By Tina Caparella
The biodiesel industry continues to grow, and the U.S. government just made it easier for some who are considering jumping into the market.
In December, the U.S. Department of Agriculture (USDA) approved over $28.7 million in rural development grants to promote the development of new products and markets for agriculturally based products in 40 states.
Along with $150,000 in funding to assist in the start-up of a winery in Iowa and $55,000 to market a more “consumer friendly” Christmas tree, multiple grants were awarded for a variety of biodiesel projects.
One of the larger grants approved was for $500,000 to Farmers Union Marketing and Processing, Minnesota, for operation of a proposed 2.8 million gallon per year continuous flow biodiesel processing facility using animal fats and vegetable oils from its livestock rendering operation.
While a step in the right direction for the rendering industry, most of USDA’s biodiesel grants approved focus on fuel produced from oilseed crops.
• Blue Sun Producers, Inc., Colorado, to receive $450,000 to “increase membership base and sustainability to produce efficient and profitable oilseed crops for production of renewable, domestically produced biodiesel fuel.”
• The West Elevator Company, West Bend, IA, to receive $30,500 to “assist them in the planning and development of a proposed biodiesel production plant.”
• Midwest Grain Processors, Lakota, IA, to receive $150,000 to “assist the group in the planning and development of a proposed expansion of the existing ethanol facility, along with the development of a biodiesel production facility.”
• The National Trail Biodiesel Cooperative, Illinois, to receive $33,000 to “establish a soybean meal/biodiesel processing facility in south central/southeastern Illinois.”
• Union County Biodiesel, Kentucky, to receive $25,255 for a “feasibility study and business plan on the conversion of raw soybeans into soy diesel and soybean meal animal feed.”
• Hopkinsville Elevator Co., Inc., Kentucky, to receive $87,500 for a “feasibility study and preliminary planning project focused on a soybean processing and biodiesel production facility.”
• Hallock Cooperative Elevator Company, Minnesota, to receive $50,000 to “explore the feasibility and develop a business plan for a prospective biodiesel production facility.”
• The Biodiesel Steering Committee, Nebraska, to receive $121,000 for a southeast Nebraska biodiesel initiative that seeks “planning funds for a feasibility study of a biodiesel plant.”
• The Progressive Producers Nonstock Cooperative, Nebraska, to receive $450,000 in a “working capital grant to…produce efficient and profitable oilseed crops for production of clean, renewable, domestic produced premium biodiesel fuel.”
• Columbia County Farm Bureau, Inc., Washington, to receive $50,000 to “complete a feasibility study and business plan to assess the economic potential of growing and processing oilseeds for oil production to be used in a biodiesel fuel oil.”
Funding of selected applicants will be contingent upon meeting the conditions of the grant agreement.
Biobased Products to be Preferred
The USDA has published a proposed rule to implement a preferred procurement program for biobased products, including biodiesel, by federal agencies.
The Federal Biobased Procurement Program was authorized by Section 9002 of the 2002 Farm Bill. When fully implemented, the program will require federal agencies to greatly increase their use of biobased industrial products. Agencies will be required to purchase biobased industrial products whenever their cost if not substantially higher than fossil energy-based alternatives, when biobased industrial products are available, and when biobased industrial products meet the performance requirements of the federal user.
The proposed rule details the process by which the USDA will designate “items,” which are generic groupings of similar biobased products, such as hydraulic and transmission fluids. To designate an item, USDA must obtain and make available information such as availability, relative price, performance, and environment and public health benefits for the items and biobased materials designated for preferred procurement. Items will be designated through subsequent regulations.
Once an item is designated, every manufacturer and vendor producing and marketing products contained within that item are eligible for preferred procurement status when marketing their products to federal agencies. Manufacturers must certify that the biobased content in their products is consistent with the statutory definition of biobased products. They must also certify that they have had third party testing of the biobased content.
For more information about the program, proposed rule, and comment submission, visit www.biobased.oce.usda.gov, or contact Marvin Duncan, Office of Energy Policy and New Uses, at (202) 401-0532, or e-mail mduncan@oce.usda.gov.
Biomass Research Grants Available
The USDA and the U.S. Department of Energy (DOE) are soliciting applications for financial assistance addressing research, development, and demonstration of biomass-based products, bioenergy, biofuels, biopower, and related processes. The fiscal year 2004 (FY04) funding opportunity is intended to promote greater innovation and development related to biomass, and to support federal policy calling for greater use of biomass-based products, feedstock production, and processing and conversion.
According to USDA/DOE, the joint solicitation for FY04 is more focused and defined than in previous years in order to assist the departments in developing a more balanced portfolio of work products under this financial assistance program. This year’s focus is on development and demonstration projects that lead to greater commercialization.
Applications are due by 6 p.m., March 26, 2004. For more information, access the DOE Golden Field Office home page at www.go.doe.gov/funding.html, or contact Mary Hartford by fax at (303) 275-4788, or e-mail Mary.Hartford@go.doe.gov.
