Several biofuel tax incentives will expire at the end of the year, including the $1 per gallon biodiesel blender credit. Congress is gridlocked. A super committee has been tasked with getting the debt ceiling and budget deficit under control. Understandably, those in the biodiesel industry must be wondering what the organization that represents them on Capitol Hill, the National Biodiesel Board, can do, or is doing, to secure a favorable policy landscape for biodiesel well into the future.
After interviewing Joe Jobe, CEO of the NBB, and Anne Steckel, the NBB&rsquo;s new vice president of federal affairs, I wrote a story, &ldquo;The Uncertain Tomorrow,&rdquo; that covers this timely topic as the year heads toward its sunset. There are several bills out there that aim to extend or alter the biodiesel incentive, but they are going nowhere fast. Will any legislation get through Congress in the next month or two? And, if so, could an extenders bill be attached? While those in the industry give me mixed opinions on whether the industry would be better off with or without the credit, the NBB leadership believes the tax credit is essential to the livelihood of its members. Here&rsquo;s why.
 When asked what NBB&rsquo;s No. 1 policy priority is today, neither Jobe nor Steckel said it&rsquo;s extension of the biodiesel tax credit. Instead, they say their focus is on upholding and defending the implementation of RFS2 and its biomass-based diesel carve-out&mdash;and the best method to do this is through extension of the tax credit. So how are they working to do this? &ldquo;NBB members have an incredible team of lobbyists and consultants who keep them plugged in on Capitol Hill and in the executive branch,&rdquo; says Jobe. &ldquo;Along with a strong in-house staff, our team includes three lobbying firms that specialize in energy, tax and agriculture issues, as well as a strong legal team. We also have a legal team that leads our litigation efforts defending against challenges to the RFS2, and regulatory and trade teams.&rdquo; Steckel adds, &ldquo;This is a historically difficult fiscal environment, and getting anything through Congress will be a real challenge. That said, it is certainly not time to throw in the towel, and I don&rsquo;t think it would be time to give up next year either if Congress allows it to lapse in December.&rdquo; Check out the full story on page 42. And contact your representatives and let them know what your position is.

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POLICY  PRIORITIES

Whether biofuels will truly contribute to the reduction of the world&rsquo;s reliance on petroleum, a critical question simply remains. What is the most cost effective process to produce biofuel?
 This was a question I asked in 2009, and recognizing a possible solution, I formed AE Resources Inc. As part of a Sponsored Research Project at Penn State University, AE Resources entered into an agreement with the university to develop and commercialize what we believe to be such a solution. Under the direction of Matthew M. Kropf, the project has investigated the technical aspects of the advanced biofuel production reaction with a focus on the development of a novel technology to minimize chemical waste, improve efficiency, product quality, and further translate to other value-added products. The research has resulted in an improved process and understanding of the benefits of ultrasound and microwaves in chemical processing.
 The Multi-Energy Optimization Process focuses two unique yet distinctive energies at the point of reaction thus optimizing the chemical conversion. Combining microwave and ultrasound has proven to produce biodiesel more efficiently than other traditional means. It produces a complete emulsification, uniformly distributing equal sizes of oil and catalyst droplets while heating it at the point of reaction. This patented technology has demonstrated that the energy needed to produce a gallon of biodiesel to be 662 Btu compared to 4,912 Btu. It furthermore reduces the catalyst consumption from 0.5 percent weight NaOH to 0.2 percent weight NaOH at atmospheric pressure. This approach has been demonstrated for a multitude of feedstocks including those with high FFA content without the need for neutralization or additional catalysts.
 Higher frequency ultrasonic cavitation is shown to result in smaller size and narrower distribution of methanol droplets in oil. The ultrasonic technique itself is shown to create finer dispersions of methanol than those prepared conventionally, as compared to shear mixing. To demonstrate the pertinence of microwave for biofuel production, the dielectric loss of pure methanol was measured as increasing amounts of NaOH catalyst were added. The relation between dipolar relaxation and the free rotation of a single polar molecule was confirmed with the complex permittivity measurements of methanol over a range of temperatures. As the temperature increases, the available energy for molecules to rotate, free of hydrogen bonding, is also increased. Practically, this result indicates that preheated methanol will absorb microwaves less efficiently.
 More importantly, this confirmed that when properly &ldquo;tuned&rdquo; and administered, microwave energy directly couples to hydrogen bonding breakages, which are limiting factors in diffusion and chemical activity. This means that the appropriate selection of microwave directly enhances the reaction rate. Measuring the time rate of change of the temperature during microwave heating of various emulsions of the components oil and methanol also revealed an unexpected result. It demonstrated that the heating rate of emulsions is greater than either component. This is a unique result, in that, one would expect the heating rate to be limited to the more active, higher dielectric loss material, in this case methanol. However, it was shown that when methanol droplets are suspended ultrasonically in a catalyst-free emulsion, the net heating rate can be greater than that of methanol alone. The reason for this extension is due to the stabilization, both mechanically and thermally, provided by the oil. The oil allows for heat to be conducted away from the methanol droplets at the same time as it prevents the fine droplets from nucleated boiling. In fact, in other studies of near-critical and supercritical fluids, stabilizing droplets in oil has been used to achieve the maximum superheated temperatures by conventional heating.
 In any manufacturing process, there a four key components to maximizing efficiencies and reducing costs while maintaining quality: capital investment, the cost of raw material, energy consumption and labor. A revolutionary approach to energy efficiency has been developed for the industrial chemical industry. MEOP is a highly cost-effective, energy-efficient organic chemistry process providing more than 26 percent savings in operational costs, and a 50 percent lower capital expense than current methods.
 The technology is an alternative, energy-efficient method of producing organic compounds that nets a 50 percent reduction in energy use and 60 percent reduction in catalyst needs. Proof of concept has been achieved with a prototype, which consistently produces near-perfect emulsifications, while achieving superheated temperatures. This has resulted in a more efficient and streamlined approach to the production of a multitude of organic chemical products. With the introduction of this technology, producers reduce capital and energy costs, maximize labor costs and increase output without sacrificing quality. Author: Chris Getty President, AE Resources Inc. (412) 996-2002 <a href="mailto:getty@aeresource-inc.com">getty@aeresource-inc.com</a>

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Reducing Cost While Increasing Output 

When Alfred Willard French founded French Oil Mill Machinery Co. in 1900, the Massachusetts Institute of Technology graduate and veteran of the linseed oil industry believed that engineering creativity and research could produce superior vegetable oil mill machinery. Today, the 110-year-old company is applying those founding principles not only to the industrial food oil markets, but it&rsquo;s also serving the burgeoning biodiesel industry through the offering of its Innovation Center in Piqua, Ohio.
 By working closely with French Oil&rsquo;s team of experienced engineers, customers are able to optimize and fine-tune their extraction process through lab tests on the company&rsquo;s processing equipment, such as conditioners, screw presses or extruders, for obtaining desired processing results prior to ordering the equipment, says Tayte French Lutz, marketing coordinator for French Oil.
 &ldquo;We&rsquo;ve performed many tests on a variety of different products over the years,&rdquo; Lutz tells Biodiesel Magazine. &ldquo;It&rsquo;s valuable for us to see how our equipment can be used and what other markets there are for our equipment, but of course it&rsquo;s great for our customers who can use our equipment to test their materials and their process to see exactly how much residual oil they can get from their products and improve their process based on information learned in the trials.&rdquo;
 While the company has years of experience testing common biodiesel oilseed feedstocks such as canola, soybeans and jatropha, the company has also tested other oil-bearing materials, including grape seed, moringa, paprika, walnut, hemp, corn germ, apricots, peach pits, coffee beans and chili peppers. &ldquo;Some produce more oil than others,&rdquo; she notes.
 French Oil&rsquo;s Innovation Center offers process optimization of its equipment to companies that integrate biodiesel and agribusiness processes, says Lutz. Can Pro Ingredients Ltd., for example, which processes canola and alfafa, partnered with French Oil in November 2005 to optimize the proprietary fractionation equipment it uses at its plant in Arborfield, Saskatchewan, Canada. The canola is processed into high-quality extra virgin oil, and press cake, which is used in a protein concentrate.&nbsp;
&nbsp; &ldquo;There have been some other customers in the biodiesel industry that have taken advantage of the Innovation Center,&rdquo; Lutz says, adding that an undisclosed biodiesel producer has been conducting trials for more than two years with the company. &ldquo;It&rsquo;s been a great project for us and them,&rdquo; she says. While a specific cost of conducting performance trial testing at French Oil&rsquo;s Innovation Center varies by project, Lutz assures, &ldquo;The cost is very manageable for customers in the crushing and agribusiness industry,&rdquo; she says, &ldquo;especially considering&nbsp; these companies are spending millions and millions of dollars to get their processes up and running, so our costs are incredibly manageable considering the overall spending for startups.&rdquo;

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INNOVATIVE BY DESIGN: French Oil offers a range of equipment to meet the needs of biodiesel and agribusiness companies, such as the company's conditioner/cooker (bottom) and its achiever screw press (top).


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How French Oil works with industry to achieve process improvements

A Confluence of Process Optimization

When he was only 14 years old, Sam Flournoy set out to design and build his own biodiesel processor. It was the summer of 2008, and fuel prices were skyrocketing. Flournoy&rsquo;s father, who owns a local tree works company, was spending $10,000 to $12,000 a month on fuel. According to Flournoy, one of his primary goals was to produce a renewable fuel that his father could use to offset a portion of his fuel costs.
 &ldquo;My father had heard about biodiesel from one of his friends,&rdquo; Flournoy says. &ldquo;The guy showed us his set-up and it seemed pretty easy to do, so I started doing some research and a whole lot of reading, and started building my first processor.&rdquo;
 According to Flournoy, it took about six months of work before he was able to produce his first batch of biodiesel fuel. &ldquo;It was kind of like a work in progress for most of the time that I had it,&rdquo; he says. Once the processor was operational, Flournoy began to automate the machine. &ldquo;I introduced the PLC (programmable logic controller) to the machine, and eventually got it to where it could run a whole batch pretty much by the touch of a button,&rdquo; he says.
 The first processor Flournoy built could produce a 60-gallon batch of biodiesel in approximately 8 hours. He has since sold that machine, and constructed a new model. The new processor can also produce 60-gallon batches of biodiesel, but does it much faster. &ldquo;The second one is the same size but it produces biodiesel in about half the time because I added a couple more tanks to make it more of a continuous batch,&rdquo; Flournoy says. &ldquo;I bought all new parts for the second one and designed each tank by myself.Right now I am working on a few other things to get the batch time down even lower.&rdquo;
 Flournoy is collecting waste vegetable oil from his high school, several other schools, hospitals and restaurants for use as feedstock. The fuel he currently produces is being used to fuel equipment in his father&rsquo;s fleet. According to Flournoy, depending upon the specific piece of equipment, the company is using anywhere from a B20 to a B100 blend.
 Flournoy says he will likely sell the second biodiesel processor as well, so he can begin work on a more streamlined third model. &ldquo;When I first started out I was more focused on producing the fuel and selling it, but after my first processor I realized I was really interested in designing the processors and making them as efficient as they can be,&rdquo; he says.
 After he graduates from high school, Flournoy says he plans to continue his education in a field that will allow him to continue working on biodiesel production. &ldquo;I&rsquo;m not 100 percent sure what I want to go into,&rdquo; he says. &ldquo;But, I definitely want to test the water with some kind of chemical engineering, or mechanical engineering, that sounds like something that would interest me, definitely.&rdquo;

DESIGNING THE FUTURE: Richmond, Va.-based high school student, Sam Flournoy, collects WVO from his and other high schools, restaurants and hospitals for use as feedstock in the processing units he designed and built. 

