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California UST Issue Resolution
After much work, the California Biodiesel Alliance (CBA) is nearing the goal line on the variance program it has worked to create with the California Water Board to resume the storage of biodiesel in underground storage tanks (USTs).
CBA has created a new web page on its website to house the UST information.
A big thank you to everyone who worked so hard to make this happen.
This should pave the way for California to resume its role in leading the nation with innovative biodiesel programs.
Eric
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savebiodiesel.org
An important new campaign lead by our friends Robin and Michele at Dogpatch Biofuels. Please take a moment to check out the website and sign the petition. This issue has the potential to spin out of control and cause great damage to the emerging biodiesel industry. Please act now!
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Hello everyone,
Please check out a new campaign website: savebiodiesel.org !
We sent out an e-mail about a month ago regarding the compatibility issues arising with biodiesel and new diesel vehicles. To quickly re-cap: the method in which many engine manufacturers are handling new emissions control systems (year 2007.5 and newer) involve in-cylinder injection of fuel late in the engine cycle. This has been shown to lead to engine oil dilution which is exasperated by the use of biodiesel, in blends from B5 to B100.
In order to make it easier to gather support (and at the great suggestion of some of our customers) we have created a website detailing the issue and an online petition which will go out to engine manufacturers along with the California Air Resources board and the EPA. The idea is to build grass roots support from us, the consumer, to demonstrate why biodiesel needs to be a viable option for all diesel vehicles.
We invite you to browse the website (savebiodiesel.org) to learn more about the issue and please add your name to the petition.
In addition please contact us if you have ideas about how to build this campaign. And please share the website with anyone you think would be interested.
Thank-you for your support!
Robin & Michele
Dogpatch Biofuels
765 Pennsylvania Ave.
San Francisco, CA 94107
ph: (415) 643-3435
http://dogpatchbiofuels.com
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Forbes Biodiesel Article - Good, but missing a key peice of the story
A recent article in Forbes about Imperium's struggles generated a lot of discussion on one of the regional biofuel email lists that I am on. It prompted me to post a comment on the forbes.com website about the need for waste feedstock biodiesel and regionally appropriate biodiesel plants. The biodiesel industry needs to focus on its future if it is to be successful and that future is waste feedstock biodiesel . . . . leading eventually to non-food crop biodiesel from crops like Jatropha and algae.
Article and comment can be found here.
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Biofuels Bloodbath
The stream of ethanol and biodiesel failures seems unending.
Today brought us the news of Aventine's demise: http://www.reuters.com/article/deborahCohen/idUSWEN701420090408
A couple weeks before that was NOVA BioSource. NOVA probably has the best biodiesel plant in the country - state of the art, multi-feedstock, low cost and scale, but with debt equal to their assets and no working capital, they could not keep the ship afloat.
Before that it was VeraSun, the country's largest independent ethanol producer.
Our friends at Salon.com have pick-up on this trend with an ongoing series they call "Biofuels Deathwatch." See latest here: http://www.salon.com/tech/giga_om/clean_tech/2009/04/05/biofuels_deathwatch_pacific_ethanol_nova_biosource_join_the_bandwagon/index.html?source=rss&aim=/tech/giga_om/clean_tech
Who will benefit from all of this? Certainly not the investors who piled into biofuels during the boom years from 2005 to 2007. Large Ag, vertically integrated and with a diverse source of revenues, certainly benefits. As does Valero who picked up several of the VeraSun plants on the cheap. And I would guess, some very smart visionary investors will begin picking up these plants at distrissed asset prices and make a princely sum. For now, they all seem to be sitting on the sidelines though, waiting to find the bottom, which shows no sign of having been reached.
The journey continues . . .
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What do San Francisco, President Obama, Darryl Hannah, and Melissa Etheridge have in common?
They all appear in another great story from my friend, biodiesel advocate and journelist, Eric Smith.
Chron:http://www.beyondchron.org/articles/The_2009_National_Biodiesel_Board_Conference_in_San_Francisco_6574.html
The world of biodiesel producers, advocates, retailers and scientists,descended on San Francisco this week for the annual 2009 NationalBiodiesel Board Conference and the Sustainable Biodiesel Summit at theMoscone Center.San Francisco is perhaps the largest city in the worldto employ biodiesel in its diesel fleet, including MUNI and the SFFire Department, as well as private companies like the Red and Whitefleet at Fisherman's Wharf and the locomotives of the San FranciscoBay Railroad. With luminaries from around the globe and advocates likeactress Darryl Hannah in attendance, the NBB's executive director Joe Jobe opened the conference and spoke of the many challenges facingthis alternative fuel, including an assault from junk scientists andlobbyists from the petroleum industry.
To showcase San Francisco for the event, Jobe scouted the city severalmonths ago, filming San Francisco's wide array of successful biodieseluses, from the SFPUC's successful Greasecycle, to Berkeley's Biofuel Oasis. What transpired was an unforgettable week of biodieseleducation, networking and the resolve to join together in facing oneof the planet's biggest challenges, our dependance on oil.
"I can't believe they are going sustainable", proclaimed a jubilant Hannah, upon hearing the NBB's adoption of the Sustainable Biodiesel Alliance's sustainable principles. The grassroot offsprings of theNBB, the SBA and the California Biodiesel Alliance, once languished in"shadow conferences" preceding the traditional NBB meetings. Nolonger. Now these groups have a seat at the table and the NBB and it'senergetic director Jobe have recognized the work of these biodieselpioneers on the front lines. "Make no mistake, we are out manned andout gunned by an extremely well funded petroleum industry who will doanything they can to stop us", says Jobe. "We have science and thefacts are on our side". Indeed, the petroleum industry as well as thegrocery manufacturers have hired an army of lobbyists and marketers tosell the public on the fuel vs. food myth, despite overwhelmingevidence to the contrary.
The City of SF was honored appropriately and a few members of itsbiodiesel community were brought on to the stage by Jobe to begin theconference. Dr. Randall von Wedel of the biodiesel testing labCytoCulture, received the NBB's "Impact" award for his outstandingachievements in biodiesel; MUNI's Marty Mallera, SF Fire Department's Mike Ferry, SF Department of the Environment's Vanadana Bali, and theSFPUC's Karri Ving of the SF Greasecycle program, all helped toconvert the city to biodiesel and make Mayor Gavin Newsom's B20mandate a reality. Panelists during many of the NBB's sessionsincluded Tellurian Biodiesel CEO and SF Biodiesel Access Taskforce Chair Eric Bowen, Community Fuel's Ryan Lamberg, Jennifer Ratke ofBerkeley's Biofuel Oasis and myself as the Director of Green Depot.
This conference had it all; debates on feedstock issues,sustainability, quality, calculating life cycle analysis and indirectland use assessments, the latest diesel vehicles, and saw a showcaseof some of California and the country's best and brightest biodieselpioneers. Ben Jordan, founder of the Biofuels Recycling Cooperativeand architect of the SF Greasecycle, Hawaii's Bob and Kelly King ofPacific Biodiesel, Jeff Plowman and Annie Nelson of the SBA, KumarPlochar of Yokayo Biofuels, Colorado's K. Shain, Dr. Dan Freeman ofSeattle, Rachel Burton of Piedmont Biofuels, Biofuel Oasis co-founderSara Hope Smith of Oregon and Biofuel Station's Kimber Holmes whohosted the weekend's Sustainable Biodiesel Summit. These folks hadworked tirelessly and sacrificed much to see the grassroots biodieselmovement take it's rightful place among the NBB.
Biodiesel Magazine's Ron Kotrba observed in his web column this weekthat "the second of three general sessions was as moving as it wasinformative. The National Biodiesel Board shared the stage withactress Darryl Hannah and singer Melissa Etheridge, who are bothpassionate about using renewable energy and biodiesel. Starting themorning, NBB chairman Ed Hegland said the board's goal is to havebiodiesel make up 5 percent of the national diesel fuel pool by 2015,a plan called 5 x 15. "And we're well on our way there," he said. Thetheme of the day's general session was sustainability, which Heglandcalled the "defining word of our time."
Kotrba also wrote that Hannah, "a familiar face to regulars at theannual biodiesel event, gave a heartfelt talk to the audience about adocumentary she's been working on, regarding sex slaves and theinternational trafficking of minors for the purpose of selling sex.Her moving speech, which wasn't read off a teleprompter but rathercrumpled pieces of paper she held in her hands, went from humantrafficking, to the state of the oceans, to the burning ofrainforests, to the "toxic patchwork" of unsustainable agriculture, tobiodiesel exports. Hannah said she knew a man who lived near a largebiodiesel plant and he was excited to start using it, but couldn'tfind any locally because all of the fuel was being exported out of thecountry. She said a situation like that needs to change; however, Jobehumorously cautioned that her views aren't necessarily the views ofthe NBB."
