Biodiesel-Equipment.com

Archive for the ‘Biodiesel’ Category

Source National Biodiesel Board
The U.S. House has approved H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, by a 215 to 204 margin (the second portion of the divided question adding a provision pertaining to Medicare physician payment updates was also adopted). The legislation retroactively extends the biodiesel tax incentive through December 31, 2010.

U.S. Senate Majority Leader Harry Reid (D-NV) has indicated his desire to have the U.S. Senate consider tax extender legislation when the U.S. Senate reconvenes the week of June 7, 2010.

Both the U.S. House and U.S. Senate will be adjourned the week of May 31, 2010. NBB’s Washington, DC office will continue to provide timely updates as events warrant when Congress reconvenes the week of June 7.

Biodiesel Public Policy Benefits: The biodiesel tax incentive has helped achieve the worthwhile policy goal of increasing the production and use of biodiesel in the U.S. In 2004, when the incentive was initially enacted, the U.S. produced 25 million gallons. In 2009, that number rose to 545 million gallons. There are compelling public policy benefits associated with the enhanced production and use of biodiesel in the U.S. Among the most are:

* The Biodiesel Industry is Creating Green Jobs and Making a Positive Contribution to the Economy;
* Biodiesel is Good for the Environment, reducing carbon pollution by up to 85 percent, according to the EPA;
* Biodiesel Reduces our Dependence on Foreign Oil.

The biodiesel tax incentive has helped achieve the desired goal of increasing the domestic production and use of biodiesel, and in turn has helped the U.S. realize the energy security, economic and environmental benefits associated with displacing petroleum with domestically produced renewable fuels. These benefits, however, will be lost if Congress does not act in a timely manner to address the immediate issue facing the industry and retroactively extend the biodiesel tax incentive.

What Can You Do?

Do you think Congress should reinstate the biodiesel tax incentive and continue to realize the economic, energy secur ity and environmental benefits that come from the production and use of biodiesel?

If your answer to this common-sense question is “yes,” then you should contact your Federal Elected officials immediately about this issue. For your Congressman, click HERE and for your Senators click HERE to get the contact information to reach out to your elected officials on this important issue.

Thank you for your support of biodiesel.

Dr. Steven Chu, distinguished scientist and co-winner of the Nobel Prize for Physics (1997), was appointed by President Obama as the 12th Secretary of Energy and sworn into office on Jan 21, 2009. He is charged with helping implement President Obama’s ambitious agenda to invest in substitute and renewable energy, end our addiction to foreign oil, address the global climate crisis and create millions of new jobs, a very large task indeed.

In 2004, the United States consumed 20.7 million barrels of petroleum products per day (about 7.5 billion barrels per year). A barrel contains 42 gallons, so total petroleum consumption in 2004 was about 318 billion gallons. Roughly 60% (~190 billion gallons) of petroleum consumed was imported, with about 13% (~40 billion gallons) coming from Persian Gulf countries. The United States primarily imports crude oil but also imports petroleum products including completed motor gasoline, aviation fuel, and fuel oil. The United States Says imported about 15 billion gallons of completed motor gasoline and gasoline-blending components in 2004. (Source: Annual Energy Outlook 2006 from the Energy Information Administration).

Biofuels are liquid, solid, or gaseous fuels derived from renewable biological sources. The biomass can be burned directly for thermal energy or converted to other high-value energy sources including ethanol, biodiesel, methanol, hydrogen, or methane. Currently, ethanol from corn grain and biodiesel are the only biofuels produced in the United States on an industrial scale.  Current biodiesel in the United States in prefabricated from used cooking oil, yellow grease, waste vegetable oil and animal fats.

Most of the 4 billion gallons of ethanol produced in 2005 came from 13% of the U.S. corn crops thus igniting the food vs. fuel debate. This was an increase from the 3.4 billion gallons produced in 2004. Ethanol is widely used as a fuel additive. The oxygen contained in ethanol improves gasoline combustibility. E10 & E85 blends are acquirable from gas stations all over the United States Say this fuel is widely acquirable in corn-producing states. E85 can be used as a substitute for gasoline in cars that have been altered to use this biofuel.