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Young Richmond entrepreneur designs his own biodiesel processors

Building a Unique Small-Scale Solution

e-Biofuels LLC, a wholly-owned subsidiary of Imperial Petroleum Inc., recently announced it sold approximately 26 million gallons of biodiesel during the fiscal year ending July 31, resulting in approximately $106 million in revenue.
 &ldquo;We&rsquo;re very excited about the company&rsquo;s growth prospects,&rdquo; says Imperial President Jeffrey Wilson. At the Middletown, Ind., facility&rsquo;s current product rates, the company is on pace to produce in excess of 34 million gallons of fuel in fiscal 2012 or an annual increase of about 30 percent. &ldquo;In the fourth quarter of fiscal 2011, we settled or resolved all of the past vendor and litigation issues that had faced e-Biofuels at the time of its acquisition by [Imperial].&rdquo;
 On Sept. 16, Imperial further announced that it has entered into definitive agreements with accredited and instrumental investors to raise $3.1 million before fees and expenses in a private placement of equity securities.
 &ldquo;The proceeds of this equity raise will enable us to rapidly expand our biodiesel operations at the Middletown facility by about 30 percent,&rdquo; Wilson says. &ldquo;We expect the rapid expansion of the plant to between 40 and 45 MMgy to increase cash flow and revenues, enabling us to continue on our growth trajectory.&rdquo;

Biodiesel producer announces record sales

A New Benchmark 

The International Biorefining Conference &amp; Trade Show held in Houston in September wasn&rsquo;t exclusively about biobased chemicals and next-gen biofuels. In fact, the event featured two speakers who presented novel biodiesel technologies that are on the verge of commercialization.
 John Massingill, president of Advanced Materials and Processes, presented on his company&rsquo;s fiber processor, which essentially consists of steel fibers between 8 and 150 microns in diameter, that can be used both as a device to clean crude crop oils and as a reactor to transesterify triglycerides into biodiesel and glycerin.
 The technology can be used to remove soapstock, gums and free fatty acids from crude vegetable oils, allowing farmer cooperatives to increase their yields by not sending out more valuable fractions of the oil as cheaper soapstock, which only sells for 5 to 10 cents a pound. The fiber processor operates via a polar phase whereby some of the liquid &ldquo;runs down the fibers, with the other running around the fibers.&rdquo;
 If this technology sounds farfetched&mdash;and even farther from commercialization&mdash;it&rsquo;s not. Massingill said it&rsquo;s going commercial next quarter at Valley Co-op in Harlingen, Texas, in a 13 MMgy cottonseed crush facility. While the cottonseed plant is being outfitted with the technology, the co-op&rsquo;s 3 MMgy Greenline Industries plant (Valco Bioenergy) is also being retrofitted to use the fiber processor for biodiesel production.
 Matthew Kropf, director of the Energy Institute and assistant professor of petroleum technology at the University of Pittsburgh Bradford, who is also a research associate and adjunct professor of engineering science and mechanics at Penn State, said he chose this opportunity at the International Biorefining Conference &amp; Trade Show in Houston to unveil his new biodiesel approach, named Multi-Energy Optimized Processing.
 Under development for four years, the process combines ultrasonic cavitation and microwave heating, which Kropf said reduces the energy required to make biodiesel and the costs associated with catalyst use by enhancing the reaction rates through process intensification approaching supercritical reaction. MEOP involves the dielectric permeation of material where only the methanol is being heated via microwaves, not the oil, which saves energy. &ldquo;You don&rsquo;t need supercritical, you need the methanol stable and heated at the right frequencies,&rdquo; he said. Stable in emulsion, he said the process can get the methanol temperatures up to 145 degrees Celsius. &ldquo;It&rsquo;s stable by using the right frequency of emulsion,&rdquo; Kropf said.
 Early on, Kropf converted a kitchen microwave and tied in ultrasonics, but household microwaves are multimode, so he moved on to develop a 10-gallon-per-hour pilot using a single-mode microwave. The process used less than 0.2 percent catalyst, which he said is less than half the industry standard, and only 1 kilowatt of energy for the microwave input with 50 watts of energy input for the ultrasonics. It achieved 99.8 percent conversion efficiency. The work was then scaled up and demonstrated at 30 gallons per hour.
 Kropf&rsquo;s research was funded by AE Resources Inc., which holds exclusive rights to the technology. Chris Getty, president of AE Resources, told Biodiesel Magazine that the MEOP biodiesel process only requires 600 Btu per gallon compared to what he said is around 4,200 Btu for conventional biodiesel processing.
 Kropf and AE Resources are now looking for partners to take the technology commercial.

Two alternative biodiesel processes discussed at Houston event 

New Technologies Continue to Develop 

After a trip to Washington, D.C., to speak with a number of people about alternative fuels, Robert Franick, manager at the Southwest Research Institute (SwRI), decided the idea of developing a &ldquo;one-stop shop&rdquo; for alternative fuel issues ranging from emissions to fuel evaluations was a good one. &ldquo;The more people I talked to,&rdquo; he says, &ldquo;the more I realized there are a number of organizations that can do emissions testing, others that can take concepts from the laboratory to commercialization, and others that can run fuel analyses.&rdquo; But &ldquo;there are not a lot of organizations that can do all three,&rdquo; he says&mdash;and this is why Franick is excited about the formation of the International Alternative Fuel Technology Center in Texas.
 For those seeking help with a biodiesel-related issue, Franick says the IAFTC can take a client&rsquo;s ideas for biodiesel from conception, to pilot operation and even to commercialization, in part, due to the chemistry and chemical engineering division at the facility. In addition to previous work with biodiesel, the staff at SwRI has also worked with shale, tar sands, coal, cellulosic ethanol and synthetic paraffins. &ldquo;We can help them work through their problems,&rdquo; he says, &ldquo;and that is the key; regardless of what the problem is, we probably have a way of helping them solve the issue.&rdquo;

LARGE SCALE: The alternative fuels center will work with clients at the bench-scale level all the way to commercialization. 


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A new alternative fuels technology center may have all the answers

The Problem Solver

While operational economics may be difficult for some in the biodiesel industry, others, such as Keystone Biofuels LLC, a 20 MMgy multifeedstock facility in Lower Allen Township, Pa., are finding that favorable market conditions, spurred on by state and federally mandated biodiesel volume requirements coupled with the $1 per-gallon federal biodiesel blender tax credit and sustained Renewable Identification Number prices, are creating ideal opportunities to reinvest in their facilities by expanding staff or making significant plant upgrades.
 Keystone President and owner Ben Wooten tells Biodiesel Magazine that plant upgrades were always a focus since the company moved its production facility from Shiremanstown to Lower Allen Township in January. The efficiency upgrades made at the plant, according to Wooten, include a methanol recovery system for recapture of methanol in biodiesel and glycerin for reuse, in addition to switching from water-wash to dry-wash finishing. He adds that the installation of demetholizer equipment will increase production capacity from 20 MMgy to 60 MMgy. While the plant is operating on the new upgraded equipment, Wooten adds that he intends to have the plant operate at half-speed through December to monitor performance before adding 14 new employees in a second shift that will monitor the increase of production volume by early next year.
 &ldquo;When you go through the experience of a new industry, you learn a lot very quickly,&rdquo; Wooten says, adding that he&rsquo;s already sold out of product through the end of the year. &ldquo;With a new plant, we were able to do the things we wanted to have that we couldn&rsquo;t have in the old plant.&rdquo;
 Wooten says the plant size increased&nbsp; from 15,000 square feet at its old Shiremanstown site to 60,000 square feet in Lower Allen Township. The new plant also features a 26-car rail spur for improved load-in and load-out of product, built-in containment with steam for use during the winter and an additional 1.2 million gallons of biodiesel storage, adding that he managed to finance the upgrades without bank financing.
 &ldquo;That was the biggest challenge,&rdquo; he says. &ldquo;Most of the money came through equipment leases and then we sold a small stake in the company to some private investors to raise some capital to finish off what we were doing.&rdquo;
 In Nevada, Biodiesel of Las Vegas has resurrected its 4 MMgy production facility outside of Las Vegas. The plant, which operated from 2004 through 2008, had closed due to the economic downturn. Today, BLV, a subsidiary of parent company New-Com Inc., has reinvested $65 million in equipment and infrastructure upgrades in order to operate more efficiently and economically heading into 2012, according to Ryan Geurts, marketing specialist for BLV.
 The plant has its own rail yard for efficient delivery of inbound and outbound product and the company plans to incrementally increase production capacity to 15 MMgy by the end of next year, Geurts says, adding that the company has already taken pre-sell orders for biodiesel and negotiations with high-profile strategic partners are also in the works.
 &ldquo;We&rsquo;re getting a lot of inquiries and there&rsquo;s a lot of excitement even with local consumers,&rdquo; Geurts says, adding the plant is expected to be in full production by end of the fourth quarter. &ldquo;We&rsquo;re not open to the public in that sense, but to see that people are jumping onboard excited about an alternative fuel like that makes us feel good about the market.&rdquo;

ON SCHEDULE: Construction is underway at the 4 MMgy Biodiesel of Las Vegas project with completion expected by the end of this year. 


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Evolving industry translates into added efficiencies, market drivers 

Re-emerging Growth

The three-member team at Organic Drive, a startup biodiesel production company based in the U.K., approaches its personal expenditures with the same analytical mindset as it would in optimizing yield or batch cycle times. The result of such an approach is a weekly food bill of roughly $5, for all three, according to Tom James, director and cofounder at Organic Drive. Although that weekly food bill might indicate incredible discipline (or sheer lack of appetite), it is, as James infers, a matter of self-inflicted circumstances.
 Every member of the team left their consulting jobs where at one time or another each worked on problems related to everything from nuclear reactors to submarines, and of course, biodiesel production. None of the members, which includes Geoff Cunningham and Duncan Morrison, have children or mortgages (they share a bungalow). And, Organic Drive is a reality today because, as James puts it, the group didn&rsquo;t want to &ldquo;wake up&rdquo; one day and have regrets at not following their passion to make biodiesel because of &ldquo;inaction, apathy or lack of belief.&rdquo; Their passion for biodiesel has helped create a 25 metric ton (roughly 7,500 gallons) per week facility that relies on a reengineered ex-brewing vessel as the main reactor.
 It might sound like the team is merely living out some kind of fantasy, but James and the team have combined their engineering backgrounds and time at Cambridge University, along with countless trips to other facilities to build and operate a successful plant. In the next two months, according to James, production will increase to nearly 60 tons per week. &ldquo;It has been operational now since the end of March,&rdquo; he says of the used-cooking-oil-based refinery. &ldquo;Most of our time since then has been spent redesigning and rebuilding purification systems,&rdquo; along with work on yield and batch cycle times. &ldquo;We know the statistics on startup company successes, and they aren&rsquo;t pretty,&rdquo; James says. &ldquo;However, we believe with enough planning and hard work, we can buck the trend.&rdquo;
 The fact that the team has no stockholders to please benefits the team, and James says they&rsquo;ve been able to move faster in the development process than the average chemical or biofuels company. For instance, he says, the team went from a clean sheet of paper to an operational and proven flash evaporator in just two weeks at a fraction of the cost. The team is also taking advantage of its contacts in North Africa to find untapped sources of used cooking oil, as well as working to develop a noncatalytic, supercritical reactor design for treating brown grease. &ldquo;We are looking to undergo aggressive growth in the immediate future,&rdquo; James says, adding that, &ldquo;if we fail, it will not be for lack of effort.&rdquo;

They gave up everything for biodiesel. Was it worth it?

Living the Biodiesel Dream

Approximately 100 professionals working in the feedstock and biorefining sectors recently met at Idaho National Laboratory to participate in a U.S. DOE-funded workshop. According to Kevin Kenney, an INL research engineer who served as a principle planner and host for the event, one of the primary objectives of the group was to develop a report for Energy Secretary Steven Chu. &ldquo;Our objective was to broaden the view of densification from just a mass and energy perspective to include what are referred to as preconversion and formulation concepts.&rdquo; The group also aimed to engage the development of partnerships that would put INL&rsquo;s feedstock process demonstration unit (PDU) to work.
 The PDU is a full-scale biomass preprocessing system that converts biomass into high-quality feedstock. &ldquo;In the simplest terms, it looks very much like a pellet mill, only it&rsquo;s much, much more than that,&rdquo; Kenney says. &ldquo;It&rsquo;s a research tool that we use to develop and demonstrate the concepts of preconversion formulations and densification.&rdquo; Since the unit is commercial scale, it is able to produce feedstock that biorefining companies can use for rather large-scale research purposes. Kenney says the main components of the PDU are grinders, hammer mills, a rotary drum dryer, and a pellet mill.
 While Kenney notes that to date the PDU has only been used to process cellulosic feedstocks, he says the system is certainly not limited to any specific feedstock type. For example, the system would work well with potential biodiesel and biobased jet fuel feedstocks such as camelina.

