100 on even more of its farm equipment models, including in electronic injection engines with common rail technology. In 2006, New Holland was the first original equipment manufacturer (OEM) to announce the support of B20 in all of its diesel engines. Overall, nearly 80 percent of New Holland's line of tractors and branded products with diesel engines are now B100 compatible. In addition to B100, Case IH also supports B20 use in more than 90 percent of the models it sells in North America and Europe. "For us, the reliability of our equipment is absolutely of utmost importance," says Don Reiser, Case IH director of tractor product management. "We have to make sure that the use of a different fuel won't cause any problems." 
 
 Similarly, John Deere Power Systems officially clarified its position on the use of B20. In 2001, John Deere approved general use of B5. In 2005, it was the first to factory fill all the tractors and combines that rolled out of its factories in Waterloo, Iowa and East Moline, Ill., with B2. While B5 is the manufacturer's preferred blend, biodiesel concentrations up to B20 can be used in John Deere engines through U.S. EPA Tier 3/Stage III A models, including all nonemissions-certified engines. 

 
 Both companies agree that by upgrading to biodiesel blends they have gained widespread appeal from their customer base. "It's obviously of great interest to the part of our customer base that produces the feedstock for biodiesel," says Don Borgman, director of agricultural industry relations for John Deere. "The rest of our customer base recognizes the environmental and security benefits that come from biodiesel. The interest among all of our customers is pretty high on biofuels, no question."
 
 Although it played a role, making its equipment more appealing to farmers wasn't the sole impetus behind the decisions made by John Deere and CNH. Rather, by increasing biodiesel usage in farm equipment, the companies also aimed to make cleaner burning fuels more accessible in agricultural, commercial and industrial markets. "Our view is that it's very positive from a national security and energy standpoint," Borgman says. "I think the tough part would be to find reasons for us not to do something like this; not to look for reasons why we support biodiesel."
 
 As they recognize the benefits of biodiesel usage and are driven to increase its use in agricultural and construction equipment markets, John Deere and CNH continue to conduct extensive research to determine the effects of biodiesel use on their customer base. 
 
 Behind-the-Scenes Testing
 Although John Deere and CNH are no strangers to diesel engine technology, the research process prior to supporting biodiesel in farm, industrial, construction and commercial equipment is a crucial component to ensure credibility. They also wanted to be able to better inform their customer base about the handling, usage, performance and storage issues that come with using biodiesel. In-house laboratory work on engines is one method to evaluate the degree of wear-and-tear biodiesel causes on engines. However, practical performance-based analysis of biodiesel has been going strong as well. "We are committed to providing equipment that is compliant with biodiesel use, and to provide top-rate biodiesel support for our customers," says Paul Trella, director of product marketing for New Holland Agricultural Tractors. "As the use of biodiesel continues to gain greater acceptance and the infrastructure for providing a quality product to consumers expands, we are ready so the customer has a choice to continue with standard off-road diesel or switch to a blend of biodiesel."
 
 Since 2005, New Holland has been involved in a collaborative biodiesel demonstration project with Pennsylvania State University's College of Agricultural Sciences, a land grant university. For the past two years, PSU's Agricultural Sciences department has been tasked to determine the effects of running B100 in two unmodified New Holland tractors. After extensive use on PSU's farm fields, neither of the machines showed any sign of extra wear, according to Glen Cauffman, PSU's farm operations and services manager. "The research involved keeping a very accurate log of the kinds of operations that tractors do; keeping comments from the operators (smoke or no smoke, effects on power, effects on performance, etc.)," Cauffman says. "We began doing very frequent engine oil analysis as well. You can foresee engine problems in today's extensive oil analysis." 
 
 About five years ago, Cauffman and his staff began an aggressive program to increase biodiesel usage in university fleet vehicles, which culminated in the use of pure biodiesel to power tractors. In 2006, the university converted all of its diesel equipment for B20 use after the college's farm operations and services began buying B100 and were splash-blending it with petroleum diesel to achieve a B20 blend. Cauffman and his staff garnered media attention for their biodiesel research efforts and were approached by New Holland. Cauffman decided to stretch the envelope even further, in collaboration with New Holland, by operating two tractors on B100. The goal was to learn what owners of diesel equipment can expect when they choose to be independent of petroleum. The cooperative demonstration project with New Holland will end when the department disassembles the engines to measure internal effects that could be attributed to biodiesel, according to Cauffman. "The idea now is to get lots of hours on them," he says. The goal is to accumulate at least 500 hours a year on the New Holland equipment before the department analyzes the engine parts. "It's more performance-based evaluations we're doing now," he adds.
 
 PSU's College of Agricultural Sciences has been using and concurrently studying New Holland tractors, combines, forage harvesters and windrowers that have two years worth of farming tests. "We will be pulling injectors from all the tractors and photographing them microscopically to see if there's build-up of 'coke'," Cauffman says. "Eventually, the engines will be taken apart to see the pistons, and to see if there's any build-up of carbon or any other wear compared with other engines running on petroleum."
 

 Case IH also continues to be involved in multiple cooperative testing efforts with Cummins Inc., one of Case IH's joint-venture partners, which approved the use of B20 in many of its engines in March 2007. According to Reiser, it's not necessarily left up to OEMs such as Cummins to decide that equipment manufacturers should adapt biodiesel. Rather, it's a consortium of OEMs and equipment manufacturers meeting in the middle taking a course of action as prescribed by each. "There's demand from all of [Cummins'] users for biodiesel," Reiser says. "I think they've probably been pushed by all of their engine users, including us, to run the tests and to give us the approval."
 
 For John Deere, much of the testing of biodiesel is conducted in-house since the company manufactures the majority of its engines for its line of equipment. The company has been researching the affects of different kinds of biodiesel feedstocks (soy, canola or rapeseed) on its engines for many years. Though methodical research continues within John Deere, diesel research in general doesn't occur in a vacuum. There's an open forum on research within the diesel community, Borgman says. "The test protocols are extremely strict and they require a great deal of efficacy so that we can have confidence in what the outcomes of those test results are," he says. 
 
 Knowledge is Key
 Both manufacturing companies stress the importance of using high-quality biodiesel produced to ASTM D6751 standards. John Deere and CNH strongly encourage users of their equipment to purchase biodiesel blends from BQ-9000 certified marketers and to source it from BQ-9000 accredited producers, as certified by the National Biodiesel Board. "It's important to use high-quality biodiesel produced to ASTM D6751 standards from a reputable supplier who can offer consistent fuel quality to ensure optimum performance and engine durability," Trella emphasizes. "It's imperative that consumers use nothing less than this quality. With the use of approved fuels, it's also essential that biodiesel be used in compliance with proper handling, storage and maintenance requirements to maintain the integrity of the biofuel."
 
 Neither equipment provider includes malfunctions associated from the effects of biodiesel misuse as part of their warranty packages. For example, John Deere would not be responsible for a mechanical malfunction due to a customer's malpractice of biodiesel. To help allay any potential problems, John Deere developed a fuel conditioner that it recommends when using lower biodiesel blends and requires when using B20 blends and above. "As a result of that, as long as you're running fuel that's in spec and the fuel doesn't cause the failure, we warranty our products whether you're running straight petroleum diesel, B5, B20 or whatever," Borgman says. "That position hasn't changed for years."
 
 As a resource for their customers, the equipment manufacturers have provided a spate of online literature available at their retail outlets and on the Internet in regard to procuring, handling, storing and using various biodiesel blends. "What we're trying to do is make sure we have a good a handle on those different characteristics so that when we make those recommendations we know exactly of what we speak," Borgman says. "As we get more confidence from our test data we will continue to release updates on a continual basis."
 To learn more about John Deere's biodiesel research and available products compatible to the biofuel, visit <a href="http://www.deere.com/en_US/rg/infocenter/biodiesel/index.html">http://www.deere.com/en_US/rg/infocenter/biodiesel/index.html</a>. 
 
 Bryan Sims is a Biodiesel Magazine staff writer. Reach him at <a href="mailto:bsims@bbibiofuels.com">bsims@bbibiofuels.com</a> or (701) 738-4962

This New Holland T7060 model tractor is approved to run on a B100 blend. 

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Cauffman, pictured, and his staff at the PSU College of Agricultural Sciences have been researching the effects of B100 in New Holland farm equipment

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Equipment manufacturing titans John Deere and CNH Global have expanded biodiesel blend allowances in their agricultural and construction equipment. EPM talks to both companies about how they arrived at endorsing the biofuel.

Mechanizing a Green Movement

Gordon Quaiattini was named president of the Canadian Renewable Fuels Association in September. The 14-year-old nonprofit's mission is to promote the use of renewable fuels for transportation through consumer awareness and government liaison activities. 

 
 As president, Quaiattini is the principal advocate for renewable fuels in Ottawa and the provinces, as well as the main national media industry spokesman. Prior to his appointment as CRFA president, Quaiattini was a partner at The Wellington Strategy Group, an Ottawa-based government relations firm. While there he played a lead counsel role to biofuels clients. Quaiattini previously worked in federal and provincial politics, as well as at Agriculture and Agri-Food Canada. His extensive government experience will play a pivotal role in developing a national biofuels plan in Canada.
 
 Quaiattini was a key speaker at December's Canadian Renewable Fuels Summit, which, despite snow-plagued travel, drew approximately 400 attendees to Quebec City, Quebec. Following the event, he provided his insight and vision of the future to Biodiesel Magazine.
 
 Q: Talk about your new role as president of the Canadian Renewable Fuels Association. What are the CRFA's priorities in 2008?
 A: Thank you for giving me the opportunity to share my perspective with your readers on the state of the renewable fuels industry in Canada and the role the Canadian Renewable Fuels Association will play in ensuring its expansion and growth for the future. 
 
 Energy and the environment are the defining issues of our time. Together they are driving massive change in consumer behavior, commercial expansion and public policy. At the same time, the emergence of the bioeconomy is no longer pure speculation; it is a reality. For renewable fuels such as ethanol and biodiesel, all this adds up to increased demand, greater opportunity and steady expansion. Biofuels is no fad. It is, to be certain, an industry of the future. 
 
 For the CRFA, this means our work is far from over. In the immediate term, we are focused on ensuring the timely passage of the government of Canada's legislation to implement the national renewable fuels standard (RFS) for ethanol and biodiesel. In addition, we will be working on the overall regulatory package required to bring into force the legislation as well as finalizing the program details for the federal government's $1.5 billion ecoENERGY for Biofuels program. In the longer term, we need to keep pace with expanding continental and global opportunities and set new federal targets for future growth and production expansion. We also want to maintain Canada's lead in next-generation biofuels development such as cellulose ethanol.
 
