REG Starts Pumping Biodiesel at Chicago Terminal

Biodiesel from Iowa-based Renewable Energy Group is now flowing at a major Chicago area fuel terminal.

The company has announced that REG-9000/1 biodiesel is now available for convenient splash blending or truck-load pick-up at Kinder Morgan’s Argo, Illinois facility:

This new terminal location combines the quality of REG-9000 biodiesel, the industry experience of REG and the convenience of the Chicago terminal site. Multiple biodiesel pricing options are available for REG customers through the Kinder Morgan terminal. on Friday, Dec. 17, 2010. Petroleum distributors may pick up REG-9000TM biodiesel 24/7 at the terminal located at 8500 West 68th Street Argo, Illinois after setting up a Kinder Morgan account.

REG says it is making several pricing options available for customers.

Industry Welcomes Back Fed Biodiesel Tax Incentive

Passage of the federal tax bill and sending it to President Obama for his signature is being welcomed by many in the renewable energy field, especially the biodiesel industry.

The nation’s largest biodiesel producer, Iowa-based Renewable Energy Group, had quick praise for the approval, which retroactively renews the year-long expired $1-a-gallon federal biodiesel tax incentive:

“The reinstatement and retroactivity of the biodiesel blenders’ tax credit provides a more predictable and stable market for our company and our customers,” said Daniel J. Oh, President and Chief Operating Officer of Renewable Energy Group® (REG®), the nation’s largest biodiesel producer and marketer.

“With President Obama’s signature as the final step for this bill, the biodiesel blenders’ tax program restores competitive pricing for biodiesel in the distillate marketplace, puts green collar workers back to work and supports the future of this advanced biofuel industry in the coming months.”

Reinstatement and retroactivity means greater market certainty for REG’s customers, the petroleum industry and RFS2 obligated parties.

“We believe reinstatement for 2011 will allow petroleum distributors and obligated parties to make biodiesel purchasing decisions which will increase demand for REG-9000TM biodiesel, “ said Oh. “With the combination of blending requirements under RFS2 and the competitive pricing model offered by the tax credit, REG expects a significant increase in biodiesel demand for our five facilities in Iowa, Illinois and Texas.”

REG officials expect to double biodiesel sales in 2011 to meet the 800 million gallon biodiesel market that has been created under the new Renewable Fuels Standard (RFS2). And that could mean the company could increase its number of workers by 30 percent in the coming year.

National Biodiesel Board officials also praised the passage, reminding folks that this is truly an economic stimulus package for the biodiesel industry:

“Reinstatement of the biodiesel tax credit is welcome news for the U.S. biodiesel industry and good news for the nation as a whole,” said Manning Feraci, NBB Vice President of Federal Affairs. “This will undoubtedly help kick-start the domestic biodiesel industry, lessen our dependence on foreign oil, and create thousands of new jobs across the country.”

Company Proposes to Build Toronto Biodiesel Plant

A Canadian company wants to turn an 8,600 square-foot building in Toronto into a biodiesel plant.

Biodiesel Magazine reports
that Energy Innovation Corp., with some help from Invest Toronto, will build the 1.3 million gallon-a-year plant in the downtown part of the city’s port lands area, near existing ship, truck and rail transportation infrastructure:

According to Patrick Dwyer, EIC vice president of communications, the company is shooting for full operation by spring 2011. Locally grown flax seed initially would be the feedstock of choice for the planned facility. Utilizing a hybrid continuous flow/batch system, the company plans to extrude the flax seed into oil for biodiesel production and take the remaining meal for use as animal feed, or have it further milled into flour to be sold in the Ontario food market, according to Dwyer.

“Everyone said you can’t grow flax in Ontario,” Dwyer said, adding that, through a partnership already established with an area farmer, EIC would have access to about 1,200 acres of flax. “We said we don’t think that’s true. Areas not too far from us used to be known as the flax capital of Canada 100 years ago before people started moving out to the prairies and different crops started to replace flax. We’re looking to bring flax back and grow it ourselves or through partnerships.”

EIC will also use local coffee grounds as a feedstock.

