Posted March 10, 2010

 
 After Argonne National Laboratory told Biodiesel Magazine in February that it was developing pipeline-ready biofuels-and that the institution did not consider biodiesel to be one of them-the National Biodiesel Board took offense. "Kinder Morgan is currently moving B5 on the Plantation Pipeline, and B5 has been piped in Europe for years," said Steve Howell, NBB technical director. "So saying that biodiesel isn't a pipeline fuel is just wrong."
 
 Nevertheless, a major national laboratory isn't looking to biodiesel as it ramps up an effort to produce a "drop-in fuel" made from biobased materials. "It's a free country and they feel they can use traditional petroleum processing technology to produce a hydrocarbon fuel that's different than a methyl ester, but that doesn't give them the right to make false statements about biodiesel," Howell said. 
 
 Howell told Biodiesel Magazine that he is part of a task force looking for the approval of 100 parts per million in jet fuel, so that biodiesel can be piped in the fuel infrastructure that transports a variety of fuels. The current level is 5 parts per million in the United States. "The RFS will force the transport of biodiesel in pipelines because it is the most efficient way for oil companies to move it," Howell said.

NBB says biodiesel is a pipeline fuel

Have you ever looked back on a period of time in your life-a day, week or month-and thought that it flew by and yet seemed like an eternity? It's not logical to perceive both scenarios at the same time, and yet I had that experience recently. 
 
 The eight days between Feb. 3, when the announcement was made that U.S. EPA had issued its final rule on RFS2 implementation, and Feb. 10, the close of this year's National Biodiesel Conference & Expo, seemed like an eternity. Usually when people are busy, time seems to fly and in one sense, it did. In another sense, however, with so much information on the final rule, the tax credit and other news made those eight days seem much longer than a week. 
 
 Having been to the past five National Biodiesel Conferences, it was clear to me this year in Grapevine, Texas, that the industry was worse off than ever before. The economy and lapse of the federal blender tax credit have taken their toll on producers. Attendance was down and there were far fewer exhibit booths in the expo hall, as evidenced by wide open spaces on the tradeshow floor. There were no celebrities this year either-no Willie Nelson, or Merle Haggard, or Melissa Etheridge. Not even Darryl Hannah.
 
 Aside from the tax credit situation and the poor economy, producers and others in the biodiesel business desperately sought information on RFS2. Associate editor Nicholas Zeman and I cover the conference in a double-length review article, called, "Seeking Answers," featured on page 22. Since we produced nearly 4,000 words in our review of the conference, I'll spare the reiteration of what you can find just pages from this column. 
 
 There is one particular aspect of RFS2 whose underlying logic I fail to understand. RFS2 was passed as part of the Energy Independence and Security Act of 2007, signed by President George W. Bush. The act was a move to decrease our dependence on foreign oil and make our energy future more secure. Replacing liquid petroleum fuels whose crude oil feedstock by and large comes from lands afar with domestic renewable fuels seems like a no brainer. It's a great concept. 
 
 However, if EISA is about energy independence and security, why is EPA allowing imported biodiesel and biodiesel made from imported feedstock to qualify for the RFS2 program? It doesn't make sense to me. I asked this question of Dan O'Connor with (S&T)2 Consultants, who presented during a breakout session on RFS2. His response was that it provides diversity to our energy supply. That sounds okay, but the act is not called the energy diversity act. 
 
 I understand that trade is global and there is no reason to be a modern-day protectionist. I also see that it is a good thing to do whatever we can to reduce oil imports from the Middle East, Venezuela and other hostile regions whose citizens and governments want us dead. But the scenario of shipping biodiesel to the U.S. from Malaysia or India to satisfy a federal mandate while domestic producers are out of business because Congress cannot bring itself to do the right thing and reissue the biodiesel tax credit borders on absurdity.

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I'm No Protectionist, but...

With U.S. biodiesel production virtually idled as a result of the tax credit lapse and poor market conditions, glycerin demand is tightening. In January, ICIS reported that domestic crude glycerin production is approaching zero, and with Archer Daniels Midland coming online soon with a 125,000 ton per year propylene glycol plant, ICIS reports that the low supplies and increased demand could cause crude glycerin prices to rise more than 10 cents a pound in coming months-creating incentive for overseas suppliers to fill the void.

Dwindling glycerin supplies tighten demand, raise prices

Even though President Barack Obama pleased some in the renewable energy sector when he mentioned advanced biofuels in his Jan. 27 State of the Union Address, the struggling biodiesel industry wants action more than words. "If Congress and the Administration truly want to protect and promote green job creation, they should act immediately to extend the biodiesel tax incentive," said Manning Feraci, National Biodiesel Board vice president of federal affairs.

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Action needed more than words

With funding from the soybean checkoff, the Soy Transportation Coalition recently published "Railroad Movement of Soybeans and Soy Products," a comprehensive report that sheds light on the role of the railroads in farm product distribution. The study found that 43 percent of rail movements of soybeans, or 9.2 million tons, are transported at rates the U.S. Surface Transportation Board would classify as potentially excessive, resulting in a potential overcharge of $120 million in 2007. View the study at www.soytransportation.org.

Report: soybeans subject  to excessive railway rates

The USDA and the U.S. Navy announced a memorandum of understanding (MOU) to encourage the development of advanced biofuels and other renewable energy systems. Secretary of the Navy, Ray Mabus, emphasized how partnering with USDA supports his vision for energy reform. Mabus' overarching goal is to increase war-fighting capability. 
 

 "In order to secure the strategic energy future of the United States, create a more nimble and effective fighting force, and protect our planet from destabilizing climate changes, I have committed the Navy and Marine Corps to meet aggressive energy targets that go far beyond previous measures." 
 
 From a strategic perspective, the objective is to reduce reliance on fossil fuels from volatile areas of the world. Tactically, on the battlefield, the costs of transporting fuel is exponentially increased; in extreme cases a gallon of gasoline could cost up to $400. Some of the MOU's goals include producing at least half of shore-based installations' energy requirements from alternative sources by 2020. Fifty percent of all shore installations will be net-zero energy consumers. Also by 2020, half of the Navy's total energy consumption for ships, aircraft, tanks, vehicles and shore installations will come from alternative sources.

Navy, USDA partner for advanced biofuels

Sea Shepherd, the New Zealand-based marine conservation, lost a biodiesel-powered boat from its fleet after it was struck by a Japanese whaling ship. The Ady Gil was basically destroyed in the accident, which Sea Shepherd says was an act of violence. One of Sea Shepherd's missions is the protection of whales in the Southern Ocean Whale Sanctuary. "This is a substantial loss for our organization," said Captain Paul Watson. "The Ady Gil represents a loss of almost $2 million. However, the loss of a single whale is more important to us and we will not use the Ady Gil in vain. This blow simply strengthens our resolve. It does not weaken our spirits."

Japanese whalers destroy biodiesel-powered boat

Fighting short-term exposure to nitrogen dioxide (NO2) is a new priority for the U.S. EPA. The agency announced Jan. 25 that a "new one-hour standard will protect millions of Americans from peak short term exposures, which primarily occur near major roads," and that the threat was linked to increased respiratory infections and impaired lung functions, especially for those who suffer from asthma. The American Petroleum Institute responded immediately, issuing a statement the same day, which accused EPA of using "faulty science" to establish the new standard. 
 
 The new one-hour standard for NO2 is set at 100 parts per billion (ppb). The ruling puts pressure on vehicle manufacturers, power plants and other industrial emitters, such as petroleum companies, to change their practices. Now, monitoring will be required by EPA to measure NO2 levels near roadways in cities with at least 500,000 residents. "Working with the states, EPA will site at least 40 monitors in locations to help protect communities that are susceptible and vulnerable to elevated levels of NO2," the agency said.

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EPA targets short-term NO2 exposure

Drivers are starting to understand that diesel technology rivals hybrid platforms for fuel efficiency and offers greater performance and torque-and the numbers are starting to show. Volkswagen of America Inc. announced in December that its line of clean diesel TDI models sold 41,278 models-approximately 20 percent of the company's overall sales volume for the year.
 
 December sales totaled 4,378 units. "There's never going to be a Prius motor sport cup," said Sean Maynard, spokesman for Volkswagen of America. "The TDI is fun to drive-its torquey, and people are becoming more aware that they don't have to sacrifice performance for the sake of fuel economy." Several government tax credits helped sales, Volkswagen of America told Biodiesel Magazine. 
 
 The TDI clean diesel line qualifies for the environmental tax credit, and combined with the sales tax exemption for new vehicles, purchasers are able to knock off more than $1,500 from the price tag. "December's performance was encouraging, as was the six consecutive months of sales growth that we have experienced," said Mark Barnes, CEO of Volkswagen of America. "During those six months, Volkswagen sales increased 8.2 percent over the same period of last year. 2009 proved to be another extremely challenging year for the automotive industry. We are encouraged by the fact that we were able to continue to grow our market share throughout 2009 despite the extremely challenging market conditions."

The Volkswagen Jetta TDI Cup 'Street' Edition PHOTO: VOLKSWAGEN

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Volkswagen reports strong diesel demand

The Minnesota Department of Commerce issued a waiver on the state's B5 mandate for No. 1 diesel fuel only, effective Jan. 15 to March 31, citing very rare instances of storage tank filter clogging. 
 
 No. 1 diesel has a much lower cloud point than No. 2, which is why winter blends in Minnesota rely on No. 1 as a blend agent or primary fuel during the coldest months of the year, but no one has a definitive explanation yet as to why No. 1 B5 is displaying issues while No. 2 B5 is not. 
 
 Hoon Ge, a fuel consultant with MEG Corp, told Biodiesel Magazine that No. 1 B5 should perform down to minus 30 degrees Fahrenheit, but he saw issues with samples of No. 1 B5 at minus 10 degrees. Even red dye No. 2 B5 with cold flow additives was performing at that temperature. "If you would have told me a month ago that No. 1 and 5 percent biodiesel would be having issues at minus 10 degrees, I would not have believed it," Ge said. 
 
 "The incidents of reports were very spotty," said Ralph Groschen, senior marketing analyst for the Minnesota Department of Agriculture. "There were so few complaints coming from far-flung areas-in Marshall, then Mankato, Grand Forks (N.D.), and then down in Alexandria-but most terminals had no problems. Those that did mostly involved above-ground storage tanks." 
 
 Out of about 12 filters the state collected and tested, none point to biodiesel as the problem. "We don't have a smoking gun in this case because so far all the fuel met specification," Groschen told Biodiesel Magazine. He noted, however, that more accountability needs to be built into the state's sampling protocol. "We came up with a list of elements we want to see included in company fuel samples, including where the last two deliveries came from and when they were delivered," he said. 

 
 While answers are being sought, hypotheses are circulating. Concerns have arisen over the past few years regarding desulfurization processes used by refineries to produce ultra-low sulfur diesel, which reduces aromatics in the fuel and alters the paraffinic structures, affecting cold flow. The aromatic and paraffinic structures of No. 2 ULSD may not be affected to the point they are in No. 1 ULSD, which could explain why No. 1 is having issues with 5 percent biodiesel but No. 2 is not. 
 
 Last year in Bloomington, Minn., school bus filters were clogging and immediately biodiesel was blamed, even though later the investigation concluded that petroleum components, not biodiesel, caused the trouble. Another possibility is that, since the IRS extended the deadline for passing the cold soak filtration test (CSFT) until Oct. 1, 2009, perhaps B100 that did not pass the CSFT was in the distribution chain and precipitated these rare events of storage tank clogging in Minnesota. Groschen said, "Hopefully, this will not be a factor next year." 
 
 Groschen added that the B5 waiver for No. 1 fuel is not a requirement that prohibits blending biodiesel into No. 1, but rather it's a waiver that allows the sale of it without biodiesel.

Minnesota was the first state in the nation to pass a B2 biodiesel mandate several years ago. Last year the state moved to B5, and by 2015, the standard will jump to B20. 

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Minnesota temporarily lifts B5 mandate for No. 1 fuel

During his State of the Union address in January, Pres. Barack Obama pleased some alternative fuels producers by giving special mention to "advanced biofuels." Biofuels have received presidential utterances in past addresses, but results haven't always been forthcoming. "First of all, there were no specifics, so there was really nothing there," said Jatrodiesel president Raj Mosali. "The president mentioned biodiesel specifically when he was campaigning, and now he's talking about 'biofuels,' which could mean anything-and that's concerning." 
 
 In addition, grants, loan guarantees and even American Recovery and Reinvestment Act funds are not going to biodiesel producers for the purposes of plant optimization and upgrades. "That's 100 percent true," Mosali says. "All of this assistance is being directed toward things like fuel cells, cellulosic ethanol and electric motors-all technologies that are still far off."
 
 The Obama administration coming out with billions of dollars from the American Recovery and Reinvestment Act to increase "clean energy manufacturing" could seem almost like a taunt to biodiesel producers.Obama announced "awardees" of the $2.3 billion clean energy manufacturing tax credits as existing biodiesel producers languish over the lapse of their specific federal blender tax credit. "Projects are assessed based on the following criteria: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions," the White House stated on Jan. 8.
 
 While the word "biofuels" was good to hear spoken by the president, there's a word that describes the 2009 biodiesel year-idle. Huge plants sat quiet for months as vegetable oils were high and diesel prices were not. Imperium Renewables Inc., which suffered an explosion at its Grays Harbor plant in Washington State, said it was in no big hurry to make repairs while the tax credit is nonexistent. 
 
 "I don't think this Obama administration is any different than any other-Republican or Democrat-in that often the right hand doesn't know what the left is doing," said Joe Gershen of Los Angeles' Tellurian Biodiesel. "So it does hurt, but I will say that I don't think they're doing it on purpose."
 
 The renewable energy sector can have legitimate economic impact for farm areas, usually far away from population centers where builders and other entrepreneurs often look for labor resources. Wind, ethanol and biodiesel have fewer formal labor requirements so their expansion can help rural development, said Ernie Goss, professor of economics at Creighton University in Omaha, Neb. "The incentives are fairly generous," Goss said. "The cost per job in the renewable energy sector is high, but it's easier to support in underdeveloped areas." 
 

