Biodiesel Magazine - January 2011

JANUARY 2011 BIODIESEL MAGAZINE 1

BIODIESELJanuary 2011

M A G A Z I N E

WWW.BIODIESELMAGAZINE.COM

INSIDE: BIOHEAT IN THE ‘NEW NORMAL’ ECONOMY

How Scientists Turn Production Obstacles into Big

Research OpportunitiesPAGE 22

PLUS:Bioheat Brings Oilheat

Industry into Green EraPAGE 32

ANDCanadian University Works to

Bring Biodiesel Back to the FarmPAGE 28

New Processes Coming Soon

US $24.95/year

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CONTENTS

JANUARY 2011 VOLUME 8 ISSUE 1

TECHNOLOGY

Coming Soon: New ProcessesDetailing research on alternative production techniquesBY LUKE GEIVER

PROFILE

Bring Biodiesel Back to the FarmU of Guelph’s Ridgetown campus believes in biodieselBY BRYAN SIMS

BIOHEAT

Transforming an IndustryThe perfect marriage of biodiesel and heating oilBY ERIN VOEGELE

4 Editor’s NoteEmbrace BioheatBY RON KOTRBA

6 Legal PerspectivesSocial Media Pose Risks as Hiring ToolBY DANIELLE D. SMID

8 Talking PointBioheat 2011 in the ‘New Normal’ EconomyBY MICHAEL DEVINE

9 Biodiesel Events

10 FrontEndBiodiesel News & Trends

16 Inside NBB

20 Business BriefsCompanies, Organizations & People in the News

36 Marketplace/Advertiser Index

Biodiesel Magazine: (USPS No. 023-975) January 2011, Vol. 8, Issue 1. Biodiesel Magazine is published monthly. Principal Offi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Biodiesel Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

DEPARTMENTS

22 28 32

BIODIESEL MAGAZINE JANUARY 20114

EMBRACE BIOHEAT

Thanksgiving came and went, bringing with it nearly a foot of snow, subzero temperatures and the short, dark, very windy days of winter in the upper Midwest. The onset of winter tends to offset people’s moods, you can see it in their faces as they adjust to the harsh reality of living in a deep freezer for the next fi ve months. The weather is really the only extreme thing the region has to offer—and it’s offered in abundance. Forty degrees below zero is not uncommon, and it doesn’t matter if I mean Fahrenheit or Celsius because it’s so cold that those scales meet there.

It’s almost exciting, waking up hours before sunrise after days of pounding wind have built mountain-like snow drifts before your very eyes, to blow these megalithic drifts away and restore order in the country—at least in the driveway. An hour later, maybe two or three, when you can’t feel your legs or fi ngers anymore, when mustache and eyebrows have turned into blocks of ice, it’s very comforting to go into the house, especially know-ing it’s warmed by biodiesel-blended heating oil.

I heat my house with an oilheat furnace and a wood stove. Wood takes a lot more work, and time, which I don’t always have. But burning a biodiesel blend in my oil furnace takes no work at all, and I don’t have to worry about its performance either since it gained my trust long ago. I’ve never been given a reason to doubt it. And I feel good because I know I’m supporting a great and fascinating industry every time the furnace kicks on, and that’s often.

Wood is nice, it offers an adventure behind it, and it will keep you warm too. Wood heats you three times more than other forms of energy because it heats you when you cut it, then again when you split it, and fi nally when you burn it. But wood is just not conve-nient and seamless to the user like biodiesel-blended heating oil is.

This is our annual Bioheat issue, in which you will fi nd a feature article, an editorial column and a story in the National Biodiesel Board’s section that cover the latest develop-ments and opportunities in the sector.

Ron KotrbaEditorBiodiesel [email protected]

EDITOR'S NOTE

“Coming Soon: New Processes,” writ-ten by Luke Geiver, highlights some interesting technology research taking place in universities and biodie-sel plants.

Bryan Sims profi les the biodiesel activi-ties taking place at the University of Guelph’s Ridgetown campus in his article, “Bring Biodiesel Back to the Farm.”

Erin Voegele gives us, “Transforming an Industry,” her feature article on the campaign to promote Bioheat as a major rebranding tool for the oilheat industry.

Associate Editors

FOR MORE INFORMATION AND PERSPECTIVE, VISIT KOTRBA’S BLOG AT BIODIESELMAGAZINE.COM/FAMEFORUM


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Subscriptions Subscriptions to Biodiesel Magazine are free for commercial scale biodiesel producers worldwide. Subscription rates for non-producers are as follows (per year): United States - $24.95, Canada & Mexico - $39.95, Outside North America - $49.95. Subscriptions can be completed online at www.BiodieselMagazine.com/subscribe or over the phone at 701-746-8385. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (701) 746-8385 or [email protected]. Advertising Biodiesel Magazine provides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Biodiesel Magazine advertising opportunities, please contact us at 701-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to Biodiesel Magazine Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected].

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Social Media Pose Risks as Hiring ToolBY DANIELLE D. SMID

The rise in social media sites has pro-vided employers with the opportunity to learn more about job applicantsthan ever before. It is an enticing notion to be able to take a sneak peak into an applicant’s personal life. But employ-ers must be wary. Using social media such as Facebook, Twitter, LinkedIn or MySpace to screen candidates may be as diffi cult as navigating through a minefi eld. While online research offers potential benefi ts such as easy, convenient and free information regarding a candidate, employers must also be aware of the concurrent risks associated with such research.

Social networking profi les often reveal information about a candidate’s protected class—a candidate’s age, race, gender, sexual orientation, gender identity, disability, religious beliefs, military status. This protected infor-mation may appear in several different forms within a candidate’s profi le. Consider the following scenario: Your company decides to perform a Web search on each of the fi nalists for a new position. The company’s human resources professional performs the search and fi nds a picture of one fi nalist in full costume leading a local gay rights parade. What does the human resources profes-sional do with that particular information? If a candidate who is not hired for the position fi nds out that the com-pany conducted the search and reviewed the candidate’s personal online profi le, the company may fi nd itself hav-ing to show that it did not rely on improper information when deciding not to hire that particular candidate. When utilizing online resources to research a candidate, employ-ers should review candidates based on their qualifi cations and not necessarily the information in an online profi le.

Practically speaking, many times information found online is more fi ction than fact. Moreover, even factual information can be misinterpreted when taken out of context. As a result, using online information creates the following dilemmas: Is the information accurate or relevant to the job opening or does it have any bearing on the candidate’s ability to succeed in a given occupation?

In addition, employers should be aware that in cer-tain circumstances, reviewing online profi les could lead to an invasion of privacy claim by the candidate. A fi ne

line exists between a candidate’s right to informational privacy and an employer knowing as much as it can about the candidate. Many social media profi les are private and only accessible by “friends” of the candidate. Employers must be careful of the tactics they use to gain access to information on social networks. For example, employ-ers should avoid using someone else’s login information or falsifying information to gain access to a candidate’s profi le.

Employers must fi rst decide whether it is worth the risk to use social media to screen candidates. Employ-ers may want to consider the reasoning/purpose behind using social media in the hiring process. Employers who conduct online research as a part of the hiring process should work with legal counsel to develop and document an internal policy to govern the use of social networks to screen candidates. Such a policy should defi ne the type or specifi c positions for which online research will be used to assess candidates. In addition, the written policy should create a standardized process for utilizing the online research including defi ning the point at which human resources may look to online resources. Also, employ-ers may want to specify in the policy what information the employer is looking for through the online research. A written policy that is consistently followed may help mitigate the risks associated with such screening.

Finally, employers may want to consider asking candidates for written consent to use social networking sites as a part of the screening process or at least provide notice to candidates that a background check will be conducted that may include a review of any publicly available social media sites. Employers, however, should avoid snooping into an account that is blocked from public viewing.

Author: Danielle D. Smid Attorney, BrownWinick

(515) [email protected]

LEGAL PERSPECTIVE


In suburban Connecticut and many other Northeastern suburban com-munities, the latest buzzwords to describe the current local economy is the “new normal.” Thousands of independent, small and medium-sized businesses are facing extraordinarily sized contractions to their sales and revenues. Financial services fi rms, real estate and construction companies, retail main street businesses and service companies are fi nancially suffering to the tune of 30 to 50 percent declines in revenues over the past 5 years. The reality of high unemployment and reductions in consumer spending are beginning to settle into the current economy. We all hope this economic cor-rection will end soon, but there are few, if any, optimistic signs in the new normal.

In 2010, the U.S. biodiesel industry also experienced a drop in domestic gallons produced and distributed, largely due to the failure of Congress to reinstate the $1 per gallon biodiesel blenders excise tax credit, and key market seg-ments such as Bioheat are feeling its effects. The indepen-dent retail oilheat marketer is not insulated from the new normal. With the family budget under siege, conservation at home is having a signifi cant impact on overall gallons sold. Other constant economic challenges for the oilheat marketer are sudden commodity changes in the price of oil, poorly hedged contract positions, natural gas competi-tion and even Mother Nature, as temperatures fl uctuate. Now more than ever, the oilheat industry must recreate its brand image. Integrating biodiesel into the existing petro-leum infrastructure provides the oilheat marketer a new, improved liquid fuel for the existing oilheat consumer. In this fast-changing world, Bioheat represents a sustainable growth opportunity, presenting the independent oilheat marketer opportunity to grow and green their business in the new normal.

For marketers and distributors searching market cer-tainty in uncertain times, Bioheat has become a signifi cant benefi ciary of the RFS2 rulemaking process. U.S. EPA now recognizes biodiesel as an advanced biofuel. Heating oil integration is allowable under RFS2 and provides an

opportunity and a likely source for many mandated biod-iesel gallons in coming years. The term Bioheat is a regis-tered industry trademark whose defi nition is ASTM D396 heating oil blended with ASTM D6751 biodiesel.

RFS2 and renewable identifi cation number (RIN) markets provide certainty for the long-term usage of biodiesel—Bioheat marketers can feel secure about mar-keting this renewable energy source. Another benefi t of the new RFS2 rules is that all of the new regulatory re-porting, RIN tracking calculations and other compliance regulations are all handled upstream between the biodie-sel producer or importer and the oilheat and diesel fuel terminal suppliers. The oilheat marketer will continue to purchase Bioheat through its current petroleum suppliers, with regulatory reporting and RINs calculations in most cases already fi gured into the wholesale pricing, eliminat-ing pricing confusion.

This past spring and summer, I spoke with numerous oilheat dealers at petroleum industry conferences, state association meetings and in several private discussions. I clearly sensed some concern from them about the fu-ture of biodiesel, because of the absence of the tax credit and the availability of ratable biodiesel supply. The truth is, with RFS2, a Bioheat marketer now has the ability to market an advanced biofuel to the consumer. Biodiesel is a liquid drop-in fuel of the highest quality; a renewable energy that possesses a minimum 50 percent reduction in carbon emission compared to distillate fuel. This reduc-tion calculation takes into account indirect land use criteria as well as the life-cycle analysis of biodiesel.

