What do an emergency room medical doctor, gardening and a community-scale biodiesel plant have in common? The answer is &ldquo;Bio&rdquo; Beth Renwick, majority owner of Midlands Biofuels in Winnsboro, S.C. With production capacity less than 1 MMgy, big things are always happening at this small biodiesel processing facility in the Southeast. When the business started in 2008, Beth&rsquo;s role was simply an investor&mdash;an investor in her husband &ldquo;Bio&rdquo; Joe Renwick&rsquo;s 50/50 joint venture with former co-owner Brandon Spence.
&ldquo;After Brandon and Joe parted ways in February 2013, we had many conversations and looked outwardly for other partners, investors and loans,&rdquo; Beth says. &ldquo;After the split, I assumed the role that Brandon&rsquo;s wife, Becky, had performed&mdash;billing, invoicing, payroll, tax filings and anything that needed doing. As the inner workings of the business became clear, Joe and I were able to brainstorm together about all aspects of the company. Sometimes what you&rsquo;re looking for is right in front of you. Fifty-one percent ownership was decided upon, and we are looking forward to the opportunities a woman-owned business may bring.&rdquo;
The couple met in Charlotte, N.C., in 2003, thanks to an introduction from a mutual friend with whom Joe attended The Citadel. &ldquo;We caught up again in 2004 and were engaged in seven months,&rdquo; Beth says. &ldquo;We were married six months later [October 2005] in Charleston, S.C., my hometown, under live oak trees on the banks of the Ashley River beside The Citadel.&rdquo;
&ldquo;After meeting briefly in Charlotte, a year passed and I happened to run into her at a local bar, which is now one of our accounts,&rdquo; recalls Joe. &ldquo;As soon as I recognized her, I walked up and I asked for her number. She said, &lsquo;You don&rsquo;t waste any time, do you?&rsquo; I replied, &lsquo;I lost you once and I am not going to lose you again.&rsquo;&nbsp; Seven months later I asked for her hand and soon after we were married.&rdquo;
When they met, Joe owned a landscaping business and Beth was on her way to becoming a medical doctor. She received her medical education at University of South Carolina School of Medicine, followed by a three-year emergency medicine residency at the Medical College of Georgia. Since July 2008, Beth has been practicing in the ER at Lexington Medical Center in West Columbia, S.C.
In 2006, Joe began home-brewing biodiesel in their garage for his own use, after meeting Mat Davis, a resident with Beth at MCG, who first showed him how to make biodiesel. &ldquo;Within 30 minutes of leaving his house, I was buying pipe fittings and valves,&rdquo; Joe says. He built his own dual-reactor processor with stand pipes and wash/dry tanks in addition to waste vegetable oil (WVO) processing tanks in the garage. &ldquo;At first, I was cautious about a heated chemical reaction occurring in the homestead,&rdquo; Beth says, &ldquo;but I became a fan after we noticed the performance benefits in Joe&rsquo;s truck.&rdquo;
One year and 10 50-gallon batches later, Joe showed former Citadel football teammate Spence his set-up, and within a few months they had secured $20,000 in angel funding and were off. &ldquo;We started purchasing equipment, using credit cards and any money we could put together,&rdquo; Joe says. &ldquo;I even took a loan against my paid-off &lsquo;03 Chevy diesel that started all this craziness in the first place. Less than six months later, we secured a small business loan using a massive amount of process equipment we were able to find, and Dr. Beth&rsquo;s signature as well. She cosigned this and backed every loan we have ever had&mdash;just one benefit of marrying a doctor. Four months from then, we built the plant much as it is today and started &lsquo;Making Fuel Baby!&rsquo;&rdquo;&nbsp;
Process Improvements
Joe says after Spence left the company, and he became 100 percent owner (before Beth&rsquo;s majority ownership came about), &ldquo;the flood gates opened with plant and process improvements, and new business strategies to survive this market.&rdquo; He installed an AgSolutions Boiler, which he acquired secondhand from a local biodiesel plant that went bankrupt years before. &ldquo;This allowed us to eliminate 100 percent of our natural gas use and gave us an outlet for waste oils and off-spec fuel to be used to heat the plant,&rdquo; he says. Over the years, Midlands Biofuels accrued thousands of gallons of bad oil, so the company hasn&rsquo;t paid to heat its plant in more than 14 months since installing the boiler because it can use the off-spec oil. It also generates tax credits for alternative fuels being used as boiler fuel, equating to about 83 cents per gallon.&nbsp;
One of the most important improvements made at the plant includes the purchase of a rotary screw air compressor. &ldquo;We operated our plant on a traditional-style compressor for four years. I always wanted a rotary screw air compressor. I heard it would help the process,&rdquo; he says. &ldquo;This provides us with dry air, and plenty of it. We can now run multiple processes at the same time, wide open.&rdquo;
Midlands Biofuels also installed eight new process tanks; new pumps with higher flow rates and lower power consumption; dry-washing to eliminate wastewater while increasing yields and throughput; a new vacuum pump to increase methanol recovery efficiency and reduce operating temperatures; a methanol recovery heating system upgrade to reach 230 degrees Fahrenheit, and new filtration systems to increase oil processing throughput. Midlands Biofuels started hauling WVO wastewater for 13 biodiesel plants and waste oil processors. Joe also designed a new process to refine the waste stream, to capture more value from the waste oil and glycerin processes. &ldquo;We spent thousands of dollars on testing to refine our process and validate our new changes and techniques for reactions, methanol recovery, biodiesel purification and, most importantly, proving operating without water-washing could be done without process modifications while increasing biodiesel quality and stability,&rdquo; he says. &ldquo;Due to my sensitive nose for a deal, only $30,000 total was spent making these upgrades. Yields are up and our costs are lower than ever.&rdquo;
The plant continues to break its own records in batch and methanol recovery yields, reaction times, total volume produced in 30 days and, most importantly, fuel quality. &ldquo;In May, our secondary waste process set a record processing close to 1 million pounds of plant waste,&rdquo; Joe says. &ldquo;In April, we set a feedstock processing record and supplied more than 232,500 pounds of 10 to 15 percent free fatty acid (FFA) WVO to another biodiesel plant that can run higher FFA than us. We have grown collections to more than 500 accounts&mdash;250 since Beth and I took over, which is close to a 100 percent increase.&rdquo;
Community Involvement, Distribution
Joe says Midlands Biofuels&rsquo; community efforts are made each day as it increases the size of the Southern Fried Fuel Program, which established drop-off zones where residents can dump their used fryer oil, and servicing the existing 100-plus accounts in this program across South Carolina. &ldquo;We helped found South Carolina&rsquo;s first biodiesel fuel program with the city of Columbia to fuel garbage, fire, dump and service trucks, and other diesels that service the capital city.&rdquo; Essentially, the fuel is made from the waste of the citizens of Columbia, Joe says.
Midlands Biofuels actively works with schools and colleges such as USC, Clemson, Denison and The Citadel, to name a few. The company has trained more than 50 interns over the six years it has been in business and renamed its biodiesel education program &ldquo;Bio4EDU.&rdquo;&nbsp; Most recently, four local high school graduates were hired to work in South Carolina&rsquo;s first &ldquo;Green Summer&rdquo; program. They will get more than 700 hours of training in the biodiesel industry over the next six weeks. The company also helped start the biodiesel program at USC and assisted in the acquisition of a mobile processor to demonstrate biodiesel production at schools and events around the state.
Midlands Biofuels sells biodiesel blends to the city of Columbia, B5 and B20, as well as B5 to USC. &ldquo;We also sell a lot directly from the plant, either B40 or B99,&rdquo; Joe says. &ldquo;We feel that B40 gives the best blend for performance and emissions reductions. &lsquo;If you can&rsquo;t smell biodiesel in your exhaust, you don&rsquo;t have enough in it!&rsquo;&rdquo; he says. &ldquo;Unfortunately, most of our fuel is blended to B5 or less and no mention of this is made at the pump because they are not required to display blended values if it&rsquo;s 5 percent or less. I have never been a fan of this, but that&rsquo;s the way it is.&rdquo;
Like many biodiesel companies in the Southeast, Midlands Biofuels sells its fuel less than rack price diesel. &ldquo;But distributors are going to charge as much as they can, and keep all the profit for themselves,&rdquo; Joe says. &ldquo;It&rsquo;s an inconvenience for them to make a second trip to get biodiesel and blend it. This takes time and is an extra step for them. Due to this, we get beat down to 40 to 50 cents off rack prices to sell our fuel to distributors.&rdquo; With no support from local, state or federal governments to reinstate subsidies, this may be the trend going forward. &ldquo;It is like I am working at the forefront of a forgotten industry while listening to people talk about the need for finding a solution to the U.S.&rsquo;s petroleum addiction,&rdquo; he says. &ldquo;The solution has been found, tested and proven to work, yet somehow we struggle to find someone willing to pay a price that is high enough to allow us to keep producing. There is very little money to be made in this industry without getting creative and finding new processing techniques and markets for biodiesel use.&rdquo;
After 9/11, national security was obviously front-and-center in U.S. policy, and energy independence through support of domestic fuels such as biodiesel played a critical role. &ldquo;The bottom line is, people just don&rsquo;t care as much now because they aren&rsquo;t scared anymore, thus the government isn&rsquo;t supporting our industry anymore,&rdquo; he says. &ldquo;But let fuel prices get to above $5 a gallon again, or have another tragic event happen, and then people come out of the woodwork supporting us. The scariest thing for me is that when the oil spill in the Gulf was happening, we saw very little surge in this industry. This begs the question, &lsquo;Just how big an environmental or national security situation do we need to make people care again and demand alternative fuels?&rsquo;&rdquo;&nbsp;
Bringing It Home
The most stressful aspect of running Midlands Biofuels together is finding the time to disengage from work and enjoy the nonbiodiesel moments at home, the Renwicks say. They enjoy traveling but also find peace at their farmhouse in Winnsboro. &ldquo;We tend the garden, have a pond with brim and bass, two lovable dogs, a pasture where we practice golf shots and a great porch for country sunsets,&rdquo; Beth says. Joe adds, &ldquo;Since we live on a farm, we enjoy fishing, hunting, gardening, and bush-hogging on biodiesel&mdash;it just smells good&mdash;in an effort to live a more sustainable lifestyle. As the months go by, we are doing less and less work at home and on the weekends, now that we have gotten things around the plant under control,&rdquo; he says.
Running the business together started out very stressful, he adds, and tough on both of them. There was a lot to fix with how the business had been running. Week by week, changes and improvements were made, which they say were exciting at first, but whose fruits weren&rsquo;t seen until months later. &ldquo;Now, we are relatively stress-free and extremely happy together, in both our business and marriage,&rdquo; Joe says. &ldquo;I couldn&rsquo;t be happier with my new business partner. She is smart, decisive and driven to perfect everything we do. She leaves no stone unturned, and making quick decisions about what you find under those stones is key. Beth is a machine&mdash;a perfectionist with unique problem-solving skills developed over the years working in the ER.&rdquo;
Having great employees helps reduce work-related stress too. &ldquo;It&rsquo;s a small and mostly family-run operation,&rdquo; Beth says. &ldquo;Joe&rsquo;s brother Matt is our collections manager, and his dad, Erwin, started working with us after he retired from the post office. Watching the three of them work together is heartwarming.&rdquo; She says Erwin&rsquo;s favorite quote is, &ldquo;If a man can put it together, another man can fix it,&rdquo; adding that observing Joe and Erwin&rsquo;s individual problem-solving skills is both &ldquo;entertaining and educational.&rdquo; Phillip, Midlands Biofuels&rsquo; Renaissance man, can do it all, she says, and oversees fuel production and secondary processes operations, while Daryl is the firm&rsquo;s commercially licensed driver who keeps everything moving safely. &ldquo;They&rsquo;re dedicated and self-motivated,&rdquo; she says. &ldquo;We couldn&rsquo;t ask for better coworkers.&rdquo;
She says since becoming co-owner with her husband, his passion for the industry has infected her. &ldquo;It&rsquo;s another aspect of our lives we can share,&rdquo; Beth says. &ldquo;The best part,&rdquo; adds Joe, &ldquo;is knowing that what I do makes a difference in the lives of millions of people.&rdquo;&nbsp;
When asked what it means for Midlands Biofuels to be a woman-owned business, Beth says, &ldquo;It means we&rsquo;re doing something big. It&rsquo;s an opportunity to be a role model and mentor to young girls, and to demonstrate that there&rsquo;s no limit to possibilities.&rdquo; &nbsp; Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