 The ARRA has already made history and headlines with various programs like "Cash for Clunkers," where new car buyers were able to trade in their used vehicles for a generous rebate. But there have been several bureaucratic bottlenecks in the way the funds are distributed, there are concerns about massive frauds and the ill, uninformed spending of funds, Goss told Biodiesel Magazine. 
 
 The National Biodiesel Board said it was pleased that the president noted the important role advanced biofuels play in the nation's energy policy, but action is needed more than words to help the faltering biodiesel industry. "If Congress and the Administration truly want to protect and promote green job creation, they should act immediately to extend the biodiesel tax incentive," said Manning Ferraci of NBB's Washington office. On February 11, the Hiring Employees to Restore Employment Act was unveiled, which included the biodiesel tax credit. Less than a day later, Senate majority leader Harry Reid, D-Nev., decided on a scaled-down version of the bill without the credit. 
 
 Biodiesel Magazine sources indicate that many plants are shut down, eagerly awaiting reissuance of the incentive. Some have tried to pass the now-additional $1-per-gallon cost for biodiesel along to customers, with little result. Others don't have the cash to float waiting for payback from the government when the credit does get reissued.

U.S. President Barack Obama has been managing billions of dollars trying to revitalize the economy. The biodiesel tax credit is somewhere in the mix. PHOTO: GETTY IMAGES

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The money chase: Obama and the biodiesel tax credit

The final rule for the revised renewable fuel standard (RFS2) was issued by U.S. EPA on Feb. 3, and soy biodiesel comes in at a 57 percent reduction in greenhouse gases (GHG) compared to petroleum diesel, making it eligible to meet the biomass-based diesel carve-out. To qualify as a biomass-based diesel or an advanced biofuel under the Energy Independence and Security Act of 2007, which RFS2 was part of, soy biodiesel was required to meet a 50 percent reduction in GHG emissions compared to petroleum. 
 
 The EPA also confirmed that the combined 2009/2010 volume requirement for biomass-based diesel is 1.15 billion gallons, the sum of 2009 and 2010 blend requirements as laid out in EISA. Since blended gallons and renewable identification number (RIN) credits from 2009 will count toward the 2010 volume, plus some carryover from 2008-in addition to reinstating some retired RINs whose wet gallons went to particular off-road markets, plus obligated parties being able to carry a deficit over-some analysts at the 2010 National Biodiesel Conference & Expo in Grapevine, Texas, said the actual volume blended in 2010 will be far less than anticipated. 
 
 Indirect land-use change is still part of the final rule, but the models used are "based on the soundest available science," and are "more sophisticated" than previously, and "better data" was available to the agency, according to Lisa Jackson, EPA administrator, during a Feb. 3 press conference. She also said EPA considered public comment and worked closely with USDA to implement a more realistic characterization of biofuels' GHG reductions, and learned its original accounts for crop productivity and yield, for instance, were incorrect. Jackson also said in its proposed rule, EPA only considered 40 nations but when 160 countries were pulled into its indirect land-use change modeling, the "impacts were different and less than we thought-we got a very different result," she said. 
 
 Ag secretary Tom Vilsack said one reason the numbers were different in the final RFS2 rule versus the proposed rule is that crop productivity is continually evolving and rapidly changing, and technology impacts and affects what happens on land. Vilsack also said there are resources in the farm bill for first-generation biofuel producers to retrofit their plants in order to update the process technology. 
 
 During the National Biodiesel Conference, which was held only days after the final RFS2 rule came out, EPA officials discussed several of the confounding issues resident in the rule, which included feedstock tracking and the enormous paper trail of facility registration, engineering reviews, RIN tracking and reporting, and even temperature standardization (the producer must use 60 degrees Fahrenheit for calculating volume and subsequent RINs). 
 
 Also, the final rule does not require soy biodiesel producers to track the origin of their feedstock and provide regular reports to the agency, as was expected under the proposed rule, but producers using animal fats or used cooking oils will be required to do so beginning July 1 if they want to generate RINs. Although producers using waste feedstock will have to keep feedstock supplier records and produce quarterly reports for EPA, Larry Schafer from the Diamond Group said the requirements are "not onerous." Paul Argyropoulos from EPA's Office of Transportation and Air Quality said if a producer is using animal fats, for instance, "they would have to say, 'Yeah, this is the feedstock I use, and this is where I got it,'" but they would not have to track it beyond their supplier. Producers using domestic crop oils will not have to track feedstock and provide reports to EPA as long as U.S. cropland acres do not exceed the 2007 baseline of 402 million acres.

RFS2 brings hope, confusion to industry

In the biodiesel industry, it's excessive capacity-not excessive speculation in futures markets-that puts upward pressure on input prices. "The market is constantly rationing out feedstock demand," said Will Babler, principal for First Capitol Ag of Galena, Ill. His firm, a U.S. top 50 hedge broker and futures commission merchant, has been closely following this issue and the deliberations of the Commodities Futures Trading Commission publicized recently. "There are too many biodiesel plants and there's not enough oil, so only the lowest-cost producers can operate," he said. 

 
 Nevertheless, some companies have lost billions of dollars betting the wrong way on agricultural and energy contracts. In the biofuels industries alone, there's VeraSun Energy Corp.'s corn bidding tragedy, which put the company in the position for Valero Energy Corp. to swoop in. And certainly, biodiesel plants have been shuttered or sit idle because of "volatility in the marketplace." 
 
 The Obama administration has reinvigorated offices at the CFTC, which wants tighter restraints imposed on the big banks that often buy oil futures as a hedge against the weakening dollar. On Jan. 14, the CFTC held a public meeting in Washington where it proposed imposing position limits on the energy futures market. 
 
 CFTC's relatively new chairman, Gary Gensler, has been particularly outspoken against excessive speculation. Gensler was nominated by Obama and sworn in last May. Since then, he has also asked Congress for authority to regulate over-the-counter markets, where traders can sidestep restrictions. 
 
 If approved by the CFTC, the so-called position limits would apply to physically settled and cash-settled futures in light, sweet crude oil, Henry Hub natural gas, New York Harbor gasoline and No. 2 heating oil, a product that is often used as a price discovery mechanism in biodiesel trading.
 
 Campaigns against excessive speculation are actually directed, however, at 10 of the biggest banks in the country, including JPMorgan Chase & Co., which retained its top spot among U.S. commercial banks, with $79 trillion in derivatives as of Sept. 30, as reported by the Treasury Department. Goldman Sachs, Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were the energy market's next four biggest users. The five firms accounted for 97 percent of the notional amount of derivatives held as of September.
 
 Realistically, there is only a handful of firms with large enough bankrolls and the potential to encroach on position limits. "Position limits are really meant to keep one player from wielding too much power in the marketplace," Babler said.
 
 Biofuels production has contributed significantly to increasing links between agriculture and energy markets in recent years. Agricultural markets actually follow energy. When oil went up to $140 per barrel in the summer of 2008, corn, wheat and soybeans went right along with it to record historic figures between $8 per bushel and $15 per bushel. This was the culmination of the food-versus-fuel debate, which dogged the biofuels industry during that time. 
 

 "While we currently set and enforce position limits on certain agriculture products, we do not for energy markets," Gensler said at the close of the public meeting. "Though there are some differences between energy markets and agricultural markets, those distinctions do not suggest to me that the federal government should set position limits on one and not the other."
 
 Speculators were blamed for the record-busting prices and various shots have been taken at the group of traders who some believe drive up prices-standing long with an interest in seeing price spikes-while others say they perform an essential risk-absorption function in commodities trading. "You have to be very careful about who you demonize in the marketplace," Babler said. "Risk transfer is the reason that the market exists." 
 
 Another Biodiesel Magazine source said he was "very uncomfortable" with the government deciding who was a speculator and who wasn't. Speculators in the futures market will no longer be lumped in with commodity-linked businesses, such as airlines and oil companies, which are allowed to exceed limits on the number of energy futures one trader can hold, according to the proposal. 
 
 "Nearly all economists that have carefully studied these markets have concluded that supply and demand fundamentals and other macroeconomic factors were the cause of these price movements," the Chicago Mercantile Exchange Group said in a 2009 report. In a relative change from its previous position-that speculators are an essential bearer of risk in the marketplace that others parties wish to avoid-CME came out with the following statement shortly after the CFTC hearing:
 "CME Group supports equitable application of aggregate position limits across CFTC-regulated designated contract markets and exempt commercial markets, CFTC-recognized foreign boards of trade, and OTC energy market participants. We will continue to analyze the new proposal in greater detail and participate in the CFTC's public comment process to ensure that the recommendations do not push market users to unregulated markets beyond the reach of the CFTC."
 
 If enacted, new CFTC limits would apply to individual exchanges, spot-month contracts, all-months contracts, and would include a cumulative cap that would apply across the U.S. exchanges. "The basic formula for the level of the all-months-combined limit is the same-10 percent of the first 25,000 contracts of open interest plus 2.5 percent of open interest over 25,000 contracts," Gensler said. "The approach to setting the level of the spot-month limit in the physical delivery contracts is the same-25 percent of the estimated deliverable supply."

The Chicago Board of Trade building is one of the world's major destinations for futures trading. PHOTO: NICHOLAS ZEMAN, BBI INTERNATIONAL

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CFTC to impose energy position limits

We have known for two years that the renewable fuel standard (RFS) would require biomass-based diesel, but there has been a great deal of uncertainty about how the program would treat the multitude of biodiesel feedstocks. The National Biodiesel Board has labored tirelessly for the past 24 months to ensure that sound science was the basis of discussion, and show all sustainable feedstocks are indeed viable alternatives to imported petroleum. 
 
 When it was enacted in December of 2007, RFS ignited hope to provide the needed backstop for the fledgling biodiesel industry. Under the RFS the initial volume requirement for 2009 was a mere 500 million gallons-nearly 200 million gallons less than the amount of U.S. biodiesel produced in 2008. This "under-sizing" of the RFS was quite intentional. The tax credit was intended to be the economic driver, while the RFS was intended to be a safety harness for the biodiesel industry when energy markets crash, as they did in 2008.
 
 Ushering in this new RFS was a rollercoaster of optimism and disbelief. The statute's requirement that biomass-based diesel reduce greenhouse gas emissions by 50 percent compared to petroleum seemed an easy hurdle. Longstanding life-cycle analysis showed biodiesel reduces carbon emissions by at least 78 percent. The provisions in the statute ensuring no direct land use change occurs for the production of biodiesel threatened to present a mountainous paperwork burden, but there remains no real concern among U.S. biodiesel producers that land use change would be necessary at all to meet the modest volume goals of the RFS. 
 

 Disbelief may not be strong enough to describe the reaction among American farmers and biodiesel producers when it became clear that emissions penalties were set to be levied against U.S. producers for the actions of cattle ranchers and illegal loggers in South America. The emissions from land-clearing activities in distant countries are linked to biodiesel only through spurious economic modeling. 
 
 Being held accountable for indirect effects, over which the industry has no control, that are caused directly by our competitors was a difficult pill to swallow. Adversity, however, is no stranger to the biodiesel industry. This challenge was met, like many others, with a do-or-die-trying attitude and a quest for better scientific data. NBB was prepared to seek this data because of funding support from NBB members, the United Soybean Board and the Minnesota Soybean Growers Association. NBB enlisted help from experts in the fields of feedstock production, economic modeling and life-cycle analysis.
 
 NBB's strategy to achieve equitable, practical, information-based implementation of the RFS was multi-faceted. One of these important facets was working to ensure all sustainable feedstocks would be eligible for the program. This meant rehabilitating flawed life-cycle modeling to show that, even with the inclusion of indirect emissions for biodiesel only and the dubious assumption that petroleum has no indirect impacts, biodiesel provides a substantial GHG benefit over petroleum. 
 
 NBB's team of experts provided in-depth, detailed analysis of the direct and indirect life-cycle modeling. Their research identified several errors or oversights in EPA's initial rules. Examples of these errors include failure to adopt the most recent guidelines from Intergovernmental Panel on Climate Change on N2O emissions for soybeans and failure to give emissions credit for glycerin, which is a valuable coproduct of biodiesel production. 
 
 NBB members also participated in the quest for better data, which included the largest survey ever of U.S. biodiesel producers. This survey measured actual energy use and proved that modern producers use significantly less energy than previous models had assumed. The survey also showed that biodiesel producers are implementing processes to reduce water consumption and to sell more glycerin to high-grade markets.
 
 Providing sound scientific data and unbiased information proved very fruitful in terms of improvements to the proposed rule. The EPA and its hard-working staff certainly gave the impression that they were trying to make the rule as good as it could be. 
 
 The volume of scientific evidence that proves biodiesel's benefits over petroleum continues to mount. That doesn't mean our challenge is over. NBB will continue to be engaged in the development of better data on life-cycle emissions and indirect land use so that consumers and policy makers can rest assured that their support for clean, renewable, domestic fuel does not have unintended consequences anywhere in the world. 
 
 Don Scott, technical and regulatory engineer, NBB

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A Data with Destiny

The National Biodiesel Board has been ranked as having one of the Top 20 Sustainable Business Conferences by Sustainable Industries magazine. The publication ranked the National Biodiesel Conference & Expo ninth in the nation.

 
 The NBB first began greening the National Biodiesel Conference & Expo in 2006, the third year for the conference. Ever since, we have been a leader in sustainable practices, believing that being environmentally friendly shouldn't stop at the tailpipe. 
 Efforts to ensure the national event generates as little waste as possible include:
 
 &bull; Waste Reclamation-NBB provides stations to give attendees and exhibitors a convenient way to recycle glass, bottles, plastic, aluminum, paper and cardboard.
 &bull; Digital Marketing-wherever possible NBB uses technology to reach our target market rather than print and direct mail.
 
 &bull; Responsible Printing-whenever possible we use FSC-certified or recycled paper and soy inks.
 
 &bull; Energy Offsetting-thanks to Renewable Choice Energy, NBB offsets the energy used at the convention center by purchasing wind energy certificates that benefit low-income communities.
 
 &bull; Sponsor & Vendor Outreach-we encourage our sponsors and vendors to join us in our mission, outlining many ways that each company can reduce its impact from the Expo Hall.
 