Biodiesel is one of the few renewable energy technol-ogies that has made its way out of the lab as a theoretical application, to become a viable renewable energy. Bioheat is ready for primetime distribution and consumer use to-day in existing heating equipment—without any modifi ca-tions.

Author: Michael DevineCEO, Earth Energy Alliance; Petroleum Liaison, NBB


Bioheat 2011 in the ‘New Normal’ EconomyBY MICHAEL DEVINE

TALKING POINT


Pacifi c West Biomass Conference & Trade ShowJANUARY 10-12, 2011Sheraton Seattle HotelSeattle, WashingtonThis event’s program will focus on the vast potential for biomass utilization in the region with more than 60 speakers within four tracks: electricity generation; industrial heat and power; biorefi ning; and biomass project development and fi nance. (701) 746-8385www.biomassconference.com/pacifi cwest

International Biomass Conference & ExpoMAY 2-5, 2011America’s CenterSt. Louis, Missouri This is the biomass industry’s largest, fastest-growing event. Plan to join more than 2,500 attendees, 120 speakers and 400-plus exhibitors for the premier in-ternational biomass show of the year. (701) 746-8385www.biomassconference.com

EVENTS CALENDAR

International Fuel Ethanol Workshop & ExpoJUNE 27-30, 2011Indiana Convention CenterIndianapolis, IndianaThe FEW is the largest, longest-running ethanol con-ference in the world. Focused on production of grain and cellulosic ethanol, operational effi ciencies, plant management, energy use and near-term research and development, the FEW will attract 2,500 attendees. (701) 746-8385www.fuelethanolworkshop.com

International Biorefi ning Conference & Trade ShowSEPTEMBER 14-16, 2011Houston, TexasThis forum will allow technology developers to con-nect with investors and strategic partners, putting them on a path toward deployment. The event will in-clude panels on project fi nance, market development and technology scale-up for advanced biofuels and biobased chemicals production. (701) 746-8385www.biorefi ningconference.com

Biodiesel: Hot in Phoenix

If you haven’t done so already, reserve a spot, get a plane ticket and book hotel reservations for the 2011 National Biodiesel Conference & Expo, Feb. 6-9 in Phoenix, where

the National Biodiesel Board plans to help ease worried biodiesel minds about operating successfully in the U.S., in a tax creditless environment. “The theme of this year’s conference is ‘Advance,’” says NBB Member Specialist Kaleb Little. “It is time for biodiesel to advance as an industry. We need to move forward, and after a couple of tough years, we are fi nally again in a position to do so.” What he means by that is biodiesel is the only advanced biofuel on the market with enough commercial production capacity to not only fulfi ll the 800 million gallons of biomass-based diesel required under the renew-able fuel standard, RFS2, but also other advanced biofuel obligations as well. “Much of the focus of the 2011 conference is on the renewable fuel standard, and how biodiesel fi ts into it,” says Little. From RFS2 101-level training, to renewable identifi cation number trading and risk management, to an in-depth RFS2 training workshop, the 2011 conference will help producers, marketers and obligated parties navigate and take advantage of RFS2, the key market driver for the U.S. industry.

“If they don’t fully understand how the renewable fuel standard works, they will be missing out,” Little says of industry stakeholders still undecided about attending. “The 2011 conference is an opportunity to hear from experts from the EPA, obligated parties, the biodiesel industry and much more.”

Let’s not forget the valuable networking opportunities either: at the trade show, the conference itself, receptions, lunches, evening soirees. “Everyone in attendance is looking to sell, buy, distribute, ship or otherwise handle biodiesel and biodiesel-related products and equipment,” Little tells Biodiesel Magazine. “If you are in the biodiesel industry, these are the people you need to know.”

Little says the NBB expects more than 1,500 people to register and 140 exhibitors on the trade show fl oor. One of the keynote speakers is pseudo-sci-ence debunker Michael Shermer, founder of Skeptic Magazine and columnist for Scientifi c American. The “junk” science buck stops at his desk. Little says while celebrities are known to frequent the event, there’s nothing offi cial to report on from that front yet for this year.

Register for the premier biodiesel industry event of the year at www.biodiesel conference.org.

02/06


Biodiesel Gets On TrackAmtrak’s Heartland Flyer uses B20 in trial experiment, makes best inventions list

What do Apple’s iPad, improved 3-D glasses and Amtrak’s Heartland Flyer locomotive have in common? They all made Time magazine’s list of “The 50 Best Inventions of 2010.” The Heartland Flyer, which makes daily runs between Oklahoma City and Fort Worth, Texas, was the only one of Time's 10 transportation innova-tions available to the public on the “50 Best” list.

Amtrak received a $274,000 grant from the Federal Railroad Administration to study the feasibility and effectiveness of us-ing B20 in its Heartland Flyer locomotive. Amtrak conducted the 12-month long trial experiment in partnership with the Oklahoma and Texas Departments of Transportation.

“Amtrak travel is already more energy effi cient than most other forms of inter-city transportation,” says Roy Deitchman, vice president of environmental health and safety for Amtrak. “If the test shows this use of a renewable fuel in our locomotive is success-ful, it’s a home run for our passengers, for our partners and for the planet.”

Powered by a 3,200-horsepower General Electric P32-8 loco-motive with a 12-cylinder diesel engine, Amtrak announced that the Heartland Flyer would be running on B20 on Earth Day in Febru-ary 2010. The locomotive subsequently received a decal in April indicating that it used nothing but B20 on its regular stops through Norman, Okla., Purcell, Okla., Pauls Valley, Okla., Ardmore, Okla., and Gainesville, Texas. The Heartland Flyer is fueled in Fort Worth by Amtrak’s existing fuel vender, Euless, Texas-based Direct Fuels, which provides beef tallow-derived biodiesel.

“The cost difference between a biodiesel blend and straight

ultra-low sulfur diesel is about a nickel per gallon to what it was a few years ago,” says Amtrak spokesman Marc Magliari, adding that the train does a daily 400-mile round trip between Fort Worth and Oklahoma City, burning about 100,000 gallons of fuel a year in the process.

As part of maintenance and inspections during the trial run test, according to Magliari, Amtrak will perform analysis of the engine oil every 10 days for degradation and/or dilution, including wear and tear on gaskets and valves. At the end of the trial test in April 2011, Amtrak will collect locomotive exhaust emissions data in accordance with U.S. EPA locomotive exhaust emissions federal test protocol in the fi nal report. The trial has received support on fuel and engine component evaluation from Chevron Oronite.

Previously conducted stationary locomotive engine testing of B20 has shown to reduce hydrocarbon and carbon monoxide each by 10 percent, particulates by 15 percent and sulfates by 20 percent, according to Amtrak.

In an effort to control quality, all the batches of biodiesel are tested in conforming to parameters set by the BQ-9000 program. “We also test for water content, viscosity and carbon residue on every batch,” Magliari says. Additionally, at least one batch is tested for metals content and sulfated ash on a monthly basis, along with semiannual testing of cetane and distillation parameters.

According to Amtrak, ridership in the 12 months ending Sept. 30 stood at 81,749, up 11 percent from the previous year, while ridership in October increased by more than 17 percent compared to the same period in 2009. —Bryan Sims

FULL SPEED AHEAD: Amtrak's Heartland Flyer at Fort Worth, Texas, the southern terminus of the daily 206-mile route to and from Oklahoma City.

FrontEnd Biodiesel News & Trends

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At a minimum, 8 percent of U.S. fuel needs in 2011 will be met by renewable fuel, if the U.S. EPA’s 2011 RFS2 volume require-ments are met. Of that 8 percent, 800 million gallons will come from biomass-based diesel. Although that number pales in com-parison to what a fully operational U.S. biodiesel producing market could produce, the number still appears to be a good thing. The NBB thinks so, as do several other producers, but is 800 million gallons attainable? According to the EPA in a statement from its fi nal rule, the answer is yes. “The total biodiesel production capacity at facilities that are still operating is 2.4 billion gallons. Ramping up production will require some time and potentially some reinvest-ment, but based on feedback from industry we nevertheless believe that it can occur in time to meet a production goal of 800 million gallons.”

For Ed Burke, a newly elected member of the RINAlliance board of directors, meeting the requirement shouldn’t be a problem, and actually, “the number is on the low side,” and it’s low, he says, partially because “it’s wrapped up into the ongoing saga of the tax credit.” The EPA might agree, stating “biodiesel production appears to have been signifi cantly affected by both the EU tariff on biodie-sel from the U.S. and the expiration of the biodiesel tax credit.” But, don’t take 2008 or 2009 as an indicator of success to come, accord-ing to the EPA. “A regulatory mandate for biomass-based diesel did not exist in 2009, and the mandate for biomass-diesel in 2010 was a unique circumstance that allowed a signifi cant number of 2008 and 2009 biodiesel RINs to be used for compliance in 2010.”

Instead, the EPA points to current production rates and the new preset demand. As an example, the EPA looked at the fi rst fi ve

months of 2010, when biodiesel production was higher than the same time period in 2009, which is attributed to the biomass-based diesel standard.

Finally, it appears there is an undeniable demand for biodiesel, and it can be met. But as Burke points out, there is still one prob-lem. “What is scary to me with the EPA,” he says, “you don’t know if they are going to do an abrupt change.” —Luke Geiver

CAUTIOUSLY OPTIMISTIC: Ed Burke, chairman of the board for fuel distributor Dennis K. Burke Inc. and newly elected board member of RINAlliance, says while the biodiesel industry is on track to meet RFS2 goals, one never knows what changes EPA might make in a hurry.

FRONTEND

Alberta Environment has brought charges against High River, Alberta-based Western Biodiesel Inc. and its former operations manager, Jason Freeman, for alleged incidents that occurred more than two years ago. According to Alberta Environment, the charges relate to alleged release of methanol, improper disposal of waste-water biodiesel, the failure to report the releases and for providing false or misleading information. A statement provided to Biodiesel Magazine by Western Biodiesel President and CEO Dean Cockshutt notes that while accidental spills and releases are not uncommon in the processing industry, it is important to respond to them appro-priately.

“In our case the company did have a release on its property over two years ago during initial commissioning, and the company did not respond correctly,” the statement notes. “The plant design engineers that commissioned the equipment advised our opera-tions manager that a waste water tank contained only distilled water

and it was safe to release to our yard to evaporate. He did so, but it turned out that the water contained some methanol…and he did not report it to Alberta Environment. He attempted to obscure the truth. That was wrong.”

