Tag Archives: NBB

Collective Biofuels, Visitors, and Production Intelligence

I find it hard to believe that we are already in the midst of summer. It has already been a tremendously eventful year at Promethean, and it seems that we need to pick up the pace.There have been so many changes in such a brief period of time. Some of the changes were made by choice; there was at least one occasion where the choice was made for us.

At any rate, change is essential for progress and progress is exactly what we are making.

Repetitive and, one can easily argue, often tedious data collection requirements resonate through the core of our fuel-making process; the legacy of instituting a quality management system. But the system is phenomenal. We are working on ensuring that process redundancies are curbed, that the data we are collecting can be easily interpreted and will ultimately yield meaningful and utilitarian production intelligence.

We are preparing for a multitude of visitors at this year’s Collective Biofuels Conference (http://collectivebiofuels.org) in Temecula, CA this year. It is being held August 17th – 19th, 2012. I will have more to say about this stupendous event in an upcoming entry, but the current confirmed speaker list includes Dr. Jon Van Gerpen (amongst other things the author of the Biodiesel Handbook), Dr. Virginia Gordon (Bonanza Labs’ President and Founder), Don Scott (Sustainability Director for the NBB), Graydon Blair (Utah Biodiesel Supply), Jason Burroughs (Diesel Green Fuels), Dr. Jonathan Meuser,… Well, we’re very excited!

We are also in the midst of making some minor adjustments to our process lines based on the changing nature of the feedstock we have available to us for conversion. We are on a very tight schedule to implement these changes, since the fire earlier this year, among other things in the key of life, resulted in a less than average production start for this year.

As a final ramble for this entry, Joe Spatafore of Extreme Biofuels in Corona, CA stopped by to see us today. Joe has had a standing invitation to come by since we broke ground in early 2008. He lives relatively close to the plant, but never had the time to come by. I was glad he did. We spent some time talking about surviving in this industry. If anyone knows about surviving in the biodiesel business it’s Joe. I wish him the best of luck.

Make it a better place!

Todd

The first post of the new year!

2010. A new year. Almost everything seems possible; everything except the passage of the biodiesel blenders credit renewal.

Everyone I have spoken to seems certain that the credit will be reinstated in a retroactive fashion. I’m pretty certain.

In an interview published in the Wisconsin Ag Connection Michael Frohlich, the NBB’s Director of Federal Communication, was quoted as saying “Pretty much every plant is idle.”

Strangely enough, things do not feel very idle at Promethean. I believe the same may be true for the majority of small poducers I have spoken to.

Oil prices seem to have remained steady.

The big news is related to RFS2. I called the EPA on Monday in the hopes of getting an updated status on the progress of the rulemaking as well as some sort of advanced information on what may be included that would interest the biodiesel industry. I received nothing more than a statement that sounded pre-canned saying that the rules would be out soon. The rest was classified, or as close to classified as the EPA gets.

RFS2 is potentially an industry game-changer. Optimistic estimates place final rule implementation sometime in the Spring of 2010.

We have been working on MRU’s (Methanol Recovery Units) this month, primarily on design/build projects for other plants.

Strangely enough I almost always fall in love with the things we build, and really hate seeing them go into service somewhere else. So much time and energy goes into the design and fabrication, and we view our equipment not only in the sense of its utility and efficiency of performing its function but also as a quasi-artistic endeavor and the opportunity to demonstrate good old-fashioned American ingenuity.

This year, with all its promise, may be more challenging for the biodiesel industry than the last.

RFS 2 will bring new compliance challenges, and organizations will need to adapt their business processes appropriately. Lack of a tax credit may make it difficult for existing producers to maintain profitability, or maintain staffing levels. It may alos be an opportunity for new entrants to carve out a niche in makets that may have been dominated by large but credit dependent competitors.

Only time will tell.

Make it a better place!

Todd

Senate Delays 2010 Biodiesel Tax Credit Extension Vote

The New York Times report issued on December 18th does more than suggest a delay of the Senate taking on the tax credit extension, tabling the matter until some time next year.

If not approved this year, the earliest the Senate can calendar this item would be the middle of January.

The full article can be found here.

It remains to be seen how a credit delay will affect the industry. The portents of doom and gloom abound for larger producers according to the NBB.

The truth remains to be seen.

Make it a better place,

Todd

Biodiesel….Great as a fuel! Better as a fuel additive?

Over the last few months I have spoken to a variety of stakeholders in the biodiesel community about the realities that inhibit the adoption of biodiesel as a neat, standalone, fuel in favor of its use as a fuel additive.