 NBB's greenness doesn't stop with the annual meeting. The organization also built a green building in Jefferson City, Mo., with features such as solar-powered parking lot lights, nontoxic paint, and carpet made from recycled materials.

NBB makes the industry's commitment to sustainability a conference priority.

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Green with envy: NBB show recognized as a Top 10 green conference

NBB members play a major role in defining the long-term objectives and programs for their trade association. Members recently completed an extensive process to prepare the 2011 NBB Program Plan that will guide the biodiesel industry's priorities for the coming year. In order to enhance the program planning process for 2011, NBB gathered input in several different ways. 

 
 1. NBB staff and contractors are constantly interacting with biodiesel companies, regulators, users, engine and vehicle companies and distributors to better understand the needs and priorities of the industry. 
 
 2. Input was gathered on the technical program through participation in the Biodiesel Technical Workshop, which NBB hosted in October 2009 in San Antonio. 
 
 3. Input was gathered at the November 2009 meeting of the National Biodiesel Board in Washington. During this meeting, the standing committees (regulatory, trade, technical and marketing) convened and discussed issues the industry would be facing in 2011. 
 
 4.Input was gathered through an electronic survey sent to all NBB members in December 2009. This survey gathered information and opinions about issues the industry faces and asked respondents to rank the priority of proposed initiatives to address these issues. 
 
 5.All NBB members were invited to participate in a webinar during which the survey results were presented and members were asked for additional input. During the discussion on the webinar, membership agreed to some prioritization changes. Staff used this revised ranking in assigning the proposed priority order of projects in for a draft 2011 NBB Program Plan. 
 
 6.Finally, the draft plan was considered during the NBB membership meeting in Texas. 
 
 This process allows NBB to prepare a clear direction to ensure the trade association continues to meet members' needs.

NBB members guide association priorities for 2011

Biodiesel is at work around the country, year round, in extreme weather. School buses in Michigan rely on biodiesel blends to transport students safely to and from school, and biodiesel does the job. 
 
 As the industry becomes more sophisticated and as new variations of ultra-low sulfur diesel are introduced in the marketplace, technical experts monitor and evaluate isolated performance variations. The ASTM process is designed to allow for specifications to be refined as new opportunities and considerations arise. 
 

 ASTM is currently discussing ballots for changes to the biodiesel specification, D6751. These changes are designed to address isolated instances of filter clogging above the cloud point, primarily with above-ground tank dispenser filters (not vehicles), with some blends of biodiesel and types of petrodiesel in very cold weather. The group will determine if changes are needed within the biodiesel specification, D6751, and if so, whether they should be made to all biodiesel, or whether the changes should be made to a new, separate grade of biodiesel. A potential new biodiesel grade would be intended to be used in extremely cold weather, similar to the No. 1 and No. 2 grades for petrodiesel. 
 
 "From the discussions, it seems likely that a new grade of biodiesel will be proposed, and that new grade will have a lower cold soak filtration requirement and more stringent controls of minor components such as mono-palmatin or mono-stearin," said NBB Technical Director Steve Howell. "This is potentially the most significant change to the biodiesel specification since the cold soak tests were adopted. Biodiesel stakeholders need to be involved with ASTM to be a part of the discussion. I strongly urge you to have your opinions count by being active in the NBB Technical Committee and by joining ASTM, and voting." 
 
 The exact form of the ballot and its limits will be determined through consensus negotiations of the members of the ASTM Filter Clogging Work Group and the ASTM Biodiesel Task Force. The ballot will most likely be presented and voted on by the entire Subcommittee E this spring with adjudication of the results at the June ASTM meeting in Kansas City, Mo. Changes could make their way to a final D02 Main Committee vote in the fall. 
 
 According to its Web site, ASTM International is one of the largest voluntary standards development organizations in the world, a trusted source for technical standards for materials, products, systems, and services. The organization was formed more than a century ago, when a forward-thinking group of engineers and scientists got together to address frequent rail breaks in the burgeoning railroad industry. Their work led to standardization on the steel used in rail construction, ultimately improving railroad safety for the public. As the century progressed and new industrial, governmental and environmental developments created new standardization requirements, ASTM answered the call with consensus standards that have made products and services safer, better and more cost effective.

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ASTM ponders biodiesel grade for extreme cold

In 2002, Ramiro Lopez led Dallas' city fleet to become the first major fleet in north Texas to switch to B20, a 20 percent blend of biodiesel. But at first, the assistant fuel director kept the progressive change to himself and his superiors. 
 
 "I would rather do the right thing and ask for forgiveness later," Lopez said with his characteristic smile. "But I didn't have to ask forgiveness at all! After everyone found out they'd already been using B20 for six months, it was smooth sailing." 
 
 Since then, about 10 government and school fleets in the Dallas-Ft. Worth area started using biodiesel, largely due to Lopez's leadership and mentoring. That includes the city of Irving, Texas, where Lopez went after retiring and promptly implemented B20 there, as well. 
 
 "Most cities are looking to become sustainable, and fuel is an opportunity to create a green fleet overnight so easily with biodiesel," Lopez said. "I look back to the year 2002 and no one else was doing it. I couldn't understand that. But now, I see all the different agencies using biodiesel, and the plants that have been built, and it is a great feeling to have been a part of that."
 
 In February, the National Biodiesel Board recognized Lopez and other biodiesel champions at the annual Eye on Biodiesel awards presentation. They were presented at the National Biodiesel Conference & Expo, in Grapevine, Texas. 
 The NBB's 2010 Eye on Biodiesel Award categories and their winners are:

 
 	
 Influence: Ramiro Lopez, city of Irving, Texas. 
 
 Impact: Terry Taylor, Sysco Corp. Sysco, North America's leading foodservice marketer and distributor, has led the way in implementing biodiesel in private industry. The company has a policy to use biodiesel blends, wherever possible, up to B20. The company today uses about 2 million gallons of blended product annually in its fleet of 20,000 diesel vehicles. 
 
 Inspiration: Wayne Hettler, St. Johns Public Schools, St. Johns, Mich. This Michigan school bus fleet manager convinced his district to switch to B20 in 2002. It has since clocked more than 3 million miles on B20. His enthusiasm for biodiesel has helped inspire other fleets to make the switch. 
 
 Industry Partnership: The American Oil Chemists' Society and Gina Clapper. In keeping with its mission to be a forum to promote the exchange of ideas, information, and experience, AOCS has provided numerous opportunities for those in the biodiesel field to share knowledge, including two international congresses on biodiesel. Technical specialist Gina Clapper has been instrumental in coordinating the development and approval of new biodiesel test methods. Clapper also has taken leadership roles within International Organization for Standardization activities and the Biodiesel Expert Panel of the AOCS.

 
 Initiative: 	The Iowa Soybean Association, Minnesota Soybean Growers Association and Nebraska Soybean Association. When NBB issued a call to action for the biodiesel industry to submit comments to EPA on its proposed renewable fuels standard rules, soybean farmers answered the call. These three organizations generated more than a third of the 8,000 comments biodiesel supporters submitted regarding the proposed standard. 
 
 "The biodiesel industry is blessed with many champions and true believers," said Joe Jobe, NBB CEO. "Each of these winners has helped carry the biodiesel torch, fostering understanding, mentoring others and encouraging broader use of a cleaner burning, sustainable fuel."

Fleet Feat: Ramiro Lopez led the way for fleet use of biodiesel in Northern Texas, starting with the city of Dallas. 

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Eye on Biodiesel awards announced

Flambeau River Biofuels executed a letter of intent to engineer, procure and construct (EPC) the largest green diesel plant in the U.S. at its pulp and paper mill in Park Falls, Wis. The $250 million project, funded in part with a U.S. DOE grant, is expected to be operating by 2013. The team of AMEC and Miron Construction Co. Inc. was chosen as EPC contractor. The plant will use ThermoChem Recovery International process technology to convert 1,000 dry tons per day of woody biomass into green electrical power, steam and heat to its adjacent paper operations, and green diesel fuel and wax to the domestic market. 
 

 
 Catilin Inc. announced a three-year, $5.3 million project as part of a $44 million U.S. DOE award made to Catilin's consortium, National Alliance for Advanced Biofuels and Bioproducts. Catilin and its partner, Iowa State University-Center for Catalysis, will provide key extraction, sequestration and conversion technologies. Catilin and ISU-CCAT will use mesoporous nanoparticles to selectively extract and sequester targeted fuel-relevant and high-value compounds within algal lipid mixtures. The balance of the algal oil, which contains free fatty acids and triglycerides, will be converted to biodiesel using Catilin's commercially available T300 catalyst. The pilot-scale work will be completed at Catilin's currently operating 300,000 gallon per year pilot plant. 
 
 
 Tri-State Biodiesel recently formed a partnership with Upper Green Side, the local environmental organization of New York City's Upper East Side. Their shared mission is to inform landlords and co-op boards that switching to biodiesel will result in significant local air quality improvements. A recent health department report identified the Upper East Side as home to some of NYC's worst air. Tri-State CEO Brent Baker said, "The community air survey cited the area's boilers and hot water heaters as principal sources of pollution." The campaign was to formally launch in February. 
 
 The explosion last month at Imperium Renewables Inc.'s 100 MMgy biodiesel plant, Imperium Grays Harbor in Washington State, was caused by an over-supply of sulfuric acid in the glycerin neutralization tank, which led to an unexpected exothermic reaction that ruptured the equipment, the company stated. "Typically, sulfuric acid is mixed with glycerin to neutralize the pH level. When mixed at the recommended ratio, the chemical reaction does not pose a safety threat." Replacement equipment was installed, and more "stringent safeguards" and new employee training and safety programs were implemented. 

 
 
 Cenergy Power Systems Technologies has an exclusive agreement to market Germany-based 2G Bio-Energy Technology Corp.'s combined heat and power (CHP) and biodiesel refining systems in the Americas. "The joint venture with Cenergy will launch the entire 2G product line including biogas, landfill gas, sewage gas, and natural gas cogeneration modules," Cenergy said. 2G's biodiesel CHP cogeneration plants, with the registered name PLA-TEC, are specifically designed and made for straight vegetable and plant oil use, so the units take in the same feedstock to make the biodiesel as it does to generate power for the process. 
 
 Glycos Biotechnologies Inc., an emerging biochemical company using sustainable feedstocks such as glycerin coproduct from biodiesel production, announced the appointment of Rich Cilento as CEO. A venture advisor for DFJ Mercury and currently executive chairman for GlycosBio, Cilento will now be responsible for the daily operations of the company. Cilento has more than 20 years of leadership and technical experience in the petroleum, alternative energy, information technology and biotechnology industries.
 
 
 Hawaiian Electric Co. signed a contract with a subsidiary of Renewable Energy Group Inc. to supply 3 million to 7 million gallons of biodiesel per year for two years, which will fuel Hawaiian Electric's new 110-megawatt combustion turbine generator unit at Campbell Industrial Park Generating Station. REG won an earlier bid to supply biodiesel for emissions testing and subsequently emerged as winning bidder out of eight companies. REG will supply biodiesel made from yellow grease and animal fats. Delivery will begin after approval from the Hawaii Public Utilities Commission with input from the state consumer advocacy group. 

 
 
 As Switzerland's Biopetrol AG nears completion of its 400,000 ton per year biodiesel facility at the Port of Rotterdam, a large commodities trader, Glencore AG, purchased a controlling interest in Biopetrol through a 50 percent plus one share stock transaction. Headquartered in Baar, Switzerland, Glencore sources raw materials for the oil and gas, mineral and metal, and agricultural processing industries. Biopetrol has two production plants already on line in Schwarzheide and Rostock, Switzerland, with a combined annual production capacity of 350,000 tons (about 105 MMgy). Glencore investing in Biopetrol signals that confidence is growing in the European biodiesel market.
 
 
 Massachusetts-based Bodega Algae LLC and Bigelow Laboratory for Ocean Sciences in West Boothbay Harbor, Maine, have received a six-month, $150,000 Small Business Innovation Research grant from the National Science Foundation to develop and test a prototype for growing high concentrations of algae for biofuel. The grant is titled Light Delivery Enhancement of Photobioreactors and will be used to develop advanced photobioreactors. A key goal is to identify best methods and design for capturing and sending light to algae in larger volumes under varying conditions to grow algae. 

 
 
 The International Organization for Standardization, ISO, will develop a global standard to address sustainability issues linked to bioenergy, which will be produced by a new ISO project committee, ISO/PC 248. The committee will bring together international expertise and state-of-the-art best practice to discuss the social, economic and environmental aspects of the production, supply chain, and use of bioenergy, and identify criteria that could prevent it from being environmentally destructive or socially aggressive. ISO/PC 248 will hold its first meeting in April 2010.
 
 
 Promethean Biofuels Cooperative Corp., a new 1.5 MMgy biodiesel plant in Temecula, Calif., came on line in January. It employs batch production with continuation purification, and is designed as a chemical blending and off-spec product rework facility. Promethean Biofuels also uses alternating high temperature/high pressure, and a deep vacuum process. As a cooperative, it also undertakes design-build projects for other producers. A grand opening ceremony was planned for Feb. 19. 
 
 
 Simply Green Biofuels and M.L. Halle Oil Service Inc. have partnered to bring Bioheat to Manchester, N.H. Halle started delivering Simply Green's B5 blend late last year, becoming the biofuel company's first exclusive New Hampshire partner. Halle celebrated its Grand Green Opening on Jan. 13, attended by 25 local dignitaries, fellow business owners and members of both the National Biodiesel Board and state oilheat council. Simply Green's biodiesel is made from waste vegetable oil and blends are available from 5 percent up. No system modifications are needed to run up to a B20 blend. &#61500;

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Business Briefs

It's a world of memorandums of understanding, research and development partnerships, letters of intent, big statements and big dreams. Big dreams that prophesize the end of the hydrocarbon economy, reduced global pollution and a new economy based on rural development in impoverished countries, environmental conscientiousness and decentralized production. The companies that foretell this vision, however, often face the harsh realities involved with intense capital needs, technological development and the cut-throat competition inherent in commercializing scientific breakthroughs. It's the world of over-the-counter bulletin board stock trading in the clean energy sector. 
 