FORMULATING FEEDSTOCKS: Researchers at Idaho National Laboratory gather raw biomass for processing during a demonstration of the feedstock PDU for more than 100 industry, academic and national laboratory experts, who attended a DOE-sponsored Biomass 

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Researchers, members of industry unite to report on feedstock densification

Feedstock Solutions  

As California goes, so goes the nation, is the old saying. It might be clich&eacute;d, but the Golden State continues to pioneer, leading the country in instituting bold, low-carbon energy policies and infrastructure build-out initiatives, and the California Energy Commission is a driving force behind those efforts.
 In September, the CEC unanimously adopted the state&rsquo;s third annual transportation energy investment plan to help change the types of vehicles Californians drive and the fuels they use. The latest investment plan appropriates $100 million in state funds to leverage funding and investments from federal agencies, research institutions, private investors, auto manufacturers and other stakeholders to advance the CEC&rsquo;s Alternative and Renewable Fuel and Vehicle Technology Program.
 Assembly Bill 118 authorized the CEC to provide approximately $100 million annually over seven years to encourage the development of new fuels and technologies. The 2011-&lsquo;12 plan allocates funding to encourage a score of transportation investments for the development of different biofuels, such as biodiesel, including: $24 million to help develop and produce biofuels such as gasoline and diesel substitutes and renewable natural gas; and $3 million to encourage the development of innovative technologies and advanced fuels, including biodiesel derived from new high-productivity feedstocks such as algae.
 Funding comes from sources such as the vehicle and vessel registrations, identification plates and smog abatement fees. The CEC&rsquo;s first investment plan combined $176 million in funds from fiscal years 2008-&lsquo;09. The second investment plan, in fiscal year 2010-&rsquo;11, provided $83 million. &ldquo;This innovative transportation investment program is unique in the country,&rdquo; says CEC vice chairman James Boyd.
 California is working to reduce its greenhouse gas emissions to 80 percent below 1990 levels by 2050, decrease petroleum fuel use to 15 percent below 2003 levels by 2020, and increase alternative fuel use to 20 percent by 2020.
 &ldquo;The funding plan for fiscal year 2011-&lsquo;12 builds on two earlier versions, fine-tuning California&rsquo;s seven-year program to increase alternative and renewable fuels and to test innovative vehicle technologies,&rdquo; Boyd adds. &ldquo;An essential element of California&rsquo;s climate change and energy policies, this program successfully attracts outside investment and promotes sustainable transportation alternatives within our state.&rdquo;

LOW-CARBON LEADER: James Boyd, CEC vice chairman, says the transportation energy investment plan is integral to Californiaâ€™s climate policies. 

2011/10/1319558606633.jpg

California's biodiesel infrastructure poised for expansion

Statewide Growth

Arizona-based REV Biodiesel LLC recently announced across-the-board price reductions for its B99. The reductions average 20 cents per gallon and increase with volume. After the Arizona Use Fuel Refund for the &ldquo;light class&rdquo; biodiesel used in noncommercial vehicles, the bulk price of the fuel can drop as low as $2.99 per gallon. According to REV Biodiesel, the price reduction became effective Sept. 9 and will continue indefinitely.
 The price reduction means that the per-gallon price of biodiesel can be approximately 80 cents less than petroleum diesel. REV notes that as of Sept. 9, the average per-gallon price of diesel in Arizona was $3.79.
 &ldquo;With increased volume and economies of scale, we have been able to bring down the cost of producing our biodiesel fuel,&rdquo; says REV Biodiesel President Dan Rees. &ldquo;We think that passing this savings per gallon on to users is the best way to get more clean biodiesel into the mainstream market.&rdquo;
 According to Rees, the ability of biodiesel producers, including his company, to be able to continue supplying affordably priced biodiesel will depend in large part on the renewal of the $1 biodiesel tax credit, which is currently set to expire at the end of the year.&nbsp;

COST REDUCTION: REV Biodiesel has significantly reduced the price of its biodiesel fuel. 

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An Increase in Affordability

National Biodiesel Board staff members represent the biodiesel industry with direct advocacy and lobbying on the Hill but they also coordinate industry efforts on legislative, regulatory and legal matters. It is absolutely imperative that law makers and regulators on Capitol Hill understand what NBB is and what the biodiesel industry does.
 NBB&rsquo;s core D.C. team is: &bull; Vice President of Federal Affairs Anne Steckel &bull; Director of Federal Communications Ben Evans &bull; Senior Advisor Larry Schafer &bull; Legislative Assistant Chico Matiella
As part of their trade association, NBB members have an incredible team of lobbyists and consultants who keep them plugged in on Capitol Hill and in the executive branch. Along with a strong in-house team, our extensive network of contractor firms works diligently in Washington, D.C., and it includes four lobbying firms that specialize in energy, tax, regulatory, and agriculture issues.
 Washington Council Ernst &amp; Young Washington Council Ernst &amp; Young is an advisory services group that helps clients manage opportunities and risks associated with the legislative and regulatory process. It covers domestic and international taxation; health care; energy; employee benefits; financial services and other issues. WCEY assists clients in navigating the often byzantine legislative and regulatory process&mdash;from committee deliberations, outreach to leadership, and House and Senate floor consideration, all the way to regulatory implementation. Its main function with NBB is focused on tax legislation.
 Gordley &amp; Associates Gordley Associates provides a full range of government relations services, focused on practice areas related to agriculture. Services include issue monitoring and analysis, lobbying, regulatory affairs, Washington representation, and providing organizational support for trade associations. Its focus on agriculture enables them to specialize in all aspects of farm and international trade policy, renewable energy, biobased products, agricultural research, biotechnology, conservation, and rural transportation, among others. This expertise means that biodiesel is represented in Washington with commodity organizations, farm bill programs and policies, and USDA programs.
 Mayer Brown LLP Mayer Brown is a leading global law firm with offices in major cities across the Americas, Asia and Europe. Its presence in the world&rsquo;s leading markets enables the firm to offer clients access to local market knowledge combined with global reach. They provide legal services in areas such as banking and finance; corporate and securities; litigation and dispute resolution; U.S. Supreme Court and appellate matters; environmental; government and global trade; and tax. In this role, it has most notably assisted NBB with international trade concerns and disputes, and RFS2 litigation from the petroleum industry.
 The Alpine Group Alpine Group is the newest member of NBB&rsquo;s lobbying team. Founded in 1996, it has become one of Washington&rsquo;s top lobbying firms, with a specialty in energy and environment issues. In its work for NBB, Alpine tracks energy legislation and issues related to the renewable fuel standard.

Meet the DC team

NBB's annual conference has become the epicenter for the growing business of biodiesel and that will be more important than ever in 2012. Companies will be making deals that will affect their balance sheet for the entire year, and as production and market demand continue to rise, next year's conference will be the springboard for a great 2012. Whether you are an attendee or an exhibitor, you can't afford to miss this opportunity!
 Join us Feb. 5-8 in Orlando for the National Biodiesel Conference &amp; Expo. Early bird registration ends Nov. 18.&nbsp;
 &ldquo;REG has been an annual sponsor of every single National Biodiesel Conference and Expo,&rdquo; says Gary Haer, vice president of sales and marketing for the Renewable Energy Group, and chairman of the National Biodiesel Board. &ldquo;On the tradeshow floor, we connect with business partners, vendors, customers and colleagues. Renewable Energy Group is proud to join the National Biodiesel Board again at the 2012 Conference and Expo in Orlando. We will see you on the tradeshow floor!&rdquo;
 You will also be the first to learn about important research, technical updates, regulatory strategies and market forces that affect biodiesel.&nbsp; The 2012 conference will also offer: &bull; A fuel distribution track, with sessions specifically targeting petroleum distributors.&nbsp; &bull; A one-day sustainability symposium, organized by NBB Director of Sustainability Don Scott, examining issues such as carbon, water, ecology, biodiversity and food security, and how biodiesel contributes to solving sustainability problems.&nbsp;
 Before the Nov. 18 early bird deadline, registration fees start at $550 per person.&nbsp; Registration includes exclusive access to specially tailored sessions, networking events and keynotes to benefit you and your business.&nbsp;
 Visit www.biodieselconference.org today to reserve your place!

The 2012 National Biodiesel Conference & Expo will be the center of biodiesel business for the year. Stay ahead of your competition by registering before the Nov. 18 early bird deadline.

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Where business gets done: 2012 National Biodiesel Conference & Expo

With record biodiesel production this year, the industry has seen infrastructure continue to grow. A number of NBB members have reopened biodiesel production plants, opened new distribution terminals, and have kicked off new retail locations. As these good-news stories about the industry arise, members have taken advantage of NBB services to help spread the message of biodiesel&rsquo;s economic, environmental and national security benefits within their local communities.
 &ldquo;It is really important to use every opportunity we can to educate people on the benefits of biodiesel,&rdquo; said Jessica Robinson, NBB communications director. &ldquo;Grand opening events are just one of the great ways to showcase the job-creation and economic benefits of the biodiesel industry to local and state leaders.&rdquo;
 In recent months a number of NBB members hosted events that were well attended by legislators, business leaders, environmental advocates and biodiesel industry representatives. &bull; NBB member Washakie Renewable Energy LLC hosted an open house event and plant tour celebrating the start of its biodiesel production facility near Plymouth, Utah. &bull; Renewable Energy Group celebrated the official opening of the REG Albert Lea biodiesel plant in Minnesota. &bull; Metro Energy opened a new state-of-the-art biodiesel and petroleum storage facility at Enterprise Park (EPCAL), Calverton, Long Island, N.Y. &bull; AMERIgreen Energy, Inc. of Lancaster, Pa., worked with students and faculty at the Lancaster County Career and Technology Center to unveil a biodiesel chopper designed and built by the school. The chopper, which runs on recycled-cooking-oil biodiesel from the school cafeteria, led an energy independence convoy of elected representatives and officials to a ceremonial signing of The Declaration of American Energy Independence, in August.
 &ldquo;As the trade association to the industry, we are here to help our members,&rdquo; said Robinson. &ldquo;The communications team can help in a number of ways. From promoting events, to helping organize, to finding speakers for the big day, we are happy to help members tout their accomplishments.&rdquo;

NBB member Metro Energy recently cut the ribbon on a new storage facility, joining a number of companies that have expanded biodiesel infrastructure. NBB CEO Joe Jobe spoke at the event and the communications team helped with promotions. 