Biodiesel is a biologically derived diesel fuel substitute created by chemically reacting vegetable oils or animal fats with alcohol. Most biodiesel in the United States comes from soybean oil or restaurant greases. Biodiesel is readily used by cars with diesel engines. In 2005, about 75 million gallons of biodiesel were produced, tripling the 25 million gallons produced in 2004.

Creating a minimum blend stipulation for the United States the biodiesel biofuels industry will help accomplish the goals of substitute and renewable energy expansion, place a halt on our addiction to foreign oil, reduce the effects of the global climate crisis and create millions of new jobs.
Substitute energy research does not stop with Algae or Jatropha, other plants such as the cassava and the Honge tree from India are alternatives for renewable green fuel feedstock sources. The research in these areas will help end our addiction to foreign oil, reduce harmful emissions by introducing green renewable fuel alternatives. Jobs will be created for agricultural research, farmers and renewable fuel industries from fuels home grown in the USA.

70CentsaGallon Inc. a Florida Biofuels technology company has started a petition for submittal to the new Secretary of Energy. They hope this petition will help secure America’s future prosperity for our future generations through a biofuel mandate. They only ask for your support of the petition for a minimum blend for bio-diesel in the USA. The petition is being hosted online at GoPetition.com and you can reach this particular petition at this link http://gopetition.com/online/29302.html

A new biodiesel production system has been delivered to a US Navy base in Southern California, so it can produce its own renewable fuel.

Modular Biodiesel Plant

Locally-based Biodiesel Industries, Inc., has been working with the Navy and aerospace technology firm Aerojet to set up a highly-automated production facility at the Naval Base Ventura County.

The project at the base located north-west of Los Angeles centers around an ARIES biodiesel plant – an Automated Real-time, Remote, Integrated Energy System.

The system can produce around 3-10 million gallons of biofuels per year to act as a replacement for the Naval Base’s petroleum-sourced diesel fuel. It could also produce heat for use on the base.

Russell Teall, President and Founder of Biodiesel Industries said: “The Integrated Energy System incorporated into ARIES will eventually allow us to generate our own heat and power, and to feed the surplus into a local micro-grid.”

It can be operated remotely, while its automated technology can control key chemistry and processing parameters to ensure optimized production capacity, according to Biodiesel Industries.

The company hopes the Naval project could act as a springboard to spread the use of the ARIES automated biodiesel system around the world.

Michael Cassady, Biodiesel Industries’ Executive Vice President and Chief Operating Officer said: “ARIES is ready now to be deployed on a global basis. The ARIES platform fundamentally transforms biodiesel production and makes this possible.”

Naval Goals

The US Navy is currently working to cut petroleum use in its non-tactical vehicle fleet in half by 2015 while also developing biofuels for use in its ships (see this BrighterEnergy.org story).

Our methods of feedstock development make ARIES an ideal solution for a globally distributed network of biodiesel production facilities” - JJ Rothgery, Biodiesel Industries

The move is being taken to improve its energy security, reducing its reliance on foreign oil, as well as environmental and economic considerations.

Global Independence

It has been reported the US government currently spends 5 dollars in transportation cost for every 1 dollars it spends on fuel in remote areas of the world such as Afganistan. A modular biodiesel processor that can produce fuel from variable feedstocks is a move towards fuel independence for the U.S. Military in its worldwide operations. Modular biofuel processing units co-location is not a new idea, but this is the first time the Navy has made a large move of this kind towards securing it’s global fuel supply using alternatives. GO NAVY!

The National Biodiesel Board (NBB) welcomed the Environmental Protection Agency’s (EPA) issuance of the final rule to implement the expanded Renewable Fuels Standard (RFS2) provided for in the Energy Independence and Security Act of 2007(EISA).

