As is our tradition, the December issue of Biomass Power &amp; Thermal is an opportunity for us to reminisce about the passing year, and to ponder what the new year might bring. It&rsquo;s clear when you read the Outlook and Project Development features in this month&rsquo;s magazine that most biomass businesses had a good year, and that federal policy will be the main thing holding the biomass industry back in the new year.
 While developers are eager to start producing biomass energy, they are being hampered by a lack of funding. The problem is that the financial community is mainly waiting for the U.S. EPA&rsquo;s boiler Maximum Achievable Control Technology final, final rules and the agency&rsquo;s decision regarding the treatment of biogenic emissions. Then there&rsquo;s the Energy Title in the Farm Bill, which is supposed to be reduced by $23 billion over the next 10 years.
 I don&rsquo;t believe the entire Energy Title will be wiped out, but there may be some reductions. How that plays out is anyone&rsquo;s guess at this point. In the meantime, it is up to the biomass industry to tell lawmakers about programs such as the Biomass Crop Assistance Program and the impact it has made and will continue to make in rural America. As I&rsquo;ve said before, it will create economic opportunities not just for landowners but for custom harvesters, truckers, equipment suppliers, not to mention the indirect benefits for restaurants, grocery stores and other main street businesses in communities where the biomass is being produced, collected, delivered and processed.
 Then there&rsquo;s the Rural Energy for America Program, which according to Sen. Amy Klobuchar, D-Minn., will likely be retained in the Farm Bill. Klobuchar, who is a member of the Senate ag committee, spoke on Nov. 7 at a conference in Fargo, N.D. Let&rsquo;s hope she&rsquo;s right.
 The good news is that the renewable energy industry is not sitting back waiting for the outcome. In October, the Agriculture Energy Coalition was formed to fight for a strong bipartisan Energy Title in the Farm Bill. The coalition sent a letter to leaders of the House and Senate ag committees, urging them to support ag- and forestry-based energy programs and policies in the new Farm Bill. The letter mentions BCAP, REAP, the Biorefinery Assistance Program and the Biobased Markets Program, and the fact that they have helped finance thousands of renewable energy projects across rural America. &ldquo;Programs are generally over-subscribed and show no signs of abating even as the economy has slowed,&rdquo; the letter states.
 The letter also points out that the total outlays for the Energy Title amount to less than 1 percent of all the programs authorized in the 2008 Farm Bill.
 As you can guess, the Biomass Power Association, American Biogas Council, Biomass Thermal Energy Council, the 25x&rsquo;25 Alliance and many others are members of the coalition.

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Federal Policy Holds Key to  Significant Progress in 2012

I recently had the privilege of speaking at a three-day meeting of the Electric Power Research Institute in Austin, Texas. The topic was biomass (what else?).
 For those readers not familiar with EPRI, it&rsquo;s the nation&rsquo;s leading collection of scientists, engineers, academicians and industry representatives who spend lots of time thinking about the generation, delivery and use of electricity. Unlike many of us in the &ldquo;merchant&rdquo; world of independent power production, EPRI is 90 percent comprised of utilities&mdash;think Duke Energy Corp., Southern Co., American Electric Power Co. Inc. and Tennessee Valley Authority. In other words, it&rsquo;s a sector of the economy with lots to say about the future of energy, and the political (and economic) clout to get it done.
 Dave O&rsquo;Connor, EPRI&rsquo;s go-to guy on biomass, organized the conference and asked me to speak. EPRI doesn&rsquo;t lobby, but figured I would provide an unvarnished view of how politics is shaping the biomass sector. As I sat waiting my turn at the podium, I heard that biomass represents one of the best opportunities for renewable base-load generation, particularly in the Southeast; that members were looking at cofiring, torrefaction, retirement of smaller coal plants; and that biomass is a way to complement local economies and provide jobs while also providing a disposal option for material that would otherwise generate methane in landfills. All good, except that in their perspective, regulatory uncertainty is causing a &ldquo;chilling&rdquo; effect on investment in the sector. Boiler Maximum Achievable Control Technology and carbon are their biggest concerns.
 The old adage&mdash;&ldquo;be at the table or run the risk of being on the menu&rdquo;&mdash;couldn&rsquo;t be more appropriate as biomass is considered by federal and state policymakers. Like all of us on the merchant side of power generation, utilities seem to appreciate the opportunity of biomass. What we need now is their help. Before the U.S. EPA are two issues that directly affect our industry&mdash;revised boiler and Non-Hazardous Secondary Materials rules, and how the Tailoring Rule will regulate biogenic emissions. Many regulated utilities have yet to speak out on these important issues.
 For too long, the sector has been balkanized into landowners, utilities, merchant developers and owners, paper mills, and the utility sector. To be sure, we serve different constituencies with sometimes conflicting views on national energy or tax policy. Despite these differences, we share the fundamental belief that biomass energy is critically important to our economy, our environment, and the health of our forests and farms. For that reason, we are coming together like never before. It&rsquo;s now time for all of the nation&rsquo;s utilities to join our effort in providing scientific support on the carbon benefits of biopower and to work with EPA on achieving sensible, science-based MACT and solid waste regulations.
 Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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Waking the Sleeping Giant

Last month, we highlighted an old technology that is resurging as a potential answer to technical issues involved in processing biomass into a suitable cofiring boiler fuel. It is called torrefaction. The largest impediments to the utilization of biomass as a cofiring fuel with fossil fuels in larger-scale utility boilers are the handling and conveyance properties of the biomass material. Torrefaction may provide an answer.
 The Energy &amp; Environmental Research Center and other entities have developed and patented various systems. The EERC&rsquo;s technology is called the controlled spontaneous reactor (CSR). The CSR was initially a type of torrefaction technology designed for high-moisture, low-rank coals where moisture and volatiles were driven off at lower temperatures, leaving an appropriately sized char that burned, releasing more heat, then reignited above the coal burners, yielding lower-nitrogen-compound pollutants. The EERC has now adapted the technology for biomass in order to convert higher moisture and low-density biomass into char biomass materials that have similar physical properties as crushed coal particles and blend effectively with coal in a cofiring scenario for conventional large-scale utility boiler systems. The added major benefit of upgrading biomass instead of coal, of course, is the lower carbon footprint that results (lower net greenhouse gas emissions) compared to coal.
 The CSR technology is a fluidized-bed technology that utilizes a proprietary fluidization plate to effectively control the velocity profile across the bed for well-controlled sizing of the produced fuels. The CSR is an atmospheric system that can be utilized as a stand-alone torrefaction system. Another rendition of the technology may be to integrate it with an existing boiler and utilize available low-grade heat, such as the exiting flue gas, to provide heat for the torrefaction process. If no source of low-grade heat is available, a portion of the biomass feed material is consumed to produce the required heat, lowering the overall efficiency of the process.
 One of the major advantages of the CSR over other torrefaction technologies is its ability to handle a wide variety of feedstocks. The fluidized-bed system is forgiving for a range of biomass sizes from several centimeters to a few millimeters. The system can be operated in an optimized mode for a specific biomass&rsquo;s physical and chemical properties, such that the produced fuels have consistent and improved grindability and handling properties along with low moisture, low volatiles, and a much-improved heat content. Additionally, because of its design, the system acts as a classifier to remove tramp metals (unwanted nails, fence wiring, machinery parts or other metals that can be associated with wood resources) and other unwanted materials carried in with the feedstock.
 In conclusion, although biomass is simply very, very young coal, it does not have the high density and heating properties that coal has, which contributes to a significant economic challenge. Torrefaction may be one solution for processing biomass into a usable fuel for utility boilers. The EERC&rsquo;s CSR technology, a pseudotorrefaction system, and several other torrefaction systems in development around the globe might provide solutions for cofiring. Torrefaction systems appear to have a lower cost and smaller design footprint, they allow for a wide range of biomass feedstock types, and they produce a consistent fuel product. Several different demonstrations are ongoing with limited reportable insights at the moment. Stay tuned for more factual torrefaction results in the near future.
 Author: Bruce C. Folkedahl Senior Research Manager Energy &amp; Environmental Research Center (701) 777-5243 <a href="mailto:bfolkedahl@undeerc.org">bfolkedahl@undeerc.org</a>

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Controlled Spontaneous Reactor

In 2012, expect to see the continued development of the biomass industry in the European Union and other areas of the world. Currently, the U.S. leads the world in biomass power capacity, but that is beginning to change. The North American wood pellet industry has become a major supplier to the EU. The volume of EU-bound wood pellet shipments in 2010 was double that of 2008, with the Netherlands, the U.K. and Belgium leading the demand. From 2008 to 2009 the EU&rsquo;s gross electricity production from biomass increased more than 10 percent, with Germany, Sweden and the U.K. leading the way. The U.K., in particular, is focusing its efforts on developing its biomass capacity. October saw the U.K. propose subsidies to business customers (to be followed by households after the program was established) who use renewable energy technology for heating. While the program&rsquo;s rich subsidy was scaled back (from 2.7 pence per kilowatt hour (kWh) to 1 pence per kWh), the efforts show clearly that the political will is in place to continue to support the biomass industry. The U.K.&rsquo;s proposals included as a key goal the development of &ldquo;cheaper&rdquo; renewable generation, focusing specifically on the conversion of coal plants to biomass and cofiring plants.
 But the U.K. is not the only place to see recent movement in the biomass space that is expected to continue throughout 2012. India, Japan and Brazil have also added biomass power capacity with additional projects in development phases. In addition, biogas is expected to see significant growth in Italy, France and Spain. China, in particular, has set ambitious goals for its biomass industry. By 2015, China wants to have 13 gigawatts of biomass power capacity, which is a 160 percent increase from its 2010 capacity. This means China anticipates adding 500 to 700 biomass power plants by 2015. With a biomass reserve equivalent to 500 million tons of coal, from sources such as straw, algae, methane, fallen timber and manure, China may very well emerge as the new high-growth country in the biomass space.
 The U.S. biomass industry is growing, though it will continue to face significant challenges during 2012. But first, some success stories. Several new biomass plants are under construction (not just in the development stage) including 100 megawatt (MW) plants in Texas and Florida and smaller 50 to 75 MW plants in New Hampshire and Florida. Several more plants are in the development phase, with construction expected to begin in 2012. Most of these plants are located in rural areas where jobs are needed the most. New plant construction and job creation will go a long way to garnering the political support needed to move the industry forward.
 What the biomass industry can&rsquo;t control is the price of natural gas and oil. Further, the inability to establish an acceptable definition of &ldquo;biomass&rdquo; has torn the industry&rsquo;s focus away from developing its supply chain and establishing its presence as a cost-effective alternative to fossil fuels. In addition, we are seeing a shift toward investment in smart grid and energy efficiency technologies, which may result in a focus away from biomass projects, at least in the short term. Energy service providers are focusing more on smart grid technologies, as a result of commercial customer demand for real-time energy management capabilities, through the acquisition of battery storage and consumer-driven energy management technologies.
 In 2012, the biomass industry needs to focus on the positive economic benefits it brings to communities and the importance of energy independence. Further, while establishing a biomass definition is important, let&rsquo;s not allow that debate to divert precious time and energy away from the development of a cost-effective supply chain and establishment of biomass as an alternative energy source to fossil fuels.
 Author: Kate Bechen Attorney, Michael Best &amp; Friedrich LLP (414) 225-4956 <a href="mailto:klbechen@michaelbest.com">klbechen@michaelbest.com </a>