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Grand opening events a springboard for biodiesel message

As obligated parties look to blend increasing amounts of biodiesel into a larger portion of the U.S. diesel pool, customers in new markets are beginning to take interest. Biodiesel, as a low-cost compliance option to meet the advanced biofuels requirements of RFS2, is beginning to reach markets where it hasn&rsquo;t been heavily used previously. As those new markets increase, the desire for information about biodiesel blends and their attributes also increases.
 Recently, the U.S. railroad sector has taken an interest in biodiesel&mdash;and has asked the National Biodiesel Board Technical Team to help educate them on the impacts of the use of biodiesel blends in their equipment, as well as to put in place plans to address any technical needs or data gaps regarding biodiesel use in railroads.
 The U.S. railroad industry, including both freight and passenger divisions, is the third highest consumer of distillate fuel in the United States averaging more than 3.2 billion gallons annually from 2000-'09, with projections of consumption expected to increase in future years. A significant amount of research and development has gone into the use of biodiesel for other on- and off-road applications, but much less has been done with biodiesel in railroad applications.&nbsp;
 Over the past 18 months, the Society of Automotive Engineers Technical Committee 7 set up a subcommittee on Biodiesel in Railroad Applications and the Locomotive Maintenance Officers Association has been investigating biodiesel blends.&nbsp; The NBB technical team, whose focus is to address technical needs and data gaps with biodiesel and biodiesel blends, collaborated with SAE and LMOA to conduct an assessment of the U.S. railroad system. The assessment covered environmental, technical, and regulatory issues associated with implementation of biodiesel (B5 to B100) in the North American railroad system. It had a special emphasis on understanding technical questions or needs for railroad applications that have not already been addressed through existing research, as well as summarized real world biodiesel experience in railroads to date.
 A lot of research and demonstration, mostly with high speed on- and off-road engines, occurred to secure the standard for pure biodiesel (B100) and biodiesel blends.&nbsp;
 &ldquo;Biodiesel blends meeting specification is a drop-in fuel,&rdquo; said Kyle Anderson, technical project manager for NBB. &ldquo;Many of the railroad users were not aware of the tremendous amount of information that went into getting the ASTM standards.&rdquo;
 B5 and lower blends made with B100 meeting D6751 fall under the conventional petrodiesel specification, ASTM D975, and biodiesel is now considered a fungible, drop-in component in petrodiesel. B6 to B20 blends are covered by ASTM D7467. Both D975 and D7467 have been in place since 2008.&nbsp;
 &ldquo;The assessment provides a valuable tool for railroads as they consider using biodiesel blends,&rdquo; said Anderson. &ldquo;We were a bit surprised at the level of biodiesel blend use that has already occurred in railroads in the U.S.&rdquo;&nbsp;
 In total, more than 3,700 locomotive months of biodiesel and biodiesel blend use with 19 different rail users were identified and summarized, with no major problems being reported by the users. Usage was from a diverse arena of applications including: passenger, commuter/short haul, short line/switching, line-haul, and specialty applications. Use included biodiesel in blends of B5 to B10, B20 to B25, B50 to B100, and B100 over the past 15 years.&nbsp;
 &ldquo;Most of these were not controlled studies with a lot of data collected. Many of the users tried biodiesel for its emissions benefits (i.e. less black smoke) or because it is a renewable, domestically produced fuel&mdash;and then they just kept using it,&rdquo; said Anderson. &ldquo;Some users stopped buying biodiesel if the price was substantially higher, but all of the folks contacted said they would use biodiesel blends again if the price was similar to petrodiesel.&rdquo;&nbsp;
 The assessment indicated both major U.S. railroad engine manufacturers, GE and EMD, currently support the use of up to B5 meeting ASTM standards. Both desire additional data before moving forward with formal support for B20, and the data contained in the assessment provides some of that information. According to the report, the technical experts at SAE and LMOA identified more work on B20 in the areas of emissions, long-term impacts in low-speed railroad locomotive engines, and sharing of existing technical information with the railroad industry as high priority areas for additional effort.
 &ldquo;We look forward to working with the technical experts within the rail industry to develop the data needed for every railroad company to feel confident using B20 and to secure formal support for B20 from the railroad OEMs,&rdquo; Anderson said.

NBB technical team collaborates with railway industry 

Bard Holding Inc. announced the opening of its Calhoun, Ga., facility, the first of multiple manufacturing sites the company plans to operate in Georgia. The company&rsquo;s global mission is to provide algae as a viable and alternative source to petroleum-based fuels by producing sustainable, green energy accessible to consumers around the world. Bard will direct manufacturing in accordance with a strategic and balanced need for nutraceuticals, pharmaceuticals and the biofuels market. Executives say Bard has developed an integrated algae production system resulting in high-grade algae biomass and valuable oils. It is a closed system that minimizes contamination and is designed for modular, commercial-scale production.
 &nbsp; The Cooking Oil Recycling Program of Buncombe County is a unique pilot project to recycle used cooking oil into biodiesel and keep oils and greases out of the wastewater system. Funded by the Biofuels Center of North Carolina, the program is a collaboration between the Metropolitan Sewerage District of Buncombe County, Blue Ridge Biofuels, and Green Opportunities. A new website, www.cookingoilrecycling.org, provides the public with information on the program as well as the location of cooking oil recycling bin locations. The first of 35 recycling bins are located at the Buncombe County Landfill and at the newly opened River District Recycling Center. Waste cooking oils are one of the major causes of costly sewer maintenance in Buncombe Co. These sewer overflows are a potential threat to the environment and take up valuable resources of the local public works budgets. The new program seeks to keep waste oils out of the sewers by diverting them to Blue Ridge Biofuels for processing into biodiesel. MSD was the first major purchaser of biodiesel in Buncombe Co. and has been using biodiesel in its fleet of 85 vehicles for more than seven years.
 Renewable Energy Group Inc.&rsquo;s board of directors recently announced its succession plan for transition of the company&rsquo;s leadership positions. The board offered unanimous approval of Jeffrey Stroburg&rsquo;s request to transition from the dual position of chairman and CEO to the sole role of chairman. Daniel J. Oh, currently president and chief operating officer, will transition to the role of CEO and president, and he will join the board. Chief Financial Officer Chad Stone and all other management remain with the company in their current roles.&nbsp;
 The Energy Cooperative, a Philadelphia-based, member-owned nonprofit, has launched an initiative to encourage the use of Bioheat. To kick off the Clean Heat initiative, the Energy Co-op is holding a Clean Heat video contest. Members of the group submitted videos of their experiences using Bioheat. The Energy Co-op will use these videos as a way to promote the use of the biodiesel-blended heating oil, as well as create more awareness of the renewable heating fuel. The contest was scheduled to conclude Oct. 20. The co-op heating oil program is largely residential and has been offering Bioheat blends of B2 to B20 to its members since 2006.
 &nbsp; Alberta-based Blue Horizon Bio-Diesel Inc. entered into an exclusive license agreement with two undisclosed third parties to utilize a patent-pending technology to convert hydrocarbons and low-grade cellulosic materials into high-grade renewable diesel. As part of the licensing agreement, BH Bio-Diesel has agreed to pay a confidential license fee as well as a royalty per liter of each project&rsquo;s net sales of renewable diesel fuel. The term of the exclusive license agreement will continue until the end of active use of the technology or the expiration of associated patents. The technology licensed to the company uses a low-temperature, low-pressure, catalytically driven process that&rsquo;s capable of fractionating complex carbon molecules and polymers into shorter hydrocarbons. BH Bio-Diesel has secured a long-term lease on a facility located in Bruderheim, Alberta, where it will install a 750 liter-per-hour (198 gallon-per-hour) pilot unit to validate the technology. The technology licensed to BH Bio-Diesel is also capable of producing methyl ester biodiesel from canola oil, yellow grease and other fats and oil feedstocks.
 Members of the Iowa Biodiesel Board elected Mark Cobb as chair of the nonprofit organization at its annual meeting Sept. 9. Cobb has 32 years of experience in the oil industry and is vice president of Iowa Renewable Energy, a biodiesel plant based in Washington, Iowa, which employs 23 people and has the capacity to produce 30 MMgy. He is also president of Cobb Oil, a petroleum distributor based in Brighton, Iowa. Cobb Oil was an early adopter of biodiesel, first offering the product in 2002 at the request of farmer customers. Cobb also serves on the board of the Petroleum Marketers and Convenience Stores of Iowa, chairing that group&rsquo;s alternative fuels committee. Cobb replaces Daniel J. Oh, president and chief operating officer of Ames-based biodiesel producer REG, who served as chair of the Iowa Biodiesel Board for four years.
 Milligan Bio-Tech Inc. has raised $8 million for a planned expansion of its 4 MMly (1 MMgy) production facility located in Foam Lake, Saskatchewan, Canada. The $8 million of newly-acquired capital effectively came in two forms; $4 million were issued through a private offering of convertible debentures and the remaining $4 million were obtained through a senior lending facility. The funds will be used initially as capital to increase production capacity five-fold to 20 MMly and to optimize a canola seed crushing facility that&rsquo;s co-located on site to enable efficient crush&nbsp; of nonfood-grade canola, which is the primary feedstock in use by Milligan. Upon completion, the expansion, expected to be complete by mid-November, will make Milligan Bio-Tech the largest biodiesel producer in Western Canada.
 Evonik Industries AG held a groundbreaking ceremony Sept. 15 for the construction of a new catalyst production plant in Puerto General San Martin, Argentina. Engineering and design of the facility is complete, and the plant is expected to be operational by the end of 2012 to supply ready-to-use alcoholates as catalysts for the production of biodiesel, adding that the facility will primarily serve Argentinean and Brazilian markets with an annual capacity of more than 60,000 metric tons. Evonik&rsquo;s catalyst production plant will be part of a site where Terminal 6 S.A. operates a major biodiesel production facility. A global market leader for specialty catalysts for the production of biodiesel, Evonik started production of a catalyst facility in Mobile, Ala., with an annual capacity of 60,000 metric tons in 2009. The company said it built the plant primarily to serve the growing North American biodiesel market.
 Seattle-based biodiesel producer Imperium Renewables and the U.S. DOE&rsquo;s Pacific Northwest National Laboratory have reported positive results in a joint development for the production of biomass-based, drop-in jet fuel in the Pacific Northwest. So far, according to Imperium, the novel process has produced a meaningful amount of fuel, which is currently being evaluated to determine if it can feasibly be blended into commercial amounts of traditional, petroleum-based jet fuel. The method being employed involves a catalytic process under development by PNNL, which converts biomass-based alcohols into renewable drop-in jet fuels. Imperium entered into the project in July 2010 through a collaborative research agreement with Battelle, a nonprofit research organization that manages PNNL for the DOE. The work by Imperium and PNNL is being further developed, led by Roselle, Ill.-based LanzaTech, as part of a recent award from the DOE towards a new biofuel research project. In addition to Imperium, PNNL and LanzaTech, other participants in the consortium include Boeing, National Renewable Energy Laboratory, Orochem Technologies and the Port of Seattle.
 Greensboro, N.C.-based Patriot BioDiesel LLC is expanding its operations in response to increased local demand for biodiesel. Once complete, the upgraded facility will have an annual production capacity of between 2.5 million and 4 million gallons. The expansion is scheduled to be complete by mid-October. Patriot BioDiesel temporarily suspended biodiesel production in early 2010, following the expiration of the biodiesel tax credit. During that time, the company collected and refined waste oil, which was sold to other biodiesel plants. However, as RIN values increased in mid-2010, the plant restarted operations. Patriot BioDiesel purchased the new equipment from Tactical Fabrication LLC. Before the tax credit expired, another company had placed an order with Tactical Fabrication for a biodiesel system. While that company did put a down payment on the equipment, it did not complete the purchase. Rather than installing a new boiler to go with the new production equipment, Patriot BioDiesel elected to go with a unique heating system featuring ceramic elements manufactured by Innovative Heat Concepts.

NEW CHIEF: Daniel J. Oh, former president and chief operating officer of REG, is the company's new CEO. 

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OIL SMART: Mark Cobb, the IBB's new chair, has decades of oil industry experience.

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JET GUY: Former pilot John Plaza, head of Imperium Renewables, is working his way into the biojet business, but he isn't leaving biodiesel behind to do so.