One of the most moving moments of the conference involved singer Melissa Etheridge, who performed during the conference's secondgeneral session and according to Kotrba, "Gave a spectacularperformance of her song, "If not now, when?" After the song, she toldthe audience the story about her rise to stardom, and once she made itthere, she asked herself, is this it? After years of being a recordingartist, her name being bought and sold from record company to recordcompany – she jokingly said one day she found out unbeknownst to hershe was the property of Seagram's Gin – she felt like there should besomething more. Shortly afterwards, she felt a lump in her breast andshe was diagnosed with breast cancer.Etheridge said after weeks and weeks of chemotherapy, lying in her bedthe whole time because light hurt, sound hurt, she was taken to ahigher place of awareness and understanding; similar to a monk whomeditates himself to supreme enlightenment. "I started to understandwhat we are," she said. Al Gore called her one day, she said, andasked her to "check out his slide show," called "An InconvenientTruth." She eventually wrote the song for that documentary and won anOscar. She then realized that in order to be healthy people, we need ahealthy planet. "I asked myself, `What can I do?'" Later, she ran intoWillie Nelson, who was heavily promoting biodiesel then, and the restis history."
Yesterday saw the closing of the conference and coincided with Mayor Newsom's press conference about a new biofuel collection planinvolving "brown grease", in other words, the waste found in greasetraps. Now even this waste can be turned into biodiesel. The biodieselmovement in San Francisco and California indeed rolls on, however manyreal challenges face this fledgling alternative fuel. There is thecontinuing debate on NOx emissions and how best to combat them; TheCalifornia State Water Board still has issues with the "UST's",otherwise known as underground storage tanks. As of today, only blendsof B5 biodiesel (5% biodiesel, 95% petroleum), are rated to be in themuntil UL, (Underwriters Laboratories), certifies them for higherblends. Meantime, biodiesel distributors are in limbo until atemporary agreement can be reached. The EPA, CARB, the CaliforniaBiodiesel Alliance and the NBB continue to meet with the Water Boardto resolve this issue; The petroleum industry, the grocerymanufacturers and their lobbyists continue to fund "junk" scientiststo try and debunk the benefits of biodiesel and continue theirill-conceived fuel vs. food fight. Lastly, some of the automakers aremaking the 2010 models more difficult to use pure biodiesel by makingthem even more petroleum diesel friendly. If they don't change theirways, many states may act to ban those vehicles from being sold andsend a clear message that all diesel vehicles must continue to be ableto use biodiesel without any potential fuel injection issues.
One thing is clear. In July of 2008, the United States saw its oilsupply reach "peak production". That means from here on out, no matterhow much we drill, or how many new provinces may yet be mined, we havereached our peak. We will never see oil production at those levelsever again. It is projected that the world's peak production,(Including Saudi Arabia, Russia, South America, etc.), could reachpeak production by as early as 2050. Until a new technologies, perhapselectric, can be perfected, the diesel engine is still the world'sbest motor and biodiesel, of all of the of the alternative fuels,continues to have the best energy ratio and sustainability.
President Barack Obama understands this dilemma and has spoken aboutthe need to use more biofuels. We really need to listen and heed hisadvice before it's too late.
Eric "Doc" Smith is the Director of Green Depot, a non-profit thatpromotes the use of biodiesel in communities challenged byenvironmental justice issues. He is also Vice-Chair of the SanFrancisco Biodiesel Access Taskforce and a board member of theBiofuels Recycling Cooperative, architects of the SFPUC's GreasecycleProgram. He drives a 2001 VW Beetle that runs exclusively on biodiesel.
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CBA Success: SB 1574 Vetoed and Biodiesel UST Standards Ordered by Governor
Friends, As you know, the California Biodiesel Alliance introduced SB 1574 to protect California’s right to use biodiesel. We were forced to take many last-minute amendments to the bill in the legislative process, and once the dust settled, it became clear that the bill as amended would do more harm to the biodiesel industry than good. For example, the bill only provided partial protection to USTs currently storing biodiesel and prohibited converting more USTs to biodiesel and any new USTs for biodiesel, in effect banning all new biodiesel tanks in California. That is obviously an unacceptable “solution.”
As a result, CBA requested that the Governor veto the bill and direct the state’s regulatory agencies to work toward a better solution for biodiesel. We are happy to report success, which you can learn about in detail at
http://gov.ca.gov/pdf/press/SB1574_Florez_Veto_Message.pdf.
Our focus now is on working closely with the Governor’s staff and key players, including Cal EPA, Water Board, and ARB. These efforts to find a solution to the UST issue will be critical to the future of biodiesel in California and will help set standards for biodiesel use nationwide.
CBA is forming a Biodiesel UST Users Working Group. We will be following up with those of you who have been threatened by, or suffered directly from, the inappropriate shutting down of biodiesel in USTs to urge your participation.
Because of your extremely responsive and time-sensitive involvement in this issue in recent months, we have introduced Sacramento to a strong statewide network of support for biodiesel from industry, municipalities, and consumers.
Thank you so much, and we look forward to working with you on this urgent issue going forward!
Sincerely,Celia DuBose forEric Bowen, ChairmanCalifornia Biodiesel Alliance
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Tax Credit Extended and Tax Credit for Used Cooking Oil Biodiesel Increased to $1.00
A big victory for the biodiesel industry and sustainable biodiesel in particular.
The tax extensions now last through Dec 31, 2009.
We have achieved equity for yellow grease with soy and other biodiesel feedstocks at $1/gallon.
Splash and dash tax loophole for biodiesel closed.
Congratulations to everyone who worked so hard to make this happen.
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Biodiesel Tax Credit Extension
The biodiesel tax credit is set to expire 12/31/08. Without an extension, the biodiesel industry will be dealt another devestating blow. Congress needs to extend the credit ASAP. Here is CBA's letter to the House stressing the importance of passing an extension before the end of the year.
Testimony of Eric M. Bowen
Chairman of the California Biodiesel Alliance
Submitted to the U.S. House Committee on Small Business
September 12, 2008
Chairwoman Velazquez, Ranking Member Chabot and Members of the Committee, I thank you for the opportunity to submit testimony today on behalf of the California Biodiesel Alliance (CBA) about the importance of the biodiesel tax incentive to the many small businesses that comprise the U.S. biofuels industry.
About the CBA: The California Biodiesel Alliance (CBA) is a non-profit corporation dedicated to promoting biodiesel in California. CBA was founded in 2006 by California biodiesel pioneers and industry leaders and represents the biodiesel industry in government relations in California and Washington, D.C. We believe that biodiesel can be a significant contributor to improving local air quality, reducing California’s dependence on foreign oil and reducing greenhouse gas emissions.
Economic & Environmental Benefits of Biodiesel to California: The economic impact to California from biodiesel development can be substantial. California is the largest state with a population of 36.6 million (12.2% of US population) and home to one of the world’s largest economies with a Gross State Product of >$1.5 trillion. California is also the largest consumer of fuel in the United States, using over 10 percent of the nation’s fuel. California is the home to 13 biodiesel plants that are either in operation or under construction. The direct, indirect, and induced increase in annual economic activity to California from a thriving biodiesel industry would be significant.
In 2007 alone, the U.S. biodiesel industry contributed over $4.1 billion to the nation’s Gross Domestic Product (GDP) and supported 21,803 jobs. In addition, economic modeling suggests that a vibrant biodiesel industry will positively impact the U.S. economy in multiple ways. America’s biodiesel industry will add $26 billion to the U.S. economy between 2007 and 2012, assuming biodiesel growth reaches 1 billion gallons of annual production by 2012. Biodiesel production will create a projected 38,856 new jobs in all sectors of the economy and additional tax revenues from biodiesel production will more than pay for the federal tax incentives provided to the industry. Equally as important, it will keep billions of dollars in America that would otherwise be spent on foreign oil. As such, there is a compelling public policy argument to be made to justify increased biodiesel production and use in U.S. (and California), and the biodiesel tax incentive is an integral part of a sound public policy framework that will allow biodiesel to play a constructive role as part of the nation’s overall energy strategy.