BIG GREASY: Midlands Biofuels in Winnsboro, S.C., uses equipment such as the aptly named Big Greasy truck to service 13 biodiesel plants and waste oil processors in the Southeast. 


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Beth Renwick, majority owner, Midlands Biofuels

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DROP-OFF POINT: Through its Southern Fried Fuel Program, Midlands Biofuels offers area residents a number of locations to dump their waste fryer oil. 


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ALL SMILES: "Bio" Joe Renwick, right, says while some of Midlands Biofuels' biodiesel is sold as B40 or B99, most of it is blended at B5 or less.

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FREE TIME: When not working on biodiesel or
ER-related issues, the Renwicks enjoy
gardening, kickball, and relaxing and traveling
together.

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The Renwicks of South Carolina, owners of Winnsboro-based Midlands Biofuels, persevere through the biodiesel industry's instability with ingenuity, passion and teamwork. This is their story. 

A Biodiesel Family Affair

The marked increase in U.S. biodiesel production over the past several years was made possible by producers who risk investment in expansion and growth after gauging existing public policy support and private demand. To move this increased product to market, an equally important wave of investment must be made in the supply chain. Biodiesel Magazine speaks with three leaders in the U.S. biodiesel distribution space about the growth and opportunities in biodiesel distribution, and the challenges that lie ahead.
Demand for biodiesel has increased gradually over the past decade, initially as a result of its benefits in energy security, clean air, domestic job creation and federal legislation, according to Steven J. Levy, managing director of Sprague Operating Resources LLC. Levy is also chairman of the National Biodiesel Board. He shares his opinions on the U.S. biodiesel distribution chain, which may not represent those of Sprague Resources LP and its subsidiaries, or the NBB.
As biodiesel began to make inroads throughout the country, there was a price premium to diesel for biodiesel where it was typically fleet users&rsquo; demand comprised mostly of government agencies, utilities and companies seeking to support energy independence and clean air policy. &ldquo;Product was distributed in a decentralized system, via truck or rail, which was not cost-effective,&rdquo; Levy says. &ldquo;Fuel bulk terminal capacity was scarce, if at all. Biodiesel blending was done loading&nbsp; a delivery truck with diesel and loading biodiesel from a transport or rail car on top of the distillate fuel or vice versa, of which the two product loadings could have been long distances apart.&rdquo; Due to the lack of rack blending, Levy notes, there were issues with blends, especially during the winter months. &ldquo;Over time and more recently, as demand grew with the instrumental addition of the federal tax credit, the renewable fuel standard (RFS), and some state and local legislation, we witnessed infrastructure investment,&rdquo; he says.Expanded infrastructure, with additional storage facilities, increased railcar availability and transportation via barge, resulted in reduced costs and reduced risk of product outage. &ldquo;Over the past several years as well, there has been an increase in biodiesel suppliers and retailers at all levels of the supply chain, national, regional and local, investing in infrastructure and increased inventory capacity.&rdquo; This resulted in increased local inventories and biodiesel being more widely available. An additional result is the multitude of various pricing mechanism strategies affording resellers and end users pricing options, Levy explains.
Ultimately, there are several factors that have contributed, and continue to contribute, to the growth of the biodiesel industry. The first factor is the fuel quality acceptance of biodiesel by the petroleum industry, says Michael Devine, Amerigreen Energy Inc.&rsquo;s New England sales and marketing consultant. &ldquo;Many, if not a large majority of, petroleum marketers are not going to risk any fuel quality issues with their ratable customers,&rdquo; Devine says. &ldquo;Second would be the entrepreneurial opportunity for petroleum marketers to diversify their fuels products with a cost-effective, high-quality renewable fuels offering to the diesel and heating oil markets.&rdquo; Finally, like Levy, Devine says the growth of U.S. biodiesel distribution is attributable to the successful implementation of the RFS and the biodiesel federal blenders tax credit. &ldquo;These programs have created a competitive market environment where biodiesel makes sense to blend for the downstream distributor, from an economic standpoint,&rdquo; Devine says.&nbsp;
Increased demand for clean fuels along with strong energy policies played key roles in stimulating infrastructure investment. Companies and government agencies were demanding biodiesel for its environmental benefits. While RFS and the biodiesel tax incentive have been particularly important, state policies such as the Minnesota requirement&mdash;which, on July 1, was the first U.S. state to jump to 10 percent&mdash;New York City&rsquo;s BioHeat program and California&rsquo;s low carbon fuel standard have also triggered investment. &ldquo;These policies were, and continue to be, crucial to expand biodiesel use in the U.S.,&rdquo; Levy says.
Being a market leader with a history of introducing new cleaner fuels and programs into the marketplace, Sprague invested in biodiesel as it saw the opportunity to be one of the first suppliers of the clean-burning, sustainable fuel. &ldquo;We are proud of the role that Sprague has played in the biodiesel industry from beginning to sell biodiesel in the early 2000s, to becoming the first recognized BQ-9000-certified marketer, to today becoming one of the leading suppliers of biodiesel in the Northeast,&rdquo; Levy says. Sprague has also played an important industry role by participating in many industry associations, as well as developing biodiesel use and education through its broad customer base including wholesalers, government, utility and private company users.
&ldquo;What is truly remarkable about our country is when opportunity knocks, people will invest and begin new businesses,&rdquo; Levy tells Biodiesel Magazine. &ldquo;The growth of this new industry is directly attributable to the opportunity created in industries that saw the biodiesel potential, coupled with government policy to assist a startup industry while affording many businesses to be on the right side of environmentalism.&rdquo;
The aforementioned policy incentives on the state and federal level have been key, but Levy adds that the NBB industry leadership was equally important to the industry&rsquo;s success in order to facilitate education, product quality standards and demonstration projects proving the uniqueness and use of the product. &ldquo;Once established, entities nationwide&mdash;both household names and small individual businesses&mdash;were established to produce biodiesel to help our country reduce emissions and become more sustainable and energy independent, while also resulting in critical job creation and putting people to work,&rdquo; Levy says. &ldquo;Today the success of biodiesel is attributed to the individual companies, both large and small and not necessarily a producer, marketer or retailer, or one company or business segment. They are also terminal operators, equipment manufacturers, transporters and used oil and grease collectors, to name just a few.&rdquo;
Steve McCracken, president of Amerigreen, says his company recognized a gap between the biodiesel producer and the downstream petroleum marketer through to the consumer. &ldquo;Connecting these dots throughout the supply chain has created a sustainable business plan for our distributors, which makes the process of marketing and distributing biodiesel an easier integration,&rdquo; McCracken tells Biodiesel Magazine. &ldquo;Our model continues to improve as our distributor base continues to grow. We customize each relationship around the current model of each distributor, and ultimately the success comes through understanding the logistics and market opportunities of the individual distributor and applying the Amerigreen lessons learned through our own experiences with our own customers.&rdquo;&nbsp;
Challenges