 Pink Sheets-the largest securities exchange after the New York Stock Exchange and NASDAQ-will list virtually any company, and the over-the-counter-market often features the thinly traded, the bankruptcy cases, and the shell companies whose financials are markedly difficult for the investor to investigate. It's where many companies must get their start. "Everybody wants to go to a bigger exchange and do everything possible to increase shareholder value," says Richard Craven, CEO of Mississippi's Universal Bioenergy. "We are working to bring increased filings and greater transparency to the market."
 
 Universal Bioenergy reports that there is now more venture capital involved in the green tech sector than there is in medical devices, telecommunications and semiconductors. The harsh reality, however, is that much of this money will be spent in vain and many of these projects will fail. "Then there are these situations where companies sought public money, got investors and their projects were either not thought out or downright shady and now these projects don't exist, the money's gone and that casts a shadow on all of the biofuels industries," says Brad Alvis of Biodiesel Business Plans.
 
 Bad projects have "cast a shadow" over the biofuels industries when it comes to public funding. "There was this exuberance in advanced biofuels and hundreds of millions of dollars got thrown into projects, and some of them were less founded on good technology than others," says Mark Yancey, principal for the Denver-based project development firm NEAtech. "Obviously there are winners and there are losers-it's the nature of our capitalist system to throw money at a new thing."

 
 The field is huge, and firms are jockeying for position, flying bold colors looking to catch the eye of money and distinguish themselves as winners. It's a new industry. Also, the stock market crash combined with the bottom falling out of crude oil prices has led to a waning of interest in alternative energy starting in summer 2008. "When diesel prices are high, my phone is ringing off the hook, but when they're low, nobody is thinking about the environment," Alvis says. 
 
 For young companies that need a fast infusion of capital for quick growth, Craven says the public model offers the best route. Conversely, that strategy can involve a lot of capital expense and overhead, which can manifest itself as a disadvantage while similar companies fight for limited resources-and the competition is fierce. "The race has actually been going on for a couple of years," Yancey says. "Companies like Mascoma and others have got millions poured into them and now it's starting to intensify to see who can perform, and who can deliver on the promise of some of these technologies." 
 
 On that note, companies trading on NASDAQ's over-the-counter bulletin board and the Pink Sheets work hard to distinguish themselves in today's market, and look for leverage among their coffers, education and experience. "I'm a scientist, I have a background in chemistry, so I think that gives us an advantage in analyzing the potentials of certain opportunities," Craven says. "You have to remember-look at VHS and beta-the best technology doesn't always win out. We have to make sure that science, and not lobbies, are driving this market."
 
 The American Recovery and Reinvestment Act has thrown billions of dollars at the clean energy sector, and has started to increase investor confidence in wind, solar, biofuels and other industries vying for roles in the world's future energy portfolio. But again, critics say that this money is available to the wealthy and well-connected more so than to the most qualified or promising firms or projects. "There have been a lot of dollars going toward advanced biofuels like cellulosic ethanol and biobutanol, but almost 100 percent of this is going toward the development and demonstration of new technologies, not commercial facilities," Yancey tells Biodiesel Magazine. "The ARRA money is going toward things that are by and large pre-commercial."
 
 
 Patents, Partnerships and Big Plans 
 
 Talking about competition, Origin Oil, the Los Angeles-based algae oil extraction firm, reports that there are approximately 1,400 companies working in the field. As a former Greenline Industries employee, Alvis says that he heard rumors of a major company pumping $1 million per day into algae research, but couldn't get it done. "They've been working on cracking the algae problem for 10 years and it hasn't happened," he says.
 
 Origin Oil's stock price in late January was 26 cents per share with a 52 week high of 48 cents per share and low of 22 cents per share. Standard & Poor's, a financial markets intelligence provider, reports that Origin Oil has 224 investors. The poor economic conditions haven't caused interest in the company to fade though. "We saw no loss in valuation throughout the course of the crash," says Origin Oil CEO Riggs Eckelberry. "We have a resilient funding model, and put substantial additional effort into reaching-and responding to the needs of-the investor base that we've built."

 
 The company reportedly lost $2 million in 2009, spending its cash on research and development efforts. Further, a decrease of $256,742 in working capital was due primarily to ongoing costs of developing the company and preparing its technologies for market. These figures, easily found on Origin Oil's Web site, are important to publish even if they are less than shining. "Investors are able to tell the difference between the companies that do provide information and transparency and those that don't, and who is responsive to their concerns," Eckelberry says. "They can tell." 
 
 Its patent-pending technology, "quantum fracturing," is based on the "science of mass transfer and fluid fracturing and addresses some of the challenges of industrializing algae oil production," Origin Oil reports. Using quantum fracturing, "water, carbon dioxide and other nutrients are fractured at very high pressure to create a slurry of micron-sized nutrition-bubbles," which is then channeled to the algae culture awaiting it in a lower-pressure growth vessel, the Helix BioReactor. "Investors are very sophisticated and they want to see the patent filings," Eckelberry says. 
 
 "You can have all kinds of patents and not have a sound business plan," Alvis tells Biodiesel Magazine. "I could decide to buy a McDonald's franchise, which would be nothing new or groundbreaking, hold no patents, have nothing secret or proprietary, but still find a group of investors and have a sound business plan." 
 
 In addition to patent filings, agreements and partnerships with established companies help build investor interest, and startups know this. Memorandums of understanding, letters of intent and other documentation of business agreements are often highly publicized by new clean energy companies. Greenhunter Energy Inc. of Grapevine, Texas-trading at press time as stock symbol "GRH" on the NYSE for $1.34 per share-is involved in a lawsuit defending its inability to fulfill a tolling agreement with Canada's Bioversel, which was slated to utilize 25 percent of its Houston refinery's widely touted 105 MMgy capacity. Shortly after the deal was announced, GRH's stock hit an all-time high.
 
 Bioversel alleges, "by speaking out of both sides of its mouth, and trumpeting the contract with Bioversel for the purchase of refined biodiesel, but failing to publicize the fact that it does not possess the ability to produce biodiesel that meets the specifications required by the contract," Greenhunter failed to provide the investing public with a full and accurate picture of its true position. "It is not resolved," Bioversel tells Biodiesel Magazine in a late January conversation. With this suit ongoing, Greenhunter has until May to get its financials in order to meet a deadline to fulfill its listing requirements with NYSE. These two situations, however, are not connected. 
 
 
 Feedstock Development
 
 Investors follow stock quotes, 52 week highs and lows, analyses from outlets such as CNN Money and Bloomberg, press releases, patent filings and Securities and Exchange Commission reports, trying to pick companies for their portfolio that will perform and deliver. The criteria, however, are fairly simple as to who will succeed and who will fail in the biodiesel world. 

 
 Technological prowess, a team of accomplished scientists, even loads of capital can help, but biodiesel success stories often boil down to one element-a dedicated supply of feedstock. "Technology, management, strategies-nothing else really matters," Alvis says. "About once a week I get a call from somebody who wants me to sell them a business plan for algae oil. I listen and say, 'I'll sell you a business plan, but it's going to be based on something that works, and not some shiny new machine.'"
 
 Feedstock development is a significant driver of other progressive biofuels companies often focused on jatropha, camelina, pennycress, and other fringe oil-bearing fruits that have been responsible for relatively little commercial biodiesel volume. 
 Australian jatropha developer, Jatoil Ltd., is preparing to integrate a crop into its Asian biofuel farms that is valued for its sweet leaves, being 40 times sweeter than sugar. At press time, Jatoil (stock symbol: JAT) was trading on the Australian Securities Exchange for 3 cents per share. Along with two other Australian firms, Nuflora and Floraquest, Jatoil will "intercrop" Stevia, a member of the sunflower family with origins in the Americas, which is said to be in strong demand from global food and beverage manufacturers as a natural low-calorie sweetener.
 
 "Feedstock cost is 70 percent to 80 percent of a biodiesel's producer's operation," Craven says. Universal Bioenergy's plant in Nettleton, Miss., is currently being subleased to another company. Universal Bioenergy was trading at 11 cents per share at press time. The 52 week high was $1.80 and the low was $.0085. The company says it hopes to "develop new feedstocks with greater sustainability and volume, such as algae and Jatropha, to achieve higher sustainable production outputs to meet the growing demand for alternative transportation fuels."
 
 Amelot Holdings of Norfolk, Va. (traded on the Pink Sheets as AMHD) reported the brokering of an agreement with a Ghana-based consulting company for the development of an initial 100,000 hectare jatropha plantation. The company says that it is currently in the midst of negotiating a 49-year lease with the land-owners, organizing local licenses, and providing initial logistics for the project plantation that, when it reaches maturity, will contain 200 million jatropha trees and "conservatively" produce 100 million gallons of jatropha oil annually.
 
 "I read about this company that uses jatropha and camelina to make jet fuel and they have this 'sustainable, secret' process-I don't see them making gobs of jet fuel," Alvis says. "If they could, they would be. The guy that owns Fed Ex is up in arms because he can't buy biofuel, and that's what he wants to use."
 
 Amelot says that it has several biodiesel production projects in the Caribbean underway, in Barbados, Trinidad and Tobago. "In 2010, we hope to prove to you that nothing can hold us back," said Amelot Holdings Inc., president and CEO Fred Guarnieri. Amelot Oil Barbados Ltd. is based on a waste cooking oil-to-biodiesel platform. In late January, the company was trading at $0.0.
 	
 
 Nicholas Zeman is an associate editor for Biodiesel Magazine. Reach him at (701) 738-4972 or <a href="mailto:nzeman@bbiinternational.com">nzeman@bbiinternational.com</a>.

For many start-up companies in the clean energy sector, success means seeing its stock trade on the floor of a major stock exchange such as NASDAQ or the New York Stock Exchange. Until they have the revenue and profits, they must build their identities and persuade investors to their base with big statements and even bigger dreams.

Pink Sheet Persuasion

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At the event, General Motors Corp. announced that all of its 2011 heavy-duty line powered by the 6.6L Duramax engine will be approved for B20 use. 

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Biodiesel producers and industry stakeholders attending the 2010 National Biodiesel Conference & Expo sought answers to the status of the expired biodiesel tax credit as well as to many confusing elements in the RFS2 final rule. While some producers found clarification, others left the event puzzled, concerned and even discouraged by the enormous amount of red tape required to participate in the program. Despite this, the conference provided a healthy mix of biodiesel information and announcements.

Seeking Answers

Questions abound as to why biodiesel plants have a much poorer safety record than other chemical and petrochemical operations, and what steps can be taken to address this issue before the industry suffers irreversible damage. Improvements can and should be made to determine new benchmarks for industry participants.

 
 The first step in assuring biodiesel safety is implementing a process safety management (PSM) program, which includes a hazardous operations review. The code of federal regulations 29 under CFR 1910.119 mandates a PSM program if more than 10,000 pounds (1,517 gallons) of methanol is present in a production facility, and all but the smallest of plants have more than this. But even the smallest plants should implement program mandates for employees and protection of investments, and to be responsible neighbors. 
 
 The PSM program is not a document that can be copied from one site and applied to another. Each phase of the operation is evaluated for potential hazards and problems that could be encountered during normal operation, start up, shut down, and stand by or down time. It must be prepared by a competent, experienced company or individual, and the facility's operations staff. Adequate time should be allowed for a review of each operation and piece of equipment in detail.
 
 As part of the PSM program, the piping and instrument diagrams should be complete and ready for review. A set should always be available at all locations for operating personnel. These drawings can be the outline for the review of each phase of the operation. The PSM program also requires detailed operating instructions for the plant so someone unfamiliar with the plant could read and understand the steps for safe, reliable, normal operation, start up, shut down, and maintaining an idle plant. It also describes formal safety training that must take place before operations begin. The training includes OSHA requirements, hot work permit requirements, enclosed space entry permits, required personnel safety protection equipment, and more.
 
 Each step in the process is analyzed by the experienced program provider, and the operations management staff. The first step in the review is to assure that each piece of equipment is safe during normal operation: the electrical classification, instrumentation and mechanical installation. The next two steps are a similar review for start up and shut down. Following this is a similar review for the plant being idle with or without process fluids present, then review of procedures for mechanical and electrical work in the plant during operation and down time.
 
 The review would also include any special precautions for handling hazardous materials, each of which must be reviewed separately. Special attention must be given to methanol during normal containment in the operating and downed plant. The hazards of methanol for equipment failure, such as a pump seal failure, must be assessed. 
 
 The methanol-based catalyst requires review in the same manner. The handling of acids and caustics should also be reviewed thoroughly, and should include recommended personal protection equipment required for every instance that acid or caustic may be encountered. In each stage of the review, recommendations should be made for steps to take in case of failure in one of the systems. 
 
 
 Common Problems 
 

 Most of the common causes of biodiesel plant problems stem from failure to adhere to good manufacturing practices for this type of chemical plant. 
 
 Methanol The largest safety hazards in biodiesel plants are methanol and catalyst, which contains 75 to 80 percent methanol. Methanol is highly flammable and vapors are explosive over a wide range of concentrations, and since they are heavier than air, vapors accumulate in low areas of the plant. Indoor production units should be well ventilated according to the NFPA code. Many insurance companies and local fire departments require sprinklers in these areas because the hazard is so great.
 The hazard classification should adhere to the National Electric Code so no spark-generating electrical components are allowed in the area. The equipment selection and installation should assure that components have the highest reliability to reduce mechanical failure.
 
 Frequent causes of methanol escaping into the operating area are pump seal failures, hose failures, instrumentation connection failures and similar incidents. Personnel should be trained to be observant for any mechanical abnormalities so remedial action can be taken immediately. 
 
 Another potential problem is spill containment, which should not only comply with storm water legislation but also control hazardous collections of flammable materials in unprotected areas. Many plants follow the guidelines for most areas but fail for hose connections that can create methanol spills. 
 
 Equipment selection and design Once a plant is operating each piece of equipment should be evaluated, and all safety precautions reviewed, to minimize chance for leaks, failure and design conditions. Temperature and pressure should be well within operational limits. Question the vendor to assure correct application in a biodiesel plant. 
 
 The design for equipment installation and relevant support systems must also be thoroughly reviewed. Pressure relief instrumentation should be selected based on upset conditions versus normal plant operations alone. Relief should be provided for overheating, over pressure, over temperature, and even upset conditions such as fire. 
 
