By Tina Caparella
Three years ago, they numbered about 600. This year, 3,800 traveled to San Antonio, TX, in early February to learn all there is about biodiesel at the National Biodiesel Conference and Expo. And while the tone of the conference was on government policy, alternatives to soybean oil as a feedstock, including rendered products, also took on an importance.
One of the many conference sessions focused on feedstock diversification and the packed room gave an indication that attendees were seeking alternatives. Jim Conway, Griffin Industries, moderated the session.
“Soybeans will continue to be the primary feedstock [for biodiesel production],” Conway stated. “But if we are to sustain growth, we have to find other viable, economical feedstuffs.”
One alternative was presented by National Renderers Association (NRA) Chairman David Kaluzny II, Kaluzny Bros., a renderer based in Joliet, IL. He provided American Fats and Oils Association specifications on rendered fats and oils, explained their availability in various parts of the United States, and shared the infrastructure renderers already have in place to collect and process yellow grease.
Kaluzny reminded attendees that when dealing with rendered fats and oils, a pretreatment system is necessary because of the high free fatty acid levels, which is a measurement of degradation. He informed the future buyers that they are competing in an open market with traditional customers, both domestically and internationally. In answer to one audience member’s question about the cloud point of rendered products, Kaluzny stated that research shows cloud point is not an issue and only varies by one to two degrees Fahrenheit when animal fat-based biodiesel is blended with petroleum diesel at 20 percent or lower blends.
Another indication of the growing interest for alternative feedstocks was at the conference’s expo. Render magazine and NRA hosted a booth at the trade show to disseminate information on the rendering industry, including the February 2007 issue of Render. Attendees flocked to the booth with questions on the industry and how to contact renderers for feedstocks. The interest in alternative feedstocks appears to be caused by the increasing price of soybean oil.
Government policy was the key topic of the conference. Joe Jobe, chief executive officer, National Biodiesel Board (NBB), opened the three-day event by claiming, “Public policy matters.” He provided examples of the industry’s efforts toward public policy, including the battle last year in getting Texas to delay becoming the first state to ban biodiesel. Jobe also highlighted NBB’s approval of a “5x’15” policy, in which the industry will strive to displace five percent of the diesel fuel market by 2015. Low blends such as B5 (five percent biodiesel, 95 percent petroleum diesel) will be the largest market.
“This is a very aggressive goal,” Jobe explained. “This will require stimulation of additional feedstocks.” Jobe explained how public policy plays a role in biodiesel’s future, beginning with the extension of the biodiesel tax credit. Legislation has been introduced to make the credit permanent, but Congress needs to be educated on biodiesel’s role in America. Also, partners such as the petroleum industry are important to the industry and the American Trucking Association has enacted a policy of voluntary use of biodiesel blends up to five percent.
“Please get involved with NBB’s policy efforts,” Jobe encouraged. “Let our diversity be our strength, not our weakness on public policy.”
Reinforcing Jobe’s sentiment were four congressmen who participated in a question and answer session. Collin Peterson (D-MN), Thaddeus McCotter (R-MI), Dave Weldon (R-FL), and Kenny Hulshof (R-MO) reiterated that Congress needs to be educated on biodiesel, especially to gain support of House of Representatives Bill 196, which will make the biodiesel tax credit permanent.
As in previous conferences, celebrities made an appearance to voice their support for alternative fuels and biodiesel. This year, Larry Hagman, who played J.R. Ewing on the television show Dallas and a proponent of solar energy, took the stage to praise the industry’s efforts in producing “liquid sunshine” and encouraged attendees to become active in NBB’s Political Action Committee. Hagman also kicked off the conference’s Ride-and-Drive event, test driving a 2007 Volkswagen Touareg TDI filled with a B5 blend.
“I think biodiesel is the future of the U.S.,” said Hagman. “Biodiesel, ethanol, wind power, solar power – we’ve got to go to these alternative ways of making energy. We also have to conserve more of the energy we use.” All conference attendees had the opportunity to test drive several new vehicles and trucks running on biodiesel blends up to 20 percent, including DaimlerChrysler’s 2007 Jeep Grand Cherokee common-rail diesel that will be factory-filled with B5. The automaker’s Dodge Ram was also available to test drive, which has been approved to use a 20 percent biodiesel blend for commercial, government, and military fleets that use military specification biodiesel fuel.
Other celebrities making an appearance at the conference were actress Darryl Hannah and country music legend Merle Haggard, who entertained attendees with an evening concert.
Public Policy Proves Popular
The conference’s multi-track schedule covered many interests, from production and fuel distribution to users and markets. But the theme of the conference, public policy, proved to be popular among the sessions. One session addressed the multitude of state regulations recently passed and introduced that target biodiesel. In 2006, 2,843 bills were analyzed, with 228 found to specifically relate to biodiesel. Of those, 54 became law in 27 states.