The statement further explains that WBI has since taken a variety of proactive measures to ensure the problems are not repeated. “Since the incident WBI has the right people and systems to prevent a recurrence,” the company says. “It’s important to have the right people and the right systems to prevent incidents. In 2008 we had poor advice from the engineering company that designed and commissioned the plant compounded with our own people failure. We didn’t have the systems in place to prevent the release from occurring. We know better now, and our experience can serve as a learning experience for our entire industry.” The initial court appearance was scheduled to be held Nov. 29 at Okotoks Provincial Court. —Erin Voegele

Pending Litigation, Proactive PreventionAlberta Environment brings charges for 2008 incidents

The EPA’s Scary RequirementThe 2011 RFS2 standards are set, but what will 800 million gallons really mean for the industry?

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According to the “Biodiesel Overview” report released by the U.S. DOE’s Energy Information Administration, production in August sat at 23 million gallons, down from 28 million gallons in July. Similarly, consumption fell to 18 million gallons in August, down from 27 million gallons in July.

Certainly, macroeconomic factors such as the lapsed tax credit, price disparity between biodiesel and diesel and unfa-vorable blend economics are impacting decreased production and consumption levels. But, there may be an additional factor, according to Lisa Mortenson, CEO and founder of California-based biodiesel producer Community Fuels.

“Customers that used to pull product on a steady basis and maintain their own high volumes are now looking at pushing down their on-hand volumes,” she says, noting that the company’s 10 MMgy multifeedstock facility in Stockton, Calif., has success-fully produced and sold biodiesel. “It’s not that they’re not still buying product, but we’re seeing our customers take a ‘just-in-time’ approach, in other words, pulling product from our plant literally as they need it.”

Additionally, EIA reported that biodiesel production peaked at 34 million gallons in March while consumption stood at a high of 29 million gallons in February. —Bryan Sims

Chairing the SolutionThe NBB elected a new chairman, a fresh face to revitalize the industry

Pump up the VolumeHow additional factors are driving decreased biodiesel production, consumption

Congress isn’t the only operation boasting the promise and renewed vigor of a few new faces. The National Biodiesel Board recently elected new leadership, including Renewable Energy Group Inc.’s very own Gary Haer, as chairman. Haer spoke with Biodiesel Magazine on the fi rst day of his new appointment. We (as in biodiesel) are part of the energy solu-tion, and everyone in Washington needs to know that, he says. As the new chairman, Haer explains that NBB’s perspective for the near-term future also involves communicating to the petroleum industry that biodiesel is the solu-tion for biomass-based diesel and for advanced biofuels required by RFS2.

“The future looks very good for us,” he says. “The RFS repre-sents a base of demand that we’ve never had before as an industry. That is going to be very benefi cial to the biodiesel producers in the U.S.” Haer cites several existing champions of the industry in Wash-ington, but unfortunately, some of them will be ushered out when the new Congress takes hold. Advocates Rep. Earl Pomeroy, D-N.D., and Sen. Blanche Lincoln, D-Ark., both praised by Haer for their efforts in promoting and pushing for biodiesel, were defeated in the November elections. Sen. Chuck Grassley, R-Iowa, and Sen.

Maria Cantwell, D-Wash., also labeled by Haer as champions, are back however, and will certainly be at the forefront again of the biodiesel tax incentive struggle.

As for the lapse in the credit and the misfortune seen by the U.S. industry in the past few months, Haer says it was just the focus of Congress at the time. “They are searching for ways to move legislation forward,” he said, “and do it in a way that meets their requirements under Paygo. If there is an expenditure to the trea-sury, they have to fi nd that money somewhere so that it is budget-neutral.”

But what about the focus of a new Congress? It might be almost impossible to argue that the “pay as you go” method that Haer infers halted the tax credit in 2010 will cease to exist in 2011, and Haer isn’t focused on that unlikely event. Instead, he pro-vides a fresh point to consider when looking at the promise of the industry, and oddly enough, it has nothing to do with saving jobs. “I think that the reason the biodiesel tax credit should receive serious consideration going forward is because it represents jobs,” but not the kind (lost jobs that could be restored) we are used to hearing about. While he does highlight the job-saving ability of a renewed incentive, for Haer, the incentive would provide room for something that once fueled the industry. “The tax incentive also represents a new industry, and it represents more opportunity for investment,” he says. —Luke Geiver

FRONTEND

FIRST PRODUCER CHAIR: REG’s Gary Haer is the NBB’s fi rst chairman to also be a biodiesel producer, and says the future for biodiesel is bright.

U.S. BIODIESEL PRODUCTION, CONSUMPTIONMonth Production (million gallons) ConsumptionJanuary 32 8February 33 29March 34 13April 31 25May 29 16June 23 17July 28 27August 23 18Total 234 152

SOURCE: EIA


A statement released by rock music legend Neil Young makes it clear that the fi re was not caused by any component of the car itself. It was human error. “The car was plugged in to charge and left unattended,” he says. “The wall changing system was not completely tested and had never been left unattended. A mistake was made. It was not the fault of the car.”

Within days preparations were already being made by the LincVolt team to rebuild the zero-emission 1959 Lincoln Continental convertible. The vehicle is a diesel-electric hybrid that uses a biodiesel-powered microtur-bine engine to recharge batteries that power an electric motor, and can travel a range of more than 400 miles, getting 80 miles a gallon.

“The reason we started this project has not changed,” Young says. “As a nation, we are still excessively burning fossil fuels, doing damage to our plant that will hurt our children’s lives and future generations as well. We’re still in a race against time. On a project like this, setbacks happen for a reason and we can see that very well from here. ‘Barn’s burnt down. Now I can see the moon.’”

The Capstone Micro-Turbine survived the fi re, and the UQM prime mover. “The underbody of the car appears to be essentially unchanged,” Young says. “The engines are both made in the U.S. These are encouraging signs. Lincvolt is ready for the next chapter and the next ride. The mission's unchanged.” —Erin Voegele

Firing up for a New StartNeil Young’s hybrid electric convertible, LincVolt, damaged in fi re

The Military’s Next Buffer ZoneAt Fort Bragg, the idea of dual-purposing crop land is catching on

North Carolina’s Fort Bragg is big, roughly 165,000 acres, but while the military installation’s main theater of training happens several thousand feet in the air, the Fort needs to expand. But while it can-not expand in acreage, the dilemma might present an opportunity for biodiesel. The institution (the size of an entire county), acts as a major economic driver, according to Jon Parsons, executive director for Sustainable Sandhills, a nonprofi t organization founded by Fort Bragg to work with the surrounding communities. Because of the impact, Parson says, “It is a very attractive place to live.” That apparently is a problem, especially to the home of the 82nd Airborne Division.

“At Fort Bragg we had a drop zone that was right on our bound-ary,” says Julia Love, sustainable land use planner for the Fort, “and real estate developers in the 1990s built right up to the property line.” And, as Love says, you can’t have a drop zone on the boundaries with hous-ing only a few hundred yards away. Why? Imagine taking a sip of your morning coffee on a crisp North Carolina morning, watching a soldier or a piece of equipment fall from the sky into your backyard. Love says, “When we were doing drops with soldiers and cargo equipment, we had drops landing in the back yards of houses, and that basically took that drop zone out of use.”

Today, with commercial and residential encroachment towards the outside fence, they employ a program developed to deal with this specifi c problem. The Army Compatible Use Buffers program acts to establish a buffer zone around a military installation to reduce land restrictions and increase the amount of land available for a wide range of military training sessions, including air drops like those performed at Fort Bragg. The program at its best, says Love, acts as a public/private partnership, bringing together local farmers or nature conservatories to

utilize and maintain sections on and off the base through agricultural practices that benefi t both parties.

Fort Bragg is currently working with a farmer to maintain a 100-acre Coastal Bermuda hay fi eld. As a result, the farmer will get paid and the base can use the hay. “We do not have any program currently where any of that land is in production for biodiesel,” Love says, “but it would certainly be a good fi t for that program in the future.” Typically the crops that grow well in the area are tobacco and soybeans.

We know the U.S. continues the push for fossil fuel independence, but could we actually grow an energy crop and produce a biofuel at our military installations? If it seems improbable, ask a few homeowners living outside Fort Bragg about the probability of a paratrooper show-ing up in the backyard. —Luke Geiver

FRONTEND

DRIVING PROGRESS: LincVolt is being rebuilt with parts from two other Lincoln Continentals; another 1959 model, and a 1958 model nicknamed “Miss Pegi” in honor of Neil Young’s wife, who gave him the parts vehicle as a 65th birthday gift following the fi re.

FROM THE SKY: Excluding holidays, Fort Bragg runs training missions everyday, and several of them utilize drop zones close to the installation's boundaries.

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FRONTEND

A Renewed StartupHow renewable diesel is fi nding its way into the global marketplace

Politics of the PastDebate on Bush-era tax cuts could be just what the biodiesel industry needs

Although production volumes of biodie-sel may be lagging in the U.S., both domestic and international production of renewable diesel may help fi ll some of the void.

Finland-based Neste Oil Corp. suc-cessfully started up its 800,000 ton-per-year (240 MMgy) NExBTL renewable diesel production facility in the Tuas industrial zone in Singapore, crowning it the largest of its kind in the world. Integrated into the area’s existing industrial infrastructure, the plant will utilize the company’s proprietary NExBTL technology to process palm oil and animal fat feedstock. Primary markets for the company’s renewable diesel, according to Matti Lievonen, president and CEO of Neste Oil, are Europe and North America.

“Our main market areas are the most challenging areas, which put special require-ments for product quality,” Lievonen says. “NExBTL renewable diesel is an excellent choice in cold areas because it has excellent cold fl ow properties compared to traditional biodiesel.”

The company operates two renew-able diesel plants in Porvoo, Finland, with a combined annual capacity of 380,000 tons per year. Neste Oil has a similar-sized facility un-der construction in Rotterdam, Netherlands, which is expected to be commissioned in the fi rst half of 2011.

On the domestic front, Dynamic Fuels LLC, a 50/50 joint venture between Syntro-leum Corp. and Tyson Foods Inc., started up its 75 MMgy renewable diesel production facility in Geismar, La. The plant, which broke ground in 2008, uses Syntroleum’s propri-etary Bio-Synfi ning Technology to produce renewable diesel from nonfood-grade animal fats produced or procured by Tyson Foods, such as beef tallow, pork lard, chicken fat and greases.

Since its start-up in October, the plant has produced renewable diesel with a cloud point as low as minus 26 degrees Fahrenheit with a cetane value as high as 88, more than twice that of the ASTM petroleum diesel specifi ca-tions. Although the Geismar plant is produc-ing at half its maximum nameplate production capacity, according to Ron Stinebaugh, senior vice president of fi nance for Syntroleum, the facility will gradually increase production levels to meet customer demand.