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Biomass 2012: International Growth and Domestic Obstacles 

New Dealer for Continental Biomass Industries Continental Biomass Industries Inc., a manufacturer of portable and stationary biomass processing and recycling systems, has announced that McCourt &amp; Sons Equipment Inc. is an exclusive dealer for CBI&rsquo;s product line and will provide equipment, parts and service for Texas, Arkansas, Louisiana, Oklahoma and Mississippi. Established in 1997 and family owned and operated, McCourt &amp; Sons has more than 65 years of combined industry experience.
 Madison college receives grantfrom Thermo Fisher Scientific Madison Area Technical College in Madison, Wis., has received a $10,000 Thermo Fisher Scientific Inspire Grant to support student participation in Renewable Energy for International Development. The course, which is offered through Madison College and the Consortium for Renewable Energy Technology, examines energy and economics in developing countries with special consideration to renewable energy sources. The class combines eight weeks of online instruction with 10 days of study and hands-on work in Costa Rica. Students design and install working renewable energy systems that can be applied in developing countries. The Inspire Grant provides six $1,500 scholarships, as well as a $1,000 stipend that will be given to a program participant from Costa Rica to offset their expenses to attend related workshops in Madison.
 GE introduces gas engine for small biogas projects Expanding the company&rsquo;s lineup of biogas engines for a wider range of power outputs, GE has introduced its Waukesha 1-megawatt APG1000 gas engine that can utilize a broader variety of biogases, including from landfills, wastewater treatment plants and agricultural waste. The Waukesha unit&rsquo;s expanded biogas capabilities are the result of an 18-month redesign and testing initiative that includes modifications to the combustion chamber, a new spark plug design, and a new fuel control system that simplifies engine start-up and operation. For example, the engine&rsquo;s greater fuel tolerances allow it to handle fluctuations in the thermal quality of the biogas with little or no manual intervention. These modifications address the unique operational challenges of using biogases and were validated at both landfill and digester biogas-to-energy project sites.
 Blythe takes over at B&amp;W Mechanical Handling Andy Blythe was appointed managing director of U.K.-based B&amp;W Mechanical Handling Ltd. He joined the company in early May succeeding Andrew Mitchell, who is focusing on his own consulting business but will maintain strong links with B&amp;W. Blythe brings his vast experience in aggregates, minerals and the bulk handling industry with a proven track record in business expansion and strategic development. With B&amp;W, Blythe&rsquo;s initial focus is to improve the strong presence in the ports and terminals sector as well as expand into other high-end markets that need the same technologies.
 Reliable Renewables joins CEA Consumer Energy Alliance welcomes Reliable Renewables LLC as its newest affiliate member. Reliable Renewables develops owns, and operates modular biomass gasification power plants of 2 to 5 megawatts. The power plants are fueled by agricultural waste, pulp and paper waste, energy crops and refuse-derived fuel. These power plants operate around-the-clock providing a consistent, sustainable flow of renewable energy. The biogas produced can be utilized to generate electricity in a GE Jenbacher, or a similar engine. Alternatively, the biogas can be used to fuel incumbent processes such as kilns, fractionation towers or existing engines and turbines. Fuel cost is reduced or eliminated as the gasification plants are small enough to be located adjacent to biomass supplies.
 Nortrax expands Morbark territory into eastern New York Morbark Inc. has signed an agreement with Nortrax Inc., a Morbark forestry and recycling dealer, to expand its territory to include eastern New York State. The expansion added 10 New York counties to an already established Nortrax northeastern territory of Maine, Vermont and New Hampshire. Nortrax has been a steadfast Morbark dealer for more than 20 years. With excellent product support, as well as an extensive equipment and parts inventory, the expansion of the Nortrax-Morbark partnership into eastern New York state will greatly benefit regional Morbark customers.
 Morbark names new president Morbark Inc., a manufacturer of forestry, sawmill and wood recycling equipment, announced the appointment of James W. Shoemaker Jr. as president. Shoemaker replaces Lon Morey who will remain as the chairman of Morbark&rsquo;s board of directors. Prior to his appointment, Shoemaker served as Morbark&rsquo;s vice president of operations and board member. He joined Morbark in 2003 as the manager of operations and has held numerous positions in the company. Prior to joining Morbark, Shoemaker served 25 years with the Jervis B. Webb Co. managing operations, accounting and supply chain.
 Bandit Industries receives EPA award Wood chipper manufacturer Bandit Industries received a National Partnership for Environmental Priorities achievement award from the U.S. EPA. The award was given to the company for efforts in reducing hazardous chemicals in the workplace, specifically with the reduction of mercury. Bandit was one of only three organizations in Michigan to receive the award. Bandit&rsquo;s proactive replacement of mercury thermostats resulted in approximately three pounds of the dangerous metal being removed from the company grounds. The old thermostats were then securely packaged and sent to a recycling facility. These reductions were achieved as part of the NPEP program, a voluntary reduction program in which companies, municipalities, federal facilities and tribes partner with the EPA to reduce and/or recycle toxic chemicals. The NPEP program also works to identify environmentally preferable alternatives and fosters technology transfer. To date, NPEP partners have been successful in removing more than 40 million pounds of potentially hazardous material.
 Davidson joins Vecoplan Matthew Davidson has joined Vecoplan LLC as a product engineer. Davidson brings three years of practical experience from Crowder Construction Co., where he was a mechanical project engineering manager and two years experience as a mechanical engineering intern with Square D, to his new position at Vecoplan. Davidson&rsquo;s responsibilities will include coordinating the design and development of turnkey shredding systems for the recycling sector. He will also oversee the manufacture and implementation of his projects once the engineering phase has been completed, in order to ensure continuous quality control.
 VIC hires Carter as electrical engineer Vecoplan Integrated Controls, a North American manufacturer of industrial control panels and plant-wide integrated control systems, has added Ron Carter to its electrical engineering team. Carter brings more than 20 years of experience to his new position at VIC. His background includes both practical experience from stints at Commonwealth Brands, Lucent Technologies and R.J. Reynolds Tobacco Co. Carter&rsquo;s responsibilities will include coordinating the design and development of individual control panels and turnkey controls integration for manufacturing plants. In order to ensure continuous quality control, he will also oversee the manufacture and implementation of his projects once the engineering phase has been completed.
 Rodman named to NECA's Renewables and Distributed Generation committee Steve Rodman, president of Rodman &amp; Rodman P.C., has been named to the Northeast Energy and Commerce Association's Renewables and Distributed Generation committee. NECA is a nonprofit trade association serving the electric power industry. Its Renewables and Distributed Generation committee is dedicated to increasing awareness of the benefits of renewable/clean energy and to facilitating growth of the industry in the Northeast. Rodman &amp; Rodman is a CPA firm with a dedicated "Green Team" Renewable Energy and Clean Technology Practice, where Rodman is a client adviser and advocate in the provision of expert green energy tax advisory, accounting services, and business strategy for alternative energy producers and investors through all stages of their project and business life cycle. The Green Team offers its services for companies in the biomass, wind, solar, geothermal, landfill gasses, municipal solid waste, hydroelectric and hydrokinetic sectors of the renewable energy industry. They also assist startup projects with the Section 1603 program.

Andy Blythe will initially focus on improving B&W's presence in the ports and terminal sector and other high-end markets. 

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GROWING BUSINESS: Nortrax and Morbark are expanding their reach to include 10 counties in eastern New York.


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REWARDING EXCELLENCE: Terry Howard (left to right), Dianne Morey, Kelly Zielinski, Janet Haff, Louie Jensen and Lee Hohlbein of Bandit Industries accepted an award from the U.S. EPA for reducing hazardous chemicals in the workplace.

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Matthew Davidson has joined Vecoplan and will design and develop turnkey shredding systems for the recycling industry.


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Steve Rodman will serve on the NECA's Renewables and Distributed Generation committee to raise awareness of the benefits of renewable energy.  