New Pickens Plan Leaves Out Wind

A couple of years ago, T. Boone Pickens unveiled a plan that would use wind energy and natural gas to help America kick its foreign petroleum habit.

But after a couple of setbacks trying to start a mega wind farm in Texas (and now possibly in Canada), the billionaire oilman is changing gears, and Mother Nature Network reports he is leaving wind out of the mix:

The new Pickens Plan calls for Congress to pass legislation that will incentivize the conversion of 18-wheel trucks to compressed natural gas (CNG). This conversion, according to a report on, would “cut in half the amount of oil imported to United States,” if just eight million of the tractor-trailers in the United States switched to CNG.

So what’s the issue? Well, some are saying Pickens’ 45% ownership in a company called Clean Energy Fuels is his sole motivation. Clean Energy Fuels makes natural gas filling equipment for buses and other large vehicles.

The story goes on to point out that Pickens aims to make hundreds of millions of dollars from his natural gas portion.

Air Force Aims High on Alternative Fuels

The men and women who wear U.S. Air Force blue are looking to help preserve your freedoms, while gaining their own freedom from non-renewable petroleum.

This article from National Defense Magazine says the service wants the biofuels industry to step up its game to provide the millions of gallons the Air Force will need when it converts to 50-50 blends of jet and synthetic fuels in 2016:

“I’m throwing the gauntlet down to industry,” said Timothy Bridges, deputy assistant secretary of the Air Force for energy, environment, safety and occupational health. “We’re doing our part. We’re asking them to do theirs and support the country as we move toward alternative energies,” he told National Defense in an interview at the Pentagon.

The Air Force is working to wean itself off foreign oil. It consumes some 2.5 billion gallons of jet fuel annually. By 2030, its intention is to fly on domestically produced alternative fuels concocted from renewable sources including biomass, which encompasses everything from wood chips and plant oils to animal fats and agricultural waste. Those fuels must be cost competitive with petroleum and have greenhouse gas emissions equal to or less than that of oil, officials said.

“It has to be a business consideration because we want competitively priced fuels for it to make sense to do it,” said Bridges. “Yes, we can get the quantities that we need for the testing, but when it comes to our requirement to actually fly the fleet, that’s a larger challenge. We’re setting the expectations. We want it to be there when we’re ready,” added Bridges, who until recently oversaw energy as part of his responsibilities. A new office dedicated solely to energy was established by the service in November. It is being led by Kevin Geiss, deputy assistant secretary for energy.

If it meets its 50 percent goal of alternative fuels from locally sourced feedstocks in five years, that would add up to 400 million gallons. The Air Force’s point is the infrastructure needs to be up-to-date to handle that demand.

“We want to say, ‘Look guys, we’re going to be ready. Will you be ready?’” said Bridges.

Opinion Piece Defends Palm Oil Biodiesel

A decision by Hawaiian Electric Co. (HECO) to build a biodiesel plant that will convert palm oil into biodiesel to be used by the utility to produce electricity has garnered the ire of some environmentalists, who decry the use of palm oil for the green fuel.

But this opinion piece in the Honolulu Star Advertiser defends the plant. Tom Tanton, president of California-based T2 & Associates, an energy technology and economic development firm, points out that the palm oil will come from Malaysia, a country that has committed to conserving 50 percent of its forests … much more than the 10 percent average under United Nations agreements:

Contrary to claims from the German environmental group leading the campaign against the HECO plan, palm oil is the most sustainable biofuel on the planet. More fuel can be produced on a smaller footprint from the oil palm than alternative biofuels such as corn-based ethanol or German rapeseed oil.

Palm oil is a perennial crop that can be converted to biodiesel, while other vegetable crops like soya that can create biodiesel are annual. Palm oil requires less tillage, resulting in much fewer greenhouse gases released into the atmosphere. It also requires considerably fewer energy inputs to grow and maintain.

In a recent statement, HECO correctly stated “biofuels are a part of Hawaii’s clean energy future. Biofuels allow us to switch from ‘black’ to ‘green’ fuel in our existing generators, reducing dependence on and vulnerability to imported oil.”

