Biodiesel Industry Takes Step to Stop RIN Fraud

By Tina Caparella


The National Biodiesel Board (NBB) has created a task force to try to prevent fraud in the renewable identification number (RIN) credit market. Two companies are currently under investigation by the Environmental Protection Agency (EPA) for violating the federal Clean Water Act by creating and selling biodiesel RINs without manufacturing or importing the fuel connected to those numbers. The RIN system was designed by the EPA to ensure that physical gallons of biodiesel are being produced and, in turn, blended by obligated parties to meet their volume requirements mandated under the federal Renewal Fuel Standard.

The 12-member task force includes small and large biodiesel plants along with petroleum refiners and distributors and EPA staff. They are: Gary Haer, co-chair, Renewable Energy Group, Inc.; David Blatnik, co-chair, Marathon Petroleum Co., LP; Gene Gebolys, World Energy Group; Janice Raburn, BP Products North America; Mary Manners, EPA; Jennifer Case, New Leaf Biofuel; Sam Bell, Echos Oils Co. and Petroleum Marketers Association of America; Nick Economides, Chevron; Jonathon Phillips, RBF Port Neches, LLC; David Dobbins, Pilot; Leif Forer, Piedmont Biofuels; and Len Federico, Louis Dreyfus Commodities. Three technical and/or support staff include Fred Walas, Marathon Petroleum, and NBB’s Joe Jobe and Larry Schafer.

During its first town hall meeting with members in early March, the NBB task force introduced an “audit option” that incorporates Genscape’s RIN Integrity Network. The NBB selected the company’s network to “provide transparency and promote integrity for producers in this important and growing market,” Genscape states on its Web site. The company is a global provider of energy information for commodity and financial markets.

According to Genscape, obligated parties that subscribe to its service will view a health score of each participating facility and view details including photos and the status of key integrity documents. In a single view, all facilities promoting their integrity will be visible on an equal stage.

“While protecting the privacy of each individual facility, the ongoing monitoring will provide a new level of transparency and integrity to fully realize the potential of America’s biodiesel industry,” Genscape stated on its Web site.

On October 3, 2011, Rodney R. Hailey, owner of Clean Green Fuels, LLC, was charged with wire fraud, money laundering, and violating the Clean Air Act. The charges arose from a scheme in which he and his company allegedly generated and sold over 32 million RINs, but neither produced or imported any renewable fuel. EPA subsequently issued 24 notices of violations to companies who retired invalid biomass-based diesel RINs from Clean Green Fuels to comply with their renewable volume obligations.

On February 2, 2012, EPA notified Absolute Fuels, LLC, that it too violated the Clean Air Act for more than a year by creating and selling biodiesel RINs without manufacturing the fuel connected with those numbers. All RINs generated by Absolute Fuels from August 31, 2010, through October 11, 2011, estimated to be over 48 million, have been deemed invalid by EPA. The agency and U.S. Secret Service agents performed a series of raids last fall at the company’s headquarters in Lubbock, TX, and the personal residence of chief executive officer Jeff Gunselman. Both investigations are ongoing.

Bridgeport BioDiesel Opens in Connecticut

Using the used cooking oil collected from clients in Fairfield County, Bridgeport BioDiesel has begun production at its three million gallon per year biodiesel plant in Bridgeport, CT. Initially, the facility expects to produce about one million gallons per year. The company has signed on more than 100 used cooking oil collection clients that include restaurants, hospitals, and schools, and plans to expand into other parts of Connecticut and eventually New York.

Connecticut law requires restaurants to separate their used oils from regular trash and dispose of it properly.

Bridgeport BioDiesel is also seeking approval to process brown grease. Once it receives its permits, which were expected soon, the company will build the second facility quickly, according to partner David Butler.

New Jersey Recycler Unveils Biodiesel Facility

American By-Products Recyclers, LLC, unveiled its new state-of-the-art biodiesel plant in Hillsborough, NJ, in mid-February. The 24,000 square-foot facility, Planet Earth Biodiesel, processes used cooking oil that American By-Products Recyclers collects from restaurants all over New York and New Jersey into biodiesel.

“On behalf of Hillsborough Township, we are delighted to have Planet Earth Biodiesel as part of the Hillsborough community,” said Mayor Carl Suraci as he and 40 close family members of owners Robert Soracco and Todd Magee gathered at the unveiling. “They are a great addition to our business community and we wish them much success. I love the tag line – Green Since 1914. It just goes to prove that sustainability and being green has transcended many generations and will continue to do so.” Suraci performed the ribbon-cutting ceremony on the main factory floor, flanked by 15,000 gallon oil tanks, before guests were treated to a reception and a private tour of the facility.

