California Biodiesel Alliance News
California's Biodiesel Industry Trade Association
On the heels of a great second annual California Biodiesel and Renewable Diesel Conference, we are very happy to start this issue by welcoming new members Downs Energy and PreProcess, Inc. This month's Who's Who article features an interview with the power duo of PreProcess co-founding engineers, Christina Borgese and Marc Privitera, of supercritical processing fame.
The lead article picks up where the conference left off with information about follow-up meetings with environmental leaders and California Air Resources Board (CARB) staff in response to the agency's presentation there. In addition to our regular Policy Updates, this issue includes a call to action on clean transportation bills in the state legislature and a new feature that will track CARB's quarterly LCFS reports.
After a 60-day media embargo, we are finally able to write about the very well kept secret that it was Community Fuels that made the biodiesel from algae for Solazyme that was sold at several Propel stations during their recent one month pilot.
NOTE: CBA President, Russ Teall, was part of a group given the Eye on Biodiesel: Inspiration award at the NBB conference for its work in Las Vegas, or what one writer has dubbed "BioVegas." Click here to learn more.
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BIODIESEL INDUSTRY DEFENDS LCFS
PRESENTS DATA ON NOX NEUTRALITY IN NEW DIESEL ENGINES
On February 20th and 21st, CBA board members Eric Bowen, Russ Teall, and Joe Gershen met with key environmental groups and with California Air Resources Board (CARB) staff in Sacramento to discuss biodiesel's ability to contribute to achieving the state's LCFS goals and CARB's white paper on the proposed biodiesel emissions regulations. The white paper, Discussion of Conceptual Approach to Regulation of Alternative Diesel Fuels, is available for download at: http://www.arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.
Ryan Lamberg of the California Biodiesel Initiative helped arrange the environmental group meeting, which included national biodiesel technical expert Steve Howell and sustainability expert Don Scott. Steve Howell and National Biodiesel Board State Affairs Coordinator, Shelby Neal, joined Eric, Russ, Joe, and Ryan for a meeting with CARB staff the next day.
In both meetings our industry stressed the following key points. We believe that biodiesel has the ability to not only meet the 10% reduction required by LCFS from diesel use, but to exceed it and to help contribute to the reductions needed from gasoline use. (See graph) . Our industry is eager to work with other LCFS stakeholders to respond to critics who say that LCFS goals cannot be met. Toward that end, CBA is working with several informal groups to defend LCFS.
National experts presented data showing that there is no increase in NOx emissions when using biodiesel in New Technology Diesel Engines (2010 and newer). This data also shows that biodiesel's potential to increase NOx emissions when compared to CARB diesel in older vehicles is very small in the aggregate and goes away all together as the diesel fleet turns over. (See graph).
Our industry believes that if concerns about a de minimus and temporary increase in NOx emissions when using biodiesel in older vehicles results in well intentioned, but poorly constructed emission regulations, the biodiesel industry would be substantially harmed and it would significantly limit biodiesel's ability to contribute to the achievement of LCFS goals with no discernible benefit to air quality.
CBA'S SECOND ANNUAL CONFERENCE PROVIDES A WEALTH OF INFORMATION ON DOING BUSINESS IN CALIFORNIA
Over one hundred attendees traveled to the Mirage Hotel in Las Vegas on February 4th to participate in CBA's second annual California Biodiesel and Renewable Diesel Conference. A full day of presentations detailed the exciting market opportunities; state-of-the-art feedstock research; regional collaboration issues; and the significant array of regulatory and compliance issues unique to our state.
In his opening remarks newly elected CBA President, Russ Teall of Biodico set the tone for the day with a gracious welcome and generous thanks to attendees and sponsors. Eric Bowen of REG, outgoing CBA Chairman, and Curtis Wright of IWP, CBA's newly elected Chairman, shared the stage for the State of the CBA Union giving attendees an overview of the battles we have won, the battles we face and the tremendous potential for the biodiesel market in the state to hit one billion gallons in the next decade under California's Low Carbon Fuel Standard (LCFS).