California Biodiesel Market: In California, demand for petroleum based transportation fuels exceeds 20 billion gallons/year. Diesel demand accounts for roughly 20% of this amount, or 4 billion gallons/year. According to the California Energy Commission, demand for diesel in California is expected to increase at a rate of 2.8% annually, outpacing the growth in demand for gasoline at 0.7%/year. According to the Energy Information Administration, transportation fuels in California account for 73.5% of total petroleum consumption as compared to 62.9% nationally. State-wide adoption of a 5% blend of biodiesel (B5), the ASTM D 975 petroleum diesel equivalent, California could support a market of over 200 million gallons/year today.
Small Business Impact: Nationally, the biodiesel tax incentive has helped increase the production and use of biodiesel from 25 million gallons in 2004 to 500 million gallons in 2007. It has established the industry as we know it, providing the stability necessary for new research and development into the next generation of fuels and fuel sources. If the biodiesel tax incentive was to lapse, biodiesel production in California would halt and the development of new production and distribution facilities would be curtailed or lost. This would have a devastating impact on the numerous small businesses that comprise all facets of the industry and jeopardize their long-term viability. Additionally, it would send negative signals to the private investment community that continues to play a crucial role in supporting the small businesses that comprise California’s biodiesel industry. This would severely disrupt the development of the State’s biodiesel industry which, in turn, would impede the State’s ability to comply with its own aggressive regulatory goals. If California’s fledgling biodiesel industry is hampered by a lapse in the tax incentive it would cripple the substantial in-state development activities and creating ripple effect that will be felt across the entire U.S. and renewable fuels industry.
Environmental Impacts: California, a proven leader in the advancement of environmental regulations that become standard practice throughout the U.S., is currently developing their Low Carbon Fuel Standard (LCFS) which will achieve significant carbon and GHG emission reductions. Biodiesel is expected to play an integral role in achieving these goals but the economic fallout from a lapse in the tax credit will have a direct effect on California’s ability to meet its own environmental targets.
In California, 42% of the GHG emissions are from transportation fuels and petroleum based diesel is the leading cause of emissions related respiratory illnesses. Biodiesel provides a simple and highly effective solution to these problems. The adoption of biodiesel as an alternative fuel requires minimal efforts and changes in existing infrastructure.
Biodiesel is an environmentally safe fuel, and is the most viable transportation fuel when measuring its carbon footprint, life cycle and energy balance. The USDA/DoE lifecycle study shows a 78% reduction in lifecycle CO2 for B100. The use of 200 million gallons of biodiesel in California would reduce current life cycle greenhouse gas emissions by 3.2 billion pounds, the equivalent of removing 280,000 passenger vehicles from our roads.
Biodiesel’s emissions significantly outperform petroleum based diesel. Research conducted in the U.S. shows biodiesel emissions have decreased levels of all target polycyclic aromatic hydrocarbons (PAH) and nitrited PAH compounds, as compared to petroleum diesel exhaust. These compounds have been identified as potential cancer causing compounds.
Biodiesel is the only alternative fuel to voluntarily perform EPA Tier I and Tier II testing to quantify emission characteristics and health effects. That study found that B20 (20% biodiesel blended with 80% petroleum diesel) provided significant reductions in the total hydrocarbons; carbon monoxide; and total particulate matter. Typically, emissions of nitrogen oxides are either slightly reduced or slightly increased depending on the duty cycle of the engine and testing methods used. Research also documents the fact that the ozone forming potential of the hydrocarbon emissions of pure biodiesel is nearly 50% less than that of petroleum fuel. Pure biodiesel typically does not contain sulfur and therefore reduces sulfur dioxide exhaust from diesel engines to virtually zero.
Energy Strategy: Together, biodiesel & California are critical to any responsible energy strategy that seeks to reduce dependence on foreign petroleum. Through the increased production and use of renewable transportation fuels such as biodiesel, California could have a significant role in the reduction of the United State’s dependency on foreign oil. California serves as the major petroleum import hub on the West Coast supplying much of the Western U.S. via Nevada, Arizona, and Oregon. California is home to 21 petroleum refineries that account for roughly 12% of U.S. refining capacity, exceeding 2 billion barrels/day, importing 36% of its refining capacity from foreign sources.
The goal of California AB 1007 (State Alternative Fuels Plan) is to reduce petroleum consumption and GHG emissions through the increased use and in-state production of biofuels. California can readily produce significant volumes of biodiesel from waste sources such as recycled cooking oils (yellow & brown grease), animal fats, and other biomass-based waste sources via traditional and developing technologies. Furthermore, the opportunity for agricultural development of dedicated energy crops such as Camelina, Jatropha, and Algae is very promising. These next generation energy crops also have numerous sustainable benefits – high oil yields, can be grown on marginal lands, require minimal inputs such as water and fertilizer, and do not compete with existing agricultural systems. With the use of B5 (5% biodiesel blended with 95% petroleum diesel), the ASTM D 975 petroleum diesel equivalent, California could support a market of over 200 million gallons/year and displace more than 8 million barrels of foreign oil. In addition, biodiesel is an extremely efficient fuel that creates 3.5 units of energy for every unit of fuel that is required to produce the fuel. For these reasons, the use of biodiesel can greatly contribute to domestic energy security.
Failing to Extend the Tax Incentive Unjustly Penalizes California: A comprehensive and fair energy policy requires tax incentives that do not reward one area of the country while penalizing another. We applaud support for all biofuels, including incentives for ethanol, but respectfully point out that at this time, crops best suited for production of biofuels are also well suited to be grown in California. As you are aware, the federal Farm Bill that passed this session included tax incentives for ethanol, thus providing strong support for agriculture and the biofuels produced in the Midwest and Farm Belt region of our country. If the biodiesel tax credit is not extended, small businesses in California that comprise the State’s biodiesel industry will be placed in an unequal and unfair position relative to our fellow citizens to the North and East who can produce biofuels from more water-intensive crops such as corn and soybeans.
It is important to note that the CBA strongly advocates for an energy strategy that benefits the entire country, and not one particular region. We believe a balanced and fair energy policy should be ecology neutral and reward each region for its contribution to our domestic energy supply. Tax law should be even-handed, and provide incentives that benefit the ability to produce biofuels from all of our nation’s diverse ecologies. Federal policy also must be cognizant of a region’s energy needs and ability to deliver its “homegrown” fuel. Biodiesel can be produced on California’s marginal lands, and can be made readily available to consumers if the Congress provides the essential tax incentives necessary for its development.
Extension of the Biodiesel Tax Incentive Is A National Priority: The biodiesel tax incentive is set to expire on December 31, 2008. Expiration of the incentive would have a catastrophic impact on the U.S. biodiesel industry, and the CBA urges Congress to approve and the President to sign an extension of the incentive before the end of the year.
The biodiesel blenders excise tax is structured in a manner that helps make biodiesel price competitive with conventional diesel fuel. If the tax incentive is allowed to expire at the end of the year, the price of biodiesel will be significantly higher than petroleum diesel, thus significantly reducing demand and making it nearly impossible for biodiesel plants to produce fuel at a profit. Thus, it is safe to assume that if the biodiesel tax incentive lapses, biodiesel production in California and the U.S. will halt or at a minimum be severely curtailed, and the energy security, environmental, and job creation benefits that the nation realizes from biodiesel production will be lost.
I would note that both the Baucus/Reid and McConnell/Grassley energy and tax extenders packages that have been unveiled in the Senate contain similar biodiesel provisions as those contained in H.R. 6049. For the sake of the biodiesel industry and the sake of America’s need to achieve energy independence, the CBA urges Congress to extend the biodiesel tax incentive prior to adjournment. A lapse in the incentive will be a devastating setback to an industry that has the capacity to make a positive contribution in breaking our dependence on foreign oil.
Again, Chairwoman Velazquez, Ranking Member Chabot and Members of the Committee, I sincerely appreciate the opportunity to submit testimony, and would be more than happy to answer any questions you may have.
/s/ Eric M. Bowen
Eric M. Bowen
Chairman, California Biodiesel Alliance
President & CEO Tellurian Biodiesel, Inc.
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Preserving Access To Biodiesel In California - SB 1574
The California State Water Resources Control Board (SWRB) recently issued a letter indicating that biodiesel cannot be used in underground storage tanks (USTs) because Underwriters Laboratory (UL) has not certified the USTs for use with biodiesel. The UST equipment manufactures have tested biodiesel with their equipment and approved them for use with biodiesel, but UL has not had sufficient time to complete its certification processes as it has been focused on other fuels like ethanol. This threatened to shut down municipal biodiesel programs and biodiesel stations throughout the state. The California Biodiesel Alliance sponsored SB 1574 to create a grace period for UL to compete its work, allowing biodiesel to continue to be used in USTs during the grace period.
