By Tina Caparella
A major fire at American Biofuels’ Bakersfield, CA, biodiesel plant in mid-February has destroyed most of the facility, resulting in reported losses of at least $2 million in equipment.
The company reports that during the transfer of a 250-gallon container of methanol outside of the 10,000-square-foot plant building, a small spill occurred that ignited, possibly by static electricity. The plant was in full production when the outside fire spread into the building, where workers quickly shut down operations. When the fire could not be contained with on-site extinguishers, personnel left the premises and notified the local fire department. No other buildings on the 30-acre site that American Biofuels shares with Hondo Chemical were affected and no personnel were hurt. Saved from damage were five biodiesel tanks containing approximately 30,000 gallons, 6,000 gallons of methanol, and approximately 90,000 gallons of corn oil stored in railroad cars.
The fire burned violently for several hours, including multiple explosions, and non-toxic plumes of smoke could be seen for miles. American Biofuels Director Joe LaStella was devastated over the fire and apologetic to local residents.
“We really want to apologize to the people of this town,” LaStella is quoted in a newspaper report. “This is a really freak-type fire. We don’t know exactly what happened. It could have been static electricity. We’re very careful even with that.” He also expressed his gratitude to those who have voiced their concerns for the five-year-old biodiesel manufacturer.
“We have received abundant telephone calls from shareholders across the U.S. and some foreign countries expressing their on-going support for the company during this unfortunate accident,” LaStella stated. “We appreciate your concerned calls and are very thankful to have our crew safe.”
The fire occurred at a time when the biodiesel plant had reached full operation. The company was ready to process 125,000 gallons of on-hand feedstock and was negotiating an order to supply 100,000 gallons to the Royal Caribbean Cruise Line by mid-March. The company had also been installing the final improvements to increase the plant’s annual capacity from five million gallons to 10 million.
American Biofuels, LLC, and Green Star Products, Inc. (GSPI), which is a 35 percent equity owner of American Biofuels, are investigating strategies to resume production. In the meantime, the company’s production crew will be utilized in fabricating the main components for a new plant at a fully equipped 5,000-square-foot research and development facility funded by GSPI located 15 miles from the destroyed plant. GSPI will also assign personnel to its blending and bottling facility in Chula Vista, CA.
Government to Dole Out Grants, Loans
Millions of government dollars are being made available to support renewable energy and biofuels. The U.S. Department of Agriculture (USDA) is earmarking $176.5 million in loan guarantees and almost $11.4 million in grants to support investments in renewable energy and energy efficiency improvements by agricultural producers and small businesses. Also, the U.S. Department of Energy (DOE) is providing $160 million in cost-shared funding over three years to construct up to three biorefineries in the United States. Both agencies’ funding is in support of President George W. Bush’s Advanced Energy Initiative, which requests $2.1 billion to develop new technologies and alternative sources of energy to help diversify and strengthen the nation’s energy sources.
Under the USDA program, the maximum amount of a loan guarantee made to a borrower is $10 million. For renewable energy systems, the minimum grant request is $2,500 and the maximum is $500,000. For energy efficiency improvements, the minimum grant request is $1,500 and the maximum is $250,000. Rural development grants under the program will not exceed 25 percent of the eligible program costs and a combination of grants and guaranteed loans will not exceed 50 percent. Applications for grants must be completed and submitted to the appropriate USDA Rural Development state office no later than May 12, 2006. Information is available on the Internet at www.rurdev.usda.gov/rbs/farmbill.
USDA recently awarded a $3.2 million Rural Development Renewable Energy Systems loan guarantee to partially fund construction and operation of a biodiesel production plant with a yearly capacity of 10 million gallons. The plant, owned by Clinton County Bio Energy, LLC, which includes local farmers and business operators, will use over seven million bushels of Midwestern grown soybeans a year. Additionally, the plant will use its own by-products to provide much of its energy supply.
The DOE funding will lead to the use of non-food based biomass, such as agricultural waste, trees, forest residues, and perennial grasses in the production of transportation fuels, electricity, and other products. The goal of the funding is to demonstrate that commercial biorefineries can be profitable once initial construction costs are paid. There is a $100 million cap on any single-demonstration award, and projects are required to show a 60/40 (industry/government) cost share. Information on the DOE funding can be found at www.doe.gov.
EPA Awards Biodiesel Industries
The U.S. Environmental Protection Agency’s (EPA’s) Landfill Methane Outreach Program has awarded the 2005 Project of the Year to Biodiesel Industries. The award highlights outstanding landfill gas recovery projects.