Of all possible biofuels, palm oil is king for its affordability, efficiency and eco-friendliness. Denying the HECO agreement would hamper wider adoption of sustainable practices worldwide.

The piece goes on to point out that some domestic sources of biodiesel feedstock, such as jatropha, aren’t scalable for a plant like this one. And, right now, Hawaii doesn’t have enough other renewable energy sources, such as wind, solar and geothermal, to be cost-effective. Tanton concludes that this palm-to-biodiesel plant will help the Aloha State meet its energy needs, while providing jobs for an impoverished part of Malaysia.

Biodiesel Tax Incentive Clears Cloture; NBB Optimistic

The federal $1-a-gallon biodiesel blenders credit has cleared an important legislative hurdle, and the National Biodiesel Board is optimistic it will become law. Earlier today, the U.S. Senate voted to end debate (invoking cloture) on the package of tax credits, including the biodiesel incentive, by a bipartisan 83-15 margin.

As the vote was going on, I talked to the NBB’s Vice President of Federal Affairs, Manning Feraci, who believes, this time, the measure is headed for actual passage.

“What this does, essentially, is put us on a glide path to have Senate passage in the next day or two of the tax package that is carrying everything from the two-year extension of the Bush tax cuts, and, as it applies to the biodiesel industry, a retroactive extension through 2011 of the biodiesel tax incentive,” Feraci said.

He believes that large bipartisan support in this cloture vote is a positive indicator for final passage. But Feraci admits some Democrats, especially in the House, where the bill would have to return once the Senate passes it, have some real angst over the package President Obama negotiated with the Republicans. “The Democrats, who still control the House at this point, are trying to figure out how they’re going to play this.” He says while no one wants Americans’ taxes to go up on January 1st, there’s a high-stakes game of chicken being played right now.

Feraci admits it has been a frustrating year for the biodiesel industry with the loss of the tax break and the lack of push until the 11th hour from the Obama Administration to get this passed. And he says there are worries that some fiscal hawks, especially from the Republican side, have some real heartburn with the tax break … although Feraci is quick to point out the economic “bang for the buck” the incentive provides. In addition, if the current Congress is not able to get this passed before the new session in January, when the Republicans take control of the House, the bipartisan support biodiesel enjoys could ensure it eventually passing, no matter who controls Congress. Feraci adds that passage could make 2011 a banner year for biodiesel, because it will bring stability to the industry. In the meantime, he’s watching carefully what is happening.

“We’re just going to have to stay tuned to see how this is going to play out over the next couple of days.”

Listen to more of my conversation with Feraci here: Manning Feraci, NBB

Biodiesel Industry Struggles, But RINS Are Strong

The biodiesel industry in the U.S. has been struggling lately, but the trading market for renewable identification numbers … the numbers the U.S. Environmental Protection Agency will require to prove compliance with the new Renewable Fuels Standard (RFS2) … is pretty strong.

Biodiesel Magazine reports that RIN prices seem to be filling the void the lapse of the federal $1 per gallon tax credit has created, fueled by the EPA’s recently released targets under RFS2:

In late November the agency released 2011 volume requirements, which consists of nested mandates. According to the release, 1.35 billion gallons of advanced biofuel must be consumed next year. Of that number 800 million gallons must be biomass-based diesel. Since biodiesel is currently the primary commercially-available advanced biofuel, the agency notes it will likely be used to meet the vast majority of the 1.35 billion advanced biofuel mandate.

According to Sam Gray, a renewable fuels trader with VICNRG LLC, 2010 biodiesel RINs hit an all-time high on Dec. 8, trading at 96 cents per RIN. Since each gallon of biodiesel that is produced generates 1.5 RINs, that equates to $1.44 per gallon, which more than offsets the lost value of the expired $1 per gallon biodiesel tax credit.

Although prices began slipping Dec. 9, Gray notes that they could easily remain in the 80 to 90 cent range for the remainder of the year. The good news for biodiesel producers is that the RIN system seems to be working as it was intended to by the EPA. “[RINs] are doing their jobs, they are doing exactly what EPA intended to do; to recognize the subsidy behind the gallon of renewable fuel to try to get favorable blending economics—or something resembling decent blending economics,” Gray said. “RINs are performing well within the mandate RFS2.” The biodiesel market in 2011 is expected to remain tight, which should ensure relatively high prices for 2011 biodiesel RINs as well.