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Business Briefs

The 2011 Southeast Biomass Conference &amp; Trade Show held Nov. 1-3 in Atlanta hosted 325 professionals and 60 exhibitors and boasted a strong regional focus.
 Jill Stuckey, director of the Center of Innovation for Energy at the Georgia Environmental Finance Authority, started off the event by addressing Georgia&rsquo;s biomass potential and the economic benefits that new industry could bring to her state.
 According to Stuckey, there are four main factors driving interest in biomass-to-energy projects in Georgia: the economy, international mandates, environmental concerns and the need for greater energy security. &ldquo;I&rsquo;m in economic development, so when I hear the word &lsquo;jobs&rsquo; my ears perk up,&rdquo; she said. Georgia ranks second in biomass supply. Only Oregon has more biomass. However, Stuckey noted that Oregon&rsquo;s forests are largely comprised of redwoods, which are unlikely candidates for energy conversion. While Georgia has vast forest resources, the logging industry and infrastructure within the state is suffering from a 25 percent unemployment rate. &ldquo;We want to do something about that,&rdquo; Stuckey said. &ldquo;We want more forests in Georgia, so we have to find good uses for those trees.&rdquo;
 We grow trees like other states grow commodity crops, Stuckey said. &ldquo;We plant [trees] in nice little straight rows, and if we want more trees to be planted we are going to have to find uses for them,&rdquo; she continued. In 1995, foresters in Georgia were harvesting about 51 million tons of biomass. &ldquo;Today we are down to 39 million tons &hellip; and they are growing 38 percent faster than we utilize them,&rdquo; she said. Although forestry is the source of Georgia&rsquo;s primary biomass resource, the state is working to expand into other areas. As industries like pellet manufacturing continue to grow, Stuckey stressed that Georgia is working to develop vast and reliable sources of biomass materials. In addition to looking at the cultivation of faster growing trees, energy crops such as miscanthus are also being considered. &ldquo;We are the biomass leader of today,&rdquo; Stuckey said. &ldquo;But we want to be the biomass leader of tomorrow.&rdquo;
 Stuckey also addressed the types of biomass-related industries that are locating in her state, including pellet manufacturers. &ldquo;I think the future is great for the pellet industry,&rdquo; Stuckey said, noting that demand from Europe could grow to 30 million tons annually by 2016. By 2026, that number could grow 100 million to 300 million tons. Regarding the electrical industry, Stuckey noted that the price is currently high, limiting the amount of biomass-based electricity that utilities are willing to purchase. However, that could change as torrefaction technologies become more advanced. The future of drop-in biofuels development also looks strong in Georgia. &ldquo;The jet fuels industry is really really pushing in this area,&rdquo; Stuckey said. &ldquo;We are working [on about] four biomass-to-jet-fuel projects right now &hellip; We are very excited about that because we have the busiest airport in the world. We utilize about 1 billion gallons of jet fuel in Atlanta every year.&rdquo;
 Regarding Stuckey&rsquo;s organization, she spoke of a unique &ldquo;one-stop-shop&rdquo; she has developed to simplify the process of gathering relevant federal and state regulatory information. Professionals representing a wide range of regulatory issues all meet face to face. Companies are scheduled in one-hour intervals to explain their projects to this group of state and local officials, who then answer questions regarding permitting, regulation, and any services they might be able to offer to expedite the development of a project. &ldquo;We want you to get that shovel in the ground sooner rather than later,&rdquo; Stuckey said.
&mdash;Erin Voegele

BIOMASS BUSINESS BACKER: Stuckey is interested in biomass energy development to help lower Georgia's 25 percent unemployment rate in the logging industry.

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Georgia has a lot to offer biomass-to-energy projects

Biomass Bonanza

&ldquo;It&rsquo;s pretty obvious to see why pellets are in the Southeast,&rdquo; said Mike Williams, director of strategy and planning for The Westervelt Co., showing a map of the wood resources in the region to attendees of the Southeast Biomass Conference &amp; Trade Show.
 The first general session panel discussion, &ldquo;Producers&rsquo; Perspective: A Manufacturers Roundtable on the Southeast&rsquo;s Growing Pellet Industry,&rdquo; revolved around the region&rsquo;s capacity for making and exporting pellets. The topic was fitting for a regional show, confirmed by the preceding keynote speaker Jill Stuckey, director of the Center of Innovation for Energy at Georgia&rsquo;s Environmental Finance Authority. &ldquo;The pellet industry is king,&rdquo; she told a crowd of about 330 attendees. &ldquo;It&rsquo;s happening and people are making money.&rdquo;
 The Westervelt Co.&rsquo;s Westervelt Renewable Energy is taking advantage of that opportunity, having just broken ground on its 280,000-metric-ton-per-year pellet plant in Aliceville, Ala., on Oct. 25. The company has a pellet business plan that specifies production of 1 million metric tons at multiple mills in the Southeast, using wood from its 520,000-plus acres, as well as third-party wood, Williams said. &ldquo;Competition is good,&rdquo; he added. &ldquo;We welcome competition. We just want good, well-thought out competition.&rdquo; Williams said he personally expects about 9 million metric tons of pellet exports by 2015 from eight ports in the Gulf of Mexico and the Southern Atlantic coast. The total tonnage for 2011 is about 1.2 million.
 Enviva makes up a large portion of that, with its 726,000 metric tons per year from four plants. &ldquo;The potential is enormous,&rdquo; said Pete Najera, vice president of operations for Enviva. The company exports its pellets, but Najera said more and more U.S. utilities are coming through its offices inquiring about biomass fuel. In fact, Enviva recently signed a contract to supply Dominion Virginia Power with 1 million tons of wood chips.
 &ldquo;Everything we do is about meeting the customers&rsquo; needs,&rdquo; he said. The company&rsquo;s five golden rules of pellet production are safety first, production of quality pellets, achieve total production volume, maintain material process flow, and excellent equipment and facility maintenance. &ldquo;An accident at one plant hurts us all,&rdquo; he said.
 The company also has a 50,000-metric-ton-per-year pellet plant in Belgium, having started its pelleting business in Europe.
 Georgia Biomass, Waycross, Ga., also began in Europe, producing 750,000 metric tons per year for RWE, its parent company and one of the top five integrated utilities in Europe, according to Sam Kang, managing director of Georgia Biomass.
 The pellet mill uses about 1.5 million metric tons on its 300-plus acre site. The plant was developed to complete the supply chain for RWE, Kang said. &ldquo;We&rsquo;ve created a lot of jobs along the supply chain,&rdquo; he added. Kang agreed with the other panelists that demand will increase, but added that RWE is unsure how much and when.
 &ldquo;Anything and everything you want to know about the industrial pellet industry is right here in these three brains on the stage,&rdquo; moderator Seth Ginther, executive director of the U.S. Industrial Pellet Association, said of the highly informed panelists.
&mdash;Lisa Gibson

PELLET PUSHERS: Kang, Williams and Najera, left to right, discussed the pellet industry and opportunities for growth during a general session panel at the Southeast Biomass Conference & Trade Show. 

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Manufacturers emphasize pellet potential in the Southeast.

Southern Comfort

The military has been especially active in the push to develop biobased jet fuel. However, the U.S. Department of Defense&rsquo;s interest in biomass-based energy sources is not limited to biofuels. Biomass-based power is also part of the department&rsquo;s plan to source 50 percent of its energy needs from renewable resources.
 Chris Tindal, director of operational energy for the U.S. Navy, spoke about the military&rsquo;s goals and biomass-based energy and fuels initiatives at the 2011 Southeast Biomass Conference &amp; Trade Show in Atlanta. Tindal&rsquo;s presentation was part of a general session panel, titled &ldquo;Exploring the Military&rsquo;s Quest for Greater Biomass Derived Energy.&rdquo;
 While the Navy will be sourcing 50 percent of its energy needs from renewables by 2020, Tindal spoke about two specific energy segments the military must address: operational energy and shore energy. Operational energy, he said, is the energy used to power ships, planes and forward deployed troops. Liquid fuels are primarily used for these purposes. Alternatively, shore energy comprises things like base operations, where other types of renewable electricity, such as biomass-power, can be deployed.
 Although the Navy has been particularly vocal in its support for biobased jet fuel, Tindal also spoke briefly about some of the shore energy initiatives that are ongoing. For example, a base in Albany, Ga., currently sources more than 20 percent of its power from a landfill gas project that became operational earlier this year. The military has also actively been developing waste-to-energy facilities. One such plant in Portsmouth, Va., actually produces enough electricity to power the entire base. Excess energy is then sold to the grid.
 Regarding biomass-based liquid transportation fuels, Tindal spoke about the Navy&rsquo;s plans to sail the Great Green Fleet. We are aiming to complete a demonstration of the Great Green Fleet in 2012, he said. The fleet includes a carrier striker, two submarines, two destroyers and a cruiser, as well as the aircraft associated with the carrier. The goal is to have all nonnuclear components of this fleet fueled with biofuels. The Navy&rsquo;s ultimate goal is to actually have the Great Green Fleet deployed overseas by 2016.
 Tindal also spoke about the need to develop global biofuel sources. &ldquo;Obviously, the Navy and Department of Defense are a global force&mdash;and this force is everywhere,&rdquo; he said. &ldquo;It&rsquo;s just not in the waters around the United States. When we go overseas, we would like to refuel on biofuels &hellip; Whether we&rsquo;re in India, Singapore or Australia, we want to be able to do that. We can&rsquo;t afford to have a tanker following [our ships] around the world just to fill them up on biofuels.&rdquo;
&mdash;Erin Voegele

CAPTIVE AUDIENCE: Attendees at the Southeast Biomass Conference & Trade Show in Atlanta learned about the military's plan to source 50 percent of its energy from renewables. 

2011/11/13220001074418.jpg

Department of Defense has lofty renewable energy goals.

