Despite some stormy weather, renderers throughout the Midwest traveled to Wisconsin Dells, WI, in early June to hear presenters talk about energy, going green, biodiesel, and livestock at the National Renderers Association (NRA) Central Region Convention.
The day-long agenda began with Paul Duke, BP Canada Marketing, discussing oil, natural gas, and power. He explained that North America is a “have not” when it comes to oil reserves, coming in second to last globally with 59.9 billion barrels of oil in reserves (the Asia Pacific region has the least oil reserves at 40.5 billion barrels). It was no surprise that the Middle East holds the top spot in reserves at 742.7 billion barrels. World oil production currently stands at over 80 million barrels per day, with the Middle East growing in recent years to become the biggest producer, while Europe/Eurasia (former Soviet Union/Russia) and North America have held steady at second and third, respectively, in production. Oil consumption on the other hand is seeing a rapid growth in the Asia Pacific region, with all other regions maintaining their consumption levels.
As for natural gas, Duke remarked that production in North America has flattened out over the last five to six years. Eighty percent of natural gas supplied to the United States is produced in the country, with about 15 percent imported from Canada. Usage is equally divided between industrial, commercial, residential, and for electrical power, although increased usage for electric generation has averaged about 7.5 percent per year with growth likely to continue.
“That’s a substantial hit on availability of supply,” Duke commented. He added that currently, the United States is running a deficit on natural gas storage compared to last year so prices this year could go up with the key drivers being weather (i.e., summer heat and hurricane season), lower Canadian imports, demand for power generation, and liquefied natural gas imports.
Tom Pahl, ChemTreat, Inc., discussed what it means to be “green”: protect the environment, conserve water and energy, reduce greenhouse gases, reduce solid waste, and increase recycling. He detailed how to implement a green project in three steps:
1. Identify all areas of the plant and how they could potentially affect each other.
2. Identify potential improvement projects.
3. Prioritize projects based on individual plant sustainability goals, return on investment, and ease of implementation.
Pahl revealed one case study where over an eight- to nine-month period the company was able to shift $1.8 million in water surcharges to a nearly $1.5 million profit. He said not only did the company see a significant cost savings, but more importantly, 6.88 million gallons of sludge was no longer land applied. Pahl informed attendees that grants are available that could help pay for an anaerobic digestion feasibility study.
Guy Tourginy, Natural Resources Canada, CANMET Energy Technology Center-Ottawa (CETC-O), highlighted various projects the center is working on to create diesel fuel from waste triglycerides. The challenge is converting animal fats and trap grease because of contaminants and high free fatty acids. One product, trademarked AVRO for animal vegetable recycle oil, is a three-step process that begins with thermal cracking of waste grease, then acid esterification of the raw product, and, finally, base treatment, which results in AVRO diesel that could meet diesel specifications. CETC-O is working on other projects, including an advanced biofuels catalytically deoxygenated process, production of high cetane diesel fuels from low-quality triglyceride feedstocks, and converting glycerol to a gasoline additive and hydrogen.
Larry Schafer, National Biodiesel Board, compared the various fuels Americans used in 2007: gasoline, 145 billion gallons; diesel, 60 billion gallons (on and off-road); 85 percent ethanol, 100 million gallons; ethanol as a 10 percent additive, 7 billion gallons; and biodiesel, 450 million gallons, displacing nearly 20 million barrels of petroleum. Currently there is over two billion gallons of biodiesel capacity with only 450 million gallons produced last year. The biodiesel industry’s goal is to displace five percent of on-road diesel by 2015 with a variety of blends (from two percent to five percent biodiesel), which equates to 1.85 billion gallons of biodiesel per year.
“We have the feedstocks available to get to the two billion gallon mark,” Schafer stated. Currently, five states have biodiesel mandates in place with other states looking into that option. Schafer reported that 40 percent of feedstocks used to produce biodiesel in 2007 were a combination of animal fats/used restaurant oil/other oils, while 60 percent of the feedstocks were soy oil. He said that what is leading the biodiesel industry’s growth is the renewable fuel standard, sustained high diesel and oil prices, state biodiesel and ethanol programs/mandates, and biodiesel’s environmentally-friendly profile.
On the legislative platform, House of Representatives (H.R.) Bill 6049 is a $50 billion tax bill that includes a $450 million portion related to biodiesel. In the bill are an extension of the current tax incentives to December 31, 2009, and a leveling of the playing field regarding feedstocks. Currently, “first use” oils such as soy oil and animal fats receive a $1.00 per gallon tax credit while “second use” oils such as recycled cooking oil receive a 50 cents per gallon credit. In H.R. 6049, all oils will receive the $1.00 per gallon credit, allowing producers to use multiple feedstocks at the same time to produce biodiesel.
Renewable diesel is also included in the bill and will receive the same credit as other oils; however, “co-processed” renewable diesel, that which is processed at a petroleum plant, will still receive the 50 cents per gallon credit. The bill also eliminates the so-called “splash and dash” provision that has been taken advantage of by biodiesel producers in other countries. Schafer predicted the Senate Finance Committee would address the bill before July 4, 2008.
Schafer emphasized that fuel quality is still very important to the biodiesel industry and explained that the renewable identification number program is a way to keep track of biodiesel.
John Lawrence made a return visit to the convention with a recap of the livestock industry. He pointed out that this quarter will be the peak in meat production for the year, which will then start to decline, and that through early June, red meat and poultry production is up over the same period in 2007. Lawrence noted that ethanol is not driving meat prices and that higher feed costs have not limited supply yet, although there are signs that the pork and poultry industries are starting to pull back.
In Canada, producers have been reducing their sow herds over the last two years; the animals are not allowed into the food supply but instead must be rendered.
Sustainable waste management was the topic of the last discussion of the day by Henry Probst, ProCorp Enterprises, who explained that from the 1970s to 1980s, waste management was regulatory driven; from the 1990s to 2000s, it was market driven; and in 2008 and beyond it will be financially driven, meaning costs must be reduced. On the plus side, he said there are plenty of incentives to drive renewable energy projects, especially in wastewater.
“Green has to make cents,” Probst proclaimed. He highlighted the various types of digesters available, including upflow anaerobic sludge blanket, mobilized film technology, plug flow, hybrids, and complete mix, which is preferred by Probst because it provides several benefits such as buffering capacity, is mechanically simple, and maximizes gas production.
Later that evening, convention attendees mingled and networked with industry suppliers at the tabletop exhibit, gathering information on the latest products and services that could benefit their businesses.
The central region held their business meeting the following morning, beginning with NRA President Tom Cook discussing the Food and Drug Administration’s finalized feed rule and the rendering industry’s efforts to get equal tax credit for rendered products in biodiesel production.
The central region then voted to donate $4,000 to the Fats and Proteins Research Foundation and adjourned until June 2009 when they will meet in Lake Geneva, WI.
August 2008 RENDER | back