Renderer Donates Fuel for Buses
In November, two programs were launched in eastern Washington that will noticeably cut diesel air pollution for school children. School buses in the region are being retrofitted to significantly reduce toxic diesel emissions and will also begin using biodiesel. The Washington state legislature passed a bill last year that provides approximately $5 million statewide for the program in the current fiscal year, which ends June 30, 2004. Lawmakers committed to continuing that level of funding for five years to reach approximately 5,000 of the more than 9,000 school buses in the state.
Central Valley School District, one of two school districts in Washington chosen to take part in the biodiesel pilot project, began using a blend of 20 percent biodiesel and 80 percent ultra-low sulfur petroleum diesel in November. Baker Commodities, a renderer with plants throughout the United States, including Washington, donated the first 800 gallons of biodiesel being blended into 4,000 gallons of diesel that the school district will use.
“We’re very excited about using these alternative fuels to reduce air pollution,” said Jim Armstrong, Spokane County Conservation District. According to Armstrong, Baker Commodities is currently doing market research and feasibility studies for biodiesel production facilities in Washington, with Spokane being identified as one of the possible plant locations.
Biodiesel Good for Georgia
A study by the University of Georgia (UGA) Center for Agribusiness and Economic Development has determined that biodiesel is a good choice for Georgia because the state is a leader in poultry fat and vegetable oil production. When other animal fats are added in, the state generates one billion pounds of fats and oils annually.
The study found that biodiesel could not yet compete with the cost of producing diesel fuel, but the cost difference is so small that it could be managed by state subsidies or the elimination of state taxes on the alternative fuel. According to the UGA study, the economic impact of a Georgia biodiesel plant producing 15 million gallons a year would be a $34 million annual boost to the state economy.
The environmental impact could be even greater, as air pollution is a problem for the Atlanta and middle Georgia regions. According to a Macon Telegraph article, the Environmental Protection Agency has said it plans to put Bibb, Houston, and Monroe counties in a “non-attainment zone” for failing to meet federal standards for ozone, the main ingredient of smog. As part of its strategy for cleaning up the air, the middle Georgia area could be required to increase the use of cleaner fuels such as biodiesel.
Dupps, Biosource Reach Agreement
The Dupps Company has reached an agreement with Biosource Fuels, LLC, Kenosha, WI, to become the preferred source for the manufacture and installation of the process systems and equipment designed by Biosource to produce biodiesel. The new partnership will combine the design and technology experience of Biosource with Dupps’ manufacturing capability to provide continuous processing equipment that utilizes a variety of animal fat and vegetable oil feedstocks.
Yosemite to Produce Biodiesel
Although many U.S. national parks have used biodiesel in their fleets for years, Yosemite National Park in California will become the first park to produce its own alternative fuel on-site.
Delaware North Parks and Resorts, the concessionaire contracted with the National Park Service to provide guest services in Yosemite, is developing a biodiesel production facility in the park to give the company access to the fuel for use in their passenger and facility vehicles while saving the cost of transporting used cooking oil for processing and improving the park’s air quality. Estimates are the plant will process about 8,000 gallons of used cooking oil per year.
The processing equipment is designed and built by Biodiesel Industries, based in Santa Barbara, CA, under their pending patent and is similar to a unit the company designed and installed for use with the U.S. Navy (see “Biodiesel Bulletin,” December 2003 Render). According to Russ Teall, chief executive officer, Biodiesel Industries, the unit is about one-tenth the size of the large production units the company operates in Las Vegas, NV, and Rutherford, Australia, and is compact enough to fit behind a standard pick-up truck. Part of the project includes working with California’s Air Resource Board and the University of California at Riverside to document emissions.
Producer Adds Reactor and Plant
American Biofuels (ABF) and Green Star Products, Inc., have installed a second 2.5-million gallon reactor at their Bakersfield, CA, biodiesel facility, in tandem with the first. With the new installation, the production capacity of the plant has increased from 50,000 gallons per week (2.5-million per year) to 100,000 gallons per week (five million gallons per year). Production of the continuous-flow biodiesel plant began in mid-November.
According to ABF Director Joe LaStella, increased pollution and resulting regulatory pressures administered by both the state and federal government are driving an increased demand for biodiesel in California and beyond. According to news reports, the North American Power Group (NAPG) issued a request for proposals in November 2003 for “the supply of biodiesel for electrical generating assets located in California.” NAPG is proposing a 100-megawatt biodiesel facility in Bakersfield whose output would be sold to Southern California Edison. The plant, pending approval by the California Energy Commission, would come online in 2004 or 2005 and would initially require up to 25 million gallons of biodiesel per year.
Along with the expansion of the Bakersfield plant, ABF is building a second continuous flow facility within the Phoenix, AZ, area. The plant, to be located in Buckeye, AZ, 30 miles west of Phoenix along Interstate 10, includes a 9,000 square foot building with office space and a railroad spur adjacent to a covered loading dock. The plant, scheduled to be online this spring, could handle the processing and production of 10 million to 15 million gallons per year.
Biodiesel Bulletin - February 2004 Render