“The U.S. biodiesel industry is pleased that the EPA has issued the final RFS2 rule,” said Joe Jobe, Chief Executive Officer of the NBB.  “There are significant job creation, energy security and environmental benefits associated with expanded biodiesel use.  Today’s rulemaking – in particular implementation of the Biomass-based Diesel program – will allow America to reap these benefits.”

EISA was enacted on December 19, 2007.  The legislation expanded the Renewable Fuels Standard and for the first time specifically provided for a renewable component in U.S. diesel fuel.  RFS2 requires the use of 500 million gallons of Biomass-based Diesel in 2009, increasing gradually to 1 billion gallons in 2012.  From 2012 through 2022, a minimum of 1 billion gallons must be used domestically, and the Administrator of the EPA is given the authority to increase the minimum volume requirement.  To qualify as Biomass-based Diesel, the fuel must reduce greenhouse gas (GHG) emissions by 50 percent compared to petroleum diesel.  Biodiesel is the only fuel available in commercial quantities in the U.S. that meets the definition of Biomass-based Diesel.

On May 26, 2009, the EPA issued the proposed rule to implement the RFS2 program.  The proposed rule contained several significant flaws that were highlighted in NBB’s comments.  Many of these concerns have been addressed in the final rule, including:

• Final rule accounts for 2009 and 2010 Biomass-based Diesel use requirements. Consistent with EISA’s requirements, 1.150 billion gallons of biodiesel must be used domestically by the end of 2010.  Biodiesel used domestically in 2009 and 2010 will count towards this total.

• EPA’s lifecycle GHG emission calculations are significantly improved. NBB’s comments noted significant shortcomings with EPA’s initial lifecycle methodology, including inaccuracies pertaining to nitrogen fixing with soybeans; co-product allocation; energy balance; and agricultural efficiencies.  Industry comments also noted significant flaws associated with EPA’s initial international land use assumptions.  The GHG methodology used in the final rule has been updated to reflect industry comments, and biodiesel produced from domestic soybean oil is assumed to reduce GHG emissions by 57 percent compared to petroleum diesel fuel, and the EPA’s uncertainty analysis recognizes that the GHG reduction could be as high as 85 percent.  Thus, biodiesel produced from soybean oil will qualify for the Biomass-based Diesel program, and the rulemaking provides pathways for biodiesel produced from other vegetable oils to qualify for the program.  Though NBB continues to object to the use of international indirect land use change in EPA’s GHG methodology, the methodology employed in the final rule represents a significant improvement over the proposed rule.

“The U.S. biodiesel industry stands ready to provide the fuel that will be needed to meet the readily attainable Biomass-based Diesel goals established in RFS2.  We look forward to working with all industry stakeholders to successfully implement this worthwhile program,” concluded Jobe.

During his State of the Union address in January, Pres. Barack Obama pleased some alternative fuels producers by giving special mention to “advanced biofuels.” Biofuels have received presidential utterances in past addresses, but results haven’t always been forthcoming. “First of all, there were no specifics, so there was really nothing there,” said Jatrodiesel president Raj Mosali. “The president mentioned biodiesel specifically when he was campaigning, and now he’s talking about ‘biofuels,’ which could mean anything—and that’s concerning.”

In addition, grants, loan guarantees and even American Recovery and Reinvestment Act funds are not going to biodiesel producers for the purposes of plant optimization and upgrades. “That’s 100 percent true,” Mosali says. “All of this assistance is being directed toward things like fuel cells, cellulosic ethanol and electric motors—all technologies that are still far off.”

The Obama administration coming out with billions of dollars from the American Recovery and Reinvestment Act to increase “clean energy manufacturing” could seem almost like a taunt to biodiesel producers.Obama announced “awardees” of the $2.3 billion clean energy manufacturing tax credits as existing biodiesel producers languish over the lapse of their specific federal blender tax credit. “Projects are assessed based on the following criteria: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions,” the White House stated on Jan. 8.

While the word “biofuels” was good to hear spoken by the president, there’s a word that describes the 2009 biodiesel year—idle. Huge plants sat quiet for months as vegetable oils were high and diesel prices were not. Imperium Renewables Inc., which suffered an explosion at its Grays Harbor plant in Washington State, said it was in no big hurry to make repairs while the tax credit is nonexistent.

