While the crowd had thinned somewhat by the third day of the 2006 National Biodiesel Conference and Expo, a large gathering rose to their feet as country music singer Willie Nelson and his wife Annie were presented with the National Biodiesel Board’s (NBB’s) Influencer Award. On hand to present Nelson with the award was good friend and fellow biodiesel supporter Darryl Hannah, who received the same recognition two years earlier.
“It’s a great honor,” said Nelson on receiving the award. “Both of us are glad to be part of biodiesel.” He said Annie first introduced him to biodiesel two years ago when she explained that a local company on Maui, HI, was taking used restaurant trap grease and converting it to a renewable fuel.
“I said it sounds like a scam to me but if you want to try it out, go ahead,” Nelson commented. He now uses biodiesel in all his vehicles, from his Mercedes Benz at home in Maui to his large tour bus that travels the mainland United States. Nelson has also helped form a biodiesel distribution company named Willie Nelson Biodiesel and promotes the alternative fuel whenever and wherever he can.
NBB recognized other mavericks in the biodiesel industry during the rousing closing session, including Jim Evanoff, environmental manager for Yellowstone National Park, who was given the Inspiration Award for his pioneering efforts in introducing biodiesel to the National Park Service nearly 10 years ago. The Innovative Award went to Bob McCormick, principal engineer, U.S. Department of Energy’s National Renewable Energy Lab, whose studies have helped to educate the government, the media, and the public about the benefits of biodiesel, particularly its role in reducing harmful emissions. Receiving the Industry Partnership Award was Don Borgman, John Deere Ag Marketing Center, who helped lead the company’s decision to fill all its diesel-propelled machines manufactured in the United States with a two percent blend of biodiesel.
Focus on Fuel Quality and Economics
Before the honors were bestowed, the first two days of the conference showcased a multitude of presentations given concurrently on various “tracks,” ranging from fuel distribution to policy and regulations to the hottest topic at the conference – fuel quality. Joe Jobe, NBB executive director, opened the conference, saying the biodiesel industry has seen explosive growth over the past year.
“But realistic, sustainable growth is what our objective is,” he told the crowd. With regard to quality, Jobe quoted Neal Bredehoeft from the American Soybean Association: “You never get a second chance to do it right the first time.” NBB is working with the National Conference of Weights and Measures to educate state enforcement officials on how to enforce the quality of biodiesel.
Thomas Dorr, U.S. Department of Agriculture (USDA) Energy Council chairman and under secretary for Rural Development, remarked that the pace the industry is setting is “amazing.”
“Biodiesel usage grew last year by 300 percent,” he said. “That is beyond impressive. Quite frankly it’s a signal, it’s a major signal, of a significant new energy industry that we all agree is being born today.”
A session on understanding the economics of biodiesel drew an overflowing crowd. Oliver Gross, Louis Dreyfus Corporation, said of all the biodiesel feedstocks available, palm oil is the cheapest to produce.
Bill Dieterichs, Jacobsen Publishing, focused on the animal fats market, informing the audience that the quality of animal fats is only as good as the quality of the raw material they’re produced from. He stated that production of animal fat is at its maximum due to no new sources of raw material available and most all of the animal fat produced is already used by several industries, such as pet food, chemical, livestock/poultry, and soap manufacturers. Dieterichs predicted that demand from the biodiesel industry will change the animal fat market dramatically, but didn’t speculate how. He forecasted a narrowing of price discounts for yellow grease to soybean oil and shared a conversation he had with one renderer who told him that within a few years yellow grease and poultry fat prices will be higher than bleachable fancy tallow prices.
Although animal fat has become valuable as an energy source to renderers and other industries over the past few years as a replacement for No. 2 fuel oil in burners, Dieterichs stated that biodiesel is a whole new concept to renderers. Renderers must agree as more than a dozen attended the conference.
Renderer Carl Wintzer, G.A. Wintzer and Sons, Inc., liked what Dieterichs had to say. Wintzer feels biodiesel producers need to know that rendered products are traditionally used in other industries and that renderers are committed to their existing customers and contracts. Wintzer was attending his first biodiesel conference.