 If fire occurs, precautionary measures should be prepared for the tank, heat exchanger, pump and other affected areas. Control instrumentation is typically designed for operating within normal limits and appropriate actions should be taken when limits are exceeded. These systems should include action and/or operations notification for processes going outside normal limits, whether it is a slow or rapid upset. 

 
 Each piece of equipment and area should be reviewed to assure correct electrical classification is met, including proper grounding. Access for maintenance is also critical for safety. 
 
 Operator training In start up operations, especially in smaller installations, operator training is often viewed as unnecessary costs to be minimized and shortened as much as possible. For a plant to operate safely, operators need thorough understanding of the mechanics and chemical reactions associated with the facility. At minimum, training should include how to start up, operate and shut down the plant. 
 
 Each piece of equipment and plant area should have an adequate training protocol so every employee has a basic understanding of each item and how it relates to other plant operations, and control, field and maintenance operators should all be included. 
 
 Understanding the basics of the entire process is also necessary for every employee. This knowledge will allow the operator to understand why issues are arising and how to respond to root problems versus treating specific symptoms. Upset conditions can cause very severe problems if the operator doesn't understand the root problem. 
 
 Everyone in the plant not only needs access to Material Data Safety Sheet information, but needs to know each material used. They need to know the proper personal safety equipment required in all areas of the plant and personal safety equipment required in special areas, or when handling certain materials. When unloading a truck of catalyst, caustic or sulfuric acid, personal safety equipment is required-not recommended.	
 
 Each operator requires instruction on how to respond to abnormal operations such as spills, tank overflows, electrical power outages, sudden operational disruptions, natural disasters and fires. The quick and accurate response to problems can sometimes prevent personal injury or death and loss of property. 
 
 Mandatory training includes the items required by the federal government in all similar industries. The biodiesel industry, which is young and relatively immature, needs to step up its efforts to improve the efficacy of its safety and training programs to save lives, money and preserve the industry's reputation.
 
 A Brief, Recent History of Safety-related Biodiesel Plant Issues

 A few of the adverse events as reported in media sources will be listed as examples of problems that can occur, most of which could be avoided with proper preparation. 
 
 American Biofuels, Bakersfield, Calif., 02/17/2006 
 	During a methanol transfer, a small spill occurred. The methanol was ignited and the fire spread into the process building. Apparently, the spill was not contained. Likewise, an ignition source was present around a flammable liquid in an upset condition. A PSM should have identified these two issues so that the spill would be contained and the area would be electrically classified so that no ignition sources should be present. This emphasizes the absolute need for the PSM Program for any size biodiesel plant. 
 
 Sun Break Biofuels, Canby, Ore., 06/23/2006 
 	A major fire resulted when a small fire melted plastic biodiesel storage tanks. Even though the cause of the initial fire was not listed, the resulting major damage could have been prevented with a PSM Program. The same analysis is that the area should have been electrically classified so that no ignition sources should be present. The area should have containment. Storing biodiesel in plastic tanks is not good manufacturing practice. 
 
 Blue Sky Biodiesel, New Plymouth, Idaho, 07/07/2006 
 	A small fire occurred when a worker was installing a vent tube in an existing tank. 
 
 Agri Biofuels Dayton, Texas, 07/14/2007 
 	A fire resulted from a methanol spill. 

 
 Better Biodiesel Spanish Fork, Utah, 7/25/2007 
 	A small fire occurred when there was a mechanical malfunction in a methanol transfer line to the reactor section.
 
 Farmers & Truckers Biodiesel Augusta, Ga., 8/21/2007 
 	A worker was welding a flow meter on the top of a tank and was killed when an explosion occurred. 
 
 Foothills Biodiesel Lenoir, N.C., 8/25/2007 
 	Feedstock tanks in the tank farm were destroyed by fire two days after the plant was shut down. The tanks were destroyed. Since the plant was unoccupied, no one was hurt. 
 
 American Ag Fuels Defiance, Ohio, 1/3/2008 
 	An explosion occurred when workers left a manhole cover off a glycerin storage tank. A spark ignited methanol vapors. 

 
 Green Light Biofuels Princess Ann, Md., 5/18/2008 
 	A hot work explosion occurred when a methane line was being added to the plant. A gas line was hit and the resulting explosion killed one worker and injured a second worker. 
 
 Biofuels of Tennessee Decaturville, Tenn., 8/15/2008 
 	A fire occurred in the plant after it had been idle for four months. No cause was determined. The company representative stated that nothing was left but smoldering metal. 
 
 All American Biodiesel York, N.D., 8/27/2008 
 	One of four processing buildings and the processing equipment was destroyed by fire. No other details were listed. 
 
 Gadsten Fleet Management Facilities Gadsten, Ala., 9/18/2008 
 	A faulty heating element on the City of Gadsten's biodiesel equipment likely caused the top of the tank to blow off (over pressure due to inadequate relief). 
 

 Nova Biosource Fuels, Inc. Clinton, Iowa, 9/30/2008 
 	A small fire in the primary biodiesel recovery column was quickly extinguished by the local fire department. The probable cause was a build-up of methanol vapors in the column during a ventilation process required as part of the maintenance activity. No injuries were reported for plant personnel. One fireman received minor steam burns. 
 
 GreenHunter Biofuels Houston, Texas, 2/9/2009 
 	A mechanical seal on a circulation pump associated with a process heating unit failed. The resulting excessive heat created caused the fire. 
 
 Minnesota Soy Bean Processors Brewster, Minn., 5/24/2009 
 	A fire and explosion on a Saturday night at10 PM resulted in several tanks being on fire. 
 
 Midwest Biorenewables Toledo, Ohio, 6/15/2009 
 	A faulty safety valve was blamed for a fire which destroyed one of two production lines. The vacuum control valve imploded, igniting biodiesel. 
 
 Columbus Foods Company Chicago, Ill., 7/19/2009 

 	Two workers were seriously injured in the biodiesel plant while mixing glycerin and sulfuric acid. 
 
 New Eden Energy St Cloud Fla., 9/24/2009 
 	Multiple chemical vessels exploded. At least one building was destroyed and several tanks. The cause has not been determined but one employee said lighting might have started the blaze and multiple explosions. 
 
 Xenerga Biodiesel Savannah, Ga., 10/14/2009 
 	One injury resulted from an explosion in a reactor used to store biodiesel. 
 
 Imperium Renewables Hoquiam, Wash., 12/2/2009 
 	An explosion occurred in a 10,000 gallon glycerin tank as a result of over pressurization. The tank reportedly split open. 
 
 Kenneth "Pete" Moss is the managing partner and owner of renewable energy consulting firm Frazier, Barnes & Associates LLC. Reach him at <a href="mailto:pete@fba.com">pete@fba.com</a>.

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Safety issues have been a chief concern for the biodiesel industry, as evidenced by a long list of fires and explosions. The following is an assessment of what improvements are necessary to make commercial biodiesel processing safer.

Biodiesel Plant Safety

ASTM International enforces a set of standards that specify the maximum allowable concentrations of various contaminants in biodiesel. The long-established ASTM D6751 specification covers pure biodiesel (B100) for use as a blend component with middle distillate fuels. The newly introduced ASTM D7467 refers to finished fuel blends of between 6 (B6) and 20 (B20) percent biodiesel for on- and off-road diesel engine use. In addition to these biodiesel-specific regulations, ASTM International has revised the D975 and D396 standards to include an allowance for up to 5 percent biodiesel in fuels used in on- and off-road engines and home heating and boiler applications respectively.
 
 BQ-9000 is a unique combination of ASTM D6751 and a quality systems program that includes storage, sampling, testing, blending, shipping, distribution and fuel management practices. The program aims to promote the commercial success and public acceptance of biodiesel as well as to help assure that biodiesel fuel is produced to and maintained at the ASTM D6751 industry standard. BQ-9000 helps companies improve their fuel testing and greatly reduce any chance of producing or distributing inadequate fuel.
 
 In order to comply with the above regulations, biodiesel companies have traditionally outsourced feedstock samples and finished product testing to a third party company. Nevertheless, this is a very expensive, time-consuming and inefficient practice, often taking up to 48 hours to obtain results. Inductively coupled plasma (ICP) technology can be efficiently utilized in-house to achieve regulatory compliance, save time, reduce costs and increase productivity in biodiesel analysis.
 
 
 Background 
 
 ICP is widely accepted as the most powerful technique for the multi-element analysis and quantification of trace elements in both solid and liquid samples. The latest advance in this technique is the groundbreaking, Thermo Scientific iCAP 6000 Series ICP. This ICP spectrometer incorporates a sample introduction system (nebulizer), an ICP torch, a high frequency generator, transfer optics and a computer interface. The ICP technique consists of a high-temperature plasma generated from ionized gas. Three gas flows are used in the plasma source: the coolant gas, the auxiliary gas and the nebulizer gas. The coolant gas plays an important role, maintaining the plasma, stabilizing its position and thermally isolating it from the outer tube of the torch. The auxiliary gas controls the position of the plasma within the torch and prevents carbon build-up when analyzing organic samples. The nebulizer gas carries the sample aerosol to the plasma. 
 

 The high temperature plasma de-solvates the aerosol and atomizes the sample. Light is then emitted by the atoms of each element and is resolved into discrete wavelengths by a high-resolution spectrometer. The optical signal is then focused onto a two dimensional solid state charge injection device (CID) detector, where it liberates electrons in the pixel sites. The number of electrons is proportional to the intensity of the light and allows the concentration of each element to be calculated.
 
 
 Benefits
 
 Advanced ICP instrumentation such as the iCAP 6000 Series includes benefits such as simple and innovative sample introduction system, which greatly improves set-up, maintenance and ease of use for the operator. The torch design uses an automatic gas connection and alignment that minimizes set up time and reduces errors. 
 
 Innovative and compact optical design delivers wide and continuous wavelength coverage, high resolution and excellent light transmission, resulting in high sensitivity and improved detection limits and reduced interferences. 
 
 New generation solid-state detectors such as the CID chip offer simultaneous analyte detection, high signal to noise ratio and the ability to measure trace level signals at the same time as high concentration signals without saturation. 
 
 Further key advantages of the technology include excellent stability, flexibility, sensitivity and precision. The method is capable of measuring a wide range of metallic and nonmetallic elements in biodiesel in compliance with current legislation. 
 
 ICP technology is easy to implement and use in an in-house laboratory, eliminating the need to outsource sample analysis. As a result, biodiesel producers achieve significant time and cost savings and can provide their customers with a fast service. In addition, since all analyses are performed in-house, the production process can be easily controlled from the outset, ensuring optimal product quality. Advanced in-house ICP technology is being applied by Imperium Renewables, one of the largest U.S. biodiesel producers. 
 
 

 Case Analysis
 
 Imperium Renewables' plant in Grays Harbor, Wash., can produce 100 MMgy of biodiesel. In order to ensure superior biodiesel quality, the company performs rigorous testing to certify compliance with the stringent regulations. It is very important that both the incoming feedstock and the finished product are analyzed. Furthermore, a number of the company's customers require in-depth analyses on additional elements not typically tested for. 
 
 Regulatory compliance The Grays Harbor plant is currently the largest BQ-9000-certified biodiesel production facility in the U.S., and uses a variety of oils such as canola grown in Washington State and Canada, and soy oil. With a commitment to local production, the company uses local feedstock sources where possible. Its fuel complies and even exceeds all regulatory standards presently enforced in the U.S. 
 
 Analytical requirements At Imperium Renewables, production is monitored at different stages and samples are analyzed on an hourly basis. With a staggering production capability of 2 million gallons of biodiesel every week, the company requires a powerful and dependable analytical system capable of coping with such a high sample throughput. It was also imperative that the chosen technology had multi-elemental capabilities, analyzing samples at low concentration levels and achieving specific detection limits for elements such as phosphorus, sodium, potassium, magnesium and calcium. 
 
 Additionally, the method needed to be able to perform rapid, accurate, rugged and repeatable analyses of all sample types while being easy-to-use. The company also required a system that would enable easy compliance with the strict regulatory standards. Advanced instrumentation was needed with a compact footprint to address its laboratory space-efficiency issues.
 
 Results Imperium Renewables uses iCAP 6000 Series ICP technology for the detection and quantification of a wide range of trace elements and metals in inbound feedstocks and outbound biodiesel. Samples are tested for many different elemental parameters, including sodium, calcium, magnesium and potassium. The measurement results obtained with ICP analysis are then compared with the maximum amount of each substance permitted in biodiesel under ASTM regulations. For each measurement to be compared with the prescribed concentration value (PCV) set by regulations and measured in parts per million, the limit of detection of the method must be significantly lower than the PCV. ICP provides the required levels of detection.
 

 Since its implementation, the iCAP has enabled Imperium Renewables to perform flexible and reliable analyses, allowing the company to produce high-quality biodiesel according to the regulations governing the biodiesel industry. In addition, by monitoring the concentration of elements and metals, it has been possible to avoid problems such as corrosion and filter clogging. Product quality is also enhanced since the production process is closely controlled from the beginning to the end. The need to outsource sample testing to a third party is greatly reduced, allowing faster service.
 
 Sample analysis time is significantly reduced, resulting in lower costs and higher sample throughput. Overall efficiency of the laboratory workflow and productivity are considerably improved. Being precision engineered to minimize day-to-day maintenance requirements, advanced ICP technology is easy to use and offers maximum dependability and optimizing laboratory operation. ICP has proven a very powerful method capable of meeting all analytical requirements of the company.
 
 
 Matthew Cassap is an applications specialist with Thermo Fisher Scientific. Reach him at <a href="mailto:matthew.cassap@thermofisher.com">matthew.cassap@thermofisher.com</a>. Nathan Shenk-Boright is the lab manager for Imperium Renewables. Reach him at (206) 254-0203.

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Many biodiesel companies outsource the sample and finished product testing to a third party company, which can be expensive, time-consuming and inefficient. Inductively coupled plasma technology, however, can be efficiently utilized in-house to achieve regulatory compliance while saving time, reducing costs and increasing productivity.

