Strategically located in the middle of New Jersey's "Chemical Corridor," Fuel:Bio Holdings LLC, isn't the typical chemical producer. In fact, the company is bringing greener pastures to the Garden State in the form of biodiesel. Based on a business plan to market large quantities of clean-burning biodiesel to fuel power plants at an economical price, Elizabeth, N.J.-based Fuel:Bio has been fully operational since May 2007 and anticipates growth due to the growing interest in its product.
 
 "It was in March 2007 that we finished construction of the biodiesel plant," says John Borruso, government affairs liaison at Fuel:Bio. "We've been very happy with how we've maintained our capacity and don't see why we would lose any momentum down the road. The Northeastern United States is a large market and we are excited about the growth potential for biodiesel as an alternative for petroleum-based fuels that are largely used in power plants today."
 
 Located on a 2.5-acre parcel along the Jersey Shore, Fuel:Bio's plant was designed internally by the company's employees. The company uses proprietary technology and processes to produce ASTM D 6751-certified biodiesel, the industry specification that ensures proper performance. The company's current capacity is 50 MMgy with an onsite storage capacity of approximately 1 million gallons. However, it plans to grow efficiently and effectively as the company continues to successfully test its product in various power generation plants throughout the Northeast. 

 
 "Most of our customers are in the testing phase of this process," Borruso says. "Since this is a relatively new product for them, they are concerned about how they would integrate it into their current system. However, a test using biodiesel in a power plant can consume a tremendous amount of fuel. You're talking about one test using about one week's worth of production."
 
 Even though Borruso won't go into specifics on just how many plants are currently testing its biodiesel, he was able to elaborate on one of the more publicized tests that took place near the end of 2007. Along with many other institutions, Princeton University is looking into several ways to reduce its carbon footprint. The university conducted a test using 
 Fuel:Bio's biodiesel to see how its campus energy plant boilers and gas turbine cogeneration system would perform with the alternative fuel.
 
 "We completed a test run for Princeton University near the end of 2007 where we ran 100 percent biodiesel in their system," Borruso explains. "The numbers that have come back have been great. The reduction in emissions and the increase in efficiency have been marvelous. What we're really looking to do is to create our fuel with that university for their generators. The idea behind this for Princeton is to reduce its emissions across the board. By using biodiesel in their generators, they can reach their goal by reducing emissions to a very low number."
 
 Keys to Success, Future Plans
 Key to the success of any biodiesel production facility is the quality of its finished product. Biodiesel can be produced by nearly anyone. However, ASTM D 6751-certified biodiesel is specified for tests being conducted by Fuel:Bio at various power plants throughout its market. In order to produce this quality product, the correct equipment must be in place and performing at expected levels. 
 
 Even though Fuel:Bio is happy with its current facility design and production capabilities, the company plans to expand capacity as demand grows. "We plan on eventually increasing our production capacity at this plant," Harnanan says. "We can easily do that by increasing the size of our pumps and a few other minor adjustments."
 
 Along with the increase in production, Fuel:Bio has plans for bringing additional feedstocks into the fold that provide a higher return on investment and a better overall approach to biodiesel production and lower emissions. In essence, this future system would provide a "closed-loop" system that would grow the feedstock from the emissions produced by a power plant. 
 
 "Algae is very exciting for us right now," Borruso says. "We have identified six strands of algae that we're focusing on right now and are currently growing. They are being grown on a farm in upstate New York. We see a tremendous amount of potential to integrate the algae with the reduction of additional carbon dioxide from power generation. We can grow the algae at any location. It doesn't have to be on a 100-acre farm. You can do it very easily in vertical tubes that can be built as high as you deem fit. What we're looking at is vertical farming of the algae. We're changing the dimensions of the agriculture industry. The algae growing process can still be paired with the power plants so that we can run those emissions through the algae so that the algae can feed off of the carbon dioxide as it grows." n

 
 Tom Stone is the director of marketing for Blackmer. Reach him at <a href="mailto:stone@blackmer.com">stone@blackmer.com</a> or (616) 248-9252.

A Fuel:Bio official says production capacity can increase through increasing pump size and other minor adjustments.

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New Jersey Producer Provides Power to Power Plants

Although it will go down in history as a necessitous rescue of the U.S. financial market, the $700 billion Emergency Economic Stabilization Act of 2008 signed into law by President George W. Bush on Oct. 3 includes significant benefits for the nation's biodiesel industry.
 
 Approved in the U.S. House by a vote of 263 to 171, the final version of the bill extends current biodiesel tax credits through Dec. 31, 2009, and qualifies all biodiesel produced in the United States for a tax credit of $1 per gallon. The original biodiesel tax credit was passed in 2004 and set to expire in 2006 before it was extended to Dec. 31, 2008, as part of the Energy Policy Act of 2005.

 
 One significant change to the biodiesel tax incentive is the complete credit eligibility of producers using nonvirgin feedstocks such as yellow grease. Previously, biodiesel producers using these feedstocks only qualified for a 50-cent-per-gallon tax credit. 
 
 Another provision of the law closes what has been coined the "splash-and-dash" loophole. The phrase refers to instances where foreign-produced biodiesel is transported to the United States, blended with a small percentage of diesel to claim the tax incentive, and then shipped to a third country for sale and use. With pressure from the National Biodiesel Board and other renewable energy organizations, the U.S. Congress reevaluated the loophole, and now fuel produced outside the United States no longer qualifies for the biodiesel tax incentive. "We appreciate the congressional action to protect domestic biofuel production," said Alicia Clancy, spokeswoman for Renewable Energy Group Inc., in response to this change. REG is a builder and manager of a network of commercial-scale biodiesel production facilities in the United States.
 
 The act also eliminates the requirement that renewable diesel be produced using a thermal depolymerization process, and reduces the credit for biomass coprocessed with a petroleum feedstock to 50 cents. There was a chance the entire credit was going to be revoked, which Jeffrey Bigger, director of Dynamic Fuels LLC's management committee, was keeping a close eye on. Once the credit was passed, the company broke ground on a 75 MMgy renewable synthetic fuel production facility in Geismar, La., which wouldn't have happened if the credit wouldn't have been extended. "We watched the renewable fuel credit closely, and we were pleased that the credit got extended for next year," he said. 
 
 Dynamic Fuels' new facility will use low-grade animal fats and waste vegetable oils as feedstocks procured and supplied by Tyson Foods and Syntroleum Corp. It's expected to be operational in 2010.
 
 Iowa-based REG also kept careful watch over the progression of the tax extension legislation. "[There were] a harried couple weeks where it looked possible the blender's credit would not be renewed before January 2009," Clancy said. "Renewable Energy Group and our network of biodiesel production facilities were very pleased with the final outcome of the legislation as it helps promote growth in our industry. We especially appreciate the Iowa biodiesel industry and Iowa biodiesel investors for calling key House members to support the final version of the bill."

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Industry welcomes tax credit extension

New and updated biodiesel standards published by ASTM International in October are expected to help build consumer confidence in the product. In particular, one new ASTM specification for finished fuel blends of B6 to B20 was published, while three other standards pertaining to fuel blends up to B5, biodiesel in fuel oil and a cold soak filtration test were revised.
 
 ASTM D 7467-08 is the newly established standard for finished diesel fuel blends containing 6 percent to 20 percent biodiesel for on-road and off-road diesel engine use. Steve Howell, chairman of the ASTM Biodiesel Taskforce and technical director of the National Biodiesel Board, said that before the introduction of ASTM D 7467-08, there were no separate specifications for biodiesel-blended diesel. One benefit of the new specification is that companies can now design engines for finished fuel blends. "With the passage of these specifications, biodiesel used in B20 blends and lower can now be considered a proven fuel," Howell said. In addition, the specifications have been designed to ensure that when B100 and diesel fuels meet their respective specifications prior to blending, the blended products will always meet the new blended fuel specifications. 
 
 Revised specifications include ASTM D 975-08a, D 396-08b and ASTM D 6751-08. ASTM D 975-08a, a specification used for on-road and off-road diesel applications, now includes requirements for up to B5. Likewise, the D 396-08b specification for fuel oils used for home heating and boiler applications now includes requirements for up to B5. ASTM D 6751-08, a specification for B100 blend stock for middle distillate fuels used to control B100 quality prior to blending with conventional diesel, now includes a requirement that controls minor compounds using a new cold soak filtration test. 
 
 Under the new specifications, fuel blends of up to B5 are considered a fungible component of conventional petroleum-based diesel fuel. In other words, biodiesel content of 5 percent and less is now considered part of the normal makeup of diesel fuel. "Diesel users can be confident that the fuels meeting the newly approved specs are fit for purpose," 
 

 Howell said. "[Original equipment manufacturers] can now use these specs to design new engines … and regulators can use them to enforce fuel quality. This is perhaps the biggest technical achievement of the biodiesel industry since its inception in the United States in the early 1990s."
 
 Joan McKinny, an analytical chemist at FutureFuel Chemical Co., also spoke favorably about the new specification. "We feel the biodiesel industry as a whole is going to benefit from these specs because it is going to establish performance consistency, ensure product quality and build customer confidence in the industry." According to Linda Bluestein, codirector of the U.S. DOE's Clean Cities program, many industry stakeholders have been anticipating the introduction of these new specifications for a long time. 
 
 More information on the specifications can be found at <a href="http://www.astm.org">www.astm.org</a>.

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ASTM publishes biodiesel standards

The search for renewable jet fuel made progress on two fronts this fall. The University of North Dakota's Energy & Environmental Research Center announced developments in its process, and a new aviation group committed some big names in the industry to support sustainable jet fuel.
 
 The EERC announced Sept. 29 that it had produced samples of renewable jet fuel from three different oil feedstocks that met the specifications required for military aviation use under a contract with the U.S. Department of Defense Advanced Research Projects Agency. "The major breakthrough is that we're using 100 percent renewable feedstock," said Tom Erickson, associate director for research at the EERC. Researchers developed a process described as being "somewhat similar to petroleum refining" to convert vegetable oils with the freeze point, density and energy content parameters necessary for jet fuel, and it was done in an efficient manner. The EERC is now working to produce larger samples to be used by DARPA for on-the-ground engine testing.
 
 Shortly after its samples were produced, the EERC announced its first private industry partnership. It signed an agreement with Great Plains-The Camelina Co. to use the EERC's proprietary technology to produce advanced fuels from camelina. Along with testing the new oil feedstock, the agreement involves writing a feasibility study and business plan for a full-scale demonstration, said Chad Wocken, research manager at the EERC. "First, we need to go through a detailed design process, and that will take six months," he said. He expects the detailed cost analysis required for a business plan to take another six months to a year. "It's conceivable to have a plant operating within three years," he said. While the initial demonstration plant will be smaller, the feasibility studies will be targeted at a plant with a capacity of up to 50 MMgy.
 
 A new Sustainable Aviation Fuel Users Group wants to make commercial aviation the first global transportation sector to voluntarily drive sustainability practices in its fuel supply chain. Boeing Co. and UOP LLC, a Honeywell company, have joined a group of international airlines in signing a sustainability pledge, including Air France, Air New Zealand, All Nippon Airways, Cargolux Airlines International S.A., Gulf Air, Japan Airlines, KLM Royal Dutch Airlines, Scandinavian Airlines and Virgin Atlantic Airways. Collectively, they account for approximately 15 percent of commercial jet fuel use. The group announced two initial research projects conducting sustainability assessments of jatropha and algae. Yale University's School of Forestry and Environmental Studies will review the jatropha, and the Natural Resources Defense Council will assess the algae.

Ben Oster, research engineer at the University of North Dakota's Energy and Environmental Research Center, holds a sample of the center's recently produced renewable jet fuel.

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Two projects advance sustainable jet fuel

The Chinese calendar says 2008 was the Year of the Rat. For the biodiesel industry, one could say it has been the Year of the Hurricane. 
 
 At press time, Hurricanes Ike and Gustav may have been the only physical manifestations to impact our industry during a stormy year, but our industry has been through a figurative tempest as well. Crude oil and feedstock prices went full circle, leaving biodiesel producers reeling. At the beginning of fiscal year 2007, prices had been on a sharp 12-month upward trend. The trend topped out at a whopping 150 percent increase, reaching a plateau during the third quarter then taking a nosedive in the fourth quarter. 

 
 Never has it been so clear that our industry operates in the unpredictable delta between the highly volatile energy and agricultural commodity markets, which are today inextricably linked. Meanwhile, the U.S. biodiesel industry faced huge public policy challenges during a presidential election year, compounded by difficult and complex trade issues.
 
 Biodiesel also came under attack by large food companies. Like pirates creating a diversion for pilfering, the Grocery Manufacturers Association launched a sustained anti-biofuels attack, blaming them for an increase in the cost of food, which happens to correspond to their record-high profits. We were hit with wave upon wave of attacks on "food versus fuel" before it was exposed that the negative coverage was the result of a carefully orchestrated-and highly funded-GMA campaign. 
 
 The credit crisis and economic meltdown has not spared the biodiesel industry. Biodiesel operations are capital intensive, and the choking off of credit strikes at the very heart of production operations.
 
 It is hard to admire a rainbow while still enduring gale force winds, but there are several bright spots shining through the cracks in the cloud cover. First, a year ago, NBB members identified eight top public policy priorities. Even during the political madness of an election year, we achieved all of them making us "8-for-8 in '08." 
 
 As for countering the GMA attacks, soybean farmers have once again come to the aid of the biodiesel industry, funding a new project for fiscal year '09 to amplify our efforts to counter the misinformation campaign and get out the truth. While our funding will never match the $15 million that GMA is reportedly spending, we do have the truth on our side. 
 
 We also have messengers from federal, economic and scientific communities that agree, and that is worth a lot. 
 
 Although the economy will likely continue to struggle, our industry can take heart in being part of the solution. There are 176 biodiesel plants churning out domestically produced fuel, and every one of them creates green jobs here at home while reducing our national trade and energy deficits. In addition, biodiesel achieved a historic level of credibility in July when B5 was balloted into the definition of diesel fuel, opening the way for universal acceptance, fungibility, pipeline movements and larger volume markets, just in time for the implementation of the new renewable fuels standard. Consumer and original equipment manufacturer (OEM) confidence in biodiesel will continue to grow, thanks to the passage of a biodiesel specification for blends of B6-B20. This technical achievement is a beacon for greater OEM acceptance of B20. 
 
 Hurricanes lose their strength as they move over land. Meteorologists say that despite their destructive forces, hurricanes ultimately help maintain equilibrium in the Earth's troposphere and preserve a relatively stable and warm temperature worldwide. I am hopeful the literal and figurative hurricanes that we have endured this year represent part of a longer-term cycle that will ultimately make us stronger and healthier as an industry. 
 

 Sincerely,
 Joe Jobe
 Chief Executive Officer 
 National Biodiesel Board

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Year of the Hurricane

Houston-based Sunrise Ridge Algae Inc. has been awarded $250,000 from the Texas Emerging Technology Fund to commercialize its wastewater algae production technology that produces feedstocks for biodiesel and other applications. The company operates a research facility and pilot-scale algae farm at a wastewater treatment facility adjacent to the city of Austin's Hornsby Bend Biosolids Management Plant. It has been working with the University of Texas in Austin to identify high oil-yielding species and growth protocols of algae.

Algae grower acquires funding

Standard Biodiesel Inc. in Arlington Wash., is seeking distributors in Idaho, Washington and Oregon for its renewable diesel blends. Standard Biodiesel collects yellow grease from restaurants and other businesses, including Wal-Mart and Microsoft Corp., and processes the oil at a plant in Coeur D'Alene, Idaho. The company manufactures approximately 1 million gallons of renewable diesel blends annually for on-road, off-road, boiler and home heating uses at its plant in Arlington.

Standard Biodiesel seeks distributors

The fourth edition of the National Renewable Energy Laboratory's Biodiesel Handling and Use Guide was published in September. The publication is an informational resource for those who blend, store, distribute, and use biodiesel blends. It contains significant information on storage stability, low-temperature blending and operability, and the new biodiesel blend specifications. The 56-page document can be found at <a href="http://www.nrel.gov/vehiclesandfuels/npbf/feature_guidelines.html">www.nrel.gov/vehiclesandfuels/npbf/feature_guidelines.html</a>.

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NREL updates biodiesel guide

Preventing fuel-related problems before they develop, whether during the production, transportation, storage or combustion of fuel, is a goal of everyone working in the fuel industry. Recent testing of biodiesel blends by ASTM D 4625, a long-term storage stability test method, has identified the formation of sediment in stored B5 and B20 blends. The sediment components have been analyzed and are shown to originate from the reaction of oxygen in the air with unsaturated methyl oleate and methyl linoleate compounds in B100. However, antioxidant addition to B100 prior to blending with ultra-low sulfur diesel (ULSD) to produce B5 and B20 biodiesel blends prevented sediment formation during long-term storage.

 
 During the 1950s, the U.S. Bureau of Mines completed a petroleum distillate fuel storage stability study, the findings of which were published in a Western Petroleum Refiners Association report in 1956. The report showed that deposits formed in drums of fuel stored for a year at ambient temperature were equivalent in amount to deposits formed in fuel stored in bottles for 13 weeks at 38 degrees Celsius (100 degrees Fahrenheit).
 
 In the late 1960s and early 1970s, the U.S. Navy developed a related testing program to help predict the potential for sediment formation in diesel fuel transported to remote base locations for storage and use. Since overseas fuel deliveries by ship could take months, or possibly even a year or more, a method to help determine the long-term stability of stored diesel fuel was needed. From the results of this fuel stability study, it was concluded that the amount of insoluble material formed in a week of storage at 43 degrees 
 Celsius (110 degrees Fahrenheit) is approximately the same as the amount formed in one month of storage at ambient temperature.
 
 This same storage stability testing method developed by the U.S. Navy was the forerunner of ASTM D 4625 Standard Test Method for Middle Distillate Fuel Storage Stability at 43 degrees Celsius (110 degrees Fahrenheit). Today, ASTM D 4625 is used to help determine whether fuels stored for an extended time develop precipitate and gums. Precipitate and gums are both problematic in the fuel intake system of internal combustion engines, turbines, burner nozzles and other fuel delivery hardware. During engine operation, sediment carried with fuel may cause filter plugging and fuel intake system fouling. Gum accumulation in storage vessels may build to form larger deposit sites. In the fuel injection system, gum accumulation may lead to sticking of moving engine parts such as fuel pump plungers, fuel injectors and valves.
 
 The Importance of Biodiesel Storage Stability
 To help predict the storage life of B100 and biodiesel blends, the fuel industry has adopted two fairly rapid testing methods: EN 14112 (Rancimat) and ASTM D 2274, Standard Test Method for Oxidation Stability of Distillate Fuel Oil. These accelerated test methods are not designed to rate the effect of long-term storage on the potential for formation and separation of oxidized precipitate in biodiesel blends.
 
 Although most biodiesel is used within a few weeks of production, biodiesel blends such as B5, B11 and B20 could be stored for several months. Farms, military bases, construction contractors, and facilities using emergency back-up power generators such as hospitals and electric utilities are examples of facilities where long-term storage of biodiesel blends is common. For this reason, the need to prevent degradation and sediment formation in stored biodiesel blends is essential. 
 
 Sediment Formation During Long-term Storage 
 In a recent study, a thick, gel-like precipitate separated in B5 and B20 biodiesel blends when stored under ASTM D 4625 conditions. However, no sediment formed in B100 when stored under the same conditions.

 
 The oils used for biodiesel blending and testing included soy oil-based B100, mixed vegetable oil-based B100, palm oil-based B100 and ULSD. All oils were obtained from U.S.-based commercial producers. The precipitate gel formed in both B5 and B20 blends made using soy oil-based B100 and mixed vegetable oil-based B100. Sediment did not form in palm oil-based B5 and B20 or in stored B100. 
 
 The appearance of precipitate in B5 and B20 blends containing high percentages of ULSD was not expected since the blends had good Rancimat and ASTM D 2274 stability ratings. 
 
 For example, as shown on page 93, the respective Rancimat lifetime ratings of 5.1 hours, six hours and more than eight hours for the soy-based B100, B20 and B5 blends coupled with the low ASTM D 2274 deposit ratings would indicate stable biodiesel blends.
 
 However, exposure of the B20 and B5 blends to the ASTM D 4625 110 degree Fahrenheit storage conditions produced fuel haziness after six weeks. A distinct gel-like precipitate layer formed in B20 and B5 blends after 12 weeks of storage. As shown in Figure 1, the precipitate is visible in the biodiesel samples without antioxidant addition. No precipitate formed in biodiesel blends containing 100 parts per million of antioxidant.
 