“It doesn’t do us any good to not run it,” Stinebaugh says, adding that Dynamic Fuels has secured off-take arrangements for its renewable diesel, but declined to name the customer.

In addition to renewable diesel, according to Stinebaugh, the plant is capable of produc-ing high-value specialty distillate chemicals that can be used in a wide variety of applications

such as base oils, solvents and ink toner. Hav-ing this capability, according to Stinebaugh, allows the company to be profi table without relying solely on a tax credit.

“We think we have a business model that is a good one in spite of the environment we’re in,” Stinebaugh says. “We also think we have the ability to push into higher-margin markets where we won’t necessarily have to depend on subsidies.” —Bryan Sims

Predicting the future of the biodiesel tax incentive might be about as easy as understanding the main block-ade holding up the incentive’s renewal: politics. After multiple attempts during the past year to reinstate the tax incentive came close but fell short, one would think sup-port for the industry was withering. But, both Democrats and Republicans voted for an amendment that included the renewal of the tax credit in a version of the recently passed Small Business Bill, which, when passed, did not contain any biodiesel provisions. In October, USDA Secretary Tom Vilsack specifi cally called for the renewal

of the biodiesel tax incentive during a speech to the Na-tional Press Club in Washington. In November, Senator Tom Harkin, D-Iowa, again called for the renewal of the tax incentive. Now, even amidst a lame duck Congress, there is a chance the biodiesel tax incentive will be once again reviewed and reinstated. But, as Vilsack indicated during his October speech, the best chance for renewal is coincidentally related to politics of the past, and on top of that, he points out it will most likely have to fi nd a way to pass during the debate of the Bush-era tax cuts. —-Luke Geiver

PRODUCT LAUNCH: Reactor tanks are installed at Dynamic Fuels' 75 MMgy renewable diesel plant in Louisiana.

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UP FOR DEBATE: During the lame duck, Congress will try to fi nd common ground on Bush-era tax cuts, and an agreement on the biodiesel tax incentive along the way.


FRONTEND

The Corn that Binds Us Why more corn oil could be making its way into the biodiesel industry

Bouncing BackReport shows global vegetable oil demand strong

It’s no secret that the ethanol industry has employed creative ways to diversify existing product lines while maintaining and growing new ones. Corn oil extracted from distillers dried grains with solubles, in the back-end of the ethanol production process, is providing a widening business opportunity for several ethanol companies to market as feedstock to existing biodiesel producers.

Since early 2010, South Dakota-based ethanol producer Poet LLC has been producing about 2 million pounds of corn oil, dubbed Voila, from its research center in Scotland, S.D., using its patent-pending BPX process. Prior to producing corn oil at its Scotland facility, Poet conducted a six-month precommercialization trial run for its BPX process at its 56 MMgy production plant in Hudson, S.D., in 2009.

A characteristic that makes Voila favorable over other crude corn oil on the market, according to Scott Weishaar, vice president of commercial development, is its lower free fatty acid content, adding that it’s also priced competitively with yellow grease, yet below soybean oil spot market prices.

“Our launch strategy with our corn oil has been targeting biodiesel producers,” Weishaar says, adding that Poet intends to in-crease production volumes to meet customer demand by installing

extraction technology in existing ethanol production assets. “The bigger issue that we’re closely watching is not only the market price of corn oil but the viability of the biodiesel market,” Weishaar says. “In other words, as we invest in [ethanol] assets we have to make sure we have a home for our corn oil.”

Voila would be a boon for existing biodiesel producers who primarily use corn oil as feedstock, such as Walsh Biofuels LLC, which operates a 1 MMgy facility in Mauston, Wis. According to general manager David Walsh, corn oil gained from the backend of ethanol plants can be one of the toughest feedstocks for producers to use due to its inherently high FFA content. “You have to change a lot of things around to make standard corn oil work,” he says.

With corn ethanol companies like Poet capable of producing increased volumes of oil to supply existing biodiesel producers with feedstock, Weishaar says marketing opportunities are expected to expand in 2011.

“What better example of going into the renewable fuels space with a coproduct of an ethanol plant being the inbound feedstock of another plant to produce yet another renewable fuel?” he says. “That’s a pretty good synergy.” —Bryan Sims

According to a report published by Global Industry Analysts Inc., vegetable oil and edible oilseed prices appreciated by about 15 percent in 2009, which is attributed primarily to increased demand for palm oil and other factors such as increasing investments in biodiesel plants and growing demand for palm-oil derived biodiesel.

Aside from the economic downturn in 2008 onward, GIA found that there has been a signifi cant rise in terms of value and volume in the world market for vegetable oils in the past decade, with Asia currently dominating the market from both produc-tion and consumption standpoints.

While North America and the Euro-pean Union dominated the world in produc-tion of vegetable oils in the early 1990s, the report shows that lead has been dwindling since 2004 due to production in China, Brazil, Argentina, Malaysia and Indonesia. In fact, the report shows that the North Ameri-can and the European Union share of world

vegetable oil production dropped from 35 percent to 20 percent over this time period.

Malaysia and Indonesia are currently the world’s largest producers of palm oil, while the U.S., Brazil, Argentina and China are cur-rently the world’s primary producers of soy oil. The report also shows that palm oil now

represents both the largest and the fastest growing segment of the world vegetable oil market. Growing demand from emerging countries, such as China, India and Indo-nesia is expected to sustain a strong, robust market for vegetable oils. —Erin Voegele

World Vegetable Oil Production 2005/06 2006/07 2007/08 2008/09 2009/10 Million metric tons Coconut 3.46 3.22 3.53 3.63 3.67 Cottonseed 4.90 5.13 5.22 4.84 4.66 Olive 2.66 2.91 2.84 2.97 2.99 Palm 35.83 37.23 40.94 43.41 45.88 Palm Kernel 4.40 4.48 4.90 5.20 5.50 Peanut 4.97 4.52 4.90 4.97 4.56 Rapeseed 17.30 17.01 18.34 20.38 22.12 Soybean 34.62 36.36 37.54 35.88 37.88 Sunfl owerseed 10.60 10.61 9.86 11.71 11.31 Total 118.72 121.46 128.07 132.99 138.57

SOURCE: OILSEEDS: WORLD MARKETS AND TRADE, FOREIGN AGRICULTURAL SERVICE, USDA.


At the November National Biodiesel Board meeting in St. Louis, biodiesel industry stakeholders came together to establish its governance structure for 2011. This included the develop-ment of policy resolutions and the election of the governing board and board officers. Ed Hegland, soybean grower from Minnesota, served as the NBB chairman for the past 3 years. During that time, Hegland relied heavily on the leadership of his vice chair, Gary Haer from the Renewable Energy Group. In the recent elections, Haer became the first biodiesel producer to be elected chairman of the board of directors. In this candid dia-logue, NBB’s immediate past chair interviews NBB’s new chair about the significance of the election of a producer chairman, the future of the industry and more.

Hegland: First of all congratulations on your unanimous election as NBB chairman. While you are the first producer to be elected chair, it really shouldn’t be a surprise to anyone. You have served as a significant part of the NBB leadership for the last decade, and especially so during the past three years as vice chair. What do you see as the significance of this election, and your new leadership role?

Haer: I have been honored to serve on NBB’s executive committee for the past nine years, and I’m humbled by my elec-tion as the new chair. I will have big shoes to fill with NBB’s long and proud tradition of farmer leaders, whose policy sup-port and checkoff investment made the U.S. biodiesel industry possible, and continues to help fuel it today. I’ve especially been honored to serve and work closely with you over the last three years. There are two things that I have come to admire most about your leadership, which I intend to carry forward. First, you have always been willing to step up and face difficult issues and address them head on. Second, you have always demonstrat-ed a willingness to listen to our members, be in touch with their concerns and needs, and to lead in a way that was truly in the best interests of the industry as a whole. Those are principles that I am committed to as well. We have some enormous eco-nomic and policy challenges that we continue to face, and it is imperative that we continue to face them as a unified industry.

Hegland: What is your vision of how we get from the eco-nomic situation that we are in now to where we need to be?

Haer: If we are go-ing to have a healthy, sustainable, growing industry, it has to be profitable for domes-tic biodiesel producers to operate. A healthy, growing U.S. biodiesel industry is good for all NBB members, includ-ing producers, marketers, distributors and feedstock producers. While we had the policy framework in place to make that hap-pen, Congress’ inability to pass timely tax legislation left the industry stranded in 2010 with a lapsed tax credit and a delayed RFS2. The positive news is that 2011 is poised to be perhaps the biggest year ever, with approximately 800 million gallons of biomass-based diesel required by law. However, it may take a few months for all of the remaining uncertainties to be resolved and for the program to really begin to generate demand. There are many NBB producer members who simply will not be able to wait any longer. This is especially frustrating considering that Congress could put this industry back to work immediately with the stroke of a pen.

Hegland: One thing discussed at the November board meeting was the need to re-launch and redefine biodiesel as an advanced biofuel, rather than being labeled by our opponents as a “conventional biofuel.” If the biodiesel industry is going to compete in the new advanced biofuel market that will be created by the RFS2, people need to know that biodiesel is currently the only commercial-scale, domestic fuel that meets the EPA’s definition of advanced biofuel.

Haer: This is truly a defining moment for our industry, and we must seize the opportunity to define ourselves rather than be defined by others. NBB staff, led by the CEO, are work-ing on new ways to emphasize biodiesel’s role as an advanced biofuel, its carbon, energy balance, diversity benefits, and the fact that biodiesel has net benefits to the food supply. These efforts clearly illustrate how unity and resource leveraging are critical. While NBB producer members' volume dues will remain primarily focused on supporting our federal and state regulatory

Changing of the Guard at NBB

Gary Haer Ed Hegland


insideNBB

National Biodiesel Board members selected their trade associa-tion leadership in November, including the first producer to take the chairman role. Four returning governing board members and three new members were elected to serve on the leadership committee.

Officers elected to lead the board are: • Gary Haer, chairman, Renewable Energy Group Inc. (pro-

ducer) • Ed Ulch, vice chair, Iowa Soybean Board (farmer) • Ron Marr, secretary, Minnesota Soybean Processors (producer) • Jim Conway, treasurer, Griffin Industries (producer) Biodiesel board members also voted to fill seven board member

spots. Elected were: • Greg Anderson, Nebraska Soybean Board (farmer)• Ramon Benavides, GEN-X Energy Group (producer)• Steven Levy, Sprague Energy (producer) • Dave Lyons, Louis Dreyfus (producer)• Doug Smith, Baker Commodities (producer)• David Womack, Tennessee Soybean Promotion Board (farmer)• John Wright, Owensboro Grain Co. (producer)Ed Hegland, Kris Kappenman, Bob Metz, and Darryl Brink-

mann also serve on the governing board. Based in Jefferson City, Mo., NBB is dedicated to supporting

the commercial biodiesel industry. Its membership is comprised of biodiesel producers; state, national, and international feedstock and processor organizations; fuel marketers and distributors; and technol-ogy providers.