Using ICP Technology to Achieve Quality Biodiesel

The failure of the U.S. Senate to extend the tax credit for biodiesel threatens to impede continued development of the industry, to weaken our nation's energy security, and to harm a vital segment of our nation's economy. On Dec. 31, 2009, the federal income tax credit for biodiesel was allowed to expire, thereby removing a vital support from this vulnerable industry despite repeated attempts to secure an extension of this provision. 
 
 Congress first created the biodiesel tax credit in the American Jobs Creation Act of 2004. Since that time, the biodiesel industry has grown significantly. In 2008, the industry employed as many as 52,000 people around the country. Much of the growth in the industry is attributable to the biodiesel tax credit, which has spawned significant private investment in biodiesel production facilities across the nation. The original biodiesel tax credit provision was set to expire Dec. 31, 2006, but as a result of timely action by Congress, the tax credit was extended on two occasions without expiration. Congress first adopted a two-year extension in 2006. In 2008, Congress adopted a one-year extension, which extended the tax credit through Dec. 31, 2009.
 
 On Dec. 9, 2009, the U.S. House of Representatives passed an extension of the biodiesel tax credit. That legislation, H.R. 4213, provided for a one-year extension of the biodiesel tax credit through Dec. 31, 2010. The House legislation would make the extension retroactive to cover sales of biodiesel that occur after Dec. 31, 2009. The Senate, however, has not taken any action on the House legislation. 
 
 In 2009, the Democratic leadership in the Senate attempted to secure passage of controversial legislation unrelated to biodiesel by attaching a package of tax extensions, including the biodiesel tax credit, to that legislation in hopes that including the package would entice fellow senators to vote for the legislation, despite opposition to the underlying legislation. That effort in political gamesmanship was defeated. The biodiesel tax credit, and the jobs and economic activity it supports, should be more than pawns in a game of congressional chess. 
 
 Fortunately, the biodiesel industry has the support of two key Senators who are responsible for federal tax policy: Sen. Max Baucus (D-MT) and Sen. Chuck Grassley (R-IA), chairman and ranking member of the Senate Finance Committee, respectively. On Dec. 22, 2009, Baucus and Grassley reinforced their commitment to the biodiesel tax credit in a letter to Senate leadership, in which they explained that the expiration of certain tax credits, including the biodiesel tax credit, creates "uncertainty and complexity in the tax law." 

 
 There is little doubt that the expiration of the biodiesel tax credit creates uncertainty in the biodiesel industry. At this time, key Senate staff members are hopeful that the biodiesel tax credit will be adopted sometime in February, possibly in connection with an extension of unemployment insurance benefits, which must occur before February 28. The timing of the extension, however, remains at the discretion of the Democratic leadership in the Senate. Under the rules of the Senate, the majority leader has wide discretion to determine which measures the Senate will have the opportunity to debate. Therefore, it is critical that anyone involved in the biodiesel industry continue to reach out to their representatives and senators to reinforce the critical need for this legislation, and the likely effects that continued inaction will have on the industry. 
 
 
 Adam J. Freed is an attorney with BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. Reach him at (515) 242-2402 or <a href="mailto:freed@brownwinick.com">freed@brownwinick.com</a>.

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Senate Inaction Causes Lingering Uncertainty

Opening-on the verge of closing. Some batches are good. Some batches go awry. Some go terribly awry. When we started, there was a federal credit in place. Now, there is not. There are decisions to be made: change the business form to raise more capital, or maintain the cooperative to stay true to the spirit of community-based energy production. 
 
 Our scheduled February grand opening of Promethean Biofuels Cooperative Corp. is just around the corner. We have invited a slew of city, state and federal officials, plus the local media and press to attend our symbolic ribbon-cutting ceremony and invitational for the community to participate in making an on-spec batch of biodiesel. Finishing the construction of a plant and planning a grand opening both seem to me to verge on the miraculous in a time like this. Our days are long, and the tasks needing attention seem endless.
 
 Promethean is a formal cooperative centrally located in Temecula, Calif., between Los Angeles and San Diego. The past 14 months have been spent designing, building and permitting our community-scale biodiesel plant. Although initially the idea was to produce a 3 MMgy plant, certain logistic and technical realities limit production of the as-built system to about 1.2 MMgy. The plant is multi-feedstock, with the ability to pretreat a wide range of virgin and used vegetable oils. 
 
 Since we focus on lower quality used kitchen oils and the occasional batch of animal fat, we have to process much more oil than 1.2 MMgy to make that much biodiesel. So far we haven't come close to producing an amount that would even put us on the trajectory of meeting our nameplate production targets. Like many producers, we are trying to change that in a time when a majority of producers are idle, waiting for the termination of an asset sale or the reinstatement of a tax credit.
 Promethean is not feeling the effects of the lack of a tax credit yet; when I first wrote the cooperative's business plan, I felt it was better not to include it. I wanted to build something based fully on the fundamentals, and realized early on that the existence of the credit worked to assist feedstock suppliers and not necessarily the producer. In fact, it can be argued that that was the purpose of the credit all along; it assists in providing a floor to those who grow, manufacture, or in some other way supply feedstock to our beloved and beleaguered industry.
 
 Nevertheless, some might say that for someone who is concerned purely with the fundamentals, I chose the wrong state to start a biodiesel cooperative in. Although I firmly believe that California is the most environmentally aggressive state in the union, it is not particularly biodiesel friendly. In fact, it is against the law for municipalites and small fleet owners in our region of Southern California to purchase diesel buses and trucks, even if they are purchasing a replacement vehicle.

 
 I realize the credit was a blender, not a producer or feedstock supplier credit. Some might feel this system worked flawlessly, allowing for something akin to the infamous "trickle down effect" where money theoretically flows from the top to the bottom of an industry, passing through many hands, lingering long enough to benefit every participant. 
 
 My personal experience is that trickle-down economics simply do not apply. The majority of the money we have spent has gone towards contractors, employees and suppliers. The credit, ostensibly set up to allow for us to produce biodiesel profitably at competitive pricepoint compared to conventional diesel, may have in part led us to the condition of the industry that exists today, with plant capacities overbuilt in a market where access and availabilty of feedstock is seriously constrained. Lest we forget, even prior to the expiration of the credit, the majority of plants stood idle. 
 I cannot speak for the industry as a whole, but I believe the few that may have been happy with the credit were far outnumbered by those longing for something that offered investor certainty in the form of a fixed and longer timeframe. 
 Speaking solely for myself, I prefer the opportunity presented by Renewable Identification Number credits, and I look forward to the implementation of RFS2. 
 
 All things being equal, I believe those who can suffer through this dark period and survive will arise leaner, faster and stronger. We will be ready to take hold of all the opportunities a growing marketplace, rising from its bottom, has to offer. Those opportunities will include plants transferred to new owners for pennies on the dollar, lower cost production technologies, lobbying for stability in the credit structure, and states creating their own policies in support of biofuels.The last year has been a trying time. It may be the worst of times for our industry, but I hope in hindsight it is the best of times for starting up. Good luck to us all.
 
 
 Todd R. G. Hill is the managing principal and founder of Promethean Biofuels. Reach him at (626) 232-7608 or <a href="mailto:todd.hill@prometheanbiofuels.com">todd.hill@prometheanbiofuels.com</a>.

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Starting Up in the Worst of Times

Posted March 1, 2010
 

 Biodiesel blending is now available at the BP fuel terminal in Ottumwa, Iowa, the only one of six BP terminals to offer biodiesel in the state. With an $80,000 grant from the U.S. DOE, Renewable Energy Group Inc. helped fund the construction of CW Terminals' 30,000-gallon heated biodiesel storage tank at BP's Ottumwa terminal, from which distributors can splash blends from B5 to B20 and higher, depending on customer needs. 
 
 
 "BP's Ottumwa terminal is a busy facility," said Alicia Clancy, communication specialist for REG. "Some of the region's largest diesel distributors pull fuel from that location. We hope that by having biodiesel available at this facility, it will help supply biodiesel throughout the supply chain from the distributor level to retail locations, truck stops and on-farm fuel delivery." 
 
 Biodiesel purchasers are always recommended to secure certificates of analysis (CofA) showing that the fuel passed all the necessary quality parameters in ASTM D6751. REG noted that every load of biodiesel purchased from the Ottumwa terminal comes with CofA documentation. 
 
 
 Jon Scharingson, REG's director of marketing, said, "This new infrastructure immediately offers renewable fuel statewide as the BP diesel fuel terminal currently serves customers from the Carroll, Dubuque, and Des Moines areas, among others." 
 
 
 Scharingson noted a recent study released by the Iowa Biodiesel Board that showed nearly seven out of 10 Iowa voters say they want legislation to ensure the state's diesel fuel supply includes five percent biodiesel (B5). "Iowans want to use biodiesel and believe in its role in reducing our dependence on foreign oil and supporting green jobs," he said.

Biodiesel comes to Ottumwa BP terminal

Posted March 1, 2010
 
 Shareholders of Western Iowa Energy LLC in Wall Lake, Iowa, recently voted down the proposal to consolidate its assets and liabilities under Renewable Energy Group Inc.'s umbrella. 
 

 The proposal, which has been in the works for nearly a year, was voted down by a narrow margin, with 40 percent of the unit holders voting against the agreement and 38 percent voting for it, according to Western Iowa Energy's Securities and Exchange Commission filings. 
 
 Larry Breeding, general manager for the 30 MMgy Western Iowa Energy biodiesel plant, told Biodiesel Magazine that this shareholder rejection was not a mandate one way or the other, but instead was "just not the right business deal at the right time." 
 
 "There just weren't enough voters," he said, adding that at least 50 percent shareholder approval was needed for the REG consolidation agreement to go through. Breeding said if more shareholders were to have voted, the situation may have turned out differently. 
 
 Alicia Clancy with REG said this consolidation process has been a very complex business deal, and, "as one would expect, not all deals receive positive shareholder votes. [Western Iowa Energy] and REG have been excellent business partners in the past, as [it] is a member of the REG network of managed plants." 
 
 The Wall Lake plant will continue operating as Western Iowa Energy, which is governed by an REG management contract that Breed said will have to be renegotiated. 
 
 In related news, another Iowa biodiesel plant involved in the same consolidation agreement with REG, Central Iowa Energy LLC, voted overwhelmingly to approve the merger with 81 percent of its shareholders in favor of the consolidation agreement and only 1 percent against it. 
 
 Clancy also said Danville, Ill.-based Blackhawk Biofuels LLC voted to approve the arrangement.

Western Iowa Energy rejects REG merger

Posted March 2, 2010

 
 The biodiesel industry is continually searching for new outlets of fats, oils and grease (FOG) that producers can tap into. To that end, the Fairfield, N.J.-based company, Renewable BioSystems LLC, has recently licensed the North American rights to make and market what it dubs "advanced oil extraction" units with "significant waste-to-energy conversion metrics." 
 
 The oil extraction machine was originally developed in England, and three of these units are operating in the U.K. and Germany today, one of which is in use at an existing biodiesel plant. Peter Behrle with Renewable BioSystems told Biodiesel Magazine that the key to the oil extraction devices is their maximization of oil release from any number of feedstocks such as livestock offal, food waste, fish residues and other prevalent wastes. 
 
 Behrle said these machines do more than just centrifugation though. "It's about particle size reduction, heat and centrifuging," Behrle said, adding that biodiesel producers are more familiar with vertical centrifuges for liquid-liquid separation than horizontal centrifugation, which Renewable BioSystems' machines employ. 
 
 The company isn't necessarily suggesting biodiesel producers go out and buy one of these units and start accepting solid food wastes at their plants though. "It's not easy in terms of getting permitting through to begin accepting food waste," Berhle said. 
 
 For biodiesel projects under development or for existing producers located next to a slaughterhouse or food processing facility, however, Behrle said, "We stress a co-location strategy for biodiesel producers." By this he means negotiating a deal with the facility to locate one of these oil extraction units on-site, from which the biodiesel facility can arrange a steady supply of feedstock for its operations. 
 
 Size of the units varies depending on need, and throughput ranges from 3 metric tons per hour to 15 metric tons per hour. Behrle said the price tag ranges from $1.5 million to $3 million. 
 
 The company stated that 95 percent of any given material's "fat" content is extracted as oil. For reference, Renewable BioSystems said that general food waste typically contains 8 percent to 26 percent fat/oil content; dough and pie waste, 26 percent; dissolved air flotation, or DAF, sludge, 8 percent to 30 percent; swine bones, 12 percent; chicken offal, up to 34 percent; swine offal, 24 percent; and lamb offal, 32 percent.

Extraction device may increase FOG supplies

Posted March 2, 2010

 
 On March 1, Senate Majority Leader Harry Reid (D-Nev.) and Sen. Max Baucus (D-Mont.) introduced the American Workers, State and Business Relief Act, a $150 billion piece of legislation that includes an extension of the biodiesel tax credit. It could see a vote this week, after fierce bickering has dominated proposals for job creation legislation between Democrats and Republicans on Capitol Hill.
 
 Biodiesel producers have watched hopefully and helplessly as a tax credit "extender" has been included now in four different pieces of legislation since last fall. For the time being, the industry remains a ringside spectator. 
 
 One Biodiesel Magazine source said the fact that some players in the biodiesel industry were "double-dipping" in 2007 and 2008 by taking the $1 per gallon federal excise tax credit for methyl ester blending, then shipping the fuel to Europe to cash in on additional subsidies, has caused a "public relations issue." 
 
 "The industry is also spread out and diverse, so the question has been 'who's going to be the champion?'" the source said. "And [the biodiesel industry] isn't economically big enough for anybody to care-that's why they've had such a hard time getting this thing passed."

Another Jobs Bill for biodiesel to watch

Posted March 3, 2010
 
 Despite reports from various media outlets that the Iowa Biodiesel Board called "erroneous," the bill that would mandate 5 percent biodiesel blending in Iowa's diesel pool, Senate File 464, is still "alive and well," said Randy Olson, director of the IBB. 
 
 With the RFS2 now in place, Olson said biodiesel will be used by oil companies in states that have requirements, because these drive infrastructure development. 
 

 He testified before the House Agriculture Committee on March 1 in favor of the proposed Iowa Biodiesel Fuel Quality Standard measure. The measure, which passed the State Senate last year with bipartisan support and now awaits passage in the House, would ensure that petroleum companies blend at least 5 percent biodiesel (B5) into the state's diesel fuel. 
 