 Analysis of Precipitate Formed in Biodiesel Blends
 The precipitate gel formed in biodiesel was collected and analyzed by gas chromatography/mass spectrometry. The analyses conclusively showed that the primary components in the precipitate are organic compounds that directly resulted from the oxidative cleavage of double bonds in the fatty acid methyl ester. Examples of compounds formed included a variety of aldehydes, carboxylic acids and ketones from six to 13 carbon atoms in length. Products of ester hydrolysis were found as well. Also detected in the precipitate gel were a number of compounds known to be impurities in B100. These included glycerol, monoglycerides, diglycerides and plant sterols. Trace amounts of additional oxidized compounds were also detected. Unoxidized fatty acid methyl ester was less than 3 percent of the precipitate volume.
 
 No single degradation species dominated the gel composition. For example, two of the more apparent species detected are azelaic acid monomethyl ester (formed by the oxidative degradation of methyl oleate) and hexanoic acid (formed by the oxidative degradation of methyl linoleate). However, oxidative cleavage can occur in any compound that contains unsaturation in the carbon chain, regardless of the chain's length or the location of the double bond. They type of polar functional group (aldehyde, acid, ketone, etc.) that can form at the point of cleavage can vary according to a variety of reaction conditions. This results in a large number of potential products. Even a relatively simple compound such as methyl oleate, which has 18 carbons and only one double bond, can yield multiple polar degradants. Several compounds are formed upon oxidative degradation of methyl oleate. 
 
 Methyl oleate is a compound commonly found in B100 produced from soy oil, animal fat, palm oil, canola oil and other feedstocks.
 

 These same products of oxidation were detected in the B100 samples subjected to ASTM D 4625 conditions, yet surprisingly no precipitate formed. In B100, the combined factors of higher viscosity and concentrated ester bond polarity work together to help disperse or suspend oxidative degradation compounds within the B100 solution. As a result, the precipitate did not form (Figure 2).
 
 It is interesting to note that a precipitate layer did not form in palm oil-based B20 and B5 biodiesel blends or in B100. As a comparison, soy oil contains approximately 83 percent oxidatively reactive unsaturated compounds. The significantly lower percentage of oxidatively reactive compounds in palm oil helps to explain why precipitate did not form.
 
 During long-term storage, soy-based and mixed vegetable oil-based fatty acid methyl ester compounds present in B20 and B5 biodiesel blends oxidized to form a variety of lower molecular weight, polar organic compounds. These compounds had poor solubility in the nearly non-polar, ULSD fuel used to prepare B20 and B5 blends. The result is fall-out and accumulation of the compounds as a gel-like precipitate. In fuel intake and distribution systems, this precipitate could block the flow of fuel through fuel filters and cause sticking of fuel injection system parts. However, the addition of an antioxidant to biodiesel blends prevented fuel degradation and the formation of a precipitate in stored biodiesel fuel blends. 
 
 Kim Peyton is a Nalco research associate. Reach him at <a href="mailto:kbpeyton@nalco.com">kbpeyton@nalco.com</a>. Tim McGinnis is a Nalco research scientist in the company's research analytical division. Reach him at <a href="mailto:tmcginnis@nalco.com">tmcginnis@nalco.com</a>. Phil Bureman is Nalco's industry technical consultant for chemicals and biofuels. Reach him at <a href="mailto:pebureman@nalco.com">pebureman@nalco.com</a>.
 
 Figure 1. A comparison of Midwest U.S. soy B20 and B5 in ULSD after ASTM D 4625 long-term stability testing. Note the precipitate formation in fuel without antioxidants.
 SOURCE: NALCO

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Figure 1. A comparison of Midwest U.S. soy B20 and B5 in ULSD after ASTM D 4625 long-term stability testing. Note the precipitate formation in fuel without antioxidants.

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Figure 2. ULSD and B100 after ASTM D 4625 testing (no antioxidant added).

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Preventing Sediment Formation In Stored Biodiesel Fuel Blends

Before undertaking a major capital project, a host of questions must be answered regarding the technical and financial viability of the project. The questions are the same regardless of the type of project being contemplated. How much will it cost? How long will it take to complete? How quickly will project owners and investors recover the investment? 
 
 What is the return on investment? Which of the assumptions about the project are critical to its success?
 
 The necessity of systematically addressing these topics leads many to utilize an engineering tool called a feasibility study early in the project's development. Essentially, a feasibility study provides an opportunity to clarify a business plan by enumerating and analyzing the risks and returns of a capital project. 
 
 The results of the feasibility study show how a business would operate under the given set of assumptions that led one to consider the project. The primary audience for the study includes potential investors, financiers, developers, upper management or anyone who will participate in deciding whether to proceed with the project. It is typical for a feasibility study conducted by a third party to be required before any major investors or banks will make a funding decision. 
 
 Feasibility studies are frequently completed by an outside engineering firm in order to obtain an independent review of a company's business plan. Selection of an outside firm should be done with a focus on those experienced in process development and banking requirements. This often will be the first time that a new company interacts with a consulting engineering firm, and it is important to select one that can provide guidance in handling projects from research and development through construction and start-up. 
 
 Without such experience, an engineering firm cannot accurately assess the risks and rewards of undertaking a major capital project. 
 
 If the project involves proprietary information, it is wise to ensure that the engineering firm hired to conduct a feasibility study has strong intellectual property protection procedures. 
 
 Consider entering into a non-disclosure agreement with any firm, even though there is no detailed technology transfer involved.
 
 Issues Addressed

 At the root, a feasibility study addresses a specific set of technical, economic, legal and schedule topics. Primarily, it seeks to provide a thorough understanding of what it will take to execute a project prior to investing significant amounts of capital. On the technical side, a feasibility study answers the inevitable engineering questions raised once a company decides to scale up a process: 
 
 ›What type of equipment is needed to operate the process at larger scales? 
 
 ›Is that equipment widely available, or is it highly customized? 
 
 ›Which utilities will the owners or investors need to provide, and are they available where the project will be built? 
 
 ›Are the required raw materials and labor available at the anticipated construction site? 
 
 ›How long will it take to get the process and ancillary equipment installed and operating? 
 
 ›What will the factory look like in the end? 
 
 ›What size property is needed to build this facility? 
 
 ›What permits need to be obtained, and which will take the longest to obtain? 

 
 ›What transportation networks are available, and which ones are needed? 
 
 A feasibility study will also help predict what will happen with a group's money. Know what the return on investment will be, what the first five to 10 years' worth of cash flow will look like, and how long the payback period will be. This includes an analysis of tax rates and possible tax incentives for the project.
 
 By estimating the capital cost of a project and calculating operating expenses such as raw material consumption and labor, a feasibility study helps identify all the costs and revenues associated with the process. Market assessment, internal rate of return, revenue and operating costs are all estimated to provide as full a picture as possible of the project's viability. 
 
 Permitting and patent/licensing issues dominate the legal focus at the early stage of a project. Identifying the permits required for the project and building a timeline for acquiring those permits is crucial for the development of a project timeline. Patents and/or technology licensing will impact costs and revenue streams and should be included in return on investment calculations. Additional questions to consider at this phase include possible markets for byproducts, disposal costs for waste streams, carbon credits for a "green" process, utility costs and evaluation of alternative technologies that might increase efficiency. These topics will not be exhaustively researched in this phase of a project, but they will be identified for future study based on their relevance to the overall project success.
 
 None of the questions raised earlier will be fully answered at the end of a feasibility study, but the key decisions that need to be made early in the next phase of engineering will be identified. 
 
 The Limits of a Feasibility Study 
 While a feasibility study covers a broad range of topics, it does not delve into great detail on any one of those topics. It will not provide a detailed equipment list nor a full heat and mass balance for a process. Nor will it provide enough information to obtain detailed bids on design and construction. Assuming the feasibility study finds that a project is viable and financing is secured, the next steps include front-end loading (preliminary engineering, site selection and permitting), followed by detailed engineering, equipment procurement, construction and start-up. Because all of those steps are contingent on the completion of a thorough feasibility study that carefully analyzes the risks and rewards of a project, it is wise to spend considerable time ensuring an appropriate engineering firm is selected to conduct the feasibility study. Upon completion of the study, a good engineering firm should also be able to help with subsequent steps as well. 
 
 Bryan Olthof is a process engineer with Harris Group's Process Solutions Unit. Reach him at <a href="mailto:bryan.olthof@harrisgroup.com">bryan.olthof@harrisgroup.com</a> or (800) 488-7410.

Feasibility Studies 101: What It Takes to Achieve Commercial Goals

In this issue of Biodiesel Magazine, we look ahead to what 2009 may have in store for our industry. 2008 was a rough year, mainly due to high feedstock prices and low demand. 
 
 However, I feel confident that there is a future for biodiesel. Here's why:
 ›Oilseed prices: Staff Writer Susanne Retka Schill concludes in her feature titled "Sizing Up the Soybean Market" on page 42 that soy oil prices will likely go down in 2009. Farmers are growing more of the oilseed crop this year, and food manufacturers are moving on to oils lower in trans fats. In fact, one source told Retka Schill that total consumption of soy oil for food use has decreased nearly 1 billion pounds over the past three years in the United States.

 
 ›Legislation: As Senior Staff Writer Ron Kotrba details in his feature titled "Transition Period" on page 52, the federal renewable fuels standard requires 500 million gallons of biomass-based diesel fuel to be consumed in the United States in 2009. Biodiesel will likely be one of the main fuels used. A word of caution here: A member of the industry once told me, "You can regulate biodiesel usage all you want, but until feedstock prices go down, it's not going to increase production." Perhaps in 2009, both factors will align into a perfect situation for biodiesel.
 
 Furthermore, the biodiesel tax credit has been extended one year to Dec. 31, 2009 (see Industry News on page 18). It now offers the $1-per-gallon credit to producers using nonvirgin feedstocks such as yellow grease. It closes the splash-and-dash loophole, and it reduces the credit to 50 cents per gallon for biomass coprocessed with a petroleum feedstock. All of these changes create huge opportunities for biodiesel. 
 	
 ›Quality control: ASTM International has published new standards for biodiesel (see Industry News on page 19). Steve Howell, chairman of the ASTM Biodiesel Taskforce and technical director of the National Biodiesel Board, said, "This is perhaps the biggest technical achievement of the biodiesel industry since its inception in the United States in the early 1990s." I think that sums it up pretty well.
 
 ›Lobbying power: Speaking of the NBB, Staff Writer Kris Bevill details the association's 2009 priorities in the feature titled "Politics, Prices and Public Support" on page 60, along with the priorities of others in the biodiesel industry. The NBB aims to focus its lobbying attention on the extension of the biodiesel tax credit beyond 2009, the trade dispute between the United States and European Union, feedstock costs and sustainable feedstocks. A carbon emissions program may also be in this industry's future. 
 
 As you can see, there are a lot of factors changing the biodiesel industry in a positive way. In fact, I admit I was somewhat surprised to see the results of a study conducted by SRI Consulting (see BIObyte on page 18) that concluded the United States would become the largest biodiesel market by 2012. Amazing! I guess the cheesy saying, "Feeling fine in '09" really does apply here.
 
 Jessica Sobolik
 Managing Editor
 <a href="mailto:jsobolik@bbiinternational.com">jsobolik@bbiinternational.com</a>

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Dare I Say, 'Feeling Fine in '09'?

California-based SRI Consulting, a business research service for the global chemical industry, released its global 2008 Bio-diesel report in September, which found that the United States is positioned to become the world's largest biodiesel market by 2012, consuming nearly 19 percent of the world's biodiesel supply. The report also concluded that the global biodiesel industry is positioned to grow 30 percent between 2007 and 2012. Between 2005 and 2007, the biodiesel industry grew 50 percent, the highest growth in the chemical industry during that time period.

US projected to lead world biodiesel market

Nova Biosource Fuels Inc.'s 10 MMgy biodiesel facility in Clinton, Iowa, remained idle at press time due to a fire that broke out in the plant's primary methanol recovery column Sept. 30. The facility, which was idle for maintenance at the time of the incident, was expected to come back on line approximately 60 days after repairs and insurance adjustments could be made, according to President and Chief Executive Officer Kenneth Hern.

Nova Biosource plant remains off-line

Dynamic Fuels LLC broke ground Oct. 6 on its 75 MMgy renewable diesel production facility in Geismar, La. The facility, a joint venture between Tyson Foods and Syntroleum Corp., will use Syntroleum's patented Biofining technology to turn low-grade animal fats and waste vegetable oil supplied by Tyson into renewable diesel.

Dynamic Fuels begins construction

Madison, Wis.-based Best Energies Inc., which operates a 10 MMgy biodiesel plant in Cashton, Wis., has been awarded $1 million in grants and loans from the Wisconsin Energy Independence Fund to commercialize its process for producing biodiesel from crude corn oil extracted at ethanol plants. In addition, Sun Power Biodiesel LLC, a 3 MMgy biodiesel plant in Cumberland, Wis., has been awarded a $25,000 state Agriculture Development and Diversity grant to promote planting canola and sunflower crops in northern Wisconsin.

Wisconsin funds biodiesel

The U.K.'s Renewable Fuels Agency has released its third monthly report on the use of renewable transportation fuels in the country, which indicated that the country is well on its way to exceeding all European Union targets for the year. The report stated biofuels accounted for 2.61 percent of the total fuel supply, which exceeds the yearly target of 2.5 percent. Biodiesel accounted for approximately 84 percent of the biofuels used, 25 percent of which was produced using American soybeans as a feedstock.

UK meets renewable transportation fuel goals

An 80 million-pound-per-year mechanical cold-crush plant began operation Sept. 25 in Rickreall, Ore. The plant, owned by Willamette Biomass Processors Inc., will take in oilseeds-mostly regionally grown canola and camelina-from farmers in Oregon, Washington, Idaho and Montana. Shipments of canola and camelina seed have already been received from producers across Oregon, according to the company. The oil is being used as a feedstock for SeQuential-Pacific Biodiesel LLC, which completed a plant expansion from 1 MMgy to 5 MMgy this summer in Salem, Ore. In-state biodiesel production totaling 5 MMgy from oilseeds in the four-state area would trigger a B2 mandate in Oregon.

Oregon crush plant opens

Exxon Mobil Corp. plans to open a biodiesel blending facility in Spokane Valley, Wash. The $3 million facility will be located on a 15-acre fuel storage site already owned by the company. It will be Exxon Mobil's first biodiesel blending facility in the United States. The terminal will begin operation by Dec. 1, which is the day after a statewide 2 percent biodiesel mandate goes into effect. Chevron Corp. has also announced plans to distribute B5 in Washington.

Exxon Mobil to blend biodiesel

In mid-October, Kinder Morgan Energy Partners LP tested a movement of B5 in a segment of the Plantation Pipe Line Co. system that transports gasoline and diesel approximately 550 miles from Collins, Miss., to Spartanburg, S.C. At press time, Kinder Morgan, a 51 percent owner and the operator of Plantation Pipe Line, expected test results to be available by the end of October. The company is also evaluating the transportation of biodiesel in its 100-mile Portland to Eugene, Ore., pipeline to support the forthcoming biodiesel mandate in Oregon.

Kinder Morgan conducts biodiesel pipeline test

Iowa State University professors are studying how the solvent properties of biodiesel can benefit military applications by investigating if, or how well, certain varieties of battlefield-generated waste plastics dissolve into biodiesel, and how that fuel would work in powering a military base generator. 
 
 "Mobile military bases produce a lot of garbage," said ISU professor Balaji Narasimhan. "If you burn it, you announce your presence. If you bury it, you leave evidence of how big a unit you're traveling with and in which direction you're headed." Since the next option is to carry the waste, the U.S. Army initiated research with General Atomics, Renewable Energy Group Inc. and ISU to investigate which plastic materials best dissolve into biodiesel, and how stationary engines perform when running on the polymer-rich fuel. 
 
 "If you take a Styrofoam cup and drop it into room-temperature biodiesel, it will dissolve in a couple minutes, but Polyethylene terephthalate (PET), or soda bottles, will not dissolve," Narasimhan said. Some garbage bags and containers for meals ready to eat (MREs) also dissolve into biodiesel. 
 
 ISU mechanical engineering professor Song-Charng Kong said the maximum concentration of plastics dissolved into biodiesel before fuel viscosity becomes problematic is 10 percent by weight. "Sometimes the engine fails at 10 percent, and sometimes it doesn't," he said. Specifically, the fuel injection pump can't handle plastic concentrations greater than the 10 percent threshold. 
 
 Kong used a 4.5-liter, four-cylinder John Deere engine (model No. 4045), from which emissions of soot, nitrogen oxide (NOx), carbon monoxide and unburned hydrocarbons were measured. "Because polymers are big molecules, soot emissions increased," he said. "NOx emissions also increased." Speciation of the exhaust gases wasn't examined. 
 
 While Narasimhan dissolved different types of plastics in B100, engine tests thus far have only successfully used biodiesel with polystyrene-in concentrations of 1 percent, 2 percent, 5 percent and 10 percent. A fuel with nine parts biodiesel and one part dissolved plastics has roughly the same energy content as straight B100 but requires 10 percent less fuel.

Left to right: Postdoctoral Associate Ying Zhang, and Professors Surya Mallapragada and Balaji Narasimhan study the dissolution of waste plastics when submerged in biodiesel.

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Biodiesel may be used as recycling agent

The northwest portion of the United States isn't rife with cropland suitable for soybeans or other feedstocks ideal for biodiesel production, so industry members there have been more resourceful in their attempts to produce biodiesel. In Oregon, an algae-based project is underway that could ultimately serve as an example for industrial partnerships throughout the country. 

 
 Two years ago, Jon Norling, vice president of Washington-based renewable energy company Columbia Energy Partners LLC, began exploring an idea to produce biodiesel from algal oil generated by feeding algae carbon dioxide emissions from a coal-fired power plant. Norling also serves as president of Portland Biodiesel LLC, a 1 MMgy biodiesel plant in Portland, Ore. Columbia Energy Partners agreed the project was a good idea, and Norling began seeking a partner. 
 
 Portland General Electric proved to be the ideal choice. The electric utility operates the only coal-fired electricity plant in Oregon and is a fairly progressive company, according to Norling. Its 600-megawatt facility is located in a part of the state conducive to algae growth and encompassed by a large amount of open space-a crucial element as Norling anticipates ultimately needing 7,500 acres of open air algae ponds for commercial production. The company agreed to give the concept a try, and preliminary work began earlier this year.
 
 At press time, Columbia Energy Partners was conducting a feasibility study to determine if algae can feed on the carbon dioxide emitted from the power plant and what amounts of carbon dioxide-and potentially other greenhouse gases-the algae can consume. Seattle-based BioAlgene LLC is providing the algae strains for this portion of the project, according to Norling. "If the results of the first phase are positive, we'll move into the second phase, which will be the construction of larger, in-the-ground test ponds," he said. The company will also then begin work on some of the engineering details.
 
 Norling said the project is taking baby steps at Portland General Electric's request. He expects a commercial-scale project to be three to five years away. "There are some major issues," he said, noting the difficulties of keeping open-air algae ponds free from contamination, and the actual process of squeezing oil from the algae. 
 The concept has the potential to offer other carbon dioxide emitters a way to reduce their output of greenhouse gases. Norling said the process can be applied to any industrial facility, provided it's surrounded by a fair amount of land and sunlight.

Columbia Energy Partners LLC is conducting its algae feasibility study at a coal-fired power plant in Oregon.

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Carbon dioxide emissions could spur algae growth

Zurix Biodiesel Inc. in Thomaston, Ga., is rising from the ashes of disaster. The company is owned by Richard Harville, who owned a grease recycling business that suffered a devastating fire in September. Zurix has received a $500,000 renewable energy grant from the USDA to start producing biodiesel instead. 
 
 Harville is in the process of cleaning up the site of the now-defunct Agri-Cycle LLC business, removing approximately 10 million gallons of water and grease. The grant was part of a $220.9 million loan and grant program within the USDA's Renewable Energy Systems and Energy Efficiency Improvements Program. Zurix Biodiesel will collect approximately 1 million gallons of grease that will be used to produce biodiesel. Harville hasn't disclosed the location of the biodiesel plant yet, citing ongoing negotiations with the community, but he affirmed it won't be in Jackson County, where Agri-Cycle was located.
 
 Agri-Cycle collected waste grease and processed it in large detention ponds. The process residue was sprayed on agricultural land. Residents of the community complained of odor problems from the plant soon after it opened in 2005. In September 2007, the Georgia Environmental Protection Department cited Agri-Cycle's operation for alleged water quality violations and ordered Harville to shut down the plant. The Jackson County Superior Court also issued an injunction requiring the plant to be shut down unless it could prove it wasn't a threat to public health. In October 2007, one of the detention ponds containing waste grease and water caught fire, and burned for more than 24 hours before the blaze was extinguished by firefighters. The company appealed the department and county court rulings to the Georgia Supreme Court, but lost those appeals. As part of an out-of-court settlement between Harville and Jackson County, Harville agreed not to reopen Agri-Cycle or to process any kind of waste in Jackson County again. However, he can reopen the site as an agricultural business.
 