American By-Products used the unveiling to also mark the 100th birthday of John “Poppy” Soracco, one of the founders of the company, who used to travel around New York City collecting wood barrels of used restaurant oil with a horse and carriage.

“We are proud to carry on my great grandfather’s and grandfather’s tradition,” stated Magee. “This factory would have been a dream come true for them. Having our own biodiesel facility brings us further in our mission to make a green impact, and reduce this country’s dependency on foreign oil. We’re grateful to the town of Hillsborough for welcoming us into this community.”

American By-Products, LLC, is a family-owned and operated company that has seen four generations of family ownership and will celebrate 100 years in 2014.

Dynamic Fuels Forms Alliance with Mansfield Oil

Dynamic Fuels, LLC, operator of the first commercial renewable diesel plant in the United States, has entered into strategic marketing alliance, commercial off-take, and supply chain management agreements with Mansfield Oil Company to distribute renewable diesel to the commercial fleet vehicle market. The two companies then proceeded to sign an agreement to supply renewable diesel to Norfolk Southern Corporation, one of the largest transporters of coal and industrial products in the United States. Norfolk Southern has been using 100 percent Dynamic Fuels renewable diesel at its Meridian, MS, rail yard since early January.

A joint venture of Tyson Foods, Inc., and Syntroleum Corporation, Dynamic Fuels’ Geismar, LA, facility has the capacity to produce up to 75 million gallons of renewable diesel annually. Mansfield Oil markets and distributes over 2.5 billion gallons of fuel products per year to thousands of commercial customers across all 50 states and Canada.

New Legislative Advocacy Web Site Launched

Renewable Energy Group (REG) has launched a new policy advocacy Web site designed to centralize the company’s constituents and rally support for biodiesel policy issues. Registration and more information are available at http://advocacy.regi.com.

“We are urging the friends of REG – who may be vendors, customers, suppliers, partners, shareholders, or family members – to sign up to receive federal and state legislative updates and calls to action,” said Scott Hedderich, director, Corporate Affairs. “The biodiesel industry is facing important issues like the expansion of RFS2 [Renewable Fuel Standard] and the reinstatement of the federal blenders tax incentive in order to grow green collar job creation, create a healthy environment, and expand energy security.”

The new site design allows supporters to sign up for informational updates and alerts and then offers an easy-to-use platform to contact state or federal elected officials. REG plans to use the Web site, in part, to extend the industry’s federal policy outreach programs. The company stated that with biodiesel plants in Iowa, Illinois, Minnesota, and Texas; additional facilities to be completed in Louisiana, New Mexico, and Kansas; and a nationwide logistics footprint, it is important to identify and build localized support.

Student’s Idea Fuels Production Facility

Last year Embry-Riddle Aeronautical University student engineer Michelle Rodio asked why not convert used cooking oil from the student cafeteria into biodiesel to run the lawn maintenance vehicles at the school’s Daytona Beach, FL, campus? Well, the university has answered Rodio’s question with an innovative biodiesel production facility she developed on campus.

Rodio, a graduate student in mechanical engineering, said she got her idea last fall in a course she took on clean energy systems, which required students to do a project on alternative energy.

“Having already been interested in biofuel, I jumped at the opportunity to study how to make biodiesel and learn about its benefits,” she said.

With help from two other students, Jay Ekelmann and Ken Meierjurgen, she obtained funding from Richard Heist, the campus’s executive vice president and chief academic officer, and Maj Mirmirani, dean of engineering. After that, she took charge of the project and managed it to completion.

The biodiesel processer mixes used cooking oil from the campus kitchens with methanol and sodium hydroxide to produce biodiesel. The processer can make 40 gallons of biodiesel at a time for $1 per gallon. Rodio’s innovative solution ties in with an Embry-Riddle program called IGNITE! that seeks to enhance education by encouraging students to get involved in research.

“We are proud of our students’ innovative spirit and their ability to put into practice the knowledge they acquire,” Heist said. “Green engineering research is one of Embry-Riddle’s core research areas and this biodiesel production facility is consistent with our university’s applied research focus. It is also consistent with other student and faculty research focused on engineering wind, ocean, and solar-powered solutions to real-world problems.”


April 2012 RENDER | back