National Biodiesel Board members elect governing board

affairs program, NBB’s soybean farmer members continue to support these efforts with additional funds above and beyond their current level of technical and communications support.

Recognizing the tremendous challenges that we have be-fore us, I would like to appeal to all biodiesel stakeholders for their help and support in getting this industry to better times. I am committed to working with this outstanding governing board to serve the industry and the organization to the best

of my ability. I’m committed to inclusiveness, transparency, and open communications among membership and leader-ship. I eagerly invite your input and ideas, as we will need all of the good minds the industry has to offer. This industry has struggled before, but we have always come through it stronger. I am confident that together, we can get through this challenge as well.

NBB welcomes new members Evergreen Biodiesel Production Facility LLC—Greenville, S.C.


Winter is a time associated with selling and using Bioheat, but this winter has also been a hot time for the promotion of the alter-native home heating oil. The National Biodiesel Board works to de-velop markets for biodiesel, and one of the most rapidly expanding new markets is Bioheat home heating oil.

The airwavesIn November the National Association of Farm Broadcasters

conference hosted a unique trade show where Greg Anderson, a soybean farmer from Nebraska, Don Allen, a Bioheat dealer from Virginia, and NBB staff members told the story of Bioheat to more than 30 farm broadcast representatives. The majority of the inter-views were recorded on the spot for radio shows to be played all across the U.S.

“This event was unlike any other I have ever attended,” said Al-len. “It gave us an opportunity to tell the public about the benefits of biodiesel, and the exciting market it has in home heating oil.” Al-len added that the Bioheat message was heard by many at the trade show, but the event was unique because the interviews then reached thousands more once they hit the radio waves.

The Big AppleThe National Biodiesel Board helped organize a group of soy-

bean farmer leaders for a New York City Bioheat tour in December. The tour brought state soybean board members to New York to see first-hand the Bioheat and biodiesel markets in the state including biodiesel production facilities, distribution and the New York Mer-cantile Exchange where billions of dollars of energy products are sold every day.

Starting in October 2012, 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 annu-ally, more than any other city in the United States,” said City Council-man James F. Gennaro, who sponsored the legislation. “This will an-nually replace 20 million gallons of petroleum with an equal volume of renewable, sustainable, domestically produced biodiesel.”

In addition to Bioheat, New York City is the largest municipal user of biodiesel in the country. NYC's Parks Department uses B50 blends in maintenance vehicles at landmarks such as Central Park, Yankee Stadium, and Coney Island. NYC's sanitation department uses B20 in all 4,000 sanitation trucks.

Success stories publishedThe NBB recently published a piece titled “Success Stories: the

Sustainability of America’s Future Through Biodiesel.” The publica-tion features profiles of biodiesel and Bioheat companies from di-

verse sectors of the petroleum market. The companies have made the strategic decision to differentiate themselves from their competi-tors by introducing biodiesel blends into their product lines.

The publication also features the Boston Bioheat tour, an event that the NBB, the National Oilheat Research Alliance and the Mas-sachusetts Oil Heat Council put on to bring the oilheat and biodiesel industries together to discuss the potential of Bioheat as the future of the home heating oil industry.

To receive a copy of the publication, please contact the NBB at [email protected].

insideNBB

New York City is a leader in Biodiesel and Bioheat use.

Winter a hot time for Bioheat promotions

Don Allen and Greg Anderson tape a radio interview at the National Association of Farm Broadcasters meeting.


insideNBB

To make it in today’s marketplace, the truth is that a renewable fuel must be more than a great product. It must have strong state and federal policies in place to support its growth and development. With the advent of carbon reduction measures and the growing popularity of Bioheat mandates, state policies are more influential than ever. The federal renewable fuel standard has created a market driver, but 2010 showed the dramatic consequences of an industry having the “policy rug” pulled out from under it, with the loss of the federal biodiesel tax incentive. What course is charted from here?

At the National Biodiesel Conference & Expo you’ll hear from the industry’s top state and federal policy strategists on what we have done well, where we are going, and how our industry can advance to the next level of effectiveness in the capitol halls of America.

Along with the federal and state policy discussions, attendees will gain insight on the biodiesel tax incentive, RFS2 implementa-tion, and how biodiesel producers and marketers can put themselves in a winning position. In an effort to gain some perspective on the events of the past year, we’re bringing back our 2010 general session of petroleum industry experts. Last year companies within the entire petroleum supply chain from the refinery to the pump explored how biodiesel fit into their businesses. Come back this year to see if their predictions were accurate, and what they see as the future of biodie-sel as RFS2 goes into full effect in 2011.

In addition to the general sessions, come see what industry experts have to say in the three breakout session areas: Technical, Markets, and Regulatory. See in-depth topics such as innovations in biodiesel production, biodiesel commodity and risk management, addressing food and fuel arguments, ASTM future developments, RFS2 basic training and much more.

Visit www.biodieselconference.org/2011 for a full list and de-scriptions of all the general and breakout sessions, and to register for the 2011 National Biodiesel Conference & Expo. Online registration will remain open until Jan. 21. After that, you must register in person onsite, and the cost of registration will increase.

Countdown to 2011 National Biodiesel Conference & Expo

The petroleum industry experts panel from the 2010 conference is back for the 2011 general session.

The Technical, Markets, and Regulatory track sessions are sure to draw large crowds again in 2011 as industry experts dive deep into issues facing the industry.

The demographics of our conference attendees indicate most are high-level decision-makers in their respective areas.

Online registration remains open until Jan. 21, then registration must be done onsite.


In a move intended to avoid delisting by the New York Stock Exchange, Green-Hunter Energy Inc. relinquished owner-ship of its 105 MMgy multifeedstock biod-iesel production plant on the Houston Ship Channel in Texas, formerly operated under its subsidiary GreenHunter Biofuels LLC. According to Jonathan Hoopes, Green-Hunter Energy president and chief operat-ing officer, the company transferred all of its ownership shares to a trust for holders of its 10 percent debentures due in 2012. The company was notified by the NYSE about a year ago that it wasn’t in compliance with listing requirements when GreenHunter’s shareholder equity fell below the exchange’s minimum $6 million threshold to remain listed. As a result, the stock exchange threat-ened to delist the diversified energy company from its NYSE Amex Equities listing if the company didn’t improve its net liquidity. Rather than issue more shares, Hoopes says, the company decided it was best to restruc-ture its balance sheet through a maneuver of divesting its subsidiary, which raised share-holder equity above $8 million.

Enzyme company Verenium Corp. has partnered with global oils, fats and biodiesel technology firm Desmet Ballestra to expand the use and geographic reach of its vegetable-oil-specific enzyme, Purifine PLC. Nearly a month after announcing a partnership with Alfa Laval to jointly market the enzyme, Ve-renium has signed with Desmet Ballestra to market the Purifine enzymatic degumming process, while packaging the enzyme with Desmet Ballestra’s processing equipment and engineering services.

Little Rock, Ark.-based biodiesel consulting group Lee Enterprises added four new consultants in the past couple of months. The most recent is Jess Hewitt, chairman of Gulf Hydrocarbon Inc., who has more than 30 years of experi-ence in the energy sector. He led the Biodiesel Coalition of Texas during 2009 and 2010 and served on the advisory board for the New York Mer-cantile Exchange propane and natural gas contracts. Formerly a member of the National Biodiesel Board, Hewitt is also a member of the ASTM com-mittee governing petroleum products and biodiesel. Lee Enterprises also added John Hardy, corporate counsel; An-gela Young, Native American Affairs; and Kent Bullard, a BQ-9000 consultant.

Milwaukie, Ore.-based Biomass Renewable Technologies Inc. has signed an agreement with Whole En-ergy Fuels Corp. of Bellingham, Wash., to manage the marketing, sales, production and deployment of its proprietary biodiesel production processes and equipment. BRT, a chemical process development company, holds patents for several renewable energy technology processes, including those for biodiesel, gasification and anaerobic diges-tion. Regarding biodiesel technologies, BRT offers both biodiesel production systems and add-on specialty modules, the latter be-ing a significant area of focus recently. One such module is designed to aid plants that are using high free fatty acid feedstock. Other modules offered can solve problems associ-ated with methanol recovery, sterol removal, feedstock degumming and product purifica-tion. Under the agreement, Whole Energy

will provide marketing, project man-agement and customer service for the deployment of BRT’s technologies and processes.

Darling International Inc. announced its board of directors has unanimously approved a merger agreement to acquire Griffin Indus-tries Inc., a provider of value-added rendering and cooking oil recycling services. Under the merger agreement, Darling will acquire Griffin Industries for approximately $840 million in cash and stock. Griffin Industries’ holdings currently include 12 rendering plants and one biodiesel production facil-ity. Darling announced a green die-sel project with Valero in September 2009. At that time, the company said it was seeking to form a joint venture with a subsidiary of Valero Energy Corp. to develop a 135 MMgy renew-able diesel facility adjacent to an exist-ing Valero refinery. As announced in 2009, the facility would convert waste grease supplied by Darling into re-newable diesel.

Municipal transit service provider City-Link unveiled a fully wrapped 1999 model bus to promote the use of B20 blends in its diesel-fueled fleets during a media event on Nov. 12 in Peoria, Ill. The service company has been using biodiesel in its fleets since 2005, beginning with B2 and then B11. The company moved to B20 in August last year. According to Rick Tieken, assistant gen-

BusinessBriefs Companies, Organizations & People in the News

ENERGY WISE: Jess Hewitt brings more than 30 years of experience to biodiesel consulting group Lee Enterprises.

QUALITY ASSURANCE: Kent Bullard was the longest serving auditor in the National Biodiesel Accreditation Commission.


eral manager of CityLink, the wrapped bus serves as a reminder of CityLink’s commit-ment to the public and other municipal fleet organizations the benefits of using B20 in fleets.

Temecula, Calif.-based Promethean Bio-fuels Cooperative Corp. has been recognized by the California Depart-ment of Resources Re-cycling and Recovery (CalRecycle) for its waste reduction efforts. As a winner of the 2010 Cal-Recycle Waste Reduc-tion Award Program, Promethean will receive authorization to use the WRAP winner logo with its products, advertising

and business websites to publicize its waste reduction achievements. Promethean’s 2 MMgy biodiesel plant has been operating since January, and is currently producing be-tween 5,000 and 25,000 gallons of biodiesel per week, depending on how much feedstock is available, says Todd Hill, Promethean’s founder.