Experts say RIN prices tend to go down in the spring but jump at the end of the year as obligated parties try to get into compliance before the deadline. Also, they say the RINs are functioning as they should, and the biodiesel market is continuing, despite the loss of the federal credit.

Navy Hybrid Ship Recognized for Energy Award

A good friend of mine from my Air Force days alerted me to a story about a U.S. Navy ship that was recently recognized for its hybrid technology during some recent energy awards.

Chris Hatch, who now does Congressional and Public Affairs for the Naval Surface Warfare Center Carderock Division in the Philadelphia, PA area, sent me this release explaining how the USS Makin Island (LHD-8) was recognized by Platts Global Energy Awards as a finalist for Engineering Project of the Year during its 12TH annual ceremony for using hybrid technology. The technology saved between $1.4 million and $2 million in fuel costs, compared to others in her class, during her maiden voyage. And over the expected life of the vessel, that could add up to more than a quarter billion dollars… of our tax dollars:

David Mako, a Naval Ship Systems Engineering Station (NAVSSES) senior electrical engineer, is honored by the prestigious nomination, and takes pride in his and other employees‘ contributions to designing the Amphibious Assault Ship with the Auxiliary Propulsion System (APS) responsible for these fuel savings.

“We were literally sitting in a room more than ten years ago in Pascagoula, Mississippi with shipbuilders and other stakeholders, sketching layouts and asking ‘what if?'” Mako said. “We had support from the ship‘s Program Manager to think outside the box on this one. He recognized early on that this would be a game changer. He was the real risk taker, and it really paid off.”

Though Mako half-jokingly bristles at the comparison, APS, also known as Hybrid Electric Drive (HED), is akin to technology used in automobiles. LHD-8 uses a gas turbine engine, and the APS‘ two 5,000hp electric motors for propulsion. APS takes electricity generated for shipboard systems like lighting and heat to turn the propeller for speeds of 12 knots and under, thus avoiding using its 35,000hp gas turbine, which is less efficient at slower speeds.

Chris goes on to explain that the slow speed savings is important as amphibious assault ships spend a great deal of time loitering at low speeds to support deployed troops.

This is just the latest effort by the U.S. Navy to get off the petroleum, especially foreign oil, addiction. In October, Joanna told you about a Navy Riverine Command Boat that runs on algae-based biofuel. The Navy also recently launched a new website to chronicle its environmental efforts, including the use of biofuels and renewable energy at

Ohioan Wants Ditches for Biodiesel Crops

Reflecting a trend that started in Utah and has been copied in several other states, an Ohio man wants to see the ditches and medians along the interstates used to grow oilseeds, such as safflower, dwarf sunflower and canola, to make into biodiesel.

This article from the Columbus (OH) Dispatch
says Mark Schaff, a member of Etna Township’s economic-development committee, got the idea after reading about a similar program in Utah and the national movement called FreeWays to Fuel:

North Carolina planted crops this summer, and programs are to start next summer in Minnesota, Michigan, Virginia and Tennessee.

Ohio spends about $17 million a year mowing state rights of way, he said.

Dallas Hanks, a doctoral student at Utah State University, originally pitched the idea to Utah transportation officials in 2006. The 47-year-old said the years of trial and error there have taught him valuable lessons about growing crops on roadsides that can now be adapted to other locations.

After some setbacks, Hanks said, he was able to develop planting and harvesting methods that allowed the crops to flourish on heavily compacted road gravel covered by a thin layer of topsoil, conditions similar to most freeway rights of way.

“We’ve been planting on sidewalks, in terms of compaction of soil,” Hanks said.

Ohio Department of Transportation officials have raised concerns about safety of those planting and harvesting crops in the ditches and medians, but proponents are quick to point out the oilseeds only would have to be tended to in the spring planting and fall harvesting … much less time than when maintenance crews have to continually mow those areas. Plus, farmers would only collect a share of proceeds generated and already have the equipment, eliminating those costs as well.