Military Might 

Just weeks before the Southeast Biomass Conference &amp; Trade Show, American Renewables held a groundbreaking ceremony for its 100-megawatt (MW) biomass power plant in Gainesville, Fla. Josh Levine, vice president of project development for American Renewables, spoke about developing the plant during the conference panel &ldquo;Southeastern Biomass Power Producers&rsquo; Roundtable.&rdquo;
 Attendees were anxious to hear what Levine and his fellow speakers, Marvin Burchfield, vice president of Decker Energy, and Raine Cotton, CEO of Southeast Renewable Energy, had to say about the successful development of their biomass power projects.
 The Gainesville Renewable Energy Center will power about 70,000 homes through a 30-year power purchase agreement (PPA) with Gainesville Regional Utilities. Sitting on a 131-acre site leased from Gainesville, the GREC will run on forestry residue, urban wood waste, and mill residue.
 Addressing the well-known concern of over-development of biomass facilities that local resources can&rsquo;t sustain, Levine said, &ldquo;If you are waiting for a flood of biomass energy in the Southeast, you can put the waders back in the closet.&rdquo; Even if that flood came, however, Levine said the region has more than enough fuel to support it. The GREC will operate under strict forest stewardship standards. Having begun construction in March, the GREC should be operating in 2013.
 &ldquo;I see three main issues [for developing biomass power in the Southeast], and the first is policy,&rdquo; Levine said. &ldquo;It is very difficult being in this business and not knowing what&rsquo;s coming down the pike.&rdquo; The second major development issue he named was natural gas prices, and the third was regulatory uncertainty. He referred to the boiler Maximum Achievable Control Technology rules and the EPA Tailoring Rule as examples.
 One challenge Levine focused on that was also a major topic in Cotton&rsquo;s presentation was biomass opposition. Opponents can file baseless appeals, and that process needs to be more realistic, Levine said.
 One of Cotton&rsquo;s presentation slides read, &ldquo;If trees could scream, would we be so cavalier about cutting them down? We might, if they screamed all the time, for no good reason.&rdquo; The fierce biomass opposition is based on incomplete or entirely incorrect information, Cotton said, displaying a photo of what current and determined opponents are certain is a smoke stack spewing white smoke. But it&rsquo;s steam, he explained. The industry needs to do better public outreach. &ldquo;We do, as an industry, need to step up,&rdquo; he said.
 Ill-informed opponents can file an appeal and not even show up at the hearing, he explained. They know the time required for an appeals process can be devastating for a project.
 Southeast Renewable Energy is developing three 15.2 MW biomass plants in South Carolina, spread across the wood basket. The plants have 30-year PPAs with Santee Cooper, an electric utility that was happy with the fact that the facilities were spread out, Cotton said.
 Rounding out the panel was Burchfield, who talked about Decker Energy&rsquo;s already-operating biomass plants, expanding on Cotton&rsquo;s statement that the wood-to-energy industry is not a new one. &ldquo;I believe we are in a mature industry,&rdquo; Burchfield said. &ldquo;Not only do I believe that, I can prove it.&rdquo;
 He showed photos of cabins using wood for energy in the 1800s, as well as boats. Specifically, he referred to Grayling Generating Station, Decker&rsquo;s 37-MW biomass power plant in Grayling, Mich., operating since 1992. The U.S. has more than 7,000 MW of biomass power, 2,180 of which is stand-alone, he cited.
 With three experienced biomass developers, the much-anticipated panel didn&rsquo;t disappoint.
&mdash;Lisa Gibson

Biomass conference panel features experienced biomass power developers.

Powerful Panel 

In a move that displays solid confidence in a plasma gasification technology patented by Bend, Ore.-based InEnTec, Waste Management Inc. has transitioned from a joint venture investment with the company to an equity position.
 The switch comes two years after the companies formed S4 Energy Solutions, the brand under which they have built a municipal solid waste (MSW) gasification plant at the Columbia Ridge Landfill in Arlington, Ore. The 25-ton-per-day facility is now complete, says Wes Muir, Waste Management spokesman. It has approval to begin operations, and the companies are currently ramping up production, he adds.
 The Plasma Enhanced Melter (PEM) technology was patented by the company&rsquo;s founders in 1995, based on U.S. DOE-sponsored research that began four years earlier. The process uses plasma gas to super heat waste materials that have been fed into a closed chamber. The extreme heat&mdash;between 10,000 and 20,000 degrees Fahrenheit&mdash;rearranges the molecular structure of the waste and transforms organic materials into syngas for conversion into electricity or liquid fuels such as ethanol or diesel. In the next stage, inorganic materials are recycled into other products.
 Waste Management is now one of the company&rsquo;s largest shareholders, says Karl Schoene, president and CEO of InEnTec. According to paperwork filed with the U.S. Securities &amp; Exchange Commission, the equity position is valued at $22.5 million.
 Waste Management has additional investments in thermal conversion technology companies including Enerkem Inc., Terrabon Inc. and Agilyx. Separate from its demonstration project venture with Waste Management, InEnTec has contracted with Fulcrum Bioenergy Inc. to provide its PEM technology for conversion of MSW into 10.5 million gallons of cellulosic ethanol at Fulcrum&rsquo;s proposed Sierra BioFuels plant to be located near Reno.
&mdash;Anna Austin

ATTRACTIVE INVESTMENT: Waste Management Inc. is now one of InEnTec's largest shareholders.  

2011/11/13220002577734.jpg

Waste Management invests in InEnTec's plasma gasification technology.  

Hot Technology  

With help from the Tennessee Valley Authority, the Golden Triangle Regional Landfill in northeastern Mississippi has commissioned a landfill gas-to-electricity system, the first of its kind to operate in the state.
 The system employs a GE Jenbacher Gas Engine that generates nearly 1 megawatt of electricity, enough to power about 700 homes. The TVA, a government-owned power utility, is purchasing the power from the 4-County Electric Power Association distribution system under the TVA&lsquo;s Generation Partners program. Generation Partners supports homeowners and businesses that install small-scale renewable generating sources such as landfill gas systems, solar panels or wind turbines on their property. Participants are able to defray the cost of their renewable systems and lower their monthly energy bills through the revenue they receive from the sale of the green power to TVA.
 TVA pays 12 cents per kilowatt-hour above the retail electric rate for solar and 3 cents above retail for all other renewable sources. Additionally, new participants receive $1,000 to help offset start-up costs. The project has several benefits beyond the capture and use of methane. Jimmy Sloan, executive director of the Golden Triangle Regional Solid Waste Authority, says the system will also provide a new revenue stream that will be used to help keep landfill fees low. It was actually the second phase of a bigger project, according to Sloan. &ldquo;The first phase was installed to destroy methane gas and secure carbon credits,&rdquo; he says. &ldquo;Then this project grew from that.&rdquo;
 Planning began in March 2010, and the project was approved by the GTRSWA board the following May. Once GTRSWA was accepted as a member of Generation Partners in October 2010 and had the contract in hand, it self-developed the project, Sloan says. Construction began in May 2011 and it was completed by the end of September.
 The cost of both phases of the project was $3.5 million, according to Sloan.
 Because this landfill gas-to-electricity system is the first in Mississippi, it will serve as a model for the state, and surrounding states, Sloan says.
 According to the Mississippi Department of Environmental Quality&rsquo;s Landfill Methane Outreach Program, the state has 16 candidate landfills for economically viable landfill gas-to-energy projects. Across the U.S., the U.S. EPA estimates there are 575 landfills that hold potential for the development of projects, on top of the 550-plus already operating or in development.
&mdash;Anna Austin

METHANE TO MEGAWATTS: A landfill gas-to-energy system at the Golden Valley Triangle Regional Landfill is the first of its kind in Mississippi.

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The state's first landfill gas-to-energy project goes on line.

Mississippi's Methane Model 

Themed &ldquo;Equipment Productivity,&rdquo; biomass equipment specialist Morbark Inc.&rsquo;s fourth annual Demo Days in Winn., Mich., drew more than 300 people from 15 counties.
 Ed Dodak, assistant sales manager for Morbark, says the event had a great turn out, with lots of interaction between vendors, dealers and customers. Those attending were able to tour the Morbark factory, attend training seminars and see live demonstrations of forestry equipment.
 Dodak says 13 different machines were demonstrated, one of which was Morbark&rsquo;s new 3800 XL Horizontal Grinder. &ldquo;What&rsquo;s unique about it is we can convert it from a grinder into a chipper, so it can produce chips in addition to mulch,&rdquo; he says. The conversion takes only a few hours. In addition, Morbark has made feeding technology improvements to the grinder to increase production capacity and operating efficiency.
 Regarding sales for biomass equipment, Dodak says 2011 started out with an increase in sales from the previous year, but have been on a roller coaster since then. &ldquo;They&rsquo;ve been up and down the past two years,&rdquo; he says. While part of it may be because of uncertainty surrounding biomass energy policy, a big part of it is obtaining funds. &ldquo;A lot of guys are having a hard time getting money,&rdquo; Dodak says. Morbark has a financing department to try to help customers find an affordable way to buy used and new equipment.
&mdash;Anna Austin

Morbark holds Demo Days to showcase its biomass equipment. 

