Awake at the Wheel

Propel’s commitment to alternative fuel access and sustainability includes economic sustainability. As a retailer, Propel purchases biodiesel at wholesale prices, and sells to our customers at margins equal to or less than traditional petroleum retailers. As wholesale costs rise for biodiesel, Propel is committed to offering clean fuel access at a reasonable price point. And our fuels and vehicles team is aggressively looking at biodiesel supply options that meet our quality, cost and sustainability parameters.

There is one main factor driving the current pricing increase: the price of vegetable oil. In the past 12 months, March 2007 to March 2008, prices have jumped 90% for soy oil.

For biodiesel producers, between 80% - 90% of the input cost of biodiesel production is vegetable oil, like canola and soy oil. And vegetable oil is currently selling at a price equivalent of between $180-$190 per barrel. This is an increase is due to speculation, not market demand. Global demand for consumable veg oils has risen at a consistent 3% level for over two decades and continues at this level. There has not been a significant demand increase, or supply decrease, that explain the price run up in veg oils. Commodities across the board have risen at the same pace- petroleum, minerals, and all agricultural products. On the upside, current economics benefit USA farm communities.

Propel is dedicated to providing the most sustainable and renewable fuels that meet our cost and quality standards. We are working hard to open markets for new feedstocks and technologies that offer viable alternatives to petroleum. Together with you, we are pioneering new ground, creating economic opportunities, and building a sustainable future for our children. We will keep you informed as biodiesel prices change. If you have any questions don’t hesitate to write us. Thank you for your commitment to clean and renewable biodiesel.

We’d also like to credit Becky Lyle, a WA small farm owner, and NW Biodiesel Network, for the ongoing discussion of feedstock costs. Join the NW Biodiesel Network email list, visit http://www.nwbiodiesel.org/mail_list.htm.

Safeway has boldly chosen to become one of the nation’s first major retailers to convert its fleet to clean burning biodiesel. No doubt the benefits of biodiesel were hard for the Pleasonton, California-based company to ignore.

In addition to improved engine performance, less harmful emissions, and a fuel source that isn’t tied to the volatility of the Middle East, none of the company’s 1,000 fleet vehicles will require any major mechanical conversion as biodiesel performs exceptionally well in any diesel motor.

For more information click here.

NW Biodiesel Network Monthly Meeting:

Sustainability in the Biodiesel Industry, a moderated panel of local biodiesel businesses talking about what our biodiesel is made from and how it gets to us.  Moderated by Peter Moulton of Washington State Dept. of Community, Trade, and Economic Development, this panel will include Dr. Dan’s Alternative Fuelwerks, Imperium Renewables, Propel Biofuels, Standard Biodiesel, and Whole Energy.  This discussion will be a great opportunity to hear our local biodiesel industry address  Food vs. Fuel, Transportation Costs, Palm Oil, GMO Soy and other topics.  All we read is the negative.  Come get the real, inside scoop on sustainability in this exciting industry!  There will be plenty of time for Q&A.  7:00 pm to 9:00 pm, Seattle Phinney Center, 6532 Phinney Ave. N, Seattle WA 98103. Cost is Free.  Information at http://nwbiodiesel.org/.

Surfing the Perfect Storm: Opportunities and Challenges in the Emerging Biofuels Industry
Location : Hyatt Regency Bellevue Hotel
900 Bellevue Way NE
Bellevue, WA
Date & Time : October 17, 2007 - 5:00pm - 8:30pm

This Dinner Program Is Exclusively Sponsored by

Wilson Sonsini Goodrich & Rosati

Surfing the Perfect Storm

Opportunities and Challenges in the Emerging Biofuels Industry

Join the MIT Enterprise Forum of the Northwest as we take an inside look at the emerging biofuels industry.

The perfect storm in the trillion $ petrofuels energy world–with issues of energy security, peak oil and global warming all converging–has created remarkable opportunities for the emergence of a major new industry: biofuels.

Tremendous amounts of capital have already been invested in the biofuel industry in the last 18 months, in spite of uncertain economics and rapidly evolving regulation. Much of the activity is occurring in Seattle.