Another session that drew a large crowd focused on federal and state incentives. Janet Kopenhaver, Eye on Washington, addressed the various programs available, such as the U.S. Department of Energy’s state energy program that provides $14 million per year to state energy offices to promote energy conservation and reduce energy demand. Under this program, biodiesel producers serve as a state contractor.
“It’s a good idea to go talk to your state energy folks about their plans,” Kopenhaver recommended. She also discussed the USDA Renewable Energy and Energy Efficiency Program, the USDA Conservation Security Program, and the Department of Transportation’s Congestion Mitigation and Air Quality Improvement Program that provides funding towards biodiesel purchased in seven states. Under the Environmental Protection Agency (EPA), the Voluntary Diesel Retrofit and Clean School Bus programs both include biodiesel.
State policies remain critical to the biodiesel industry, said NBB’s Scott Hughes. In 2004, 27 state bills were passed, a 30 percent increase from 2003. In 2005, 31 bills passed, and so far in 2006, about 100 state bills have already been introduced. State incentives range from tax credits or exemptions to mandatory public fleet use.
Biodiesel’s role in California drew interest as several individuals spoke about the state’s stringent air emissions standards. Dean Simeroth, California Air Resources Board (CARB), noted that biodiesel can be used in the state so long as it meets California’s diesel regulations for sulfur and aromatics, which it does; however, he added that retail sales are limited to a blend of 20 percent biodiesel (B20) or less. Mike Smith, California Energy Commission, pointed out that the state consumes 2.8 billion gallons of diesel fuel annually in on-road use alone, making it the second largest consumer of diesel in the world behind the United States. And although the Energy Commission is recommending all diesel fuel contain a minimum of five percent non-petroleum fuel, including Fischer-Tropes diesel, Smith recognized that California has a lot to learn from other states in how to expand its alternative fuels market, specifically biodiesel.
Perhaps the most memorable speaker in the session was Randy Friedman, Navy Region Southwest, who is involved with the Navy’s biodiesel program in Ventura County, CA. He said that testing being conducted on the Navy’s vehicles using biodiesel fuel show “there were no statistically significant emissions difference found between biodiesel fuels manufactured from yellow grease or soybean oil feedstocks and an extensive statistical analyses indicated no statistically significant difference in hydrocarbon, carbon monoxide, nitrogen oxides (NOx), or particulate matter emissions between a B20 biodiesel manufactured at Naval Base Ventura County from yellow grease and CARB ultra-low-sulfur diesel petro diesel.”
The audience loudly applauded Friedman’s statement with many encouraging wider dissemination of these findings that are significant to the biodiesel industry, especially in California. Friedman said the final testing report was due out in May 2006 and would be made available to the NBB.
Other notable speakers appeared at the general session on the second day of the conference, including EPA Administrator Stephen L. Johnson, who believes, “Our country is on the verge of a dramatic change in how we power our cars, our homes, and our businesses. And innovation – including innovations in biodiesel – is the catalyst of this change.” He touched on President George W. Bush’s energy plan that includes alternative fuels and recognized the environmental benefits of biodiesel, adding that he thinks the U.S. agricultural industry is strong and up to the challenge when it comes to reducing foreign oil.
Deborah Morrissett, DaimlerChrysler, shared the vehicle manufacturer’s enthusiasm for alternative fuels and their use in the company’s vehicles.
“We know that clean, renewable American-made biodiesel extends the benefits of diesel,” she said. “We’re already encouraging the use of biodiesel by fueling each Jeep Liberty diesel vehicle with B5, five percent biodiesel, when it leaves our assembly plant in Toledo, OH.” The automaker recently approved and endorsed the use of B20 in diesel-powered Dodge Ram pick-up trucks operated by their government, military, and commercial fleet customers beginning with the 2007 model year this fall (see “Biodiesel Bulletin” on page 48). The company is also setting a long-term goal of making high-quality biodiesel available to diesel customers across the United States.
“But first we must guarantee our customers that fuel available at their stations meets the high-quality standards no matter where they buy it,” Morrissett stated.