I have included below a representative sample of a support letter, this one from the Mayor of Stockton, who's program was in jeopardy of being shut down.
We still have work to do to get this bill passed. It has been wonderful to receive broad based support for this bill and we are hopefully it will become law shortly.
Eric
* * *
June 24, 2008
FAX 916-319-2106
The Honorable Jared Huffman, Chairman
Assembly Environmental Safety and Toxics Materials Committee
State Capitol
Sacramento, CA 95814
SUBJECT: SUPPORT FOR SB 1574
I am writing to express our support for SB 1574, which will allow biodiesel stations and fleets operators to continue to use biodiesel in underground storage tanks (UST).
The State Water Resources Control Board (SWRB) has recently issued a letter indicating that biodiesel cannot be used in UST because Underwriters Laboratory (UL) has not certified the UST for use with biodiesel. The UST equipment manufactures have tested biodiesel with their equipment and approved them for use with biodiesel, but UL has not had sufficient time to complete its certification processes as it has been focused on other fuels like ethanol. SB 1574 creates a grace period for UL to compete its work, allowing biodiesel to continue to be used in UST during the grace period, which will expire as soon as the UL standards are in place or until January 1, 2012, whichever is sooner.
The need for this legislation is extremely urgent. In a few short months, local enforcement agencies have moved quickly, shutting down city-run programs in Santa Monica and Pasadena, threatening the city of Stockton’s program, and red-tagging pumps at fueling stations around the state, making it illegal for them to receive future biodiesel shipments. Important state goals like the Low Carbon Fuel Standard and AB 32 are seriously threatened by this situation. Biodiesel is the only low carbon diesel fuel available on the market today.
We strongly support SB 1574, which would allow biodiesel fueling to continue while cities and industry cooperate to insure the best certification for underground storage tanks, pipes, and fittings. Please do not hesitate to contact me should you have any questions.
Sincerely,
EDWARD J. CHAVEZ
MAYOR
EJC:CT:jml
cc: Louie Brown, CBA Lobbyist (FAX 916-448-3850)
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Biodiesel Comes to the SF Bay Railroad
Biodiesel Comes to the SF Bay Railroad
Last Friday, a 5 man team from California's Air Resources Board arrived at the San Francisco Bay Railroad yard to test a variety of biodiesel blends on locomotive engine number 25, the first train to successfully run on biodiesel in San Francisco. "You are witnessing history people", proclaimed David Gavrich, President & CEO of the SFBR, formerly known as LB Railco. The test results from CARB will likely not be known for some time, however the smooth operation of this 1946 diesel engine bodes well considering the large amount of aging locomotives still in operation in the U.S. today. There is hope for many of these necessary relics with the assistance of the SF Department of the Environment and the BAAQMD, (Bay Area Air Quality Management District) "Carl Moyer" grant programs to help refurbish them. Gavrich, a recipient of two such grants applauded the Moyer program, however for some locomotives, they aren't an option. "Some of the parts and infrastructure for these older engines aren't cost effective", he explained. "Biodiesel offers another alternative in the interim".
Fellow SF Biodiesel Access Task Force member and president of the San Francisco Biofuels Cooperative Eric Bowen, joined me on several quarter-mile tests with CARB's crack team. With a hearty "All Aboard", we were off and running. CARB came armed to the teeth with laptops and state-of-the art software, lase r timers, generators, sensors and more. "
It will be great to see the Port doing this next", Gavrich opined, and Bowen, also a member of the Biodiesel Access Task Force's Marine Subcommittee agreed. They may be right, as the infrastructure and cost effectiveness of doing business along the water ways, powered by alternative fuels, safely and responsibly makes a lot of sense.
With the first set of tests completed, Gavrich briefly departed and quickly returned with another fresh supply of 55 gallon drums of "B100" or pure biodiesel from SF Petroleum, the City's supplier of biodiesel to MUNI, it's entire diesel fleet as well as an estimated 100 members of the SF Biofuels Co-op. "This is only the beginning gentlemen!", proclaimed Gavrich, a long time alternative fuels advocate. Gavrich has two locomotives, circa 1946 in his yard; a host of diesel powered lifts and vehicles he plans to use biodiesel on.
Gavrich also hosts many of the truckers from the Bay View Truckers Association, and it's president, Michael Dennis hopes to get many of his members on board. Rising fuel costs are a barrier for many these days, however a variety of options and talk of local biodiesel production are being explored. Gavrich and Bowen also agree that diesel engines will be with us for a while, and until other viable alternatives can be made available, biodiesel, preferably made from sustainable sources, may be one of the best options we have to mitigate some of the effects of global warming and green house gases. New studies and research by the EPA and others may show that NOX emissions from biodiesel may well be less than originally thought, with an increase perhaps as little as 4%. At a recent biodiesel roundtable, Dr. Randall Von Wedel, a leading expert on biodiesel here in the Bay Area, explained that the earlier testing on NOX were outdated, and used a very limited type of engine and conditions to produce a higher NOX score.
Next year, San Francisco will host the annual National Biodiesel Board Conference, and in March of 2009, the City's Green Public Works Ordinance will go into effect, which means any city contractor engaged in public works with diesel vehicles for more than twenty days, must either have their vehicles fitted with particle traps, or use a minimum blend of "B20" biodiesel, 80% petroleum and 20% biodiesel. With City's entire diesel fleet and MUNI now running on B20 biodiesel through the efforts of the Department of the Environment, and the Public Utilities Commission's "Greasecycle" program, collecting waste veggie oil from participating restaurants and turning it in to biodiesel; both with the aid of the SFBC, San Francisco finds itself at the center of the nation's debate on the positive merits of alternative energy and the need to become a more sustainable society.
Gavrich's dream of his railyard, powered by biodiesel must also now be added to the mix. The success of these endeavors will be watched closely indeed. If we get it right here, California and others will surely follow.
E. "Doc" Smith is a member of the SF Biodiesel Access Task Force and the Director of Green Depot, a non-profit organization funded in part by the SF Department of the Environment, advocating the use of biodiesel, particularly in Bayview Hunters Point and Potrero. He can be reached at esmith@greendepot.org
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Tellurian Biodiesel
I have been quiet for several months as Tellurian has been focused on closing some key deals. We are about to being making some fun announcments and I am going to make a renewed effort to post more frequently.
The California Biodiesel Alliance (CBA) has also been busy at work, particulary with California's low carbon fuel standard (LCFS) and a few bills CBA is sponsoring in Sacramento this year. I will also attempt to use this forum to keep those interested updated on CBA's efforts.
Best regards,
Eric
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California Biodiesel Industry Launches Trade Group
The latest news from the California Biodiesel Alliance (CBA).
NEWS
FOR IMMEDIATE RELEASE
Contact: Doug Smith, Secretary
(949) 463-4279
dsmith@bakercommodities.com
September 10, 2007
California Biodiesel Industry Launches Trade Group
Industry and the public invited to help promote low-carbon diesel fuel alternative
Biodiesel pioneers and industry leaders have created a new not-for-profit trade association to promote increased use and production of high quality, renewable biodiesel fuel in California. The group, known as the California Biodiesel Alliance (CBA), is a diverse association of biodiesel feedstock suppliers, producers, fuel marketers and distributors, technology providers, fuel retailers, consumers, and advocates. CBA is committed to developing and protecting the biodiesel supply, educating the public about the benefits of biodiesel, and representing the California biodiesel industry in government relations in Sacramento and beyond.
“We’re inviting industry and members of the public to join us in unleashing the power of the biodiesel market here in California,” said Alliance Chair Eric M. Bowen of Tellurian Biodiesel. “We believe that by working together we can prove that biodiesel has a significant role to play in improving California’s air quality, decreasing greenhouse gas emissions, and reducing the state’s dependence on foreign oil.”
“Our goal is to ensure that biodiesel receives favorable treatment by state and federal regulatory agencies as part of the solution to California air quality challenges and as a benefit to California workers, farmers, and the economy,” said Alliance Secretary Doug Smith of Baker Commodities. “We support California Air Resources Board research studies and the inclusion of biodiesel into the California transportation fuels portfolio.”
CBA offers memberships to biodiesel producers, marketers, and distributors as well as to companies and individuals who support the industry at the highest level of fuel quality. Membership forms are available at http://www.californiabiodieselalliance.org/.