Biodiesel Industries’ facility in Denton, TX, is a renewable biodiesel plant whereby methane from the municipal landfill is used to provide heat for the plant’s processors. The facility uses one million British thermal units per hour of landfill gas to heat water to nearly 200 degrees Fahrenheit, which then is used to heat fats and recycled vegetable oils for optimal reactions in the biodiesel production process.
Currently there are more than 475 operational landfill methane recovery projects in 38 states.
DaimlerChrysler Approves Use in Dodge Trucks
DaimlerChrysler has approved the use of 20 percent biodiesel (B20) in 2007 model year Dodge Ram pickup trucks equipped with Cummins diesel engines for its military, government, and commercial fleet customers. The automaker is requiring biodiesel to meet specifications established by the U.S. military and is working with the government, automotive suppliers, energy providers, universities, and independent agencies on a national fuel standard that would make B20 an option for all owners of Dodge Ram diesels.
“Biofuels represent a huge opportunity to reduce fuel consumption and our dependence on foreign oil,” said Chrysler Group President and Chief Executive Officer Tom LaSorda. Promoting increased use of biodiesel is part of DaimlerChrysler’s campaign to re-introduce diesel-powered passenger vehicles to U.S. consumers.
Chrysler Group has previously endorsed the use of five percent biodiesel (B5) in the Jeep Liberty CRD diesel sport utility vehicle, and every vehicle is fueled with B5 at the assembly line in Toledo, OH. In addition, use of two percent biodiesel is approved for the diesel-powered Dodge Sprinter vans.
Cummins has approved use of B5 in its full line of on- and off-highway engines and is supporting DaimlerChrysler’s approval of B20 use in Dodge Ram trucks.
Manitoba Appoints Board
Appointments to Canada’s Manitoba Biodiesel Board and funding for the Manitoba Biodiesel Production Program were recently announced. The Manitoba Biodiesel Production Program will promote the development of smaller, community-based production facilities supplying biodiesel to local and regional markets. A total of $1.5 million (Canadian) has been allocated to the program with support from the Canadian government under the Opportunities Envelope Program administered by Natural Resources Canada.
Eligible projects must be located in Manitoba and have an annual capacity of at least two million liters (528,000 gallons). The projects must also demonstrate technical feasibility and economic viability through the preparation of a comprehensive business plan.
Manitoba Biodiesel Board appointments include Ken Thomas, fleet manager at Manitoba Hydro, as chair, and Marg Rempel, an agricultural producer, as vice-chair. Members appointed to the board are Bob Lafond, division manager, corporate services, Credit Union Central of Manitoba; Rene Maillard, mayor, Town of Ste. Rose du Lac; and Al Cormier, acting executive director, Center of Sustainable Transportation. The board will review applications for program funding and recommend which projects receive support.
Last November, the province announced a 10-point action plan to promote the development of biodiesel as a new economic opportunity based on the recommendations of the Manitoba Biodiesel Advisory Council. In addition to the creation of the board and the establishment of a funding support package, the action plan included a 5.5-cent per liter tax advantage for biodiesel compared to petroleum diesel.
NBB Opens Washington Office
The National Biodiesel Board (NBB) has opened an office in Washington, DC, that will focus on federal regulatory and legislative issues impacting the biodiesel industry. The board has also promoted Scott Hughes from NBB regulatory director to director of Governmental Affairs.
Hughes will have management responsibility for NBB’s state and federal regulatory and legislative programs, while other team members will be partially dedicated to biodiesel issues and specialize in their respective areas. Team members include:
• Alan Weber, MARC-IV, who will serve as a transition team member moving to Washington for approximately one year to help ensure the successful launch of the new team;
• Tim Urban, a partner with Washington Council Ernst and Young, whose expertise includes tax and budget;
• Karen Coble Edwards, KCE Public Affairs Associates, who will provide public affairs services to NBB;
• John Gordley, founder of Gordley and Associates, a government relations firm specializing in legislation and regulatory policies affecting agriculture and related industries that has been at the center of biodiesel policy efforts since NBB’s beginning;
• Mark Palmer, Gordley and Associates, who has served as the primary federal contact for the biodiesel industry over the last two years; and
• Janet Kopenhaver, Gordley and Associates and Eye on Washington, who has over 20 years experience in the governmental relations field and has been serving as the federal regulatory consultant to NBB for over two years.
New Book Launched
Biodiesel America, a new book authored by Josh Tickell, made its debut at the National Biodiesel Conference in early February. It explains how America can break its dependence on Middle East oil and how biodiesel could bring over one million jobs to the country, invigorate the nation’s economy, and create a stable domestic fuel supply. Tickell also authored the book, From the Fryer to the Fuel Tank: The Complete Guide to Using Vegetable Oil as an Alternative Fuel, which sold more than 50,000 copies.