Discussing biodiesel from a user’s perspective was Terry Taylor, Sysco Corporation. The food service company has the largest independent fleet in the United States, boasting 6,000 Class 8 tractors and 11,000 trailers that consume 67 million gallons of diesel per year. Although they would like to use a higher blend, Sysco is only using five percent biodiesel in about 400 tractors due to original equipment manufacturer restrictions. Taylor said the company requires their biodiesel fuel to meet BQ-9000 standards and that one obstacle is availability of biodiesel at a good price.
“The message I want to leave here and that everyone gets is we would use more biodiesel if it was available to us, at a high quality, and at a competitive price,” Taylor commented, adding that Sysco sees biodiesel as a way to help raise the lubricity level of ultra-low-sulfur diesel.
Dedication to Quality Continues
Biodiesel quality took center stage for several sessions, beginning with Steve Westbrook, ASTM International, who briefly explained ASTM’s role and membership. He said that ASTM does not certify anything but provides specifications, test methods, and practices developed by its members. Westbrook clarified that the current ASTM standard for biodiesel, D6751, defines 100 percent biodiesel as a blend component, not as a finished fuel, and that work is underway on a standalone specification for B20.
Several speakers addressed the quality problems experienced in Minnesota this winter that led to the suspension of mandatory blending of two percent biodiesel in the state’s diesel fuel (see “Biodiesel Bulletin,” February 2006 Render). Steve Howell, MARC-IV Consulting, said programs are being put in place to help guarantee biodiesel is meeting quality specifications, including an analysis certification that will be presented to petroleum blenders and a test to ensure cold flow properties are met. Rod Lawrence, Magellan Midstream Partners, said the petroleum distributor is committed to the biodiesel market in Minnesota and checks that biodiesel arriving at their terminal meets ASTM specifications.
Marathon Petroleum Company maintains their biodiesel supply at a constant 70 degrees Fahrenheit before blending to ensure the fuel remains fluid, according to David Blatnik. He feels the biodiesel industry needs a better understanding of the petroleum industry and vice-versa. Several key issues learned in Minnesota were the lack of independent laboratories for testing, even within the petroleum industry; biodiesel is used as a lubricity agent; and biodiesel producers should certify that their fuel meets ASTM specifications.
Howell reminded everyone that companies who produce biodiesel need to be committed to quality and biodiesel users/distributors need to commit to only buying quality fuel that meets specifications.
“This is a new industry and the bad apples will be weeded out,” Howell commented.
Renderers Pleased with Conference
Renderers who attended the conference were eager to network and learn what they could about this new industry. They were not disappointed.
“I went to meet buyers and hear how the U.S. market is developing,” said Canadian renderer and biodiesel producer Ron Wardrop, Rothsay. “This was accomplished by the size of the conference and the quality of the people who attended. It was a great networking event.”
“There is much more interest and participation now from those not necessarily connected with feedstocks,” commented Fred Wellons, Baker Commodities. “The biodiesel industry is becoming less associated with feedstock producers and more towards involvement from petroleum marketers, entrepreneurs, financial backers, and others.”
Most agreed that even if a renderer is not planning to produce biodiesel or sell their products to biodiesel producers, knowing about the industry is important because of the impact it will have on rendered products.
“The marketplace for renderers’ finished products will be changing dramatically due to the need for feedstock,” stated Mike Langenhorst, Sanimax. “As the biodiesel market becomes a pull market, demand equals or outstrips production, the dynamics of the fats and oils markets will change dramatically.”
Chuck Neece, Central Bi-Products, Inc., pointed out that “an understanding of the opportunities for the rendering/waste grease industry and the impact on product values is very important, even if the company doesn’t plan on producing biodiesel.”
“Even if renderers are not choosing to build biodiesel plants, they do need to find out what’s happening,” Wellons added. “Renderers need to note that they have a new market: biodiesel producers. They should also be aware that there may be new competitors for raw materials, especially recycled cooking oil.”
Next year’s biodiesel conference is scheduled for February 4-7, 2007, in San Antonio, TX.
April 2006 Render