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Biodiesel Industry Urges Congress to Close Loophole on Oil Co.’s Renewable Diesel
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What started out as strong U.S. energy policy has been weakened by a recent ruling by the U. S. Department of the Treasury, which approved a request by ConocoPhillips to expand the definition of renewable diesel. This ruling means oil companies, like ConocoPhillips, can take advantage of a dollar-per-gallon federal tax incentive for merely adding raw vegetable oils and animal fats into their conventional diesel refining process.
“I see this as a simple question about what makes sound energy policy: Do you take limited government resources and invest them in new energy technologies built from the ground up? Or do you take those dollars and give them to large, mature, highly profitable companies that will use those dollars for their conventional petroleum processes?” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “Subsidizing existing capacity does not create many of the benefits that the biodiesel tax incentive has created.”
Since the biodiesel tax incentive passed in 2004, biodiesel plants have grown more than 4-fold, with 105 plants capable of producing 864 million gallons of domestic biodiesel from coast to coast. That means the biodiesel industry can displace 864 million gallons of petroleum produced from foreign oil. Another 1.7 billion gallons of capacity is reported to be under construction.
A recent economic study found that the biodiesel industry will add $24 billion to the U.S. economy. That economic stimulus created by biodiesel plants more than pays for the biodiesel tax incentive. Further, using existing refining capacity to make renewable diesel does not add significant jobs to the U.S., unlike with the biodiesel industry’s growth. Public opinion research shows 82% of Americans support a federal tax incentive for biodiesel.
“If oil companies want to subsidize their existing petroleum refineries with this product, then the merits of that process and fuel should be evaluated and debated before Congress, and not through an exploitation of an ambiguity in the tax code,” Jobe said. He added that NBB hopes to see Congressional legislation passed that will close this tax loophole.
Scott Hughes, NBB Director of Governmental Affairs, recently testified to the House Committee on Energy and Commerce Subcommittee on Energy and Air Quality on biodiesel’s impact on energy security and other societal benefits.
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Bi-o-diesel: The San Francisco Fleet
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The City of San Francisco is now the largest city to use a 20 percent blend of biodiesel (B20) fleet-wide. This announcement, made by Mayor Gavin Newsom at a biodiesel retail pump, came appropriately just two days after Earth Day.
“Every city bears responsibility for taking local action to address our global climate crisis, and vehicle emissions are a major source of greenhouse gases,” said Mayor Newsom. “When it comes to the use of alternative fuels, renewable energy sources and greening our city fleet, San Francisco is demonstrating leadership and commitment on every front.”
“The city of San Francisco departments have announced various strategies using biodiesel to reduce air pollution and greenhouse gases, and to use local resources to produce biofuels,” said Randall von Wedel, a biochemist representing the National Biodiesel Board (NBB) in state regulatory affairs, based in the San Francisco area. “We hope that San Francisco will serve as a model for other large cities on how to make a difference in reducing air pollution, greenhouse gases and dependence on petroleum fuel."
The city’s “Biofuel Recycling Program,” announced at the same time, will collect waste grease and cooking oil from area restaurants to make into biodiesel. The grease will be fed to anaerobic digesters to produce methane gas for electric power generation at the city’s waste water treatment plant. All 325 of the waste management company’s trucks are running on B20. That is in addition to the thirty-nine percent of the city’s diesel vehicles that are already running on B20. All 2,000 city-owned vehicles will be running on B20 by the end of this year.
The city started the pilot program using B20 in various locations such as the San Francisco International Airport and the San Francisco Fire Department (SFFD) in 2006. During the National Biodiesel Conference held in February in San Antonio, NBB honored firefighters Mike Ferry and Brie Mathews from the San Francisco department for their personal influence in starting SFFD on B20.