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Business Briefs

It's been nearly two decades since ASTM International initiated spec development efforts for biodiesel. Since then, the organization has developed specifications for not only B100, but also blends of up to B20. Alterations to specifications for petroleum diesel and oilheat products were also made, allowing blends of up to B5 to be considered fungible components of these fuels.
 While ASTM&rsquo;s actions have helped open the market for biodiesel and biodiesel-blended fuels, Steve Howell, president of Marc-IV Consulting and chairman of the ASTM biodiesel task force, notes the process of spec development is never over. &ldquo;We continue to improve the specifications as time goes on, as engines change, as petro-diesel changes, and as biodiesel changes,&rdquo; he says. &ldquo;We continue to improve the specs,&rdquo; just like what happens with diesel fuels.&nbsp;
 ASTM currently has several changes to biodiesel and biodiesel-related specifications in the works that are designed to do just that. Most immediately, the organization is moving to develop No. 1 and No. 2 grades of biodiesel. Additional changes that are in various stages of development include a move to increase the amount of residual biodiesel that can be present in jet fuel, which should open up additional pipeline transportation opportunities; the development of a specification covering higher Bioheat blends; and the possibility of altering the organization&rsquo;s definition of biodiesel to include new technologies and feedstocks.
 A New Grade
 Most people are familiar with the concept of No. 1 and No. 2 grades of diesel. Now, ASTM is addressing the same concept with biodiesel. &ldquo;We are currently balloting at the main committee level a new No. 1 grade of biodiesel within D6751,&rdquo; Howell says. &ldquo;That grade would be intended to provide a grade of fuel with lower levels of minor components that would address the rare instances where we&rsquo;ve seen blends of some No. 1 diesel fuel and some biodiesel have instances of filter clogging above the cloud point of the finished fuel.&rdquo;
 According to Howell, the ballot will provide a No. 1 grade of biodiesel that can be used in similar fashion to how No. 1 and No. 2 diesel fuel are used in the U.S. &ldquo;That&rsquo;s kind of the whole philosophy behind it,&rdquo; he says. &ldquo;Most people will use No. 2 because it works well for just about everybody out there, but in the rare cases where you find that it doesn&rsquo;t work down to the cloud point with blends, you can try No. 1.&rdquo;
 However, Howell stresses, the new grade would not be specifically for cold weather use. &ldquo;The No. 1 grade of biodiesel would provide additional assurances that the fuel is going to work down to the cloud point of whatever the blend ends up being,&rdquo; he explains. &ldquo;You could have a No. 1 fuel that is not a winter fuel, but what it would do is provide more assurance that with every kind of diesel fuel out there, it would operate down to the cloud point on the blend, wherever your blend ends up being.&rdquo; The ballot for that change to D6751 is currently out for vote. &ldquo;The results will be adjudicated at the December ASTM meeting,&rdquo; Howell says. &ldquo;That&rsquo;s the biggest item on the plate right now.&rdquo;
 Stu Porter, director of BBI Biofuels Canada and ASTM member, notes that the specification changes for the new grade are relatively minor. Specifically, he says the No. 1 grade would have a flat limit for monoglycerides and lower cold soak filtration test requirements year-round. &ldquo;Otherwise all of the specs remain the same,&rdquo; he says.
 Porter says that the change is seen as critical to the industry because petroleum companies want to have a standard in place to help minimize and limit their risk during all seasons of operation. While there have been rare instances where dispenser filters have experienced plugging in a few states, Porter notes there are several variables those issues could be attributed to. &ldquo;One of the things that is always an unknown is, there are a number of different blending strategies for different organizations and different regions around the country,&rdquo; Porter says. &ldquo;Sometimes when these things happen, you don&rsquo;t really know for sure what the root cause is, whether it was because it was splash blended, or because the diesel that it was blended with is more or less aromatic than another one might be. The intent of the specs is to try to make it as unilateral as possible so that, irrespective of poor blending practices, or when good practices are employed, or the range of aromaticity of diesels you would normally find in the marketplace, you wouldn&rsquo;t have any issues with filter clogging above the cloud point.&rdquo;
 According to Porter, there is also a possibility that this current ballot will be seen as more of as an initial step rather than as a final solution to the two-grade system for B100. &ldquo;One of the things that has been discussed&hellip;is that they see this as a starting point, and want to gather more data and do more testing to get a better understanding of things, but also to look at the potential to add some additional tests once we have a better understanding for maybe a different approach,&rdquo; Porter says.
 While the current ballot would indeed result in two different grades of biodiesel, Porter notes that the differences would be quite minor when compared to the different grades of diesel. &ldquo;The thing that often gets lost is between No. 1 and No. 2 diesel there are a number of different parameters,&rdquo; he says. &ldquo;No. 1 versus No. 2 diesel is lighter in viscosity, it&rsquo;s lighter in distillation, it&rsquo;s lower in cloud point. There are a number of parameters in No. 1 versus No. 2 diesel that are different, and the difference between the proposed No. 1 or No. 2 grade of B100 is really just a couple of properties.&rdquo;
 A Better Bioheat
 ASTM is also working towards the development of a specification for higher blends of Bioheat. However, that work is still in a relatively early stage. That said, Howell notes that it shouldn&rsquo;t take nearly as long to develop a specification for Bioheat as it did to develop D6751 or D7467. &ldquo;A lot of the work that was put in to develop the on- and off-road fuel specifications can be cross-applied to heating oil,&rdquo; Howell says. &ldquo;But, there are some things that are special for heating oil that don&rsquo;t happen in on- and off-road diesel engines. There will be some additional work specific to the heating oil market that we&rsquo;ll need to do, and industry is actually in the process of doing that.&rdquo; The National Biodiesel Board and the National Oilheat Research Alliance have set up a Bioheat technical steering committee to guide those efforts, which includes a multifaceted group of equipment companies, petroleum companies, biodiesel companies and technical experts that are identifying what those technical needs are executing against those, he says.
 According to Porter, a primary issue with the use of blends higher than B5 in home heating use has to do with the yellow metals and elastomers that are found in some legacy equipment. The furnace equipment manufacturers have been resistant to higher blends because they have some material compatibility concerns, he says. &ldquo;I think looking at up to a B7 or possibility of B10 or B20 is certainly being discussed,&rdquo; Porter adds.
 Porter also points out that elements such as higher oxidative stability limits might be important to building more furnace equipment manager acceptance of blends higher than B5. &ldquo;With home heating oil, some folks may buy their oil at the end of one season and not use it till the following season, or vice versa,&rdquo; Porter says. &ldquo;They may store it longer than 6 months, which is the recommended storage, based on the current oxidation stability limits in D6751.&rdquo;
 However, Howell points out that stability might not be that great a concern. &ldquo;There are no stability specs for petro diesel for heating oil,&rdquo; he says. &ldquo;Very few people realize that home heating oil has its own stability problems, and its own quality issues over the years. Biodiesel stability is one of the questions that the technical steering committee is set to address. If it is something that needs additional attention, there are a lot of stability additives that have proven very effective. You don&rsquo;t want to add them unless you need them, but if you need them, the stability additives have been shown to be very, very effective in increasing the storage life of biodiesel.&rdquo;
 Howell notes that a big push from NORA has been integral in moving work on the spec forward. NORA has formally issued a vision statement, he says, to move to a 100 percent biodiesel fuel by 2050, which would create an 80 percent carbon emissions reduction when compared to petroleum fuels. Howell estimates that the development of a new Bioheat specification will take at least a couple of years, but he says it shouldn&rsquo;t take the full eight it took to create D6751. It will ultimately depend on what the data says, he stresses. &ldquo;If I knew what the data was going to be before we did it,&rdquo; he says, &ldquo;we wouldn&rsquo;t have to do the [research].&rdquo;&nbsp;
 Additional Actions
 Several other important actions are in progress at ASTM as well. Regarding pipeline shipments of biodiesel-blended fuel, the organization is working to increase the allowable portion of biodiesel that can be present in jet fuel. Currently, D1655 allows for up to 5 parts per million (ppm) biodiesel in jet fuel. That could increase to 100 ppm in the future, opening up the market for additional pipeline distribution of biodiesel-blended fuel.
 &ldquo;It&rsquo;s technically illegal for jet fuel to contain any component that is not specifically approved for jet fuel, whether that be an additive or incidental contact with other fuel,&rdquo; Howell says. &ldquo;We&rsquo;re doing a project right now in combination with the airlines and the European and American petroleum refiners and military agencies to approve 100 parts per million biodiesel in jet fuel. That will make it easier to carry biodiesel blends on pipelines that also carry jet fuel.&rdquo;
 According to Howell, work on this initiative is approximately 90 percent complete. &ldquo;So, far it&rsquo;s all been positive,&rdquo; he says. If all continues to go well, the balloting process could be complete in late 2012 or 2013.
 &ldquo;In addition to the jet fuel work, we&rsquo;ve done a bunch of other improvements that have been incorporated into D6751,&rdquo; Howell says. &ldquo;We&rsquo;ve improved the stability test method for biodiesel and biodiesel blends, and we&rsquo;ve approved the option of using the AOCS FTIR system for measuring total and free glycerin, cloud point and methanol content, which could provide a significant reduction in testing cost for a biodiesel company to meet the spec.&rdquo; According to Howell, the new test methods are fast, cheap and effective. He says that especially for medium and small producers, the new methods could be an extremely valuable tool. &ldquo;It will reduce the overall cost of fuel quality and increase the likelihood that companies will do more testing,&rdquo; he adds.
 While Porter notes the changes don&rsquo;t necessary represent his preferred approach to testing, he does say it was believed to be a positive move for expediency and cost effectiveness. &ldquo;It was felt that it was a compromise of allowing more testing to be done and more results to be given,&rdquo; he says. &ldquo;I&rsquo;m not sure it&rsquo;s the best way to go, but that&rsquo;s why we have a balloting process, and that&rsquo;s why we have an opportunity for everyone at ASTM to have their say and their vote, and the consensus was it was an overall better thing for the industry.&rdquo;
 Howell also notes that the development of specifications for blends between B21 and B99 is on the committee&rsquo;s to-do-list. In addition, Howell says work is underway to complete engine testing to confirm that the existing specification for metals content is sufficient for full useful life for heavy-duty engines to protect the catalysts. &ldquo;Most engine companies are quite comforted by the fact that we&rsquo;re doing that type of work and making sure we are testing over the full 450,000 miles of usage, not just one or two years in the field,&rdquo; he said.
 Finally, Howell confirms ASTM is open to clarifying the terminology for biodiesel. &ldquo;Right now, the definition of biodiesel in the terminology section of D6751 states biodiesel is a mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, since that covered all the biodiesel that was being produced or contemplated,&rdquo; he says. &ldquo;If we need to change terminology to cover mono-alkyl esters produced from sugars or other processes, then ASTM will entertain ballots to change that so that [the terminology] remains feedstock- and process-neutral, as it has been designed thus far.&rdquo;
 Porter adds that ASTM has always been open to updating specifications and terminology when there is a commercial need for it. &ldquo;The intent with the definition of biodiesel was always to be open to change based on the commercial need,&rdquo; he says. However, if a company were producing a biodiesel blend stock that is not a mono-alkyl ester that does not meet the current D6751 specification limits, Porter notes that would be an entirely different issue above and beyond simply clarifying terminology, since the current D6751 specification limits were based in consensus and considerable input from original engine manufacturers.
 Author: Erin Voegele Associate Editor, Biodiesel Magazine (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

A Second Option: ASTM is currently balloting a change to D6751 that would create No. 1 and No. 2 grades of B100. 

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Technical Expert: Stu Porter,  director of BBI Biofuels Canada and ASTM member, has a long history of working on biodiesel standards. 

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Technical Leader: Steve Howell, president of Marc-IV Consulting and chairman of the ASTM biodiesel task force, says specifications for biodiesel fuels will continue to grow and change to reflect the current state of the industry.

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Putting it in the Pipe: Work is underway at ASTM to increase the allowable content of biodiesel in jet fuel from 5 parts per million to 100 parts per million, which would open up greater opportunity for pipeline shipments. 