 The $2 million biodiesel operation will obtain yellow grease from restaurants and chicken fat from poultry processing operations to be used as feedstocks. The facility will also be able to convert trap grease into biodiesel. Harville said the plant will have a competitive advantage due to its ability to convert poor-quality feedstocks. It will employ 20 to 30 people and create additional jobs in support industries. It has been under development for two years, according to Harville.

Biodiesel firm rises from recycler's ashes

Throughout the world, biodiesel projects and policies are simultaneously being crafted. Biodiesel Magazine recently discovered such activities underway in China, Ireland, Wales, Scotland, Brazil and Argentina.
 
 Gushan Environmental Energy Ltd., a biodiesel plant in Beijing, resumed operations Sept. 22 after travel regulations during the 2008 Summer Olympic Games forced it to halt production Aug. 1. Traffic control measures restricted the ability of the plant's suppliers to deliver raw materials. The company estimates it lost 3 million gallons in production during the Games.

 
 Meanwhile, the Republic of China has granted 110 acres near an industrial site in Wahan, China, to BioCentric Energy Algae LLC. The company aims to build an algae farm that captures carbon dioxide to grow 80 tons of algae per day for biodiesel production. The algae would contain 47 percent oil, according to Dennis Fisher, president and chief executive officer of BioCentric.
 
 In other algae developments, Alternative Energy Resources Ltd. in Dublin, Ireland, and a team of researchers at the National University of Ireland in Galway have successfully produced biodiesel from local species of algae, according to John Travers, chief executive for Alternative Energy Resources. The project reached the milestone after 18 months of work.
 
 Just east of Ireland, Flex Fuels Energy Ltd. is moving forward with plans to build an oilseed-crushing and biodiesel plant in Cardiff, South Wales, according to Chief Executive Officer Brian Barrows. The company intends to build a 60 MMgy biodiesel plant using rapeseed blended with 20 percent soybean oil. At press time, it was considering three proposals from prospective engineering, procurement and construction companies, and expected to make a decision by the end of October.
 
 Scotland intends to increase its biodiesel usage from less than 1 percent to 10 percent by 2020, and the federal government may act on such a proposal in February. To do so, more investment is needed in production and transport infrastructure. The biodiesel will mainly be produced using European sunflower and imported palm oil. 
 
 <center><img src="/images/upload/20081113021926.jpg" alt="" /></center>
 
 Brazilian oil company Petrobras and Portuguese oil company Galp Energia agreed Oct. 10 to jointly produce, market and distribute 150 MMgy of biodiesel. Half of the biodiesel will be produced in Portugal, and the origin of the other half is to be determined. The biodiesel will be marketed primarily in Portugal and Spain.
 
 According to Carlos St. James, president of the Argentine Renewable Energies Chamber, Argentina will become the third-largest biodiesel producer by the end of 2008. The chamber recently completed a study of the country's biodiesel market, which concluded that Argentina will produce more than 10 percent of the world's biodiesel in 2008. Only Germany and the United States will produce more, it said. The 27-page study can be found at <a href="http://www.argentinarenovables.org">www.argentinarenovables.org</a> under the Info, Studies & Essays tab.

Production, infrastructure, usage grow worldwide

The federal renewable fuels standard (RFS) set forth in the Energy Independence & Security Act of 2007 will greatly change the future of renewable fuel use. How this new standard could affect the biodiesel and renewable diesel industries was presented to attendees at the 2008 Advanced Biofuels Workshop & Trade Show in Minneapolis on Sept. 28-30.

 
 The RFS mandates the United States to consume 36 billion gallons of biofuels by 2022, which includes a 21 billion-gallon advanced biofuel carve-out. For 2009, the RFS mandates 10.5 billion gallons of conventional biofuel (primarily corn-based ethanol) and 600 million gallons of advanced biofuel, which includes 500 million gallons of biomass-based diesel (biodiesel or renewable diesel) and 100 million gallons of undifferentiated advanced biofuel (such as biobutanol). 
 
 Stu Porter, manager of business development and projects for BBI Biofuels Canada, highlighted how the biomass-derived diesel component of the RFS could become a significant piece of the advanced biofuels category. One indication is the emergence of utilizing hydrogenation-derived renewable diesel (HDRD) reactions to produce renewable diesel fuel. 
 
 The HDRD production process differs from conventional biodiesel production in that hydrogen and a catalyst (such as platinum, palladium, rhodium or ruthenium) are used to produce renewable diesel. However, the HDRD process uses virtually the same feedstocks used to produce biodiesel. 
 
 According to Porter, the only drawback to HDRD is that it has no official specifications as a pure fuel blend component under ASTM D 6751 standards, whereas biodiesel specifications are outlined in the spec (see page 19). Otherwise, HDRD requires no special tank storage, and can be pipelined to blending sites or retail distribution centers. Porter also said HDRD plants tend to be larger and located with refineries on waterways. "[HDRD plant capital] costs are more than biodiesel plants, even when taking infrastructure and logistical costs into consideration," he said, adding, "There will be room in the industry for both biodiesel and renewable diesel to flourish."

Left to right: Panelists participate in the "Biomass-Based Diesel Production" breakout session during the Advanced Biofuels Workshop and Trade Show in Minneapolis in September.

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Workshop defines biomass-based diesel options

Experts from around the world addressed biofuels as they gathered for the "most significant observance of World Food Day around the globe," on Oct. 15-17. The National Biodiesel Board offers interviews, audio clips and photos from world food experts on its Web site. 
 
 The event honored Nobel Peace Prize Laureate Norman E. Borlaug, who sparked the "green revolution" of increased agricultural productivity. The promise of biofuels, as well as greater agricultural productivity, was repeatedly addressed at the World Food Prize International Symposium in Des Moines, Iowa.
 
 Republican Sen. Chuck Grassley of Iowa paid a visit to the World Food Prize event. In an interview, Grassley said that incentives for biodiesel included in the financial rescue plan passed by Congress are critical to the development of the industry.
 
 Grassley introduced U.S. Secretary of Agriculture Ed Schafer and made comments about the importance of American agriculture in feeding the world. He also honored colleagues from the Senate, and George McGovern and Bob Dole, who are this year's World Food Prize recipients.
 
 "It is heartening to see international leaders discussing biodiesel's value on World Food Day," said NBB Chief Executive Officer Joe Jobe. "Food production and transport are particularly dependent on diesel engines and biodiesel is a crucial part of bringing energy security benefits to the global food supply."
 
 Audio is available on www.biodiesel.org for:
 
 ›Sir Gordon Conway, a world-renowned ecologist and chief scientific advisor to the U.K. Department for International Development

 
 ›Gale Buchanan, U.S. Undersecretary for Research, Education and Economics
 
 ›Sen. Chuck Grassley
 
 ›Former Sen. Bob Dole
 
 ›Former Sen. George McGovern
 
 ›Roberto Rodrigues, co-chair of the Interamerican Biofuel Coalition
 
 ›Paul Schickler, president of Pioneer Hi-Bred International Inc.
 
 ›Jim Hershey, executive director, World Initiative for Soy in Human Health
 
 ›Robert Zoellick, president of the World Bank.

Left to right: McGovern, former World Food Price recipient Catherine Bertini and Dole

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Biodiesel recognized on World Food Day

Spot a city bus, fire truck or double-decker tour bus in San Francisco, and chances are good that it is running on 20 percent biodiesel. The area's biodiesel enthusiasm even flows beyond the "City by the Bay" into the bay itself, where the famous Red and White Fleet ferries cruise on B20. 

 
 "San Francisco is an inspiration to our industry like none I've ever seen," said Joe Jobe, NBB chief executive officer. "The enthusiasm for biodiesel is in every corner of the city. The commitment is contagious, and I am eager for our conference attendees to experience it for themselves." 
 
 The San Francisco city government has the largest known city fleet in the world using B20, one of many reasons it is the perfect host for the 2009 National Biodiesel Conference & Expo, Feb. 1-4. 
 
 People who have made the biodiesel program a success will kick off the conference educational program.Mayor Gavin Newsom is expected to speak. In 2006, he issued an executive directive designed to increase the pace of municipal use of biodiesel. Today, virtually all of the city's 1,500 diesel vehicles run on B20. The city uses approximately 5 MMgy of B20.
 
 Other city speakers include Chief of Climate Action and Greening Marty Mellera; Clean Vehicles Manager at the Department of the Environment Vandana Bali; Mike Ferry of the San Francisco Fire Department and past recipient of the Eye on Biodiesel Inspiration Award; and Karri Ving, biofuels coordinator for the Public Utilities Commission.
 
 The 2009 conference will offer valuable educational and networking opportunities that attendees have come to expect. A new feature will be sustainability sessions that supplement existing educational tracks. For more information and to register, visit www.biodieselconference.org.

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San Francisco opens gate to National Biodiesel Conference & Expo

Ten years ago, Joe Biluck took a leap of faith. After applying for and receiving a U.S. DOE grant for alternative fuel, he filled a school bus with a blend of what was then a little-known fuel called biodiesel.
 
 "I will admit, I was a little scared that first time," he said. "But when you see an opportunity or a technology that has a lot of potential, and you've done your homework on it, you have to be willing to take a calculated risk for the greater good. Someone has to raise their hand, and why not Medford?" 
 
 This fall, the Medford Township School District in New Jersey hosted a commemorative event and educational session celebrating 10 years of using B20. "We transport 3,500 students a day in our buses," said Biluck, director of operations and technology for the Medford Township Board of Education. "This biodiesel program was started for them. It has been proven that biodiesel improves air quality both outside of the bus and in the interior."
 

 Over the past decade the district's school buses have traveled more than 4 million miles, consumed more than 615,000 gallons of B20, displaced more than 123,000 gallons of diesel fuel, and eliminated 127,000 pounds of hazardous emissions and 428 pounds of particulate matter while reducing the overall cost of fleet operations by $80,000 per year, according to Medford Township Public School System officials.
 
 "Medford's public school district serves as a great example to other schools looking to use biodiesel," said Joe Jobe, National Biodiesel Board chief executive officer. "Joe Biluck has been a tireless advocate for biodiesel use in school buses nationwide and we have been lucky to have his support. It has helped launch the use of biodiesel in an important and sensitive environment-the air around schoolchildren." 
 
 Approximately 200 school districts in the United States use biodiesel. Biluck points out to other fleet managers that there are many benefits. "We are helping with energy security by displacing hundreds of thousands of gallons of petroleum diesel fuel and have experienced significant cost savings through reduced maintenance costs in our bus fleet," Biluck said.
 
 The district has been widely recognized for its pioneering efforts with biodiesel. The National Biodiesel Board awarded Biluck its annual Inspiration award in 2005 for his efforts to increase awareness and use of the cleaner-burning fuel. The district received two New Jersey Governor's Environmental Excellence Awards in 2007. Biluck was also named an 
 Alternative Energy Pioneer by the DOE Clean Cities program.
 
 The anniversary event, featuring local and governmental dignitaries, was held at the Chairville Elementary School in Medford, N.J. Michael Frohlich, NBB's Washington, D.C., director of communications, participated. Other notable participants included Medford Mayor Christopher Myers, members of the U.S. EPA and New Jersey Clean Cities, soybean farmers and schoolchildren from the Medford Township School District.

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School celebrates decade on biodiesel

Biodiesel is reaching new heights as a proven fuel, bolstered by new quality specifications for biodiesel blends published by ASTM International. Biodiesel producers, petroleum and engine companies, vehicle manufacturers, pipeline operators, fleets and consumers will benefit from new biodiesel blend specifications, using them for fuel preparation, quality checking, engine design, and bid and purchasing contracts. Key National Biodiesel Board personnel have worked the past few years to make this a reality.
 
 ASTM International, one of the largest and most highly regarded standards development organizations in the world, has officially published the highly anticipated biodiesel blend specifications for general use on its Web site, <a href="http://www.astm.org">www.astm.org</a>. 
 
 Steve Howell, technical director for the NBB and chairman of the ASTM Biodiesel Task Force, has been NBB's liaison in this process and is responsible for much of the work needed by ASTM to adopt biodiesel specifications since the fuel's inception. He noted that the specifications are set on a performance basis for a diesel engine, not on the feedstock or the production process. "These specifications combine the input of engine interests, petroleum interests and biodiesel interests, as well as government and military representatives, researchers and academics," Howell said. "It took cooperation and a lot of data and information sharing between all those parties to reach consensus. This is an important achievement for the biodiesel industry that will help move us forward." 
 

 Bob McCormick, principal engineer on fuels performance at the National Renewable Energy Laboratory, said, "The new ASTM standards for biodiesel blends are the result of years of negotiation between the various parties at ASTM and years of research on how the properties of biodiesel blends affect engine performance. NREL has conducted extensive research over the past four years to support development of these standards, which we believe will lead to an expansion of markets for biodiesel while at the same time ensuring that users have trouble-free performance." 
 
 The research was jointly supported by the U.S. DOE and the NBB under a cooperative research and development agreement. The new biodiesel blend specifications include: ASTM D 975-08a, Specification for Diesel Fuel Oils, revised to include requirements for up to 5 percent biodiesel; ASTM D 396-08b, Specification for Fuel Oils, for home heating and boiler applications, revised to include requirements for up to 5 percent biodiesel; and ASTM D 7467-08, Specification for Diesel Fuel Oil, Biodiesel Blend (B6 to 20), a completely new specification that covers finished fuel blends of between B6 and B20. 
 
 ASTM International also approved some updates to the existing ASTM standard for biodiesel, ASTM D 6751, which is designed to control pure biodiesel product quality prior to blending with conventional diesel fuel.
 
 The official publication of the new biodiesel blend specifications is welcome news to automakers and engine manufacturers, who have been requesting a finished blend specification for B20 biodiesel blends for several years. Some companies, such as Chrysler LLC, stated that the need for that specification was the single greatest hurdle preventing their full-scale acceptance of B20 use in their diesel vehicles. Chrysler was instrumental in working with the ASTM task force toward B20 specification development and approval, having supported fleet use of B20 in its Dodge Ram diesel pickups since January 2006. 
 
 Biodiesel producers are also cognizant of the many benefits the new biodiesel blend standards hold for the industry. FutureFuel Chemical Co. is one of the 30 companies currently certified as a BQ-9000 accredited biodiesel producer. "FutureFuel expects the increased support of key stakeholders, such as engine and vehicle manufacturers and fuel refiners, resulting from the new blend standards to generate continued robust growth in our biodiesel sales," said Joan McKinney of FutureFuel Chemical Co.
 
 The biodiesel industry's BQ-9000 program couples the foundations of universally accepted quality management systems with the ASTM product specifications, and has become the premier quality designation in the industry. 
 
 The ASTM International biodiesel standards can be purchased from ASTM Customer Service at<a href="mailto:service@astm.org"> service@astm.org</a>, (610) 832-9585 or <a href="http://www.astm.org">www.astm.org</a>.

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NBB welcomes new biodiesel blend specifications

Norwegian newsprint and magazine paper producer Norske Skog has partnered with Germany-based gasification technology provider Choren Industries GmbH to explore building full-scale, second-generation biodiesel production facilities in Norway, using woody biomass as a feedstock. Earlier this year, Norske Skog organized subsidiary Xynergo to focus on biofuel production with a goal of building one or two full-scale biodiesel production facilities. Choren began construction of its first full-scale, second-generation biodiesel facility in Freiberg, Germany, this year, and it's slated to begin production in 2009.

Choren Industries GmbH is building a biodiesel production facility in Freiberg, Germany.

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Norwegian paper company considers biodiesel production

Algae-to-biodiesel developer PetroAlgae LLC has been acquired by PetroTech Holdings Corp., a Delaware-based investor group. The privately held group is managed by Valens Capital Management, an investment firm with more than $1.7 billion in manageable funds. Financial details of the transaction weren't released. However, PetroAlgae said the deal will allow it to commercialize its algae technology. The company has been working to produce modular algae cultivation bioreactor systems, using algae strains developed and licensed by researchers at Arizona State University.

PetroTech acquires PetroAlgae

GreenHunter Biofuels LLC is facing a lawsuit filed by Bioversel Inc. on Sept. 25 in the 55th District Court of Harris County, Texas. The lawsuit accuses GreenHunter of providing misleading statements regarding the production capabilities of its 105 MMgy biodiesel plant in Houston, failing to provide investors with information regarding its inability to deliver biodiesel under the terms of the tolling agreement it signed with Bioversel, and failing to produce biodiesel that meets American or European standards. GreenHunter, which briefly operated its facility before sustaining extensive damage from Hurricane Ike in mid-September, denied all of the allegations in a statement issued Sept. 29.

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Bioversel sues GreenHunter

Florida-based Renew Energy Resources Inc. and The Doe Fund, a New-York based nonprofit, announced Sept. 16 they will partner to manufacture biodiesel in New York City using waste cooking oil and trap grease as feedstocks. The partnership will form a Renew Energy subsidiary called Legacy Oil LLC, which will build the 5 MMgy biodiesel plant in one of New York City's five boroughs. RTP Environmental Associates Inc., an environmental consulting company specializing in permit application preparation, has already begun the preliminary permitting process. The Doe Fund will collect and deliver the feedstocks through its RWA Resource Recovery program. The project is expected to be operational by mid-2009.

Biodiesel plant to be built in New York City

Renewable Fuel Corp., a Las Vegas-based producer, blender and distributor of biodiesel blends throughout North America, has announced the acquisition of Bio Refining Industries Inc., which includes two biodiesel projects, licenses and plant properties in Indonesia. Each of the facilities, which are still in the early development stages, will have a capacity of 60 MMgy, and produce biodiesel from Southeast Asia-derived feedstocks such as jatropha and crude palm oil.

Nevada company acquires Indonesian projects

Imperium Renewables Inc. has received a cash infusion from its investors to satisfy its secured project lender Société Générale, lien holders and unsecured creditors. The company said it also retained an independent third-party business debt restructuring firm to assist in negotiating with its creditors to settle its remaining creditor obligations, leaving it with sufficient capital to continue operations. Neither the specific amount of funding, nor the total outstanding debt was released.

Imperium receives funds to repay debt

Original equipment manufacturers want more power. Regulators want better emissions. End users want increased fuel economy. The role of fuels and additives in diesel engines is clearly being steered by several different demands.

 
 At least two things can be accepted as fact. First, although no engine is 100 percent efficient, as with most mechanical equipment it runs best when it is clean. That is the way it was designed. Second, university, engine manufacturer, oil and additive company research repeatedly confirms that engines develop deposits over time. These deposits directly affect the engine's performance.
 
 In gasoline engines, the air and fuel is pre-mixed before it enters the combustion chamber, which is why we worry about deposits in the fuel injectors, and on the intake ports and intake valves. However, in a diesel engine, the air for combustion enters the combustion chamber by itself. The fuel is injected directly into the cylinder, which is why the primary deposit concern in a diesel engine is the fuel injectors themselves.
 
 A clean injector delivers a fine mist of tiny fuel droplets that are easily mixed with air, evaporated and burned. Dirty fuel injectors can reduce the amount of fuel delivered and result in a poor spray pattern with larger droplets. This makes it difficult for the fuel to mix, evaporate and combust. When some of the fuel fails to burn, three things can happen: power decreases, emissions increase because unburned fuel exits through the tailpipe, and fuel economy decreases. In other words, performance suffers.
 
 Changes in Diesel Engine Design
 To meet new emissions requirements and consumer demands, diesel engines are rapidly evolving and becoming more complex. These changes are happening worldwide in every segment of the diesel engine market, including off-road equipment and heavy-duty trucks in the U.S. market and passenger cars around the world. More than ever, diesel engine technology for all of these segments is looking more similar.	While diesel engines have always been inherently efficient, meeting new emissions regulations requires tighter controls on primary emissions (NOx and particulate matter). This requirement is leading diesel engine designers to adopt some practices that have been on gasoline-powered engines over the years. Exhaust gas recirculation is used to reduce NOx emissions during combustion. Beyond the combustion process, aftertreatment devices are used to clean up the exhaust. In the case of diesel engines, this can include diesel particulate filters or selective catalytic reduction using urea injection.
 
 Technologies that reduce emissions can be very effective, but they add cost to the engine and can reduce fuel economy. Therefore, additional resources are used to try to develop injection and combustion systems that produce maximum fuel economy and minimum emissions from the engine itself. One of the areas receiving a lot of attention is the fuel injection system. New systems are being designed to more accurately deliver the precise amount of fuel needed at exactly the right time in the smallest droplets possible.
 
 The new systems rely on tighter tolerances, smaller injector orifices and higher pressures to produce smaller droplets. In older systems, all of the fuel for a combustion cycle was injected at one time. Today's modern systems allow several injections during a single combustion cycle. This allows engine calibrations to determine not only how much fuel is injected at each point in the cycle, but precisely when it is injected.
 