 Q: Tell us a little about yourself. How did you get involved in the renewable fuels industries, and how did you get started with the CRFA?
 A: I began my work with the biofuels industry in Canada more than five years ago when we had only a couple of ethanol facilities in operation and no provincial or federal mandates in place. I was very fortunate to be part of a team that helped implement the framework for tremendous growth and expansion in the biofuels industry. My background is in public policy and government relations. For the past 11 years, I was a partner in The Wellington Strategy Group, an Ottawa-based government relations firm. 
 
 Q: You are known as a "veteran political insider and government relations specialist." How does that experience relate to your role as CRFA president?
 A: My time in government and my experience in government relations over the years have allowed me to develop the necessary skills to understand public policy development and the decision-making dynamic within government. As CRFA president, not only am I the lead spokesperson for the sector in Canada, but I am also the industry's chief lobbyist. It is my job to work with our member companies and organizations to engage federal and provincial political and bureaucratic decision makers in support of growing the biofuels industry in Canada. Canadians are asking industry and governmentto lead the effort to address critical energy, agriculture and rural development issues, while at the same time ensuring Canada is meeting its climate change responsibilities. A robust renewable fuels industry addresses each of these public policy drivers, and it is my job to work with governments, the industry and Canadians to ensure the right policy and programs are in place to develop this critical sector in Canada.

 
 Q: Canada's federal government has done a lot to help biofuels. One of the more significant moves was an RFS that requires 5 percent of gasoline be renewable by 2010. Also included is a separate 2 percent requirement for renewable content in diesel and heating oil by no later than 2012. How important is this standard for the country's renewable fuel industries? In other words, what role does it play in furthering them?
 A: The RFS is extremely important to our industry. Quite simply, it will drive the demand for ethanol and biodiesel in Canada. The RFS will not only ensure biofuels are blended in our national transportation fuel supply, it will ensure that farmers and rural communities in Canada benefit, and Canadians benefit from a reduction in greenhouse gases by filling their cars and trucks with a renewable fuel.
 
 Q: The U.S. fuel ethanol industry was largely kick-started by farmer/investors. Likewise, the Canadian federal government's ecoAgriculture Biofuels Capital Initiative helps give agricultural producers an opportunity to invest in biofuels facilities. How important is farmer investment to Canadian ethanol and biodiesel development? 
 A: Canadian farmers' participation both in terms of growing the renewable feedstock and investing in building biofuels facilities is critical to the sector's success in Canada. The CRFA membership actually consists of several grower groups and farmer-led biofuels projects, and we work closely with other stakeholders in the larger agricultural sector as well. 
 
 The CRFA championed the creation of the federal government's ecoABC program that provides direct capital support for biofuels projects that have important farmer investment within the project. Thousands of Canadian farmers are investing in ethanol and biodiesel projects across Canada and the CRFA will be working to ensure that even more opportunities exist for Canadian farmers to not only provide the feedstock to these facilities but also see the opportunity to diversify their farm-gate revenue by investing in these projects themselves.
 
 Q: In early November, you as head of the CRFA, European Bioethanol Fuel Association Secretary General Robert Vierhout, Renewable Fuels Association President Bob Dinneen and Marcos Jank, president of Brazil's Sugarcane Industry Association, made a collective statement supporting increased biofuels production and availability. Why was there a need for a collective statement from such a diverse group, and what does it say about the role international partnerships play in expanding biofuels?
 A: Each of our industry associations is working to engage governments and citizens in the critical role that biofuels can play in addressing energy security, agriculture, rural economic development and environmental issues and needs within our respective regions of the globe. Collectively, through a global partnership, we are better able to communicate the positive role biofuels can play in addressing these important public policy drivers in forums right across the globe, and engage and educate others who are interested in the potential for biofuels where they live and work. Unfortunately, our industry has critics who are misinformed, and this is happening on a global basis. Therefore, it is critical for us to work collectively to get the real biofuels story out-the real benefits to farmers and rural economies, the positive environmental benefits and greenhouse gas reductions, and the absolute need to diversify our global energy supply utilizing clean, renewable fuels. This is a great story where everyone wins, and it needs to be told more at that international level. 
 
 Q: Besides sharing a border, there is a great deal of commonality between the Canada and U.S. biofuels industries. Both nations face their share of detractors, such as those who criticize ethanol's energy balance, the food-versus-fuel debate and its impact on animal feed costs. What are the most prominent negative claims the CRFA is facing, and how are they being countered?
 A: Canadians and Americans enjoy a unique friendship that transcends well beyond the fact that we are each others largest trading partners and benefit from a continental economic partnership that is not easily duplicated anywhere else in the world. The future of a robust and dynamic biofuels industry is shared equally between our two countries. Yes, we do have our detractors. That is unfortunate given all the positive benefits I shared earlier with you. Grain farmers in Canada have suffered from economic cycles over the past 20 years that saw them more often than not selling their grains and oilseeds at below the cost of production.
 
 This is not the case today as commodity prices have risen because of world demand, economic prosperity in developing regions like China and India, and the growth of the biofuels sector. However, Canada and the United States remain large grain exporters. Even after diversifying our energy supply with a clean fuel, we are still going to be large grain exporters feeding and fueling the world. The so-called food-versus-fuel debate is one where the facts do not seem to matter as they are seldom reported in the media. The facts are that only a small amount of grain costs exist within the retail price of food, and distillers grains is an important coproduct of ethanol production and a valuable high-protein livestock feed. 
 

 Q: The U.S. ethanol tax credit and the import tariff have created contentious debate in Washington, D.C., and in the mainstream U.S. media. What impact is the credit 
 having on the development of the Canadian ethanol industry? Is the more competitive exchange rate having an impact?
 A: Canada, thus far, has been a net ethanol importer. Our industry is just beginning to grow and take shape. Federal and provincial governments in Canada have worked with the CRFA to ensure that the biofuels industry can be as competitive here as in the United States by investing in critical policies and programs such as the national RFS, the ecoABC program and the ecoENERGY for Biofuels program. The CRFA supports an open border for biofuels and believes that as both countries continue to expand the demand for biofuels, new opportunities for production facilities will exist on both sides of the border.
 
 Q: The U.S. Energy Information Administration recently stated that U.S. greenhouse gas emissionsdeclined 1.5 percent in 2006. The report stated that "increases in ethanol fuel consumption in recent years have mitigated the growth in transportation sector emissions somewhat." What impact might such a report have on Canadian policy in regard to biofuels as part of Kyoto Protocol compliance?
 A: Well, governments in Canada see the many benefits that a strong biofuels industry brings, and GHG emissions reductions is a key aspect of that. It is estimated that Canada's new RFS will result in an annual 4.2 megatonne reduction in net GHG emissions-the equivalent of removing more than 1 million cars from Canadian roads. Ethanol and biodiesel are definitely significant keys to helping fight global warming by reducing these harmful GHGs. 
 
 Q: You recently attended the fourth annual Canadian Renewable Fuels Summit. What role do you feel the event, or those similar to it, play in bringing together the Canadian biofuels industry? What "take-away" point did you get from it?
 A: Despite some challenges presented to us by Mother Nature in Quebec City, the Canadian Renewable Fuels Summit was a success. Participants heard from the Canadian Minister of Agriculture and Agri-Food Gerry Ritz during the opening keynote address when he announced that the government of Canada would be tabling the implementation legislation for the national RFS as well as the release of the program details for the ecoENERGY for Biofuels Program. Quebec Premier Jean Charest also addressed the summit and shared his government's plans for renewable energy and renewable fuels for the province of Quebec. The Canadian Renewable Fuels Summit provides an excellent opportunity for all stakeholders in the sector to come together to network, share ideas, do business, and hear from dynamic speakers on the critical issues of the day for our industry. 
 
 Q: While both the ethanol and biodiesel industries have grown considerably in Canada, the country's biodiesel industry has recently lagged somewhat in terms of increasing 
 production capacity. Why is this, and what do you expect from the biodiesel industry in 2008?
 A: There was no biodiesel industry in Canada just a few years ago, and today we have a couple of world-class facilities producing almost 100 MMly (26 MMgy). There are several projects being financed and constructed that will significantly grow the size of the Canadian biodiesel industry using a variety of feedstocks such as soybeans, canola and tallow. 
 
 Many large government and private fleets are moving to biodiesel blends, including several large city bus fleets across Canada. In addition, the federal government is proceeding with the national RFS for biodiesel and several provincial jurisdictions are moving ahead with their own commitments to expand the use of biodiesel, thus growing the demand. Industry is responding by expanding existing and building new biodiesel facilities, and exploring the use of higher-yielding varieties of canola and seeing new feedstocks such as algae come on line. 
 
 Q: Canada clearly has great potential to supply its domestic-and potentially international-market with homegrown biofuels. What potential do you feel ethanol and biodiesel holds in Canada in the next five years? What role will the CRFA play in that future?

 A: From my perspective, the potential is unlimited. The national RFS in Canada of 5 percent and 2 percent for ethanol and biodiesel is just the beginning as the CRFA begins to champion higher blends of 10 percent and 5 percent, respectively. With the recent passage of the new U.S. Energy Bill, the potential for Canada to be part of a significantly larger continental and global biofuels market is very real. Canada is also leading the way in developing next-generation feedstock and technology including the commercialization of cellulosic ethanol. The CRFA will continue to play a proactive role of engaging governments and Canadians to inform and educate them on the innovations taking place within the biofuels sector and to ensure that we are part of Canada's permanent renewable energy and transportation fuel supply today and in the future. 
 
 Dave Nilles is the Biodiesel Magazine contributions editor. Reach him at <a href="mailto:dnilles@bbibiofuels.com ">dnilles@bbibiofuels.com </a>or (701) 373-0636.

Following the departure of longtime Executive Director Kory Teneycke, the Canadian Renewable Fuels Association looked for government experience for his replacement. New CRFA President Gordon Quaiattini has taken the lead and is providing the Canadian biofuels industries with an experienced voice.

Familiar Face Takes the CRFA Helm

Canada has committed to reducing national greenhouse gas (GHG) emissions between 2008 and 2012 by 6 percent below 1990 levels, in accordance with the Kyoto Protocol. 
 