Enterprise Holdings, owner of the Alamo Rent-A-Car, Enterprise Rent-A-Car and National Car Rental brand names, made a big announcement in support of biodiesel during day two at the National Biodiesel Conference & Expo in Grapevine, Texas.

Big Business Goes Green

The company announced its commitment to move its entire fleet of more than 600 shuttle buses to B20 within the next 5 years, beginning with incorporating at least B5 in all its buses this year.

Nine Enterprise Holdings markets will convert to using B20 in its shuttle buses immediately, said Lee Broughton, director of corporate identity and sustainability for Enterprise Holdings, and by the end of next year, 50 percent of Enterprise Holdings’ shuttle buses will be running on B20.

Broughton said the company will have reduced its petroleum consumption by 420,000 gallons in the first year alone.

Also announced was the appointment of Richard Sayre as director of the Enterprise Rent-A-Car Institute for Renewable Fuels at the Donald Danforth Plant Science Center in St. Louis.

Sayre, former cellular plant and molecular biology professor at Ohio State University, and his team of 10 researchers will work to develop algae for biofuels, and will focus efforts in ways such as utilizing CO2 from coal-fired power plants to help grow algae, which would act as a carbon sink. Sayre said nutrients could be provided to the algae with water from sewage treatment facilities.

“We can use the contaminants as fertilizer,” he said. “Algae doubles it biomass in 24 hours, and it can be harvested daily,” he added—which captured the attention of the Department of Defense.

Sayre said algae’s energy balance today is only about 2:1, but theoretically this can increase four to six times with research and development.

Alaska is one of the coldest spots in the world, but its natural sources of heat represent a wonderful opportunity in renewable energy resources.

Geothermal Generator

One of these natural sources is the hot springs which give the town of Chena Hot Springs, Alaska its name. Recently, the owner of the Chena Hot Springs Resort, Bernie Karl, has developed a new way to harness this energy: a portable geothermal power generator which generates electricity from hot water.

The resort’s hot springs result from geothermal heat that rises to the earth’s surface through fissures in the planet’s core. But Karl realized that the heat from the springs can offer more than a spa experience; it can provide electricity. Karl developed what’s being called the first portable geothermal generator. The generator takes hot water from the ground and cycles it into a refrigeration system to generate power. Once the water is used, it gets pumped back into the ground to be reused again.

The resort’s work was the result of state and federal grants; Karl also worked with United Technologies of Hartford, Connecticut to develop the 400 kW low-temperature power generator that generates electricity from the 165 degree water at the springs. Basically a power plant on a flat bed truck, the mobile generator could be transported to communities anywhere in the world that are near hot springs.

“When this prototype starts making electricity it will totally change small energy consumption and production,” Karl said.
Karl has also developed a portable geothermal power unit that can be hooked up to oil or gas wells, which generate hot water as a byproduct of drilling. When it’s hooked up to an oil well the unit can generate enough power for 280 homes, allowing the oil industry to produce electricity as well as oil. The U.S. Department of Energy (DOE) and several private companies will test a prototype generator at an oil well in Florida this fall.

“Any waste heat stream. Go to anybody that’s got an engine running, anybody that’s manufacturing something. It’s got waste heat,” Karl said. “You back it up and turn it into electricity.”

The technology can also use waste heat or geothermal energy to create hydrogen fuel which Chena Hot Springs plans to use to run its cars. Karl hopes the technology can help develop a cheap supply of power for rural Alaska, where fuel can cost as much as $6 a gallon.

“I’m telling you every community in Alaska can be totally sufficient in ten years,” Karl said.