On Wednesday October 17, 2007, join Seattle-based moderator Ross Reynolds of KUOW to learn more about what is enticing local entrepreneurs into a sector that includes bio-feedstocks, processing plant technology, new distribution chains and more.

Panelists for the program will include:

§ Rob Elam, President of Propel Biofuels

§ Tomas Endicott, Chairman of Sequential Biofuels

§ Nancy Floyd, Founder, Nth Power Venture Capital

§ Dan Parker, CEO of Parker Messana

§ Michael Weaver, CEO of Bionavitas

Topics to be explored by Ross Reynolds and the panel include:

§ The current development status of the biofuels industry (an overview of terms and topics will be provided for those new to this industry)

§ Why companies around the world are investing in a space that is yet to be proved profitable, and what they see down the ‘2nd Generation’ road

§ Which companies and which strategies are likely to prosper

§ Why local entrepreneurs and professionals from other industries are jumping into biofuels

§ What will happen to our baby biofuels companies if the petrofuels ‘elephant’ rolls over on them

Mark your calendars for this provocative dinner event.

Cummins Inc. today announced the approval of biodiesel B20 blends for use in its 2002 and later emissions-compliant ISX, ISM, ISL, ISC and ISB engines. This includes the recently released 2007 products.

Cummins is able to upgrade its previous position on the use of biodiesel fuel, which limited the use to B5 blends only, up to B20 for three key reasons. First, the American Society of Testing Materials specification ASTM D6751 now includes an important stability specification for B100 biodiesel. Second, the availability of quality fuels from BQ-9000 Certified Marketers and Accredited Producers is growing rapidly; and third, Cummins has completed the necessary testing and evaluations to ensure that customers can reliably operate their equipment with confidence using B20 fuel.

The speculative money pumped into biodiesel production start-ups is about to reach it’s expected outcome: a very oversupplied domestic market. In fact, this market condition already exists, with much domestic biodiesel production heading to Europe in late 06.

One industry insider, who prefers to remain anonymous,  predicts…

“Total U.S. biodiesel capacity will be at less than 50% utilization in 2007, which will effect planned delays in several new plant construction projects as well as some complete plant shutdowns; marketers and retailers will benefit from good pricing.”

Some 80% of on-road diesel is sold at public fueling locations. So will Big Oil help make biodiesel available? American Petroleum Institute President Red Cavaney, in an exclusive interview with EnergyWashington senior editor Peter Rohde, says…

“You have got to remember, when you get down to retail only 5 percent of the retail stations are owned by the oil companies or the refiners. The rest of them are owned by individual businessmen or women. Some of them are jobbers, but a lot of them are just independents. Those are the ones that make those decisions. So they have got to see in their community enough demand to make them feel comfortable, and the government is going to give them credit so they can factor that in and all, and I am sure to a degree that will help a lot of people in their decision, but at the end of the day it is individual business men and women that are going to make these decisions. So the oil company is not going to decide this.”

So all the biodiesel demand side pull will come from mandated RFS laws? Or will a true, ground up market develop? Of course, this could all change if crude reaches $85/bbl and stays there. But this doesn’t seem likely in the near term, given the market’s new-found ability to withstand the same events that shocked crude up $5 a day back in ‘05 (like Nigerian oil worker kidnappings or threats of war against Iran).

We expect biodiesel wholesale prices to squeeze in 2007 and beyond. The producers with control over feedstocks will be in the best position to ride out the storm (Cargill, West-Central, etc).

What does this mean for biodiesel users? Frankly, don’t expect Big Oil to offer biodiesel at the pump anytime soon. They have nothing but upside should biodiesel producers fail. Like any true market, the answer will come from businesses serving a demand that really exists. Propel will continue to target biodiesel outlets at business and communities that are willing to pay for the benefits of biodiesel. In fact, they just may end up paying less in the end.