Back in the early 2000s, biodiesel may not have been ready for &ldquo;primetime,&rdquo; as Levy says, due to the product quality issues in producing, transporting and blending biodiesel. &ldquo;This is not true anymore,&rdquo; he says. &ldquo;Biodiesel is a premium, consistent high-quality product when purchased and blended from a reputable source. Over the years, the majority of producers have become accredited by the BQ-9000 program.&rdquo; Furthermore, ASTM standards have improved to correct early quality issues experienced in the field. While quality may no longer be an issue&mdash;a big accomplishment of which the industry should be proud&mdash;other challenges to the distribution system exist.
For the past several years, the biodiesel industry has been railcar constrained for a number of reasons, including growth in domestic energy production, thanks first to a boom in the ethanol industry and, more recently, because of the significant exploitation of shale oil in the Bakken and other regions. What this has traditionally meant, according to Targray President Andrew Richardson, is that producers with railcars would sell until they ran out of railcar capacity. Then they would switch to selling by truck to cost-effectively serve only the local markets. &ldquo;This situation leaves value on the table at both ends of the supply chain,&rdquo; Richardson tells Biodiesel Magazine. &ldquo;Producers are unable to access higher-priced markets and buyers in remote markets may go without product, or have very few choices.&rdquo;&nbsp;
Levy says the issue of railcar supply shortages more recently became apparent after the coldest, longest winter experienced in the U.S. in a long time. &ldquo;Railcars at times were extremely delayed or could not be located,&rdquo; Levy says. &ldquo;This seemed to be more prevalent on the coasts. If it weren&rsquo;t for imports and increased biodiesel inventory at the expanded storage terminals, this could have been a supply issue.&rdquo;&nbsp;
Targray has deployed a biodiesel-specific fleet of railcars to add value and improve logistics in the business. &ldquo;We&rsquo;ve worked with producers who had never shipped a gallon by rail before and have completely changed their business and target markets by spotting Targray railcars at their plant,&rdquo; Richardson says. &ldquo;This is the definition of value creation.&rdquo; At the end of 2013, Targray had more than 60 dedicated railcars under service. &ldquo;With railcar lead times in the 12 to 24 month range, this represents a sizable investment in the future of the biodiesel business,&rdquo; he says. Richardson says Targray is adding cars at a rate of about 40 per year for the next several years. &ldquo;Operating a dedicated fleet allows us to create new value for both producers and customers in the bio space,&rdquo; he says. &ldquo;This results in increased competitiveness for the fuel buyer.&rdquo;
In 2014, Targray began holding inventory in California to serve its customers. &ldquo;Some of our customers needed more ratability than railcar deliveries could provide, so holding this was the natural next step for us in creating value for our customers,&rdquo; says Richardson. &ldquo;Holding 400,000-plus gallons of inventory is a large investment, but it allows us to effectively serve a new segment of the business.&rdquo; The Bakersfield, Calif., location was selected due to its ability to serve both the northern and the southern portions of the state. &nbsp;&nbsp;
Today, infrastructure investment expansion and improvements have slowed due to the uncertainty of the tax credit and the RFS. Both of these policies are essential for continued growth and stability to incentivize more companies to continue to invest in distribution and blending infrastructure, according to Levy, to reduce costs and make biodiesel competitive economically.
&ldquo;The major obstacle is instability, stemming from policy uncertainty,&rdquo; Levy says. &ldquo;And unfortunately that instability creates something of a vicious cycle that ultimately makes biodiesel more difficult and costly to distribute, and therefore less competitive with petroleum. Quite simply, in addition to other segments of the industry, oil companies have not yet seen a compelling reason to invest the time and resources into expanded biodiesel infrastructure because policies vacillate so much from year to year. We finally were starting to have some stability around the RFS, for example, until the EPA released this curveball proposal in November that would significantly cut biodiesel production in the U.S. The entire industry simply won&rsquo;t invest when they see that type of uncertainty.&rdquo;
An additional challenge is biodiesel&rsquo;s acceptance by pipeline companies, Levy says. It has been tested by many pipelines and it is now being determined what the allowable limits will be to transport biodiesel on pipelines that also carry jet fuel. The outcome on that issue could significantly improve distribution and afford improved economics.
&ldquo;Biodiesel is still a young industry and, to some, a boutique fuel,&rdquo; Levy says. &ldquo;Although it has grown immensely, there are suppliers who treat biodiesel as a traditional fuel relating to supply, distribution and blending. There are certain handling guidelines to follow and until biodiesel becomes an even more stable industry, suppliers should have quality control practices in place.&rdquo;
One challenge, Levy adds, is to be sure everyone in the supply chain is receiving the biodiesel content in the distillate fuel they desire. &ldquo;Whether there is no biodiesel content so they may blend to their desired level, or a percentage they can verify should they decide to blend to a higher blend level, ongoing testing is a prerequisite,&rdquo; he says.
Another key component for the future is that the public and policy makers continue to be educated about the use and benefits of biodiesel. Levy says this includes NBB&rsquo;s valuable educational programs and demonstration projects to further the expansion of biodiesel in OEMs and also to educate policy makers and users about the benefits and advantages of biodiesel and Bioheat. &ldquo;I firmly believe that if the National Biodiesel Board was not leading the industry, we would not be where we are today as the only commercial-scale advanced biofuel produced nationwide,&rdquo; Levy says.
In the biodiesel space, customer and suppliers want to do business with counterparties who do what they say they are going to do. &ldquo;This has been one of the simple mantras for our business for the past 25 years,&rdquo; Richardson says. &ldquo;Our size as well as our experience selling to some of the largest companies on the globe has made us readily accepted as counterparty by both the large refiners and national blenders. The biodiesel business is a trust and reputation business, and Targray has been working hard to create value for our customers and suppliers.&rdquo;
Reputation is important, clearly, and keeping one&rsquo;s word is critical to building trust and investment. Ultimately, the U.S. biodiesel industry needs Congress and the White House to stand firmly behind strong energy policies that are in place, Levy says, so the fuels industry has some reasonable certainty of what the rules of the game will be and can make investments accordingly. These subject policies should be for multiyear periods, three to five years, to afford investors a degree of certainty in market dynamics. Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

BIODIESEL LEADER:  In 2006, fuel distributor Sprague Operating Resources LLC became the first petroleum company to earn the status of Certified Marketer in the BQ-9000 program. 

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Amerigreen was born out of the retail and commercial fuel industry. Its founders embraced biodiesel early on and were committed to making it a focal point of their business. 

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Sprague Operating Resources LLC is a subsidiary of Sprague Resources LP, with corporate headquarters located in Portsmouth, N.H. 

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Targray is a global marketing and trading organization. As a global player trading several commodities, Targray solar PV and biofuels trading activity is driving efficiency in those supply chains. 

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Biodiesel Magazine speaks with three leaders in the U.S. biodiesel distribution space about the growth and opportunities in biodiesel distribution, and the challenges that lie ahead.

