New York City Mandates Biodiesel Use in its Fleet

By Tina Caparella

New York City Mayor Michael Bloomberg has signed legislation that will require at least five percent (B5) biodiesel to be used in all diesel-fuel powered vehicles operated by a city agency beginning July 1, 2014. There are approximately 6,000 vehicles in the city fleet. New York City’s Parks and Recreation Department has been using B5 for the last two years and increased the usage to 20 percent biodiesel (B20) this year during warmer months.

The new city requirement increases to B20 during the warmer months of April to November starting July 1, 2016. Exceptions are incorporated in the event that biodiesel use may void a manufacturer’s warranty or the biodiesel supply is interrupted. The legislation also requires that a pilot program be undertaken to determine the feasibility of using 20 percent biodiesel year round.

New York City has had a two percent biodiesel (B2) blend requirement in place for home heating oil since last year and the New York State legislature recently passed a B2 statewide mandate for home heating oil in any building within four specific counties beginning October 1, 2014. That requirement expands to any building statewide on July 1, 2015.

Bently Biofuels Buys Got Grease

Nevada-based biodiesel producer Bently Biofuels Company has expanded its used cooking oil collection program by purchasing the assets of Got Grease, a San Francisco, CA, waste oil and grease trap pumping company.

Got Grease collects used cooking oil throughout the San Francisco peninsula, East Bay, and Marin areas up to Sacramento. The oil is then sold to biofuels producers. Bently Biofuels was one of Got Grease’s largest customers. The expansion means an addition of about 12 jobs in the Bay Area.

European Parliament Caps First Use Oils in Biofuels

The European Parliament has called for a cap on the use of traditional biofuels and a speedy switchover to new biofuels from alternative sources such as seaweed and waste, in a vote on draft legislation in September.

According to the current Renewable Energy Directive, European Union member states must ensure that renewable energy accounts for at least 10 percent of energy consumption in transportation fuel by 2020. In the adopted text, first-generation biofuels (from crop-based sources) should not exceed six percent of the total 10 percent aimed for by 2020 and advanced biofuels, sourced from second generation oils such as seaweed or certain types of waste oils, should represent at least 2.5 percent of energy consumption in transportation fuel by that time.

Lignol Energy Buys Big Stake in Australian Producer

Lignol Energy Corporation, a Canadian technology company in the advanced biofuels and renewable chemicals sectors, will provide funding of $4 million (AUD) to acquire a 40 percent equity stake in Neutral Fuels’ parent company and a 51 percent interest in Neutral Fuels’ Australia and New Zealand biodiesel operation, Neutral Fuels (Melbourne) Pty., Ltd. This funding is for the deployment of the next phase of a planned rollout of closed loop biorefineries throughout the Asia Pacific/Middle East/Africa region in an agreement with McDonald’s used cooking oil biodiesel program. Under the agreement with McDonald’s, Neutral Fuels currently operates two closed loop biorefineries in Dubai, United Arab Emirates, and Melbourne, Australia.

Neutral Fuels’ system, which was developed specifically for McDonald’s, takes used cooking oil from its local restaurants and in return provides 100 percent biodiesel to fuel its suppliers’ delivery fleets. Neutral Fuels’ current management team will continue to manage all of the operations with support as required from Lignol Energy.

Feds File Biodiesel Fraud Charges

The United States (US) Securities and Exchange Commission (SEC) has charged Imperial Petroleum and several executives and suppliers for posing to investors as a legitimate biodiesel production business while concealing the extensive illegal activity that accounted for 99 percent of its revenues. 

The SEC alleges that when Imperial Petroleum purchased Middletown, IN-based E-Biofuels, LLC as a subsidiary in 2010, E-Biofuels’ owners falsely represented that they were producing renewable fuel from raw agricultural products such as soybean oil and chicken fat. E-Biofuels received significant government incentives based on its biodiesel production representations, but the company actually used middlemen to buy finished biodiesel then portrayed those purchases in fake invoices as the raw feedstock needed to produce biodiesel. E-Biofuels later sold the purchased biodiesel for as high as double the price it paid.

According to the SEC, when Imperial’s Chief Executive Officer Jeffrey Wilson learned that E-Biofuels was not producing biodiesel from raw materials, he allowed the scheme to continue instead of taking corrective action. Imperial’s annual revenue increased from $1 million to more than $100 million and its stock price soared as the company falsely told investors that E-Biofuels was in the business of environmentally friendly biodiesel production. Imperial’s stock price plummeted to less than 10 cents per share after the scheme fell apart, resulting in a market loss of approximately $60 million.

The SEC’s complaint charges Imperial Petroleum and Wilson as well as three former owners of E-Biofuels – brothers Craig and Chad Ducey of Fisher, IN, and Brian Carmichael, who now lives in Bend, OR. The complaint also charges three New Jersey-based companies – Caravan Trading, LLC, Cima Green, LLC, and CIMA Energy Group – and their operators Joseph Furando and Evelyn Pattison (also known as Katirina Tracy) for acting as the middlemen in the scheme. They allegedly provided false and misleading documents to deceive government regulators and attract investors to Imperial.

The US Attorney’s Office for the Southern District of Indiana has also filed criminal charges. The investigation is continuing.

October 2013 RENDER | back