 Consequently, many urban cities across Canada have already begun to adopt the use of biodiesel, in conjunction with an increased public transportation capacity, in the attempt to improve air quality and reduce GHG emissions. This is a growing trend, fueled by research, knowledge and greater public support for these applications. While demand is growing for biodiesel use, both from the government and consumers, the national infrastructure is not yet adequate to ensure efficient, cost-effective distribution of B100 to meet these demands. Further growth within the public transportation sector is dependent on new technologies and research, and a comprehensive infrastructure that meets the increasing demands. 
 
 The Saskatoon BioBus Project
 The Saskatoon, Saskatchewan, BioBus Project provides a prime example of the strides the biodiesel industry is taking on a community level. With support from a number of local organizations, the city of Saskatoon completed phase two of its three-phase BioBus project in 2005-a combined six-year process intended to evaluate the influence of canola-based biodiesel on the fuel economy and engine wear of Saskatoon Transit buses. The fuels in each bus were alternated between B5 and seasonal low-sulfur diesel. The city used an inductively coupled plasma spectrometer to analyze weekly engine oil samples and obtain engine wear rates. Fuel consumption records provided energy efficiency data and the fuels themselves were tested for lubricity, viscosity and specific gravity at the University of Saskatchewan. 
 
 "We chose to be a leader instead of a follower, of that I'm proud to say," says Abe Driedger, maintenance project manager for Saskatoon Transit. While this project demonstrated the city's leadership, Driedger had his reservations prior to its start-up. However, upon learning the initial facts regarding the economic and technical viability, and seeing firsthand the ease of implementation, his doubts were relieved. For blends up to B5, no modifications were required for diesel bus engines, and a GHG reduction of up to 8.2 percent was observed. In regards to developing this path even further: "I can't see us going in any direction but forward," Driedger says. Phase three of the Saskatoon BioBus project commenced in February 2007 and is scheduled to run until 2009. The study will continue to analyze the potential benefits of using B1 and B5 blends. As technology continually evolves, it is important to maintain similar studies in order to facilitate the introduction of more progressive initiatives.
 

 One major contributor to the project has been Milligan Bio-Tech, a producer of canola-based biodiesel in Saskatchewan, who supplied the fuel throughout the project's duration. According to Carl Perlinger, business development manager for Milligan Bio-Tech, it's important for the biofuels industry to get involved and support studies like these because the potential benefits, both for industry and the public, are too great to let pass by. "This study will prove to the public that biodiesel is in fact a high-quality product," Perlinger says. It also provides feedback for producers regarding their product's functionality and allows them to further refine their production methods. 
 
 Engine Issues
 In the BioBus study, fuel economy benefits were highest with B1 fuel, ranging from 2.3 percent to more than 2.9 percent. Engine wear reductions were highest with B5 fuel, ranging from 42 percent to more than 46 percent. While the canola-based biodiesel costs more than low-sulfur diesel fuel, when a direct decrease in fuel demand and potential engine wear reductions are taken into account, there was an observed savings of up to 4.6 cents per liter for the transit company.
 
 The Toronto Transit Commission invested $6.1 billion in an Environmental Initiative/Green Plan that was implemented in December as part of the growing movement to tackle climate change. "The TTC is committed to becoming the greenest transit company in North America," Adam Giambrone, chair of the TTC, announced at the Ontario Environment Industry Association conference in November in Toronto, Ontario. This encompasses all aspects of operations from waste reduction to the use of biofuels within fleet buses. The TTC however, is currently using B5 in its fleet and is not able to increase its blend ratio due to engine manufacturer warranty restrictions. "The public is ready for governments to get started, but setbacks like these are making it difficult," Giambrone says.
 
 The warranty restrictions put in place by the engine manufacturers are likely to improve once the American Society for Testing Materials' B6-B20 specification, currently under balloting process, is passed. "Some OEMs [original engine manufacturers] have indicated they will warranty up to B20 once ASTM blend specifications are in place," says BBI International's Project Development Manager Stu Porter, who recently attended the ASTM meetings in Phoenix. Due to biodiesel's lower relative cloud point to petroleum diesel, it is also the responsibility of the blender to ensure that biodiesel and petroleum diesel are blended in such a manner that the end product will still meet the seasonal diesel specifications for the fuel's region of use. 
 
 Infrastructure
 In Canada, there is no specification in ASTM or the Canadian General Standards Board for B100, moreover, the feedstock to supply B100 on a wide scale is not available. For Canada, the use of B5 is most appropriate to accommodate the colder winters and to meet the level of demand. Introducing a B5 blend of biodiesel on a national level would require the production of 800 MMly (211 MMgy) for the on-road sector. In 2006, Canada produced 100 MMly (26 MMgy) up from only 10 MMly (2.6 MMgy) in 2005.
 
 A major setback requiring remediation, before nationwide mandates of B5 can take effect, is the lack of a fully developed biodiesel blending and distribution infrastructure. It has been recognized that the necessary first step is emphasizing the development of greater biodiesel production to meet increasing demands. This is evident with the variety of government incentives for biodiesel producers however, in order to meet increased future demand, it is necessary to make biodiesel readily available for public use at the lowest possible cost.
 
 A recent Sine Nomine study for Canada's biodiesel infrastructure needs highlights the specific challenges and solutions to biodiesel distribution and recommends a scenario for infrastructure systems that allows the product to flow smoothly from producers to end-users. In this study, three steps are outlined in the creation of an effective biodiesel infrastructure, including storage, blending and transportation.

 
 While transporting B100 in Canada for blending, dedicated, insulated and heated equipment is required, regardless of the mode of transportation, because of its lower relative cloud point. In a well-developed biodiesel market the most cost-effective strategy involves storing B100 in "primary terminals," with access to all the necessary equipment (dedicated, insulated and heated tanks; fuel in-line injection blending systems). The first two steps in the process, storage and blending, will occur at the primary terminal. This ensures maximum quality control of the end product. The entire downstream distribution process, including secondary terminals, would be concerned with biodiesel blends only ranging from B5 to B20 and would not require special dedicated equipment. Current blending such as in-tank or splash blending at on-site locations does not guarantee a high-quality product. The suggested scenario effectively leaves the challenges and risks of handling B100 to the professionals.
 
 While the most effective configuration for a biodiesel infrastructure is clear, the question now is how to institute this process in the private market. The Sine Nomine study points out that government support for infrastructure through incentives, is only one solution toward developing a comprehensive transportation capacity. The most effective strategy for developing greater infrastructure is to encourage a high demand for the product. Demand can be achieved through mandating the use of biodiesel within public transportation fleets, or establishing competitive prices and users who believe in the product's quality, effectiveness and safety. Increased demand will put pressure on the petroleum companies to develop increased infrastructure capabilities.
 
 While the biodiesel industry is constantly growing, it is still fairly immature in Canada. One avenue for tremendous industry growth will be the transportation sector, due to its heavy dependence on diesel fuels. Studies such as the Saskatoon BioBus Project are integral to creating stable growth. With increased knowledge comes increased quality and in turn increased demand. For Canada to continue moving ahead with reducing GHG emissions it is imperative for government, industry, and consumers to work together to improve the economic and technical feasibility of biodiesel use in the transportation sector. 
 
 
 Ryan Deska is a Biofuels Canada magazine staff writer. Reach him at <a href="mailto:rdeska@bbibiofuels.com">rdeska@bbibiofuels.com</a> or (519) 576-4500. This feature was reprinted from the February/March 2008 issue.

Cities such as Montreal, Saskatoon and Toronto have already begun to adopt the use of biodiesel 

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For decades, smog, acid rain and global warming have all been linked to the transportation industry. As the leading consumer of oil, motor vehicles account for approximately 25 percent of Canada's national levels of greenhouse gas emissions. With rising concerns over climate change, the country is faced with developing alternative transportation solutions to reduce its environmental footprint. From this cloudy problem emerges one clear answer: The road to cleaner air may be paved with biodiesel.

Canada Greens its Transportation Industry

Many politicians and free-market advocates have a disdain for mandates or subsidies for biofuels and maintain that free-market economics should determine their use. I was born and raised in Iowa and have lived there my entire life, so I have a stake in Iowa and correspondingly in biofuels since Iowa is the largest biofuels-producing state in the nation. 
 

 However, like the free-market advocates, I also believe in free trade and minimal government involvement. Therefore, I am conflicted and find myself agreeing with those who do not believe in government subsidies and mandates for biofuels. 
 
 The presidential candidates were interviewed by the Des Moines Register for its Dec. 16, 2007, feature insert "Fueling Iowa's Future" concerning their respective stances on subsidies and mandates for biofuels. Surely it would have been politically "expedient" for all of the candidates to respond to that query with what most Iowans probably want to hear, that biofuels should be subsidized or mandated. It's hard not to respect the fortitude and integrity of candidates John McCain and Ron Paul (and then-candidate Fred Thompson) who didn't buckle under the question and in my opinion gave the right answer, which is: Do not subsidize biofuels and let them stand on their own. 
 
 However, if one argues that biofuels should not be subsidized, then petroleum fuels shouldn't be subsidized either. It sounds good to say that biofuels should be able to stand on their own in a competitive free market, but the problem with that argument is that government created the subsidies for petroleum fuels. After decades of a status quo energy policy, even after the wakeup call with the OPEC oil embargo in the early 70s, those subsidies are so ingrained in federal, state and local energy infrastructures that they're virtually impossible to quantify, much less eliminate. 
 
 This editorial is about biodiesel. Granted, ethanol has received its fair share of criticism and people have tried to downplay its role in energy policy, but let's be honest, ethanol is the poster child for biofuels and doesn't need the advocacy that biodiesel does. The fact that ethanol is blended into gasoline and therefore directly affects consumers and that it has been around a lot longer makes it more widely understood and accepted. Biodiesel, on the other hand, is blended into the diesel that fuels commerce and industry and therefore indirectly affects consumers.
 
 The real cost of diesel fuel could be at least twice as much as what we pay. An indication of this is the disparity between the price of diesel fuel in Europe and the price in the United States. Diesel costs at the pump in places in Europe is more than double what it is in the United States. Here are some ways in which petroleum diesel fuel is subsidized because these costs are not factored into its price:
 
 › The cost of the trade deficit: The United States imports 4.75 billion barrels of diesel fuel per year at a cost of $450 billion
 
 › The cost of preferential tax treatment that oil companies receive
 
 › The cost of maintaining the Strategic Oil Reserve, and federal, state and local distribution infrastructure
 
 › The cost of government-assisted exploration and research

 
 › Environmental and health costs associated with vehicle exhaust
 
 › Military cost.
 