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BQ-9000: New Companies and New Learning Opportunities
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The National Biodiesel Board (NBB) congratulates two new companies on their acceptance into the BQ-9000 program. Peach State Labs, an NBB-member biodiesel producer, of Rome, Ga., received its Accredited Producer status in April, as did Pro Petroleum, Inc., which became a Certified Marketer. Pro Petroleum is based out of Phoenix and is a biodiesel distributor. There are now 18 accredited producers and seven certified marketers in this voluntary quality assurance program.
For those who may be newer to the program, don’t forget to register for the ongoing one-day BQ-9000 seminars, held throughout North America. “Understanding and Implementing BQ-9000” seminars will provide the fundamentals for implementing BQ-9000.
BQ-9000 couples the foundation of universally accepted quality management systems with the product specification ASTM D 6751, and has become the premier quality designation in the industry. These seminars focus on understanding the details of the requirements, the steps to implement the requirements, and the most efficient approaches to managing the registration project. Organizers encourage quality managers, operations managers, and other management personnel from biodiesel industry companies and organizations to attend.
The remaining dates are as follows:
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May 3 – Charlotte, N.C.
- June 14 – Seattle
- July 12 – Winnipeg, Manitoba
- August 16 – Boston, Mass.
- October 18 – Las Vegas
Visit www.bq-9000.org or contact Anne Klempke at the NBB office, 800-841-5849 or aklempke@biodiesel.org, to register for a course.
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Biodiesel Training Webinars Start this Week
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The Petroleum Marketers Association of America (PMAA) and the National Biodiesel Board (NBB) are offering a series of free comprehensive biodiesel educational programs starting this week. The webinars are designed to teach petroleum distributors about biodiesel and Bioheat® fuel oil.
The NBB is working to meet petroleum marketers’ growing appetites for biodiesel information in a convenient and cost effective way that does not require travel expenses. Each one and a half hour session webinar will cover:
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Biodiesel basics, production, feedstocks and ASTM specifications
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BQ-9000 quality program and what it means to the industry
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Real-time production and prevailing demand
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Biodiesel market drivers
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Handling and distribution strategies - upstream and downstream
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Cold flow and stability concerns and suggested remedies
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Bioheat® fuel oil
This will be an opportunity to have questions answered in detail. We hope you can join one of the following sessions: May 3, 10 and 17 (Thursdays), 2:00 EST. To enroll, please log on here.
You must register in order to obtain the webinar information. Please note that if you are viewing this as a group, only one person needs to register. For more information on the agenda, please contact Paul Nazzaro, NBB Director of Petroleum Affairs, 978-664-5923, or advancedfuel@comcast.net. For general information, please contact Susan Isard, PMAA Manager of Programs & Administration, 703-351-8000, or sisard@pmaa.org.
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Kansas Farmer Relays Some of Earthrace’s Ups and Downs
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Earthrace is now en route to Singapore after several days in Koror, near Palau, awaiting parts for engine damage. Earthrace set out to break the world record for circumnavigating the globe, while also using biodiesel. Although the record bid is still in place, Captain Pete Bethune has said time was built in for one problem while pursuing the record, not the three they had. Harold Kraus, Kansas farmer and longtime National Biodiesel Board member, sponsored and served as crew on one leg of its ongoing journey.
As a former naval aviator and as a biodiesel advocate, Kraus knew early on he wanted to be a part of this endeavor. He became the first leg sponsor for the race, in 2003. While on his San Diego/Maui leg, Kraus experienced some days of repairs while still in San Diego, and days of storms at sea. Last year, he was on a familiarization leg of its U.S. promo tour, also in California.
“One of my duties during the actual race bid was doing 6-8 hours at the helm during the day to give the three crewmen a chance to get some well-needed rest,” said Kraus. “My years of service in the Navy enabled me to understand seamanship, navigation, crowded living conditions and non-air-conditioned vessels. I used all of those experiences on the Earthrace. I do not think I could have been of use to the crew of Earthrace if I had not had the naval training and the summer training on Earthrace.