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ASTM contemplates several updates, including a new grade of biodiesel

A New Standard for Quality

A high degree of importance is placed on the quality of methyl esters, properly so, particularly when used as on-road fuel. So much so that for biodiesel to be a legally registered fuel additive with the U.S. EPA, it must meet strict industry specifications as prescribed by ASTM D6751 prior to blending with diesel in order to ensure proper, consistent performance. Additionally, the National Biodiesel Board has implemented its own quality assurance program, BQ-9000. Further biodiesel quality specifications in different applications under ASTM requirements include D975-08a for diesel fuels in on- and off-road applications, D396-08b for fuel oils such as home heating oil and boiler applications, and D7467-08 for diesel fuel oil with biodiesel blends ranging from 6 to 20 percent.
 With all the stringent quality measures imposed on producers, there is, however, no governing body that imposes or oversees similar quality standards for crude glycerin, the byproduct that&rsquo;s left at the end of the transesterification process. Most biodiesel production today involves homogeneous alkaline catalysts such as sodium methylate. The transesterification of triglycerides with methanol generates a biodiesel phase and a glycerin phase. Impurities such as catalyst, soap, methanol and water concentrate in the glycerin phase, which is typically neutralized with acid, and the cationic component of the catalyst is incorporated as a salt. Remaining contaminants such as methanol, soaps and water can render the composition of glycerin to consist anywhere between 40 and 80 percent pure glycerol, depending on the feedstocks and processes employed.
 Because of the these differences in purity levels, crude glycerin is viewed as a highly variable commodity from plant to plant, making it difficult for a regulatory body or standards committee to impose any kind of uniform quality standard across the board, says Mark Rice, CEO of Northbrook, Ill.-based chemicals and fuels testing firm Biofuels Technology LLC.
 &ldquo;Quality of crude glycerin has to do with everything from the weather to the feedstock that they&rsquo;re using, to the plant manager who&rsquo;s on shift, so the glycerin byproduct is very inconsistent and, for the most part in the U.S., is very poor quality,&rdquo; Rice explains. &ldquo;It&rsquo;s a hard product to manage. For some plants it&rsquo;s all over the board in terms of what crude glycerin means or what that glycerin product looks like. They are primarily making sure that they can make the specification requirement for their ASTM biodiesel product, and what&rsquo;s left over isn&rsquo;t something that they have much control over, or the economics aren&rsquo;t there for them to spend the money to refine that into some kind of a product to get an added value for.&rdquo;
 According to information based on a report authored by the U.S. census bureau, the NBB and brokerage house HBI International, Rice says an estimated 343,000 metric tons of glycerin is projected to enter the market by the end of this year. In 2010, 245,000 metric tons of glycerin was produced, compared to glycerin&rsquo;s highest production volume ever at 376,000 metric tons in 2008. Brent Pohlman, marketing director for Omaha, Neb.-based fuels and chemicals testing company Midwest Laboratories Inc., tells Biodiesel Magazine that while the firm isn&rsquo;t seeing the volumes of crude glycerin samples like it once did during the industry&rsquo;s boom year of 2008, quality remains a concern.
 &ldquo;It was typical where we would get anywhere from 20 to 30 samples per day,&rdquo; Pohlman says. &ldquo;We haven&rsquo;t seen those kinds of volumes come back since, but we&rsquo;re seeing that people are more concerned about quality right now.&rdquo;&nbsp;
 The Different Grades
 Irrespective of the projected volumes of glycerin this year, it&rsquo;s still an important ingredient and chemical building block for the production of high-volume industrial chemicals such as propylene glycol, epichlorohydrin, acrylic acid and polyhydroxybutyrate.
 Biodiesel producers have the choice of refining their crude glycerin into two higher forms&mdash;technical or USP grade (U.S. Pharmacopeia)&mdash;to get an added value for their byproduct because, as a rule, the purer the glycerin, the higher the market value. The purity requirements for the emerging applications of glycerin vary, and are often intermediate to the crude and refined grades previously established for the classical applications. Biodiesel companies can either refine crude glycerin at their production facility by installing glycerin refining equipment or methanol recovery systems that can strip methanol out of crude glycerol. Producers can also ship their crude glycerin to companies such as Biofuels Technology LLC or Midwest Laboratories for testing and analysis. While some biodiesel producers refine their crude glycerin to technical grade, the majority of them can&rsquo;t afford it and are left having to dispose of it according to regulatory requirements or sell it at a very low price&mdash;between 1 and 8 cents a pound in some cases. Because of its low value, crude glycerin is sometimes used as a dust suppressor on roads or burnt for energy even though its Btu value is low. Interest, however, in finding other applications for crude glycerin, such as a supplement for animal feed, is on the rise. At press time, crude glycerin was selling at 7 cents a pound, according to The Jacobsen, a fuel, feed and chemical commodity pricing and market analysis firm based in Chicago.
 &ldquo;Everyone in the industry has a different brand of crude glycerin,&rdquo; Rice says. &ldquo;Because of that, the price that most producers are getting is very low, and if they get a price that&rsquo;s greater than what the market is, and it seems to be too good to be true, it usually is.&rdquo;
 Technical-grade glycerin usually has a water-white pigment to it and a purity of 97 to 98 percent with most of the contaminants completely removed. Technical grades of glycerin are usually classified by derivation of feedstocks such as tallow, which are considered lower grade, and vegetable oil-based (or kosher), which are considered higher grade. These two subforms of technical-grade glycerin are typically designated for polyols and alkyd resins markets. Technical or crude forms can also be further refined to 99.7 percent purity or higher to meet USP-grade glycerin, suitable for food, personal care, cosmetics, pharmaceuticals and other specialty applications. At press time, USP refined glycerin with 99.7 percent purity was selling at 43 cents a pound, according to The Jacobsen.
 Unlike crude and technical grades of glycerin, the quality of USP glycerin is closely regulated by the Federal Drug Administration and Federal Communications Commission. This assures buyers of the glycerin&rsquo;s quality that might not otherwise be achieved through physical and chemical testing alone. While it may be produced in similar processes, technical-grade glycerin doesn&rsquo;t have to be in compliance with USP, FCC or FDA requirements and therefore typically conforms to specifications mutually agreed upon between the buyer and seller.
 Quality End-Use Assurance
 For large biodiesel producers such as Ames, Iowa-based Renewable Energy Group Inc., overseeing glycerin quality, particularly of technical-grade glycerin, is paramount to the overall economics of its operations, says Dave Elsenbast, vice president of supply chain management.
 &ldquo;REG has always looked at glycerin as a coproduct as opposed to a byproduct,&rdquo; he says. &ldquo;I think when we look at it that way, we look at marketing our glycerin to the higher value end-markets that we can target, as opposed to disposing of a byproduct at prices that just move the product. We&rsquo;re always looking for ways to maximize our biodiesel crush margin, and therefore we take a very serious approach to marketing our glycerin.&rdquo;
 Currently, REG has six operating biodiesel plants with a combined installed production capacity of 212 MMgy. Elsenbast says five of those facilities produce a consistent quality of crude glycerin, while the other, a plant in Seneca, Ill., produces technical-grade glycerin. In total, REG produces about 190 million pounds of glycerin a year out of its operating plants.
 While crude product may get discounted in the open market, making it difficult for producers to find useful markets for it, Elsenbast advises other producers to regularly test batches of their crude in-house or through third-party labs to maintain quality throughout continuous processing.
 &ldquo;We think of glycerin as a very competitive energy business, and we have to participate and do well every step in the business process,&rdquo; Elsenbast says. &ldquo;Certainly, being a consistent supplier of high-quality glycerin and selling that to the high-value market helps us succeed in the marketplace.&rdquo; Like REG, Keystone Biofuels LLC, a 24 MMgy multifeedstock plant in Lower Allen Township, Pa., places as much importance on its quality of glycerin as it does fuel. According to President Ben Wooten, his company recently upgraded the facility&rsquo;s efficiency by installing a methanol recovery system, which has opened new markets for Keystone&rsquo;s crude glycerin.
 &ldquo;Historically, most of our glycerin in 2010 went down the street to a concrete company that burned it for fuel,&rdquo; Wooten says. &ldquo;Now, we&rsquo;re getting calls from engineering firms that are actually putting out their own quality specifications where some want a certain percentage of methanol, a certain percentage of glycerol and so forth. We figured if we do a couple steps like that, it opens different markets so we&rsquo;re not relying on just one.&rdquo;
 By reinvesting in the plant for upgrades such as glycerin purification and methanol recovery systems, Wooten believes this strategy will determine who will ultimately remain profitable heading into next year.
 &ldquo;Those of us that are reinvesting in the plant to get those efficiencies are going to get a better leg up on the ones that aren&rsquo;t doing that,&rdquo; Wooten says. &ldquo;I think you&rsquo;ll see kind of an evolution, hopefully for those of us that are investing it pays off, and I think those that aren&rsquo;t could still play in a niche market.&rdquo;
 Plants that have made upgrades like Keystone Biofuels, or those considering this strategy, may reap the benefits, but Rice suggests that the economics of adding equipment to handle glycerin might be negligible in today&rsquo;s volatile economy. He adds that dealing with opportunistic glycerin traders who sometimes take it and behave irresponsibly is something producers should consider, because when crude glycerin is sold, &ldquo;the customer trail ends with them,&rdquo; he says.
 &ldquo;If biodiesel plants are selling to people that don&rsquo;t know what they&rsquo;re doing and don&rsquo;t handle their glycerin in a safe and ethical manner, it could come back to bite them in a really bad way,&rdquo; Rice adds. &ldquo;Understanding the technicalities of glycerin, where it goes and knowing the composition of it is very important and often overlooked.&rdquo;
 Author: Bryan Sims Associate Editor, Biodiesel Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

EBB AND FLOW: Crude glycerin may be viewed as a low-grade byproduct for some, but it's price and quality are trending upward with additional innovative applications on the rise.

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UPGRADE PRIORITY: REG produces crude glycerin, left, with 80 percent purity at five of its biodiesel plants while one plant in Seneca, Ill., produces technical-grade glycerin. 


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Market Mizer: Viewing glycerin as coproduct rather than a byproduct is important to REG's scope of business, according to Dave Elsenbast, REG vice president of supply chain management.  


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Why quality for glycerin is just as important for biodiesel