 <center><img src="/images/upload/20081113014409.jpg" alt="" /></center>
 Diesel injector deposits can lead to power loss. After operating on a 10 percent biodiesel blend, this 

 engine experienced greater power loss than when diesel fuel was used alone. However, when a 
 detergent additive was added to the blend, the power loss was restored.
 
 SOURCE: THE LUBRIZOL CORP.
 
 While these injectors provide benefits on emissions and fuel economy when they are tested as designed, these changes can allow deposits to easily plug injectors. Some of the newer fuel systems can make this problem worse because they feature recirculating fuel systems, where a portion of the fuel that goes to the engine is returned to the fuel tank, hot. Heating the fuel can lead to thermal degradation and cause even more deposits. In other words, injectors are more likely to create deposits and, at the same time, injector deposits have a greater impact on vehicle performance.
 
 Changes in Fuel
 Engines are not changing in a vacuum. At the same time these engine design changes are occurring, diesel fuel is also evolving. To enable the use of some of the aftertreatment systems mentioned previously, it has been necessary to lower the sulfur levels in diesel fuel. While the new ultra-low sulfur diesel fuels allow the use of these aftertreatment systems in the exhaust, there is growing evidence that these new fuels may actually cause more deposits on the injectors in the engine. 
 
 The other major change in the market is the growing use of biodiesel. We know about the technical benefits of using biodiesel, such as improved cetane and increased lubricity. But what do we know about how biodiesel impacts diesel injector deposits? The answer is that biodiesel can be both better and worse than diesel fuels when it comes to forming deposits. 
 
 So far, available test data shows that biodiesel can actually help to reduce deposit buildup in some older engine designs that use indirect injection systems with lower temperatures and pressures. However, in more modern, hotter-running engines with direct injection systems, biodiesel fuel may lead to an increase in injector deposits. Ongoing research is trying to identify why some biodiesel fuel may cause this result.
 
 We know that biodiesel can vary greatly depending upon its feedstock. With such a variety of biodiesel sources in the market today, it may take some time before we fully understand how these sources might impact deposit buildup in various engine designs. Even if the source of biodiesel is constant, some batches appear more prone to cause deposits than others. 

 
 The United States and Europe are two of the largest biodiesel markets in the world. Europe produces more than five times the amount of biodiesel produced in the United States. The use of biodiesel in Europe is even higher than that with some biodiesel produced in the United States and Asia being imported into Europe. While biodiesel is still relatively new in both markets, evidence is emerging that some biodiesel batches in Europe can cause injector deposits. 
 
 Injector Deposit Testing
 While many of the factors previously mentioned are leading to increased attention to diesel injector deposits, these deposits are not completely new to the industry. In fact, the industry has dealt with these deposits and the performance issues they cause for many years. Because it is difficult to simulate the complex interactions that occur in a running diesel engine on a simple bench test, tests typically involve full-size diesel engines operating on dynamometer stands.
 
 In the 1980s, two such tests were developed. In the United States, an injector deposit test based on the Cummins L-10 engine used direct injection but in an older, pressure-time mechanical injection system. The test was used for many years but has been out of production for more than five years. Meanwhile, in Europe in the 1980s a test was developed based on a Peugeot XUD-9, indirect-injection engine. While the test is still available today, new engines no longer use this injection system.
 
 <center><img src="/images/upload/20081113014420.jpg" alt="" /></center>
 Oils with more saturated fat provide better stability, while oils with less fat provide better cold flow properties in biodiesel fuel.
 
 SOURCE: NATIONAL RENEWABLE ENERGY LABORATORY
 
 With today's diesel engines having deposit problems that lead to complaints of power loss, pressure has been on to develop a new test that represents these modern engines. The industry developed a new test this year, based on the Peugeot DW-10 engine. This turbo-charged engine features a common rail, direct, modern electronic injection system and represents modern diesel engines used in both passenger cars and heavy equipment.
 

 Additive Solution
 An additive solution is available for reversing the problems associated with loss of performance caused specifically by engine deposits. As diesel engine technology becomes more complex and tighter emissions standards are introduced, the use of diesel detergent additives appears to be growing around the world. Diesel injector additives are common in 
 Europe and have been for a number of years. In the United States, they are much less common but growing in popularity. Using detergent additives at low dosages in the fuel can control or even remove these deposits, restoring combustion performance.
 
 To boost consumer confidence in biodiesel, detergent additives must prove that they prevent and remove deposits in a variety of fuels used in the market. This includes traditional diesel fuel and biodiesel blends from various sources. Proper additive treatment can address biodiesel performance concerns, including preventing or correcting field issues and improvements in the operability of biodiesel in modern vehicle technologies. Use of properly formulated additives can also reverse performance problems such as power loss.
 
 The future is engines that are more likely to have injector deposits, fuels that are more likely to cause deposits and finally, a test that can measure the deposits. But, as the European market has proven, the proper additives can make the difference. 
 
 Keith Corkwell is with The Lubrizol Corp. Reach him at <a href="mailto:keith.corkwell@lubrizol.com">keith.corkwell@lubrizol.com </a>or (440) 347-5963.

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Diesel Fuel Injector Performance: The Difference is in the Additives

The president of Integrity Biofuels, a 5 MMgy biodiesel plant in Morristown, Ind., is the new chairman of the American Trucking Association. Charles "Shorty" Whittington is also president of Grammer Industries in Grammer, Ind., a trucking company that specializes in transporting liquid and hazardous materials throughout the eastern half of the United States. Shortly before Whittington's appointment Oct. 7, the ATA published its biodiesel policy, which calls for federally enforced biodiesel quality standards. He said the ATA's policy won't change with him as chairman.

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Biodiesel president leads ATA

Phil Hodgson, a former manager for Shell Oil in Australia, has joined the board of Australian firm Jatoil Ltd. as a nonexecutive director. Jatoil has jatropha field trials underway in Vietnam, where it plans to develop plantations. Hodgson said he will tap into his experience in distribution, sales and strategy to help the company develop its biodiesel market. Since leaving Shell, he has worked as a consultant in the energy industry.

Former Shell exec joins Jatoil board

Methes Energies International Ltd. appointed two scientists to its new advisory board, which will assist in creating strategies for the company's biodiesel processor development. Perichiyappan Senthilnathan has 25 years of experience in chemical and environmental engineering, and Kebir Ratnani is a chemical engineer with 13 patents. Last year, Methes introduced a flexible-feedstock, compact and fully automated continuous flow biodiesel processor to the market. The company has subsidiaries in the United States and Canada.

Methes appoints advisory board

Mike Waring has joined Montana-based Sustainable Oils Inc., a producer and marketer of camelina-based biodiesel, as its camelina production and marketing team territory sales manager. In his new position, he will be responsible for contracting camelina production acres, and providing technical and agronomic assistance to growers in Montana and North Dakota. Most recently, he was a sales representative with Nichino America, a crop protection research and technology company. He also served as a sales representative at Bayer CropScience for 20 years.

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Waring joins Sustainable Oils

Though the tightening of the credit market has affected the biodiesel industry, it's just one part of the industry's worries. For biodiesel plants under construction, general building challenges still abound. 

 
 "Probably the biggest challenge faced by biodiesel companies under construction,including ours, is just handling equipment required by the sheer size of these plants," said Terry McCullers, general manager of Arkansas Soy Energy Group LLC, a 7 MMgy soy-based plant under construction in DeWitt, Ark. Construction staff members are charged with the daunting task of organizing the equipment, parts and components to expedite the building process with the ultimate goal of efficiently meeting project deadlines. Failing to do so can result in delayed start-up dates. Arkansas Soy Energy Group pushed back its start-up date from October to November in order to complete more pipe work. "It's not so much the equipment itself, but you've just got miles of piping and fabrication work on top of that," McCullers said. "It's been a slow go for us, but we're finally getting there."
 
 Eastman Bio-Fuels Ltd., a 10 MMly (2 MMgy) facility in Beausejour, Manitoba, also pushed back its original start-up from October to January. According to President Robert Small, the delay was due to equipment for tanks and biodiesel skid units not arriving on-site as scheduled. They were en route at press time. Once received, prefabrication and assembly work was expected to occur, he said. Internal electrical work and safety procedures were also being finished at press time. 
 
 As a way of circumventing equipment handling challenges, some biodiesel companies such as Maple River Energy, a 5 MMgy plant under construction in Galva, Iowa, look to third-party companies that offer fabrication or prefabrication services. "We're not your 'normal' biodiesel plant," General Manager Delayne Johnson said. "We have a lot of beams and pipes, but our equipment and parts are prefabricated off-site and then delivered where they can be assembled from there."
 
 Despite on-site construction challenges and the macroeconomics affecting projects, a few plants are nearing completion and entering the commissioning phase. One project has officially completed construction: New Leaf Biofuels LLC, a 2 MMgy plant in San Diego. According to Executive Director Jennifer Case, the company was conducting final "walk-through" procedures at press time. The fire suppression system was the last item to be installed, and so the company was waiting on the system's test results before it moved forward with start-up in mid-November.

Projects Fight Construction Challenges

Just two years ago, soybean oil accounted for more than 90 percent of the biodiesel produced in the United States. That has changed, thanks to sky-high commodity prices the past year, which prompted some biodiesel producers to turn to lower cost animal fats and waste vegetable oils to reduce their feedstock costs. Stratospheric markets, though, follow the rule of gravity-what goes up must come down. A tapering off from the early summer highs, which at its peak churned out 60-cent-per-gallon soybean oil, dived when the October financial crisis shook all of the commodity markets.
 
 Soybean oil is still the dominant feedstock for biodiesel, although its use has dropped to an estimated 59 percent of the feedstock supply, according to Brad Anderson, senior vice president of Informa Economics Inc. Bruce Babcock, director of Iowa State University's Center for Agricultural and Rural Development, agrees and predicts soybean oil will remain the preferred feedstock for biodiesel. There is not enough waste grease available to make a tremendous amount of biodiesel, he says. Although soybean oil has been high priced in recent months, all the other oils are priced jointly with soybean, and producers aren't going to want to pay transportation costs for those others, Babcock says.
 
 A number of factors have come into play as market observers try to predict longer term trends in the soybean market: the relationship between corn and soybeans is changing, the crude oil market has a stronger influence, and global supply and demand will continue to grow, although that growth is expected to slow.
 
 Imported Crude Oil Prices and Soybean Prices January 2003 to September 2008
 <center><img src="/images/upload/20081113021917.jpg" alt="" /></center>
 SOURCE: ISU AG MARKETING RESOURCE CENTER

 
 Corn Versus Soybeans?
 Regarding the changing relationship between corn and soybeans, soybean acres have increased but not at the expense of corn acres. "We're in a new realm," Babcock says. "It's pretty hard to apply what we thought we knew about corn versus beans in the old days." This year, the market was surprised when the October USDA reports showed more soybean acres than expected. Babcock says those came from more double cropping of soybeans after wheat and more soybeans on traditional cotton acres. The increase in acreage more than offset reduced yields. "We were able to squeeze in a lot more soybean acres than we thought we were going to," he says. "That old relationship between corn and soybeans has changed." 
 
 To predict what the corn/soybean balance will be over the next few years, one needs to look at the renewable fuels standard (RFS), Babcock says. "For 2009 and '10, we're going to have to look at the number of corn acres needed to hit the RFS," he says. In the United States, corn acreage has historically been in the high 70s, (78 million acres planted in 2006), and soybean acres have run in the low-to mid-70s, Babcock says. "To meet the RFS, you have to plant 10 million more acres to corn," he says. That means corn would have to consistently be in the 88 million to 89 million acre range. To put that into perspective, more than 93 million acres of corn were planted in 2007 and 87 million acres in 2008. 
 
 Just as the ethanol industry has eaten up excess corn supplies, the biodiesel industry has soaked up excess soy oil. Traditionally, the soybean crush has been driven by demand for soybean meal. David Asbridge, senior economist with Doane Advisory Services explains that historically, meal has carried the bigger value, and soy oil was 35 percent to 38 percent of the value of the soybean. The oil value rose to 45 percent to 46 percent of the value of the bean when prices were high, indicating the value of soybean oil increased relative to soybean meal. However, soybean demand is still driven more by the soybean meal market. "We actually crush for the meal but the meal isn't very storable," Asbridge says. "You can't crush excess meal and store it, but you can oil. We're coming off record stocks of soybean oil in the United States." 
 
 The early expectation was that biodiesel would take the soybean oil it needed and oil exports would decline, Anderson says. "Well, this past year, we had huge soybean oil exports," he says. Under those early expectations for biodiesel, the industry thought the supply of soybean meal would accumulate. Instead, demand for meal continues to drive the crush. "We've seen soy oil stocks build to more than 3 billion pounds and the reason was, we had strong exports of soy meal in the past year," Anderson says. 
 
 Nonetheless, even though the crush is still determined mostly by meal demand, the influence of biofuels has soybeans tracking the crude oil market in recent months in much the way that corn has (see chart on page 45). "If you look at what soybean oil prices have done, they basically have tracked whatever biodiesel producers can afford to pay," Anderson says. While Babcock agrees with that influence, he says the RFS will put a limit on just how far corn and soybeans will follow crude oil, should the decline in oil prices continue. "If oil goes to $50, you won't see corn and soybean prices follow," he says. 
 
 Trans Fat Impact	
 Biodiesel has been particularly helpful to the soybean industry in that it became a home for the soy oil that didn't go to the food market after the trans fat labeling law took effect. "The trans fat issue was a big feature of the market when the [U.S. Food and Drug Administration] required the labeling of trans fat on food labels beginning January 2006," says Mark Ash, agricultural economist with USDA's Economic Research Service. "That caused a lot of food manufacturers to seek alternative oils for their products and minimize that trans fat percentage." For the past three years, food use of soy oil has declined about 3 percent annually. "Total consumption is down by close to 1 billion pounds over the past three years for food use," he says. "Methyl ester demand picked up all of that decline." The American Soybean Association says the cumulative 10 percent drop in food use over the past three years amounted to more than 4.6 billion pounds of soybean oil, which has been used to produce more than 600 million gallons of biodiesel. In refuting the food-versus-fuel debate, the ASA points out that at the same time biodiesel has offset the edible soybean demand, ending stocks of soybean oil have more than doubled since 2004 when the biodiesel tax incentive was first implemented. Soy oil now holds a 70 percent share of the edible oil market compared with the 80 percent it had prior to the trans fat labeling change.
 

 Around the World
 While the decline in food use for soybean oil in the domestic market appears to be tapering off, global food use of edible oils continues to grow, although the pace has slowed. Anderson says vegetable oil food use has grown by 2 million tons per year for the past couple of years compared with 5 million tons annual growth earlier. "The high prices appear to be slowing growth in traditional nonbiodiesel demand," he says. The world produced 135 million tons of vegetable oils last year, of which he estimates more than 10 million tons were used for biodiesel production. "The reason the world raises soybeans is the demand for meal," he adds. "If we need additional oil supplies in the world, we're getting it from palm oil production."
 
 The global recession sparked by the October financial crisis is expected to dampen the growth in global food demand, but not reverse it. Iowa State University agricultural economist Bob Wisner returned from a meeting in China in the midst of the October financial meltdown. "The view in China on their economy is that it may slow a little, but it is much less sensitive to what's happening here in the U.S. and other areas because there is a tremendous amount of investment going to their domestic infrastructure-residential, industrial construction, road construction, new factories being built," he says. 
 
 Break-Even Chart
 <center><img src="/images/upload/20081113021851.jpg" alt="" /></center>
 SOURCE: MIGUEL CARRIQUIRY, ISU CENTER FOR AGRICULTURAL AND RURAL DEVELOPMENT 
 
 Jerry Gidel, an analyst and broker with North American Risk Management Services Inc., agrees that China's economy will continue to grow. "China and India were running at 12 
 percent growth, and if they drop to 6 percent to 8 percent growth, that's still going the right way." Not only will the Chinese continue to improve diets, he says, but feed demand should grow as the country's pork and poultry industries recover from disease-related production losses. 
 European demand, on the other hand, is expected to decline partly because of high prices and partly due to the anticipated world recession. Biodiesel growth is also slowing because the big biodiesel producer, Germany, has begun adding fuel taxes back into biodiesel, Asbridge says. "It's at 9 cents a liter now, and it's expected to increase until it's back up to 45 cents a liter," he says.
 
 On the supply side of the global equation, analysts are watching developments in South America. Although soybean acres in Brazil have expanded, that growth is expected to wane, Gidel says. The USDA dropped its projections for growth in the acres being planted now to 3 percent, which was down from a 5 percent increase projected earlier. Gidel says one factor that's driving the acreage decline in Brazil is that much of the expansion has been financed by big multinational grain companies. "All of them got clipped back this year," he says, making further expansion less likely. In Argentina, there is a differential export tax structure that favors exporting soybean oil over exporting soybeans, and favors exporting biodiesel over exporting soybean oil, Anderson says. That incentive is driving growth in the Argentine biodiesel industry, with Europe as the target market.

 
 While long-term expansion of soybean supply and demand appears to be in the cards, there is much more uncertainty about the near-term outlook, thanks to the October financial crisis. "Are we going to have a world recession, and what will happen to the value of the dollar?" Babcock asks. "A lot of that will play out in the price of 
 crude oil." 
 
 Crushing Overcapacity
 Looming over the supply and demand fundamentals for global oilseed production and the U.S. soybean crop is the overwhelming surplus of biodiesel capacity. The United States biodiesel industry is operating at 35 percent to 40 percent of capacity and the EU at about 50 percent. "We have so much excess biodiesel capacity," Anderson says. "If much of a margin develops in the industry, we'll bring more of that idle capacity into production and the margin goes away. The most efficient, best-run, best-placed plants are the ones that get to operate." 
 
 In October, there was a wider window of favorable margins when soybean prices dropped faster than diesel prices, Asbridge says. "It should be a fairly decent time for biodiesel producers. They deserve it after what they've been through in the past year or so."
 
 Looking at the fundamentals, Asbridge says the market went down too fast and too far this fall. "After we get through the harvest season and harvest pressure is off, we'll see the prices moving back up in the winter," he says. "We've got to see corn acres increase next year in the United States. We're anticipating corn prices will move up and pull soybeans up with it." 
 
 Susanne Retka Schill is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:sretkaschill@bbiinternational.com">sretkaschill@bbiinternational.com</a> or (701) 738-4922.

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New currents are influencing the soybean market-crude oil has a bigger influence than ever before, the relationship with corn is changing, global food and feed demand growth is slowing while U.S. food use declines.

Sizing Up the Soybean Market

2009 will be interesting with respect to implementation of the new renewable fuels standard, which many refer to as RFS2. New terms such as "advanced biofuel" and "biomass-based diesel" were never part of the 2005 RFS and just this year emerged as part of the new national energy-policy vernacular. Biomass-based diesel is a specified title under "advanced biofuel." In 2009, RFS2 mandates that 11.1 billion gallons of renewable fuels must be blended into energy supplies; 10.5 billion of which is corn-based ethanol, and the other 600 million gallons must be "advanced biofuel," 500 million gallons of which is to be biomass-based diesel. By 2012, 1 billion gallons of biomass-based diesel is required under the mandate. 

 
 Since the signing of the Energy Independence & Security Act of 2007-the Energy Bill that RFS2 was part of-speculation has run rampant as to how events will play out. There are a lot of unknowns left, especially since U.S. EPA delayed provisional rulemaking on implementation of RFS2 until January. 
 
 Clayton McMartin, president of Clean Fuels Clearinghouse, says the attempt to identify exactly how RFS2 will be implemented prior to its rule is like trying to nail Jell-O to the wall. 
 
 Clean Fuels Clearinghouse operates the only renewable fuels registry in the nation, called RINSTAR. RIN stands for renewable identification number, each of which is a long series of numbers used to help the government keep track of what renewable fuel is going where and which companies receive credits. McMartin says there's not a lot of biodiesel activity now in the renewable fuels registry, but numbers 20 through 22 inside the long number can differentiate biodiesel from other types of renewable fuels. 
 
 "There are a lot of questions still," McMartin says. "The big question is what's to be done in this interim period, meaning 2009? I don't think anyone expects the final ruling to go into effect until 2010." McMartin calls this interim period RFS1.5. "2008 itself is kind of a hybrid," he says. "The standard for 2008 was established by RFS2 even though we have no proposed rulemaking yet." 
 
 According to Paul Machiele, director of EPA's Fuel Programs Center, the biomass-based diesel carve out in the RFS includes biodiesel, biomass-to-liquid diesel and renewable diesel-provided the fats or oils aren't co-processed with petroleum diesel. Clearly for 2009, the only commercially available biomass-based diesel available in significant quantities is biodiesel. 
 
