Awake at the Wheel

Biodiesel and Marine Use: Boats, Shipping, & Ferries.  Learn what boaters need to know about using biodiesel.  What’s happening with the ferries using biodiesel again?  What’s the scoop on biodiesel use in cruise ships and commercial shipping? Why is biodiesel use especially important on our waters?  Speakers include Barbara Cole with the Port of Seattle and Paul Brodeur with Washington State Ferries.  Get your questions answered!  7:00 pm to 9:00 pm, Seattle Phinney Center, 6532 Phinney Ave. N, Seattle WA 98103. Cost is Free.  Information at www.nwbiodiesel.org/.

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.

Michael Wang of Argonne’s Transportation Technology R&D Center and Zia Haq of the Department of Energy’s Office of Biomass respond to the article by Searchinger et al. in the February 7, 2008, Sciencexpress, “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change”

______________________________

Letter to Science

Michael Wang

Center for Transportation Research

Argonne National Laboratory

Zia Haq

Office of Biomass Program

Office of Energy Efficiency and Renewable Energy U.S. Department of Energy

The article by Searchinger et al. in Sciencexpress (”Use of U.S.

Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change,” February 7, 200 provides a timely discussion of fuel ethanol’s effects on greenhouse gas (GHG) emissions when taking into account GHG emissions from potential land use changes induced by ethanol production.

Land use change issues associated with biofuels were explored in life-cycle analyses beginning in early 1990s (Delucchi 1991). In general, the land use changes that occur as a result of biofuel production can be separated into two categories: direct and indirect.

Direct land use changes involve direct displacement of land for farming of the feedstocks needed for biofuel production. Indirect land use changes are those made to accommodate farming of food commodities in other places in order to maintain the global food supply and demand balance.

Searchinger et al. used the GREET model developed by one of us at Argonne National Laboratory in their study (see Wang 1999). They correctly stated that the GREET model includes GHG emissions from direct land use changes associated with corn ethanol production; the emissions estimates in GREET are based on land use changes modeled by the U.S. Department of Agriculture (USDA) in 1999 for an annual production of 4 billion gallons of corn ethanol in the United States by 2010. Needless to say, the ethanol production level simulated by USDA in 1999 has been far exceeded by actual ethanol production - about 6 billion gallons in

2007 (Renewable Fuels Association 2008). Thus, the resultant GHG emissions from land use changes provided in the current GREET version need to be updated. Argonne, and several other organizations, recently began to address both direct and indirect land use changes associated with future, much-expanded U.S. biofuel production. Such an effort requires expansion and use of general equilibrium models at the global scale.

Many critical factors determine GHG emission outcomes of land use changes. First, we need to clearly define a baseline for global food supply and demand and cropland availability without the U.S. biofuel program. It is not clear to us what baseline Searchinger et al. defined in their modeling study.

Searchinger et al. modeled a case in which U.S. corn ethanol production increased from 15 billion gallons a year to 30 billion gallons a year by 2015. However, in the 2007 Energy Independence and Security Act (EISA), Congress established an annual corn ethanol production cap of 15 billion gallons by 2015. Congress established the cap - based on its awareness of the resource limitations for corn ethanol production - to help prevent dramatic land use changes. Thus, Searchinger et al. examined a corn ethanol production case that is not directly relevant to U.S. corn ethanol production in the next seven years.

Corn yield per acre is a key factor in determining the total amount of land needed for a given level of corn ethanol production. It is worth noting that U.S. corn yield per acre has steadily increased - nearly 800% in the past 100 years (Perlack et al. 2005). Between 1980 (the beginning of the U.S. corn ethanol program) and 2006, per-acre corn yield in the United States has increased at an annual rate of 1.6% (Wang et al. 2007). Seed companies are developing better corn seeds that resist drought and pests and use nitrogen more efficiently. Corn yield could increase at an annual rate of 2% between now and 2020 and beyond (Korves 2007). Despite these trends, Searchinger et al. used a constant corn yield, assuming that low yields from corn fields converted from marginal land would offset increased yields in existing corn fields. A more accurate approach would be to use the increased yields in existing corn fields, determine how much additional land was required for corn farming in the United States, and then use the corresponding yield of the new corn fields (some of which could be converted from marginal land). Searchinger et al. further assumed constant corn yield in other countries, many of which have lower corn yields and, consequently, greater potential for increased yields.

Searchinger et al. also assumed that distillers’ grains and solubles

(DGS) from corn ethanol plants would displace corn on a pound-for-pound basis. The one-to-one displacement ratio between DGS and corn fails to recognize that the protein content of DGS is much higher than that of corn (28% vs. 9%). The actual displacement value of DGS is estimated to be at least 23% higher than that assumed by Searchinger et al.

(Klopfenstein et al. 2008).