 Feedstock oils for biodiesel are at historically high prices, yet biodiesel cannot pass on its feedstock cost as petroleum fuels are able to do. With vegetable feedstock oils exceeding 50 cents per pound ($3.75 per gallon), the cost to produce biodiesel is more than $4 per gallon. Obviously, with petroleum diesel retailing for $3.30 per gallon and biodiesel wholesaling at well over $4 per gallon, biodiesel cannot compete unless subsidies are removed from petroleum diesel, or biodiesel is subsidized. 
 
 Since it is not realistic to believe that petroleum fuel subsidies are going away any time soon, the argument I am making is simply that if biodiesel is not going to be subsidized, then it should be considered a premium diesel additive and therefore worth more than petroleum diesel. Besides reducing by more than 70 percent the components of diesel exhaust that adversely affects respiratory health, biodiesel is a low-sulfur diesel fuel lubricity replacement. This is important because with ultra-low sulfur requirements now in effect, taking the sulfur out of diesel fuel also removes lubricity which is absolutely essential to engine performance. Of course, biodiesel reduces our trade deficit and does not carry the other costs associated with petroleum fuels. 
 
 Unless fuel companies are mandated to put biodiesel in diesel fuel, they have no incentive to pay more for it. There is no question that in the future consumers will end up paying more for energy and transportation fuel, but cleaning up the environment and reducing our oil imports is going to come at a price. We have had cheap energy ever since the first oil well was drilled so there has to be a paradigm shift with regard to what transportation fuel "should" cost. Biodiesel is a lower-cost solution than is imposing the true cost of petroleum diesel.
 
 There is, however, another solution: a carbon tax on energy sources that emit carbon dioxide. This is an example of a pollution tax, which some economists favor because they tax a "bad" rather than a "good" (such as income tax). The purpose of a carbon tax is environmental, to reduce emissions of carbon dioxide and thereby slow global warming. It can be implemented by taxing the burning of fossil fuels-coal, and petroleum products such as gasoline, diesel, aviation fuel and natural gas-in proportion to their carbon content. Unlike market-based approaches such as carbon cap-and-trade systems, it has the benefit of being easily understood and can be popular with the public if the tax is hypothecated to fund environmental projects. Diesel fuel emits 22.384 pounds of carbon dioxide per gallon, so a tax of $100 per ton of carbon dioxide emission translates to a tax of $1.119 per gallon of diesel fuel. Our $3.30 per gallon diesel fuel now becomes $4.50 per gallon.
 
 When biodiesel feedstock costs drop from their current level of 53 cents per pound ($4 per gallon) for refined soybean oil to less than 40 cents per pound ($3 per gallon) for future feedstocks that will more than likely be something other than refined soybean oil and petroleum diesel retails at $4.50 per gallon, biodiesel no longer needs a subsidy (currently the $1-per-gallon excise tax credit) to be competitive. It is conceivable, however, feedstocks for biodiesel could be developed that cost far less than even 40 cents per pound, possibly reaching 30 cents per pound ($2.25 per gallon). Add production costs (50 cents per gallon) and state fuel taxes (50 cents per gallon) making the retail cost of biodiesel $3.25 per gallon, and the petroleum diesel scenario of $4.50 per gallon, biodiesel not only does not need to be subsidized, it actually lowers the pump cost of diesel fuel.
 
 Nothing happens with energy policy because it is too painful to face the reality that we have had cheap energy for so long. Transportation energy costs will go up with or without biofuels. At least with biofuels some of the impact to the economy will be offset by 1) the creation of an entire industry with good-paying jobs, 2) a decrease in the national trade deficit, 3) a decrease in health-related costs, 4) a decrease in the costs imposed by natural catastrophes caused by global warming, 5) a decrease in the costs associated with military global intervention, and 5) other benefits to the economy. The discovery of other renewable feedstock sources and the technology to convert them to transportation fuels, such as cellulose for ethanol and algae for biodiesel, might actually cushion the rise in energy costs. 
 

 If biodiesel is going to be part of the solution to our future energy challenges, then now is the time to act, because high feedstock costs are killing biodiesel producers. Killing those pioneers, entrepreneurs and investors who took the risk to make biodiesel what it is today, is not the American way. 
 
 
 Mark Vermeer is the director of construction services for Progressive Energies Inc., a multi-faceted biodiesel project development company based in Leawood, Kan. Reach him at <a href="mailto:mvermeer@proenergies.net">mvermeer@proenergies.net</a> or (515) 333-2360.

Some day, lower-cost feedstocks such as algae may make biodiesel more cost competitive with diesel fuel in a free market.

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Biodiesel, Petroleum Diesel and Free Markets

More than 100 new biodiesel and ethanol facilities are expected to start production in the United States this decade. As the competitiveness within each industry grows, project owners spend considerable time and expense selecting the right property, preparing the site and constructing the facility. Yet, once the facility is in production, many owners will overlook protecting their multi-million dollar investment in railroad track infrastructure.
 
 If properly maintained, railroad track will endure into the next century and generate a handsome return on investment. If neglected, the track will deteriorate, exposing owners to thousands of dollars in lost productivity and revenues, safety incidents and excessive track rehabilitation costs.
 
 Even for facilities less than two years old, it's not too early to initiate a track maintenance program to safeguard the investment and ensure plant operations are not interrupted due to track failure.
 
 Track maintenance doesn't require a significant time or financial investment. Much like there's no need to call in a professional to fuel and wash your car, or put air in the tires, the same applies for an ethanol facility's railroad track. Basic track housekeeping can be performed by a facility management team as part of a routine maintenance regimen.
 
 Initial track maintenance is simple, but occasionally overlooked. The main objective is to keep the track free from any type of obstruction. Clean up feedstock and other materials that may have spilled from a railcar. Apply a herbicide or cut down vegetation that may have begun growing within and around the track. During the winter months, remove snow and ice from the track and switch points. A proactive and ongoing housekeeping program that pays attention to these areas will extend rail life and help make train movements more fluid throughout the facility.
 

 Plant managers who wait to take action until others report track problems are taking a costly risk. Plant personnel can't count on railroads to alert them to track defects. The practice of railroads conducting routine industrial track inspections is a thing of the past. Railroad inspectors generally examine track only when they suspect a defect or safety concern. If inspectors find a serious defect, the railroad will not hesitate to "red flag" or discontinue service until repairs are completed.
 
 Industry train crews are credited with reporting many track failures. However, a plant manager is already behind when a train crew member reports a "dip or kink, or the track is way out of cross level."
 
 Taking a preventive approach will be less costly in the long run, eliminate safety risks and avoid a track outage. That begins by relying on a qualified track contractor to conduct semi-annual inspections, generally in the fall and spring, or before and after winter takes its toll on the track. 
 
 A thorough inspection involves walking the entire track, evaluating the subgrade, rail, ties, ballast, switches and turnouts. The inspection team will also often perform routine maintenance, such as adjusting switches and tightening bolts. If a pressing deficiency is identified, the contractor will notify the facility manager so immediate action can be taken. A few days after the inspection, the contractor will present a detailed report featuring an overall track evaluation and an assessment of each turnout in the facility.
 
 Even though the track design and scope vary from facility to facility, new biodiesel startups will be confronted with similar track infrastructure concerns a few years into production. One of the most common problem areas is ballasted "approach track" set on the subgrade. This track adjoins direct fixation track in structures, which is set on concrete and generally located near the track scale. Track is only as good as the surface it is built upon. If the subgrade is inadequate, the approach track may show signs of settling as early as one year into use. A qualified track contractor can repair this problem by using a tamper to raise the elevation of the track, and tamping and re-ballasting the subgrade.
 
 Another common problem area is water drainage, particularly at facilities that have expanded production capacity since opening. The addition of a new road or structure on the property can impact how water collects and drains. When water doesn't drain properly, it can erode the track subgrade, creating dips or uneven elevation. Again, the remedy calls for correcting the drainage problem and resurfacing-or tamping-the track to achieve the proper elevation.
 
 Resurfacing costs vary based on the track profile, length and if any additional ballast is needed. Spot surfacing to correct low spots in approach tracks, isolated dips on the track and minor cross-level corrections may cost as much as $4,000 to $5,000. Resurfacing the entire track structure is more costly, with an average cost of $2 per foot and $1,200 per turnout.
 The popular expression "Pay me now or pay me later" rings true when it comes to longer-term track maintenance. Spreading out a track maintenance investment over 15 years will put one ahead compared to putting off the expense until a severe problem arises. Well-maintained track will extend the life of the track and track components and save maintenance dollars in the long run.
 
 Neglected track requires emergency repairs and more extensive rehabilitation. Without maintenance, track components such as ties, rail, ballast and switches will fail prematurely and require replacement years sooner than necessary. Wood ties with a life of 25 to 30 years will deteriorate years earlier. The same goes for rail, which if neglected will break down rather than last indefinitely.
 

 Private industry can take a lesson from well-traveled railroads. Invest in properly maintaining a track network and it will keep a business free from safety incidents and profitable for generations to come. 
 
 Project Manager/Estimator Hal Harrison and Area Manager Steve Kadrlik work in the Lakeville, Minn., office of RailWorks Track Systems, a leading North American track contractor. Reach Harrison at <a href="mailto:hharrison@railworks.com">hharrison@railworks.com</a>. Reach Kadrlik at <a href="mailto:skadrlik@railworks.com">skadrlik@railworks.com</a>. Both can be reached at (952) 469-4907.

RailWorks Area Manager Randy Ruppert inspects track at a Nebraska ethanol facility.

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A common track problem area occurs where the ballasted track adjoins direct fixation track in structures, such as weigh scales.

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The Fundamentals of Track Maintenance

Web exclusive posted Feb. 11, 2008, at 3:05 p.m. CST 
 
 Six weeks after a biodiesel plant exploded in Defiance, Ohio, injuring four, American Ag Fuels LLC is making "substantial progress" toward reopening, its chief executive officer said.
 
 Two of the three injured workers have returned to work, said CEO Steve Lankenau. He said city officials have issued permits necessary to reopen, and the loading zone that was heavily damaged in the Jan. 3 explosion is being redesigned. Damage estimates aren't available yet, and plant officials are still awaiting results from an insurance investigation.
 
 The fourth injured person was a police officer who was treated for minor smoke inhalation when he responded to the scene. 
 

 Lankenau said plant officials would like to begin production by mid-March. Work on the loading area will begin as soon as design plans are approved. Acting Fire Chief Pete Schlosser said a vapor buildup occurred from unknown sources. Flammable gases were triggered when plant employees hit the switch to open an overhead garage door. 
 