Biodiesel is the fastest growing alternative fuel in the US market with production having tripled between 2005 and 2006, from 75 million gallons to about 250 million gallons. It is renewable, biodegradable, and nontoxic. Biodiesel significantly cuts life cycle carbon dioxide and other harmful environmental emissions, including carbon monoxide, sulfur, and aromatics. It can be made from recycled cooking greases and any vegetable oil or animal fat, can run in any diesel engine with little or no modification, and is compatible with the existing petroleum distribution infrastructure.
For further information: mailto:info@californiabiodieselalliance.org
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San Francisco Continues to Make Great Progress Towards its Goal of B20 in the Entire City Fleet
San Francisco Continues to Make Great Progress Towards its Goal of B20 in the Entire City Fleet. Here is the latest update.
Hi folks,
As of today, 42% of the city's diesel vehicles are running on B20. This is up from 39% in mid-April.
This new total includes one of Muni's diesel-hybrid buses, 29 vehicles from the SFFD (a combination of fire trucks and ambulances) as well as the diesel vehicles at SFO and Central Shops. In addition, roughly 10-15 additional SFFD vehicles occasionally fuel with B20 - these vehicles have not been included in the current total.
Thanks,
Vandana
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Vandana Bali
Clean Vehicles & Alternative Fuels Manager Clean Air Transportation Program
Department of the Environment
City & County of San Francisco
11 Grove Street, San Francisco, CA 94102 http://www.sfenvironment.org/
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Biodiesel Letter To San Francisco Gas Stations
I thought I would share this letter from the San Francisco Biodiesel Taskforce to gas stations in San Francisco encouraging them to consider selling biodiesel at the pump.
Go San Francisco, Go!
June 6, 2007
Gas Station Owner
San Francisco, California
RE: Biodiesel: Environmentally Friendly, Renewable Diesel Fuel – Available Today
Dear Sir or Madam,
We would like to bring to your attention the exciting opportunity provided by America’s fastest growing alternative fuel, biodiesel. The City of San Francisco has adopted a policy to promote the use of biodiesel throughout the City and is considering adopting financial incentives to encourage existing gas stations to provide biodiesel at the pump. The City would greatly appreciate your consideration of offering biodiesel for sale at your San Francisco filling station.
Biodiesel is a safe, nontoxic and biodegradable substitute for petroleum diesel that is made from renewable vegetable oils, recycled cooking greases or animal fats. Biodiesel is designated under federal law as an ‘alternative fuel' and is registered with the US Environmental Protection Agency (EPA) as a fuel and fuel additive. It can be blended with traditional petroleum diesel in any ratio, can be used in any diesel engine without need for mechanical alterations and is compatible with the existing petroleum diesel distribution and dispensing infrastructure.
The US Department of Energy (DOE) has recognized biodiesel as the fastest growing alternative fuel. The biodiesel market is expected to grow from a couple hundred million gallons per year today to over one billion gallons per year by 2010. The DOE’s National Renewable Energy Laboratory (NREL), US EPA and Department of Transportation (DOT) have all embraced biodiesel as a means of reducing diesel engine emissions, lowering our dependence on imported petroleum fuel, and boosting the agricultural sector for our country.
Biodiesel is currently cost competitive with petroleum diesel. The City’s Biodiesel Access Taskforce is ready to help, free-of-charge, all interested station owners explore the potential of dispensing biodiesel at their stations. For more information, please contact Monica Fish, the Taskforce’s secretary at (415) 355-3709 or Monica.Fish@sfgov.org.
You can find more information on biodiesel at http://www.biodiesel.org/ and you can find more information on the SF Biodiesel Taskforce at http://www.sfenvironment.com/aboutus/innovative/biodiesel.
Thank you for your consideration. We look forward to hearing from you.
Sincerely,
Eric M. Bowen
Chair, San Francisco Biodiesel Access Taskforce
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San Francisco Biodiesel Pump Opening
Olympian and Tellurian Biodiesel held an opening ceremony for their B20 pump at Olympian's station on 3rd street in San Francisco. It is great to now have B20 available to commerical fleets in the City. Here is a link to CNET's coverage with some good photos.
http://news.com.com/San+Francisco+opens+first+commercial+B20+biodiesel+station/2100-11392_3-6178914.html
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California Biodiesel Alliance - Update Email
Dear friends of the California Biodiesel Alliance (CBA),
It has been several months since my last email and I wanted to update everyone on CBA’s progress and activities.
The CBA is the trade association for the California biodiesel industry. We incorporated the CBA as a California Nonprofit Mutual Benefit Corporation in December and are completing our IRS tax filings as a 501(c)(6), a not-for-profit trade association. The CBA steering committee has been busy working to finalize the CBA charter documents. Once those are finalized, we will begin accepting applications for membership.
The CBA Steering Committee is comprised of the following members:
Russ Teall – Biodiesel Industries
Fred Wellons – Tellurian Biodiesel, formerly of Baker Commodities
Curtis Wright – Imperial Western Products
Wade Randlett – National Biofuels
Doug Smith – Baker Commodities
And myself, Eric Bowen – Tellurian Biodiesel (successor to SF Biodiesel and LA Biofuel)
The Steering Committee has been aided by Ryan Lamberg of Community Fuels and Ashley Henry, the Energy Industry Liaison for Stoel Rives, one of the leading biofuel law firms. We are very appreciative of their assistance.
As most of you are aware, there are several legislative proposals in Sacramento this year relating to biodiesel. The CBA is tracking those bills and making itself available to work with the bill sponsors. Please let me know if you are interested in participating in helping educate legislators in Sacramento about the benefits of biodiesel.
Finally, we are working on a website and logo for the CBA, which we hope to launch shortly.
We look forward to working with each of you to make the California biodiesel industry a great success.
Warm regards,
Eric
Acting Chair, California Biodiesel Alliance
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Seattle Times Article on Imperium
Good article by Luke Timmerman at The Seattle Times regarding Imperium and the importance of biodiesel being able to compete on price.
http://seattletimes.nwsource.com/html/businesstechnology/2003470213_biodiesel10.html
One of my favorite quotes from John Plaza "You have to be competitive on a cost basis, not just for the environmental or social play," said Plaza. "Otherwise, this would never grow the way we want it to grow."
And Luke was kind enough to quote me . . .
Eric Bowen, an energy expert with Sigma Capital in San Francisco, said that among the 100 biodiesel business plans he's reviewed there are three types of companies: agribusiness giants like Archer Daniels Midland with lots of cash and talent; old hippies working on small projects that will mostly fail; and a new breed of "pure-play" venture-backed companies focused on making large volumes of biodiesel.
Imperium, he said, is in the third camp. Bowen said he's not sure the company has "a secret sauce" for success, but Chief Executive Martin Tobias, who took Seattle-based Loudeye public in the dot-com heyday, has to be taken seriously.
"Whether these guys are riding a bubble of biodiesel or building a business for the long term is a fair and open question," Bowen said. "But Martin and his team certainly know what they are doing."
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Great Women of Biodiesel Calendar
I strongly recommend that everyone rush out and buy a women of biodiesel calendar for everyone on their holiday list . . . and if not that, at least one for yourself. These are all amazing pioneering women and if enough sales are generated to payback the cost of printing, half the proceeds go to support the important work of the Biodiesel Counsel of California.
You can find the calendar here:
http://www.greenmeansgocars.com
Here is Sienna's original email describing the calendar:
Hey there,My dream of making a calendar featuring some of the amazing women in this community has become a reality. You can see it at the BioFuel Oasis or the Ecology Center in Berkeley. There is a way to buy it on my website, too. If I make any money from the calendar, I'm going to split my profits with the Biodiesel Council of California.