 Nathaniel Doyno, executive director of Steel City Biofuels, tells Biodiesel Magazine, "I think we'll see that we can get to 500 million gallons real quick if we don't export it, but that's going to require a shift in currency value. What's fueling the high volume of exports right now is the weak dollar, strong European incentives and a lot of U.S. loopholes regarding the federal blender's credit." 
 
 The European Commission is currently investigating whether sanctions should be placed on U.S.-originated B99 in order to level the playing field for European biodiesel producers, who claim the importation of cheap U.S. biodiesel into their markets has adversely affected the European biodiesel industry (see "Biodiesel Trade Wars" in Biodiesel Magazine's 
 October 2008 issue). A provisional ruling is expected by March, with a final ruling no more than four months after that. Most people watching this unfold expect that it's only a matter of time before a tariff will be placed on U.S. biodiesel entering Europe. 
 

 The Waiver Process"The big picture though is that the state of the federal RFS is in transition," Doyno says. "Across the biofuels industries there's a realization that the sustainability bug, the local economic development issues and air quality issues are all reformulating. And I'm proud of the federal government's denial of Texas' petition for waiver, but there are some legitimate problems with the standard. Via policy we're building an industry-it's a delicate act. We need to balance the need to grow without killing the industry in the process. But I challenge you to find someone in the industry who is completely confident in their understanding of this issue of the RFS2-no one really knows." 
 
 In addition to the emergence of new terms and volumes in RFS2, compared with the RFS1, perhaps one of the biggest changes in the policy concerns the waiver process. "For RFS1, only states could petition for a waiver," McMartin says. "But in RFS2, anybody affected by the program can petition for a waiver. That's a huge difference. We're going to see lots of waiver requests, lots of petitions. And unfortunately what this does is insert some uncertainty-which makes for good news but whenever you're trying to operate a plant on a day-to-day basis, it's tough." He hopes the EPA's proposed rulemaking establishes more rigorous criteria as to what constitutes a valid waiver. "That's what we should really hope to see," he tells Biodiesel Magazine. 
 
 The EPA administrator can also waive RFS2 in whole or in part if, in consultation with the U.S. secretaries of agriculture and energy, a determination is made that either there is an inadequate domestic renewable fuel supply; or implementation of the requirement would severely harm the economy or environment of a state, region or the United States. In a report for Congress titled "Waiver Authority under the Renewable Fuels Standard," written by Brent Yacobucci, a specialist in energy and environmental policy with Congressional Research Service, he writes, "It is unclear how EPA will interpret these criteria. In its May 1, 2007, final rule for 2007 onward, EPA explicitly stated that it would not establish more specific criteria for the waiver." Then he includes language from the federal registry addressing this: "While EPA realizes that the criteria provided by the statute are quite general, the rationales of severe environmental or economic harm or inadequate domestic supply are sufficient for a basic framework upon which a petition can be built and evaluated. Each situation in which a waiver may be requested will be unique, and promulgating a list of more specific criteria in the abstract may be counter-productive." 
 
 If the EPA administrator makes the determination that there are significant market circumstances, including feedstock disruptions, "that would make the price of biomass-based diesel fuel increase significantly," the administrator may reduce the amount mandated for up to 60 days-but the volume reduction can be no more than 15 percent; then, an extension of the waiver can be issued for no more than an additional 60 days. 
 
 "Your biodiesel readers should say, 'Gee whiz, now I've got EPA who's in control over modifying this demand-this mandate or demand for my product-and what are they going to base that on?'" McMartin says. "Do they have reliable, immediate data to draw conclusions from? No because they don't have a registry like ours." He says for EPA to gather all the necessary reports on which to base an evaluation could take from two to five months after the fact. "There's a quarterly reporting period and each quarter everyone in the program must report," McMartin says. "But then there's 60 days to submit, and everyone waits until the end, so the data can be two to five months old, but EPA still has to compile that information and somehow make an assessment. They don't have the systems in place to do that today, and if I were a biodiesel producer I'd say that gives me reason for concern." 
 
 "This is a difficult chicken and egg situation-you want to incentivize the industry but, at the same time, you don't want to set goals that can't be met," Doyno says. "I think we're going to see the program restructured actively with the next administration regardless of who wins the election." 
 
 On-Road and Off-Road Markets
 Unlike ethanol, very little biodiesel is blended by refiners today. Instead, biodiesel is blended closer to the retail end, either by a petroleum marketer or the biodiesel producers themselves. "Most refiners don't actually take physical possession of biodiesel," McMartin says. "So, under RFS2, what they would do is, with the provision of the credit trading and banking program the standard provides, buy paper credit from someone else. Logistically we don't see a whole lot of biodiesel going into refiners' product at the refiners' level. It's once the product moves through the supply chain and just before retail that you actually see the biodiesel introduced." 
 

 Another milestone deviation from RFS1 to RFS2 is the inclusion of off-road markets in RFS2. "We're in great shape because we're really not part of the standard, so we're not mandated to use biodiesel, but we can be in the position to generate credits under RFS2, so it's perfect," says John Huber, president of the National Oilheat Research Alliance. He thinks quite a bit of biodiesel-and RIN credits-will come to the heating oil market. "There's going to have to be some sorting out though," he says. "For the credits to be worthwhile there's going to have to be an association of paperwork, so it's unlikely that a dealer at the retail level is actually going to be in the credit market. The buyers and wholesalers are most certainly going to be in that market." With credit generation, Huber says the main point EPA should consider is making it clear in its rulemaking that credit generation is done upstream. "Because, when you're talking about 2 percent bio at a retail outlet doing 5 million gallons, and the filling out of all those forms, is it worthwhile for that person to go through all that paperwork, versus someone doing a billion gallons? We need to ensure this is approved and credits are generated and available at the wholesale level." 
 
 Massachusetts has a 2 percent biodiesel mandate in heating oil, which would equate to about 20 MMgy of B100, all of which could be applied to satisfy the mandate, Huber says. 
 
 The 112 confirmed operating biodiesel plants in the United States represent nearly 2 billion gallons of installed capacity. "Versus the mandate, the biodiesel industry is overbuilt today and into the foreseeable future," McMartin says. "So although it will be a differentiated product-a RIN from biodiesel versus a RIN from ethanol-and it'll trade at different values, it's likely to trade at a minimum value. I think we're going to see consolidation in the biodiesel industry unless there's an increase in the mandate or feedstock costs come down to where they can compete at incremental volumes above the mandate." 
 
 Ron Kotrba is a Biodiesel Magazine senior writer. Reach him at <a href="mailto:rkotrba@bbibiofuels.com">rkotrba@bbibiofuels.com</a> or (701) 738-4942.

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A RIN trading and tracking exercise is tackled at the RINWorld Summit in Dallas, Texas, Oct. 16 and 17.

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The federal renewable fuels standard calls for 500 million gallons of biomass-based diesel to be used in 2009. Many questions remain as to how this will play out.

Transition Period

Many biodiesel producers won't be sad to see 2008 come to an end. High feedstock costs, the fate of the biodiesel tax credit and a financial crisis that has rocked the world have taken a toll on the industry. Although it may be too early to tell what impact the nation's financial stability will have on the biodiesel industry, it is no doubt on the minds of everyone as they make business decisions. 
 
 National Biodiesel Board Executive Director Joe Jobe says economics is the biggest challenge for the biodiesel industry. This year, the biodiesel lobby was successful in convincing the U.S. Congress to extend biodiesel tax credits as part of the $700 billion economic bailout bill. That will help alleviate some economic issues, but there is more work to be done. "The bad news is we only got it extended for one year, so unfortunately that will be our No. 1 priority again next year," Jobe says.
 
 John Hoffman, president of the American Soybean Association and a staunch ally of the biodiesel industry, says he believes the extension of biodiesel tax credits will allow industry members to plan their production and marketing schedules for the first half of 2009. Lower feedstock prices in late 2008 may also help producers lock in supplies at more manageable costs for part of the next year. "Prices are difficult to forecast whether you're a grower or a biodiesel producer," he says, but Hoffman is confident that the supply is there. As a fifth-generation soybean and corn farmer, Hoffman knows well the uncertainties when dealing with commodities but he's optimistic prices will be a little easier to stomach in 2009.
 
 Joe Gershen, vice president of sales and marketing at Tellurian Biodiesel Inc., also ranks the economy as the most pressing issue facing the biodiesel industry. His company produces, markets and distributes ASTM-certified biodiesel throughout southern California and recently opened a storage/distribution terminal in Los Angeles. He mentions specifically the fact that economic issues will dictate the buying habits of fleet managers and individual consumers, which concerns him greatly.

 
 Another economic factor to consider, is the drastic swing in oil prices, according to Brent Baker, founder and chief executive officer of New York's Tri-State Biodiesel. He believes the biodiesel industry needs to work on indexing prices to match the petroleum industry in order to be successful. "We need to start hedging against petroleum," he says. "Otherwise we will be in this feast or famine situation that will be predicated by the daily gyrations of the petroleum market." Tri-State has begun implementing that strategy with some of its customers and Baker says that while they make less money when markets are down, they make up for it when prices go up and, most importantly, they are able to retain customers who might otherwise seek out petroleum-based competition for a better price. 
 
 Exerting Influence
 Convincing Congress to extend the biodiesel tax credits in 2008 was an amazing feat. Credit must be given to the NBB and the ASA for their work in achieving a do-or-die mission in what Jobe describes as an "excruciating year" to attempt to pass legislation. Both groups say they will continue to work to get tax extensions passed beyond 2009. 
 
 In the meantime, the industry must turn its attention overseas as the trade dispute between Europe and the United States comes to a head. According to Jobe, preliminary findings will be released in early 2009 from the European commission's investigation into complaints from the European Biodiesel Board that exports from the United States have destroyed their industry. The NBB will be prepared to deal with the outcome, and will continue to defend the United States against what it believes are unfair complaints against U.S. producers, Jobe says. 
 
 The renewable fuel standard (RFS) mandates that 2009 will be the first year that biomass-based diesel must be blended into the nation's fuel supply. At a mere 500 million gallons, it's not much, but there are major implementation issues. Jobe says the NBB will be involved in the RFS implementation process as much as possible-determining how renewable identification numbers (RINs) for the fuel should be counted and traded, and how the industry should meet the criteria requiring a 50 percent reduction in carbon emissions. 
 
 At press time, the presidential election had not yet been held and the question of who will take office in November weighs heavily on the minds of those in the industry. No matter who takes office, the NBB has a world-class governmental affairs team in place, ready to work on important issues in 2009, Jobe says. "We have been disproportionately effective in terms of the size of the industry and the results," he says, adding that the organization was "8-for-8 in '08"-accomplishing all eight of the goals it set out to achieve at the beginning of the year. For those who would ask for more, Jobe says any industry would be hard-pressed to find a government affairs team that has been more effective.
 
 Feedstock and Food Versus Fuel and Sustainability
 The industry won't soon forget the record-high oil prices in 2008 and the organized attack mounted by the Grocery Manufacturers Association against biofuels. And, as with other biofuels producers, the industry is also faced with calculating its carbon footprint, which will be heavily weighted by the type of feedstock that producers use. "Unless we have some serious feedstock breakthroughs, I think the industry will continue to struggle," Baker says. His business uses yellow grease, but he would like to see advancements made in other nonfood feedstock sources so the industry can continue to defend itself against the food-versus-fuel debate and sustainability arguments. His hope is that, by this time next year, the industry will be talking more about algae.

 
 The NBB isn't about to let down its guard against those who blame biofuels for higher food prices. "The Grocery Manufacturers Association is not done with us," Jobe says, adding that the NBB is expecting continued attacks on biofuels and biofuels policies in 2009. Feedstock development has been deemed a priority by NBB members and "we've got a number of feedstock developments we'll be working on," he adds.
 
 While new feedstocks are being developed, the ASA is advocating for new, improved biotech soybeans that will provide bigger yields, according to Hoffman. Genetically modified seeds can be a tough sell in Europe. The United States needs Europe's approval before it can export fuel or other products derived from those seeds to European markets, so the association will continue to work for regulatory approval overseas. "The bottom line is that yields will grow in 2009," Hoffman says. He points to the Bioenergy Program for Advanced 
 Biofuels, which was included in the 2008 Farm Bill, as an added incentive to continue research into yield improvement. The program allows for payments to be given to producers of advanced biofuels based on yearly increases in production. A total of $300 million has been allocated for the program over the next three years. "We just hope it will provide assistance to biodiesel producers to help mitigate some of the feedstock costs and maintain competitiveness with foreign biodiesel manufacturers," he says.
 
 Continuing Education
 Passage of the biodiesel tax credits extension may prove that the industry has bipartisan support in Congress, but that support is grounded in the lawmakers' constituents. "Public education is imperative so that customers, policy-makers and other stakeholders understand what is really at risk going forward, both environmentally and economically," Gershen says. "We [the public] are so concerned with the immediate cost of fuel at the pump that we might see folks go back to buying fossil energy. We cannot afford to do this." Gershen asserts that fossil fuel industries have been successful at cleaning up their images by coining terms such as "clean coal," "clean diesel" and "natural gas." The biodiesel industry needs to continue to educate the public on the differences between fossil fuel-derived products and biodiesel, he says.
 
 Baker also thinks that education and public relations need to remain at the top of the list of priorities for the industry. "We got the tax credit because we had wide public support across the aisle," he says, adding that if public support wanes, political support will go right out the window, taking with it the mandates and subsidies that the industry relies on as it continues to mature.
 
 Government education assistance can be found in the Biodiesel Fuel Education Program. Re-approved in the 2008 Farm Bill and extended until 2012, it allows $1 million annually to be dispersed among approved nonprofit organizations and institutions of higher learning for educational purposes. 
 
 Counting on Carbon 
 Jobe is convinced that carbon will be the No. 1 issue that everyone will have to deal with by this time next year. He believes that carbon is "the issue of our time," and predicts that by November 2009 the organization will be involved deeply in the development of a national carbon emissions reduction policy, including how carbon credits will be counted, verified and traded and how all of those things will apply to biodiesel. It's an issue not many biodiesel producers have had the luxury of thinking about yet, but Jobe believes that on a policy level, a carbon program will have a larger impact on the biodiesel industry than any other single issue. For now, "it's a bit like talking about quantum physics," he says. "It's all theoretical at this point." The NBB is taking the initiative though, and trying to anticipate how carbon markets might develop and how biodiesel producers can participate. The board is working with the Chicago Climate Exchange, North America's only legally binding carbon credit trading system to determine how biodiesel producers can generate credits and have several other carbon emission-based projects in the works.

 
 As a California-based company, Gershen is watching intently as the state develops its low-carbon fuel standard. The program being developed in California could serve as a template for a national standard, and, so far, the program looks good for biodiesel. This will be an issue that develops more thoroughly in the next year and industry leaders are urging producers to pay close attention. 
 
 The NBB realizes that some individual states are ahead of the federal government on developing low-carbon fuel standards. In response, the NBB is ramping up its state regulatory programs and government affairs branches in order to ensure the industry is well-represented and can participate in state standards, Jobe says.
 
 Baker, however, isn't sold on the carbon factor playing a major role in 2009, but he agrees that it will eventually be a major issue. He put it on his outlook for 2010.
 
 Many issues related to the industry may seem like more than a single producer can bear, and many members may feel like there is nothing they as individuals can do to help. Not true. Gershen says producers, who don't have the ability to lobby legislators in Washington, D.C., have other avenues where they can advance their industry. "Work with distributors so they understand more about the product," he says. "Understand your feedstocks and how they will impact your finished product. Understand your market. Don't be greedy. And develop a relationship with your legislators and educate them, just like you would a customer. They need your input."
 
 Baker says the producers left standing in 2009 are strong and will make the industry smarter and better next year.
 	
 Kris Bevill is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:kbevill@bbiinternational.com">kbevill@bbiinternational.com</a> or (701) 373-8044.

Hoffman, president of the American Soybean Association, testifies before the Senate Agriculture Committee in support of biodiesel. 

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The biodiesel industry survived a tough 2008 and can look forward to a new year full of challenges and opportunities. Biodiesel Magazine spoke with industry representatives about the major issues facing biodiesel producers in 2009 and how they plan to address those concerns.

Politics, Prices and Public Support

U.S. glycerin production remained relatively stable from the late 1990s through 2003. Since then, biodiesel production has drastically increased domestic crude glycerin supplies. 
 

 According to BBI International's engineering and consulting team, in 2007 biodiesel manufacturers created 187,000 tons of crude glycerin. When added to the 150,000 tons of crude glycerin produced through other processes, glycerin produced through biodiesel manufacturing more than doubled market supplies of the product. 
 
 According to John Urbanchuk, an LECG LLC analyst who tracks biofuels industries, it is important to note that there are two different glycerin markets: crude and refined. "The market for crude glycerin has been relatively depressed because of a larger supply of crude than the ability to turn it into refined product," Urbanchuk says. "The market for refined glycerin has been, until now, reasonably good."
 
 Crude glycerin can be produced through a variety of processes, including soap and fatty acid production, and by transesterification during biodiesel production. Crude glycerin is generally about 80 percent pure. However, depending on specific manufacturing processes, some biodiesel plants produce crude glycerin of a much higher purity. The process of refining glycerin involves removing residual organic nonglycerin matter, water, salt and odors. Refined glycerin is used by many industries, including the food, cosmetic and pharmaceutical industries.
 
 The Market
 Urbanchuk says slow growth rates in the United States and the world economies are beginning to concern him. Slower economic growth rates may reduce demand for the products glycerin is used to produce. "It could be a factor working to trim demand for and prices of crude glycerin and refined glycerin," he says.
 
 Furthermore, the recent decrease in the price of biodiesel feedstocks, will likely increase biodiesel production, leading to a larger supply of crude glycerin. "There are a number of factors that are working to remove financial pressure from the production side of biodiesel," Urbanchuk says. "That basically means there is going to be even more crude glycerin on the markets to hold those markets down."
 
 Urbanchuk says he sees two trends developing right now. "You've got improvements in the commodity prices that are working to improve the profitability of biodiesel production," he says. "On the other hand, you've got a slowing economy, and that is going to potentially slow growth in demand for the products glycerin is made of." The combination will probably soften prices through 2009.
 
 The economic downturn is a factor that will affect the markets for the next year or 18 months, Urbanchuk says. "I think the slower growth in demand is going to be a fact of life, and that it is going to reduce price pressure," he says. "That means that if we continue to get increases in supply, it is going to hold prices down."
 
 Emergent Industrial Solutions Inc., which buys and sells glycerin products, expects to see significant volatility in the 2009 glycerin markets. "Everything hinges on biodiesel production," says Todd Pencarinha, EIS's vice president. "Demand for crude glycerin is reasonably constant and growing at a healthy rate." However, he says, when biodiesel economics are strong, the biodiesel industry creates much more crude glycerin than the refined glycerin market needs. This leads to crashing prices. 

 
 Although not all crude glycerin is produced by the biodiesel industry, Pencarinha says upswings in the market are a result of those refining glycerin from biodiesel production. "When the biodiesel economics are strong, there is so much crude glycerin out there that everybody is producing refined glycerin to make money," he says. The result is an excess in refined glycerin that reduces market prices. "I think-as far as the glycerin market is concerned-volatility is going to be the rule," Pencarinha says. "A stable glycerin market would be extremely unusual and not foreseeable for quite a number of years."
 
 Global Factors
 The United States and European Union currently dominate the biodiesel and glycerin markets, according to Urbanchuk. However, significant growth is underway in China. "I think the market in China is going to continue to expand," he says. He also notes that the United States currently has a relative advantage over the EU because of the difference in exchange rates. "I think that's one area that is a bright spot in the overall market," Urbanchuk says. 
 
 Jerry Patak, director of commodities for Massachusetts-based World Energy Solutions Inc., says the U.S. crude glycerin market is being inundated with imports. Southeast Asia and Europe are exporting glycerin to the United States in large volumes at low prices. "The market is depressed as a result of that," he says. Patak expects those depressed prices to continue through the end of 2008, and possibly into 2009. "It depends totally on how much biodiesel production continues in Southeast Asia, Europe and Argentina," he says. "This is a peculiar year in that we are being inundated with so many imports. Usually, that's not the case."
 
 The market is also experiencing reduced demand from Asia. Dave Elsenbast, Renewable Energy Group Inc.'s vice president of procurement, says his company has exported glycerin to Asia in the past. "The Asian demand that we were selling into seems to have dramatically slowed," he says. "They may have started buying more of their supplies out of the Argentinean biodiesel market as that market has developed." 
 
 Biodiesel Producers
 REG produced an estimated 100 million pounds of crude glycerin in 2007, and expects to produce approximately 130 million pounds of the product in 2008. "We do think the output for us is goin</a>g to increase into 2009," Elsenbast says. "We take the marketing and production of glycerin very seriously so we can maximize the revenue stream that we can achieve from this coproduct. It is not something that we-from a marketing standpoint-look to dispose of. We look to make a quality product and sell it to a high-value returning market."
 