Joe Gershen of Crimson Renewable Energy, CBA's Vice President, moderated the first panel after first explaining how the Integrated Energy Policy Report (IEPR) works to guide our state's energy decisions; the importance of LCFS for the low-carbon fuel market; and how the AB 118 funding program creates opportunities for businesses.
Greg Staiti of Weaver & Tidwell presented a compliance-based overview on LCFS detailing his take on the program's facts, upsides, downsides, and questions for the future. Discussing the market for LCFS credits from a brokerage perspective, David Dunn of Progressive Fuels Limited included data on credit price history showing a curve rising steeply since June 2012 and some thoughts about the ability of alternative fuels to meet future demand for credits. Shawn Garvey of the Grant Farm presented a seasoned glimpse into the issues of where to find state and federal funding for clean energy (including AB 118 funds), which is expected to total $250 billion in the next 10 years, and outlined what's involved for those wishing to compete for it.
Experts on the feedstock front, assembled by CBA Secretary, Doug Smith (Baker Commodities), took over from there. Stephen Kakka of the California Biomass Collaborative delved in the science (and some of the policy issues) required to answer the questions of where and at what price might biofuel feedstock crops be grown on farms in California and how can the true potential of purpose-grown crops and crop residues for biomass energy in state cropping systems be accurately estimated. He discussed the use of multidimensional scaling and cluster analysis in the sophisticated approach to understanding cropping possibilities for precise regions and presented information on his research with Camelina, Meadowfoam, Castor, and Pennycress.
Stephen Silva of E.B. Wakeman discussed the main issues at play in our state's yellow grease and UCO markets, including those related to seasons, regions, and interestingly, the growth of the "natural" meat industry. Citing the need for additional sustainable feedstocks, Randall von Wedel shared research on prospective oil seed crops and sustainable techniques focusing on varieties of sunflower, safflower, and American joint vetch and ending with next steps for research and scaling up with a commitment to sustainable soils management.
Joe Jobe and Anne Steckel of the National Biodiesel Board (NBB) treated conference participants to lunchtime presentations. Joe touched on a number of national market issues and political challenges but made sure we all knew that when it came to litigation, 2012 saw the 3rd case where the EPA upheld in the biodiesel industry's favor. Anne talked about our industry's success in getting the tax incentive reinstated. Stressing the need to rally the whole of our diverse national membership for the huge upcoming fight for 2014 RFS2 volumes, where we face opposition from the petroleum industry, she asked specifically for our state's help with the California congressional delegation.
The first afternoon panel, moderated by Eric Bowen, featured a much-awaited presentation by Lex Mitchell, Air Pollution Specialist at the California Air Resources Board (CARB), on the agency's current thinking on pending biodiesel emissions regulations. Detailing options on a path for biodiesel to become the state's first alternative diesel fuel (ADF), the presentation specifically stated that here is room for dialogue on fleet-specific considerations and suggestions in general. Steve Howell of MARC-IV, an expert on New Technology Diesel Engines (NTDE), followed with a detailed talk on the latest NTDE research, which included the finding that "NTDEs resolve potential NOx concerns with B20 blends, even when using CARB like diesel fuel." CARB staffers Jim Aguila, Manager, Substance Evaluation Section, Air Pollution Specialist, and Floyd Vergara, Chief, Alternative Fuels Branch, participated in a discussion. CARB staff participated via Skype. (See lead article above for an important update on this issue.)
Russ Teall's panel on regional issues began with Peter Moulton, State Bioenergy Coordinator for the Washington Department of Commerce. Peter outlined his state's ambitious biofuel goals, strategies, procurement policies, and next steps in regional leadership, including efforts to develop a regional carbon policy framework. Andrew Hill of Biodiesel Industries Australia spoke about his experience with the highs and lows of that county's version of clean fuel grants, government mandates, quality, and tax issues.
In a brief impromptu statement, Graham Noyes of Stoel Rives, (replacing Atul Deshmane of Whole Energy who was ill and could not attend), urged the broadest possible efforts toward finding common ground and harmonizing state and federal regulations against the threat from the petroleum industry. Spencer Kelly of OPIS presented on his company's methodology for tracking prices for ethanol, biodiesel, RINS, and LCFS credits; factor affecting RIN pricing; the impact of RIN pricing on blending economics; and how carbon Intensity points can be used to calculate the fair market value of biofuels. Carlo Luri of Bently Biofuels pointed out the many contrasts between California and Nevada biodiesel markets and policies from the unique perspective of a biodiesel producer who operates just outside the state border and sells into the California market.