US  Biodiesel Supply Kings

John Campbell, a former Deputy Undersecretary of Agriculture and a highly regarded 35-year veteran of renewable energy, agribusiness and policy, has joined Ocean Park Advisors, a corporate finance advisory firm. Based in Los Angeles, OPA is a leading advisor to biofuels and other agribusiness companies. Campbell will serve as managing director based in Omaha, Neb. His duties will be to broaden the company&rsquo;s relationships, develop new business and help execute transactions. Campbell spent 21 years with Ag Processing Inc. (AGP) where he was an executive vice president responsible for leading the industrial products division. He is credited as being one of the driving forces behind the creation of the U.S. biodiesel industry. Under Campbell&rsquo;s leadership, AGP constructed the first commercial-scale biodiesel plant in North America followed by numerous other expansions, projects and acquisitions.
&nbsp;
Hydro Dynamics Inc. of Rome, Ga., announced that complete biodiesel plants incorporating its cavitation-based ShockWave Power Reactor are now available for the ethanol industry. In order to offer ethanol plants a seamless &ldquo;bolt-on biodiesel&rdquo; solution, HDI is expanding its existing relationships with World Energy of Boston and Phibro Ethanol Performance Group of Teaneck, N.J. HDI previously partnered with World Energy&rsquo;s WMG Services business unit for sale of the SPR to the biodiesel industry. This new venture expands the cooperative offering to include not only the SPR, but complete plants designed by WMG Services. Phibro Ethanol Performance Group is the exclusive marketer of Lactrol antimicrobial to the ethanol industry and HDI has been partnered with Phibro for commercializing the SPR to enhance yield.
 Evonik Industries is investing in the Northville, Mich.-based algae technology startup, Algal Scientific Corp. Evonik is part of an investors&rsquo; consortium that is investing more than $3 million in a Series A financing round. Under the trade name Algamune, ASC markets 1,3-&beta;-glucan, a polysaccharide that strengthens immune response. It is used as an additive in animal feeds and as a nutritional supplement, as well as in pharmaceutical formulations. According to Evonik, this is the first time it has been possible to obtain &beta;-glucan from algae on an industrial scale. ASC has developed a new technology for this purpose and is in the process of starting up the first commercial production plant in Michigan. &beta;-glucan is usually extracted from grain or produced using yeasts or fungi. ASC&rsquo;s new biotechnological process needs fewer production steps while generating significantly higher yields.
 Renewable Energy Group Inc.&rsquo;s wholly owned subsidiary, REG Synthetic Fuels LLC, has closed acquisition of substantially all of the assets of Syntroleum Corp. Syntroleum advised REG in early June that a majority of its shareholders had voted to approve the asset sale to REG. Shortly after the Syntroleum stockholders&rsquo; meeting, officials from the two companies completed the transaction, which included the issuance of 3,493,613 shares of REG common stock to Syntroleum. The assets acquired from Syntroleum include a 50 percent ownership interest in Dynamic Fuels LLC, which owns a 75 MMgy nameplate capacity renewable diesel biorefinery located in Geismar, La. REG has a separate pending agreement with Tyson Foods Inc. to acquire the remaining interests in Dynamic Fuels. Most of the employees at Syntroleum&rsquo;s Tulsa, Okla., headquarters will join REG as part of the newly formed REG Synthetic Fuels.
 Methes Energies International Ltd. has received BQ-9000 Producer and Marketer status from the National Biodiesel Accreditation Commission. &ldquo;We are very proud of this achievement,&rdquo; says Nicholas Ng, president of Methes Energies. &ldquo;There are not many companies that are both accredited as a producer and a marketer by the NBAC.&rdquo;
 Prairie Horizon Agri-Energy is partnering with WB Services LLC to integrate a 3 MMgy renewable diesel production facility into its existing 40 MMgy ethanol plant. WB Services will design, construct and operate the renewable diesel plant utilizing patented renewable diesel process technology. Ron Beemiller, president and CEO of WB Services, says, &ldquo;This plant will be the first of its kind&mdash;the first renewable diesel plant to fully integrate into an existing ethanol operation.&rdquo; In addition to renewable diesel, the new plant will produce denaturant, fuel gas and steam for use at the existing facility. Prairie Horizon Agri-Energy also has a significant investment in the renewable and biodiesel plants under construction by Green Energy Products in Sedgwick, Kan.

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Business Briefs

The stark reality of the economic, political and environmental impacts of our current petroleum-based society is so daunting that America seems to have turned a blind eye. Even worse, it appears that we have traded our ability to determine our own destiny for our individual short-term self-interests. Despite the latest assessment from the Intergovernmental Panel on Climate Change that warns climate change is happening faster than anyone projected, the U.S. EPA has proposed stalling the biodiesel mandate under the federal renewable fuel standard&mdash;even though the very same agency has determined that biodiesel reduces greenhouse gas emissions by 57 to 86 percent compared to fossil diesel.
Almost 10 years since the federal government helped commercialize the biodiesel industry, it appears we have been duped since the beginning. The coming and going of mandates and tax credits has boosted people up, only to knock them down. Now we are being further betrayed by an administration that ran on an agenda of renewable fuels that garnered my complete support. Joe Jobe, the CEO of the National Biodiesel Board, voiced this sentiment in a recent letter to the Obama administration: &ldquo;You need to know that this decision would have lasting, damaging consequences for the jobs and economic activity supported by the U.S. biodiesel industry, while undermining your efforts to boost U.S. energy security through clean, domestic energy production.&rdquo;&nbsp;
I have a vision of a new energy economy based on integrated production (which is starting to happen&mdash;see &ldquo;Time Has Come Today,&rdquo; Kotrba, May/June 2014 Biodiesel Magazine) and efficient distribution of a diverse fuel mix. This new energy economy makes economic sense first, as the more sustainable it is built, the cheaper the fuels become. The idea is to leverage drop-in alternatives such as biodiesel today while next-generation fuels for the advanced vehicles of tomorrow are developed; all while incrementally reducing our carbon emissions, creating energy security and unfathomable prosperity as more and more energy dollars stay in America, spawning unprecedented innovation. In December 2012, with Anish Mashettiwar, a childhood friend and attorney, I founded Akash Energy to do my part in making this vision a reality. Through our retail division, Root Fuel, we have undertaken the mission of redefining America&rsquo;s relationship with fuel&mdash;what I believe to be the most critical step in creating a new energy economy.
We started with no licenses, storage assets, supply or customers; we were forced to rely on the few relationships I had in Houston. We partnered up with everyone we could in the beginning to get access to supply and storage space. In the beginning of 2013, with the blenders credit recently reinstated, we were able to find distressed supply produced in 2012 and claim the credit on it. This enabled us to sell to downstream jobbers and significant discount to OPIS diesel prices, and still make 75 cents to $1 per gallon. Trading in this market, we quickly built up cash, and thus overhead.
In April 2013, we finally started tolling at a small plant in Louisiana. We were killing it in the beginning, making well over $1 per gallon. We had a solid RIN offtake and were able to get our tax credits financed, shortening our overall cash cycle. Unfortunately, things quickly took a turn for the worse. The feedstock tank at the plant we were tolling at exploded, shutting down that operation for two months. A few of our &ldquo;partners&rdquo; turned out to be crooks; one actually ended up in jail (for something he had done prior to us meeting him). We still had obligations to meet and were forced to buy product in the market, cutting our margin dramatically. The plant became operational again in July, and we had a few months of solid production. At this time, we had also identified the stations that would become Root Fuel&rsquo;s first sites. With less than a year of financials, we had to go through the Small Business Administration to buy them. This was not an easy process, and we did not get approved until this June.&nbsp;
At the end of October, with the tax credit clearly coming to an end, we decided to liquidate our toll and sit on cash reserves. This is when things got really bad. The plant refused to release our remaining feedstock. Liquidated at the end of 2013 as biodiesel, it would have been worth close to $400,000.We finally just got it sold as off-spec feedstock. It had been contaminated, and we took a solid $120,000 hit. The efforts to get our feedstock out effectively killed our cash flow. In an effort to get cash flow going again, we leased our retail stations prior to having the loan in place. This helped initially, but got us into debt, as we did not manage our cash flow well. We had to lay off half of our team, and essentially rebuild from negative in today&rsquo;s weak market. We fought on though, and our struggle is finally starting to pay off. We partnered with Western States Oil, a jobber based in San Jose, Calif., who supplies the cities of San Francisco and San Jose among many others. The company has been offering biodiesel since 1999 and has been a great source of inspiration and support for us.Our SBA loan also came through and we expect to begin building Root Fuel in July. With the SBA loan and the WSO partnership in place, the future is looking much brighter. It has been a brutal struggle, and there were many days when I thought we were not going to make it. The personal stakes were too high to quit, not mentioning the RVO proposal. We felt compelled to go on, as we truly believe that empowering the consumer at the retail level is essential for long-term viability of a new energy economy.
This vision can only become a reality if it is implemented successfully within the existing infrastructure. It must be put in place with minimal disruption to the status quo. It is a preposterous notion that overnight we can have a world where everyone has an electric car charged by solar panels. That may be where we ultimately end up, but it&rsquo;s not for certain. I am certain though that the first objective is to empower the consumer with choice. If we draw from Economics 101, and assume that when a rational individual is presented with a choice, that individual will always choose what is in his or her best interest. Clearly consuming fossil fuels is not in our best interest, but we do it anyway. The only logical reasoning for this is an information gap and lack of choice.
Today&rsquo;s fueling infrastructure is set up to not be questioned. The only concerns are cost and convenience. The ability to choose based on other merits is nonexistent (e.g., emissions profile, source, etc.). Even the integration of biofuels does not allow the consumer to make the conscious decision to use an alternative fuel. The average consumer does not have the opportunity to choose biodiesel or ethanol; it&rsquo;s either blended or not. All that happens is a sticker is thrown on the pump that says &ldquo;May contain up to X percent biodiesel or ethanol.&rdquo;&nbsp; Think about the implications of the vagueness of that language. Think about the look and feel of those stickers; they subtly take away any semblance of control the consumer has over the decision of what fuels their motoring life.&nbsp;
Root Fuel intends to change the experience at the point of consumption. Our objective is to utilize the existing, relatively low-cost cardlock infrastructure, to create a completely new consumer fueling experience. We supply our stations through our upstream infrastructure at Akash Energy. Our goal is to create a user experience that changes the way the consumer thinks and feels about fuel. If we can successfully do this in Houston&mdash;in the belly of the beast&mdash;we can do it anywhere. Hopefully this will help spark the outright demand by the people for transportation fuels sold not just based on price and convenience, but on their overall impact on climate change as well as economic and political stability.By empowering the consumer through providing a better overall choice, we hope it will inspire a greater movement in the fight against climate change, and ensure the prosperity of our future. As our tag line will say, &ldquo;Everything is possible.&rdquo; Author: Justin Heller CEO, Akash Energy Inc. 281-954-4651 <a href="mailto:jheller@akashenergy.com">jheller@akashenergy.com</a>

NEW ENERGY OUTLET: Root Fuel is Akash Energyâ€™s retail outlet established in Houston.