 Lankenau said the redesign will incorporate suggestions from the insurance investigation. "There will be the most state-of-the-art design that the industry offers," he said of the loading zone. A temporary loading facility will be operational by March 1, while the permanent structure won't be completed until later this spring, Lankenau predicted.
 
 American Ag Fuels processes approximately 1.5 MMgy of biodiesel from multiple feedstocks and has been in operation since June 2005. A newer facility, with different processing technology, was slated to open this winter, bringing the total plant capacity to 7 MMgy. Lankenau said that opening was delayed pending the investigation even though that unit wasn't damaged. He anticipates production at the larger facility to also begin by mid-March.

American Ag Fuels rebuilds

Web exclusive posted Feb. 12, 2008, at 11:50 a.m. CST 
 
 A new training consortium for the biodiesel industry was announced at the National Biodiesel Conference in Orlando, Fla., earlier this month. Two Iowa colleges, Kirkwood Community College in Cedar Rapids and Indian Hills Community College in Ottumwa and Centerville, received U.S. Department of Labor grants to establish the Iowa Biofuels Training International. The IBTI collaborated with Renewable Energy Group Inc. to develop the plan.
 
 IBTI intends to partner with other domestic and international educational institutions, as well as biofuels producers, to train individuals for full-time ethanol and biodiesel laboratory, maintenance and operations positions. By 2015, the industry is expected to create more than 240,000 full-time jobs in all sectors related to renewable fuels production, IBTI spokesmen said. 
 
 IBTI will use existing training programs or modules from existing programs and coordinate the offerings from more than one training partner, if necessary, to develop training for specific positions. Joe Brehm will act as executive director of the IBTI, headquartered in Eddyville, Iowa. For more information, visit <a href="http://www.biofuelstraining.org">www.biofuelstraining.org</a>.

New training consortium announced

Web exclusive posted Feb. 13, 2008, at 8:50 a.m. CST

 
 Orlando, Fla.-based Xenerga Inc. is set to open its first biodiesel plant in LaPorte, Ind., in mid-March. 
 
 The Xenerga business model consists of easily replicable, small-scale production facilities designed to serve local markets, using waste cooking oil and animal fats as feedstocks. "Our unique business model will change the way biodiesel is profitably produced," said Xenerga Chief Executive Officer Jason Sayers. "Many of the plants being built today are 100 MMgy plants that require a huge investment and have complicated logistics. We've taken a different view. We've cut out the logistical problems, and we distribute the biodiesel locally without a lot of the distribution costs."
 
 The company teams with investors in various locations and helps them obtain permitting. Xenerga then builds the plant and trains the staff. The company is targeting 20 major U.S. markets during its first phase of plant openings. The 5 MMgy plant in LaPorte is owned by Indiana Flex Fuels, a consortium of 15 businessmen.
 
 "The biofuel industry is a fast-growing industry that lies somewhere between petroleum and agriculture," said Dennis Zeedyk, general manager of the LaPorte plant and president of Indiana Flex Fuels. "Working with Xenerga allowed us to reach start-up and ultimately production faster while avoiding some of the technological pitfalls that would be faced by our lack of experience in biodiesel production."
 
 Xenerga and Indiana Flex Fuels teamed with Ancon Construction to develop the LaPorte plant. The company's second plant location is under construction in Mansfield, Ohio, and is expected to be completed by mid-March, as well.

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Xenerga to open Indiana biodiesel plant

Web exclusive posted Feb. 18, 2008, at 4:35 p.m. CST 
 
 Aside from occasional reports on how the Oscars planning committees are "greening" up the award show, biodiesel and movies traditionally haven't been topics covered in the same conversation. That changed earlier this year when Josh Tickell's first feature-length documentary Fields of Fuel debuted at the Sundance Film Festival in Park City, Utah, in January. Every screening of the film during the festival was sold out, and the film received the highly coveted "Audience Award," one of six awards handed out to documentaries. 
 
 <div align="center" style="margin-bottom: 0px;"><object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/WlR2OArgi4I&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/WlR2OArgi4I&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object></div>
 

 Wheels have been spinning around the clock at film Producer Greg Reitman's office since returning from Sundance. Plans are underway to launch a 50-city U.S. tour this spring, beginning with the Tribeca Film Festival in New York in April. Tickell will then lead a biodiesel-fueled caravan across the country to promote the film, and hold question and answer sessions regarding biofuels. Reitman is in charge of lining up music concerts for tour stops, and he said there will be announcements in the near future. Reitman and Tickell aim to show the film on at least 1,000 movie screens across the country before the tour ends in Washington D.C., prior to the presidential election in November.
 
 International screening dates are also in the works. Reitman said he plans to take the film to the Jerusalem Film Festival later this year, and he is working on screenings in Japan, Sweden and Australia.
 
 Reitman signed his company Blue Water Entertainment Inc. to coproduce the film three years ago after Tickell called him daily for a year, asking him to be a part of the film. He's been heavily involved in the production process ever since but never expected the film to achieve the kind of response it has received since premiering at the festival. "I never expected it to be what it is," he said. "[Winning the award was] a testament to what we were all about and what we were trying to create."
 
 Fields of Fuel is the largest film that Reitman has ever produced. "It's been an incredible journey," he said. "We all know the [world's oil] problems, but Josh really wanted to show the solutions. People walk out of the film, and they have a sense of hope and empowerment, and that's an amazing thing to be a part of."
 
 Biodiesel Magazine will feature a more in-depth look at the film and its creators' future plans in the April print issue.

Fields of Fuel to screen around the world

Web exclusive posted Feb. 19, 2008, at 1:20 p.m. CST 
 
 A recently released study of the biodiesel industry found that the industry is entering four fundamental transitions: from traditional soy, rapeseed and palm oil feedstocks to alternative, nonfood feedstocks; from commercial markets in developed countries to emerging markets in developing nations; from first-generation plants to second-generation technologies; and from first-stage government policies to revised policies favoring sustainable fuels.

 
 The report, Biodiesel 2020:A Global Market Survey, published by Emerging Markets Online, is in its second edition. The fact-filled study is targeted at financiers, producers, developers, distributors, consultants and analysts. Author Will Thurmond said the current period of rapid transitional growth is creating both uncertainty and opportunity. "In the year 2007, there were only 20 oil-producing nations supplying the needs of more than 200 nations," he said. "By the year 2010, more than 200 nations will become biodiesel-producing nations and suppliers."
 
 The study includes profiles and analyses of emerging biodiesel feedstocks, including jatropha, tallow, waste vegetable oil, yellow grease and algae, as well as renewable diesel ventures. It identifies and discusses other trends in the developing biodiesel industry worldwide.
 
 Emerging Markets Online is a global energy and utilities market research service providing studies, management reports, databases, and research and advisory services. A prospectus of the study can be found at <a href="http://www.emerging-markets.com/biodiesel">www.emerging-markets.com/biodiesel</a>.

Biodiesel 2020 report identifies global trends

Web exclusive posted Feb. 20, 2008, at 11:30 a.m. CST 
 
 On Feb. 14, California-based Monterey-Salinas Transit began the testing phase of a project aimed at supplying the transit authority with biodiesel produced from locally grown mustard seed. A 30-acre test plot with two varieties of mustard seed- Pacific Gold and Wild California-is being planted on land donated by San Bernabe Vineyards. Mustard seed is planted by growers in the Salinas Valley as an off-season cover crop. 
 
 To convert the crop into biodiesel, MST has partnered with Energy Alternative Solutions Inc., which has a 2.5 MMgy biodiesel plant currently using animal fats as a feedstock in Gonzales, Calif. Competitive Clusters, a public/private partnership for economic development in Monterey County, Calif., initiated this project, which is sponsored by the Monterey County Office of Economic Development and the Monterey County Business Council.

California project explores mustard for biodiesel

Web exclusive posted Feb. 20, 2008, at 11:55 a.m. CST 

 
 A group of Red River Valley farmers has begun a membership drive to build a soybean crushing plant in eastern North Dakota that could crush up to 40 percent of the state's soybean crop and create a feedstock supply for biodiesel producers. 
 
 The facility is estimated to cost between $130 million and $200 million. Ag Plus Co-op, which is spearheading the drive, wants 250 members to each contribute $2,000 by the end of February.
 
 "We had a group of producers that got together and said, 'We raise a lot of soybeans in this area, and we think it's a valuable crop that we need to enhance while it's still in our neighborhood,'" said Mark Ottis, president of Ag Plus. "So we started looking at the idea of a soybean-crushing plant."
 
 For $2,000, an investor would receive co-op membership, a voting share, priority rights to purchase equity and a guaranteed purchase price. Early investors will also participate in the initial phases of the project. The capital campaign will fund engineering and product design, start-up expenses and a marketing plan. Some funds will be earmarked to secure matching grants for the project.
 
 Co-op member Dale Beck said the plant capacity will take in 21 million to 42 million bushels of soybeans annually and produce 30 MMgy to 60 MMgy of soybean oil. "If the stars align perfectly, we'd be breaking ground later this summer with a completion date of mid-summer 2010," he said. The plant will employ between 45 and 60 people.
 
 Beck said co-op members are closely watching the biodiesel industry because no decision has been made yet to refine food-grade oil or produce biodiesel. "Economics will dictate that as we move closer," he said.
 
 Investors aren't worried about volatility in the soybean market, he added. "We feel pretty good about it as long as the price remains consistent so you can realize a margin across the board," he said.

North Dakota soybean producers propose crushing plant

Web exclusive posted Feb. 22, 2008, at 5:15 p.m. CST 
 

 New business endeavors are on the horizon at Beacon Energy Corp. in Cranford, N.J. Formerly known as AgriFuel Co., Beacon has announced plans to acquire Smithfield BioEnergy LLC,and all of its operating assets, including a 12 MMgy biodiesel plant in Cleburne, Texas. The plant processes of animal fats and other secondary feedstocks.
 
 According to Carlos Aguero, Beacon Energy chairman and stockholder, the acquisition may spur more endeavors. "With the signing of this acquisition, we take a further step in Beacon's development," he said. "We continue to explore a number of additional opportunities to invest in or outright acquire already-constructed and operating biodiesel production facilities that meet our strategic objectives." 
 
 Driving factors in Beacon's purchase of Smithfield BioEnergy are rising feedstock costs and much lower biodiesel prices. These dynamics lend themselves to possible growth, Aguero said. "We believe these conditions will provide further acquisition opportunities and allow Beacon to cautiously accelerate our participation in the industry," he said.
 