The calendar has pictures of and writing by:
Jennifer Radtke www.biofueloasis.com www.backyardbiodiesel.org
Emily Butterfly www.bigtadoo,org www.cleanfuelcaravan.org
Jolie Ginsburg www.incadventures.com
SaraHope Smith www.biofueloasis.com www.biodieselcouncil.org
Amy Sinsheimer www.sfbiofuels.org
Jessica Redford Hoelle www.cafepress.com/vexpat
Sarah Rich www.worldchanging.com www.inhabitat.com
Gretchen Zimmermann www.biofueloasis.com
Kimber Holmes www.paxfuel.com
Sunny Beaver www.ybiofuels.org
Melissa Hardy www.biofueloasis.com www.veggiebus.com
and myself www.greenmeansgocars.com
Peas,
Sienna
http://www.greenmeansgocars.com
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Good New York Times Article
I had a few good conversations with Susan Moran, a very nice professor of journalism at Boulder who also freelances for the NYT. Below is her recent article (and a link to the article on the NYT website) on biodiesel.
http://www.nytimes.com/2006/09/12/business/smallbusiness/12bio.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1158120445-bEsgK5uhEfZV2bmT2+hjdA
Biofuels Come of Age as the Demand Rises
By SUSAN MORAN
Published: September 12, 2006
BARACK OBAMA is not a farmer, but he believes in biodiesel and the votes of farmers who produce soybeans and other crops for it. Senator Obama, Democrat from Illinois, spoke last month at an event to celebrate plans for a new biodiesel plant in Cairo, Ill. His presence was a welcome endorsement for a budding industry.
Nile Ramsbottom, of Renewable Energy Group in Ralston, Iowa.
On the day that Mr. Obama joined the Renewable Energy Group in announcing that it would build a 60-million-gallon-a-year refinery, the company said it had garnered $100 million in financing, the largest equity investment in biofuels so far. The infusion came from the American division of Bunge Ltd., a major food processor; two venture-capital funds controlled by Natural Gas Partners of Irving, Tex.; and ED&F Man Holdings Ltd., a global shipper of grains.
The investment underscores how the biodiesel industry is coming of age as demand for renewable fuels increases. The businesses range from soybean farmers in the Midwest seeking new markets to coastal start-ups with an environmental mission. Both camps are attracting a flow of money from venture capitalists and corporations alike.
Traditionally, soybean farmers dominated the biodiesel business, but lately a broader array of entrepreneurs is joining the pack, creating a curious convergence of environmentalists, farmers and investment bankers. Growth in the last year has been “phenomenal, almost frightening,” said Joe Jobe, chief executive of the National Biodiesel Board, a trade association.
But the ability of entrepreneurs to succeed in the long term will depend on much more than acres of oil-rich crops or deep pockets, industry players and analysts say.
“You don’t necessarily have to be a national player, but you need to optimize distribution within your region,” Mr. Jobe said.
And you need to make high-quality commercial biofuel while promising consistent quality to your customers, he added.
“Some people say anybody can make biodiesel if he can bake a cake,” Mr. Jobe said. “Have you ever baked a cake involving methanol, sodium hydroxide and other chemicals that could start fires?”
About 76 commercial biodiesel plants are in production today, up from 22 in 2004. The average business operates one plant that yields 30 million gallons a year of fuel and costs up to $20 million to build. Some companies are planning refineries capable of brewing up to 100 million gallons a year.
Nationwide production of the fuel tripled last year over 2004 to 75 million gallons. The board estimates that production will double this year, but Mr. Jobe estimates that the number could reach as much as, if not more, than 250 million gallons by year’s end.
That’s still a drop in the bucket compared with the nearly 140 billion gallons of gasoline the United States consumes each year. It also pales in comparison with ethanol. Last year, the global biofuels market totaled $15.7 billion in sales, of which only $1.6 billion came from biodiesel. That number could jump to $7.1 billion by 2015, says Clean Edge, a research company in Portland, Ore. But biodiesel has immediate appeal in that it does not require modifications of a diesel engine. It also requires far less fossil fuel to make than, say, corn-based ethanol.
Biodiesel comes from soybean, palm or oil-seed plants like canola and mustard, as well as from animal fats. Corn oil can also be extracted for fuel. Some start-up companies and university scientists are testing algae, which is attractive because it would not dip into the nation’s feedstock reserve.
Typically blended with conventional diesel, biodiesel burns cleaner and releases fewer pollutants, including carbon monoxide and particulate matter. Several factors are driving growth, including a federal ruling on low-sulfur diesel, state mandates on renewable fuels and concern about climate change and dependence on foreign oil.
But the strongest incentives are high petroleum prices and federal tax credits. “If one of those two fall, the industry’s growth would slow significantly, but would survive,” said Eric Bowen, a lawyer who helped found San Francisco Biodiesel, which plans to build refineries based on rendered animal fat and recycled vegetable oil from restaurants. “But if both fall away, the biodiesel industry would be in serious trouble.”
The federal excise tax credit, aimed at curbing pollution, offers producers and distributors of agri-biodiesel, which comes from virgin crop oils and animal fats, $1 for every gallon of biodiesel they blend with regular diesel. This means that even producers who blend their 100-percent pure biodiesel with only 1 percent of petroleum-based fuel can reap the credit.
Most biodiesel sold in the United States is a blend of 20-percent pure biodiesel and 80-percent conventional diesel fuel, called B20.
So far, commercial demand has outpaced supply. Renewable Energy plans to produce 460 million gallons from several of its plants. The company was spun off from a soybean farmer cooperative called West Central, which built its first biodiesel plant in Ralston, Iowa, in 1996. Nile Ramsbottom, the president of Renewable Energy, said he expected sales to reach $740 million in 2010, a rise from $116 million last year.
Without forming alliances and not managing risk between energy and agriculture commodities, many start-ups will falter, some industry experts contend.
“Plants are going up everywhere,” said Gene Gebolys, founder of World Energy Alternatives in Chelsea, Mass. “But individual plants must be part of a network in which products can get to the best markets.” The company expects to exceed $100 million in sales this year from producing biodiesel from soybeans, canola and animal fat.
The first biodiesel business to receive venture-capital financing was Seattle Biodiesel, which recently changed its name to Imperium Renewables. Since spring of last year, three firms have invested $10 million in the company: Nth Power of San Francisco; Technology Partners in Palo Alto, Calif.; and Vulcan Capital, led by Paul G. Allen, the co-founder of Microsoft.
Imperium’s Seattle refinery produces five million gallons a year, and the company is building a refinery in Grays Harbor, Wash., able to produce 100 million gallons a year. Imperium now buys soybean oil from the Midwest, a costly business. But it is seeking crop sources closer to home.
Another biofuel company, Greenshift Corporation, based in New York, announced in June that it had received $22 million from Cornell Capital Partners for its GS AgriFuels division, mostly to build a plant that will produce 45 million gallons of fuel a year.
Major food processors like Cargill and Archer Daniels Midland Company are investing heavily in biofuels. On the energy front, Chevron and BP are pouring millions into biofuels production or processing.
Small businesses will have to reckon with big players. As Mr. Gebolys of World Energy says of the biodiesel business: “It’s still fun, it’s cool, it’s dynamic and it’s global. And you get to make a contribution.”
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California Biodiesel Alliance Response to Air Resources Board Draft Biodiesel Policy
Here is a copy of the letter the CBA sent ARB regarding the draft biodiesel policy.
June 23, 2006
VIA EMAIL
Robert Okamoto
Industrial Section
California Air Resources Board
Sacramento, CA
RE: Biodiesel Policy
Dear Mr. Okamoto,
The California Biodiesel Alliance (CBA) strongly supports the inclusion of biodiesel into the California transportation fuels portfolio. We applaud the Air Resources Board’s (ARB) draft biodiesel policy. The policy will begin the process of breaking down the regulatory logjam biodiesel has faced in California.
The California Biodiesel Alliance (CBA) is a diverse association of biodiesel feedstock suppliers, producers, fuel marketers and distributors, technology providers, fuel retailers, consumers and advocates. The CBA is affiliated with the National Biodiesel Board (NBB) as the California State Chapter with support from and direct access to the NBB and its resources. Our mission is to promote increased use of high quality renewable biodiesel in California.
We would like to draw your attention to our strong support of the following specific items in the draft policy:
First, we strongly supports ARB's proposal to "consider B20 and below as California diesel fuel."
Second, we strongly support ARB's proposal to "allow use with verified technologies."
Third, we strongly support ARB's proposal to "initiate biodiesel research and study the impact of biodiesel use in California." We encourage ARB to publish the specifics on what tests will be done, who will be expected to pay for them (state vs. industry) and a timeline for such testing. Providing a road map for this process will be a great assistance to the biodiesel industry and other stakeholders.
We would also like to draw your attention to a few specific items in the draft policy where we have concerns.
First, we are concerned about the uncertainty that biodiesel blends between B21 and B50 face. The ARB needs to establish a procedure to remove this uncertainty as soon as practicable. Blends between B21 and B50 are important and need your support. Such blends are currently being used by Marin County and both Santa Monica and San Francisco have plans to begin using such blends in the near future. These blend levels are frequently sought by biodiesel users who are motivated to use higher blends as a means of further reducing emissions and increasing the renewability of their diesel fuel. B21-B50 are common blend levels that fleets use when implementing staged biodiesel programs where they start with lower blends like B20 and slowly increase the percentage of biodiesel in the blend until they reach blends up to B100 (which as you know is really B99.9 for excise tax reasons).