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Akash Energy's retail division Root Fuel intends to change America's relationship with fuel. The company's objective is to utilize the existing, relatively low-cost cardlock infrastructure to create a new consumer fueling experience. 

Building the New Energy Economy

Mark your calendar now for the biggest biodiesel event of the year&mdash;the National Biodiesel Conference &amp; Expo to be held Jan. 19-22 at the Fort Worth, Texas, Convention Center. This annual event promises to be the most important ever.&nbsp;
&ldquo;By January, the industry will have received the EPA&rsquo;s long-awaited final volume proposal for the 2014 renewable fuel standard (RFS) and will be adapting to it&mdash;good or bad,&rdquo; said Donnell Rehagen, NBB&rsquo;s chief operating officer and conference director. &ldquo;Coming together as an industry at the conference will be critical to charting our course for continued growth under the new rule.&rdquo;
Whether you&rsquo;re a biodiesel producer, marketer, supplier, funder, retailer, researcher or student, you won&rsquo;t want to miss the 2015 conference. The event offers trade show opportunities as well as rich content, inspiring speakers and numerous networking opportunities.&nbsp;
&ldquo;We tailor the format to facilitate as much networking as possible&mdash;both formal and informal,&rdquo; Rehagen added. &ldquo;We&rsquo;re proud of the National Biodiesel Conference &amp; Expo&rsquo;s reputation as an event where business gets done.&rdquo;&nbsp;
As in the past, the latest B20-approved diesel vehicles will be on display at the vehicle showcase and the Ride-n-Drive, where participants can get behind the wheel and go for a spin.
Student scientists will again be invited to participate in the conference in an effort to foster collaboration and professional development opportunities for the future leaders of our industry. The United Soybean Board and state checkoff organizations will offer scholarships to bring Next Generation Scientists for Biodiesel to the conference where they will share their research in a breakout and/or poster session. Details on NGSB scholarships will be available this fall.
The conference website, registration link and exhibitor prospectus are coming soon. Please check www.biodieselconference.org/2015 for details in the coming weeks. Additionally, NBB staff members are working on the program now. If you have ideas for breakout sessions or speakers, please contact Kaleb Little, <a href="mailto:klittle@biodiesel.org">klittle@biodiesel.org</a> in the NBB office.

Save the date: 2015 National Biodiesel Conference & Expo 

Three university students have been selected through a competitive process to help lead the Next Generation Scientists for Biodiesel program. First launched in 2010, the National Biodiesel Board program aims to educate young scientists with factual information about biodiesel. It has led to increased communication and collaboration between the biodiesel industry and colleges and universities involved in biodiesel research.
&ldquo;By engaging with student scientists, our industry has not only learned about their upcoming research, but has opened new lines of communication with their professors and university researchers as well,&rdquo; said Don Scott, NBB&rsquo;s director of sustainability. &ldquo;The new co-chairs are passionate, energetic and innovative, and will do a great job taking this program to the next level.&rdquo;
The new co-chairs are:
-James Anderson, Agricultural Sciences, Southern Illinois University-Carbondale.
-Katharine Ann Heil, Electrical Engineering, University of Colorado at Boulder.
-Michael Morgan, Biochemistry, Utah State University.
The new co-chairs replace three other students who have graduated from their studies. Dan Browne, a research assistant in the Department of Biochemistry and Biophysics at Texas A&amp;M University, remains on the team as a co-chair.
All of the co-chairs are already engaged in biodiesel-related research or education. Heil serves as director of the University of Colorado at Boulder&rsquo;s CU Biodiesel club. The club is one of the larger and more established campus biodiesel organizations, and has a biodiesel-producing trailer named Ester, which hosts campus workshops and has a research component.&nbsp;
&ldquo;I believe that being a co-chair will give me the opportunity to continue to spread my knowledge and experience with other young scientists,&rdquo; Heil said. &ldquo;Biodiesel is an emerging fuel and in order for it to continue to grow, we must continue to inform others of its importance in society today.&rdquo;

James Anderson, center, presents a poster at the National Biodiesel Conference & Expo.

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Katharine Heil, left, discusses biodiesel with Monsanto's Beth Calabotta. 

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Three university students have been selected through a competitive process to help lead the Next Generation Scientists for Biodiesel program. Launched in 2010, the NBB program aims to educate young scientists with factual information about biodiesel.

Next Generation Scientists program welcomes 3 new student leaders 

A group of U.S. Senators came together with biodiesel producers and supporters in May calling on the administration to end policy uncertainty that is hurting the biodiesel industry by restoring a strong renewable fuel standard (RFS) and reinstating the biodiesel tax incentive. Led by Sen. Heidi Heitkamp, D-N.D., the group highlighted the results of the National Biodiesel Board&rsquo;s biodiesel producer survey that showed significant negative impacts in the first part of 2014 due to unstable federal policy.
The press event helped draw media attention to the administration&rsquo;s proposed retreat on the RFS and included Heitkamp, Dick Durbin, D-Ill., Maria Cantwell, D-Wash., Amy Klobuchar, D-Minn., Al Franken, D-Minn., and Joe Donnelly, D-Ind. Biodiesel industry representatives who participated included Jeff Haas, CEO of General Biodiesel in Seattle, Wayne Presby, owner of White Mountain Biodiesel in North Haverhill, N.H., Bryan Christjansen, general manager at Renewable Energy Group&rsquo;s refineries in Albert Lea, Minn., and Mason City, Iowa, and Terry Goerger, a seed company owner and third-generation farmer from Mantador, N.D. Coverage of the event was extensive, including pieces by the Associated Press, Reuters, Roll Call, Politico, E&amp;E News, The Seattle Times, and many more.
Heitkamp said during the press event that the administration&rsquo;s proposal and the loss of the tax incentive hurts her state&rsquo;s agriculture sector as well as its production plant in Velva, N.D.
&ldquo;Biodiesel has an incredible success story to tell. Farmers in North Dakota and throughout the country are supporting good jobs, reducing our dependence on foreign oil, and boosting rural communities,&rdquo; Heitkamp said. &ldquo;But instead of promoting these successes, federal policies are dragging our farmers and producers down. That&rsquo;s the wrong direction.&rdquo;
Following the press event, NBB&rsquo;s vice president of federal affairs Anne Steckel echoed the senator&rsquo;s thoughts.
&ldquo;Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry. It&rsquo;s not just hurting these biodiesel producers. It is a setback for local economies where these plants operate, for our environment, for our national energy security, and for drivers who are tired of ever-increasing fuel prices that result from the petroleum industry&rsquo;s monopoly at the pump.&rdquo;
The producer survey was conducted by NBB between April 14 and April 25 with 54 producers across the country participating. Of those surveyed, nearly all attributed the industry decline to the weak RFS proposal and the loss of the biodiesel tax incentive.
April Biodiesel Producer Survey findings include:
&bull; 78 percent had reduced production vs. 2013.
&bull; 57 percent had idled production altogether or shut down a plant this year.
&bull; 66 percent had reduced workforce or anticipated reducing workforce.
&bull; 85 percent had delayed or canceled expansion plans.
This was the first time NBB had used a survey of producer members to quantify industry effects of policy decisions and while the numbers weren&rsquo;t good news, it did provide valuable information for the industry&rsquo;s champions in the Senate to call on the administration for change.

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Senators highlight unstable policy climate at May press event

Minnesota and Iowa recently took steps in their already steadfast support of America&rsquo;s advanced biofuel, biodiesel. With the uncertainty surrounding the federal biodiesel tax incentive and the renewable fuel standard (RFS) volumes, strong state biodiesel policies help stabilize the industry and provide a baseline for producers.
Recently, Iowa Gov. Terry Branstad signed into law an extension of the state&rsquo;s biodiesel producer incentive.
&ldquo;Iowa is a biofuels leader in this country and having states step to the plate with legislation supporting America&rsquo;s advanced biofuel, biodiesel, is a win for our industry,&rdquo; said Steven J. Levy, chairman of the National Biodiesel Board. &ldquo;Our champions in Iowa have shown that hard work to grow this still-young industry pays off.&rdquo;
The legislation is an extension of the current biodiesel producer incentive that is structured as a 2-cent-per-gallon refundable credit for the first 25 million gallons produced at any single plant in the state. The incentive was set to expire at the end of this year but the extension now moves that through 2017.
On July 1, Minnesota became the first state to move to B10 statewide in all diesel fuel. &ldquo;This sends a very important message that Minnesota remains a leader, because the state&rsquo;s B2 mandate back in 2002 really jumpstarted the biodiesel industry nationwide,&rdquo; said Ed Hegland, an Appleton, Minn., farmer and member of the NBB&rsquo;s governing board. &ldquo;Proving that a state can now go to B10 is a significant step in the right direction for renewable fuels.&rdquo;
The move is expected to take the state&rsquo;s yearly biodiesel consumption from 40 to 60 MMgy. State biodiesel policies come in many forms across the country but regardless of their structure, they help provide a baseline of biodiesel demand on which the industry can build for future stability and growth.