 As the legislation gets closer to a vote, some fierce bickering has ensued. 
 
 Decker Trucking, which participated in the Two Million Mile Haul-a biodiesel performance study that included carriers, OEMs and biodiesel producers and reported positive results-has reportedly changed its stance on biodiesel now that a mandate looms. Decker told Biodiesel Magazine in 2007 that it was going to help promote the use of biodiesel in the trucking industry, and that it had used the fuel with positive results. 
 
 "The main thing is we need to get credible information out there to the people [of the fleet industry and media], and not just the rumors or false information that has been circulating in the market," said Dale Decker in the 2007 article. "We're going to get [the information] out there and tell people what we're actually finding. Once people get our truthful and accurate information from our test to make a decision, it's a no-brainer."
 
 The firm nevertheless sent a very negative letter to the Iowa Motor Trucking Association last month, saying that biodiesel did not perform well in cold weather, that its lubricating benefits were minimal and that the fuel was not cost effective. Renewable Energy Group Inc. of Ames, Iowa, which also participated in the Two Million Mile Haul, put out a letter Tuesday that catalogued all of the positive comments Decker has made in support of biodiesel in recent years, asking "What's Changed?"

Iowa B5 legislation alive and well

Posted March 3, 2010
 
 The American Society of Agricultural and Biological Engineers has revised its standard for testing biodiesel fuel. ASAE EP552.1, Reporting of Fuel Properties when Testing Diesel Engines with Alternative Fuels Derived from Plant Oils and Animal Fats, covers the reporting of testing of any alternative fuels derived from plant oils and their blends with petroleum diesel for use in diesel engines.
 
 While ASTM standards are dominant in the U.S. biodiesel industry, the new ASABE standard contains many references to ASTM and basically serves as laboratory guide for proper testing procedures and reporting at the university level, said Scott Cedarquist of ASABE. "This is for assessing different crops at the ag research stations along with their consistencies and performance as feedstocks," he said. "ASTM standards are a little different in that they mostly apply to biodiesel's performance on the road." 

 
 The original document was developed in the 1990s. Since that time, with the rapid growth of the biodiesel industry, the procedures and practices in reporting the testing of such alternative fuels have evolved considerably. The revised document reflects current practices and international standards, with input obtained from experts in industry, academia, and public service.

ASABE revises its biodiesel standard

Posted March 8, 2010
 
 Springboard Biodiesel, manufacturer of the trademarked BioPro line of biodiesel processors, will host a comprehensive, introductory workshop on small-scale production at its facility in Chico, Calif., March 26 and 27. The course is designed to help people who want to make their own biodiesel, or for those who wish to polish their biodiesel skills and learn more, said Matt Roberts, vice president of marketing. 
 
 "There aren't many of these types of courses offered anymore," he said, adding that this may be a reflection of the industry's current state. 
 
 The course will be held at Springboard's new, scaled up facility where it manufactures the BioPro line of fully automated biodiesel processors, units that are scaled to produce between 40 and 100 gallons of fuel per hour. "It's the Mercedes of biodiesel processors," Roberts said of Springboard's BioPro line. 
 
 The course will cover topics such as production demonstrations, equipment overviews, relevant chemistry and production processes, titration basics, how to make and sell biodiesel, case studies, latest studies on emissions, a tax credit overview and more. The cost to attend the two-day course is $199, and includes meals and a tour of the Sierra Nevada Brewery, which uses solar panels, fuel cells and biodiesel at its facility. 
 
 The course will be held at 341 Huss Lane in Chico, Calif. Click <a target="_blank" href="http://tinyurl.com/ykxseld" rel="external">here</a> to sign up.

Springboard to host production workshop

Posted March 9, 2010

 
 A dispute over the Bioheat trademark was recently settled in favor of the registered trademark holder, the National Biodiesel Board. 
 
 Earlier this year, the NBB initiated a lawsuit against Tarm USA Inc., a New Hampshire-based company that was using the term "BioHeatUSA" in relation to unrelated products. The recent settlement over Tarm USA's unlicensed use of the word Bioheat calls for discontinued use of the BioHeatUSA term within six months, as well as changing its Web site domain name (www.BioHeatUSA.com). 
 
 BioHeatUSA sells wood- and pellet-fired boilers, among other heating systems. 
 
 "Protecting the Bioheat trademark is about protecting the integrity of the product on behalf of the entire industry and the more than 300 dealers who offer the fuel," said Paul Nazzaro, petroleum liaison for NBB. "We're dead set on protecting the Bioheat identity. Bioheat heating oil offers a better alternative for the environment and for consumers. The fuel and this settlement is a win for the environment, the industry and consumers using cleaner burning Bioheat heating oil." 
 
 The NBB obtained federal trademark registration on Bioheat, a B2 to B5 blend of ASTM-spec biodiesel in heating oil, and launched its official logo in 2006. The trademark was licensed to the National Oilheat Research Alliance, which has sublicensed the Bioheat trademark to hundreds of retailers.

Bioheat trademark dispute settled

Posted March 10, 2010
 
 Soybean producers gathered in Anaheim, Calif., last week to review and revise the policy direction of the American Soybean Association. One hundred thirty three producers from ASA's 25 state affiliates served as voting delegates in this annual process that guides the association as it pursues future initiatives to improve U.S. soybean farmer profitability. 
 
 The voting delegates' session was held on March 6, following the close of the Commodity Classic Convention and Trade Show. What follows are the most significant additions and modifications covering a variety of important soybean issues. 
 

 Biodiesel and Bio-based Products
 ASA strongly encourages the retroactive reinstatement of the federal biodiesel tax credit and encourages Congress to make the tax credit permanent. ASA supports restructuring the biodiesel tax credit from a blenders credit to a production credit, and encourages the U.S. EPA's implementation of the revised renewable fuels standard (RFS2). 
 
 ASA supports implementation of the bio-energy program as authorized in the 2008 Farm Bill to provide Commodity Credit Corporation payments to domestic biodiesel producers on all production to offset feedstock costs and subsidized foreign biodiesel imports. ASA supports bio-energy program payments to all domestic biodiesel producers regardless of location or ownership.
 
 ASA supports incentives for the use of bio-based products and expansion of USDA's bio-preferred product list, finalization of the bio-based product label, and an equitable tax credit for bio-based products. 
 
 Technology
 ASA supports enabling trait providers and seed companies to access and use the data package of a patented biotech trait through agreements and established procedures for the purpose of preparing to register and commercialize generic versions of the trait after patent expiration. ASA supports efforts by the private sector or, if necessary, the federal government that facilitates this process. ASA encourages the seed production companies to continue offering "genetic technology" post patent. 
 
 While ASA supports establishing a process to maintain foreign registrations of biotech traits in countries that require them as long as traces of a trait are identified in export shipments, ASA also supports efforts to establish a commercially viable and internationally accepted tolerance levels for the presence of deregistered traits in shipments and products in order to ensure the competitiveness of U.S. soy exports in world markets. 
 
 Delegates also added support for the science of nanotechnology to ASA's resolutions. Nanotechnology, which is the study of the controlling of matter on an atomic and molecular scale, could help develop drought and pest resistant crops, and also maximize yield. 
 
 ASA strongly supports biotechnology and nanotechnology and believes the development of biotechnology-enhanced and nanotechnology crop varieties and products will benefit farmers, consumers and the environment. ASA believes biotechnology and nanotechnology are key tools that will help meet growing world food, health and energy needs. Production-oriented research should be pursued in both these areas. 

 
 Climate Change
 ASA strongly opposes Cap and Trade legislation or similar regulatory rules until such time that an international agreement provides for enforcement of similar provisions world-wide as not to put U.S. farmers or livestock producers at an unfair trade disadvantage. 
 
 ASA strongly opposes greenhouse gas restrictions or any other greenhouse gas regulations that would negatively affect the profitability of the U.S. soybean and livestock farmer. Any climate change legislation must ensure that agriculture is not adversely impacted by climate change legislation or regulation, and can maintain international competitiveness. 
 
 In the absence of Climate Change legislation, ASA supports legislative measures that would prevent EPA from regulating greenhouse gases under the Clean Air Act that will have a harmful effect on U.S. soybean and livestock production. 
 
 Environmental Regulation
 ASA recommends that the Clean Water Act be amended to exempt producers from litigation/liability and not require a National Pollution Discharge Elimination System (NPDES) permit when producers can certify that the pesticides have been used in a manner that complies with the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).
 
 ASA requests the EPA discontinue any further implementation of "chemical specific" or "chemical class specific" use of buffer restrictions on pesticide labeling until the agency establishes protocols to evaluate "drift reduction technology" (DRT) and incorporates DRT language into pesticide labeling. 
 
 ASA opposes the establishment, by any unit of government, of water quality impairment taxes or fees, and supports a requirement that Total Maximum Daily Load (TMDL) allocations be updated when new science indicates the existing allocations are incorrect. 
 

 ASA strongly opposes any effort by EPA or judicial ruling to regulate dust, whether from crop or livestock production, as a pollutant. 
 
 Other Issues
 ASA supports front of package labeling on processed foods indicating the level of saturated fat content on a per serving basis. In recent years, some food companies have significantly increased the amount of saturated fat in their products to avoid listing trans fat content on their labels. 
 
 ASA supports establishment of an estate tax exemption of $5 million per individual with a 100 percent spousal exemption, indexed to inflation with continuation of stepped up basis, and with a maximum tax rate of 30 percent for small businesses. Special use valuation should include all land staying in production agriculture for minimum of 15 years.
 
 U.S. soybean farmers recognize that agricultural development in Least Developed Countries (LDC's) can help drive economic development worldwide. U.S. soybean farmers stand ready to work with participants in the soybean value chain targeting subsistence farmers to improve nutrition to their community, raise themselves from poverty and develop strong local markets providing such assistance complies with current agricultural policy and law.
 
 ASA supports reform of the Surface Transportation Board (STB) to address competitiveness issues. ASA supports legislative efforts to promote increased competition in the rail industry to foster better service and lower rates, and strong state and federal assistance in maintaining low volume rail facilities in rural areas of the country. ASA encourages alternative access for farmers in the event of railroad grade closings during and following railroad development. 
 
 ASA encourages all soybean farmers to voluntarily be a member of ASA so they better understand how policy and active farmer involvement compliments their checkoff funded successful marketing, research and education efforts for U.S. soybean farmer profitability.
 
 ASA represents all U.S. soybean farmers on domestic and international issues of importance to the soybean industry. ASA's advocacy efforts are made possible through the voluntary membership in ASA by over 22,500 farmers in 31 states where soybeans are grown.
 
 SOURCE: AMERICAN SOYBEAN ASSOCIATION

Soybean industry sets policy direction

Posted March 10, 2010

 
 Maersk Line, the large Denmark-based liner shipping company that services customers all over the world, used more than 9 million tons of bunker fuel in 2009 and has set a corporate target to reduce its carbon dioxide emissions by "20 percent per container moved" by 2017. 
 
 On Mar. 5, Maersk announced that they were testing biodiesel in hopes that the fuel could help achieve those goals. 
 
 "To the best of our knowledge, we are the first to test biodiesel in a large container vessel," said Jacob Sterling of Maersk's sustainability team. "We want to be ready when biofuels become sustainable in large volumes." 
 
 Five business units are already carrying out tests on the fuel to see how biodiesel reacts to Maersk's tanks and engines. The test is being performed using biodiesel based on crops grown in temperate regions or reused oils, as the company stated it wants to use a "biofuel that does not take away agricultural land from the world's food supply."
 
 Biodiesel blends between 5 percent and 7 percent are currently being tested. Maersk is cooperating with a consortium of Dutch sub-contractors on this project, which is being funded in part by the Dutch government.

Mega-shipper tests biodiesel

Posted March 10, 2010
 
 On March 10, the U.S. Senate passed H.R. 4213, the American Workers, State, and Business Relief Act of 2010, by a 62 to 36 margin. Among its provisions, the legislation provides a one year retroactive extension of the biodiesel tax incentive. 
 
 "The domestic biodiesel industry is pleased that that the Senate has approved a retroactive extension of the biodiesel tax incentive," noted Manning Feraci, National Biodiesel Board vice president of federal affairs. "The lapse in the biodiesel tax credit has been extremely disruptive to the domestic biodiesel industry, and a retroactive extension of this worthwhile incentive will help America realize the job creation, energy security and environmental benefits associated with biodiesel." 
 

 The biodiesel tax incentive has played a critical role in allowing the U.S. to achieve commercial scale production of biodiesel, an advanced biofuel that meets a commercial fuel specification and is used to displace petroleum diesel fuel. This incentive is designed to make biodiesel price competitive with conventional diesel fuel, and is structured in a manner that allows the value of the incentive to be recognized immediately in the market price of the biodiesel. Since the lapse in the tax credit, the US biodiesel industry has seen a dramatic drop in demand and production, leading to additional job losses in this difficult economy. The 23,000 jobs currently supported by the U.S. biodiesel industry are in jeopardy if the incentive continues to lapse.
 
 With passage of H.R. 4213, the U.S. House and U.S. Senate must reconcile the differences between the two versions of the bill approved by the respective chambers. H.R. 4213 as approved by the U.S. House in December, 2009 also provides for a one year retroactive extension of the biodiesel tax incentive.
 
 "The NBB strongly encourages House and Senate to work quickly and get legislation retroactively extending the biodiesel incentive to the President's desk for signature. Quick action will allow the nation to again reap the substantial benefits associated with a healthy domestic biodiesel industry," concluded Feraci.
 
 SOURCE: THE NATIONAL BIODIESEL BOARD

Industry Urges House and Senate to Quickly Reconcile Respective Bills

Senate passes biodiesel tax incentive

Posted March 10, 2010
 
 On May 23, the Chicago Mercantile Exchange Group will launch a palm oil futures contract. Palm oil is the most abundant and widely consumed edible oil in the world and has strong ties to the biodiesel industry. Each contract will be equivalent to 25 metric tons of crude palm oil.
 