I started these conversations after I arrived at the conclusion that, in the near term, biodiesel’s current position in the marketplace as a fuel additive will most likely be its longer term position in the markets until we see the arrival of new feedstock technologies and a change in the legislative and regulatory climate.

My conversations have included the folks that write policy at the EPA, a bevy of representatives of the California Air Resources Board and the South Coast Air Quality Management District (SCAQMD) other producers like Brandt Clupper from EcoLife;  Leif and Matt Rudolf from Piedmont; and marketers like Jason Burroughs of DieselGreen, and one or two NBB committee members.

It is something that I will be talking about to the NBB leadership as well.

Twelve years ago when the soy farmers and NBB began lobbying for the mandated use of agribiodiesel, the focus was on obtaining as large a piece of the diesel fuel market as possible. At that time there had not been a large amount of salient research related to land use, oil yield per acre, or feedstock availability to indicate what the actual supply capability targets should be. And so, one might say blind to the potentially negative consequences, NBB and the other agents of change that wanted to see biodiesel as a viable alternative fuel in the marketplace were ultimately successful in carving out a niche for the creation of the biodiesel industry.

The core problem is that with American diesel utilization averaging more than 65 billion gallons a year, the biodiesel industry does not have the feedstock supply or infrastructure necessary to replace the use of petroleum diesel.  In addition, because the lobbying efforts were for biodiesel as a replacement diesel fuel, the industry has been forced to suffer through a period of price competition related to the price of conventional diesel, a product which is supported by an infrastructure that is nearly a century old and has benefited greatly from a variety of subsidies and taxpayer supported initiatives.

In addition, biodiesel has had to suffer various attacks from the petroleum industry and car manufacturers related to topics ranging from appropriateness for underground storage, pipeline access, and its emissions profile. It continues to suffer these attacks even though it is now widely accepted that ASTM 6751 compliant biodiesel has a smaller COx and particulate matter profile than its petroleum counterpart, and well-cleaned without additives is less toxic than table salt. One might also note that historically the fuel manufacturers rarely bear the brunt of emissions standards issues; the car manufacturers do.

Several states have adopted biodiesel as a fuel additive, in percentages ranging from 2 – 20%.  Auto manufacturers for the most part have agreed to support some level of biodiesel mixed in with petroleum as long as the petroleum diesel meets the ASTM D975 specification and the biodiesel meets the ASTM D6751 specification.

And although it is quite possible to run 100% biodiesel (B100) in a vehicle with great results, the current technology selections of the automotive industry make it difficult for a consumer or fleet manager to find newer vehicles.

In summary: Supply limits adoption. Legislative mandates promote the use of biodiesel, but in many ways inhibit its use as a standalone fuel. The majority of producers have idled their plants because they cannot cost effectively produce sufficient product when it is tied to the price of petroleum diesel.

Fuel additives generally sell for more than the fuel they are added to; our system seems designed in such a way as to consign biodiesel to a fuel additive category without wanting to increase what the consumer needs to pay.

Biodiesel may be great as a fuel. It may be better as a fuel additive. It may need to cost more no matter what.

Make it a better place.

Todd

On the edge of open highway…

As it gets closer to the grand opening of the plant there has been a definite increase in traffic from the general public and enthusiasts. The phones are ringing more often with interested parties planning their summer vacations around access to biodiesel or who are simply excited to discover that a new production facility is coming online.

The increased traffic is slightly surprising because the only advertising has been through word of mouth and the existence of our sight on the internet and the NBB web site. One can imagine the tremendous challenge finance management poses in a cooperative environment, and the advertising budget is “Zero!”

Jeremy and I have been working on the details of plant construction that remain.

A slew of projects have been completed in the last few weeks.

My friend Bill, owner of Tuff Kote Systems, helped install a chemically resistant coating on the floor of our chemical storage room. A lot of work goes into the installation of a chemical floor; resurfacing of the concrete substrate, preparation of a custom-made epoxy coating that consists of 4-parts, laying the epoxy’s first and second stages, curing each stage, and finishing. The epoxy heats and smokes when you mix it, and the smell is unpleasant for a couple of days after installation.

One of the major projects I have been working on is the permit applications for the installation of the gas supply line for the boiler and the electrical control panels and motor installations for the pumps.  As the principal plant engineer, architect, and logistician I have had the opportunity to spend endless hours formally drafting plant diagrams, citing national and civil codes, performing a variety of calculations (including the dreaded fault interrupt current and maximal motor load contribution calcs), reviewing more advanced control panel plans, and enjoying meeting the various individuals at the City Planning and Fire Departments who are involved in approving the plant during every phase of its constuction.

The boiler installation / upgrade has passed the half-way mark; the plumbing of placement for gauges and sample taps is nearing completion.