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Minnesota and Iowa recently took steps in their already steadfast support of biodiesel. With the uncertainty surrounding the federal biodiesel tax incentive and RFS volumes, strong state policies help stabilize the industry and provide a baseline. 

States provide policy stability for biodiesel industry

NBB has made it a top priority to work aggressively toward an improved standard for 2014 renewable fuel standard (RFS) volumes since the U.S. EPA announced the proposed RFS rule last fall.
NBB conducted a series of high-level meetings with administration officials to convey the biodiesel message. This includes meetings with EPA Administrator Gina McCarthy, USDA Secretary Tom Vilsack, senior White House officials, the U.S. DOE, and others. While there was no confirmation on how the administration would ultimately decide the final rule, we know that a strong impression was made and the administration was forced to reconsider the initial November proposal.
Nearly 120 biodiesel companies signed a letter to President Obama calling for a higher volume and nearly 100 Republicans and Democrats in Congress signed a letter or contacted the White House directly to advocate on our industry&rsquo;s behalf. This is more support than we&rsquo;ve ever had, and these lawmakers from across the country represent districts where the U.S biodiesel industry has a presence, and they highlight the political and geographic diversity of our industry that is among its greatest strengths.
NBB rounded out the month of June with a strong finish to our earned media campaign designed to raise awareness of the impact that the proposed EPA standard would have on the industry. In total, the effort saw nearly 200 stories, editorials, columns, and letters to the editor published in news outlets nationwide highlighting the need for a strong biodiesel RFS, including in the Wall Street Journal, Reuters, Politico, USA Today, The Seattle Times, The Associated Press, The Chicago Tribune, and many others.
NBB would like to thank all biodiesel stakeholders and supporters who participated in the various advocacy campaigns. Collectively, we made a strong and compelling case for a strong, stable RFS.
2014 RFS Advocacy and Earned Media Highlights By the numbers: &bull; More than two dozen local news outlets highlighting damage &nbsp;&nbsp; from RFS proposal &bull; At least 100 stories in Washington, D.C., media, and other &nbsp;&nbsp; trade outlets &bull; Nearly 50&nbsp; letters/op-eds in recent months, including in Wall &nbsp;&nbsp; Street Journal, The Associated Press, Reuters, USA Today, &nbsp;&nbsp; Chicago Tribune, etc. &bull; Additional op-eds/columns by third-party supporters &bull; 120 industry signers on letter to President Obama &bull; 100 bipartisan legislators contacted the White House on behalf &nbsp;&nbsp; of the industry

Biodiesel advocacy hits high gear as administration works to finalize RFS

Biodiesel is the only advanced biofuel commercially available across the country, but it is still a relatively young industry when compared to conventional petroleum fuels. As the industry continues to mature, strong public policy remains critical. The biodiesel industry has long been commended for its advocacy efforts in Washington, D.C., and grassroots lobbying strength, but political fundraising remains an important component of supporting effective public policy and, as of now, has been the only avenue that the biodiesel industry isn&rsquo;t punching above its weight class in Washington.
The National Biodiesel Political Action Committee is the connected PAC of the National Biodiesel Board. It is dedicated to electing and supporting political leaders around the country who understand the vital role of biodiesel in the nation&rsquo;s energy policy.
The cornerstone of our industry, the renewable fuel standard (RFS), creates a floor of demand for our product on an annual basis. Needless to say, having champions in the U.S. House and Senate is critical to ongoing success in federal policy. Political giving is an important form of free speech and supporting the members of Congress who support our industry is mission-critical. NBB members contributing to the NBPAC is an efficient and ethical way to do so through a coordinated effort. Others who support the RFS and energy tax incentives provide support to their champions in the Senate and the House, and maybe more importantly, those who oppose renewable energy policies donate big dollar amounts to support their champions.
During the recent NBB membership meeting in Washington, D.C., the biodiesel industry hosted a fundraiser meeting with Sen. Al Franken, D-Minn., in which NBPAC participated. Franken chairs the Energy Subcommittee of the Senate Committee on Energy and Natural Resources. He also participated in a Senate press conference in May on behalf of the biodiesel industry calling on the administration and Congress to restore stable policy.
Past fundraising events the NBPAC has participated in have raised contributions for Sen. Maria Cantwell, D-Wash.; Sen. Chuck Grassley, R-Iowa; Rep. John Shimkus, Ill.-13; Rep. Adam Kinzinger, Ill.-16; Rep. Ed Whitfield, Ky.-01; and others.
Also during the NBB membership meeting, the NBPAC hosted a separate fundraising reception to raise additional funds for future contributions. The PAC&rsquo;s executive committee is currently planning fundraising events connected with the upcoming November NBB membership meeting and the National Biodiesel Conference &amp; Expo to be held Jan. 19-22 in Fort Worth, Texas.
The executive committee includes a mix of NBB staff and members to help guide the efforts of the PAC to be as effective as possible. Officers include Jennifer Case, chair, New Leaf Biofuel; Ron Marr, vice chair, Minnesota Soybean Processors; Kirsten Skala, secretary, NBB; Donnell Rehagen, treasurer, NBB; Doug Whitehead,&nbsp; assistant treasurer, NBB; Denny Mauser, development officer, Western Iowa Energy LLC; and Tim Keaveney, assistant development officer, Hero BX.
All members of NBB are eligible to become members of NBPAC and there are many ways to make contributions including one-time donations, participation in fundraising events, and even automatic monthly deductions. Additional information on how you can get involved and approval forms can be found at <a href="http://www.biodieselpac.org">www.biodieselpac.org</a>.
While there is often a stigma attached to political giving in the media and pop culture, it is a vital component of the political process and we know for a fact that RFS opponents are not bashful about making donations to candidates who support their cause. We simply cannot afford to rely on our advocacy and grassroots efforts alone and must do everything we can to support our industry.
Donnell Rehagen, Treasurer, National Biodiesel Political Action Committee

Donnell Rehagen, Treasurer, 
National Biodiesel Political Action Committee

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The biodiesel industry has long been commended for its advocacy efforts in Washington, D.C., and grassroots lobbying strength, but political fundraising remains an important component of supporting effective public policy. 

Political Giving an Important Piece of Federal Policy Puzzle

The soy checkoff is spearheading a major project to boost yields for U.S. soybean farmers to an average of 60 bushels per acre, nearly 20 bushels higher than the current national average, by the year 2025. To do it, scientists are using soy-checkoff funding to harness the power of the sequenced soybean genome by using various genetic methods, such as nested association mapping (NAM), RNA sequencing and epigenetics. While this might seem ambitious, farmers are achieving extremely high yields now&mdash;in some cases, more than 100 bushels per acre&mdash;showing the goal is achievable.
 USDA researcher Michelle Graham and her team are sequencing the genomes of 100 different soybean cultivars heavily adopted by U.S. farmers over the past 90 years because of their high yield potential. This will help the team identify the genes and gene combinations that have been responsible for yield increases. &ldquo;This project will generate hundreds of thousands of new molecular markers that will be released to public and private researchers for use in soybean improvement,&rdquo; says Graham.
 At the University of Illinois, Brian Diers uses a NAM technique to find the location of important genes, helping save time in field trials. In every soybean plant cell, all of that plant&rsquo;s genes are present. Expressed genes produce RNA, and scientists can sequence that RNA to find out which genes are expressed in each area of the plant.
 Gary Stacey works with a team of researchers at the University of Missouri to grow soybeans under various stressful conditions. They then take samples of the different parts of these soybean plants and isolate the RNA. Next, they send the isolated RNA to the U.S. DOE Joint Genome Institute for sequencing to show how the plants react under these environmental stresses. The information is recorded and mapped to provide a &ldquo;soybean genome atlas.&rdquo; Stacey says this resource will save researchers time in finding the genes that are responsible for yield and other desirable traits.
 Other soybean scientists study a genetic component called epigenetics to learn how soybean plants respond to pathogens, pests and other yield robbers. Scientists hope to be able to predict those responses and use them to farmers&rsquo; advantage. Epigenetics serves as a switch that determines whether a soybean plant expresses certain genes, as well as the intensity with which those genes are expressed.
 &ldquo;The goal of the checkoff project is really to understand how many of those switches are there in the background that we don&rsquo;t know about,&rdquo; says University of Georgia soybean researcher Scott Jackson. Another collaborator on the project, University of Delaware Professor Blake Meyers, says yield is a combination of genetics and the environment, and epigenetics could help determine which varieties to use in different situations.
 &ldquo;The environment is not easy to predict, if it can be predicted at all,&rdquo; says Meyers. &ldquo;So having soybeans that can respond to the widest range of environments in a beneficial way&mdash;drought tolerance, for example&mdash;will be critical to achieving that goal of 60 bushels an acre.&rdquo;

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Soy-checkoff project targets 60 bushels an acre by 2025 

Biodico&rsquo;s Vice President of Research and Development Trey Teall presented the results of a five-year research project in May at the 105th American Oil Chemists&rsquo; Society Annual Meeting &amp; Expo in San Antonio, Texas. The project focused on the use of Fourier Transform Near-infrared Spectroscopy to provide real-time in situ analysis of the biodiesel production process as an alternative to conventional ASTM biodiesel methodology.
 ASTM D6751 protocols require the use of techniques that are relatively time-consuming and provide data about the state of the biodiesel reaction kinetics after the fact. For example, the use of gas chromatography (GC) to determine mono, di and tri glycerides, and free glycerin will take a trained technician more than 45 minutes. It requires that a sample be drawn, reacted (silylated) and run through the GC, and the results indicate what the reaction state was, instead of what it is in real time. In contrast, Teall&rsquo;s research has shown that the use of FT-NIRS can be conducted with sensors imbedded in various production process streams and provide highly accurate, near-instantaneous data about the state of the reaction. It can also detect low-level contaminants to ensure that finished biodiesel meets the requirements of ASTM D6751 for finished biodiesel.