For the last panel of the day, Curtis Wright's panel provided a look at the nitty-gritty details of California compliance issues for biodiesel, the likes of which have never before brought together in one place at one time. Mike Lewis of Pearson Fuels presented an overview of retail requirements from his broad experience in alternative fuels. On the tax front, Dan Olivier of Mueller, Olivier, and Whittaker provided very important detailed information about who needs to pay what to whom and much more. After a disclaimer that to talk about the compliance issues associated with building a plant would take a whole other presentation, Lisa Mortensen of Community Fuels went on to discuss a broad array of compliance issues. She then pointed out that while many industrial regulations don't mention biodiesel specifically, they do in fact regulate biodiesel.
A lively group of CBA members and interested attendees gathered after the presentations at the Open CBA Meeting to meet each other, discuss our organization's volunteer committees, and sign up to get involved before heading off to the joint CBA/NBB reception.
Our deepest thanks go to the National Biodiesel Board for their generosity in co-presenting with us in 2013. We also wish to thank our sponsors Progressive Fuels Limited, Argus Media, Biodico, and REG for their generous support.
JOIN CBA IN SUPPORTING AB 8 AND SB 11
Two bills, AB 8
and SB 11
, that would extend until 2023 the sunset dates on California's clean transportation incentive programs have been introduced in the California Assembly Transportation Committee.
The three programs, which together would provide more than $2 billion in clean air and transportation funding between 2015 and 2023 in the state, are Carl Moyer, AB 923, and AB 118. AB 118 provides $100 million per year for alternative fuels and is a key funding source for the development of the biodiesel industry in California.
Please take a moment to write a letter. It's very important that we succeed this year because, even with broad support from a range of groups, this same effort fell just short of passage last fall. CBA's letter of support gives more details on the programs covered under these bills and includes the names and addresses of the Assembly committee members to whom your letters should be sent.
Thank you in advance for your help! We will keep you informed about our efforts to support these very important bills as they move through the legislative process. They are scheduled for a hearing in the Assembly Transportation Committee in March, so time is of the essence.
PRODUCED BIODIESEL FROM ALGAE SOLD IN PROPEL PILOT
The buzz surrounding Propel's announcement last fall that four of their Northern California stations would sell B20 made from algae in a one-month pilot prompted a rash of emails and phone calls among industry insiders wanting to know exactly where and by whom this fuel had been made. The easy part was learning that the fuel was Solazyme's Soladiesel, which started with sugar-fed microalgae that grew indoors in industrial fermentation equipment and produced the combustible algal oils within a few short days using an innovative process that took place out of state.
Propel revealed information about several other players last fall as well including the California Department of Food and Agriculture's Division of Measurement Standards, which had tested the fuel for quality (passed with flying colors), and the National Renewal Energy Lab, which had tested the fuel's emissions (positive results in at least three categories).
But it wasn't until January of this year that it was finally revealed that it was Community Fuels who turned Solazyme's algal oil into biodiesel at the company's plant in Stockton. Regarding that agreement, Lisa Mortenson, CEO of Community Fuels, said, "It is a small sample of the work that we continue to perform related to feedstock. We take a comprehensive approach to feedstock evaluations by considering a range of factors such as yields, chemical inputs, energy use, regulatory compliance, logistics, environmental impacts, and fuel performance properties.
It is all about the details if you plan to scale."
Lisa is consistently enthusiastic about her company's interest in finding and testing new potential feedstocks and has presented on this subject before the California Energy Commission's recent public meeting on AB 118 and at this year's National Biodiesel Board conference in Las Vegas as part of a panel on sustainability.
LOW CARBON FUEL STANDARD REPORT: Q3 2012
The California Air Resources Board (CARB) publishes quarterly reports that provide details and statistics on compliance with the state's Low Carbon Fuel Standard (LCFS) and includes a list of the 84 parties reporting transactions.