Clearing the Way for  Byproduct Quality 

Biodiesel testing services and analytical solutions have never been easier to access. Small producers have the option to outsource product testing on any sample, from cloud point to total glycerin,&nbsp; and save hundreds of thousands of dollars on the required equipment. For large producers, it&rsquo;s no different. A sample can be shipped overnight, tested, and returned the next business day giving an almost instant readout of the process&rsquo; effectiveness at making a quality, on-spec fuel. And for the qualified do-it-yourselfer, an array of testing equipment is available to make any biodiesel production facility lab top of the line.
 Several leading biodiesel testing and analytic service providers operating in the industry today spoke with Biodiesel Magazine about modern testing practices, how the industry has changed, and why the industry may grow in the future.
 Change is Good
 John Coonfare cares about state incentives, cheap feedstocks and clients who can pay their first bills on time. Coonfare is the biodiesel lab manager for Midwest Laboratories Inc. He&rsquo;s been testing biodiesel since before the boom years in Omaha, Neb., and for him, change in the industry is a good thing. Around 2008, his team received as many as 20 to 30 samples a week from separate producers, and at that time, he says, he didn&rsquo;t always know what he was going to get. At one point, Coonfare had to be extra careful when testing because some producers were unwilling to disclose the contents used to make their fuel. Because of that, he was once almost injured when a sample containing gasoline caught fire near a lab burner.
 But today, after the ramped up testing requirements linked to the ever-expanding list of ASTM specs, things are different for his team. &ldquo;I think the samples are a lot better,&rdquo; he says, and now, established companies rarely have an issue with their fuel unless &ldquo;some major glitch happens.&rdquo;
 The change in fuel quality isn&rsquo;t only about the expanded role and testing requirements of ASTM. Coonfare believes that the fluctuations in the biodiesel tax incentive policy, which have created an atmosphere of uncertainty based on the on-again off-again history of the credit, have actually helped eliminate the type of companies that put his testing team at physical risk and the overall biodiesel industry in question due to low-quality, hazardous fuel produced from unproven methods. &ldquo;A lot of the smaller businesses (doing just that) couldn&rsquo;t handle losing the tax break,&rdquo; he says.
 Although changes brought on by the onset of new testing procedures like cold soak filtration and the weeding-out effect created by the inconsistent tax incentive have made the industry stronger, they have also made it more difficult for new biodiesel startups to be successful, Coonfare says, at least if they want to test their own fuel. &ldquo;I know a lot of people want to get certified and get their lab certified, but it is hard,&rdquo; he says. By hard, Coonfare means financially difficult. As another member of the Midwest Lab&rsquo;s team explains, some of the gas chromatography equipment typically used to test biodiesel can be very expensive. Companies could save so much money if they outsourced their tests, the two agree, for a number of reasons.
 For instance, a basic testing package offered by Midwest Labs that includes testing for flash point, sulfur, free glycerin, total glycerin, oxidation stability, phosphorus, carbon residue, cetane and a number of other variables, costs $800. A typical company may perform two to three tests per week, or the financial equivalent of one employee. Basic math shows that expensive equipment and expensive labor costs due to the skill required in running such equipment doesn&rsquo;t equate to financial gain. As an example, they offered up a biodiesel production company that purchased two GCs that have only collected dust as the company struggled to get up and running. &ldquo;It is hard in this day and age to get started,&rdquo; Coonfare points out. And instead of worrying about running testing equipment, he feels young companies might be better off outsourcing their testing. A simple overnight delivery via UPS can ensure a small, plastic vail of product is on-spec and doesn&rsquo;t have to be relegated to the unfit-for-use category.
 1-Drop Wonders
 Although the Cognis QTA biodiesel test based on infrared spectroscopy may not provide every single testing option when compared to that of different methods used by people like Coonfare and company, there is no arguing that in an astounding two minutes the QTA version is the quickest way to test biodiesel for methanol, cloud point, total and free glycerin. The testing method has been available for more than three years, and in that time, it has been used to test more than 3,000 samples per month, one drop at a time. &ldquo;It has helped [producers] tremendously in how easy the testing can be done and how quickly they can get results,&rdquo; says Kangming Ma, business director for QTA. ASTM recently approved the QTA approach as an alternative test to the wet chemistry method.
 The QTA system is based on a series of advanced algorithms, and differs from other testing approaches in a number of ways. For one, the testing approach utilizes a central database located in Ohio that receives data inputs via the Internet from anywhere in the world before running a test and producing a report (in two minutes), which is then returned to the user and doesn&rsquo;t require sample preparation or a skilled operator. One drop of biodiesel is simply placed on the device&rsquo;s clear screening area and the operator hits send. In addition to that, the system does not require people at a facility to be highly trained in how to read the reports, Ma adds.
 Put that into perspective, he says, and producers can have real-time results about their production process and may not have to waste feedstock. &ldquo;What the industry and manufacturers are interested in are rapid and quick measures that they can rely on for their daily measures,&rdquo; he says. &ldquo;If it is found that their product is out of spec, the cost is huge.&rdquo;
 The needs of the industry have helped the QTA team further refine the testing process and expand on the database of samples, Ma says, something they hope to continue. And it&rsquo;s that attention to detail and passion for providing what the industry needs that has formed the opinions of both Ma and Coonfare, each of whom have their own thoughts on what it will take for the industry to remain at production level highs, now and into the future.
 &ldquo;We have more customers this year,&rdquo; Ma says, &ldquo;and just by looking at that, we could say the industry is turning around.&rdquo; More importantly, he explains, don&rsquo;t let the possibility of an expired tax credit at the end of 2011 scare you. &ldquo;There is always a debate about the incentives, but most of our existing clients, or our believers,&rdquo; Ma says, &ldquo;follow the mandate of the RFS2 rather than the incentive.&rdquo; As long as there is a mandate, he says, &ldquo;there is always a demand.&rdquo;
 For Coonfare, along with the mandate, one of the factors his team follows is the support for biodiesel at the state level, which he says shows that biodiesel is strong and getting stronger. &ldquo;That is going to help,&rdquo; he says, &ldquo;but there needs to be an abundant, cheap feedstock that is easier to work with.&rdquo; While he acknowledges that cheap feedstock is always a concern, he also points to news that a 50 MMgy biodiesel plant is scheduled for construction in the next two years as an example of why his team is still working hard to provide the biodiesel testing services it does. &ldquo;Many people now are starting to get back in the market.&rdquo;
 And Coonfare is right. Mark Hall, Alabama Cooperative Extension Services sustainable energy specialist, has received so many calls from startup biodiesel producers and cities in Alabama seeking information on biodiesel testing that he teamed up with Tim McDonald, associate professor of biosystems engineering at Auburn University, to explain the basics of biodiesel testing.
 &ldquo;We aren&rsquo;t talking about biodiesel to sell, we are talking about biodiesel to use,&rdquo; Hall explains. &ldquo;If you are going to make your own biodiesel, what testing do you need to do?&rdquo; As McDonald explains, the answer for those cities looking to make biodiesel for their own fleets without intent to sell is to look at total and free glycerin, and the pH of the fuel. After basic tests are performed to provide a general sense of the fuel&rsquo;s quality, the best way to further test the fuel, McDonald says, sounds a lot like something a professional biodiesel lab technician might say. &ldquo;The best way, the ASTM way, is to run it through a very complex analysis tool, a gas chromatograph,&rdquo; which he says requires a Ph.D. in chemistry. It might be easy to agree with the perspective of Coonfare or Ma who argue for the use of their services over in-house testing given the requirements, but that might be missing the point.
Whether it is cities in Alabama looking to produce biodiesel for their own use, a new facility in Nebraska, or an existing company looking for up-to-the-minute updates, biodiesel testing services have never been easier to get. There is no algorithm or doctoral degree needed to explain that&mdash;unless one doesn&rsquo;t understand the basic principles of supply and demand. Author: Luke Geiver Associate Editor, Biodiesel Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

OPEN HOUSE: In 2009, REG Inc. held an open house at its feedstock characterization laboratory in Ames, Iowa, where high-tech testing equipment fills the room. 


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IN-HOUSE OR OUTSOURCE? While some producers find more value in on-site lab testing, others use third-party labs to get the job done. 


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REFEREE: If there are any calibration or other concerns with the QTA test methods recently approved by ASTM, the wet chemistry methods will be the referee. 


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QUICK TURN AROUND: Kangming Ma, business director for QTA, says ASTM's adoption of the QTA test method for glycerin, methanol and cloud point have really benefited producers.

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Testing services are abundant, and there's a reason why 

Easier Than Ever 

Several major biofuel tax incentives are set to expire at the end of this year, including the $1 per gallon biodiesel blender credit. Petroleum has enjoyed tax breaks for years, even though the 100-plus year old oil and gas industry reaps record profits quarterly. The Center for American Progress recently stated that the top five oil companies&mdash;BP, Chevron, ConocoPhilips, ExxonMobil, and Shell&mdash;have combined on-hand cash resources totaling $59 billion. Between that and nearly $1 trillion (that's a one with 12 zeroes) in combined profits over the past decade, why they need tax breaks at all, especially $41 billion over the next 10 years as President Obama said he will strive to eliminate, is a mystery to everyone. Obama wanting to eliminate oil and gas tax loopholes and Congress actually doing it, however, are two different things. Anne Steckel, the National Biodiesel Board&rsquo;s new vice president of federal affairs, says oil and gas subsidies add up to more than $4 billion a year. &ldquo;We certainly believe that if Congress can find resources to encourage an entrenched and highly profitable oil industry,&rdquo; she says, &ldquo;it can find resources to support cleaner alternative fuels.&rdquo; Capitol Hill&rsquo;s iron triangle, however, is strong and oil lobbyists hold much influence.
 &ldquo;Is our tax policy a bunch of special interest loopholes or is it aligned with the objectives of the U.S.?&rdquo; asked president of the Advanced Biofuels Association Michael McAdams at the International Biorefining Conference &amp; Trade Show in Houston in September. In addition to the favorable tax credits the oil and gas industry receive, McAdams brings to light another point of contention with the policy structure associated with petroleum: greenhouse gas emissions reductions&mdash;or lack thereof, to be more precise. &ldquo;Ironically, the only industry in the U.S. regulated by GHGs is the advanced and cellulosic industry,&rdquo; he says.
 The irony, says Joe Jobe, CEO of the NBB, is that &ldquo;everyone knows that America&rsquo;s singular addiction to oil has dramatically dangerous direct and indirect impacts&rdquo; including &ldquo;watching oil run up to almost $150 per barrel in the spring of 2008, which contributed to the biggest economic recession since the [Great] Depression. It includes turning on the television and watching the Gulf of Mexico on fire in 2010. It includes America&rsquo;s current involvement in three different wars right now in three different countries whose strategic interests for America all include oil &hellip; Clearly biofuels are being held to a different standard in terms of GHGs and indirect environmental impacts &hellip; Either estimate indirect impacts for all fuels, or for none.&rdquo;
 But given Congress subsidizing an obviously profitable oil industry, coupled with subjecting biofuels to stringent GHG emissions reductions while the petroleum industry has none, in addition to expiring biofuels tax incentives that are critical to continued development and U.S. objectives of energy security, Congress&rsquo; actions have made one thing clear: the possibility of anything moving through the gridlocked legislative body this year is slim to none. The dysfunction in Washington is evidenced by the development of a super committee of 12 to do what the 535 elected senators and representatives couldn&rsquo;t do: get our government&rsquo;s runaway debt and financial situation under control.
 &ldquo;This is an unusual time in Washington,&rdquo; Steckel says. &ldquo;Many of the old rules that have applied in the past seem to be getting thrown out the window. There is obviously a sharp focus on reducing deficits, but with deep divisions over how to do it and how far to go. That&rsquo;s creating tremendous uncertainty surrounding what Congress can ultimately pass and, frankly, a very difficult environment for any tax or spending measures.&rdquo;
 While the ethanol industry is preparing to enter a new world without its longtime and successful blend credit of 45 cents per gallon (previously it was 54 cents), the biodiesel industry has been there before. What we&rsquo;ve all learned about the U.S. biodiesel complex from 2010, the worst year in our industry&rsquo;s history when almost 12 months without the $1 per gallon blender credit shuttered plants and halted production, is how resilient our industry is. During that time, plants that did remain open and producing were able to do so thanks to strong state policies, such as the Minnesota mandate and the Illinois fuel tax exemption for biodiesel blends above B10. &ldquo;But the experience [of 2010] also reaffirmed just how vulnerable our industry still is,&rdquo; Jobe says, &ldquo;and how important federal policy is in helping it succeed. People forget&mdash;we&rsquo;ve had commercial-scale production for only about six years compared with a petroleum industry that has enjoyed policy support and been entrenched in our economy for decades.&rdquo; McAdams says if the biofuels industries must face a future without tax credits, then it&rsquo;s time to lay them all on the line, including oil subsidies, and start fresh. After all, our current national biofuel tax provisions are inconsistent, McAdams points out. &ldquo;One&rsquo;s a blender credit, another is production, others yet are feedstock credits,&rdquo; he says. &ldquo;It&rsquo;s all over the board.&rdquo;
 Biodiesel Policy Priorities
 The NBB&rsquo;s No. 1 policy priority right now is the successful implementation of RFS2&mdash;and extension of the tax credit is at the heart of this strategy, Jobe tells Biodiesel Magazine. &ldquo;The RFS program faces a three-pronged attack,&rdquo; he says. &ldquo;It faces on-going legal challenges, administrative challenges with waiver requests, and it will face political challenges with current and predicted legislation calling for various modifications or repeals to the program &hellip; The best defense for all three categories of attack would be the extension of the biodiesel tax credit. Without it, we know there would be a more robust effort by some of our critics to chip away at the program,&rdquo; chiefly because the credit makes biodiesel cost competitive with diesel. &ldquo;There are still some people out there who have suggested that we abandon the tax credit and focus all our resources on defending the RFS,&rdquo; Jobe says. &ldquo;This approach ignores that the RFS and the tax credit are complementary policies designed to work together.&rdquo; Let&rsquo;s not forget, also, that 2011 is the first year in history these two policies have worked in tandem, and as a result the industry is producing record volumes. &ldquo;Of course, we know that having the tax credit lapse for a time creates extraordinarily undesirable business uncertainty. But killing the tax credit would not reduce uncertainty, it would increase it. It would put all our industry&rsquo;s eggs in the RFS basket.&rdquo; Jobe says RFS2 was extremely hard to get passed with a specific role for biodiesel. &ldquo;It was difficult for us to achieve advanced biofuel status under the program and make no mistake, it will be difficult to defend the program,&rdquo; but as it goes forward, and as volume levels increase, the attacks will continue, Jobe says, &ldquo;and likely become increasingly fierce. We will need every tool available to defend it.&rdquo;&nbsp;
 Steckel adds, &ldquo;The RFS is an incredibly important policy for our industry, not just in that it includes a biodiesel requirement but also that it designated biodiesel as an advanced biofuel. It is imperative that Congress stand behind the programs.&rdquo; She also highlights how important the farm bill programs have been over the years providing much-needed policy support to the biodiesel industry and, she says, &ldquo;we will continue to advocate for a strong energy title in the next farm bill,&rdquo; one that includes both the Biodiesel Education Program and the Advanced Bioenergy Program.&ldquo;While we understand the pressures that Congress is facing and agree that deficits should go down, we think there is a very compelling case for extending the biodiesel tax incentive,&rdquo; she says, &ldquo;particularly in this kind of economy where most people believe Congress&rsquo; top priority should be helping create jobs.&rdquo;
 And speaking of fuel tax credits and jobs, the Center for American Progress noted recently that the House Natural Resources Committee Democrats found that despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell, and BP combined to reduce their U.S. workforce by 11,200 employees over that time. In 2010 alone, the big five oil companies reduced their global workforce by a combined 4,400 employees, while making a combined $73 billion in profits.
 &ldquo;Clearly, the biodiesel industry creates jobs,&rdquo; Steckel says, referencing the 31,000 employees who will be supported by our industry in 2011 alone. &ldquo;Congress is looking for ways to stimulate the economy, and the biodiesel tax credit is one of those items that Congress understands is good for the economy.&rdquo;
 And that approach of aligning biofuel incentives with broader U.S. objectives&mdash;job creation, economy revitalization, energy security, improved environment&mdash;is critical to the vitality of future federal policy support for the biomass-based fuels industries, experts say. &ldquo;How do we craft biofuel policy that&rsquo;s in alignment with the goals (reducing GHG emissions and reliance on foreign oil) of the U.S.?&rdquo; McAdams asks. In that vein, maybe future tax policy should consider approaches such as fuels that produce fewer emissions should receive greater subsidies, he offers, or maybe the more energy dense a fuel, the more credit it receives.
 But whichever direction future biodiesel and other advanced biofuel tax policy takes, there is no question what happens when it goes away completely: Plants close and thousands of green-collar jobs are lost. &ldquo;Specifically,&rdquo; Jobe says, &ldquo;U.S. biodiesel production plummeted by 42 percent, resulting in the loss of nearly 8,900 jobs and a drop in household income of $485 million.&rdquo; When it was reinstated at the end of 2010, in just a few short months the industry was producing at record capacity. &ldquo;With the ongoing economic downturn,&rdquo; Jobe says, &ldquo;now is not the time to allow that to happen again. Under projected expansion by 2015, biodiesel is expected to support more than 74,000 jobs, $4 billion in income, and some $7.3 billion in [gross domestic product],&rdquo; according to a recent economic study. &ldquo;That growth will be severely jeopardized by the expiration of the tax incentive, and we strongly encourage Congress to provide a seamless extension of the biodiesel, renewable diesel and biojet tax credit.&rdquo;&nbsp;
 &ldquo;At this point,&rdquo; Steckel says, &ldquo;there is a lot of wait-and-see regarding what the deficit super committee will do. Once their path is clearer, we think there could be some openings for moving legislation,&rdquo; she says. &ldquo;Though it&rsquo;s too early to say what those vehicles might be, we are resolute to do all we can so the tax credit is best positioned, should any opportunity arise.&rdquo;
 The NBB launched its biggest program to date, the Advanced Biofuel Initiative, a comprehensive national communications campaign including a nationally aired television commercial. &ldquo;It&rsquo;s already having a significant impact,&rdquo; Jobe says, urging biodiesel producers to personally join the fight in defense of RFS2 through extension of the biodiesel tax credit by calling their senators and representatives. &ldquo;Members of Congress should be as motivated by biodiesel as we are,&rdquo; he says, &ldquo;and that will only happen if every biodiesel plant does its part.&rdquo; Author: Ron Kotrba Editor, Biodiesel Magazine (701) 738-4942 <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com </a>