In situ biodiesel testing technology presented  at AOCS meeting

Researchers from the University of Bath&rsquo;s Centre for Sustainable Chemical Technologies conducted a study looking at fuel properties of biodiesel produced from different types of waste coffee grounds. Twenty different geographically sourced coffees, including regular and decaf and Robusta and Arabica types, were used to make various biodiesel samples that were then tested and fuel properties compared.
 The end result was little variation in properties despite the spectrum of coffee feedstock used to make the fuels. &ldquo;For all samples, with the exception of Vietnamese coffee, the FAME profile of the resulting biodiesel was consistent,&rdquo; states the study's abstract. Pour points ranged between minus 1 and 16 degrees Celsius. The kinematic viscosity ranged between 4.0 and 5.5 mm2 s&ndash;1; the density ranged between 841 and 927 kg m&ndash;3.
 Chris Chuck, Whorrod Research Fellow from the Department of Chemical Engineering, says, &ldquo;The yields and properties of biodiesel can differ depending on the growth conditions of current biodiesel feedstocks, sometimes causing them to fall out of specification. The uniformity across the board for the coffee biodiesel fuel is good news for biofuel producers and users.&rdquo;

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Coffee biodiesel properties studied

On May 28, Brazil&rsquo;s President Dilma Rousseff signed an increase in the nation&rsquo;s biodiesel mandate, starting in July, from 5 to 6 percent, and moving to 7 percent in November, according to Brazil&rsquo;s Ministry of Mines and Energy. The measure was signed during an event at the presidential palace.
 Minister Edison Lobao says the increase will allow full use of Brazil&rsquo;s biodiesel production capacity and benefit family farmers with income generation. He also cited the environmental gains. Brazil currently has 57 plants able to process about 7.5 billion liters (approximately 1.98 billion gallons) of biodiesel annually. The increase to 7 percent biodiesel in Brazil will reduce diesel imports by 1.2 billion liters a year. The National Biodiesel Program instituted a 2 percent biodiesel mandate in 2008, and in 2010 it rose to 5 percent where it has stayed.

Brazil biodiesel mandate moves to 7 percent come November

A new report by Lux Research says while China and India will dominate growth in Asia&rsquo;s renewable sectors thanks to aggressive mandates, government support and cost advantages, their aggressive, self-imposed targets will not be met&mdash;even with strong growth.
 India is betting on &ldquo;risky jatropha&rdquo; for biodiesel, according to Lux, as it races to meet an aggressive 20 percent biofuels mandate for 2017. &ldquo;But biofuels will account for less than 0.6 percent of its diesel fuel and 0.3 percent of its gasoline in 2017,&rdquo; the company finds.&nbsp;
 &ldquo;Both countries have huge populations and huge fuel demands, and both governments extend support for ethanol and biodiesel,&rdquo; says Nancy Wu, Lux Research analyst and an author of the report titled, &ldquo;Planning for the Long-Term in Asia Pacific Alternative Fuel Markets.&rdquo;
 &ldquo;However,&rdquo; she adds, &ldquo;challenges with cost, feedstock availability and infrastructure will still hold them back from ambitious targets.&rdquo;
 In the report, Lux evaluates ethanol, biodiesel and natural gas vehicles in 10 of the largest markets in Asia-Pacific.
 For biodiesel, India will outpace Asia&rsquo;s growth, according to Lux. &ldquo;Indonesia, China and Malaysia are the three dominant nations in biodiesel, each driven by challenging mandates,&rdquo; the company states. &ldquo;Indonesia is targeting 20 percent adoption by 2025 while Malaysia positions itself to be a dominant exporter with 143 MMgy in 2015. India&rsquo;s growth, however, at an impressive 18.5 percent compound annual growth rate (CAGR) through 2017, will outpace the rest of the region, which will post a 3.9 percent CAGR through 2017.&rdquo;

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New report evaluates Asia-Pacific biodiesel markets, growth

On June 13, the European Union Energy Council announced it had reached a political agreement on measures to incorporate indirect land use change (ILUC) into EU biofuel policies. Biofuel trade groups say the move is expected to restore investor confidence.
 The agreement places a 7 percent cap on the use of conventional biofuels. It also encourages the transition to second- and third-generation biofuels. To support the move to advanced biofuels, member states are invited to promote their use and are required to set national targets for advanced biofuels based on a reference value of 0.5 percentage points of the 10 percent target for renewable energy in transport of the renewable energy directive (RED). According to information released by the EU Energy Council, member states can set a lower target under certain circumstances.
 Information published on the agreement also notes that a new annex to the RED has been established that contains feedstocks for advanced biofuels that could count double toward targets. Double counting is also permitted for advanced biofuels not listed in that annex, but used in existing installations prior to the adoption of the new directive.
 The agreement also includes additional incentives for advanced biofuels by extending the tool of statistical transfers of the renewables directive to cover such advanced biofuels, and the double counting of the contribution of these biofuels is extended to the overall renewables energy targets. In addition, the agreement includes a provision to generate electricity from renewable sources in order to reduce greenhouse gas (GHG) emissions in transport.
 The EU Energy Council also indicated that ILUC reporting on GHG emission savings from the use of biofuels will be carried out by the commission using data reported by member states. Finally, a review clause in the agreement makes it possible to introduce adjusted estimated ILUC factors into the sustainability criteria.
 The European Biodiesel Board welcomes the final agreement and fully supports the point of view expressed by a large number of member states that any attempt to decrease the 7 percent objective would pose a threat to the EU economy and agriculture.
 Rob Vierhout, secretary general of ePURE, the European renewable ethanol industry association, calls the agreement &ldquo;welcome progress&rdquo; and says it should pave the way towards a stable policy framework that will restore investor confidence in the biofuel industry. He also notes, however, that more progress needs to be made.
 &ldquo;The proposed ceiling of 7 percent for conventional biofuels could limit the uptake of renewable ethanol as the majority could come from existing biodiesel capacity,&rdquo; he says. &ldquo;It is essential that the ceiling is combined with a separate renewable in petrol target as proposed by the European Parliament in its first reading position.&rdquo;
 &ldquo;Low- or no-ILUC-risk biofuels should count toward the target above the ceiling, as a way to promote further market penetration of the best performing biofuels,&rdquo; Vierhout says. &ldquo;To date, the analysis on ILUC merely confirms that ethanol makes a very strong contribution to the decarbonization of Europe&rsquo;s road transport.&rdquo;
 While the proposed 0.5 percent subtarget for advanced biofuels is a start, Vierhout says it must be higher, particularly after 2020. He adds that any target must exclude the current system of multiple counting, which allows more fossil fuels to be used.
 The U.K.-based Renewable Energy Association says the new agreement will effectively bring a close to almost two years of investment-blocking policy paralysis in the low carbon fuels sector. While the REA says it continues to oppose the use of ILUC factors in GHG accounting for biofuels, the organization adds the new proposal should give the existing biofuels industry room to grow and invest in the development of advanced biofuels. The REA also says it remains opposed to double counting toward the renewable energy target.
 The REA points out that the proposal must undergo a second reading in the new European Parliament before it becomes law.&nbsp; &ldquo;All EU member states are committed to securing 10 percent of transport energy from renewable sources, such as biodiesel, bioethanol and biomethane, by 2020,&rdquo; the organization states. &ldquo;The UK Renewable Transport Fuel Obligation is currently set at 4.75 percent (by volume, equivalent to 3.8 percent by energy). The government has previously stated that it would not raise the RTFO beyond this year due to the ongoing uncertainty over the European ILUC dossier. With ILUC now resolved, the REA calls on the Department for Transport to set out the RTFO to 2020 to give our members the policy framework they need to secure investment in both current and advanced biofuels.&rdquo;
 &ldquo;This is a compromise that will frustrate parties on both sides of the debate, but the overriding feeling is one of relief that the ILUC saga is finally drawing to a close,&rdquo; says Nina Skorupska, chief executive of the REA. &ldquo;Our members and stakeholders have grappled with this issue for several years, when they would rather have been focusing their efforts on creating jobs in sustainable biofuel production. We urge the government to get its own house in order now so that the transport sector can get the low carbon momentum back on track and catch up with the progress being made in renewable heating and electricity.&rdquo;

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EU agreement on ILUC caps conventional biofuels at 7 percent