The National Alliance for Biofuels and Bioproducts has successfully produced ASTM-quality biodiesel from oil extracted from algae. The NAABB, made up of scien-tists and engineers from universities, private industry and national laboratories, received

$44 million from the U.S. DOE to develop a commercial process for algal biofuel. In its first year, it has produced a small sample of the algal fuel. The oil was supplied by Eldo-rado Biofuels and was converted using the T300 solid catalyst system developed by Cat-ilin Inc. The consortium will now disperse samples of the algae-based fuel to all 13 of its members for further analysis.

FUELING FLEETS: Biodiesel is now offered in the Hunts Point section of the South Bronx, thanks to Tri-State Biodiesel and others.

A new fuel station in the New York metro area is now offering B5 to customers. The lo-cation, a Sunoco station located in the Hunts Point section of the South Bronx, caters pri-marily to fleet drivers. Biodiesel sold at the station is being supplied by Bronx-based Tri-State Biodiesel LLC, a local waste cooking oil collector, renderer and biodiesel marketer. TSB partners with Rochester-based Northern Biodiesel Inc. for biodiesel production. Ac-cording to TSB CEO Brent Baker, his com-pany supplies feedstock to Northern Biodie-sel, and then markets the resulting biodiesel in the New York metro area. TSB is currently working to contact fleets to fuel with B5 at the Sunoco station. While he cannot provide an estimate of how much biodiesel might be sold at the station over the next year, Baker notes that two of the fleets his company is working to get onboard with the fuel would utilize up

to 100,000 gallons of fuel per month. “We’re hoping it will be more than that,” Baker says.

In December, Renewable Energy Group Inc. began offering its branded REG-9000 biodiesel for splash blending at a Kinder Mor-gan terminal site near Chicago, in Agro, Ill. Ac-cording to Jon Scharingson, REG’s director of marketing, the new terminal will expand REG’s downstream capabilities that will allow petro-leum marketers to continue to supply biodiesel to a healthy B11 market. The Kinder Morgan terminal is equipped to handle large volumes of various fuel and chemical commodities that fea-ture a total storage capacity of nearly 2.5 million barrels from 218 tanks, with each tank having a storage capacity range between 50,000 and 80,000 barrels. Located along the shore of Lake Michigan, the terminal has access to multiple forms of land and water transport. REG ex-pects biodiesel from its two production facilities in Seneca and Danville to be the primary suppli-ers for the new terminal location.

Dec. 1 marked a major milestone for the nation’s transition to ultra-low sulfur diesel (ULSD) fuel as all highway diesel fuel in the U.S. complies with the landmark 15 parts per million (ppm) sulfur standard—a 97 percent reduction in sulfur content from diesel’s 2006 levels. The deadline was mandated by the U.S. EPA. How-ever, according to EPA’s pump survey, the high-way transition to ULSD was actually completed a few weeks prior to the deadline. “It is quite a remarkable feat that refiners have been able to reduce the sulfur content in diesel fuel by 97 percent,” said Allen Schaeffer, the executive director of the Diesel Technology Forum. “The United States now officially has the clean-est on-road diesel fuel in the world.”

SHARE YOUR BUSINESS BRIEFS To be included in Business Briefs, send information (including pho-tos, illustrations or logos, if available) to: Business Briefs, Biodiesel Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax in-formation to (701) 746-5367, or e-mail it to [email protected]. Please include your name and telephone number in each correspondence.

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REDUCING WASTE: Todd Hill, founder of Promethean, says 99 percent of his company’s products are made from used cooking oil or kitchen grease.

BUSINESSBRIEFS

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TECHNOLOGY

THE DREAM TEAM: Research groups like those assembled at Brown University are turning dreams of some biodiesel process methods into a reality.

PHOTO: MIKE COHEA/BROWN UNIVERSITY


ComingSoon: New Processes

Oxygen and wastewater can present problems for biodiesel, but researchers are fi nding solutionsBY LUKE GEIVER

TECHNOLOGY


Chad Joshi wanted to elimi-nate the presence of oxygen within the biodiesel mix. To do it, he looked for people who had knowl-edge of biofuel chemistry. The CEO of Altranex, a startup company determined to produce a fuel that works in cold weather (as in minus 30 degrees Celsius), Joshi says he wanted people who “understood what needed to be done.” The people he even-tually found, Jason Sello and Aaron Socha at Brown University, were chosen more on their ability and “understanding” of biofuel chemistry than by any proven cold flow work. But, if the research team's track re-cord predicts success, then Altranex may be producing a biodiesel mix of the future—what Joshi calls “Green Kero”—that per-forms in cold climates and, very likely, does it without the presence of oxygen.

Rachel Burton, the research and analyt-ical director of Piedmont Biofuels, doesn’t have much work interest in oxygen, but she, like the team from Altranex, is part of an innovative research and process design ef-fort that may someday change the face of the biodiesel industry—and she will do it with enzymes. After meeting a member of Novozymes at a 2008 speaking engage-ment, Burton formed a relationship that would eventually combine her skills with the sustainable biodiesel team of the Den-mark enzyme giant. Now, whether its oxy-gen elimination or wastewater reduction via enzymatic processing, there is no shortage of novel process method research efforts, all of which are tackling the challenges of chemistry. The methods may not be com-mercially here today, and they may not be quite here tomorrow either, but work such as Burton’s and Joshi’s show that new ap-proaches are bubbling towards the surface.

The History of Green KeroTo say the creation of the Altranex

team and its quest for a cold-climate, biod-iesel-like fuel started with the easiest of revelations—that in northern regions the air is anything but warm much of the year and certain biodiesel blends begin to gel in these conditions—would only be half the

TECHNOLOGY

S FOR SURETY: Socha and Sello were chosen by Altranex based on their understanding of organic chemistry.

THE HEART OF THE RESEARCH: Brown University will house the majority of the Altranex research, while Novozymes' enzymatic work is ongoing at Piedmont Biofuels' plant in Pittsboro, N.C.

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story. Joshi, who says his oxygen-devoid “Green Kero” could act as either a fuel additive to help lower the cloud point of biodiesel, or eventually even as a fuel itself, points out that work by Sello and Socha on waste vegetable oil process techniques also piqued his interest, helping bring the team together.

The work, which is based on convert-ing triacylglcerols and fatty acids found in waste vegetable oils, implements a single catalyst vessel combined with a microwave reactor. Using Lewis acidic metal catalysts scandium triflate and bismuth triflate in a single reaction to create methyl esters, the two found a way to reduce the reactions needed from two to one. With the help of the microwave reactor to induce tem-peratures reaching 150 degrees Celsius, the team from Brown was able to produce a reaction in roughly 20 minutes. The metal catalysts could be reused up to five times at 97 percent efficiency, and although the energy required to run the microwave reac-

tor was greater than typical energy require-ments, Socha says, the overall energy usage is less given the shorter amount of time needed for the reactions.

Although the WVO process method was only performed at bench scale, and Sello and Socha haven’t tested any low-grade grease at this point, small-scale chemistry achievements can sometimes in-duce big plans (e.g., Altranex). “The stuff they (Sello and Socha) are doing over at Brown really dovetails with some of the processing we want to do to produce the Green Kero,” Joshi says. The same catalyst process used in the WVO project would help in one of the steps of the Altranex process. One of the advantages of the sol-id catalyst system developed by the Brown team, according to Joshi, is that unlike con-ventional potassium hydroxide-based cata-lysts that must be removed, the Brown ver-sion will cut down on the removal expense due to the recyclability of the catalyst. And it doesn’t hurt that the team from Brown

TECHNOLOGY

HOW COLD?: If Sello and his team are successful, their work will create a fuel product functional at minus 40 degrees.


knows a thing or two about chemistry. “We’ve been thinking about these issues for quite a while,”

Sello says about his team’s work with biodiesel conversion and the chemistry approaches that could make it more efficient. Now, Sello, Socha and others will begin tackling the problem posed by Joshi, making a fuel unphased by cold temps. “The problem with biod-iesel,” Joshi says, “is that is has some oxygen in it. And the oxygen in some sense is responsible for the high cloud point.” Oxygen is at one end of the molecule, Joshi explains, and the methyl esters are at the other end of the molecule. The oxygen present on the molecules tends to attract hydrogen from adjacent molecules due to something known as the Van der Waals force, a weak force that pulls hydrogen towards other molecules. “That attraction is what causes the high gel point,” Joshi says. If you get rid of oxygen, that attraction isn’t there anymore and the cloud point will drop, and the result will be a fuel similar to Green Kero developed by Sello and Socha.

“We expect that we will be able to make small quantities of Green Kero by this time next year,” Joshi says. “Instead of doing a B2 or B5 blend, we could enable B20 to B50 blends that could be run in the winter.” The process will utilize multiple feedstocks, including one familiar to the Brown team, waste vegetable oil. Al-though Joshi is hesitant to discuss the process method further due to patent applications still pending, he says there is already inter-est in his product. “We’ve talked with people at Irving Oil, Global Partners and Mansfield Oil,” he says, “and they all see the value of what is we are doing. According to Joshi, Global Partners, which has a facility in Albany, N.Y., has shown interest in trying the prod-uct as a winter blending agent. “They have a demand for about 25 MMgy of kerosene that we could substitute for,” he says.

Sello says he working on multiple biofuels projects at the mo-

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BIG LITTLE DROPS: A small amount of the Altranex product will go a long way, especially when used as an additive.

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ment, including the continuation of the microwave reactor metal catalyst method along with the new work for Altranex. “There is a movement at Brown to create a greater presence in the energy area,” Sello says, “and there has been a lot of discussion about en-ergy.”

Sustainable Energy via EnzymesPart of the Altranex approach is based on the ability of a

fuel additive product to be sustainable, and Rachel Burton is no stranger to that concept. “Piedmont Biofuels approach has always looked to be leading in biodiesel sustainability,” she explains. Add the help of Novozymes, and the concept of sustainability that Piedmont Biofuels strives for has bred a new free fatty acid pre-treatment method that Burton says has already been proven (at a small scale).

Burton says as a biodiesel producer operating under current market conditions, being able to process lower-quality feedstock high in free fatty acids is what several producers gravitate towards, but doing it without creating a significant amount of waste is the approach Piedmont is taking. “A number of technologies do exist to process the high free fatty acid, low-quality fats and oils but they do create either more waste water or more acidic methanol streams, or they use excessive amounts of methanol,” she says.

The enzymatic approach provides a significant reduction in the amount of wastewater, Burton says. “When you use enzymes as opposed to sodium or potassium hydroxide for basic reac-tions,” she says, “you are not going to create soap. By just having the soap in the process, you are creating a significant amount of wastewater because you have to use water to wash out the soap.” Along with a soap-free reaction, the coproduct is higher qual-ity. “The coproduct doesn’t have any of the soaps or impurities,”

Burton says. This, in turn, creates a higher value coproduct. And if you don’t believe Burton’s assertions that reducing the

amount of wastewater used in the biodiesel production process is important, look at part of the funding awarded to Piedmont. Not surprisingly, the team received a U.S. DOE grant for waste water reduction, and it is in the second phase of the grant, worth $1 million over two years.