Second, the draft policy states that "NOx emissions may increase." We greatly appreciate ARB's recognition of recent testing data that shows NOx emissions increase, decrease, or remain the same depending on the biodiesel feedstock, engine type and engine duty. We encourage ARB to revise the statement "NOx emissions may increase" and replace it with something more nuanced along the following alliance: "recent data indicates that NOx emissions may increase or decrease depending on a number of factors including, but not limited to, biodiesel feedstock, engine type, engine duty and testing protocols.”
Third, we would appreciate some clarity and around the statement "widespread use of biodiesel may require ARB to set specifications to ensure CARB diesel emissions benefits." As you know, regulatory uncertainty is harmful to the growth of the emerging biodiesel industry. Accordingly, anything you can do to reduce uncertainty would be greatly appreciated.
We would like to take this opportunity to remind you of some of the key benefits of biodiesel.
Including biodiesel in the California transportation fuel portfolio will:
· Take the lead to meet Governor Arnold Schwarzenegger's GHG reduction and biofuel production goals;
· Lower costs to clean the air, ground and waterways of diesel pollutants and improperly disposed waste; and
· Add to the state’s job and tax base by supporting Californian and American farmers;
· Decrease fleet maintenance costs while increasing employment and innovation within the renewable energy sector;
· Assist in the transition toward a diverse transportation fuel portfolio necessary for the growth of our economy.
· Reduce health care costs to state residents caused by diesel pollutants;
Biodiesel is the fastest growing alternative fuel in the US market. It:
· Is a clean burning renewable fuel,
Can be produced in California using crops grown in California that will benefit California farmers (canola, mustard, cotton seed, walnuts, flax, etc.);
· Contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend;
Adds lubricity to Ultra Low Sulfur Diesel without the risks associated with un-tested additives
Mitigates or reduces many of the problems of diesel including emissions and bio-contamination from spill, and
· Is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.
In 1998, the National Renewable Energy Lab (NREL) showed the ratio of energy in biodiesel to fossil energy used to produce it was 1:3.2. A recent study of energy balance by the University of Idaho demonstrates a slightly higher energy balance of 1:3.8. These energy balance numbers are based on soy crops. Many alternative feedstocks can be used for biodiesel production such as animal fats, inedible kitchen greases and experimental algae that dramatically increase the energy balance and carbon sequestration ratios.
Biodiesel diversifies our energy supply and stabilizes our fuel prices. While biodiesel has historically cost slightly more than petroleum diesel, biodiesel has more recently maintained price or gone down in price as compared with petroleum diesel, which saw an increase of 40% last year alone. Biodiesel's role in providing enhanced lubricity, decreased exposure to toxics and support of American farmers makes any price difference negligible at best. By diversifying our energy supplies with a clean renewable fuel that is 100% compatible with petroleum diesel, CARB will help provide California residents some relief to our current diesel only economy. As volatile petroleum prices jump even higher, biodiesel can provide energy stability and dramatic economic savings.
Biodiesel is also a direct benefit to American farmers. With continued California innovation, biodiesel can be grown (at least in part) by our strong California agricultural community. Direct economic benefits to farmers, production and transportation jobs and state taxes created by biodiesel production could add millions to the California economy.
At a variety of blend levels, the performance, economic, environmental and social advantages of using biodiesel in our on-road and off-road diesel engines is the most cost-effective alternative to diesel fuel available today.
We urge you to adopt the draft biodiesel policy. We also encourage you to continue biodiesel testing through ARB’s existing programs and to establish a policy for the use of biodiesel blends between B21-B50.
Please let us know if the California Biodiesel Alliance or any of its members can provide assistance to you in these important matters.
Sincerely,
/s/ Eric M. Bowen
Eric M. Bowen
Acting Chairman
California Biodiesel Alliance
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Biofuels on Eco Talk
SaraHope Smith, of the Biofuels Oasis, and myself had a good chat with Betsy RosenBerg on Eco Talk, her leading edge Air America show. Click here for the audio link.
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San Francisco Makes Historic Biodiesel Announcement
On Thursday, May 18th, at the San Francisco Civic Center Plaza, City leaders gathered for the announcement of the largest commitment to biodiesel ever made by a major American city. The press conference began with the announcement by the Fire Chief that her department had begun its B20 pilot program. The Fire Chief was followed by SFPUC General Manager Susan Leal who announced the PUC's commitment to cleaning up San Francisco's sewer system and converting waste products into fuels.
Supervisor McGoldrick announced the formation of the Biodiesel Access Task Force, the first of its kind in the nation, which was created by legislation authored by Adam Hagen and me. I then had the privilege to speak and inform the press and the gathered crowd about the Task Force's two principal goals: creating incentives for improving access to biodiesel and biodiesel blends and streamlining the permitting process for co-op style B100 filling stations.
 (Eric presenting to the crowd along with Mayor Gavin Newsom)
Mayor Gavin Newsom followed with his announcement of his Executive Order to move the entire City fleet to B20 by the end of 2007, making San Francisco the first major American City to make such a commitment.
These announcements were the culmination of a great deal of work by a number of people both inside City agencies and within the larger San Francisco biodiesel community. Brie Matthews and Mike Ferry spearheaded the effort at the Fire Department. Great photo of Brie in this story of the event. And members of the SF Biofuels Co-op have been working with the City on these and other biodiesel initiatives for over a year.
It was great to be part of this wonderful day and I look forward to continuing to work with the City of San Francisco to make this a successful program.
Written By: Eric Bowen
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To B2 OR NOT TO B2: musings on a blend specific RFS versus a volumetric RFS
Many of you have heard me express that I believe the biodiesel industry is supported by a two-legged stool of high petroleum prices and government support. You will also have likely heard me say that if one of those legs falls, the industry would likely contract, but would survive and that if both legs fell, the industry is dead.
There is not much one can do about the price of petroleum, so it is particularly important that biodiesel supporters get the government policy leg right. If the policies we advocate for end up too costly or onerous, we will risk losing these very policies. One of the key biodiesel policies being pursued is a patchwork of state biodiesel mandates or renewable fuel standards (RFS). Minnesota is the best-known example.
Minnesota’s legislature passed its B2 bill a few years ago, but the law only became effective last year when the trigger was satisfied. The bill requires that all diesel sold in Minnesota contain 2% biodiesel. I refer to this type of policy as a “blend specific RFS,” meaning that the blend itself is specified in the law, in Minnesota’s case 2% biodiesel or B2. Also worthy of note is the trigger Minnesota chose for when the requirement would take effect. Minnesota’s B2 bill was positioned primarily as an agricultural and rural economic development bill and accordingly the trigger that was chosen was that the state had enough biodiesel production capacity in state to satisfy the mandate. When two new 30 million gallon per year facilities came on line in Minnesota last year that threshold was crossed and the B2 requirement went into effect.
Contrary to the Minnesota blend specific model, the recently enacted (2005) Federal RFS, which includes both ethanol and biodiesel, is a volumetric requirement, meaning that no particular blend level is required, but rather, that the overall pool of fuel must contain at least a certain amount or volume of biofuel.
The second state to pass a biodiesel RFS was Washington State, which adopted a biodiesel and ethanol RFS earlier this year. Washington State’s biodiesel RFS was the result of a coalition of environmentalist and farmers. The bill began life as a Minnesota style B2 blend specific bill, but in the face of fierce opposition had to change to a Federal RFS style volumetric bill.
California now has a B2 biodiesel RFS winding its way through the legislative process. The bill is SB1675 (Kehoe) and is sponsored by Energy Independence Now. I have had the good fortune of working with the author, sponsor and other supports on the bill. Ever since I became aware of the bill, I have been trying to decide whether a blend specific or volumetric approach is preferable. I have consulted dozens of people in trying to answer this question and have come to the following conclusions.