 Rob Keeling, REG's purchasing manager, says his company has identified the value in supplying a high-quality glycerin. "Consistency is the building block around any new or existing end-use process utilizing glycerin," he says. "We have taken great strides and have a large amount of success in supplying our current customers with that type of crude glycerin."

 
 Instead of selling their crude glycerin on the open market, a few biodiesel manufacturers refine it. Glycerin refiner World Energy at one time produced biodiesel. However, its biodiesel operations shut down last year in response to economics and high feedstock prices. "Since we shut the plant down, we've been buying crude on the open market-vegetable-based kosher crude-and refining it at the plant," Patak says. "The refinery has not missed a beat."
 
 Texas-based GreenHunter Energy Inc. has a distillation tower for refining glycerin. Although the facility is currently shut down due to damage from Hurricane Ike, once biodiesel production begins, the company will refine crude glycerin. According to a GreenHunter spokeswoman, the distillation tower will have the capacity to refine more glycerin than the biodisel refinery produces. 
 
 Delta Biofuels Inc. has been selling its crude glycerin to a variety of markets, including Asia. According to Clint Vegas, president of Delta Biofuels, the crude glycerin his company produces is 90 percent to 94 percent pure. "If our production would crank up to where it needs to be … we would probably go ahead and refine our glycerin closer to 100 percent," Vegas says. Feedstock prices would have to drop in order to increase production to a level where refining the glycerin would be feasible. 
 
 Louis Dreyfus Agricultural Industries produces about 65 million pounds of crude glycerin annually with a purity rate of 80 percent. According to senior merchandiser John Meyer, the company is selling the majority of its crude glycerin into the industrial market. 
 
 Erin Voegele is a Biodiesel Magazine staff writer. Reach her at <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a> or (701) 373-8040.

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Glycerin is produced during biodiesel manufacturing. 

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Glycerin markets are expected to remain volatile throughout 2009. Factors such as the global economic crisis and falling commodity prices are expected to have an impact on pricing, supply and demand for crude and refined glycerin. In addition, crude glycerin imports from Southeast Asia, Europe and Argentina may continue to pressure prices.

Glycerin's Role in 2009

High vegetable oil prices over the past year have reportedly driven most biodiesel producers to using yellow grease, animal tallow or palm oil as feedstocks, but vegetable oil remains an important and often preferred feedstock. The viability of oilseed crops is as important to the biodiesel industry as is the viability of an end-user market, which is why it's in the industry's interest to start paying closer attention to the health of pollinators.
 
 As bees, moths, butterflies, beetles, bats and birds move about feeding on nectar and pollen, they are ensuring the reproduction of almost 90 percent of all flowering plants, according to the Pollinator Partnership, a nonprofit advocacy group based in California. Pollinators help start the food chain; they are part of the food supply and they pollinate food for the wildlife higher up in the food chain. Without their actions, 75 percent of the plants humans consume as food, fiber, spice or medicine could not reproduce. 
 

 Pollinators' monetary value to agriculture is estimated at $20 billion annually in the United States, according to the Pollinator Partnership. For many specialty crops such as almonds growers must rent one or two hives of honeybees per acre during the blooming season. In fact, half of the U.S. honeybee population is imported to California's Central Valley just to pollinate almonds.
 
 Some commodity crops are wind-pollinated, like corn and soybeans, but most other oilseeds are dependent on pollinators. More than half of the world's diet of fats and oils comes from oilseed crops, many of which are pollinated by animals, including cotton, palm oil, canola (rapeseed) and sunflowers. Though pollinators are not required for soybeans to produce, they are required for hybrid seed production.
 
 Oilseed crop fields make good summer cafeterias for honeybees. Beekeepers will often set up hives in a nearby shelterbelt or unplowed plot to feed their bees. It's no coincidence that North Dakota leads the nation in honey production and, according to North Dakota State University entomologist Janet Knodel, produces 92 percent of the canola in the United States. 
 
 Bees can dramatically increase yield. In an experiment Knodel conducted last year, she found that the presence of honeybees and other pollinators increased yield by 1.8 to 3.6 bushels per acre over the control crop's yield. Of course, honeybees are not the only pollinators. The Pollinator Partnership estimates that 30 percent of pollination needs are met by native pollinators. The Xerces Society, an invertebrate conservation group, reports that in the absence of rented honey bees, canola growers in Alberta, Canada, make more money from their fields if 30 percent of the land is left in natural habitat, rather than planting it all. "This natural habitat supports populations of native bees close to fields and increases bee visits and seed set in adjacent crops," reads a Xerces Society publication. It continues, "Wild native bees improve the pollination efficiency of honeybees in hybrid sunflower seed crops by causing the honeybees to move between male and female rows more often. The only fields that had 100 percent seed set were those with both abundant native bees and honeybees."
 
 Of course, oilseed crops are good for the bees, too. "Canola is a great pollen and nectar plant for bees," says University of Minnesota entomologist Marla Spivak. "It is quite attractive to bees; the more canola the better. But bees also need a variety of pollen sources to obtain all of their amino acid requirements. In addition to canola, bees need clover, alfalfa and other legumes. Bees do not need [Conservation Reserve Program] land replaced by corn or switchgrass for biofuel. Corn pollen is only fiber for bees; it has very low protein content and is not good for them. Grasses are also wind pollinated, like corn, and bees do not collect pollen from grasses."
 
 Pollinators in Danger
 Unfortunately, the number of pollinators-including both native and honeybees-is steadily declining in the United States and around the world. According to the Pollinator Partnership, the United States has lost more than 50 percent of its managed honeybee colonies during the past 10 years. The phenomenon of honeybee die off, called Colony Collapse Disorder, came into mainstream consciousness last year. In a survey this year, the American Apiary Association found that the die off was greater this year than last year, according to Tom Van Arsdall, director of public affairs for the Pollinator Partnership. "It's steadily increased over the past four years," he says. "The overall loss rate is about 35 percent. In most of society, we don't have everything in one basket. In pollination, the real workhorse is the honeybee. If pollination services go down, then we don't have good backup."
 
 The news gets worse. The backup that does exist-native bees-is also facing decline, and there's even less known about those causes, says Knodel, who is part of the newly formed Native Pollinators in Agriculture Project. "There's a lot of research with honeybees, but we're also seeing a decline with native bees," she says. "That's what we're focusing on with this project."
 
 Van Arsdall agrees that native bees get taken for granted. "Native bees are providing a lot of free pollinator services," he says. "I know a cucumber producer who said he has to rent twice as many hives now as he used to because native bees aren't there any more." 

 
 The issue is quickly getting the attention of specialty crop producers. "The cost for pollination services has risen faster than the price of energy in the past three years," Van Arsdall says. "A couple of years ago, it cost $35 to rent one hive; next year they are predicting it to cost over $200 per hive. It used to be that a crop producer who needed honeybees would say it's a beekeeper problem. They're not saying that anymore. They have a lot at stake in it. They want to know how much it will cost, and if they can get them. If they don't get bees, they get no crop. If you shut off pollination services, it's like shutting off the rain."
 
 The cause of CCD is still a mystery. A number of factors have been hypothesized, including pesticides, stress, monoculture, parasites and others, but no solid answer has been found yet. The Pollinator Partnership says there are multiple threats to honeybees, including mites, misuse of pesticides and degradation and depletion of habitat. "Our farm and ranch lands that support pollinators are disappearing at the alarming rate of 3,000 acres a day," states a publication by the Pollinator Partnership. "As landscapes are converted from wild to managed lands, many pollinators' habitats may be destroyed or fragmented. Habitats that remain are often in isolated patches, degraded by invasive plant species or other biological or man-made influences. These changes can lead to the loss of wildflowers used by pollinators for foraging, nesting and/or egg-laying." 
 
 Spivak, the University of Minnesota entomologist, agrees. "The major threats to pollinators are land use-there are not enough flowers out there for them to feed on, and we have destroyed many of the native bees' nesting sites with our agricultural practices and urban sprawl-and often the pollinators, visit is contaminated with insecticides," she says.
 Habitat is an issue where the interests of bioenergy and pollinators may not align. High crop prices and increased demand-both credited in part to biofuels-are inspiring many farmers to let their CRP contracts expire. Many biofuel advocates have lobbied for CRP acres to be released for crop production, while wildlife groups have been active in opposing such legislation. In the end, the Farm Bill did lower the cap on the total number of acres allowed in the CRP program from 39.2 million acres to 32 million acres, but it did not remove the penalty for early withdrawal. 
 
 Van Arsdall argues that decreased CRP acreage doesn't have to be a bad outcome for pollinators, as wildlife habitat and crops don't have to be mutually exclusive. "Farmers are farming a lot smarter," he says. "It doesn't have to be crop production or conservation. It's in the interest of the producer and other stakeholders to be both. If we're interested in developing and increasing feedstocks, can we work together to see what we can do so we're not zeroing out habitat at the same time?" 
 
 Bioenergy crops don't have to be a threat to pollinators. Biodiesel industry groups can either fight conservation efforts or be a stakeholder group to work towards common ground. In fact, the biodiesel industry and its feedstock suppliers can be part of a movement to support, improve and expand pollinator habitat. "I believe it's in the renewable energy industry's interest to take a hard look at dialoguing with the pollinators and wildlife habitat community in general," Van Arsdall says. 
 
 Because most biodiesel feedstocks depend on pollinators, biodiesel advocates may have more incentive than other renewable energy groups to work with conservation groups to find solutions. While researchers are trying to figure out why bees are dying, Van Arsdall says there are actions that can be taken now. "Habitat is one of the critical components, and we do have the science for that," he says. Initial actions are funding and enforcing conservation measures included in the Farm Bill, which were passed with overwhelming support. "Once you get the Farm Bill enacted, then the work begins," Van Arsdall says. "What's next is not just funding and implementing Farm Bill conservation programs, but trying to insert conservation into whatever is happening on the landscape." To encourage habitat improvements, the Pollinator Partnership has several resources on its Web site, including zip code accessible "Ecoregional Planting Guides for Pollinators" at <a href="http://www.pollinator.org">www.pollinator.org</a>. 
 

 
 Anduin Kirkbride McElroy is a Biodiesel Magazine freelance writer. Reach her at <a href="mailto:anduin.mcelroy@und.nodak.edu">anduin.mcelroy@und.nodak.edu</a>.

Bees are important for production of oilseeds, including the canola shown here. 

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Thirty percent of pollination needs are met by native pollinators. 

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Beekeepers often set up hives in shelterbelts or unplowed fields near crops that honeybees feed on.

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Pollinators are vital to agriculture yet are often taken for granted. The number of pollinators has been steadily declining, a dismal prospect that could have unexpected consequences for oilseed crop production and bioenergy as a whole.

Bees Essential for Biodiesel

When the U.S. EPA's renewable fuels standard (RFS) program went into effect on Sept. 1, 2007, it established a range of provisions applicable to regulated parties. Those provisions include annual attest engagements (audits) that must be performed by a certified internal auditor, an independent certified public accountant or a CPA firm.
 
 The first reporting period covered by those requirements was Sept. 1 to Dec. 31, 2007, with attest engagement reports due by May 31, 2008. Auditors examined companies' annual compliance demonstration reports, quarterly renewable identification number (RIN) generation reports, quarterly RIN transaction reports, quarterly gallon-RIN activity reports, and the underlying documentation, including product transfer documents required for each change in renewable fuel ownership.
 
 EPA provisions mandated detailed examinations and audit reports that went beyond identifying exceptions. While particular circumstances varied among obligated parties (a gasoline refiner or importer), exporters of renewable fuel and non-obligated parties (renewable fuel producers and importers, and any other party taking ownership of RINs), initial audits for the 2007 reporting period identified the following general concerns which must be addressed as companies face updated audit procedures for the 2008 calendar year.
 
 Complete, Accurate RINs	
 The EPA established the RIN system to track renewable fuel batches from the producer through various downstream entities. Each RIN represents a batch of renewable fuel, and each batch of renewable fuel generated requires a RIN. 
 
 A RIN consists of a 38-digit code that includes the year the fuel was generated, the equivalence value for the specific type of renewable fuel, a company registration number and a facility registration number. Each RIN also includes an unassigned or assigned designation. Generally, an assigned RIN must accompany any renewable fuel batch transferred to a new owner. 
 
 Once the renewable fuel batch is purchased by an obligated party or blender of gasoline with renewable fuel, the RIN can either be retained by the purchaser or sold separately as an unassigned RIN. With that system, the EPA created a market where obligated parties could purchase RINs to meet annual renewable volume obligation requirements.

 
 Quarterly RIN transaction reports contain the RIN traded as part of the transaction. Common difficulties uncovered during audit examinations included RINs that did not have all 38 digits or typographical errors related to entry of some of the characters in the RIN sequence. Companies need to ensure that RINs are correctly entered. 
 
 The Need for RFS Compliance-Specific Software
 In addition to difficulties encountered in recording complete and accurate RINs, companies faced challenges in correctly documenting all of the activities associated with generating, buying, selling or retiring renewable fuel batches, and producing the necessary quarterly and annual reports for RFS program compliance.
 
 Using a spreadsheet or another general business application for necessary documentation requires devising macros for cross checking, as well as conducting regular manual reviews. Without such controls, companies faced considerable risk for reporting errors.
 
 To promote greater accuracy and efficiency, some larger companies have developed custom compliance-related applications. For smaller companies lacking such in-house information technology capabilities, a variety of applications specifically designed for RFS compliance purposes are on the market. 
 
 Balancing Report Totals, Accurate Reporting
 When the EPA established the audit requirements for the RFS program, it defined methods for auditors to use in reconciling or verifying the accuracy of various reports. For example, the total buys, sells and retirements listed in the quarterly RIN transaction reports should correspond to the total buys, sells and retirements listed in the quarterly gallon-RIN activity report. Inventory analysis is used to verify gasoline production volumes reported in the annual compliance report. Renewable fuel production documentation is used to determine the accuracy of RIN generation reports. 
 
 Unfortunately, audit examinations revealed instances where various report totals that should have balanced did not balance. To promote greater efficiency and remain in compliance, companies need to deploy the EPA's prescribed methodology and regularly contemporaneously check whether report totals balance properly.
 

 Renewable fuel producers and importers generate RINs. Uncertainty regarding the proper method to account for such generations in the gallon-RIN activity reports, however, prompted some companies to report those activities as purchases in transaction reports. The RINs generated must be manually added to the end-of-quarter RINs for balancing.
 
 The EPA allows parties to use RINs generated in a previous year for current year compliance, up to a 20 percent threshold. A company cannot, however, use RINs generated in a future year. In other words, RINs generated in 2008 were not valid to meet 2007 compliance.
 
 Planning for 2008 Audits	
 In February 2008, Congress approved increasing the annual renewable fuel amount that is required to be blended into gasoline for the 2008 compliance year to 9 billion gallons, or 7.76 percent of the nation's gasoline production. That standard is used to calculate the renewable volume obligation that obligated parties must meet every year. A company's renewable volume obligation for 2008 is determined by multiplying annual gasoline production volume by 7.76 percent.
 
 The EPA also released technical amendments in October 2008. The amendments address various grammatical or typographical errors, or provide minor clarifications to assist regulated entities in complying with the existing RFS program requirements and include revisions to the audit procedures. Audit procedures for the 2008 compliance year address: 
 
 ›Annual Compliance 
 
 Demonstration Reports
 The annual compliance demonstration report is used to verify that an obligated party has met its renewable volume obligation. For meeting that obligation, RINs are considered expired or invalid two years after they were generated.
 
 Documentation for all renewable fuel used in gasoline at the refinery or import facility must be obtained and reviewed by the auditor, with the volume being reported as a finding. 

 
 This procedure is meant to address situations where renewable fuel is used in the production of gasoline and should be excluded from the volume of gasoline produced for purposes of calculating the company's renewable volume obligation. Inventory analysis is then used to verify the total gasoline production volume reported to EPA. Auditors are also responsible for recalculating the renewable volume obligation. 
 
 One of the updated rules directs auditors to calculate the total number of RINs used for compliance based on year of generation, rather than calculating and reporting on all RINs used for compliance. The auditor must compare that data with information reported to the EPA. For further examination, the auditor must select a representative sample of RINs used for compliance and review supporting product transfer documents and other documentation. 
 
 ›RIN Generation Reports
 
 The RIN generation report is unique to a renewable fuel producer or importer, and must be filed quarterly. Auditors cannot rely upon examining samples and need to review production data for each renewable fuel batch, and verify that the proper number of RINs were generated and assigned to fuel batches. 
 
 The auditor must determine whether actual volumes of denaturant and applicable values, the designated renewable fuel type and other listed details conform to information provided to the EPA. Related product transfer documents require scrutiny on a representative sample of renewable fuel batches produced or imported during the year, with auditors verifying the accuracy of the information contained in the product transfer document.
 
 ›RIN Transaction Reports
 
 Each transaction in a listing of RIN transaction reports is essentially a report in itself, providing considerable documentation for that event. Under revised EPA rules, a sample is required for each type of transaction-purchases, sales and retirements-included in the listing of transaction reports. Retirements are of particular concern to obligated parties, since they retire RINs for use in meeting their annual renewable volume obligation. RINs listed as retired due to use need to include the unassigned RIN (k=2) designation.
 
 The auditor must test each transaction sampling to verify its accuracy. That entails obtaining and reviewing contracts, invoices, product transfer documents or other relevant documentation. Findings must conform to what was reported to the EPA, and any exceptions must be reported.
 

 ›Gallon-RIN Activity Reports
 
 Auditors must review documentation used to generate information for the quarterly gallon-RIN activity reports, and compare information contained in that report to the transaction samples examined as part of the transaction report audit procedures. Sampling information from the transaction report should correspond with activity report data. Quarterly beginning and ending totals and sums for RIN purchases, sales and retirements should also correspond to transaction report information. The auditor is required to report any discrepancies. 
 
 ›Product Transfer Documents
 
 Under RFS provisions, a product transfer document needs to accompany each change in renewable fuel ownership. Each product transfer document requires the RINs assigned to the volume transferred, as well as the name, address and EPA registration number for the transferor and transferee, volumes of renewable fuel being transferred and transfer date. 
 
 The auditor must verify that this information is included on all product transfer documents reviewed related to audit procedures performed, with exceptions being reported. 
 
 Summary
 
 The initial work related to RFS filings and audits illustrated the importance of devising and sustaining processes for effectively capturing necessary information, and then regularly reviewing that data for accuracy. RFS compliance is an ongoing requirement, and addressing those provisions in the most efficient manner possible is a crucial concern for all affected parties. 
 
 Wade Watson is a certified public accountant, certified fraud examiner and an audit partner for Weaver and Tidwell LLP. Reach him at <a href="mailto:wlwatson@weaverandtidwell.com">wlwatson@weaverandtidwell.com</a>.

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Initial RFS Program Audits, Updated Rules Require Comprehensive Evaluations

Web exclusive posted Nov. 13, 2008 at 12:54 p.m. CST 
 
 Former Maui County Environmental Coordinator Rob Parsons joined protests by Rainforest Action Network (RAN) at the annual shareholders meeting of Archer Daniels Midland Co. in Decatur, Ill., on Nov. 6. 
 
 Parsons, who serves as executive vice president of Maui Tomorrow Foundation Inc., obtained a shareholder's proxy for the meeting in an effort to try and sway agri-business corporations like ADM away from imposing biofuel ventures in Hawaii and decimating rainforest lands associated with widespread mono-cropping of soybeans and palm oil for biofuels production. 
 
 "We will remind them that soy and palm plantations are among the greatest threats to the world's tropical rainforests," Parsons said. "The expansion of these plantations spells a disaster for these biodiverse forest habitats, indigenous peoples' rights and climate change."
 
 Hawaii is the most petroleum-dependent of the 50 U.S. states, with more than 90 percent of the state's energy needs coming from imported foreign oil. Despite abundant potential for solar, wind and hydropower, the Hawaiian Electric Co. (HECO) has spent the past two years supporting proposals to construct two biodiesel plants – one by Imperium Renewables Inc. on Oahu and another by BlueEarth Biodiesel LLC on Maui. 
 

 If these plants were to be constructed, their combined production of 222 MMgy would exceed the potential output that could be produced in Hawaii, even if all available statewide agricultural lands were utilized solely for biofuel crops. Much of the palm oil used to produce biodiesel would be sourced from Malaysia or Indonesia, the world's top two palm oil producers, according to the Maui Tomorrow Foundation. 
 
 "It is incumbent upon the people of Hawaii to demand local solutions for renewable energy, which in turn will bolster our local economy," Parsons said. "Working with groups such as RAN helps spread the word far and wide that continuing rainforest destruction for biofuel production should be stopped immediately. The Hawaii coalition of groups is eager to help work for solutions to saving the world's remaining rainforests."
 