Mor Biomass Machines

Facing what could be its final funding obstacle, the fate of the Biomass Crop Assistance Program lies in the hands of those crafting the 2012 Farm Bill. Despite Congress&rsquo;s drastic budget cutting efforts, however, there may still be hope for BCAP. U.S. Secretary of Agriculture Tom Vilsack recently shed some light on his hopes for the Farm Bill, stating that BCAP and the Rural Energy for America Program are two of his priorities.
 In an Oct. 24 speech at John Deere Des Moines Works in Ankeny, Iowa, Vilsack pointed out that a proposed $23 billion in cuts to the Farm Bill over the next 10 years means priorities must be clear. &ldquo;And though these numbers are by no means final, it is a reminder to all of us that if we want this legislation to accomplish a lot, we have to understand that there will be considerably less funding in which to do it,&rdquo; he said. &ldquo;We simply need to do more with less.&rdquo;
 In the case that BCAP funding is cut, project areas announced to date will remain fully funded, according to USDA Farm Service Agency Chief of Staff Todd Atkinson. &ldquo;There will be no reduction in funding there because we entered into those contracts with money in-hand, we just wouldn&rsquo;t be able to expand acreage,&rdquo; he says.
 Over the past six months, BCAP has announced multiple project areas in several U.S. states to grow biomass crops such as miscanthus, camelina and switchgrass, for which farmers would receive annual establishment payments. About half are for biomass-based heat and power, the remainder for liquid biofuel, Atkinson says.
 While the annual establishment payment component of BCAP is going seemingly smoothly, Atkinson says the rushed timeline for participation&mdash;for example, four months for miscanthus and 45 days for camelina&mdash;was because of the foreseen funding issues. &ldquo;The program is funded by the Commodity Credit Corp., so it&rsquo;s not subject to appropriations,&rdquo; he explains. &ldquo;The underlying statute functions similar to conventional crop programs; you go from one fiscal year to the next, rather than the length of the Farm Bill. Since the House zeroed the program out and the Senate decided not to act, it meant we had up until the end of the fiscal year 2011 to obligate the funds that were made available for 2011.&rdquo;
 If BCAP were functioning how it was originally intended to, Atkinson adds, FSA would still be seamlessly working with farmers, signing them up and educating them. &ldquo;But the budget challenges have created these uncertainties,&rdquo; he says. &ldquo;The existing climate is that there are some significant funding challenges, and lawmakers and policymakers are looking at everything.&rdquo;
 On the matching payment portion of BCAP, which was implemented before the annual payments, Atkinson says FSA has issued an interim rule that would require it to evaluate applications for project areas first. &ldquo;That&rsquo;s because of these funding limitations,&rdquo; he says. &ldquo;After those applications, we would look at matching payments. As an interim rule it&rsquo;s effective immediately, but there&rsquo;s a 60-day comment period which ends Nov. 14 and the public is invited to comment up until the closing date.&rdquo; Matching payments aren&rsquo;t ending, Atkinson emphasizes. &ldquo;We&rsquo;ve just prioritized the establishment of the annual payments to grow new biomass first. Should funding be remaining, we would consider the matching payments to harvest existing biomass.&rdquo;
 There are some in Congress who are working diligently to keep BCAP and REAP alive. Sen. Richard Lugar, R-Ind., and Rep. Marlin Stutzman, R-Ind., have introduced Farm Bill reauthorization legislation, the Rural Economic Farm and Ranch Sustainability Act, or REFRESH, which includes key components of the existing Farm Bill, including the two programs.
 REFRESH provides nearly $1.3 billion in mandatory appropriations for five different clean energy programs with significant additional discretionary funding authorizations. It would annually provide $55 million dollars for BCAP with an additional $150 million a year in discretionary funding, while working to improve the program in several important respects, and $70 million for REAP and an additional $80 million annually in discretionary funds. It also extends REAP to assist our nation&rsquo;s rural schools with energy efficiency programs, and includes complementary loan guarantee financing for biorefineries by continuing the Biorefinery Assistance Program for two more years.
&mdash;Anna Austin

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BCAP funding is once again on the chopping block. 	

A Tough Row to Hoe

Following a September trip to Takasaki, Japan, local officials from Cleveland, Ohio, are now more confident in the benefits and efficiency of a system they hope to implement in their city.
 Cleveland&rsquo;s plan would use gasification technology to convert municipal solid waste (MSW) into about 15 megawatts of power for Cleveland Public Power customers, and would also include the development of a plant that would compress the MSW into pellets for the gasifier, as well as a curbside recycling component. Heat from the gasification process would also be used in pellet production to help sterilize the raw material.
 Cleveland&rsquo;s existing Ridge Road Transfer Station currently processes 3,000 tons of MSW daily during its 253 days of operation annually. It represents an opportunity for Cleveland to advance progress toward its 15 percent by 2015 advanced energy portfolio standard.
 Japanese gasification equipment vendor Kinsei Sangyo Co. Ltd. could be the perfect fit for Cleveland&rsquo;s project, having several systems in operation already. &ldquo;We went to see the technology,&rdquo; says Ivan Henderson, commissioner of Cleveland Public Power and assistant director of Public Utilities.
Henderson was joined by Cleveland Mayor Frank Jackson; Kevin Kelley, city councilman and chair of the Utilities Committee; Matt Zone, city councilman and chair of the Sustainability Subcommittee; and Valarie McCall, chief of government affairs.
 &ldquo;Councilman Zone and myself have seen it in action &hellip; and we wanted to share the experience with the mayor and the utilities committee chairman,&rdquo; Henderson says, adding that the intent was to showcase the equipment at the vendor&rsquo;s location, as well as in use for a customer.
 So the group visited BML Corp., a large medical technology company in Takasaki that processes millions of blood samples every day and produces a considerable amount of hazardous waste. The company gasifies that waste stream with Kinsei Sangyo equipment, producing heat for the facility, Henderson explains. The operation is in a densely-populated urban area with an abundance of urban gardens and is able to operate within Japan&rsquo;s emission limits.
 &ldquo;I believe it was successful,&rdquo; Henderson says of the trip. &ldquo;It really helped demonstrate the technology.&rdquo; Some who participated in the trip wondered if it is indeed feasible and came back confident it is, he adds.
 Besides seeing the system, the Japan expedition also aimed to meet Kinsei&rsquo;s local government requirements, and explore a sister city relationship, along with other potential development opportunities, according to Maureen Harper, chief of communications for the mayor&rsquo;s office. Cleveland&rsquo;s project is estimated to cost about $180 million, including the pellet facility, recycling component and gasification system, but project information will be updated again at the end of the year, drawing from new knowledge and experience, such as the Japan trip. The city applied for air permits in March and is expecting a draft from the U.S. EPA soon. A design report is also being produced, and the results from a request for information across all aspects of the project from 125 businesses were expected to be prepared by November.
 &ldquo;We&rsquo;ll evaluate the results of that process and then we&rsquo;ll determine what our next steps are,&rdquo; Henderson says. He adds that facilitating a trip for local government officials to witness the system of a potential bidder in action was a crucial step in the development process.
&mdash;Lisa Gibson

GASIFYING GARBAGE: Cleveland's Ridge Road Transfer Station currently presses 3,000 tons of municipal solid waste per day.

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Cleveland, Ohio, officials visited Japan recently to learn more about a gasifier they hope to use.

Educational Expedition 

Since the Public Utility Regulatory Act was passed in 1978, power utilities have been required to pay an &ldquo;avoided cost&rdquo; rate to certain types of small power production, cogeneration facilities and other types of qualifying facilities. That rate is typically the cost of the cheapest type of energy the utility has in its portfolio&mdash;usually coal&mdash;and that&rsquo;s a price with which small renewable energy providers cannot compete.
 More than 20 years later, PURPA is doing something it was never intended for&mdash;limiting individual states&rsquo; ability to make their own decisions about incentivizing small distributed renewable energy. A new bill introduced in the Senate Energy &amp; Natural Resources Committee, however, could change that. PURPA Plus, which is intended to encourage distributed generation of renewable energy, would remove the avoided cost restriction and let states set their own prices, according to Patrick Serfass, executive director of the American Biogas Council. In many cases, PURPA makes small renewable energy generation unfeasible.
 For example, if a biogas producer has to turn on his facility&rsquo;s lights or use power for something else, he&rsquo;s probably paying a retail rate, Serfass says. &ldquo;If he is selling any power back, he is getting a small fraction of that rate, so he&rsquo;s not even getting paid the same rate he&rsquo;s being charged. In most cases, they only have to pay you for the cost of avoiding the same amount of electricity from coal.&rdquo;
 PURPA Plus is a way for states to raise that price to incentivize distributed renewable electricity generation. &ldquo;Generally in the energy industry it makes the most sense to produce your own electricity where you need it because it costs money to move it some place,&rdquo; Serfass explains. &ldquo;If you have a locally available resource, and people who need energy locally, why not produce and use it there? That&rsquo;s where distributed generation comes in. If states want to encourage that, not only does it create business for those companies and jobs, but also increases the amount of electricity the state produces without having to upgrade transmission systems.&rdquo;
 The most important component of PURPA Plus is that it allows states a choice, and it is at no cost to taxpayers, Serfass says. &ldquo;It&rsquo;s a gateway for states to create more incentives, one of which could be a feed-in tariff. That would allow biogas projects to compete with other traditional energy sources on a level playing field.&rdquo;
 Though it&rsquo;s less of a priority, the ABC would like to see PURPA Plus tweaked so that the cap is raised from 2 to 5 megawatts.. &ldquo;Over half of current biogas projects are less than that, but a lot of larger projects in the works are between two and five,&rdquo; Serfass says. &ldquo;A slightly larger project could have a big impact on the industry.&rdquo;
 The ABC is urging its members to write their senators to request support of the bill. &ldquo;With the current Congress being focused on cutting our federal budget and reducing costs everywhere, this bill is important because it doesn&rsquo;t cost taxpayers any money,&rdquo; Serfass reiterates. &ldquo;It&rsquo;s a really valuable piece of legislation.&rdquo;
&mdash;Anna Austin

PURPA Plus bill allows states to make their own decisions about renewable energy.