“On my way back to Kansas, I was tired, happy and very satisfied that I was a part of this effort to promote biodiesel and possibly set a world speed record,” said Kraus. “My hat is off to Pete and all the various ground and sea crews of Earthrace. They are extremely talented, hard working, and at the top of the list: Volunteers for the cause.”
Since its departure on March 10 from Barbados, Earthrace was involved in a fishing boat accident which left one fisherman dead in Guatemala and two episodes of waiting for several days on repairs or needed parts.
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Speaker Pelosi Visits Biodiesel Plant In Push for Energy Legislation
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House Speaker Nancy Pelosi rallied for energy legislation at a press conference held at Seattle Biodiesel headquarters April 13. Pelosi described a commitment to reducing carbon emissions and developing American-made fuel sources. She told media that lawmakers "have an approach that says that America's farmers will fuel America's energy independence. We will send our energy dollars not to the Middle East, but to the Midwest and to rural America." Pelosi has pledged to have energy legislation on the floor before the July 4 recess.
Imperium Renewables, a member of the National Biodiesel Board, is parent company to Seattle Biodiesel.
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The Happiest Place on Earth Now More Earth-Friendly
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The Governor of California recently helped announce Disneyland’s new green initiative of using biodiesel in its train engines. At an Anaheim event, Gov. Schwarzenegger said, “You are here at Disneyland which is a perfect example of running things green. We can see the locomotive trains running on biodiesel, the subs with zero emissions, and how the park recycles. It is really an extraordinary place that is a perfect example to the rest of the state.”
The park switched over to B98 (biodiesel with 2 percent diesel) recently for all the trains, and made the announcement as part of a South Coast Air Quality Control Management District event on April 18 -- just days before Earth Day. The engines are authentic (1880s) steam trains that were retrofitted in the 1950s to run on diesel fuel.
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Kum & Go Adds Biodiesel Blends to 28 Iowa Stations
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Kum & Go, a line of convenience stores, has added a B2 biodiesel blend to 28 Iowa retail locations. These additions bring the number of Kum & Gos in Iowa carrying B2 (2 percent biodiesel/98 percent diesel) to 36.
“Kum & Go is proud to be an active member of the renewable fuels industry that is dedicated to providing consumers effective fuel alternatives. These alternatives also create development opportunities for the state of Iowa and the entire Midwest,” said Kyle J. Krause, president and CEO of Kum & Go. Further, Kum & Go offers E85 at five retail sites in Iowa.
A complete list of Iowa’s biodiesel retailers can be found at www.iowarfa.org/biodiesel_retailers.php.
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Nissan to Introduce Diesel Maxima in 2010
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Nissan announced recently its plans to launch its first clean diesel engine in the United States for use in the Nissan Maxima in 2010. The passenger car will be powered by an all-new Alliance engine co-developed with its partner, Renault, and will clear stringent U.S. Environmental Protection Agency (EPA) Tier II Bin 5 emissions requirements. Further details about the car, including its launch date, will be announced later.
“Nissan is fully engaged in reducing emissions and improving fuel economy and efficiency. Launching a clean diesel engine in the U.S. will offer customers the benefits of fuel economy, CO2 reduction and a satisfying, fun-to-drive performance that is a hallmark of the Nissan brand,” said Carlos Ghosn, President and CEO of Nissan Motor Co., Ltd., in a speech at the Council on Foreign Relations. “You can expect to see more diesel engines in our product lineup in Europe, Japan, North America and China by fiscal year 2010.”
Nissan already has clean diesel engines in Europe offering significant fuel efficiency and the ability to run on biodiesel fuel blends, according to its company press release.
This U.S. initiative is part of Nissan’s plan to reduce CO2 emissions for the future as outlined in Nissan Green Program 2010, the company’s mid-term environmental strategy. Nissan will be investing in a variety of technologies including fuel cell cars, hybrid cars, biofuel-based cars, electric vehicles, improvement in gasoline engines and clean diesels.
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