Image courtesy of Chena Hot Springs

Even though the federal government has not approved the biodiesel tax credit extension yet, some states have already been proactive in mandated biodiesel blend policy or state run tax credits. The states that have a mandated blend are: MN,WA,LA,MA,NM,OR & PA. Indiana and Iowa have their own state run tax incentives for biodiesel biofuel producers. Sen. Chuck Grassley of Iowa, a ranking member on the Senate Finance Committee, has said he wants to make the federal credit a priority and thinks it could be passed in February or March. The question is just how long will the biodiesel industry have to wait?

The next few months could be “make or break time” for the soy biodiesel industry in the U.S.

Biodiesel faces several challenges right now, including the high cost of the feedstock and the loss of the one dollar biodiesel blenders’ tax credit, which Congress allowed to expire on December 31^st.  Indications are that most biodiesel plants have ceased production as they await Congressional action on the tax credit, which may not happen until March.

In Iowa, the state’s Renewable Fuels Association has launched a campaign to highlight the importance of biodiesel—and renewable fuels, in general—to Iowa’s economy.  Monte Shaw is the executive director ofIRFA. “We’ve got a lot of exciting thing coming down the road for this industry—things that are going to really redefine renewable fuels for the future,” says Shaw. “Whether it’s exciting feedstock projects like the algae project at Shenandoah, or maybe it’s the biorefinery  project that’s scheduled to go into Newton.”

Good reasons, Shaw says, to keep Iowa’s biodiesel industry viable.

“If we let the current biodiesel industry wither away and lose the jobs we have today, it also means we’re not going to be the place—we’re not going to be the state—where those next generation investments and next generation jobs come either,” he says.  “So we’re really at a turning point, not just for the investors and jobs of today, but for making Iowa the place to be for the future of this industry as well.”

In addition to the federal tax credit extension, Shaw says IRFA will also be lobbying for a five percent biodiesel mandate in the Iowa legislature.

“We really do need a B5 fuel quality standard to create a low level of demand,” says Shaw. “It’s constant, it’s year-around, it’s predictable—and that’s what can help these plants cash flow during the good times and the bad times.”

A bill creating a B5 fuel quality standard passed the Iowa Senate in 2009, but time ran out before the Iowa House could consider the legislation.

The $1-a-gallon tax credit that keeps the industry afloat is due to expire Dec. 31, and lobbyists for biodiesel producers and soybean growers are scrambling to get Congress to enact an extension before lawmakers leave town for the holidays.

The House included an extension of the subsidy in a package of extensions for other business tax credits. However, the Senate has so far failed to act on the issue.

A House Democratic aide said Wednesday that there have been a “number of conversations” with Senate leaders about the issue, but that the Senate only has time to deal with health care and a defense bill. Press representatives for Senate leaders had no immediate comment on the issue.
Were the tax credit to lapse, “it would be a devastating blow to the industry,” said Michael Frohlich, a spokesman for the National Biodiesel Board.

Biodiesel plants could shut down or reduce production if the tax credit lapses, said Daniel Oh, president and chief operating officer of the Ames-based Renewable Energy Group Inc., which operates biodiesel plants in Iowa and other states.

If biodiesel production is limited, it could have a detrimental effect on the price of soybeans and other feedstocks utilized to produce biodiesel,” he said.
Biodiesel producers have been struggling to stay in business for some time because of the relatively high prices of their main feedstock, soybean oil, and the global recession, which has dampened fuel demand. They were dealt another blow early this year when the European Union imposed tariffs on imports of the U.S. product to offset the value of the tax subsidy.

U.S. biodiesel production is down 30 percent this year from 2008, and the industry is operating at about 15 percent of its production capacity.
A recent study by industry consultant John Urbanchuk warned that the “biodiesel industry could be expected to collapse” if the tax credit is removed.

With the tax credit, producers earned about 26 cents a gallon over their production costs in November.

Sen. Charles Grassley, R-Ia., said the uncertainty about the tax credit raised questions about the commitment of Democratic leaders to alternative fuels.

“This lack of action so far is especially inexcusable, considering the House and Senate have been in session nearly continuously for months,” he said.
John Hoffman of Waterloo, a former president of the American Soybean Association, said the tax credit is “essential to the continuation of the biodiesel industry.”