Searchinger et al. estimated that U.S. corn ethanol production (between

15 billion and 30 billion gallons) would result in an additional 10.8 million hectares of crop land worldwide: 2.8 million hectares in Brazil, 2.3 million hectares in China and India, and 2.2 million hectares in the United States, and the remaining hectares in other countries. The researchers maintain that the United States has already experienced a 62% reduction in corn exports. Actually, U.S. corn exports have fluctuated around the 2-billion-bushel-a-year level since 1980. In 2007, when U.S. corn ethanol production increased dramatically, its corn exports increased to 2.45 billion bushels - a 14% increase from the 2006 level. This increase was accompanied by a significant increase in DGS exports by the United States - from 0.6 million metric tons in 1997 to 3 million metric tons in 2007.

Searchinger et al. had to decide what land use changes would be needed in Brazil, the United States, China, and India to meet their simulated requirement for 10.8 million hectares of new crop land. With no data or modeling, Searchinger et al. used the historical land use changes that occurred in the 1990s in individual countries to predict future land use changes in those countries (2015 and beyond). This assumption is seriously flawed by predicting deforestation in the Amazon and conversion of grassland into crop land in China, India, and the United States. The fact is, deforestation rates have already declined through legislation in Brazil and elsewhere. In China, contrary to the Searchinger et al. assumptions, efforts have been made in the past ten years to convert marginal crop land into grassland and forest land in order to prevent soil erosion and other environmental problems.

In estimating the GHG emissions payback period for corn ethanol, Searchinger et al. relied on the 20% reduction in GHG emissions that is provided in the GREET model for the current ethanol industry. Future corn ethanol plants could improve their energy efficiency by avoiding DGS drying (in some ethanol plants) or switching to energy sources other than natural gas or coal, either of which would result in greater GHG emissions reductions for corn ethanol (Wang et al. 2007). Searchinger et al. failed to address this potential for increased efficiency in ethanol production.

In one of the sensitivity cases, Searchinger et al. examined cellulosic ethanol production from switchgrass grown on land converted from corn farms. Cellulosic biomass feedstocks for ethanol production could come from a variety of sources. Oak Ridge National Laboratory completed an extensive assessment of biomass feedstock availability for biofuel production (Perlack et al. 2005). With no conversion of crop land in the United States, the study concludes that more than 1 billion tons of biomass resources are available each year from forest growth and by-products, crop residues, and perennial energy crops on marginal land.

In fact, in the same issue of Sciencexpress as the Searchinger et al.

study is published, Fargione et al. (200 show beneficial GHG results for cellulosic ethanol.

On the basis of our own analyses, production of corn-based ethanol in the United States so far results in moderate GHG emissions reductions.

There has also been no indication that U.S. corn ethanol production has so far caused indirect land use changes in other countries because U.S. corn exports have been maintained at about 2 billion bushels a year and because U.S. DGS exports have steadily increased in the past ten years.

U.S. corn ethanol production is expected to expand rapidly over the next few years - to 15 billion gallons a year by 2015. It remains to be seen whether and how much direct and indirect land use changes will occur as a result of U.S. corn ethanol production.

The Searchinger et al. study demonstrated that indirect land use changes are much more difficult to model than direct land use changes. To do so adequately, researchers must use general equilibrium models that take into account the supply and demand of agricultural commodities, land use patterns, and land availability (all at the global scale), among many other factors. Efforts have only recently begun to address both direct and indirect land use changes (see Birur et al. 2007). At this time, it is not clear what land use changes could occur globally as a result of U.S. corn ethanol production. While scientific assessment of land use change issues is urgently needed in order to design policies that prevent unintended consequences from biofuel production, conclusions regarding the GHG emissions effects of biofuels based on speculative, limited land use change modeling may misguide biofuel policy development.

References

Birur, D.K., T.W. Hertel, and W.E. Tyner, 2007, The Biofuel Boom: The Implications for the World Food Markets, presented at the Food Economy Conference, the Hague, the Netherlands, Oct. 18-19.

Delucchi, M.A., 1991, Emissions of Greenhouse Gases from the Use of Transportation Fuels and Electricity, ANL/ESD/TM-22, Volume 1, Center for Transportation Research, Argonne National Laboratory, Argonne, Ill., Nov.

Fargione, J., J. Hill, D. Tilman, S. Polasky, and P. Hawthorne, 2008, “Land Cleaning and Biofuel Carbon Debt,” Sciencexpress, available at www.sciencexpress.org, Feb. 7.

Klopfenstein, T. J., G.E. Erickson, and V.R. Bremer, 2008, “Use of Distillers’ By-Products in the Beef Cattle Feeding Industry,”

forthcoming in Journal of Animal Science.

Korves, R., 2007, The Potential Role of Corn Ethanol in Meeting the Energy Needs of the United States in 2016-2030, prepared for the Illinois Corn Marketing Board, Pro-Exporter Network, Dec.