 The ability to seize potential opportunities is contingent on the availability of operations. To successfully capitalize on those opportunities, Beacon will need to find "quality operations at compelling valuations and secure then sufficient debt and equity resources to consummate the transactions," Aguero said.
 
 The acquisition price hasn't yet been disclosed. The transaction is subject to the approval of customary conditions. Beacon will finance the purchse through available cash and proceeds of a private equity placement. The transaction should be completed by the end of March. 
 
 Beacon Energy Corp. is a biofuel affiliate of Metalico Inc, also based in Cranford. Metalico operates several recycling facilities and fabrication plants across the United States.

Beacon purchases Smithfield BioEnergy

Web exclusive posted Feb. 22, 2008, at 5:30 p.m. CST 
 
 Will governments worried about national food supplies begin restricting land available to grow feedstock for biofuels? If they do, it may be after using a new United Nations tool to analyze their countries' food-versus-fuel balance. The instrument, now available in a test version, is from the UN's Food and Agriculture Organization.
 
 The five-module, software-and-print tool is designed to help governments analyze land use devoted to biofuels against land for food-an issue receiving greater attention globally as food prices rise. The Rome-based FAO said it would field-test the tool in Peru, Thailand and Tanzania before making it available elsewhere.

 
 The "analytical framework," designed by economists from the FAO, Utrecht University's Copernicus Institute in the Netherlands, and the Oeko-Institut in Darmstadt, Germany, addresses mounting concerns that biofuel feedstocks may displace food-producing areas. The instrument assesses biofuel potential, production costs and economic potential against macro-economic consequences, impacts on national and household income, and on affected demographic groups. It uses existing mathematical tools, including the FAO's Cosimo, which models the agricultural sector in many developing countries. 
 
 What does all this mean to producers? That's up to individual governments, according to Erika Felix, an FAO bioenergy officer and technical adviser who helped create the instrument. If producers "are already producing, there would possibly be no impact," she said. "We are analyzing potential scenarios, not what is already on the ground."
 
 What the tool won't address, of course, is the checkerboard of national and international politics. "It's up to the countries if they want to implement some of the outcomes that come out of this analysis," said Irini Maltsoglou, an FAO bioenergy and food security economist, who also helped create the instrument. "It's the position of the country ultimately."

UN tool to help nations balance food-fuel equation

Web exclusive posted Feb. 22, 2008, at 5:40 p.m. CST 
 
 Arkansas SoyEnergy Group LLC hosted a grand opening event Feb. 19 at its new 10 MMgy biodiesel plant in DeWitt, Ark. The ceremony featured remarks from U.S. Sen. Blanche Lincoln, D-Ark.; U.S. Rep. Marion Berry, D-Ark.; and former Arkansas House Speaker Benny Petrus, as well as Arkansas SoyEnergy Group founders. 
 
 Arkansas SoyEnergy Group owners and brothers Jon, Troy and Jeff Hornbeck plan to raise soybean seed, research and develop their own varieties, offer crop monitoring and farm management services, and buy soybeans to crush and turn into biodiesel to sell locally. 
 
 In a <a href="http://www.biodieselmagazine.com/article.jsp?article_id=1800&q=arkansas%20soy%20energy&category_id=18">September 2007 Biodiesel Magazine feature</a> Jon Hornbeck, president of Hornbeck Seed Co. Inc., said the project was sized to meet local biodiesel needs. It will take soybeans from the farmer's field and put biodiesel in the farmer's fuel tanks, said Terry McCullars, general manager of Arkansas SoyEnergy.

Jon Hornbeck addresses attendees at the grand opening of Arkansas SoyEnergy Group LLC, a soybean-crushing and biodiesel plant in DeWitt, Ark./ PHOTO: ARKANSAS SOYENERGY GROUP LLC

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Arkansas SoyEnergy holds grand opening

Web exclusive posted Feb. 25, 2008, at 1:30 p.m. CST 

 
 An Oklahoma biodiesel producer will auction off its equipment Feb. 26. Green Country Biodiesel Inc. filed for asset liquidation of its 2 MMgy facility in November, citing rising feedstock prices and a lack of financing. The auction will be held by Duckwall & Co. Inc. at the biodiesel facility's site in Chelsea, Okla., approximately 30 miles north of Tulsa, Okla. 
 
 All equipment will be auctioned off, including process and lab equipment; polymer, steel and stainless steel storage tanks; heat exchangers; a 30-horsepower, low-pressure steam boiler; a 19-gallon-per-minute centrifuge; and a 40-gallon-per-minute filter press. Liquids such as methoxide, soy oil, methanol, biodiesel and glycerin will also be auctioned. There are more than 100 items, so the auction will take approximately one hour, according to Dan Duckwall, president of Duckwall & Co. Pictures and a detailed list of equipment to be auctioned, as well as directions to the site, can be found at <a href="http://dciauction.com">http://dciauction.com/</a>.
 
 "This is more of a pilot or experimental plant," explained Green Country Biodiesel President David Allen, who designed the facility with advisement from DuPont engineers. "This is not the kind of plant you expect to see made by some of the huge, multimillion dollar plants, but it has good pumps, good mixing systems, good heat exchangers-we have a good formula for making biodiesel."
 
 Duckwall said the value of the items will be determined at the auction. "We hope the auction will be successful, but it's a tough industry to resale," he said. "With the biodiesel industry like it is, you never know what will happen." He told Biodiesel Magazine he's not looking forward to this auction. "It's sad for us to have to liquidate people like this who are on the cutting edge of innovation," he said. 
 
 Green Country Biodiesel initially broke ground on a 600,000-gallons-per-year facility in June 2005. It expanded to 2 MMgy in April 2006. It was continually upgrading and expanding. In fact, it was in the middle up upgrading to an explosion-proof plant when liquidation became necessary. 
 

 Allen, who put a lot of his own money into the plant, hopes to return to the biodiesel industry some day. "If the right opportunity comes along, I'm looking at algae," he said. "I think there's a possibility that someone will come up with a good way to use the flake for food and the oil for fuel. When that happens, I might stick my feet back in the water."

Green Country Biodiesel will auction off its assets Feb. 26.

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Green Country Biodiesel to auction equipment Feb. 26

Web exclusive posted Feb. 22, 2008, at 6:15 p.m. CST 
 
 Leading biodiesel producer Renewable Energy Group Inc. has entered into a revolving credit facility with WestLB AG, one of the world's leading financial service providers for alternative energy companies. 
 
 According to REG, the loan was initially set at $28 million with the ability to grow to $100 million. It is among the first working capital lines of credit for U.S.-based biodiesel companies not secured by their biodiesel plants. 
 
 "As Renewable Energy Group Inc. strives to meet the needs of the biodiesel industry, this line of credit offers operational flexibility while REG continues to grow," said REG Chief Operating Officer Daniel Oh. "We appreciate WestLB's partnership and their confidence in our business model as we continue to expand."
 
 The loan is targeted at providing working capital for REG's biodiesel facility management services, marketing logistics and biodiesel distribution businesses. WestLB's New York branch acted as sole arranger, bookrunner and administrative agent on this financing. WestLB is a leading biofuel financial institution committed to the renewable energy industry.
 
 "This is the first-ever corporate level financing in what has become a rapidly changing and dynamic biodiesel industry," said Robert Vincent, director of WestLB's Global Energy Group. "WestLB is excited to partner with one of the pioneers of the biodiesel industry as it aims to supply biodiesel into new markets and continue on its significant growth path."
 
 In addition to its biodiesel production and marketing activities, Ames, Iowa-based REG also provides management services, sales and plant construction services within its turnkey operations. REG has developed seven biodiesel plants that currently produce approximately 222 MMgy. Three additional REG-affiliated plants are under construction.
 	
 For more information, visit <a href="http://www.regfuel.com">www.regfuel.com</a>.

REG secures $28 million

Web exclusive posted Feb. 22, 2008, at 6:15 p.m. CST 

 
 Diesel fuel sold in Missouri should contain no less than 5 percent biodiesel by April 1, 2010, said Missouri Gov. Matt Blunt in his State of the State address Feb. 15. He believes the proposed standard would pump life into the emerging industry. "Our state has great potential in the emerging renewable fuels industry," he heralded. 
 
 The plan, included in Senate Bill 759, was sponsored by state Sen. Bill Stouffer. "The biodiesel standard and its quality standards is a win-win-win for Missouri's consumers, farmers and the environment," Stouffer said. "This is the single most important thing we can do to fuel a vibrant economy in rural Missouri in 2008." 
 
 A B5 standard is the next step in advancing the state's biofuel industry, said Dale Ludwig, executive director and chief executive officer of the Missouri Soybean Association. "The standard is critical."
 
 In addition to the B5 standard, Blunt is also supporting new laws to further promote alternative fuel use. The laws include a tax incentive program to expand access to E85, a new state income tax deduction for Missouri residents who purchase qualified hybrid vehicles and tax credits for purchasing E85. 
 
 According to research, the change in standards would reduce carbon dioxide and cancer-causing emissions by more than 75 percent, particulate matter emissions by more than 15.4 million pounds, and carbon monoxide emissions by 168 million pounds.
 
 Stouffer introduced similar biodiesel legislation in the Missouri Renewable Fuel Standard Act, which was signed into law in 2006 and became effective at the beginning of this year. The act also requires all gasoline sold in Missouri to contain at least 10 percent ethanol.
 
 Blunt has been a supporter of alternatives fuels in the past, signing an executive order supporting legislation that requires at least 70 percent of new vehicles purchased for the state's fleet be flexible-fuel vehicles.

Politicians push biodiesel standards in Missouri

Web exclusive posted Feb. 25, 2008, at 3:15 p.m. CST 
 

 Ralston, Iowa-based Renewable Energy Group Inc. is conducting a five-state tour to spread the word about biodiesel.
 
 REG has conducted workshops in New Orleans, Louisville, Ky., and Dallas, giving participants an overall introduction to the biodiesel industry. On Feb. 26, a workshop will be held in Atlanta, followed by one in Nashville, Tenn.
 
 REG spokeswoman Alicia Clancy said the workshops are designed for industry stakeholders, or simply the curious. She said people want to know the basics: what is biodiesel, what is it made of, how to check for quality, who is using it, how much they're using and its availability.
 
 The workshop also addresses biodiesel storage and handling, state and federal legisilation, biodiesel mandates, and niche markets such as Bioheat and the mining industry because past participants have shown interest in those areas. "It's really biodiesel 101 for petroleum distributors and trucking fleets that haven't had a lot of exposure to biodiesel," Clancy said. "We try to cover the gamut."
 