 According to Parsons, his mission in Decatur was to educate ADM officials on the harmful impacts of displacing rainforests with biofuel crops, such as soybeans and palm; he hopes that other companies like ADM will take heed of his concerns on the issue.
 
 "Hawaii has a chance to show the world how sustainable energy production can be done, and that what's sustainable can also be profitable," Parsons said. "Let's move away from damaging proposals such as the import of palm oil. This is our golden opportunity to influence our leaders and return the 'power to the people'."

Rainforest Action Network voices concerns at ADM meeting

A hospital during a power outage, a family home on a cold winter night, a farmer racing to get the crops in before a freeze-in all of these scenarios, critical equipment is relying on stored fuel for dependable operation. 
 
 Regardless of the need, stored fuel sitting in above-ground storage tanks must perform as expected. Failure or poor fuel performance can result in financial loss or threatened personal safety. A backup generator, home heating system or farm tractor must be maintained and serviced so that equipment will operate effectively and efficiently when needed. 
 
 So does the fuel. 
 
 Several trends have led to an increased need and attention to fuel storage. First, the sources of diesel and heating oil have changed to include various crude grades and alternative fuels that are more viscous and may be prone to contamination. Second, clean air and energy independence initiatives have required new fuel formulations, such as the required reduction of sulfur in diesel. These new fuels often act as solvents, causing decades of accumulated grime to suspend in the fuel. Finally, dramatic advancement in the efficiency of the fuel-powered equipment has also made equipment more susceptible to fuel quality problems.
 
 Biodiesel has been gaining interest and market share as a blend component in home heating oil. In the past few years, Bioheat home heating oil has become more popular, particularly in the Northeast United States where a bulk of the country's heating oil users reside. However, biodiesel can act as a solvent. According to the National Biodiesel Board, biodiesel has a solvent effect that may release deposits accumulated on tank walls and pipes from previous diesel fuel storage.
 
 The NBB suggests that only fuel meeting the biodiesel ASTM specification be used. ASTM International recently published a furnace fuel specification for Bioheat home heating oil (B5 in ASTM D 396 fuel).

 
 In recent years, equipment and fuel advancements have been made in reaction to energy shortages and environmental concerns. These shifts have resulted in many benefits. 
 
 However, the benefits carry costs that include increased prices and fuels that are less stable and more prone to contamination. In a first quarter 2008 Petroleum Equipment Institute Journal article, Tim Brady of Algae-X International mentions that major storage tank contaminants include water, microbial growth, particulate matter and fuel breakdown byproducts. These contaminants cause increased wear and corrosion, clogging, degraded performance and equipment failure. 
 
 Protecting Fuel Investments
 A robust fuel storage plan is needed to avoid these potential issues, protect fuel investments, ensure ultimate performance of equipment and the reliability of the equipment when it is needed most. 
 
 As fuel costs rise, fuel users have changed their buying behaviors. Homeowners often buy fuel at lower prices in the spring, although they will not need it until the fall. Farmers top off their tanks at the end of the planting season, and store fuel until the harvest. Backup generator owners never know when they will need their fuel-it may sit for months or years. While it may make sense for users to buy their fuel just before they need it, the reality is that fuel will be stored for an extended period and require more care.
 
 As petroleum professionals, we are well aware of the many issues facing fuel tank owners. Conversely, the more than 9.5 million households using heating oil or the millions of farms and businesses dependent on stored fuel are not as aware. Educating tank owners about fuel storage risks and problems is a daunting task, but it's our responsibility as well-informed fuel professionals to provide customers with guidance about the proper care of their equipment. It's important to emphasize that proper up front care will lead to long-term efficient and reliable operations and will help users avoid the financial pain of a lost fuel load. In other words, fuel storage stewardship must be provided to fuel users.
 
 Protecting fuel investments and ensuring that the fuel load can perform when users need it most can be accomplished in four specific steps.
 
 ›Step 1: Get the fuel user's storage environment to a proper state of readiness. This includes inspecting the tanks and piping, as well as fixing leaks, corrosion or damage. 
 

 ›Step 2: Clean the storage system of existing contaminants and sediments. It is self-defeating to put clean fuel into an environment ripe for future contamination and clogging. 
 
 ›Step 3: Assess whether ongoing fuel filtering and conditioning is adequate and reliable. 
 
 ›Step 4: The final step is to prepare a storage maintenance plan that includes scheduled testing, assessment and periodic maintenance of the fuel storage system and not just the fuel-powered equipment. The plan should consider the conditions under which the fuel is stored, the types of stored fuel and the special requirements and usage of the fuel.
 
 Stewards for Reliable Fuel Storage
 Fortunately, tools and technologies exist for us to prepare, maintain and, when needed, decontaminate fuel tanks. Effective and proven tank cleaning, fuel polishing and treatment processes are readily available and can be incorporated into maintenance or service plans.
 
 The challenge is how do we impart the need for increased fuel storage stewardship to customers that are already suffering from higher fuel prices? A proactive and recommended strategy is to educate ourselves on the issues and potential resolutions and develop a simple, clear message and solution for the customer.
 
 The fuel storage message should be that today's fuels require extra care and are significantly different in ways other than cost. A review of the customer's maintenance history may show that over the years they have paid more to resolve issues caused by poor fuel. In addition to reviewing their maintenance costs, also review the equipment performance and efficiency. 
 
 A viable fuel system maintenance plan must also fit the customer's budget and lifestyle. Investigate the available tools and techniques and select those which best enable you to provide the customer the services they need. Show customers how the costs of these services are justified, such as in reduced equipment repair, improved performance and reduced risk of fuel loss.
 
 A primary benefit of providing a fuel system plan is the increased positive interaction with the customers which will enhance your reputation as an energy expert. The plan development will also be a chance to find other equipment and service opportunities. In addition to finding more work, the maintenance tasks can be done during off peak times, keeping crews busy during slow times. A good plan will also reduce the service calls required during busy periods, which again enable you to provide customers with better service while leveling your staff demand.

 
 Most important, the plan will enhance your ability to deliver products with perceived high quality and efficiency to your customers. Delivering proper fuel stewardship to customers will make you the reliable petroleum professional they need and will be loyal to. 
 
 Michael Delaney is the manager of business development for Gamajet Cleaning Systems. Reach him at <a href="mailto:michael.delaney@gamajet.com">michael.delaney@gamajet.com</a>.

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A technician cleans a tank used to store home heating oil.

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Establishing a Fuel Storage Plan Ensures Long-Term Reliability

In this time of historically high soybean oil prices, biodiesel manufacturers are looking for new feedstocks. One alternative has been to obtain crude corn oil from ethanol plants. In negotiating the terms for an agreement to purchase corn oil from an ethanol manufacturer, a biodiesel manufacturer should consider the following unique issues created by the situation. 
 
 Quantity: A key term of the corn-oil procurement contract will be how much corn oil the ethanol manufacturer is required to provide to the biodiesel manufacturer. The amount should be a set number of gallons or a percentage of its total corn oil output. This provision will provide the biodiesel manufacturer with a stable supply of corn oil and prevent the ethanol manufacturer from selling to other parties if the market price of corn oil increases to prices greater than those under the procurement contract. The contract should also allow the biodiesel manufacturer to obtain corn oil from third parties in the event the ethanol manufacturer does not produce corn oil at the anticipated rate.
 
 The biodiesel manufacturer may also want to negotiate a right of first refusal on any unused corn oil. This will allow the biodiesel manufacturer to purchase additional corn oil as needed in the event the ethanol manufacturer expands its production capacity, the biodiesel manufacturer expands its production capacity or the biodiesel manufacturer chooses to begin producing biodiesel made from a larger percentage of corn oil.
 
 Term and Termination: The biodiesel manufacturer will want to negotiate a reasonably long period for notice of termination and the initial contract term. The biodiesel manufacturer should balance the need for time to find a replacement feedstock source in the event the ethanol manufacturer terminates the contract, or the term of the contract expires, with the biodiesel manufacturer's desire to not be locked into the contract in the event the terms become unfavorable to it in the future.
 
 Pricing: Prices in feedstock procurement contracts are often tied to market prices. Readily available crude corn oil prices, however, can be difficult to obtain because the crude corn oil market is a recent development, resulting largely from the needs of the biodiesel industry. There is a market for food-grade corn-oil, however, these prices tend to be higher than crude corn-oil prices because food-grade corn oil has more uses. Therefore, the biodiesel manufacturer should consider tying the price to the market price of biodiesel. This will also allow the biodiesel manufacturer to lock in a profit margin that makes utilizing corn-oil a cost-effective alternative to soybean oil.
 
 Product Specifications: This issue becomes particularly important in corn- oil procurement contracts because of the relatively new development of technology used to produce biodiesel from corn oil. Some biodiesel manufacturers may experience difficulties with equipment if the corn oil is not specifically suited to the needs of its production technology. 

 
 The biodiesel manufacturer should obtain product samples for test runs, consult its engineering procurement and construction agreement to confirm that the quality of the corn oil is in line with the quality of vegetable oil the plant equipment needs to operate, and consider the effects processing corn oil may have on the plant's equipment warranties. The biodiesel manufacturer will want the right under the procurement contract to require the ethanol manufacturer to incur costs associated with disposing of corn oil that does not meet the requirements of the biodiesel manufacturer's equipment. 
 
 Kristi Harshbarger practices primarily in the areas of securities and corporate transactions at BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. Reach her at <a href="mailto:klh@brownwinick.com">klh@brownwinick.com</a> or (515) 248-6627.

Tips for Negotiating a Corn-Oil Procurement Contract

In April, a welder working at a biodiesel plant in Alberta, Canada, touched off an explosion that ended his life and damaged the 5 MMgy facility. The next month, a contract welder at a 4 MMgy biodiesel plant in Princess Anne, Md., also ignited an explosion that killed the worker. While the investigations from both of these accidents are ongoing, the most likely "fuel" for these explosions was methanol vapors. On a smaller scale, similar accidents have occurred involving "backyard biodiesel blenders," including a fire that left a barn burned to the ground in Oregon.
 
 For the Methanol Institute, the global trade association for the methanol industry, these incidents represent a serious product stewardship challenge. Accidents such as these are very preventable, had the welders understood the risks of working around methanol. First, as we tell callers to our global trade association looking to purchase methanol for biodiesel production, methanol is a flammable and hazardous chemical that should only be handled by trained professionals in an industrial setting. Having said that, we do have members that sell 55-gallon drums of methanol to individuals, although some distributors will not ship to a residential or farm address, and others require a minimum order of several drums. 
 
 From our homepage at www.methanol.org, we have an online "Methanol Source Request" for producers looking to purchase methanol. Just tell us where your facility is located and how much methanol you need, and we share your information with our members and encourage them to contact you directly. 
 
 Many biodiesel plant operators and home blenders are unfamiliar with methanol, so the first task is to impart some basic facts about its physical properties, and how to properly store and handle this flammable and hazardous chemical. The Methanol Institute has recently published the "Methanol Safe Handling Manual," to serve as a guidance document for methanol distributors and downstream customers such as biodiesel producers. The manual was developed by Alliance Consulting International, an environmental and health and safety professional services firm based in San Diego. The manual is available free on the "Health, Safety and Environment" page of the Methanol Institute's Web site, www.methanol.org. To serve a global market, this document will soon be translated into Chinese, Spanish, Japanese and Arabic. In 2009, we will produce a companion Methanol Safe Handling video. 
 
 The manual is designed to be a resource for information on methanol specifically for those responsible for its safe handling. It presents current information on methanol's properties, potential environmental, health and safety hazards, safe handling practices, emergency response procedures, product and distribution stewardship, and risk communication.
 

 The manual's chapter organization and content are intended to provide readers with convenient access to practical information. Key facts and useful references are highlighted in the text. Additional technical data, such as methanol's chemical, physical and thermodynamic properties, can be found in the appendices. The reference section presents a list of scientific and technical resources for more in-depth research.
 
 We understand that expertise in the safe handling of methanol is available in every corner of the globe. We hope to capture this expertise in future editions of the manual. We welcome comments, questions and feedback via e-mail at mi@methanol.org. 
 
 Gregory Dolan is the vice president of the Methanol Institute. Reach him at <a href="mailto:gdolan@methanol.org">gdolan@methanol.org</a> or (703) 248-3636.

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New Resource Provides Methanol Handling Guidance

Web exclusive posted Nov. 13, 2008 at 3:02 p.m. CST 
 
 A new research and testing facility at the Queensland University of Technology in Brisbane, Australia, will test new technologies for producing industrial and transportation engines that are designed specifically for using biofuels. The first project in the new Biofuel Engine Research Facility, which opened Nov. 6, is to enable diesel engines to use both petroleum diesel (or biodiesel) and ethanol at the same time, according to Dr. Richard Brown, a senior lecturer in mechanical engineering at the university's School of Engineering Systems.
 
 Brown said the engine is currently being tested using petroleum diesel and ethanol, which are introduced to the engine separately. The ethanol is mixed with air in the intake manifold before it's introduced into the cylinder. The mixture is then compressed in the cylinder before diesel fuel is introduced to initiate combustion. "So far, we have reduced diesel consumption by about 40 percent," Brown said. The engine is also able to use hydrous ethanol and ethanol with up to 25 percent water content has been tested with no reduction in thermal efficiency, he added.
 
 In the future, biodiesel will be tested in the engine, Brown said, as well as methanol and hydrogen. The new research facility includes a dynamometer with instrumentation that instantaneously measures the fuel consumption of each fuel being fed into the engine and engine efficiency, he said. "The facility is able to simulate a full driving cycle for the engine and to record all engine parameters during the cycle," Brown said. "We are able to measure in-cylinder pressure in order to make a detailed study of the combustion process in the engine."

 
 The new research facility cost approximately $AUD 400,000 ($250,000), Brown said, with funding provided by industry partner Alternative Engine Technologies, as well as the Australian Research Council and the university. Ethanol producer Heck Group and ethanol and biodiesel retailer Freedom Fuels are also project partners. Three faculty members, two doctoral students, and six undergraduate students are involved in the research, he said.

QUT to test engine using biodiesel, ethanol at once

Web exclusive posted Dec. 3, 2008 at 10:33 a.m. CST
 
 Ontario-based <a href="http://www.rothsaybiodiesel.ca">Rothsay Biodiesel</a>, a division of Maple Leaf Foods Inc., will begin fueling its largest truck fleet with B5 produced at its 9.2 MMgy biodiesel facility in Montreal.
 
 The 40-truck fleet in Dundas, Ontario, will consume approximately 1.4 million liters (370,000 gallons) of biodiesel annually. Since 2002, Rothsay Biodiesel has provided fuel for its Montreal truck fleet. 
 
 The company estimates converting the Dundas fleet to biodiesel will be the equivalent of eliminating 30 cars from the road, and plans to expand the program to other Maple Leaf fleets in the future. 
 
 Rothsay Biodiesel has a history of contributing to biodiesel-fueled transportation projects, such as the Canadian Renewable Fuel Association's BioBus project in 2001. BioBus was a joint effort between the CRFA, the Fédération des producteurs de cultures commerciales du Québec, the Société de transport de Montréal and Rothsay Biodiesel. The project's goal was to test the use of biodiesel as a supply source for public transit, assess the viability of the fuel as part of the routine operation, and measure biodiesel's environmental and economic impact. Rothsay Biodiesel supplied 500,000 liters (approximately 132,000 gallons) of biodiesel to fuel 122 Montreal Urban Transit buses for a full year.
 
 Rothsay Biodiesel uses a feedstock that consists of primarily tallow and yellow grease to produce biodiesel. The company also collects edible and inedible food byproducts from meat processing plants, grocery stores and restaurants to produce animal feed inputs, and chemicals used in soaps, cleaners, and cosmetics.

Rothsay Biodiesel powers two truck fleets with B5

Web exclusive posted Nov. 17, 2008 at 4:16 p.m. CST 

 
 Green Flight International successfully completed the world's first transcontinental biodiesel-powered jet flight Nov. 1. The flight began in Reno, Nev., and ended in Leesburg, Fla. 
 
 According to Douglas Rodante, Green Flight's chief executive officer, 1,776 miles of the flight were flown using B100. The remaining 710 miles were fueled by a mixture containing 50 percent biodiesel and 50 percent jet fuel.
 
 The aircraft completing the flight was a 1968 L29 Dephin, a single engine military jet aircraft built in Czechoslovakia. By using the Dephin, Green Flight said it was able to overcome cold-flow problems associated with biodiesel. Rodante said the aircraft has a system integrated into the fuel system that allows the fuel to be heated. Around the fuel filter there is an area where the engine oil runs through, heating the fuel going through the fuel filter, which is then circulated back through the fuel tanks. "Our fuel temperature on the flight was 27 degrees Celsius (80 degrees Fahrenheit) and that was up and over 17,000 feet," Rodante said. 
 
 Lake Erie Biofuels LLC co-sponsored the flight. According to Justin Corritore, Lake Erie Biofuels' spokesman, Green Flight International selected the company because of its national recognition and superior quality standards. "[The project] is really opening up a lot of opportunities for us that we didn't foresee developing," Corritore said. "We look forward to working with Green Flight in the future."
 
 Green Flight International, which was founded in 2006 as a result of environmental concerns, researches the feasibility of implementing alternative fuels into aviation to reduce the industry's carbon dioxide footprint. According to Rodante, the Federal Aviation Administration plans to use Green Flight's test flight as a model for future fuel testing.

Biodiesel-powered jet makes transcontinental flight

Web exclusive posted Nov. 17, 2008 at 4:26 p.m. CST 
 
 James Eger has resigned as chief financial officer of Texas-based Continental Energy Corp. to explore biodiesel. 
 
 Eger's resignation is effective Nov. 30. According to a statement released by Continental Energy, Eger will relocate to Southeast Asia to pursue business opportunities involving palm oil plantations and biodiesel production. 
 

 Eger will remain as a part-time non-exclusive consultant and advisor to Continental Energy, particularly in the areas of new business and corporate development. 
 
 "I look forward to continuing to work on Continental's behalf to identify new business opportunities in Southeast Asia, in both traditional and alternative energy," Eger said.

Continental Energy executive to pursue palm oil biodiesel production

Web exclusive posted Nov. 17, 2008 at 4:36 p.m. CST 
 
 <a href="http://www.amyris.com">Amyris Biotechnologies Inc.</a> has commenced operations at a pilot-scale renewable diesel facility in Emeryville, Calif., as part of its strategy to ultimately commercialize renewable diesel production in Brazil.
 
 The biotechnology company will use the California facility to perfect the production process for its trademarked No Compromise renewable diesel fuel, according to company spokesman Josh Wozman. Another larger pilot-scale plant is scheduled to open in Campinas, Brazil, in the spring of 2009. The company plans to finalize the process for its Brazilian operations there, although findings from the California facility will also be applied to the Campinas plant. 
 
 Wozman told Biodiesel Magazine that the Emeryville facility houses two 75-gallon tanks and has the capacity to produce up to 2 million gallons of renewable diesel annually, although that level of production is not expected. The company is using sucrose obtained from U.S. wholesale stores as the feedstock in Emeryville. Brazilian sugarcane will be the preferred feedstock at a commercial-scale. "During the production process, Amyris will do certain things to the sucrose to ensure that it resembles Brazilian sugarcane, which has more impurities," Wozman explained, adding that the pilot facility in Brazil will use sugarcane from the onset.
 
 Earlier this year, Biodiesel Magazine reported the partnership between Amyris and Crystalsev, one of Brazil's largest ethanol distributors and marketers, in order to scale up Amyris' production of renewable diesel in Brazil. (Read <a href="http://www.biodieselmagazine.com/article.jsp?article_id=2328&q=amyris%20crystalsev&category_id=28 ">"Amyris, Crystalsev form joint venture to produce renewable diesel by 2010."</a>) The partnership helped to secure two million tons of sugarcane crushing capacity by SantelisaVale, one of the country's largest ethanol and sugar producers. 

 
 Amyris plans to commercialize its process by 2010. The company believes its renewable diesel will be compatible with existing infrastructure, unlike other forms of biodiesel on the market, and that it will be capable of being blended with petroleum-based fuels at higher percentages than other biofuels.
 
 "This new diesel fuel has all the characteristics to make an important contribution toward solving our global transportation energy and climate crisis," Amyris Chief Executive Officer John Melo said. "The opening of our pilot plant is a significant business marker for us, taking us one step closer to bringing our diesel fuel to market."

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Amyris Biotechnologies Inc. recently opened a pilot-scale facility in Emeryville, Calif., in order to perfect its production technology for a renewable diesel derived from sucrose/sugarcane./PHOTO: AMYRIS BIOTECHNOLOGIES INC.