Perlack, R.D., L.L. Wright, A. Turhollow, R.L. Graham, B. Stokes, and D.C. Urbach, 2005, Biomass as Feedstock for Bioenergy and Bioproducts

Industry: the Technical Feasibility of a Billion-Ton Annual Supply, prepared for the U.S. Department of Energy and the U.S. Department of Agriculture, ORNL/TM-2005/66, Oak Ridge National Laboratory, Oak Ridge, Tenn., April.

RFA (Renewable Fuels Association), 2008, Industry Statistics, available at http://www. ethanolrfa.org/industry/statistics/, accessed Feb. 13, 2008.

Searchinger, T., R. Heimlich, R.A. Houghton, F. Dong, A. Elobeid, J.

Fabiosa, S. Tokgoz, D. Hayes, and T.H. Yu, 2008, “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land Use Change,” Sciencexpress, available at www.sciencexpress.org, Feb. 7.

Wang, M., 1999, GREET 1.5 - Transportation Fuel-Cycle Model, Volume 1:

Methodology, Development, Use, and Results, ANL/ESD-39, Volume 1, Center for Transportation Research, Argonne National Laboratory, Argonne, Ill., Aug.

Wang, M, M. Wu, and H. Hong, 2007, “Life-Cycle Energy and Greenhouse Gas Emission Impacts of Different Corn Ethanol Plant Types,” Environmental Research Letter, 2: 024001 (13 pages).

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.

From Science Daily

“Our research found that the particulate matter from diesel exhaust stimulated a ‘death pathway’ response that the body uses to dispose of damaged cells. This response caused the airway cells to fuse together and die.

“We saw hardly any cell death after treatment with biodiesel particulates.”

Associate Professor Ackland said that the results of the study provide support for calls to move towards replacing petrol and diesel with cleaner biofuels.

“It is clear that breathing in diesel fumes is going to have a far more detrimental effect on our health than biodiesel. Given the level of cell death we have found, diesel exhaust could be the cause of respiratory disorders such as asthma and could even be implicated in cancer,” she said

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.

A quick link re: a subject we’ll drill down on, way down, in future posts. Chip Keen writes the DriveTime column for The Oregonian. A reader wrote presuming biodesel’s net energy negative conspiracy. Chip breaks down the factors from the “competing scientists” (Pimental and Patzak enjoy the equivalent science community peer status as climate change non believers)…

It draws this conclusion: “Biodiesel yields around 3.2 units of fuel-product energy for every unit of fossil energy consumed in the life cycle. By contrast, petroleum diesel’s life cycle yields only 0.83 units of fuel-product energy per unit of fossil energy consumed.”

In other words, petrodiesel has a negative energy balance of 17 percent, while biodiesel has a positive energy balance of 220 percent. Biodiesel crops yield more than double their fossil energy input. Petrodiesel is the fuel that takes more energy to produce than it provides in return.

See Propel’s about biodiesel page for more info.

The difference between how much energy is created when producing these top four fuel sources (longer bars are better)

Fuel	Energy IN	Energy OUT
Biodiesel (soy bean)	1.0	3.2
Ethanol	1.0	1.34
Petro-diesel	1.0	0.84
Gasoline	1.0	0.81

Joint study by U.S. Dept of Energy (DOE) and U.S. Dept of Agriculture (USDA), 1998.

R320 cdi clean-diesel (from mbusa.com)

Is there really a diesel passenger car market in the USA? Yes there is.
From the Diesel Technology Forum

New data from R.L. Polk & Company shows that annual registration of diesel passenger vehicles in the U.S. has grown 80 percent since 2000, from 301,000 vehicles to nearly 550,000 in 2005. 31 percent of this growth came in the past year alone. Most analysts expect the diesel trend to continue. Researchers at J.D. Power and Associates predict that diesel sales will approximately triple in the next 10 years, accounting for more than 10 percent of U.S. vehicle sales by 2015 ­ up from 3.6 percent in 2005.

The emerging diesel driver demographic is very interesting- as the new passenger models will be leaning heavy on high end European models (BMW, Mercedes, VW) and luxury SUVs (Chrysler). Of course the vast majority of diesels are still business and gov’t fleet vehicles. What is the emerging biodiesel driver profile? Indeed: well educated, well paid, environmentally conscious (and/or patriotic) individuals, and gov’t and business fleets under increasing clean air mandates and shareholder pressures to clean up. These drivers are choosing diesel because of efficiency, lower total cost of ownership, and better environmental profile than gasoline. Using biodiesel dramatically improves these qualities. Our research hints that biodiesel is the main driver for passenger diesel sales (where biodiesel and diesel cars are both widely available).

List of current diesel vehicles via DTF

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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Testing topics.