 Participants have included members of state petroleum associations, oil marketers, industry partners, trucking fleets, and larger fleet managers who are using it or have questions about who is using it, Clancy said.
 
 Online registration has prompted a variety of questions regarding storage, what types of filters are used, whether truckers have to modify their engines, what types of feedstocks are used and the availability of high-quality blends.
 
 These workshops come on the heels of a new blending and distribution initiative REG announced in January, making biodiesel more accessible to truckers across the country. The Retail Blending Biodiesel Program will provide subscribing retailers with a dependable supply of biodiesel, an injection system that will blend fuels at the pump, automated reordering and a remote monitoring system to ensure a steady flow of biodiesel. 
 
 For more information on these workshops, visit <a href="http://www.regfuel.com">www.regfuel.com</a>.

Biodiesel 101 may be coming to a classroom near you

Web exclusive posted Feb. 28, 2008, at 8:22 p.m. CST 

 
 The waste vegetable oil that once browned French fries to a golden crisp at Mount Vernon Nazarene University is now fueling campus buses, lawn and snow removal equipment, and diesel generators thanks to a small 90-gallon-per-day biodiesel reactor set up in a university storage building. The move is part of a new "green" initiative on the Mount Vernon, Ohio, campus, which is intended to save money and challenge future students to do more with less.
 
 Last fall, Denny Taylor, director of facilities management/campus safety, and Jeff Spear, vice president of finance, looked at ways to reduce the university's environmental impact and provide an inexpensive method of recycling the waste vegetable oil produced by MVNU's Pioneer College Caterers, the university's food service. They found that recycling the vegetable oil would completely offset the monthly fee that Pioneer Foods had to pay to dispose of the used cooking oil. "We already had a base here with our own college caterers in our cafeteria and our dining commons," said Carrie Crouch, MVNU director of communications. "They're already using vegetable oil, so that was a good place for us to start."
 
 According to Crouch, Taylor and MVNU Maintenance Assistant Garry Detty ordered the $4,100 biodiesel production unit from <a href="http://www.homebiodieselkits.com">www.homebiodieselkits.com</a>. After studying the assembly manuals and procuring the various chemicals, Detty assembled the unit, creating an effective straining system to keep the large portions of food out of the raw material. He also built a special trailer to haul the vegetable oil from the cafeteria to the makeshift storage facility. After successful performance tests, the biodiesel production unit began producing biofuel for the camp, providing a projected $2 per gallon in savings, which will cover the cost of the machine in two years. 
 
 MVNU conducted its first test batch in November. Initially, a 50-50 mix of biodiesel and petroleum diesel fueled snow plows. Now, the campus has ramped up to B100. Glycerin, the byproduct of biodiesel production, is being mixed with mulch and used as a fertilizer on campus. According to Crouch, at some point in the future MVNU may sell the glycerin to third parties. She said the university might also work with local restaurants that are looking for cost-effective means of recycling their vegetable oil.
 
 "We're really excited about future usage [of biodiesel], and if we can inspire other campuses to do this as well, that's wonderful," Crouch said.

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MVNU converts cafeteria waste

Web exclusive posted Feb. 26, 2008, at 2:38 p.m. CST 
 
 Los Angeles-based biodiesel producer and distributor Allegro Biodiesel Corp. has signed a binding letter of agreement to partner with an unnamed investor group for the acquisition, development and operation of the sole liquid terminal at the Port of Alexandria in Louisiana. 
 

 The partnership is part of Allegro's efforts to pursue a strategy of vertical integration. The joint venture has signed a 40-year lease of riverfront property with the Alexandria Port Authority. In addition, the partnership plans to acquire 22 acres of adjacent land with existing liquid terminal infrastructure, including 5 million gallons of tank storage and a fuel rack.
 
 The port lies along the Red River, a tributary of the Mississippi River, and is approximately 20 miles from the 12 MMgy biodiesel plant that Allegro operates in Pollock, La. By developing this terminal, the company expects to significantly reduce the costs of producing and selling biodiesel.

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Allegro Biodiesel to acquire fuel terminal

Web exclusive posted Feb. 28, 2008, at 8:45 p.m. CST 
 
 All 14 operating biodiesel plants in Iowa are now members of the Iowa Biodiesel Board. In mid-February, Freedom Fuels LLC in Mason City and Sioux Biochemicals Inc. in Sioux Center joined the other 12 biodiesel plants that were already members. The board's membership also includes representatives from other areas of the industry from feedstock to retail, said Randy Olson, executive director of the IBB.
 
 Having the full backing of Iowa's biodiesel producers is important to carrying out the three pillars identified by the IBB, Olson said. Those pillars are: promote and educate the public, government and marketplace about biodiesel; maintain and strengthen Iowa's leading biodiesel position; and shape and drive the legislative agenda on biodiesel. "This is a clear sign that the Iowa biodiesel industry is unified and a demonstration that we need to work together to pursue an agenda for the success of biodiesel in Iowa," Olson said.
 
 The board's top priority for the current legislative session is an enhanced retail tax credit targeting higher blends of biodiesel.
 
 The other IBB plant members include: Ag Processing Inc. in Sergeant Bluff, Cargill in Iowa Falls, Central Iowa Energy LLC in Newton, East Fork Biodiesel LLC in Algona, Iowa Renewable Energy LLC in Washington, Nova Biofuels Clinton Co. in Clinton, Renewable Energy Group Inc. in Ralston, Riksch Bio Fuels LLC in Crawfordsville, Soy Solutions in Milford, Tri-City Energy LLC in Keokuk, Western Dubuque Biodiesel LLC in Farley and Western Iowa Energy LLC in Wall Lake.
 
 For more information, visit <a href="http://www.Iowabiodiesel.org">www.iowabiodiesel.org</a>.

Iowa biodiesel plants join IBB

Web exclusive posted March 3, 2008 at 10:28 a.m. CST 

 
 Trading renewable identification numbers (RINS), the mechanisms that the U.S. EPA created to ensure compliance with the renewable fuels standard, is still in its infancy. As expected, new programs and companies designed to serve the new system are still working out the kinks as they develop a market share.
 
 One such program is a Web exchange platform for trading RINs, owned by Renewable Trading Services LLC. The platform, which opened for trading Jan. 30 and was previously named RINMark, is now called the RINXChange. According to Managing Director John Gelbard, the name RINMark was already trademarked by another company. "Fortunately, it's pretty early in the game," Gelbard said. The RIN market exchange can be found at <a href="http://rinxchange.com">http://rinxchange.com</a>, as well as its old domain <a href="http://rinmark.com">http://rinmark.com</a>. 
 
 The company is still looking for a clearing firm to settle the trades on the exchange. "When you buy and sell stock through a broker, there's a clearing firm that acts as a neutral middleman," Gelbard explained. "Because RINs are a totally new product, a lot of clearing firms aren't familiar with it. They're trying to figure out the best way to handle it. That will be the best way to do business."
 
 Renewable Trading Services, which is a conglomeration of Agrifuels LLC, I.A. Englander and Co. Inc., Freedom Group Inc. and Belzberg Technologies Inc., recently went through another change when it mutually agreed to part ways with former partner Clean Fuels Clearinghouse, which operates the RINSTAR Renewable Fuel Registry. When the Web exchange platform was developed, Renewable Trading Services required that the traded RINs be validated by RINSTAR, where RIN numbers are registered and validated before transferring the title to another party. 
 
 While the initial idea to offer validated RINs through RINSTAR was good, Gelbard said the partnership created some hurdles. "We met a lot of potential clients who weren't partners with RINSTAR," he said. "We had to convince people to use RINSTAR in order to use the exchange. It created the incorrect perception that we were funneling business to the exchange. Now it's open to anyone." 
 
 While RINSTAR could offer validity on RINs that originated on its system and check on the accuracy of others, Gelbard noted that it couldn't offer a guarantee on RINs generated outside of its system. That wasn't enough for some of the larger buyers, Gelbard said.
 

 Clean Fuels Clearinghouse President Clayton McMartin said the split will enable his company to focus on its primary product. "The RIN program is so much in its infancy that our focus is on building a solid foundation through the registry," he said. "That entails a level of validation that we must have to have confidence in the marketplace." 
 
 As of Feb. 13, RINSTAR had facilitated the transfer of 1 billion gallons worth of RINs since it started Sept. 1. "We've facilitated over 50,000 bilateral transactions on our system," McMartin said. "These RINs are selling. It's just that price discovery is being done directly. Then they come to RINSTAR to finalize the transfer. The price hasn't been negotiated on an open exchange like RINXChange is attempting to deliver. This was the best thing to do. It doesn't matter where the price discovery is done, people can still come to RINSTAR to make those transfers."
 
 Parties who produce, buy or trade RINs were expected to submit fourth-quarter reports and year-end compliance reports Feb. 28.

RINMark changes name, leaves RINSTAR

Web exclusive posted March 3, 2008 at 10:32 a.m. CST 
 
 A certification upgrade of the World Energy Alternatives LLC glycerin-refining facility in Lakeland, Fla., will allow the plant to produce kosher-grade glycerin. 
 
 The kosher-grade certification, which was awarded by Rabbi Nathan Greenblatt of Memphis, Tenn., will be valid for the Lakeland facility through February 2009.
 
 Jerry Petak, director of commodities and risk management for World Energy, will oversee the company's glycerin operations. "Availability of kosher glycerin is limited," he said. "This will help us meet the strong demand from our customers for this premium product."
 
 Petak said the Lakeland facility has the capacity to refine approximately 10 million pounds of glycerin, which is the main byproduct of biodiesel production. It is refined for use in high-end cosmetic products such as soaps, lotions and shampoos. 

 
 In 2006, the Lakeland plant received BQ-9000 accreditation as part of the industry's quality assurance program. With the kosher designation for its glycerin refinery, World Energy has been awarded the highest certifications for these complimentary products.
 
 Petak, a 35-year industry veteran, said World Energy focuses on bringing new energy resources and markets to the global energy supply.

World Energy glycerin earns kosher status

Web exclusive posted March 3, 2008 at 10:48 a.m. CST 
 
 A pump is one of the most crucial pieces of equipment in a biodiesel plant, and Michigan-based equipment manufacturer Blackmer claims it makes a pump that producers will want to use. Blackmer spokesman Darren Wight said the company's ProVane Motor Speed Vane Pump not only last for decades, but is currently being used in various-sized plants throughout the country with great success. "We know of our pumps being used in 2 MMgy facilities, as well as in the largest plants in the country," Wright said. "It's not cost-prohibitive and should be one of the longest-lasting pumps Blackmer has made."
 