Pros of B2 Mandate:
1) easy to monitor
2) gets renewable fuel into each gallon of diesel sold
3) provides a floor upon which to increase the percentage of renewable fuel in diesel
4) creates higher demand than an equivalent volumetric requirement (B20 and B100 market will continue to exist)
5) puts infrastructure in place for biodiesel blending at every terminal
6) no concern about increase in NOx
7) no engine warranty concerns
Cons of B2 Mandate:
1) difficult to implement - every terminal must be equipped to handle blending
2) will create lots of political opposition as all diesel users are hit (main concern is truckers and farmers)
3) higher implementation/transition costs as both low and high cost fuel providers and users are forced to make the switch
4) no significant air quality improvement
Pros of Volumetric:
1) harness power of market to maximize efficiencies and reduce cost of incorporating biodiesel into fuel mix
2) maximum flexibility for diesel users
3) encourages biodiesel to be used where it will have greatest environmental benefits (i.e. ports)
4) less political opposition from diesel users
Cons of Volumetric:
1) difficult to police
2) creates less demand for same % mandate (b/c existing and new B20 and B100 users likely included in mandate %)
3) potential for increased NOx emissions
4) potential for engine warranty issues
Depending on what hat I am wearing I come down on different sides of this debate.
When I am wearing my E2 hat, I lean toward the volumetric approach because of its flexibility and design to maximize the efficiencies of the marketplace. If a system to monitor and police the volumetric approach could be easily designed and implemented, I believe the volumetric approach would provide society with the greatest amount of renewable biodiesel at the least cost. A credit driven approach where excess credits can be freely traded, as with the Federal RFS, could be such a system. Layering a state-wide renewable fuel credit system on top of the Federal system would seem to create undue complication for fuel providers and as such I do not feel comfortable recommending such an option at this time.
When I am wearing my biodiesel industry hat, I lean towards the blend specific approach. It provides the greatest amount of certainty and would create the greatest amount of additional demand. It also creates an environment where all petroleum infrastructure is biodiesel ready and creates a low-blend baseline upon which to build.
Given the difficulty in designing a viable volumetric biodiesel RFS, I come down on the side of the B2 blend specific RFS. This provides the greatest increase in biodiesel use, vastly increasing the percentage of renewable fuel in the diesel fuel supply and reduces GHG emissions. The short-term transition costs to upgrade all petroleum facilities to handle biodiesel and blending of biodiesel is vastly outweighed by the benefits of biodiesel.
I encourage readers to come to their own conclusion and contribute to this discussion. Biodiesel and all of us who are believers in its potential will be better off as a result.
The other principal issue that comes up in designing a RFS is deciding on the trigger. As mentioned above, Minnesota chose in state production sufficient to met its mandate as its trigger. The Federal RFS chose time as its trigger, the volume of renewable fuel that must be in the total national fuel mix increase each year from 4 billion gallons in 2006 to 7.5 billion gallons in 2012.
What would be an appropriate trigger for California? Washington State chose a hybrid approach. The initial 2% volumetric requirement is timed based and becomes effective in 2008. The second phase trigger, where the volumetric requirement is increased from 2% to 5% is keyed to the production of in-state feedstocks equal to 3% of Washington State’s diesel consumption. This is rather different than Minnesota. Minnesota was already growing vast amounts of soybeans when it passed its RFS bill, but had very little biodiesel production. Accordingly, Minnesota in the name of rural economic development tied the implementation of its B2 mandate to in-state production.
Washington State on the other hand does not currently grow a significant amount of oil seed feedstocks. In order to gain the support of the farming community, the bill has to tie the second phase requirement to the growing of in-state feedstocks.
California is more like Washington State than Minnesota in that we do not currently grown a significant oil seed crop. I have proposed to the author and sponsor of SB 1675 that they consider both a Minnesota style in-state production trigger and a Washington State style in-sate feedstock growth trigger. I believe California industry and consumers can benefit from in-state production and that California agriculture can benefit from growing oil seed crops. Both of these should be explicitly encouraged in SB 1675.
Again, I encourage readers to come to their own conclusion and offer up their opinion on what triggers would be most appropriate for California. Feel free to offer any suggestion in the comment section of this blog or to email them to me directly at ericbowen@yahoo.com.
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Sustainable Biodiesel Summit
I attended the Sustainable Biodiesel Summit (SBS) hosted by the Biodiesel Council of California in San Diego at the beginning of February. The Summit was a terrific event attended by over 200 people. The tone of the event was very positive regarding the opportunity for advancing a sustainable biodiesel industry. Lyle Estill of Piedmont Biofuels covered the Summit very well on his Energy Blog.
I gave a presentation at the SBS on Federal Incentives for biodiesel. Several members of the audience contributed to the presentation by providing real life examples of using the incentives in biodiesel projects they have been involved with. This added richness to the presentation and is the sort of dynamic that one only finds at community oriented events like the Sustainable Biodiesel Summit.
For those interested in the community and sustainable sides of the biodiesel industry, I highly recommend that you attend next year's Sustainable Biodiesel Summit, which will be held prior to the NBB's conference in San Antonio (2/4-7).
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California Biodiesel Board Letter to the EPA
At the recent NBB conference in San Diego, a group of California biodiesel producers, users and advocates formed the California Biodiesel Board (CBB) to promote the use of biodiesel in California. Below you will find the CBB letter to the EPA regarding the need for the EPA to update its biodiesel NOx emissions data and requesting a scientifically based high credit value for biodiesel in the RFS regulations.
For all you regulatory nuts out there, enjoy!
Eric
***************
Stephen L. Johnson
Administrator, USEPA
US EPA Headquarters
Ariel Rios Building
1200 Pennsylvania Avenue, NW
Mail Code 1101A
Washington, DC 20460
March 3, 2006
RE: Biodiesel NOx Emissions and RFS Credits
Dear Administrator Johnson:
The California Biodiesel Board would like to thank you for your recent presentation at the National Biodiesel Board (NBB) Conference in San Diego. We appreciate your willingness to take time from your busy schedule to travel to California and inform the conference about EPA and the President’s commitment to replacing petroleum with renewable fuels.
Our members were in attendance at the conference, along with over 2000 other participants who want to increase biodiesel use in the United States. Our focus as the California Biodiesel Board is to educate Californian’s about biodiesel and to remove barriers, which impede its use.
We would like to have your help in increasing biodiesel use in California. There are two main ways you can help us:
1) EPA should evaluate new sources of biodiesel NOx data and establish a NOx emission rate that states can use in State Implementation Planning (SIP) - In 2003, EPA published a proposed regulation, which was a compilation of studies on biodiesel criteria pollutant emissions. EPA received very few comments on the regulation and, thus, did not issue a final regulation. In the proposed regulation, biodiesel NOx emission data was presented that claimed an increase over petro-diesel. Since that time, new NOx data has become available from sources such as the US Navy and NREL that demonstrates much lower NOx emissions for biodiesel. This important new NOx data has been presented in several public forums, including at the NBB conference. We respectfully request that EPA re-open the proposed regulation so that new NOx data can be submitted by interested parties and considered by EPA as you determine an emission rate for biodiesel NOx. In California, biodiesel NOx emission rates as presented by EPA (in the proposed regulation) are currently the primary barrier to CARB’s acceptance of biodiesel.
2) US EPA should consider the technical data on the total life cycle analysis of ethanol verses biodiesel and the BTU loss in using ethanol verses biodiesel to replace petroleum fuels when establishing a credit for biodiesel in the renewable fuel regulations; EPA should base the biodiesel credit number on science, not politics. In the fall of 2006, EPA plans to propose regulations that will establish the credit value for biodiesel and the credit-trading program rules for all renewable fuels. The credit value for biodiesel and the credit-trading program will have an enormous impact on the biodiesel industry. It is imperative that the rules be established in a fair and scientific way. We understand that EPA is under strong political pressure to favor ethanol in this process. Based on several technically sound methods, biodiesel should receive a credit of no less than 3 to 1 as compared to ethanol. We further understand that EPA is considering a number less than two for biodiesel. A low credit value for biodiesel is advocated by the ethanol industry for obvious reasons. Unfortunately, the dynamics of the NBB have prohibited the NBB from being able to oppose a low credit value for biodiesel. This dynamic exists because many of NBB’s members have ethanol interests. The California Biodiesel Board respectfully requests that EPA consider only the scientific and technical information, and not politics, as you make this important choice. The biodiesel credit value will greatly affect the growth of biodiesel in California and the rest of the US. Furthermore, and of equal if not greater importance, the methods used to determine such credit value will set a crucial precedent for how renewable fuels will be evaluated in the future.
The California Biodiesel Board will be glad to answer any questions you have regarding our requests. Again, please let us thank you for your support of biodiesel.
Sincerely,
Eric M. Bowen
Acting Chairman
California Biodiesel Board
CC: Margo Oge, USEPA, Office of Transportation and Air Quality
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