Ethanol and biodiesel may not be worlds apart…

I have spent the last few days in scenic Florida at the NBB’s 2012 conference. It has been an interesting event, part time to see old friends and industry veterans, part opportunity to hear about the industry from both NBB’s and Big Petroleum’s perspectives, and finally time to see what wares the larger technology vendors have augmented their armouries with in the last year or two.

I have received invitations from several ethanol producers in the last few months interested in the co-locating a Promethean-scale biodiesel plant next to their ethanol production facility. This has historically been a challenging sort of partnership for the for both biodiesel and ethanol producers alike given the intertwined states of current technology and economic conditions.

A current factoid is that there is more than 2 billion gallons of biodiesel capacity ready today with a market size of 1.3 billion gallons (given RFS 2 mandated production targets). With that quantity of excess capacity, I do not believe that any new large-scale greenfield biodiesel plants need to be built anytime soon. Even with site-sourced feedstock, its axiomatic that the investment in a new facility is unnecessary with the quantity of willing and able buyers that are out there for DDG-derived oil.

At the moment the most logical model for those plants interested in processing DDG-derived oil remains sourcing and transporting it from logistically tenable ethanol plants. This also allows the plant to leverage it’s current fuel blending and distribution infrastructure, which is feasible, yet obviously tangential, to the core business of the manufacturer.

And then there is the additional issue of the technical complexity of converting corn oil into biodiesel. The fact is inedible corn oil is difficult to process into biodiesel feedstock. Coupled with the ever-evolving set of ASTM specifications for biodiesel and plant installation now runs the risk of having to upgrade there equipment early enough that it ruins any amortization assumptions made to support timely ROI (return-on-investment).

That said, I do believe that there is a bright future for the ethanol industry to create plants that make specialty chemicals out of byproduct streams. That is one reason I believe I have been receiving so many paid invitations; we have a good deal of experience in developing products out of our byproduct streams.

Make it a better place!

Todd

A collective aacount…

I made a journey recently to attend the Collective Biodiesel Conference, held this year in Duncan, British Columbia.

From my perspective, it was nothing short of amazing.

I was there to give a talk on the last day of the conference about growing community-scale biodiesel cooperatives.  It gave me the opportunity to visit some old friends, make new ones, and share our differing philosophies on how to handle common problems affecting us all.

I was surrounded by a cadre of biodiesel loyalists and industry heroes and often found myself in the midst of conversations that ranged from a gregarious Lyle Estill (Piedmont Biofuels) and Jennifer Radthke (Biofuels Oasis) discussing Josh Tickell’s new film “Freedom” to Josh and I discussing his plans to develop an off-grid community, followed by Jason Burroughs and I discussing his trip from Seattle in a fully loaded vehicle with 8 other passengers and a scary tire blow out.

The next day I was spent listening to Lyle Estill as he discussed a brief history of Piedmont Biofuels, a cooperative that has  into an industrial producer  and research organization over the course of the lst 9 years. Piedmont’s capacity is roughly 1 million gallons per year. They are working on an enzymatic approach to treating high FFA feedstock with Novazymes, and have several patents in the works.

I flitted from presentation to presentation, covering everything from the state of algal research, especially as it pertains to the future of genetically modified algal strains, to Kumar Plocher’s talk on all things Yokayo, until finally on the last day my turn to speak came.

My presentation was focused to assit those interested in the set of considerations that affect whether or not a group interested in forming a cooperative should, how the goal of the industry at large should be to make BQ 9000 obsolete, and the trials and tribulations of facility registrations under RFS2.

In a short three days I was reunited with old friends, made several new ones, and spent my time immersed in the nurturing environment of old friends more used to the daily trials and tribulations of manufacturing, marketing, and evangelizing our advanced biofuels.

I came back rejuvenated, and refocused on our goal: Clean chemicals, clean materials, and clean power from recycled feedstock.

It’s time to shake the world.

Make it a better place!

Todd

RFS 2 Rumour Mill

The EPA is getting closer to final decision making related to the new set of rules slated for implementation in RFS 2 (renewable Fuel Standard v2).

Rumors abound, but I do have some interesting tidbits related to some of the biodiesel producer requirements that seem sure to become fact.

The first is that biodiesel producers everywhere will be required to re-register their facilities.  This re-registration may require a plant engineering review, ostensibly to ascertain the ability of a plant to actually produce ASTM quality fuel. This requirement may also be an attempt for the EPA to regain a certain amount of credibility as well as limit the currently overwhelming number of new producer registrations.

Another item that seems to be the next sure thing is that the future EPA hosted RIN tracking system will be added as a module to the current Central Data Exchange (CDX) registry system. I would suggest that any producers out there may want to check the accuracy of their CDX records sooner rather than later.

Make it a better place.

Todd

The new Renewable Fuel Standard

The Environmental Protection Agency (EPA) is proposing revisions to the National Renewable Fuel Standard program (more commonly known as RFS).  The proposed rule is intended to address changes mandated by the Energy Independence and Security Act of 2007 (EISA).

The recently legislated requirements establish, and in some cases adjust, specific volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used as, or in, transportation fuel each year.

The requirements include new definitions and criteria for renewable fuels and the feedstocks used to produce them. The EPA has also proposed new greenhouse gas emission (GHG) thresholds for renewable fuels.

Importantly, these new RFS requirements will apply to producers and importers of renewable fuel that are both foreign and domestic.

The passage of EISA expanded the coverage of the RFS program beyond gasoline to broadly cover all transportation fuels, including diesel fuel used in highway vehicles and engines as well as offroad, marine and locomotive engines.

Mirroring the same approach adopted to implement RFS 1, the EPA believes these provisions should be applied to refiners, blenders, and importers of transportation fuel with the designated percentage standards applicable to the total amount of gasoline and diesel produced.  Some special caveats exist for small refiners which are intended to decrease the administrative burden these rules create.

Ultimately RFS under the new act is expected to reduce American reliance on foreign oil sources, increase the domestic production of energy, foment the reduction of greenhouse gas emissions (GHG) , and diversify the American renewable energy portfolio.

The increased use of renewable fuels like biodiesel may also expand the market for agricultural products used in fuel production and accelerate the growth of new markets focused on the development of cellulosic feedstocks and production technologies.

The volumes of renewable fuel are specified by statute and will ultimately affect the price of fuel paid by the consumer.

In my next few posts I will discuss various aspects of RFS2 as the EPA approaches its final decisions on implementation. The discussion will include the topic of Renewable Identification Numbers (RINS), fuel quantity targets, and compliance issues that directly affect small producers like Promethean.

Make it a better place.

Todd