The team is mainly focusing on Novozymes’ 435 enzyme, the most commonly used lipase in biocatalysis. It can be used in both batch and column reaction operations and is also used in industri-al processes as a catalyst in the synthesis of simple esters (includ-ing polyesters), according to Novozymes. “We’ve been working on this for at least a year and a half,” Burton says, “so we are fairly new to the enzyme biodiesel research body. We approach it as, can we make this process meet the commercial specifications? We’ve shown some success in being able to have a process that meets the ASTM specification.”

The Piedmont process won’t be commercially available to-morrow, but in two years, Burton says they hope to have a scaled-up version. Between now and then, however, the work will con-tinue, and it is safe to say that even if the reason for innovation may differ from one research team to the next, as Altranex and Piedmont show, the challenge of chemistry will never be enough to stop novel process method ideas from boiling over into main-stream use.

Author: Luke Geiver Associate Editor, Biodiesel Magazine


TECHNOLOGY

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PROFILE

BIODIESEL CHEERS: Mark Uher is a lab technician for CARES' biodiesel facility at University of Guelph's Ridgetown Campus in Ontario, Canada. The plant can produce 1 MMly, or 256,000 gal-lons, of biodiesel per year.

PHOTO: LIZ MEIDLINGER, UNIVERSITY OF GUELPH-RIDGETOWN CAMPUS


Bring Biodiesel Back to the FarmHow biodiesel is behind one Canadian university’s mission to promote rural development BY BRYAN SIMS

PROFILE

The small farming community of Ridgetown, Ontario, Canada, within the municipality of Chatham-Kent, is known as a breeding ground for a budding biofuels and bioenergy indus-try. A driving force that helped accelerate this movement can be traced back to the town’s premier agricultural and environmental institution, the University of Guelph’s Ridgetown Campus. With a deeply-rooted connection to its farm-based community, the campus holds firm its mission to promote a big message to local farmers: that a sustainable bioeconomy is achievable.

Recognizing biodiesel production as an emerging opportu-nity, in 2008 the campus received nearly $1 million in funding from the Canadian government to build a pilot biodiesel produc-tion plant and an oilseed crushing facility on campus. The plant has operated since 2009 with a nameplate production capacity of about 1 MMly (256,000 gallons a year) using primarily waste vegetable oil as feedstock, sourced by the truckload from South-western Ontario. Designed and built by Owens Borrow-based Lougheed Biodiesel Reactors, the plant typically receives about 20,000 liters of waste vegetable oil per shipment. In addition to the production plant, the federal money helped support the building of an oilseed crushing facility, which is under construc-


tion now. According to technician Mark Uher,

the plant runs a batch process with output typically ranging from 1,000 to 8,000 liters per batch per week. The purpose of the biodiesel project, Uher says, is to help de-termine the optimum model and scale of an economically viable on-farm biodiesel facil-ity.

“Ultimately, the scope of the project is to show farmers and farm-based business-es how this equipment works, and what’s cost-effective and applicable for their op-erations,” Uher tells Biodiesel Magazine. “To have that equipment showcased is key to the research.”

With a keen interest in renewable en-ergy, Uher graduated with a diploma in ag-riculture from Ridgetown Campus in 2008. Combined with his passion for agriculture and knowledge of renewable energy, the biodiesel project drew the Blenheim, Ontar-io, native back to campus to work full time as a biodiesel technician.

“I like the idea of combining some of these different renewable energies with their applications on the farm, and how to make farming a more sustainable enterprise,” he says.

Once construction of the oilseed crushing facility is complete, which should be by this spring, Uher says it will allow the production plant to handle multiple oil feedstocks in addition to waste vegetable oil. “We want to not only look at various types of oilseed feedstock, but also examine how the equipment performs,” Uher says. “We’re not sure it’s going to be crushing huge quan-tities to begin with.”

In addition to producing biodiesel, vari-ous campus farm and equipment fleets use blends of biodiesel in their diesel engines, Uher says. For example, some of the cam-pus lawn mowers and vehicles run on B100 in the summer, while the farm machinery might use B5 or B10 all year long.

Uher says an important component of this project represents how intimate the connection is between the university and its rural farming community. Through com-munications, outreach, teaching, on-site demonstrations and on-farm consultations, the project has been well-received by the

surrounding communities it serves since the project launch, Uher adds. “We want to show farmers how to do it themselves,” he says.

The biodiesel production plant, along with the oilseed crushing facility under con-struction, was a major driver behind shap-ing the launch of the university’s Center for Agricultural Renewable Energy and Sustain-ability. Officially formed in early 2009 with a five-year commitment, CARES marked a significant turning point for the community’s agricultural sector. The primary focus of the center is to demonstrate renewable, sustain-able practices, particularly to help increase value at the farm level and promote com-munity development through research and knowledge transfer. Additionally, CARES aims to help rural producers make informed investment decisions when considering the adoption of renewable energy technologies, while providing benchmark data to support economic and technical viability.

Along with the University of Guelph, Ridgetown Campus and the main branch

in Guelph, Ontario, the concept was devel-oped in collaboration with the Southwestern Ontario Bioproducts Innovation Network, Community Futures Development Coop-eration of Chatham-Kent, Ontario Minis-try of Agriculture, Food and Rural Affairs, Municipality of Chatham-Kent, Agricultural Adaptation Council and the Ontario Seed Corn Growers.

The biodiesel production plant and oil-seed crushing facility are successfully prov-ing out the positive economic and environ-mental impacts they’d have on a farm-based level. But that’s just a start to the goals set by CARES, which include showcasing how synergies of biodiesel and other renewable energy projects can create a truly closed-loop renewable energy system.

Valuing EverythingFor projects facilitated by CARES, the

notion that nothing goes to waste is an un-derstatement. With that in mind, research-ers at the Ridgetown Campus are hard at work attempting to unlock potential uses

PROFILE

SHOWCASE SHOWDOWN: The Ridgetown campus' biodiesel plant acts in part as a showcase to display to farmers how the biodiesel production process works.

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biogas by February. The plant will produce biogas from sev-

eral organic waste streams such as manure sourced from various dairy, swine, and beef lots located on campus. Corn silage, glycerin and other off-farm wastes that might other-wise find their way to landfills are being ex-plored as additional inputs for the digester, Uher says.

Adding the anaerobic digester would open up synergistic avenues leading to new

energy streams. For example, waste heat could be fed back to campus boilers for heating buildings, or be directed to a green-house adjacent to the digester. Uher says the digestate could become a potential feedstock stream for the biodiesel production facility.

“The possibilities are endless,” he says.

Author: Bryan SimsAssociate Editor, Biodiesel Magazine


PROFILE

from waste streams derived from the biod-iesel production process, such as glycerin, for use in making value-added chemicals.

Rob Nicols, an instructor and research-er on the project, says he and his team are using a microbial fermentation technique on crude glycerin to see what types of chemicals could be released when isolated with various types of fungi. Nicols says his team has screened about 50 different types of fungi and found three able to use glyc-erol as the main nutrient. The next step, ac-cording to Nicols, is to pinpoint what types of chemicals are produced.

“We feel we can still get new oppor-tunities out of this approach,” Nicols says, adding that he’s identified a few hurdles yet to overcome. “The challenge is that crude glycerin has a high pH and trace amounts of methanol still in it,” he says. “We’re in the process of using applied research to pull everything through.”

In addition to exploring glycerin’s abil-ity to produce chemicals, Nicols says that the campus is considering recapturing the wastewater from the biodiesel process to use as a composting agent with poultry litter. “With our first trial we noticed it composted litter quickly, and reduced odor issues,” Nicols says. “We’re looking to con-duct additional experiments to see where it goes from there.”

Also, an anaerobic digester on campus will be operational this spring. The digest-er will serve as an additional platform for showcasing new methods and technolo-gies that can be adopted throughout On-tario to add additional revenue streams to family farms. In April, Ridgetown Campus received an investment of more than $2.6 million through the Federal Development Agency of Southern Ontario to build the digester. Built and designed by PlanET Bio-gas Solutions, the digester will feature one dry feeder system, one pasteurization unit and a biogas engine to convert the biogas into renewable electricity. “The electricity will be sold to the grid as part of Canada’s feed-in-tariff (FIT) program,” Uher says. “It’s exclusive to Ontario where the campus would get an elevated rate on its electric-ity.” Construction on the plant began in late September and is expected to be producing


BIOHEAT


Transforming an IndustryEducational, research and marketing initiatives in the Bioheat world plow ahead with a real sense of urgencyBY ERIN VOEGELE

BIOHEAT

The past year has proven to be both challenging and successful for the Bioheat sector. While economic conditions and the expiration of the biodiesel tax credit have worked against growth in the industry, new mandates, increased public perception and new marketing initiatives have contin-ued to edge the industry forward. As we move into the New Year, those involved in the industry are regrouping, planning new initiatives and projects expected to enable further growth in the utilization of Bioheat.

The National Biodiesel Board and National Oilheat Research Alliance have teamed up with the goal of establishing a new ASTM standard for higher blends of Bioheat. The initiative includes two extensive studies designed to prove the safety and effectiveness of heating oil blends containing up to 20 percent biodiesel.

The NBB was the catalyst for the studies, says NBB Petroleum Liaison Paul Nazzaro. “Steve Howell, the technical director of NBB, and I brought NORA leader-ship and their technical people together to determine what additional investigations would be required for us to get a higher blend of biodiesel approved for use in home heating oil,” Nazzaro says. “Right now, under ASTM 396—which is the heating oil spec—we have approval to use up to 5 percent. The purpose of this new testing is to determine if we can move into a 10, 15 or 20 percent blend, and what harm—if any—would be done to legacy systems. The whole purpose of this round of testing is to get approval for higher blends, up to 20 percent, in 396 heating oil.”

NBB has taken on a leadership role in the project, which includes making sure the entire team is on track and getting the necessary funding into place. Work on the project began in early 2010. To date, this has included preliminary discussions, the formation of a task force, known as the Bioheat Technical Steering Committee, and a peer review of project plans.


bioheat

One of the studies will focus on the field experiences of dealers who have been supplying higher Bioheat blends to customers, says NORA Presi-dent John Huber, noting that work on that project should be complete by next summer. The other will focus on study-ing the effects of biodiesel-blended ultra-low sulfur fuel oil on equipment. “This study is a more rigorous scien-tific study,” Huber says. “We’re looking at pumps, which are the main movable part in the oil heating system. We’re run-ning those in an effort to mimic a five-year cycle.” The second study, which is being completed at Pennsylvania State University, is expected to be complete in late 2011 or early 2012.