REACHING OUT: U.S. Rep. Blaine Luetkemeyer of Missouri, right, discusses policy issues with National Biodiesel Board CEO Joe Jobe during a visit to NBB's headquarters in Jefferson City, Mo. 

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NEW BLOOD: Anne Steckel is NBB's new VP of federal affairs.

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Expiring biofuel tax credits and a dysfunctional Congress 

The Uncertain  Tomorrow

A public opinion research company recently pulled together 12 New York oilheat customers to hear what they thought of oilheat, biodiesel and Bioheat. Those of us watching from behind the glass witnessed a transformation unfold as the focus group members made one thing very clear: Virtually every consumer objection to oilheat can be overcome with Bioheat. In fact, by the end of the night, some of the biggest oilheat detractors in the room said they would call their fuel dealers and ask for Bioheat. In an industry that watches its market share slip away to natural gas little by little each year, the results of this public opinion research should be a wakeup call to any oilheat dealers not making Bioheat a part of their business. This research should also reinforce to biodiesel producers that this potential 800 MMgy market could be a powerful stabilizing influence on the biodiesel industry. This is a market that wants and needs our product.&nbsp;&nbsp;
 Frank M. wears a suit, sitting at the front of the U-shaped table, joining the focus group after a day at the office in the financial district. He has a wife and a two-year-old son at home in Fresh Meadows, N.Y. When the facilitator asks him how he likes oilheat, he says he looked at switching to natural gas, but found it cost-prohibitive. So he stays with oilheat, saying it is easy and by and large, he trusts his supplier. It becomes clear Frank doesn&rsquo;t feel very warmly towards oilheat. Rather, he tolerates it. He rattles off his concerns, which are nothing new.&nbsp;&nbsp;
 Philip R., a homeowner in Queens, grew up with natural gas, and made no bones about how he felt about oilheat. &ldquo;It&rsquo;s dirty, noisy, smelly,&rdquo; he said.&nbsp;
 By the end of the focus group, after hearing about biodiesel and the benefits of Bioheat, both Frank and Philip had done a turnaround. They said Bioheat would make them feel better about their home heating, and they would be willing to pay more for it. This dramatic transformation should catch the attention of any petroleum marketer. (Although the focus group was a small sample, statistically there will be many other customers out there who feel the same way).&nbsp;
&nbsp; Bioheat fuel is made from a combination of biodiesel and heating oil, making it a superior product for the environment, as well as for the overall operational enhancement of the heating system. The most common blends of Bioheat today are B2 and B5. The ultimate goal, however, is to gradually move consumers to higher blends. In fact, the National Oilheat Research Alliance has voted to move the oilheat industry in the direction of 100 percent biodiesel by 2050.&nbsp;
 Overcoming Objections
 Let&rsquo;s take a look at common homeowner objections to oilheat one by one, and how switching to Bioheat offers a clean sweep of solutions.
 Oilheat objection: &ldquo;It&rsquo;s dirty.&rdquo; Bioheat solution: Biodiesel is clean-burning. It reduces all emissions in an oilheat system, including NOx. Biodiesel reduces greenhouse gases by more than 80 percent compared to petroleum products, making it the nation&rsquo;s only advanced biofuel that is commercially available. It is less toxic than table salt and biodegrades as fast as sugar in water.
 Oilheat objection:&nbsp; &ldquo;It&rsquo;s noisy.&rdquo; Bioheat solution: Biodiesel has higher cetane than oilheat, helping to improve combustion efficiency. It also has the highest Btu content of any alternative fuel.
 Oilheat objection: &ldquo;It&rsquo;s smelly.&rdquo; Bioheat solution: Biodiesel has a pleasant odor.&nbsp;
 Oilheat objection: &ldquo;It&rsquo;s made from foreign oil.&rdquo; Bioheat solution: Biodiesel is domestically produced from renewable, sustainable resources. Every gallon of biodiesel we use displaces the equivalent of foreign oil. The biodiesel industry is expected to support 31,000 U.S. jobs in 2011 and contribute $1.7 billion of income to be circulated throughout the economy.&nbsp;
 Naturally in this economy, price was a hot topic among the 12 New Yorkers participating in the focus group. Some of them knew to the penny how much they were paying for their oilheat. Biodiesel economics make Bioheat competitively priced right now, due to the federal and state policies in place.&nbsp; This means that even if an oilheat state doesn&rsquo;t have a Bioheat mandate, dealers should not sit idly waiting for one, because RFS2 is a powerful market driver. Our message to oilheat dealers is simple: &ldquo;If you haven&rsquo;t made Bioheat a part of your business, you are losing a valuable market opportunity to create long-term satisfaction of your customers.&rdquo;
 After watching a short video on Bioheat and discussing its benefits, 11 out of the 12 consumers in the focus group said they would use Bioheat if it didn&rsquo;t cost them more than oilheat alone. Others, including Frank and Philip, said they would even pay more. Here&rsquo;s what else the group had to say about switching to Bioheat: &ldquo;The video we watched said it has cleaner emissions in the house and helps with things like asthma. We have asthma in our family. So if it&rsquo;s healthier, I would try it.The sludge in the oilheat tank is not healthy for us.&rdquo; (Anna A., Queens, N.Y.); &ldquo;All things being equal, I would choose Bioheat.&rdquo;&nbsp; (Wanda H., Bronx, N.Y.); &ldquo;I&rsquo;m the cheapest guy in town. But if it&rsquo;s better in every way, that&rsquo;s value. Isn&rsquo;t it worth a couple of cents more with all the benefits?&rdquo; (Phil R., Flushing, N.Y.).
 The Evolution of Oilheat
 What New Yorkers think of Bioheat is important to understand because starting next October, all heating oil sold within New York City will contain at least 2 percent biodiesel. New York City consumes 1 billion gallons of heating oil annually, more than any other city in the United States. The legislation will replace 20 million gallons of petroleum with an equal volume of renewable, sustainable, domestically produced biodiesel. Shoring up support for Bioheat will help ensure this landmark legislation is successfully implemented and viable for the long run.&nbsp;
 To that end, the focus group participants also got a sneak peek at the new Bioheat advertising campaign that the National Biodiesel Board, with additional funding from the Nebraska Soybean Board, is rolling out in New York City. This will include Bioheat billboards on city buses, posters on the subways and Bioheat radio commercials.
 The theme of this campaign is &ldquo;Bioheat: The evolution of oilheat.&rdquo; This message resonated with the entire focus group, from the plumber&rsquo;s daughter to the law firm headhunter to the homemaker. They said it made them think of: &ldquo;The next step.&nbsp; Progression. Enhancement.&rdquo; Additionally, through NBB funding, a robust line of marketing materials is available to oilheat dealers at no cost while supplies last. These free marketing pieces include brochures, door hangers, postcards, Q-and-A and more. Dealers can contact their local oilheat association group, or Advanced Fuel Solutions, and ask for the literature menu to review the materials and place an order.
 The focus group participants were very clear that Bioheat interested them. After learning about the product, 11 out of 12 said they wanted more information from their dealer. That&rsquo;s a powerful statement about Bioheat&rsquo;s market potential.&nbsp;
 Now I can ask dealers: When was the last time you were invited by more than 90 percent of your customers to provide them with information on anything new? Bioheat represents a golden opportunity to change the way customers feel about oilheat. In turn, it could provide a sure market for biodiesel producers, helping to fill in demand gaps in winter, and serving as an insurance policy against the whims of legislators.
 Author: Paul J. Nazzaro&nbsp;&nbsp;&nbsp; Fuel Specialist, Advanced Fuel Solutions; Petroleum Liaison, NBB <a href="mailto:paulsr@yourfuelsolution.com">paulsr@yourfuelsolution.com</a>

BIOHEAT EXPERT: Paul Nazzaro, a fuel specialist for Advanced Fuel Solutions and petroleum liaison for NBB, is well known throughout the industry as a leader. 

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Focus group illuminates what petroleum marketers are missing


November 2011

Business Briefs

Business Briefs

Columns

POLICY PRIORITIES

Reducing Cost While Increasing Output

Featured

A New Standard for Quality

Clearing the Way for Byproduct Quality

Easier Than Ever

The Uncertain Tomorrow

Contributions

Will NYC Homeowners Embrace Bioheat as the Evolution of Oilheat?

November 2011.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

POLICY PRIORITIES

Reducing Cost While Increasing Output

Featured

A New Standard for Quality

Clearing the Way for Byproduct Quality

Easier Than Ever

The Uncertain Tomorrow

Contributions

Will NYC Homeowners Embrace Bioheat as the Evolution of Oilheat?

November 2011