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Amyris begins pilot-scale renewable diesel plant

Web exclusive posted Dec. 3, 2008 at 11:25 a.m. CST 
 

 Researchers at the Center for Renewable and Alternative Fuel Technologies at Eastern Kentucky University in Richmond, Ky., are partnering with San Diego-based General Atomics to study the potential for converting cellulosic biomass into biodiesel and ultimately jet fuel. 
 
 General Atomics is best known for its affiliated company, General Atomics Aeronautical Systems Inc., the manufacturer of the U.S. military's Predator unmanned aircraft system.
 
 According to Dr. Bruce Pratt, chairman of the Department of Agriculture at EKU, researchers will look at using commercially available cellulase enzymes to convert cellulosic biomass to sugars, which will then be fed to heterotrophic algae that can convert sugars to oils without photosynthesis. "These are not the phototrophic types (of algae) that use sunlight," Pratt said. "These are membranous-type algae and they are heterotrophic, because we need to feed them the nutrients rather than getting the nutrients from the sun. These strains of algae have very high oil content." The oils are then extracted from the algae and converted to biodiesel.
 
 Pratt said the process is similar to how cellulosic ethanol is produced, but the end product is biodiesel. "The similarity is that we're using biomass and we're going to be digesting it to release the sugars," he said. "To get ethanol, you take those sugars and ferment them to make alcohol. Our difference is taking the sugars and feeding them to algae and having the algae produce the oils."
 
 The researchers are choosing to produce biodiesel instead of ethanol because biodiesel is a key fuel for heavy industry, Pratt said. "With biodiesel, you have a product that is going to have more industrial applications," he added. "Diesel runs industry: our trucks on the road, our trains, our freighters out on the ocean, our jets – jet fuel is not too far from diesel fuel – whereas ethanol is primarily just a gas additive for the auto industry. Both of them are very important and have a place."
 
 EKU scientists will analyze multiple non-food feedstocks for the program – including corn stover, woody biomass, switchgrass, and sorghum – to determine potential crop yields and the best feedstock for the conversion process. EKU will also identify which land in Kentucky might be cultivated for energy crop production without negatively impacting existing agricultural businesses. One of the project's goals is to provide Kentucky's tobacco farmers with cash crop alternatives, according to Doug Whitlock, president of the university. Pratt said tobacco stalks, a crop residue, might also be considered as a feedstock.
 
 EKU will also examine the logistics for transporting feedstocks to regional processing facilities and determine the economic impact of energy crop production in the region. The researchers will also examine uses for byproducts. 
 
 As a partner, General Atomics will provide input on the cost of converting various feedstocks to biodiesel and will design the processing system that will be used to derive biodiesel from cellulosic biomass. 
 
 According to the university, the project is being funded through a $4 million federal appropriation contained in the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009.

Enzyme, algae process converts biomass to biodiesel

Web exclusive posted Nov. 18, 2008 at 2:19 p.m. CST 
 
 Biodiesel manufacturer and distributor China Clean Energy Inc. resumed production at its facility in the Fujian Province of China on Nov. 10. The company suspended operations in April as a result of increasing costs for raw materials and stagnant diesel pricing. (See <a href="http://www.biodieselmagazine.com/article.jsp?article_id=2335&q=Chinese%20biodiesel&category_id=19">"China Clean Energy suspends biodiesel production."</a>)
 
 According to a company statement, it decided to recommence operations after a drop in yellow grease, cotton seed waste and rapeseed prices, which allowed China Clean Energy to "enjoy sufficient margins" to regain profitability. 
 
 China Clean Energy expects to produce up to 800 tons of biodiesel this quarter (approximately 219,000 gallons), compared to the plant's annual capacity of 10,000 tons (approximately 2.7 MMgy).
 
 "We are very excited that we have moved back into producing biodiesel," said Tai-Ming Ou, chief executive officer and chairman of China Clean Energy. "We are also hopeful that the continued growth in the demand for fuel in China will allow us to operate our biodiesel plant at close to full capacity and help us improve our revenue and profit growth in the quarters ahead."
 

 On Oct. 28, Biodiesel Magazine reported that China Clean Energy had halted construction of its 30 MMgy biodiesel plant in Jiangyin, China. (Read <a href=" http://www.biodieselmagazine.com/article.jsp?article_id=2907&q=China%20Clean%20Energy&category_id=19">"China Clean Energy delays plant."</a>)

China Clean Energy resumes biodiesel production

Web exclusive posted Nov. 19, 2008 at 8:56 a.m. CST 
 
 Ireland-based Biobode Ltd. is developing technology that converts crude glycerin into commodity plastics. According to Chief Executive Officer Scott O'Connor, glycerin accounts for 20 percent to 38 percent of the plastic's volume, measured by weight. The remainder of the material is made from low-cost commodity chemicals. 
 
 The company is currently working on a bench-scale, and has scaled up to producing 1 kilogram of glycerin-based plastic. "We have plans to scale up to 5 kilograms next," O'Connor said. He estimated it will take approximately 18 months to improve the plastic's physical properties, at which point the company plans to produce it on a pilot-scale. 
 
 Making a useful polymer out of glycerin is complicated, O'Connor said. Historically, there has been difficulty using glycerin to produce plastic because it creates a cross-linked polymer that has no significant commercial value. "This has been a persistent limitation with glycerol since the 1930s," O'Connor said. Until recently, only low molecular weight polymers containing small amounts of glycerin were created. "We have overcome this, and our cost-efficient proprietary process produces a high molecular weigh polymer made of 20 to 38 percent glycerol," he said. "The process is akin to standard polymer reaction; therefore it would be feasible to produce industrially."
 
 Biobode has been working to develop the technology for two-and-a-half years, and has successfully injection molded test components made of the glycerin-based material. "Currently, we need more development to define an exact commercial application for the plastic, but are working on foaming and fiber versions," O'Connor said. "We would envision this plastic being used in many of the commodity applications you see around us everyday." 
 
 Due to the glycerin's current low value, O'Connor said Biobode's plastic would cost 15 percent or 25 percent less than petroleum-based commodity plastics, depending on whether crude or technical grade glycerin is used. 

 
 Biobode is currently seeking partners to further develop and commercialize the technology. While O'Connor didn't want to share technical information on the technology due to its proprietary nature, he said Biobode would share specific information with potential partners under confidentiality agreements.

Biobode develops glycerin-to-plastic technology

Web exclusive posted Nov. 19, 2008 at 9:39 a.m. CST 
 
 Air New Zealand Ltd., Boeing Co., Rolls-Royce Motors and UOP LLC's much-anticipated biofueled jetliner test-flight date has finally been set. 
 
 Slated for Dec. 3, the 747-400 jetliner will leave Auckland, New Zealand, with one of its four Rolls-Royce RV211 engines partially powered by fuel derived from jatropha. The flight will reputedly designate Air New Zealand as the first airline to use a sustainable, commercially viable biofuel.
 
 UOP, an Ill.-based Honeywell company, supplied its hydroprocessing technology to convert jatropha into the jet fuel. The company developed the process under a $6.7 million contract from the U.S. Defense Advanced Research Projects Agency to produce renewable JP-8 jet fuel for military aircraft. 
 
 Rolls-Royce reported that tests performed by its technical team indicated the fuel met all critical specifications, including a freeze point at -50 degrees Fahrenheit and a flash point at 100 degrees Fahrenheit. The fuel used in the single engine will be mixed 50-50 with Jet A1 fuel. 
 
 "Laboratory testing showed the final blend had excellent properties meeting and, in many cases, exceeding the stringent requirements for fuels used in civil and defense aircraft," said Chris Lewis, Rolls-Royce company specialist for fuels.
 
 Air New Zealand Chief Executive Officer Rob Fyfe said introducing a new generation of sustainable fuels is the next logical step in the company's efforts to save fuel and reduce aircraft emissions. 
 

 "We recently demonstrated the fuel and environmental gains that can be achieved through advanced operational procedures using Boeing 777s," Fyfe said. "We are also modernizing our fleet as we await our Trent 1000-powered 787-9 Dreamliners, which will burn 20 percent less fuel than the planes they replace."
 
 The companies said additional details will be released closer to the flight date.

Air New Zealand, Boeing set test flight date

Web exclusive posted Nov. 19, 2008 at 9:45 a.m. CST 
 
 Great River Soy Processing LLC, a 5 MMgy biodiesel plant in Lilbourn, Mo., will be auctioned Nov. 20, beginning at 11 a.m. Great River Soy was on line for two weeks in October 2007 before it was shut down due to rising soybean oil prices. During those two weeks the refinery produced 94,000 gallons of biodiesel. 
 
 Interested parties are encouraged to attend one of the open houses being held on the afternoon of Nov. 19 or the morning of Nov. 20. Auction buyers will need $100,000 Certified Deposit with the balance of the purchase price due at the time of closing within 30 days, and assumable financing may be available to those who qualify. 
 
 According to Mass Companies Inc., the company auctioning Great River Soy, the plant is registered for the Missouri Incentive Pay Program. 
 
 The auction will be held on the plant site located at 813 County Road 641 in Lilbourn, Mo. For more information, visit <a href="http://www.maascompanies.com">www.maascompanies.com</a>.

Missouri biodiesel plant up for auction

Web exclusive posted Nov. 19, 2008 at 9:48 a.m. CST 

 
 Universal Bioenergy Inc., a public company trading on the pink sheets, announced Nov. 10 it's in negotiations for two process technologies that the company states could lower the cost of biodiesel production. 
 
 According to Universal Bioenergy, its subsidiary, Universal Bioenergy North America Inc., owns a biodiesel plant in Mississippi with a 10 MMgy capacity. The first technology will allow the use of lower-cost feedstocks with high free fatty acid content and will produce additional products like furnace oil and lubricant base oil. Universal Bioenergy said these products can receive 20 percent to 25 percent higher revenue than biodiesel – and the process doesn't produce glycerin. 
 
 The company's news release made no mention of the Ultra Vibration Fusion Process, but Universal Bioenergy states on its Web site that the company will begin producing biodiesel with UVFP in 2009. 
 
 The second process technology for which the company said it's negotiating for will allow the reaction temperature to be lowered by up to 35 degrees Fahrenheit using a "chemically modified" process to save energy and operating costs. 
 
 At press time, Universal Bioenergy President and Chief Executive Officer Richard Craven was not available to comment on the negotiations.

Universal Bioenergy negotiates for two technologies

Web exclusive posted Nov. 24, 2008 at 11:12 a.m. CST 
 
 A camera crew visited Lake Erie Biofuels LLC's 45 MMgy biodiesel plant in Erie, Pa., on Nov. 20 to film a Discovery Channel documentary that will air in February. "Shades of Green" will showcase the cutting edge technology and on-site laboratories that Lake Erie Biofuels utilizes at its year-old facility. While emphasizing the importance of biodiesel in today's global economy, "Shades of Green" will provide an inside look into the production of biodiesel and the impact it could have on the planet's future.
 
 Discovery Channel's documentary on biodiesel is part of a series covering alternative energy and sustainable living. Each feature segment of "Shades of Green" will focus on a specific renewable energy source, such as wind, fuel and solar power. 
 
 Lake Erie Biofuels uses continuous-flow technology designed by Desmet Ballestra in its multi-feedstock facility that was completed in November 2007. The company has been certified as a BQ-9000 producer and marketer of biodiesel.

Discovery Channel to feature Lake Erie Biofuels

Web exclusive posted Nov. 19, 2008 at 9:51 a.m. CST 
 
 Amiworld Inc. has signed an agreement with Odin Energy Corp. to supply biodiesel and petroleum diesel to Odin Energy's planned blending plant and subsequently market the blends. 
 
 Amiworld, a New York-based energy company, owns and operates the only government-certified biodiesel plant in Columbia, a South American country which mandated a B5 blend in 2008 increasing to B10 in 2009. Odin Energy is a wholly owned subsidiary of JASB of New York Corp., Amiworld's principal shareholder. 
 

 Odin Energy is in the process of negotiating a site adjacent to land owned by Amiworld where it plans to build a blending facility. Once completed in mid-2009, the Odin Energy plant will be capable of producing a number of biofuel blends. The new blending facility is designed to utilize product from Amiworld's biodiesel plant in Columbia, as well as diesel from the oil refinery owned by another affiliate, Odin Petroil SA. Amiworld intends to triple the production of the biodiesel plant from its current capacity of 3,000 tons per month (11 MMgy). There are also plans to increase production at the oil refinery.
 
 According to Amiworld, the agreement will ensure stable and increasing production levels at both refineries with Odin Energy financing the purchase of the refineries' raw materials thus securing the supply of input for the new blending facility. If the business opportunity is successful, Amiworld plans to acquire a majority interest in Odin Energy in 2009.
 
 "We greatly welcome the agreement we have reached with Odin Energy Corp. and its expansion efforts since it will facilitate our ability to mix biodiesel and petroleum diesel on site," said Mamoru Saito, chief executive officer of Amiworld. "This expansion will also enable Amiworld to meet the growing demand for specific mixtures and enable us to export our products to international markets. Amiworld anticipates additional sales of its products purchased by this affiliate and will also receive a sales fee equivalent to 2.5 percent of all sales, which Amiworld anticipates to be approximately $2.4 million per year."

Amiworld, Odin Energy partner in Columbia biodiesel blending plant

Web exclusive posted Nov. 19, 2008 at 9:55 a.m. CST 
 
 Fort Collins, Colo.-based Solix Biofuels has raised $10.5 million in a Series A round of outside financing and reached an agreement with its investors for an additional commitment of $5 million. The funding will support the construction of a pilot-scale plant in Durango, Colo., and will enable Solix to produce oil feedstocks derived from algae that will be supplied to biodiesel producers and the chemical industry.
 
 The Series A funding was led by I2BF Venture Capital, a London-based venture capital firm focused on biofuels development, and Bohemian Investments, a private investment company based in Forth Collins, Colo. Southern Ute Alternative Energy LLC, Valero Energy Corp. and Infield Capital also participated in the round. 
 
 The $5 million follow-on commitment from the investor group will provide construction financing for the pilot plant, which will be jointly developed by Solix Biofuels and Southern Ute Alternative Energy. The plant, which will be located on a 10-acre site on the Southern Ute Indian Reservation in southwest Colorado, will be built in two phases with the first phase scheduled to be completed in 12 to 18 months. The first phase calls for four acres of photo-bioreactors for growing algae and one acre for a lab facility. Upon completion of the first phase, Solix will build an additional five-acre expansion that will allow the pilot facility to produce at commercial-scale.
 
 "We secured this investment with energy industry innovators who see the potential for algae to transform our energy economy," said Doug Henston, chief executive officer of Solix. "Our partners understand Solix Biofuels' technologies and the potential for large-scale commercialization."
 
 According to Henston, Solix is not a biofuel producer, but rather a biofuel feedstock supplier that supplies feedstocks to would-be biofuel producers. 

 
 "There are plenty of buyers for the oil and we have buyers already lined up," Henston said.
 
 Meanwhile, two new members joined Solix's board of directors: Jim Gillingham of Valero Energy and Rebecca Kauffman, president and chief operating officer of Southern Ute Alternative Energy. 
 
 Solix Biofuels is a spin-off and technology partner of Colorado State University in Fort Collins. Solix seed funds were used to support research by CSU faculty and graduate students in identifying algae species with the best potential to grow at large-scale to produce high yields of fuel and chemical feedstocks and to develop technology that can bring the process to commercial-scale.
 
 To learn more about Solix Biofuels, visit <a href="http://www.solixbiofuels.com/">www.solixbiofuels.com/</a>.

Solix Biofuels receives funding to build pilot-scale plant in Colorado

Web exclusive posted Nov. 19, 2008 at 9:58 a.m. CST 
 
 The process of forming an international agency to promote worldwide transition to use renewable energy has not been easy. And why would it be? But it appears as though the final stage of founding the International Renewable Agency may be approaching as soon as January 2009.
 
 Representatives from 51 nations attended a conference Oct. 23-24 in Madrid, Spain, and settled on a statute that will serve as the backbone of IRENA. The founding conference will be held Jan. 26, 2009, in Bonn, Germany, where the statute will be signed and IRENA will be officially established.
 

 First suggested by German leaders, the purpose of IRENA will be to provide practical advice and support for both industrialized and developing countries to help improve their regulatory frameworks and build capacity. Because many countries have embraced the idea of renewable energy, but so many have not, IRENA is seen by its future members as a necessary agency with many obstacles to overcome before becoming a major force in spreading the notion of sustainable use of renewable energy at a global level. 
 
 Germany has been designated as depositary for the agency and will handle the necessary distribution of documents to participants, as well as invitations to the founding conference and respective documents to all United Nations member states.
 
 For more information, visit <a href="http://www.irena.org">www.irena.org</a>.

International Renewable Energy Agency closer to reality

Web exclusive posted Nov. 19, 2008 at 10:38 a.m. CST 
 
 Inland Empire Oilseeds LLC, an 8 MMgy biodiesel producer in Odessa, Wash., has begun producing biodiesel from canola. The company will ramp up production with hopes of reaching full capacity within the next few months, according to General Manager Steve Starr.
 
 The company was formed three years ago, Starr said, adding that construction on the biodiesel production facility began in the fall of 2007. Inland Empire Oilseeds processes strictly canola oil feedstock and has begun construction for an oilseed crushing facility, which is expected to be operational by June 2009. Starr said the crushing facility will supply up to 50 percent of the canola oil needed for biodiesel production at the plant.
 
 "Farmers already produce canola in the area and there are several growers who have been successful with it," Starr said. "Now, our role is to provide a local market and perhaps a little better pricing than what [farmers] have been able to get. This is primarily a wheat production area, but we're going to be communicating to farmers the advantages of putting canola into their rotation and we will work with them to refine their agronomic techniques so that they can get the best yields."
 
 Starr said 80 interested farmers attended a meeting held in early November. "There are a number of elevator cooperatives that we'll be working through to generate canola within a couple-hundred-mile radius," Starr said.

 
 Inland Empire Oilseeds is currently owned by Odessa Union Warehouse Cooperative, Reardan Grain Growers Inc., Reardan Seed Co. Inc. and Michael Dunlap. Green Star Products Inc., the plant's transesterification technology provider, became a partner with Inland Empire Oilseeds in August 2007. The venture is funded in part by a $1 million Energy Freedom Loan from the state of Washington through the Odessa Public Development Authority.

Inland Empire Oilseeds begins biodiesel production

Web exclusive posted Nov. 19, 2008 at 11:10 a.m. CST 
 
 German biofuels producer Vereinigte BioEnergie AG (Verbio) reported higher profits during the first nine months of 2008 due to increased biodiesel exports to Eastern Europe. The profits were made despite a significant decrease in sales within Germany as a result of increased German taxes on biofuels and financial losses related to ethanol production, the company said. The company reports profits in biodiesel were €16.4 million ($20.8 million), while losses in ethanol were €1.5 million ($1.9 million). 
 
 Verbio has been running at 94 percent production capacity and increased its biodiesel output to 300,000 metric tons (82.1 million gallons) during the period, up from 260,000 metric tons (71.2 million gallons) the previous year. The company said it exported 40 percent of its biodiesel production in an environment where domestic sales of biodiesel were down 43 percent during the first half of the year.
 
 Verbio's annual biodiesel production capacity is 450,000 tons (123.2 million gallons). 
 
 Both of the company's ethanol plants were off-line during part of the year due to high prices for grain, the company said.

December 2008

Business Briefs

Algae grower acquires funding

Standard Biodiesel seeks distributors

NREL updates biodiesel guide

Norwegian paper company considers biodiesel production

PetroTech acquires PetroAlgae

Bioversel sues GreenHunter

Biodiesel plant to be built in New York City

Nevada company acquires Indonesian projects

Imperium receives funds to repay debt

Biodiesel president leads ATA

Former Shell exec joins Jatoil board

Methes appoints advisory board

Waring joins Sustainable Oils

Columns

Year of the Hurricane

Dare I Say, 'Feeling Fine in '09'?

New Resource Provides Methanol Handling Guidance

Featured

Sizing Up the Soybean Market

Transition Period

Politics, Prices and Public Support

Glycerin's Role in 2009

Bees Essential for Biodiesel

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

Business Briefs

Algae grower acquires funding

Standard Biodiesel seeks distributors

NREL updates biodiesel guide

Norwegian paper company considers biodiesel production

PetroTech acquires PetroAlgae

Bioversel sues GreenHunter

Biodiesel plant to be built in New York City

Nevada company acquires Indonesian projects

Imperium receives funds to repay debt

Biodiesel president leads ATA

Former Shell exec joins Jatoil board

Methes appoints advisory board

Waring joins Sustainable Oils

Columns

Year of the Hurricane

Dare I Say, 'Feeling Fine in '09'?

New Resource Provides Methanol Handling Guidance

Featured

Sizing Up the Soybean Market

Transition Period

Politics, Prices and Public Support

Glycerin's Role in 2009

Bees Essential for Biodiesel

December 2008