In the new book, Tickell explains why America is more dependent on oil than any other nation; why Saudi Arabia’s oil empire will soon crumble, sending energy prices skyrocketing; why everyday vehicles that get 80 miles per gallon are already sold in Europe, but not in the United States; and how Rudolf Diesel invented an engine to run on vegetable oil over 100 years ago.
Partners to Open Biofuel Energy Lab
NextEnergy, a non-profit alternative energy accelerator, is partnering with Wayne State University (WSU) to open the National Biofuel Energy Lab, made possible through a $2 million U.S. Department of Energy grant. The lab is scheduled to open later this year in NextEnergy’s facility in Detroit, MI.
The ultimate goal of the National Biofuel Energy Lab is to develop and strengthen B20 specifications and standards in order to facilitate widespread warrant of B20 use by vehicle and engine manufacturers and component suppliers. WSU professors, graduate students, and PhD candidates from the school’s College of Engineering will conduct the day-to-day research and experiments carried out in the lab.
Other partners will also be involved in contributing to the lab:
• DaimlerChrysler will supply engines used for research.
• Biodiesel Industries, a biodiesel producer, will aid in the production and development of biodiesel.
• Delphi Corporation, a Tier 1 automotive supplier, will provide emission management technology and fuel injectors.
• Robert Bosch Corporation, a global manufacturer of automotive and industrial technology, consumer goods, and building technology, and U.S. Army Tank and Automotive Research, Development, and Engineering Center (TARDEC), the nation’s laboratory for advanced military automotive technology, will provide test facilities and personnel for fuel evaluation work.
Quebec Biodiesel Council Opens Office
In late February, the Quebec Biodiesel Council inaugurated its head office at Thetford Mines, QB, Canada. Located in the offices of the Thetford Regional Economic Development Corporation, the council’s mission is to promote the use of biodiesel as a substitute for petroleum diesel in the fight against climate change and for sustainable development. The opening of the head office also gives the Quebec Biodiesel Council a permanent staff.
The Quebec Biodiesel Council was launched in 2005 through the cooperative efforts of its four founding members: Canadian renderer Rothsay, Oleotek, the Sine Nomine Group, and the Quebec Advanced Transportation Institute. The council was later joined by the Societe de transport de Montreal, Sonic, and the Quebec Center for Biotechnology Commercial Development.
South Dakota Governor Orders Biodiesel Use
South Dakota Governor Mike Rounds has issued an executive order promoting biodiesel use by directing the South Dakota Department of Transportation (SDDOT) to stock and use biodiesel-blended fuel that meets technical specifications whenever it is available and financially prudent to do so.
“The use of biodiesel is good for agriculture, good for economic development, good for the environment, and good for the taxpayer,” said Rounds. “State government is obligated to reduce expenses and operate in the most economical, cost-effective, and environmentally beneficial way possible, including the operation and maintenance of vehicles. The use of biodiesel in our state fleet helps us do that.”
The results of a SDDOT initiated study released late last year recommended the use of a two percent biodiesel blend to meet the lubricity requirements needed for ultra-low-sulfur diesel fuel use. The SDDOT currently operates more than 1,200 diesel vehicles and uses approximately one million gallons of diesel fuel per year.
Willie Nelson Launches Pump in California
In town to headline the National Biodiesel Conference and Expo in early February, legendary musician Willie Nelson dedicated a new biodiesel pump in San Diego, CA, that bears his name.
Wilson Nelson Biodiesel, the company in which Nelson is a partner, and Pearson Ford Fuels in San Diego have joined forces with distributor Plavan Petroleum to create California’s first full-time “BioWillie” B20 retail outlet. The Pearson Ford Fuel Depot is a one-of-a-kind alternative fuel station, carrying ethanol, natural gas, and biodiesel. It is also home to the San Diego Ecocenter, an alternative fuel educational center.
Wisconsin to Increase Renewable Fuel Use
Wisconsin will expand its commitment to renewable fuels under an executive order issued by Governor Jim Doyle. The order requires all state agencies to reduce the use of petroleum-based gasoline in the state’s vehicle fleet by 20 percent by 2010 and by 50 percent by 2015, and reduce the use of petroleum-based diesel fuel in those vehicles by 10 percent by 2010 and 25 percent by 2015. To do this, vehicles will be filled with ethanol blended gasoline or biodiesel as much as possible.
Biodiesel Bulletin - April 2006 Render