The 2012 LCFS Reporting Tool (LRT) Quarterly Data Summary - Report No. 3 charts the credits and deficits reported by regulated parties through the four quarters of 2011 and the first three quarters of 2012. This report documents the continued success of the LCFS, which began in 2011. The program has consistently generating more credits than deficits even during the period from Q4 2011 through Q1 2012 during which enforcement of LCFS was enjoined by a court ruling in the still-pending lawsuit against it.
Good news for our industry, the report shows that the volume of credits from biodiesel is growing and is now at 8%.
The publication of the list of parties reporting is provided in order to help facilitate credit transactions between potential buyers and sellers. Trading did not actually begin until 2012. In the first three quarters of 2012 there were 17 trades with prices ranging from $10- $30 per MT. The report is posted on CARB's main page for LCFS at: http://www.arb.ca.gov/fuels/lcfs/lcfs.htm.
REGULATORY AND POLICY ISSUE UPDATES
CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
Joe Gershen, CBA's member on the AB 118 Advisory Committee, and several other CBA members attended CEC's January Biofuels Workshop and continued our group's advocacy for increased funding for biodiesel and metric-based decision making. CBA will present at the February 28th meeting on the Revised Staff Draft of the 2013-2014 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program. All documents and related meeting details are posted at: http://www.energy.ca.gov/2012-ALT-2/documents/.
CALIFORNIA ENERGY COMMISSION (CEC): IEPR
CBA attended the February 19th 2013 Integrated Energy Policy Report meeting on Economic, Demographic, and Energy Price Inputs for Electricity, Natural Gas and Transportation Fuel Demand Forecasts. We are actively engaged in providing current, accurate information on our industry for inclusion in the Transportation Energy Staff Report, expected to be finalized in August. All IEPR workshop information and documents are posted at:
DIVISION OF MEASUREMENT STANDARDS (DMS)
CBA continues its participation in the fuels working group of the California Department of Food and Agriculture's Division of Measurement Standards (DMS) consortium, which is designed to find solutions to fiscal challenges facing the program due to mandatory General Fund reductions. DMS is involved with biodiesel standards, testing, and labeling.
LOW CARBON FUEL STANDARD (LCFS)
See lead article above.
CBA urges compliance with the new 2012 permanent regulations governing UST storage of biodiesel. See our Regulatory Matters webpage for more information and links to the State Water Board website that posts the new compatibility forms from equipment manufacturers. The Water Board list is constantly being updated and revised forms may not be labeled as such.
NOTE: Your CUPA may require engineering approvals for non-integral secondary containment (sumps and UDCs).
CBA WELCOMES NEW MEMBERS
Downs Energy is a nationwide leader in the marketing, distribution and transportation of petroleum products to commercial, industrial and retail customers.
PreProcess, Inc. is a process development, engineering, and automation firm that delivers customized technical solutions to entrepreneurs.
______ JOIN CBA AS AN INDIVIDUAL, A NONPROFIT, OR A BUSINESS _____
If you are reading this and are not yet a member, please join us. CBA offers membership levels with the following annual dues: $25 for students; $100 for individuals and nonprofit organizations; $500 for small businesses; and $2000 (Silver). Full voting memberships are available by application at $3000 (Gold) or $5000 (Platinum). Our Join Us webpage has details and an easy online membership fee payment process.
Membership benefits include:
- CBA's Email Newsletter with important industry updates and features about Who's Who in biodiesel in California and Action Alerts when your help can really make a difference.
- Participation in policy discussions and legislative/regulatory visits.
- Discount on CBA's annual California Biodiesel and Renewable Diesel Conference.
- Your company's logo and link on our Members webpage ($500 level and up).
- Special recognition at events and in publications (Platinum members).
_______ SIGN UP FOR EMAIL ALERTS _____
Anyone can sign up to get CBA's special Alert emails, which we send out when we need biodiesel stakeholders and enthusiasts to take action on important issues facing our industry. Visit our Home page and add your email address.
_______ VIEW PAST NEWSLETTERS AND EMAIL ALERTS _____
Just click on the "View CBA Email Newsletter Archive" button on our Home page.