“The growth in states has been tremendous,” stated Josh Zahn, Zahn Public Affairs. Bills covered incentives, requirements, state fleet mandates, point of taxation, research studies and task forces, definitions/standards, and executive orders, with one state, Louisiana, mandating a feedstock preference. In just the first month of 2007, over 100 bills had been introduced that relate to biodiesel, with many focusing on fuel quality.
In California, which has fallen behind the rest of the country in biodiesel use, promotion, and production, Senator Dean Florez has introduced seven comprehensive bills being presented as a package.
• Senate Bill (SB) 70 establishes biodiesel as a fuel, not an additive.
• SB 71 requires all diesel vehicles owned or leased by state, county, and city governments to use a minimum blend of 20 percent biodiesel (B20).
• SB 72 requires school buses to use B20 or higher with the state providing reimbursement.
• SB 73 provides a 30-cent per gallon credit for biodiesel produced in California, up to the first 30 million gallons.
• SB 74 provides a tax exemption on biodiesel and the equipment purchased to manufacture and store the fuel. It also provides tax credits for the production and sale of biodiesel.
• SB 75 requires state vehicles purchased or leased to be a “warranty-certified” vehicle that uses at least B20.
• SB 76 creates a California Biodiesel Investment Account to provide grants to encourage installation of biodiesel pumps, encourage growth and use of crops for biodiesel, and fund research on the growth and expansion of a biodiesel industry in the state.
National energy legislation was also addressed at the conference. Last year, Democrats in the House of Representatives released A New Direction for America, in which they propose to double the percentage of renewable fuels sold in six years, making sure that biodiesel and cellulosic sources, such as switch grass, are a key part of that increase. In the initiative, they also propose to extend the tax credit for ethanol and biofuels through 2015.
Another session focused on this year’s farm bill, which Lloyd Ritter, Green Capital, LLC, felt would be similar to what’s already in place but perhaps expanded and refined. Beverly Paul, the American Soybean Association’s (ASA’s) Washington representative, believes budget problems will be an issue for the new farm bill. The ASA is pushing to continue the government’s Commodity Credit Corporation program and increase the biodiesel education program from its current $1 million budget to $2 million.
A concern voiced among some attendees is the tax credit being applied and extended to imported biodiesel or feedstock. Although some disagree with allowing imported fuel and feedstock to receive the tax credit, it was pointed out that not allowing it would violate World Trade Organization rules.
Not Just All Politics
While public policy was a hot topic, other areas of interest drew attention, including last year’s theme: quality. NBB Chairman Darryl Brinkmann noted that the board has a fuel quality guide available on its Web site at www.biodiesel.org for consumers and government, and that NBB is working with the Internal Revenue Service to enforce quality standards for those claiming the excise tax credit.
“People need to know their fuel is reliable,” Brinkmann commented. Currently there are six marketers and 17 producers accredited under NBB’s BQ-9000 quality program, which represents 40 percent of the nation’s biodiesel capacity.
Transporting and storing biodiesel and feedstocks was another issue that drew interest. Speakers emphasized that producers need to have a balanced and flexible approach to their transportation needs and depend on as many methods as possible, and that any type of vehicle transporting palm oil or animal fats needs to be insulated. Michael Szady, World Energy, said that tank trucks are preferred for local delivery – less than 300 miles – because of the 12-hour limit on drivers that must include the time it takes to load and unload. He added that railcars are ideal for transporting feedstocks and glycerin, but with the growing ethanol industry ordering a large number of railcars, there is a backlog of over 85,000 railcars.
Quality control should be the first priority throughout the supply chain and transportation concerns include water contamination, temperature moderation, and proper cleanout of the transportation vehicle. Under a new maritime law that went into effect January 2007, vegetable oils and animal fats transported by ocean vessel must be in double hull containers.
For the fourth year, key players in the biodiesel industry were recognized with NBB’s “Eye on Biodiesel” awards. This years recipients were:
• Innovation – Gene Hemphill, New Holland Co., for his advocacy in getting the original equipment manufacturer to approve the use of B20 in all of its equipment using New Holland engines.
• Industry Partnership – Rod Lawrence, Magellan Midstream Partners, LP, for his leadership role in developing the industry’s BQ-9000 program as well as ASTM International specifications.
• Impact – Sprague Energy, a Northeastern petroleum distributor that was the first petroleum company in the country to become a BQ-9000 certified marketer.
• Inspiration – Brie Mathews and Mike Ferry, San Francisco Fire Department, for their persuasion in getting the department to conduct a pilot program of using B20 in some of its fire trucks, engines, and an ambulance, with plans to go department-wide.
• Influencer – Bill and Cindy Mack, radio show hosts well-known and admired by U.S. truckers, for significantly increasing the awareness of biodiesel in that large market.
Jim Gay, a founding member of the original national biodiesel organization, received the Pioneer Award.
Next year’s National Biodiesel Conference will be held February 3-6, 2008, in Orlando, FL.
April 2007 Render