It is important to note that these tests have no impact on the current abil-ity to sell Bioheat today, Nazzaro says. “Bioheat is fit for use up to 5 percent under ASTM 396. This is just behind-the-scenes work with NORA to get a higher blend for long-term utilization.”

Rebranding an IndustryAccording to Nazzaro, a lot of

the push for higher blends of Bioheat is coming directly from the oilheat sec-tor, which is unique when compared to the transportation fuel industry. “They know for their industry to continue to move on, they have to change their whole operating system to Bioheat be-cause they face fierce competition from natural gas,” he continues.

It has been proven that when ultra-low sulfur heating oil is blended with approximately 12 percent biodiesel, the fuel competes on an environmental ba-sis with natural gas. “That’s huge—and part and parcel the driving reason why we are pursuing higher blends,” Naz-zaro says.

“We as a petroleum product get beat up by politicians, get beat up by the environmentalists, just regularly get beat up,” Huber says. “The Bioheat product allows us to make a lot of those prob-lems disappear,” and sometimes even lean in our direction, he adds.

From the standpoint of heating oil dealers, the two primary attributes of Bioheat are that it’s a renewable fuel that has a reduced carbon footprint, and it’s a domestic fuel. “When we put those two things together, the industry feels that this will allow us to become a strongly marketed fuel again, and move us away from the traditional oil product into a new renewable, green fuel,” Huber says.

Matt Cota, executive director of the Vermont Fuel Dealers Association, agrees that competition with natural gas is a primary driver of interest in Bio-heat. “If the agreement is that we want a renewable fuel, we’ll win that argument against natural gas. If we want to reduce carbon, we’re a better fuel than natural gas when we are blended with biodiesel. From a regulatory standpoint, from an environmental standpoint, biodiesel-blended heating oil is better on many levels than natural gas.”

“Natural gas is not renewable,” says Michael Cooper, vice president and director of sales and trading at Ultra Green Energy Services LLC. “That’s the bottom line.” When the Bioheat blend approaches 11 or 12 percent, you have an edge over natural gas when it comes to emissions, he says, and when you move to B20, you are beating them by a significant margin.

For these reasons, the oilheat in-dustry is moving in the direction of re-branding itself as the Bioheat industry. “Bioheat is eventually just going to be our heating oil product,” Cooper says. “That’s a great thing. It’s huge, but it doesn’t maximize the opportunity” if only B5 is being sold. The real opportu-nity, Cooper says, is selling higher blends that compete with natural gas.

While the heating oil industry is moving towards Bioheat, Cooper also notes that it is necessary for those on the biodiesel side of the equation to un-derstand that oilheat suppliers have very intimate relationships with their custom-ers, and need to be absolutely certain that the fuel works as promised before they are willing to supply it. “Heating oil

is an old-fashioned business,” he contin-ues. “We have to fit into their paradigm, their speak, and their emotional connec-tion to their customers.” Cooper says oilheat is the only industry he knows where dealers have keys to their custom-ers’ homes, which speaks to the intimate relationship an oilheat dealer has with its customers. Huber notes that sometimes these relationships are multigenerational, so they need to be certain their custom-ers won’t be adversely affected by a new, or unfamiliar, product. But as the use of Bioheat builds a stronger, more extensive history, dealers, and their customers, will steadily gain more faith in the product.

“It’s definitely an evolution here,” says Michael Ferrante, president of the Massachusetts Oilheat Council. “That’s how I would describe this whole process of transforming the oilheat industry into a Bioheat industry.” The industry is really working together to make that happen. “Many of us believe we should change the name of our fuel,” he says.

Education and MarketingTo help expedite the acceptance

and use of Bioheat, Nazzaro says that the NBB will be stepping up marketing and education initiatives this year. Those efforts will be much more targeted than they were in the past, however. “Funding that is coming in right now is being used to invest in Bioheat and people who are really selling Bioheat, not just dreaming of selling it,” Nazzaro says. “We have to do that because resources are precious” and they ought not to be wasted.

“All consumer outreach moving forward will be developed and invested in areas where biodiesel is actually at the terminal and can be delivered,” Nazzaro continues. “I will not allow any of the funding to be deployed in areas where there is no Bioheat distribution. We are going out with a rifle and a scope versus going out with a cannon. I cannot reem-phasize this enough—we are interested in helping fuel dealers that are already doing their best to get the product main-streamed.”

WHOLESALE EXPERT: Michael Cooper, vice president and director of sales and trading at Ultra Green Energy Services LLC, is working to make Bioheat easier and more economical for retailers to supply through risk management and hedging activities.

OILHEAT ADVOCATE: National Oilheat Research Alliance President John Huber is working to make home heating oil more competitive with natural gas and electricity through the use of Bioheat.

BIOHEAT SUPPORTER: Matt Cota, executive director of the Vermont Fuel Dealers Association, is working to develop a Bioheat market in his state.


credit would come through. However, that met-ric doesn’t work for wholesalers. Dealers need to know the fuel will be available for purchase when they need it, Cooper says.

The expiration of the tax credit has had an impact, but Nazzaro points out that the require-ments of the RFS2 and higher renewable iden-tification number prices are offsetting at least a portion of that impact. We need to keep the wheels of progress turning, he says, and if the tax credit isn’t reinstated, we still have to trudge forward without it.

Although those already selling Bioheat are sticking with it, Nazzaro notes that those who haven’t adopted it are in a holding pattern. “It’s not just because of the tax incentive, by the way,” he says. “NORA has not been reauthorized [by Congress]. So, the oilheat industry is concerned that its own leadership group has a short shelf life. If they don’t get reauthorization, there'll be

no funding to come into NORA to help pro-mote the best interests of oilheat. We are in a very, very unsettled time on both the biodiesel and heating oil sides of the fence.”

“We know that we have the infrastructure to deliver Bioheat; we know that we can easily create the infrastructure to produce biodiesel; we know that we have the consumers that can burn Bioheat; we’ve just got to tie it all together in a cost-effective way,” Cota says. “At the end of the day, consumers want to find the least-cost way to heat their homes. If that way is re-newable and green, then we’ve got a win-win. We know it can happen, we’re just working on ways to make it price competitive.”

Author: Erin Voegele

Associate Editor, Biodiesel Magazine(701) 850-2551

[email protected]

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In addition to creating new direct market-ing materials for potential Bioheat customers, the NBB will also be conducting two focus groups of current oilheat users. The purpose of the focus groups will be to really drill down what their expectations and understandings of Bioheat are. “We really want to, at this stage, take a snapshot of what they are thinking now,” Nazzaro says. “Once I get that material collated, it will be the premise for continuing to utilize the materials that we have, or modify them for the future.”

The NBB is also reaching out to energy executives in the Northeast for train-the-train-er educational initiatives. The organization has also been approached by several states seeking to market Bioheat to their citizens. According to Ferrante, the Bioheat educational initiatives he is pursuing in his state took a real hit when the Massachusetts biodiesel mandate was sus-pended last year. “That really took some of the wind out of our educational initiatives, but we’re continuing to do as much as we can in the area of education,” he said.

Making Economics Work“Biodiesel really had a steam going at the

end of 2009, and some of that has dropped off with the loss of the tax credit,” says Cota, noting that approximately 10 percent of the Vermont Fuel Dealers Association’s members are currently supplying a Bioheat product. “There were some dealers that were selling it exclusively, but as the tax credit has [expired], they’ve offered conventional heating oil as well. They believe in the product, but at the end of day they’ve got to make sure they stay in busi-ness.”

While Ferrante notes there is a slight price premium for Bioheat in the current market, he adds that it shouldn’t be an impediment to its use. “No matter what the price is, we have to do it,” he says. “That’s my view, and I think a lot of us feel that there is a price to pay for reducing petroleum use and making heating oil a cleaner, renewable fuel.”

The biodiesel tax credit is important, Coo-per says—but market stability is even more im-portant in the eyes of wholesalers. Whenever the biodiesel tax credit moved towards rein-statement this past year, many producers put their sales and operations on hold in hopes the


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Field Instruments

Filters

Midwest Filtration Solutions816-943-6141 [email protected]

Laboratory-Equipment

Lazar Scientifi c, Inc.574-271-7020 www.lazarsci.com

Laboratory-Testing Services

Cennatek Bioanalytical Services519-479-0489 www.cennetek.ca

Storage

Guttman Group800-245-5955 www.guttmangroup.com

Tanks

JVNW Inc.503-263-2858 www.jvnw.com

Spokane Industries Inc.509-921-8868 www.spokanemetalproducts.com

Used Equipment

UPM Machine713-440-8200 www.upmmachine.com

FeedstockRecycled Fats & Oils

GreenLight Biofuels Inc.410-290-3287 www.glbiofuels.com

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Biofuels Manufacturers



Advertiser IndexMarketingBiodiesel

Suma Energy LLC516-816-3705 www.sumaenergy.com

Blender/Distributor

American Biofuel Solutions,LLC305-246-3835 www.305biofuel.com

Market Data

Research 13503-863-9913 www.Research13.com

Miscellaneous

Maas Companies507-285-1444 www.maascompanies.com

Process TechnologyModular Systems

GreeNebraska Renewable Diesel Refi neries402-640-8925 www.greenebraska.com

Turnkey Systems

Green Fuels America, Inc.866-996-6130 www.greenfuelsamerica.com

JatroDiesel Inc.937-847-8050 www.jatrodiesel.com

Mcgyan Biodiesel, LLC763-421-3729 www.mcgyan.com

Research & DevelopmentEngine Testing

Roush Industries 734-779-7736 www.roush.com

TransportationRailcar Gate Openers

The Arnold Company800-245-7505 www.arnoldcompany.com

2011 International Biorefi ning Conference and Trade Show

2011 International Biomass Conference and Expo

2011 National Biodiesel Conference

Dennis K. Burke, Inc.

DuPont

Evonik Degussa Corporation

MP Biomedicals, Saftest Division

National Biodiesel Board

Oil-Dri Corporation of America

Pure Fill Solutions

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Now AvailableNow Availablewas a runawayThe 2010 International Biomass Conference wors, 120 speakers andsuccess. Nearly 1,700 attendees, 300 exhibito

60 sponsors made for the largest and most successful biomass60 sponsors made for the largest and most sconference & expo on earth. We expect exhibit space andsponsorship opportunities to go fast again this year. Don’t missyour chance to be a part of this cutting edge event.

The 2010 International Biomass Conference was a runaway success. Nearly 1,700 attendees, 300 exhibitors, 120 speakers and 60 sponsors made for the largest and most successful biomass conference & expo on earth. We expect exhibit space and sponsorship opportunities to go fast again this year. Don’t miss your chance to be a part of this cutting edge event.

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Documents

Biodiesel Magazine - January 2011