A Biogas Friendly Bill

As the need for renewable energy and energy efficiency grows in the U.S., businesses providing technology and equipment for new projects are in the best position to gauge the future of the biomass industry. With their finger on the pulse of biomass, these companies are optimistic about prospective opportunities in 2012.
 Companies, such as Metso Corp., Eisenmann, and ProcessBarron, provide essential technologies, products and services to biomass project developers. These companies are in the trenches, and witness first-hand the flow of interest from potential investors.
 Representatives from these companies report that biomass business and interest was solid in 2011 and ample opportunity exists for 2012 if the right pieces of the puzzle fall into place. These opportunities stem from a combination of aggressive developers who understand the need for less reliance on fossil fuels and to reduce emissions, the benefits of using biomass to produce energy and the impending shift toward using alternative fuels. Also, governments at the state level, through renewable portfolio standards are embracing renewable energy development as a job creation tool. Trends are evident, including increased interest in cogeneration and anaerobic digestion. Although woody biomass is still the most common feedstock, some developers are turning to grasses and municipal solid waste.
 The optimism is not without a bit of caution, however, as these grassroots leaders await pending decisions from the U.S. EPA regarding emission regulation and possible future mandates from government at all levels. The pending EPA reconsideration of the boiler Maximum Achievable Control Technology regulations looms large in the eyes of potential investors looking into biomass projects. In addition, the question of whether the federal government will step in with specific mandates, similar to those set in Europe places uncertainty on the industry.
 Despite the guarded optimism, the economic trends are pointing in the right direction and the biomass industry&rsquo;s future looks promising.
 Mounting Megawatts
 Showing how well business has been for Metso Corp., which provides renewable energy technology and products, the company will soon be the first in the U.S. with 250 megawatts (MW) of biomass boiler technology under construction at any one time, according to Robert Deneault, general manager of capital sales for Metso Power in North America. Metso has three large projects utilizing its fluidized-bed technology including the Gainesville Renewable Energy Center in Gainesville, Fla., developed by American Renewables, the Nacogdoches Power LLC biomass project in Sacul, Texas, owned by Southern Power, a subsidiary of Southern Co., both using bubbling fluid bed technology (BFB), and the We Energies/Domtar Biomass Energy Project in Rothschild, Wis., owned by We Energies and using circulating fluid bed technology (CFB).
 &ldquo;Metso had a fantastic year in 2011,&rdquo; says Deneault, who is in charge of sales in North America. Through new equipment sales, Deneault is in the perfect position to evaluate Metso&rsquo;s business performance. &ldquo;The company was very fortunate to work with good projects that included strong developers who fully embraced Metso&rsquo;s proven fluid bed technologies as vital to the success of their projects,&rdquo; he adds.
 Through the past few years, Deneault recognized a trend toward developers embracing cogeneration projects. Combined heat and power helps facilities, such as paper and pulp mills, to create renewable power and thermal from the same amount of fuel, thereby receiving a better return on investment. Another trend noticed by various company representatives, some developers are waiting on projects due to the uncertainty created by emission regulations and mandates, Deneault says. Many are waiting to see what will happen with the pending boiler MACT rules, which are boiler standards set by the U.S. EPA that, although currently stayed, are under a period of reconsideration with proposed finalization by April 2012.
 Despite the hesitation, Deneault believes that there will be a second wave of biomass projects once emissions standards and regulations are determined. &ldquo;We need stability in the regulations,&rdquo; he says. &ldquo;We will see a more robust commitment from plants to utilize biomass when there is a commitment from governments who enact renewable portfolio standards that direct the use of biomass.&rdquo;
 Metso provides numerous services and Scandinavian-derived technology that include material handling equipment, plant automation systems and air pollution control systems, but the company is best-known for its BFB boiler technology. Many developers are interested in the BFB technology because of its beneficial emissions, efficiency and fuel flexibility.
 Metso is proud of the Gainesville Renewable Energy Center developed by American Renewables, which includes a 100-MW Metso BFB boiler. It will be the largest BFB boiler in the world with the lowest emissions, Deneault says. &ldquo;This is an industry watershed kind of boiler,&rdquo; he says, adding that the construction groundbreaking occurred in October.
 In Texas, Metso is supplying a 100-MW BFB boiler to the Nacogdoches Power biomass project, with commercial operation planned for the spring of 2012. Rounding out the 250 total megawatts under construction, the company will supply a 50-MW, CFB boiler for the We Energies/ Domtar Biomass Energy Project. Commercial operation of this Wisconsin plant is scheduled for 2013.
 Metso is also breaking into gasification technology, through a small commercial plant in Scandinavia, which the company plans to bring to the U.S. once it is comfortable with the technology&rsquo;s performance.
 Mandate Momentum
 Eisenmann President Mark West says his company noticed an uptick in the biomass industry in 2011 due to renewable portfolio standards enacted by state governments nationwide. &ldquo;A lot of states are not waiting for the federal government to act,&rdquo; he says. &ldquo;At the state level, the states can&rsquo;t afford to wait. They see biomass as a way of creating jobs that they must take advantage of now.&rdquo;
 Over the past year, business has been strong for Chicago-based Eisenmann, a supplier of environmental products and services, with the company involved in various projects. West specifically notes two projects as good examples of Eisenmann proprietary technology including the W2E Organic Power anaerobic digestion facility in South Carolina and the Wild Turkey Distillery wet electrostatic precipitator project in Kentucky.
 West saw a common interest in renewable energy and energy efficiency across the industry in 2011. Energy has been relatively inexpensive in the U.S. of late, and West believes the cost will eventually increase due to overseas demand. When it does, the biomass industry will benefit on a private level, he says.
 The biggest obstacle for developers was obtaining financing to proceed with projects. While developers were able to obtain power purchase and waste agreements, most were not sufficient in duration or stability to satisfy investors. Developers are not waiting for a mandate, however, some financiers are waiting for the government uncertainty to clear.
 Thinking prospectively, West believes his company will see a number of projects receive funding in 2012. &ldquo;Things will start to shake loose with the economy, and when they do, there are good opportunities and investments available for biomass projects,&rdquo; he says. Once the ball starts rolling, the biomass industry will receive the momentum it needs to take business to the next level.
 Eisenmann has experienced increased interest in anaerobic digestion (AD), installing more than 80 systems worldwide that also incorporate material handling and feedstock preprocessing equipment. The company is providing AD technology for the 3.4-MW W2E facility, which is expected to be operational in 2012 and will process 48,000 metric tons of waste per year. &ldquo;As the first of its kind in the United States, the Columbia facility marks a new way to reduce greenhouse gas emissions, while providing an alternative source of energy to the electrical grid,&rdquo; according to Eisenmann.
 The company&rsquo;s wet electrostatic precipitator technology enables clients to meet current emissions and regulatory requirements. The precipitator is a pollution control system that removes multiple pollutants from system exhaust.
 With an eye on emissions regulation, the Wild Turkey Distillery has utilized an Eisenmann wet electrostatic precipitator dual field system to provide air pollution control that produces near-zero opacity on emissions. The whiskey distillery in Lawrenceburg, Ky., requires the application of appropriate amounts of heat in the form of steam from multiple sources of energy. &ldquo;Whatever the biomass fuel combination selected by the facility, the plant has multiple fuel options available while always maintaining environmental compliance,&rdquo; according to the company.
 Although wind and solar projects are popular and sometimes are more appealing to environmentalists, biomass waste and waste streams will gain increased momentum, West adds. Waste is constant. It is a matter of providing education on biomass and getting people to understand and embrace its benefits.
 Massive Material Management
 &ldquo;We are committed to the biomass world as technology and interest is as high as it has ever been,&rdquo; says Cliff Moss, vice president, director of materials handling for ProcessBarron. Specializing in design and installation of material handling systems, the company provides services and products from the ground to the boiler to the ash handling at the end of the process.
 Business in 2011 was good for ProcessBarron, a company with 30 years of experience in boiler-related products and services. &ldquo;We specialize in providing equipment around the boiler that will keep the boiler running reliably,&rdquo; Moss says. The company has recently designed and supplied material handling systems for Eastern Illinois University, the University of Missouri and Frito-Lay. The company specializes in fuel, ash and air handling solutions for the biomass industry.
 The project at Eastern Illinois, in Charleston, was a showcase system installation for ProcessBarron, according to John Saucier, the company&rsquo;s system design and project manager. The biomass gasification facility will annually consume about 27,000 tons of woods chips to provide power and thermal to the university. ProcessBarron was provided a small plot of land on campus, and from there, it designed and installed the entire material handling system including a travelling screw reclaimer. The facility itself was designed to aesthetically mimic the surrounding buildings on campus.
 Five years ago numerous feasibility studies were done to pursue biomass projects, but similar studies have fallen off lately. Being highly driven by mandates, Moss notes that developers may be waiting to see what the government is going to do with the boiler MACT regulations, which is a similar trend noted by other companies.
 Similar to Metso, ProcessBarron is seeing certain trends in the industry, including cogeneration projects that contain the necessary infrastructure oftentimes for feedstock transportation purposes. In addition, the company is seeing a trend toward developers looking into advanced technologies such as gasification. Regarding feedstocks, wood is king, but the company also sees some developers leaning toward municipal solid waste and other feedstocks to create bioenergy.
 An overwhelming theme that resulted from the discussions with all the industry leaders was that biomass is booming, and developers are persevering through uncertainty to make their projects happen. Author: Matt Soberg Associate Editor, Biomass Power &amp; Thermal (701) 746-8385 <a href="mailto:msoberg@bbiinternational.com">msoberg@bbiinternational.com</a>

EARTH MOVING: A groundbreaking ceremony was held at the Gainesville Renewable Energy Center in Gainesville, Fla., in October. Once it's completed, the GREC will be one of the largest biomass power facilities in the U.S., producing 100-megawatts of el

2011/11/13220011340079.jpg

AD ACTIVITY: Eisenmann has installed more than 80 anaerobic digestion systems worldwide, and is currently providing the technology for a 3.4-megawatt facility in South Carolina for W2E Organic Power. 


2011/11/13220011722673.jpg

BUILDING UP BIOMASS: ProcessBarron has recently been involved in designing and supplying biomass handling systems for projects at Eastern Illinois University, the University of Missouri and Frito-Lay. 


2011/11/13220012069093.jpg

Despite regulatory uncertainty, renewable energy businesses did well in 2011 and expect continued success in the new year. 