One major project has been determining the solution for indicating level in PSICLOPS, our core reactor. The team had in the past made a couple of concept designs, all of them using a traditional sight tube, which would ostensibly be made of a high-grade clear plastic that could support heat and vacuum (given the nature of our production process). I was unhappy with most of the designs we had arrived at and took it upon myself to make a command decision and redesign the approach for level.  I will unveil this solution in photos after the grand opening.

The hours are still long, and really the completion of the plant simply heralds the next phase of the journey. It reminds me a little of taking a road trip to the mountains. It takes a little while to get out of the city, but once you do you start really watching the road and the mile markers.

We’re almost out of the city, on the edge of open highway.

Make it a better place!

Todd

Biodiesel complexities: Two sources of botheration.

I’ve started the new year reflecting on two complications impacting the production and distribution of biodiesel; feedstock sourcing and accessibility to health effects data. These issues might not be issues that solely plague the emergent biodiesel industry. The biofuels industry is immature, and currently does not benefit from a well-established infrastructure of diverse players occupying a well-stratified marketplace. Consequently, the sources of annoyance for me in the biodiesel industry probably have equivalents in the ethanol industry as well. I believe it is important to address these issues now or risk that they will go on to effect the production and consumer value proposition of second generation biofuels if solutions are not arrived at soon that can be successfully modeled.

The feedstock situation is a constantly evolving muddle. A few companies with big names like ADM and Cargill control the majority of the domestic virgin oil used by the largest biodiesel (and ethanol) producers. It is important to understand that these entities not only “control” the cost and destination of finished, harvested, product but the intellectual property related to the genetically modified seedstock used for planting.  Although most in the industry currently acknowledge that biomass is the future of widespread biofuels production, it will still be the case that the companies that develop the technologies used to convert waste products to fuels, whether those technologies are genetically modified algae or enzymes or future tech, will likely control the licensing or monopolization of the technologies they have developed.

In a similar sense access to health effects data is an issue of growing concern to the biodiesel industry. Currently there is one organization that has successfully submitted the health effects data required by the EPA to produce B100 (or pure biodiesel). That organization is the National Biodiesel Board or the NBB. That’s not to say that other health effects data isn’t out there for biodiesel. At least one other organization has submitted health effects data for B20 (or 20% biodiesel mixed with 80% petroleum diesel), but if you want to commercially produce the pure stuff, you must currently have demonstrated to the EPA that the NBB has given you permission to rely on the set of data they have submitted. The catch is that the NBB requires any would-be producer to join, and although the EPA will stop requiring producers to submit either health effects data or proof of access in 2015, current NBB membership policies require producers to pay a per gallon “tithe” when they reach certain production levels. The commitment to pay this fee currently extends beyond 2015 for members.

The NBB does also offer access to the data to non-members for a $25,000 fee. This is obviously no small sum to would-be small producers.

Further complicating the health effects data issue is the EPA’s policy related to the Tiers of data required. Basically, the EPA can require that organizations provide up to 3 tiers of data, with each tier requiring further study and more investment.  For biodiesel only two tiers were required for initial submission. 

In reality, small producers only need access to Tier 1 (the first tier) of data. Only large producers require proof of access to both Tier 1 and Tier 2 data. NBB does not explicitly make this distinction in its membership requirements but does offer a reduced cost non-voting membership ostensibly for small producers.

I personally believe an argument can be made that their is sufficient health effects data in the public domain to satisfy EPA’s Tier 1 requirements. (I will have more to say on this topic in future posts.) At any rate, I do believe that any combustible energy source needs to be thoroughly tested to protect the public health.

Health effects data is required for any fuel, whether it is toxic or non-toxic, to determine the effects on the general public after exposure. The data compiled includes animal testing and emissions data.

The data gathering and packaging into an EPA compliant format is expensive. And this is where this issue effects the biofuels industry in general. Historically the EPA has adopted a strategy to protect the technology licensor, allowing those responsible for the research and development of a fuel product to recoup the cost of research as well as profit from their endeavors.

But this may be a case where government policy has not kept pace with a changing marketplace and research environment. Oftentimes much of the new research is subsidized with government grants, also known as taxpayer dollars, and preserving a system where an organization can receive public monies to do research and then profit from the research is difficult to balance.

Energy independence is a rising American priority of tremendous importance. It is critical that the mechanisms that allow for widespread production and distribution are constantly examined to evaluate potential inefficiencies and inequities.

I also believe that the need is so great, and the consequences for failure are so dire, that we need to support as citizens a revised approach to allowing small biofuels producers to thrive.

Make it a better place,

Todd

 

 

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