Biodiesel innovation is occurring at blinding speed. The latest: Prince Charles has developed an insulating artificial turf, suitable for garage wallpapering, that will keep his B100 powered Range Rover and Jaguar above the dreaded Cold Filter Plug Point. Many of you northern climate types may be familiar with the plug-in engine block heater. That is history. The Moore’s Law of biodiesel cold flow properties has been defined, and it is astroturf.

Ok. In layman’s terms, what happens to high blend biodiesel at cold temperatures? B100 soy biodiesel begins causing problems at 30 degrees, +/- 5. At this temp biodiesel begins to form crystals in the tank. These crystals are too large to fit through the fuel filter. Eventually, they will clog the filter and stop the flow of fuel to the engine. The temperature at which this happens is called the Cold Filter Plug Point (or CFPP). When asking your biodiesel supplier about cold weather performance, ask for the CFPP test results. CFPP is a more appropriate metric than Cloud Point (CP) when considering biodiesel cold flow performance, because it is the true operating limit.  If you operate in temps below the advertised CFPP, you should consider a lower biodiesel blend level.

Do B100 additives help? Our research has shown that cold weather additives don’t have any affect on biodiesel above B60. Why? The additive is working on the diesel portion of the blend, but not the biodiesel. The most effective current additives remain petroleum based- petrodiesel (aka D2) or kerosene (aka D1). The chemists promise new and improved non-petro additives soon.

What to do if your vehicle stops? Warm it up. And don’t excessively crank the engine.

The National Biodiesel Board randomly tested biodiesel for quality this fall. The results were discouraging (.pdf). So remember these keys for winter biodiesel driving:
All biodiesel is not created equal. Buy from a reputable retailer or supplier.
Plan ahead! Blend with D1 or D2 as temps are forecasted to drop below 40.
If buying pre-blended fuel, ask your supplier about the blend stock, winter additives and CFPP rating.
Demand ASTM certified B100.

Senators Obama and Lugar have reintroduced the American Fuels Act of 2006. This is essentially a federal RFS (Renewable Fuels Standard) that sets minimum consumption mandates to suport the biodiesel production industry. Read the bill here (new window). It will be interesting to watch this bill evolve as Big Oil attempts to broaden the definition of biofuels to include non-renewables and old petroleum technologies.

`(1) DEFINITION OF ALTERNATIVE DIESEL FUEL-

• • `(A) IN GENERAL- In this subsection, the term `alternative diesel fuel’ means biodiesel (as defined in section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 13220(f))) and any blending components derived from alternative fuel (provided that only the alternative fuel portion of any such blending component shall be considered to be part of the applicable volume under the alternative diesel fuel program established by this subsection).

• • `(B) INCLUSIONS- The term `alternative diesel fuel’ includes a diesel fuel substitute produced from–

• • • `(i) animal fat;

• • • `(ii) vegetable oil;

• • • `(iii) recycled yellow grease;

• • • `(iv) thermal depolymerization;

• • • `(v) thermochemical conversion;

• • • `(vi) the coal-to-liquid process (including the Fischer-Tropsch process); or

`                               (vii) a diesel-ethanol blend of not less than 7 percent ethanol.

Propel Biofuels studied biodiesel implementation challenges in Puget Sound area fleets including King County Metro Transit, City of Seattle and City of Tacoma; for the Puget Sound Clean Air Agency (PSCAA). These agencies are among the earliest public sector fleets to adopt a comprehensive biodiesel use policy. The study adresses key areas of concern: fuel quality, distribution challenges, and storage/use.

For the full report: Propel Biofuels: Puget Sound Clean Air Agency 2006 Biodiesel Study

The latest version of D6751-06-e1 has been published and is available on the ASTM web site as of May 12, 2006. This updated version includes two changes, including a lower acid number limit of 0.5 mg/KOH, and the inclusion of a combined Na + K limit of 5 ppm. This revised specification represents the new legal requirement for biodiesel as of the release date. These changes are good for the biodiesel industry, in that they will help ensure fuel quality, seen as a significant hurdle toward more widespread use of biodiesel fuel. However, these more stringent specifications may prove difficult for some current fuel producers to meet. (more…)

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