Digging In

As 2011 comes to a close, the biomass industry can look back on a fairly active year, not necessarily all positive, and look ahead to a more advantageous one that brings recognition to its benefits and merit.
 With portions of the Maximum Achievable Control Technology (MACT) rules stayed and further changes expected, a delay on implementation of the EPA Tailoring Rule for biogenic emissions, and pending revisions of certain waste definitions, the biomass industry is suspended in a realm of political uncertainty.
 But what does 2012 hold in store? Could research to better understand biogenic emissions prove that biomass is indeed a clean replacement for fossil fuels and warrant more reasonable emission guidelines? Will development opportunities, support and funding sources grow for power and thermal applications?
 Charlie Niebling, chairman of the Biomass Thermal Energy Council board of directors, tells Biomass Power &amp; Thermal what he expects in the biomass thermal industry in the year ahead, while Bob Cleaves, president and CEO of the Biomass Power Association, makes his predictions for the biomass power industry.
 Here&rsquo;s what they had to say:
 Opportunities
 Where do the best opportunities for biomass power/thermal currently lie and why?
 Niebling: The best opportunities lie in providing residential, commercial and industrial heat consumers, who currently use heating oil or propane, with a cost-effective alternative heating fuel. Biomass fuels are less than half the heating cost of oil and propane. Cost savings is the single-most important factor driving market penetration for biomass thermal.
 Cleaves: Our members are engaged in development projects across the country. Conventional wisdom continues to be that the Southeast has the greatest opportunities, and the recent 100-megawatt Gainesville, Fla., project is probably the most dramatic illustration of such potential. That said, in the past 24 months, we have seen projects undertaken in Texas, New Hampshire, Wisconsin and the Pacific Northwest. While different, all of these projects are being undertaken in renewable portfolio standard (RPS)-friendly states and where biomass is welcomed.
 Do you see this changing in 2012 and why?
 Niebling: I don&rsquo;t see this changing in 2012 as long as oil and propane prices stay high.
 Cleaves: In the near term, given the effect of natural gas on pricing and the lack of electricity generally, we see new projects as being &ldquo;opportunistic&rdquo; in nature, meaning in regions where fuel is competitively priced and where local markets value energy diversity, rural economic development and sustainable forestry.
 Policy
 Which current or developing policies (state and federal) can/do help spur project development and how?
 Niebling: Unfortunately there is little policy developing at the federal level in support of biomass thermal. Biomass thermal is not recognized with investment tax credits (ITC) similar to solar thermal or geothermal. Expansion of tax credits seems unlikely in the current fiscal climate but BTEC continues to advocate for tax parity with other renewables, for both residential and commercial/industrial entities. The greatest need is to help build the market with demand-side incentives such as ITC&rsquo;s or demonstration project grants through USDA, U.S. DOE or other agencies. At the state level, we are seeing some progress, particularly in the Northeast U.S. where heating oil is prevalent. Massachusetts is expected to unveil supportive policies during 2012 for small-scale biomass thermal. New York is funding a statewide biomass thermal &ldquo;roadmap&rdquo; strategic planning effort. New Hampshire is considering amending its RPS to include thermal renewables; if this moves forward New Hampshire would be the first state with a fuel/technology neutral renewable energy standard.
 Cleaves: We would like to see the Section 1603 Treasury Program extended. We also need the production tax credit (PTC) extended beyond 2013, and we need parity with other technologies on the applicable rate. We also need Congress to enact legislation governing boiler MACT and the solid waste rules so that U.S. EPA has the necessary time to craft regulations that are achievable, affordable and based in science and common sense. At EPA, we are cautiously optimistic that the agency will &ldquo;get it right&rdquo; on the carbon equation.
 What can the industry do in 2012 to help craft and/or change policy that would be more beneficial to biomass power and thermal?
 Niebling: Continue to advocate the cost saving/job creating advantages of displacing fossil heating fuels with renewable fuels such as biomass. Continue to work together through organizations such as BTEC and its regional affiliates in the Northeastern and Midwestern states. Also, focus organized advocacy at the state level where state legislatures are showing increased support for biomass thermal.
 Cleaves: Ultimately, we need a national energy policy that promotes carbon-friendly, renewable technologies such as biomass. To achieve that goal, we need federal and state policymakers to fully appreciate the carbon benefits of biomass.
 Supporters
 Which congressional leaders have supported and helped the biomass power and thermal industries the most? How?
 Niebling: In the U.S. Senate, Sens. Jeanne Shaheen, D-N.H., Olympia Snowe, R-Maine, Jeff Bingaman, D-N.M., Debbie Stabenow, D-Mich., Ron Wyden, D-Ore., Lisa Murkowski, R-Alaska, Bernie Sanders, I-Vt., Mike Crapo, R-Idaho, and Mark Begich, D-Alaska, have shown the greatest interest in biomass thermal. These members have introduced and reintroduced legislation to advance biomass thermal, or raised the profile of this technology through their committee assignments. The current membership of the House Biomass Caucus is a good proxy for those members who support biomass thermal along with other forms of biomass energy.
 Cleaves: A majority of House members, from leadership to the rank and file on both sides of the aisle, have shown tremendous support for our industry. A recent example was the vote on HR 2250 (the EPA Regulatory Relief Act allowing more time for better Boiler MACT rules), which received bipartisan support on its passage.
 Who do you see taking the lead in your industries in 2012?
 Niebling: Pretty much the same group, although BTEC continues to recruit and educate new champions in both the House and Senate.
 Cleaves: We see members primarily from forestry and agricultural states continuing to take a lead in 2012. They understand the need for Congress to enable, not stifle, private investment in our rural economies.
 Financing
 What are the best financing options and mechanisms for developers in the biomass power and thermal industries today?
 Niebling: There are limited options underwritten by the federal government that are accessible for biomass thermal projects. For example, U.S. DOE loan guarantees are not available to small-scale thermal projects. These projects do qualify for grants from the USDA Rural Energy for America Program, and they qualify for loans or grants through USDA Rural Development&rsquo;s Business and Industry Program.
 Cleaves: The 1603 and Investment Tax Credit programs are undoubtedly the single-most successful financing program in the history of our industry. It has unleashed more than $1 billion in private capital&mdash;an amount not seen in our sector since the early 1980s.
 Are there any financing options on the horizon for 2012 or beyond that you believe could play a major role in the growth of our industry?
 Niebling: At the state level, one program that holds great promise is PACE, Property-Assessed Clean Energy, which allows communities to float bonds to finance residential or commercial renewable energy investments, with the loan being paid through property tax assessments. States must first enact the program, and communities must agree to adopt it. Another innovative approach mostly applicable to larger projects is financing through energy service contracts, where future energy savings are used to pay off the upfront capital cost through a third-party intermediary. The large upfront capital cost of these systems remains an impediment to more rapid market growth, and creative financing will be more important in the future.
 Cleaves: We would like to see extension of the PTC, and the extension of in-service dates that are sufficiently extended to facilitate the development cycles of biomass, which are sometimes five years or more.
 Action
 What benefits of your industry sector will you be emphasizing in order to gain support from Congress in 2012, and why?
 Niebling: Jobs, jobs, jobs; rural economic development; energy independence and security&mdash;these are the key talking points for biomass thermal going forward.
 Cleaves: It&rsquo;s all about jobs. Biomass is base-load power, and job intensive. The payback for the public&rsquo;s support of this industry is immediate and meaningful.
 Outlook
 What is your outlook on the biomass power and thermal industries in 2012 and what, if any, major developments or happenings do you expect?
 Niebling: With continued high oil and propane costs, I expect robust growth in this sector in 2012&mdash;with or without support from government. I expect commercial- and industrial-scale heating and combined-heat-and-power projects to get real traction in 2012. With these larger projects will come critical mass in the marketplace that will enable greater access by residential consumers, too. High capital cost of fuel switching will continue to be our greatest challenge.
 Cleaves: We continue to be optimistic about the industry. Natural gas markets and shifting political winds in Washington, D.C., have forced all renewable technologies to rethink how we present our benefits to policymakers and the market generally. Fundamentally, and this is particularly true with base-load forms of renewable energy like biomass, it&rsquo;s all about energy diversity at an affordable price for the ratepayer while providing economic benefits and other ancillary benefits like healthy forests. We are confident that this message is a compelling one.
 What factors are affecting your industries now, and do you see them continuing or changing in 2012? Niebling: I do see political support for biomass thermal growing as our elected leaders come to more fully appreciate the economic and environmental benefits of reducing our reliance on imported fossil heating fuels. I see a challenging transition from getting projects done without the benefit of public grants (stimulus funding) that is drying up at the federal and state level. However, I think the understanding of favorable payback economics is growing. Hopefully with a strengthening economy and stronger consumer confidence, we will see homeowners and businesses investing capital again in projects that will save them lots of money in the future&mdash;and strengthen their community at the same time.
 Cleaves: We would like to see greater regulatory certainty at EPA, and anticipate that 2012 will see clarity on Boiler MACT, the solid waste rule and the Tailoring Rule. Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a> (701) 738-4952

ENERGIZED: Niebling and Cleaves shared their legislative insights with attendees of the 2011 International Biomass Conference & Expo in May during a panel moderated by BBI International's Tom Bryan (left to right), participating were Mary Rosenthal, 

2011/11/13220013756027.jpg

Key leaders in the biomass power and thermal industries discuss their sectors' outlooks for 2012, drawing from experiences in 2011. 