Whether buried underground, positioned above ground, or exposed in a basement, fuel-storage tanks have kept millions of cars and trucks, as well as businesses, industries, aircraft, homes and the like adequately supplied with fuel. For as long as liquid fuels have needed some form of bulk storage, they have been filled with gasoline, diesel fuel, aviation fuel, biodiesel, ethanol and home heating oil. Generally, the consumer rarely notices these tanks, nor does the consumer think about how their fuel could be impacted by factors such as quality and tank design. &nbsp;
Over the past few years, a great deal of attention has been given to what appears to be an increase in premature filter plugging and corrosion activity in the underground storage tank systems across the country, which can affect every type of liquid fuel.
To appreciate what could be happening to these fuel-storage systems, we need to understand how the petroleum supply chain functions and how quality standards maintain fuel quality from the point of manufacture to the point of sale. It is interesting to contrast fuel quality management practices between the aviation and the pleasure-craft industries. In the case of the former, the airline industry worldwide has invested millions of dollars and hundreds of thousands of hours to develop a fuel management program that ensures that jet fuel maintains stringent fuel quality standards by filtering and dewatering it every step along the distribution network. From production, transport, and storage to fueling the aircraft, industry practices ensure optimum fuel quality, resulting in reliable aircraft operation and, in turn, passenger safety during flight.
In contrast to the aviation industry is the marine retail market, selling diesel fuel, gasoline and E10. These fuel storage tanks are typically near a body of water, subject to temperature fluctuation and humid conditions. Over time, these elements lead to the formation of sediment and bottom water that remains with the stored fuel until the tank is physically cleaned and dewatered. Let&rsquo;s face the facts. Even if the fuel you are buying and selling meets an ASTM specification, this represents &ldquo;minimum&rdquo; standards. That doesn&rsquo;t mean it&rsquo;s a super fuel, nor does it mean the vessels storing that ASTM-specified fuel prior to consumption are clean and dry.
In the fast-paced world of liquid fuels marketing, in which I include biodiesel, one thing is certain: Sellers sell, buyers buy, but neither party frequently focuses on managing the storage tanks that store their purchases and sales. People often ask why petroleum terminals across the nation still have not begun investing more in infrastructure to accommodate efficient and economical blending of biodiesel, even with the success of the renewable fuel standard now in place. The simple answer centers around uncertainty with the blenders tax credit as well the EPA&rsquo;s current position on holding production values at 1.28 billion gallons. Interestingly, last year was a banner year for the biodiesel industry as we endured the coldest winter on record and still produced and delivered nearly 2 billion gallons of biodiesel to the marketplace. The industry demonstrated it could deliver.
Millions of gallons of liquid fuels will have changed hands during the time you read this article. The question is, how many of those gallons passed through to consumption without enduring negative impacts of challenged storage tanks containing water, sedimentation and degraded components of countless tank transfers? Adhering to ASTM standards and BQ-9000 fuel policies is a good start to minimizing fuel performance consequences, however, it&rsquo;s not enough. Those in the supply chain who move or consume fuel need to adhere to tank management policies that can help preserve the quality criterion of the fuel to maximize investment in each gallon consumed. Author: Paul Nazzaro President, Nazzaro Group 978-258-8360 ext. 301 <a href="mailto:paulsr@yourfuelsolution.com">paulsr@yourfuelsolution.com</a>

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Protecting Storage  Tanks From the Unknown 

On April 3, the Senate Committee on Finance moved legislation to the full body to extend expired tax provisions (&ldquo;extenders&rdquo;). Included in the energy provisions section of that package was an extension of incentives for biodiesel and renewable diesel. Specifically, the bill extends for two years the $1 per gallon tax credit for biodiesel, and the small agri-biodiesel producer credit of 10 cents per gallon through 2015. The bill also extends through 2015 the $1 per gallon tax credit for renewable diesel. The two-year extension is estimated to cost about $2.6 billion over the course of 10 years.
Unfortunately, having nothing to do with the extenders legislation or biodiesel, the bill has been delayed over 2014 election year politics. Because of leadership on both sides of the aisle, and their unwillingness to make a deal over amendments on other legislation, the fate of this bill, while wildly popular on its merits, having achieved a 96-to-3 vote in May on a major procedural hurdle, may not make it to the president before election day.&nbsp;
Some have suggested once the November elections pass, this legislation will make its way through both the House and Senate, and then to the president for his signature. As you can recall, this seems to be a pretty common pattern in Washington with respect to extenders.
As the extenders legislation lingers in Congress, one common question by many in industry has been will Congress change the structure of the biodiesel tax credit from a blender to a producer credit? The answer to that question would seem to be no.
With respect to extenders, Congress typically does not change the structure of a tax credit. They rarely address major policy changes or shifts as they currently exist for fear of opening a Pandora&rsquo;s box. Generally speaking, they are clean extensions of existing statutes, only changing the date from which they expire again.
However, to flip the aforementioned question on its head, perhaps the more appropriate question might be, does any of this have any meaning for the makings of tax reform? The answer may be yes, for a few reasons.
1. If there are going to be wholesale changes to the tax code, such as making the jump from a blender to a producer credit, tax reform would be the most logical place to make that change.
2. The Senate has a relatively new chairman of the Finance Committee, Ron Wyden, D-Ore., and he has indicated on numerous occasions he is seeking to change how tax credits are established. Providing young industries such as biodiesel with uncertainty, having to deal with extenders annually is not good for the economy, and it&rsquo;s not good tax policy.
3. In the House, we can expect to see a new Ways and Means Committee chairman emerge as well. Might this hint at new ambition that may lead to a generation-changing tax code for the first time since 1986?
4. Deep into the president&rsquo;s second term, ushering in a new Congress and having two new tax-writing committee chairs, can the two sides of Pennsylvania Avenue reach a deal on broader economic policy, and tax reform? If they do, the biodiesel industry and its stakeholders will most definitely have to fight to ensure there is a biodiesel tax credit going forward. Because at that time, everything will be on the table.
The bottom line is the U.S. needs tax reform that not only cleans up the code, but also provides the American biodiesel industry with some certainty and predictability. The fact is that the biodiesel industry, in the almost 10 years since achieving its first-ever tax credit, has experienced this credit expiring three times. This does little to assure producers, blenders, farmers and other stakeholders the needed assurance to build and sustain an industry. Author: Mark M. Palmer President &amp; CEO, Palmer Policy Group LLC 202-297-2596 <a href="mailto:mark.m.palmer@gmail.com">mark.m.palmer@gmail.com</a>

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Some suggest once the November elections pass, tax extenders legislation will make it through Congress and then to the president for his signature. As you recall, this seems to be a pretty common pattern in Washington with respect to extenders. 

Tax Extenders: A Harbinger for Tax Reform?

While major improvements have been made to physical movement, storage and availability of biodiesel over the past several years, there seems no escaping the risk unstable government policies poses to future investment. I would like to thank Steven J. Levy, managing director of Sprague Operating Resources LLC and chairman of the National Biodiesel Board, for sharing his personal thoughts with me on the state of the U.S. biodiesel distribution system as a whole, specifically on improvements, challenges and opportunities.
Come to find out, not only is it difficult to make biodiesel more available at a lower price through &ldquo;the system,&rdquo; but it&rsquo;s also tricky to write about. And much easier said than done is getting big companies&mdash;such as the largest U.S. producing company that manages a sizable distribution business, major pipeline and terminal operators, and others&mdash;to talk about it on the record. For example, one executive for a small company that ended up not participating in a featured article on this subject gave me the number to an attorney, to get it cleared through his legal department before speaking with me. That is fine, except the attorney never returned my voicemails.
It is clear there is a level of discomfort associated with exposing weaknesses in a system, placing blame for those weaknesses, and then having to play nice in the sandbox with those you blame. For a professional in this business to throw petroleum companies who block growth but through whom biodiesel can be supplied, or OEMs that ultimately support increased use, or terminal operators that do not pass the savings along to the distributor and consumer, under the bus, or call ASTM processes cumbersome or inhibitory when it&rsquo;s clear they have done so much good for quality and acceptance, this would not serve anyone well. I can appreciate taking the high road on this.
I would like to give a special thanks to the people and companies that participated in our distribution-themed issue, including Sprague, Amerigreen and Targray executives for our featured article on page 20, &ldquo;US Biodiesel Supply Kings.&rdquo; NBB petroleum liaison Paul Nazzaro gives us &ldquo;Protecting Storage Tanks From the Unknown&rdquo; on page 7. Justin Heller, CEO of Akash Energy in Houston, writes &ldquo;Building the New Energy Economy&rdquo; on page 32. Considering how future investment is affected by policy uncertainty, Mark M. Palmer, president and CEO of the Palmer Policy Group, contributes &ldquo;Tax Extenders: A Harbinger for Tax Reform?&rdquo; on page 6. And learn about the personal side of running a small biodiesel plant from majority-owner of Winnsboro, S.C.-based Midlands Biofuels, &ldquo;Bio&rdquo; Beth Renwick, and her husband and co-owner &ldquo;Bio&rdquo; Joe, in &ldquo;A Biodiesel Family Affair&rdquo; on page 26.

July/August Biodiesel Magazine

Business Briefs

Business Briefs

Columns

Protecting Storage Tanks From the Unknown

Tax Extenders: A Harbinger for Tax Reform?

DISTRIBUTION CHALLENGES

Featured

A Biodiesel Family Affair

US Biodiesel Supply Kings

Contributions

Building the New Energy Economy

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

Business Briefs

Business Briefs

Columns

Protecting Storage Tanks From the Unknown

Tax Extenders: A Harbinger for Tax Reform?

DISTRIBUTION CHALLENGES

Featured

A Biodiesel Family Affair

US Biodiesel Supply Kings

Contributions

Building the New Energy Economy

July/August Biodiesel Magazine