 Crude palm oil is contained in a multitude of diverse products, and is a major feedstock for biodiesel production in Asia. Settlement prices at expiration of the new electronically traded futures contract will be based on Bursa Malaysia Derivatives Berhad Crude Palm Oil futures, the global benchmark for crude palm oil pricing that is traded in Malaysian ringgit (one ringgit equals 0.30 U.S. dollars). The use of the settlement prices is part of an agreement between CME and Bursa that includes a provision for CME Globex electronic trading services and an equity investment in Bursa Malaysia by CME Group.
 
 "This opportunity to work with our Bursa Malaysia partners enables us to offer a contract that meets the growing customer demand for trading crude palm oil, one of the world's most widely used commodities, on CME Globex, the same electronic trading platform as CME Group's existing suite of agricultural products," said Tim Andriesen, CME Group managing director of agricultural products and services. "Food processers, commercial firms and other multinational companies that use crude palm oil and trade in U.S. currency now have an alternative for hedging that risk."

CME Group to launch palm oil futures

Posted March 16, 2010
 
 In the northern regions of the U.S. and Canada, winter temperatures can reach minus 40 degrees Fahrenheit-a harsh environment for biodiesel transport. Thermex Engineered Systems Inc. has developed a system for in-transit heating of biodiesel during cold weather transport, a retrofit system that can be used to upgrade existing uninsulated fuel tankers to accommodate biodiesel transport. 
 

 The biodiesel is heated by multiple HeatProbes, a patent-pending immersion heater that takes advantage of waste heat from the truck engine's coolant, which is installed through a two-inch tank port. The supply and return lines are joined to the vehicle's coolant lines, allowing the heat from the running engine to be transferred to the biodiesel in the tanker-negating the use of steam hook-ups or other limited-use heating alternatives. 
 
 A HeatProbe system can be installed on any tanker truck or trailer, according to Thermex Engineered Systems, and multiple probes and tanks can be plumbed up in parallel sequence. Trailers can also be equipped with a stand-alone heating package that includes an onboard coolant heater mounted on the tanker service rail. This is useful for extended layovers and will also accommodate towing by any tractor with or without quick-coupler connections. 
 
 Installation involves tank-shop installed two-inch half-couplings along the tank bottom between the frame rails, followed by hook-up of the HeatProbe plumbing kit supplied by Thermex Engineered Systems. 
 
 Any piece of equipment or vehicle that runs on biodiesel and has to be operated in a cold environment could also benefit from the installation of a HeatProbe system, the company stated. The biodiesel fuel is heated "in-tank" to overcome any cold filter plug point issues and to prevent product clouding.

HeatProbes utilize waste heat from the truck's engine to keep biodiesel from cooling down in transport. // PHOTO: THERMEX ENGINEERED SYSTEMS INC.

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HeatProbes help biodiesel stay warm en route

Posted March 16, 2010
 
 The Pennsylvania Department of Agriculture and the National Biodiesel Board are holding a one-day event, called the Pennsylvania Biofuel Development Conference, on April 20. The purpose of the conference will be to provide information to biodiesel producers on what should be expected when the state's B2 mandate goes into effect May 1. 
 
 The mandate is based on trigger points, so when instate production-not installed capacity but actual production volumes-reaches 100 MMgy, the Pennsylvania biodiesel standard will move from B2 to B5. Keystone Biofuels' Ben Wootten, also president of the Pennsylvania Biodiesel Producers Group, said installed biodiesel production capacity in Pennsylvania is currently 114 MMgy. 
 
 The B2 mandate is for on-road diesel fuel only, but Wootten, who just accepted the position of regulatory chair for the National Biodiesel Board, said Bioheat legislation was just recently proposed, Senate Bill 1282, which would seek a B5 mandate for all heating oil sold in Pennsylvania beginning May 2011. 
 
 Justin Fleming, press secretary for the Pennsylvania Department of Agriculture, told Biodiesel Magazine that the April 20 event will host sessions focusing on statewide biodiesel distribution systems, best practices to ensure fuel quality, testing methods and more.

 
 The conference will be held at the Pennsylvania Farm Show Complex & Expo Center in Pennsylvania's capital city of Harrisburg. To register for the show, or for more information, contact Michael Radar at (717) 787-9089.

PA ag dept., NBB to host biodiesel event

Posted March 16, 2010
 
 A new biodiesel project, Golden State Biofuel, is under development in southern California. Located in Indio, Calif., Golden State Biofuel is finalizing the permitting phase for its 1 MMgy biodiesel refinery being positioned in a preexisting Indio building. 
 
 Randall Lichner, chief operating officer for Hawaii Bioenergy-the parent company of Golden State Biofuel and Rocky Mountain Biodiesel in Parker, Colo.-said once permits are fully secured, the company will begin moving in its process equipment. Lichner said he anticipates the biodiesel plant to be fully operational by the middle of summer. 
 
 The Indio plant will employ continuous batch processing and be multifeedstock, even though Lichner added that used cooking oils will be the primary feedstock used. 
 
 Lichner also said the tax incentives available to biodiesel producers in California were a deciding factor in locating the project there, especially in an Enterprise Zone such as the one Golden State Biofuel is located in. Gross tax liability reductions, low interest loans and rebates on excise taxes are some of the incentives Lichner mentioned his project is taking advantage of.

New biodiesel project comes to SoCal

Posted March 17, 2010
 

 More and more products are surfacing to compete directly with sodium methylate for market share in the catalyst sector of biodiesel processing. As the industry is embracing low-quality feedstocks for production, new catalysts are needed that deal with a variety of animal fats, waste greases and waste vegetable oils. "Sodium methylate works better for very clean, degummed feedstocks," said Jeff Fischer of Cyclogine Inc., a Wisconsin-based, start-up biodiesel technology provider. 
 
 Cyclogine is in the processes of bringing to market the third or possibly the fourth generation of its original catalyst, but the technology has not yet been implemented at a biodiesel plant. The company is looking for potential partners-biodiesel plants-to validate the performance of its catalyst at a full-scale operating facility. 
 
 One target area for Cyclogine is a practice that has long been thought to create synergies between the ethanol and biodiesel industries. "As a means of increasing their profit margin, the ethanol industry is extracting corn oil prior to or after the starch is removed [to ferment]," Cyclogine said. "This corn oil can be used to produce biodiesel. However, their corn oil is usually extracted after fermentation, leaving it contaminated with a number of undesirable components, and therefore unsuitable for producing clean biodiesel."
 
 Corn oil extracted from the back end of an ethanol plant is a potentially abundant and cheap waste stream that could serve as a biodiesel feedstock. "The problem is that it has a lot of free fatty acids and requires a lot of effort to clean up. Most plants can't convert it, but our catalyst can," Fischer said. 
 
 This technology "can be used to build state-of-the-art biodiesel manufacturing plants or modify existing biodiesel manufacturing plants," providing them with additional feedstock choices. In addition, Cyclogine said its advanced technology will make its customers' plants run more efficiently and profitable. "Our processes will strive to recycle and reuse the majority of all chemicals and energy not consumed," the company said.

Cyclogine markets new biodiesel catalyst

Posted March 17, 2010
 
 During the first round of fiscal year 2009 Farm Bill funding for renewables, USDA Secretary Tom Vilsack awarded funding to 123 recipients in 34 states to accelerate the production and usage of advanced biofuels. 
 
 Among those receiving money was FutureFuels Chemical Co. of Batesville, Ark. This integrated biodiesel refinery and chemical producer was awarded more than $544,000. Richard Byers, biofuels manager for FutureFuels said that the money would be used to purchase a distillation column and other equipment for the biodiesel plant. "By installing a distillation column, we're responding to the needs of our customers," Byers told Biodiesel Magazine. "The petroleum industry is our primary customer and they are very aware of impurities in fuel and some of the advantages that distillation provides. I'm certain that they want to see the biodiesel industry succeed, but their job is to protect fuel consumers."

 
 For the complete list of biodiesel and other renewable fuel producers, click <a target="_blank" href="http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2010/03/0127.xml" rel="external">here</a>. 
 
 Applications are also being accepted for remaining FY 2009 funding under the Repowering Assistance Program (Section 9004), which provides for payments to biorefineries (that were in existence when the Farm Bill was passed) to replace the use of fossil fuels in their operations with renewable energy from biomass. Biorefineries interested in obtaining funding must apply by June 15, 2010. 
 
 "The Obama Administration is working aggressively to give our nation's rural communities, farmers, ranchers and producers of biofuels the financial tools they need to help bring greater energy independence to America," Vilsack said. "This funding will help the nation's advanced biofuel industry produce energy from sustainable rural resources, and in doing so create jobs and stimulate rural economies across the nation."

Biodiesel producers receive Farm Bill grants

Posted March 22, 2010
 
 Mission NewEnergy Ltd., a biodiesel refiner and Jatropha plantation company, recently announced that the Indian Government (Ministry of Finance) has approved further capital investment by Mission NewEnergy into its Indian feedstock business, and to carry on with the original approved activity of being engaged in the contract farming of jatropha and utilization of the jatropha oil for domestic or export markets.
 
 "This affirmation confirms the Indian government's support for the development of the jatropha industry and the leadership role that Mission NewEnergy is playing in the further development of the industry," said Nathan Mahalingam, managing director of Mission NewEnergy.
 
 While the company expects India to become a significant market for jatropha biodiesel in the future, it currently sees the United States and Europe as its primary markets given significant legislated demand.
 

 Mahalingam stated that Mission NewEnergy is already in discussions with several oil majors regarding new off-take agreements similar to its recent contract with U.S.-based Valero Energy Corp. 
 
 Mission NewEnergy owns and operates a 30 MMgy biodiesel plant in Kuantan, Malaysia, adjacent to which the company is commissioning another biodiesel plant, a 75 MMgy refinery designed and built by turnkey contractor KNM Process Systems SdnBhd that will employ Axens' heterogeneous catalyst technology. The company stated that oil from its jatropha farms will eventually replace crude palm oil as feedstock for its biodiesel manufacturing plants.

Mission NewEnergy gets nod from Indian gov't

Posted March 17, 2010
 
 Residential heating oil prices increased during the week ending March 8, 2010. The average residential heating oil price rose 1.9 cents per gallon to reach $2.91 per gallon, 73.7 cents per gallon higher than the same time last year. Wholesale heating oil prices gained 6.7 cents per gallon to reach $2.18 per gallon, 87.6 cents per gallon higher than at this time last year.
 
 "You have to remember that this time last year was an aberration," said Charles Cross of Pittsburgh's United Oil Co. "Almost all commodities dipped very low, crude was near $30 per barrel and fats were at 13 cents per pound. If you back two years instead of one, the numbers aren't really far off from the numbers before the crash."

EIA reports rising heating oil prices

Posted March 23, 2010
 
 GlobalData, a global market intelligence services company, recently published a report titled, "Global Biodiesel Market Analysis and Forecasts to 2020." 
 
 Worldwide biodiesel production increased from 253.34 million gallons in 2001 to 4.16 billion gallons in 2009, at a compound annual growth rate (CAGR) of 41.9 percent. Supported by governments to increase energy independence and meet rising energy demand, the biodiesel market is expected to produce 11.96 billion gallons of biodiesel in 2020, representing a CAGR of 10.1 percent during 2009 to 2020. 
 
 Europe is the leading biodiesel market with a production share of 49.8 percent, followed by the Americas with a production share of 32.8 percent, and Asia Pacific with a share of 4.4 percent in 2009. European share in biodiesel production has been declining since 2001 while the share of Americas and Asia Pacific increased. The top five biodiesel producing countries in the world are Germany, the U.S., France, Argentina and Brazil. All of these countries together produce 68.4 percent of the world's total biodiesel. Australia is the largest producer of biodiesel in Asia Pacific, followed by China and India. 

 
 The U.S. is the second largest producer of biodiesel in the world, producing 17.7 percent of the world's biodiesel in 2009. The biodiesel market in the U.S. is expected to reach 745.5 million gallons in 2010 and 1.7 billion gallons in 2020. The U.S. government has been promoting the production and use of biodiesel through various incentives and policy measures. The revised renewable fuel standard (RFS2) program has been formulated to meet the requirements of the Energy Independence and Security Act of 2007. RFS2 requires the use of 11.1 billion gallons of renewable fuels in 2009, which will continue to increase thereafter to reach 36 billion gallons by 2022. According to RFS2, biodiesel is categorized in the biomass-based diesel category and a minimum of 1 billion gallons annually is to be blended into U.S. diesel fuel supplies by 2012. 
 
 The German biodiesel market is facing a bleak outlook due to the imposition of taxes that have made biofuels too expensive for its consumers. Though the country is the largest producer of biodiesel in Europe, the future for the market looks weak. This is mainly due to the taxes the German government has imposed on green fuels. Another factor that has contributed to the negative outlook of the German biodiesel market is the generous export subsidies received by the U.S. producers. The EU has now imposed an import tariff on US biodiesel imports to protect the European market. The country has reduced the blending target to 6.3 percent in 2010 from 6.8 percent as set out previously in the plan to cut carbon dioxide emissions, although the specific blending mandates for biodiesel will remained unchanged until 2014. 
 
 China has become the world's largest automotive market in terms of units sold, surpassing the U.S. This, coupled with the country's concern for energy security, has led to increased interest from the government in developing the alternative fuel vehicle market in the country. In 2009, the government of China provided a 10 billion yuan ($1.5 billion) subsidy for three years to automakers who upgrade their technology and develop alternative fuel vehicles. This stimulus package will result in rising activity in the Chinese biofuels sector. 
 
 "Global Biodiesel Market Analysis and Forecasts to 2020" is the latest research from GlobalData. This report gives an in-depth analysis of the global biodiesel market and provides forecasts up to 2020. The research analyzes key trends, major issues and growth opportunities in the global biodiesel market. Market share by production capacity, elaborate profiling of major industry participants and information on major present and upcoming production facilities provide insight into the competitive scenario in the global biodiesel industry. This coupled with information on important news and deals provide a comprehensive understanding of the market. Information on the regulatory framework and key policies governing the industry has also been dealt with in detail.

March 2010

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Business Briefs

Business Briefs

Columns

I'm No Protectionist, but...

Starting Up in the Worst of Times

Featured

Pink Sheet Persuasion

Seeking Answers

March 2010