 The pump, designed to be the most energy-efficient process pump in the industry, is also ideal for caustic transfer applications. Featuring a compact design and motor speed advantages, it has the ability to operate in the presence of caustic solutions. Because it's a motor speed pump, producers save money and energy by not having to buy an additional motor. It doesn't require a gear reducer, so it offers upfront equipment, installation and energy-cost savings, plus the smaller footprint of a complete pumping unit. This ProVane pump offers all of the characteristics of other pumps with the added benefits of higher operating speeds, longer bearing and vane life, and one mechanical seal.
 
 Blackmer, part of Dover Corp., is a global leader in the design and manufacturing of high-quality flow technologies. Blackmer pumps and compressors are used worldwide in a variety of industries, including liquefied petroleum gas, chemical and industrial processing, food and sanitary, military and marine, and the mobile transport industries.
 
 For more information on the ProVane Motor Speed Vane Pump, visit <a href="http://www.blackmer.com">www.blackmer.com</a>.

ProVane Motor Speed Vane Pump/PHOTO: BLACKMER

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Blackmer pump offers cost-effectiveness

Web exclusive posted March 3, 2008 at 10:54 a.m. CST 

 
 While on line ethanol capacity increased during the last quarter of 2007, the industry experienced declines in both capacity under construction and proposed, according to Soyatech's latest quarterly Biofuels Index. The findings support information reported in earlier issues of the Biofuels Index, which suggested a leveling off of corn-based ethanol build-out. 
 
 The report said total ethanol on line capacity increased approximately 407 MMgy, representing a growth of nearly 6 percent. However, ethanol capacity under construction decreased by 344 MMgy, a decline of 5.4 percent. Proposed ethanol capacity contracted by 577 MMgy, or 3.5 percent.
 
 "We are circumspect about the numbers for total planned capacity, as it is very easy to announce plans," said Jacob Golbitz, director of research for Soyatech and its parent company HighQuest Partners. "Additionally, some groups that have suspended or cancelled their plans have not made those decisions public. As a result, we believe that there is 'phantom capacity' reflected in these numbers. To get a better handle on this situation, in the fourth quarter of 2007, we began tracking planned facilities that had exhibited no signs of life over the past four quarters and began labeling that cumulative planned capacity as 'unconfirmed.'"
 
 According to the report, total on line biodiesel capacity increased approximately 202 MMgy, representing an 11 percent growth. Biodiesel capacity under construction over the period grew by 239 MMgy, or 17.5 percent, while proposed biodiesel capacity, contrary to ethanol, increased by 210 MMgy, or 9.7 percent. Approximately 173 MMgy of proposed biodiesel capacity was cancelled in the fourth quarter of 2007, which was offset by the 306 MMgy in new proposed capacity announced during the same quarter. 
 
 "As with ethanol, we are looking at phantom capacity in biodiesel and have determined that approximately 313 MMgy falls in our 'unconfirmed' category," Golbitz said.
 
 According to the Biofuels Index report, inadequate infrastructure for the distribution of ethanol-commonly referred to as the "blend wall" -continues to keep ethanol prices below gasoline prices, which may benefit the industry over the long term by giving petroleum companies an economic incentive to blend with ethanol. This would result in lowering the blend wall as more infrastructure is developed to get ethanol to the market. However, this positive development could be offset by high corn prices, which place financial pressure on ethanol producers and give added support to consolidation now taking place in the industry.

Soyatech releases quarterly biofuels index

Web exclusive posted March 3, 2008 at 12:38 p.m. CST 
 
 In the next decade, Pioneer Hi-Bred International Inc. is targeting a 40 percent yield increase in its corn and soybean products, according to Pioneer President Paul Schickler, who announced the projection at the USDA Agricultural Outlook Forum in Washington, D.C., on Feb. 22. He explained the corn yield increase will come from a convergence of proprietary accelerated yield technology, the new Optimum AcreMax insect control system, improved drought tolerance and nitrogen-use efficiency. 
 
 Schickler pointed to global growth trends-a 13 percent growth in global population in the past decade, along with a 35 percent increase in global income and a 25 percent increase in meat consumption -that are driving the increased demand for corn and soybeans. Those trends have resulted in a 32 percent growth in global corn consumption and a 59 percent increase in global soybean consumption. The global harvested crop area has also grown, though at a smaller rate of 4 percent.

Pioneer forecasts 40 percent yield increase

Web exclusive posted March 5, 2008 at 4:16 p.m. CST 

 
 On Feb. 25, diversified energy company PetroSun BioFuels Inc. agreed to acquire partial ownership in Eagle Biodiesel in Bridgeport, Ala., which will be switching to algae oil as a biodiesel feedstock within the next 12 months, according to PetroSun.
 
 Specifically, PetroSun acquired a 50 percent interest in Fleet Biodiesel Inc., which is in turn acquiring an 82.5 percent stake in Eagle Biodiesel. The move follows PetroSun's joint venture formed in January to build and operate a 30 MMgy biodiesel plant near Coolidge, Ariz, which will also use algae oil as a feedstock.
 
 The Eagle Biodiesel assets also include port access to the Tennessee River, a five-truck tanker fleet and a retail biodiesel station, according to PetroSun. The production plant first used soy oil as a feedstock, but is now producing and selling 60,000 gallons of yellow-grease-based biodiesel per month. It is in the process of expanding its monthly production to 4.2 million gallons.
 
 In 2006, PetroSun formed subsidiary Algae Biofuels Inc. to engage in the research and development of algae cultivation. Studies conducted at the National Renewable Energy Laboratory have demonstrated that algae can produce 30 times more oil per acre than oilseed crops. Some algae species may be ideal for biodiesel production because of their rapid growthy rate and oil content, which is higher than 50 percent. Most of the studies involved large-scale algae production in open ponds.

PetroSun buys Tennessee biodiesel plant

Web exclusive posted March 5, 2008 at 4:22 p.m. CST 
 
 Seaport Biofuels made history in early February when it installed the first biodiesel blender pump in Washington. The Seattle distributor, which has offered ASTM spec biodiesel to retail consumers and commercial accounts for years, now offers the choice of B20, B50 or B99 with the simple push of a button. 
 
 Seaport Vice President of Finance Travis Paulson said sales from the multi-blend biodiesel dispenser have been steadily increasing in the first two weeks of operation. "It's been a little difficult to get the word out, but I've been going out and personally talking to customers, and people are really excited about it," he said.
 
 The company decided on the three specific blends for several reasons. First, average customers are more willing to use lower blends of biodiesel such as B20. Second, B50 is a good wintertime fuel when B99 would become too thick to run in vehicles. Third, B99 is for customers who want a pure biodiesel. Paulson said customers who use B99 aren't just fueling vehicles but are also using it for home heating, off-road vehicles and other applications. For the past four years, Seaport has fueled its own fleet of 12 trucks with B99. 
 

 Ethanol retailers are required to label ethanol blender pumps with consumer warnings stating that certain blends are intended for flexible-fuel vehicles only. There is no such requirement for biodiesel retailers in Washington, and Paulson doesn't think there should be. "Our trucks have actually run better," he said. "When we took them in for emissions testing (after switching to B99), the reports came back so low that we were accused of tampering with the emissions." Paulson said before the blender pump was installed, customers would often create their own biodiesel blends by filling their tank half-full with diesel and then driving 30 feet to the biodiesel pump to fill the remainder of the tank.
 
 Paulson believes that Seaport's biodiesel blender pump is the first retail pump of its kind in the United States. The company isn't releasing the pump manufacturer's name, but Paulson said more blender pumps are possible in the near future. He added that the pumps will benefit the average consumers, who are unsure about pure biodiesel and would be more likely to fuel their vehicles with a lower blend if it's available. Seaport has been working with a few other local biodiesel retailers to provide Seattle consumers with additional biodiesel blender pump locations in the future. 
 
 Laurelhurst Oil is one of several retailers offering single-blend biodiesel in the city and wants to install a multi-blend pump. Co-owner Tom Marier said biodiesel blender pumps are a great idea because various consumers want various blends of biodiesel. His company currently has one B99 pump located next to a regular diesel pump, where customers routinely mix the two offerings to create their own blends. He has never had a problem with customer complaints because he said there has never been a problem. 
 
 Marier, who is waiting for blender pumps to be offered on the market, thinks more suppliers would install them if they were readily available. "The obvious advantage is that you can just push a button and pick a blend," he said. "I would still offer diesel so that the odd customer can make their 44.4 percent blend or whatever, if they wanted to."

Seaport Biofuels Vice President of Finance Travis Paulson, left, and President Randy Thomas/ PHOTO: SEAPORT BIOFUELS

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Seaport Biofuels new multi-blend biodiesel pump offers consumers B20, B50 or B99 at the touch of a button. The company believes it is the first multi-blend biodiesel pump in the country./ PHOTO: SEAPORT BIOFUELS

March 2008

Business Briefs

Benefuel offers new solid catalyst

Nova Biosource secures senior debt financing

Imperium restructures staff, drops IPO

GreenHunter Energy begins trading on AMEX

BioEnergy of America files for bankruptcy

Agri-Energy sells U.S. biofuels assets

Photovac offers methanol leak detector

Mission Biofuels signs jatropha contracts

Robert-James Sales names management team

SGS names alternative fuels manager

China Clean Energy appoints new board member

Columns

Getting to Know the Competition

Featured

Defining the Alternatives

Biofuels at Bali

Irreconcilable Differences:Chevron v. Galveston Bay

Walking a Tightrope

Power Without the Burn

Mechanizing a Green Movement

Familiar Face Takes the CRFA Helm

Canada Greens its Transportation Industry

March 2008.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Benefuel offers new solid catalyst

Nova Biosource secures senior debt financing

Imperium restructures staff, drops IPO

GreenHunter Energy begins trading on AMEX

BioEnergy of America files for bankruptcy

Agri-Energy sells U.S. biofuels assets

Photovac offers methanol leak detector

Mission Biofuels signs jatropha contracts

Robert-James Sales names management team

SGS names alternative fuels manager

China Clean Energy appoints new board member

Columns

Getting to Know the Competition

Featured

Defining the Alternatives

Biofuels at Bali

Irreconcilable Differences:Chevron v. Galveston Bay

Walking a Tightrope

Power Without the Burn

Mechanizing a Green Movement

Familiar Face Takes the CRFA Helm

Canada Greens its Transportation Industry

March 2008