WHO'S WHO IN CALIFORNIA BIODIESEL
Christina Borgese and Marc Privitera
Chemical engineers Christina Borgese and Marc Privitera, both past presidents of the student chapter of the American Institute of Chemical Engineers at UC Santa Barbara, were colleagues at Clorox before joining the team at BioFuelBox. At BioFuelBox, they worked together to design, build, commission, and operate the world's first commercial scale supercritical biodiesel production plant using waste trap grease as its primary feedstock -- and won the World Economic Forum's Technology Pioneer award in 2010, the same year Twitter did.
The supercritical method uses high heat and high pressure and is able to process feedstocks with free fatty acid levels of 85% and higher, according to Christina. The ability to take more and more waste out of landfills is a passion that Marc and Christina share. "We love biodiesel because it's straightforward, it's urgently needed, and it's a chemical engineer's dream -- you have messy multiphase feedstocks; you get to use centrifuges; decanters and filters; the reactors could be high sheer, high pressure, high temperature; you have hazardous materials to respect; you have low level constituents you have to separate using some creative methods; and you top it off with some precision distillation tricks -- it's everything we do," Marc said.
Christina and Marc are proud of the work they did in scaling supercritical processing from the bench, to a pilot in San Jose, to a 1 mgpy plant in Idaho, using techniques licensed from the Idaho National Laboratory, but they are quick to point out that supercritical processing is not all they want to be known for. PreProcess, Inc., the process development and process engineering company they co-founded after BioFuelBox succumbed to the economic downturn, allows them to offer their unique brand of chemical engineering for entrepreneurs through a range of services in waste repurposing, foods, and biofuels. Among their many projects, they are currently working on alternative energy related systems that are in various stages of development, construction, and commissioning in California.
"PreProcess is chemical engineering for entrepreneurs. We are fast, we are hands-on, we can pivot, and this is what sets us apart," Christina stresses. She says that they do first of its kind technologies and loves to jump into the details of how to scale up from an idea to the joy of completion. Those details are described at length in Marc and Christina's article Biorefining Technology Scale-Up in Biomass Magazine. Doing what hasn't been done before also sometimes involves advising clients on development paths, filling in gaps of information, and intellectual property concerns, including helping them identify exactly what might need to be protected and then determine if it should be patented or kept as a trade secret.
The company is committed to the critical issue of safety and rigorous, iterative quality measurements, starting with feedstock characterization, an all too often underestimated part of the production process. Christina and Marc point out the need to get exact measurements for six aspects of the feedstock you are going to be processing -- before you buy it and regardless of whether it's being called yellow or brown grease -- in their article Quick and Dirty Feedstock Characterization: Practical advice for cash-strapped community scale biodiesel plants in the August 2011 issue of Biodiesel Magazine.
Educating clients, local permit agency staff, and students is an important part of the work of the PreProcess team. In addition to presenting at conferences, writing articles for industry journals, and offering information and documents for download on their website (Grease Trap Waste Backgrounder and Sulfur Removal Strategies for Biodiesel), every fall the duo returns to their alma mater, UC Santa Barbara, where they guest lecture on the real world aspects of UCSB's chemical engineering curriculum. PreProcess also offers an Engineering Bootcamp built on practical applications to help get new hires and folks changing roles get off to the right start.
As part of his long-standing mission to educate the next generation of chemical engineers (he has many under his belt so far), Marc recently developed a course at San Jose State University, Biofuels Process Engineering, which requires undergraduates and graduate students to work together in teams to create a presentation pitch to build a biofuel plant. He's more poet than engineer when talking about the ability of biodiesel as an American product to contribute to both energy independence and environmental solutions and the part he is playing to home grow a special breed of creative engineers with the technical know-how to make that happen.
PreProcess is CBA's newest business member. The company joined just after our February 4th conference, while still in Las Vegas, and is eager to get involved. As they describe the "lunch and learn" program they developed to educate local permit agency staff, it's easy to envision this versatile duo scaling up that process and deploying it on behalf of biodiesel at CBA's next lobby day in Sacramento. We look forward to it.
Thank you for your time and efforts on behalf of biodiesel. I look forward to working with you.
California Biodiesel Alliance