Industry Insight

In mid-July, right around the time the area&rsquo;s corn crop was beginning to mature and farmers could start looking ahead to the season&rsquo;s harvest, a number of ethanol producers, farmers and researchers gathered for a daylong meeting at the University of Minnesota to discuss ways to best use the aftermath of the harvest. Corn stover has long been pegged as a potential feedstock for cellulosic ethanol, but this group focused instead on a more immediate application&mdash;energy generation. An increasing number of studies are showing that in order for farmers to maintain high corn yields, some of the stover will need to be removed from the fields. For corn-based ethanol plants, this represents an opportunity to displace at least some of their fossil fuel consumption with a renewable resource readily available from their existing corn suppliers. Researchers also believe that it represents an opportunity for new partnerships in the power generation sector.
 Power Island
 Biomass gasification technology is not new and is relatively easy to install. It has been used effectively to produce heat and power for varying-size facilities for generations. While it&rsquo;s not as widely deployed in the U.S., facilities in Europe and Japan often install combined heat-and-power (CHP) systems. The reason for this, of course, is that those countries do not possess the same abundant supplies of cheap fossil fuels as can be found in the U.S. When every strategic move can be boiled down to dollars and cents, it just makes economic sense for U.S. facilities, including ethanol plants, to use the cheapest fuel available to them. In 2008, when natural gas prices soared to painful levels, gasification of biomass was an attractive option for ethanol producers seeking to reduce the cost of their highest input after corn. But in the past couple years, natural gas has regained the lead as the most affordable, widely available fuel for U.S. ethanol producers. As a result, the few producers who had installed biomass gasification systems in 2008-&rsquo;09 idled their equipment and switched back to the cheaper option. During the conference at the University of Minnesota, researchers proposed a new strategy for ethanol producers to use renewable resources such as corn stover to power their facilities and still profit. They believe that by partnering with entities that have an appetite for short-term losses, ethanol producers can afford to gasify enough corn stover to power their plants and be electricity producers as well.
 Wind as an Example
 University of Minnesota extension production economist Doug Tiffany is part of a group of renewable energy researchers who analyzed technologies to gasify biomass for steam and electricity generation at ethanol plants. They identified technologies and possible feedstock options fairly quickly, including corn stover, syrup and distillers grains. Many ethanol plants already have power islands that house the power generation units for the facility that could be updated to also produce electricity for sale back to the grid. But the researchers soon found the difficult part of this concept would be to make the improved power island an economic benefit for the ethanol plant. They also needed to find a way to finance the construction of these new islands. They found their inspiration in the wind.
 Wind power projects are notoriously expensive to construct and require years of operation to repay the investment. Therefore, those projects require hefty investments up front from parties who have an appetite for tax losses. Power island projects using stover at ethanol plants are expected to experience similar situations regarding up-front capital and sustained losses. Because ethanol plants generally are smaller companies with a group of owners who cannot utilize long-term paper losses, Tiffany suggests modeling corn stover power islands after wind projects by bringing in partners who take on the losses and also have the experience and capability to handle the day-to-day business of power supply contracts. The power island can be siphoned off from the ethanol plant and function as its own entity, allowing the plant to use waste heat produced from the gasification of biomass to power its operations, but protecting its owners from the inherent first few years of loss. &ldquo;Here&rsquo;s a distinct business and it would have some opportunities for depreciation and use of provisions in the tax code and might be in a better position to negotiate with power companies than an ethanol plant itself,&rdquo; Tiffany explains. &ldquo;It may be attractive to investors and it may be more attractive to bankers if they&rsquo;re dealing with investors who own the power island. And it may be a very good deal for the ethanol plants themselves, especially if they&rsquo;re rewarded for ethanol that uses steam that came from biomass or electricity that came from biomass.&rdquo;
 Major electric companies are an obvious choice to partner with for such a project. Companies such as Florida Power &amp; Light Co. and Xcel Energy Inc. have invested in wind projects and have enough passive income from other operations that can be shielded from taxes by showing losses on renewable energy projects, such as wind. Oftentimes, these companies participate in wind projects by taking a 99 percent share of the valuation of equipment and earnings for the first 10 years, which are the years of largest losses, according to Tiffany. After the first decade, majority ownership flips back to the landowners. Aside from the tax benefits, power companies may be interested in partnering to produce this form of renewable energy as a way to meet environmental standards. Energy policy in the U.S. is currently fragmented. Some states have initiated renewable energy standards and many expect that a future nationwide energy standard will include requirements for renewable energy generation. Also, companies currently investing in renewable energy stand to benefit from the positive publicity of being an early adopter of this technology. Additionally, ethanol plant power islands serve as a more reliable source of electricity than wind projects, which often produce power only about 35 percent of the time, Tiffany says. &ldquo;This could run 95 percent of the time. We&rsquo;d only be stopping the generation of power for repairs and times of the year when there isn&rsquo;t quite as much demand,&rdquo; he says. &ldquo;In that way, this would be power that would be more attractive for power companies to manage. That&rsquo;s why we were attracted to this whole concept. These ethanol plants are running basically year-round. They have a constant demand for steam or thermal energy and they could be using biomass and be a reliable source of renewable energy. This is a perfect marriage. The ethanol plant and the power island essentially need each other. The power island needs to have a place to discharge the heat, and drying the distillers grains or doing some cooking at the ethanol plant is a way to use that heat. The corn stover is out there. We need to see some businesses get organized, the farmers themselves, and say they can be contracted to bring in this biomass. That still has to happen, but what we&rsquo;re trying to do is to jump ahead a little bit and determine how some of these things might come together.&rdquo;
 Tiffany says that while power companies are certainly prime partner targets for ethanol plant power generation projects, he&rsquo;s also seeing increased interest from municipalities in smaller communities that might be willing to take some losses in order to become part owners of their own reliable power supply. A power island at a 50-million-gallon-per-year (MMgy) ethanol plant could produce up to 25 megawatts of electricity, enough to service up to 25,000 people, he says. And with ethanol plants already located in rural areas, partnering with those smaller municipalities is an option that makes good sense. A handful of ethanol plants have done this already, but are using natural gas to power the generators and capturing waste heat for process heat.
 Simple Economics
 Vance Morey, professor of bioproducts and biosystems at the University of Minnesota, admits that ethanol producers are not likely to switch from natural gas to biomass as long as natural gas prices stay low. Not unless they entertain the option of becoming electricity producers as well as users. &ldquo;The key is the ability to generate electricity and get more efficiency out of the process,&rdquo; he says. &ldquo;There are two things that I think will make that happen: if the price of natural gas goes up biomass starts to get more attractive, and if we eventually go to some type of carbon credits and low-carbon electricity.&rdquo;
 Chippewa Valley Ethanol Co. LLLP in Benson, Minn., was one of the first ethanol plants to adopt biomass gasification when it installed a gasifier at its 48-MMgy plant in 2008. But plant engineer Andy Zurn says the monetization of carbon played a secondary role in the plant&rsquo;s decision to utilize area biomass. &ldquo;Value for low-carbon ethanol is icing on the cake,&rdquo; he says. &ldquo;Our primary focus is hedging against the cost of natural gas. If the economics relative to natural gas make sense, we&rsquo;ll run the gasifier and spend those energy dollars in our local community. The carbon markets, if they come along, that&rsquo;s gravy.&rdquo;
 CVEC installed a Frontline Bioenergy gasifier in 2008 and used it to fire corncobs for cogeneration in 2008 and 2009. The first year&rsquo;s harvest was a small, grassroots production, Zurn says, but in 2009, the operation was expanded to include more farmers and more acres. With the help of a 50-50 funding promise from the USDA&rsquo;s Biomass Crop Assistance Program, CVEC agreed to pay farmers $80 per ton for their cobs, a generous offering in order to convince first-time cob harvesters that participation would be worth their effort. Area farmers signed up and made good on their end of the bargain, but when it came time to pay, BCAP&rsquo;s funding was cut and it backed out of the project. &ldquo;We went to get our money from BCAP and they said they weren&rsquo;t funding it,&rdquo; Zurn says. &ldquo;CVEC already had an agreement with these farmers. We already had the corncobs.&rdquo; CVEC settled on paying farmers $60 per ton for the cobs&mdash;$20 less than the farmers expected, but $20 more per ton than CVEC had originally planned on contributing&mdash;in order to make up at least somewhat for the federal government&rsquo;s failure. Rightly, CVEC is leery of participating in any future BCAP projects and would likely pay farmers outright for their cobs in future harvests. &ldquo;If you don&rsquo;t trust that it&rsquo;s going to be there for you, why are you going to do all the work to set up and get the whole logistics supply chain arranged?&rdquo; Zurn says. &ldquo;It fooled us once in 2009. We&rsquo;re not going to play that game again.&rdquo;
 Despite the less-than-expected pay-out, Zurn says Minnesota farmers would likely participate in cob harvests again. &ldquo;These farmers are businessmen,&rdquo; he says. If there&rsquo;s additional money to create a new supply stream, which is corncobs in our world, and it doesn&rsquo;t hurt their business, it just makes good business sense.&rdquo; But CVEC doesn&rsquo;t plan on asking for cobs again until the economics of fuel sources demands it. The plant is set up to switch between biomass and natural gas pretty simply and the biomass gasifier has been shut off since gas prices took a nose dive two years ago. CVEC doesn&rsquo;t currently possess the capability to produce additional electricity for a power partner and the low cost of natural gas doesn&rsquo;t justify the use of cobs to displace fossil fuel right now, Zurn says. In the future, if the plant expands its gasification abilities and entertains the option of becoming a renewable energy generator, switching fuel sources to respond to the lowest cost would be less of an option. Power purchase agreements may require a specific feedstock to be used and deviating from that protocol could void the contract. CVEC may be interested in producing excess power in the future, Zurn says, but that would likely happen only after the plant has met its own power needs for a couple of years and ensured that its system is up to par.
 Cellulosic Considerations
 University of Minnesota researchers believe that of the three gasification options most readily available at ethanol plants&mdash;distillers grains, syrup and corn stover&mdash;stover is hands down the best candidate for energy production. But is that still the case when considering stover as a feedstock source for cellulosic ethanol production? How do the two compare?
 Morey and Tiffany say that using corn stover as an energy source could provide ethanol producers with some needed experience in handling the biomass. &ldquo;We wouldn&rsquo;t use nearly as much of it as would be needed for cellulosic ethanol, but this would be the time for us to learn the lessons on how to put together businesses and maybe removal rates and enforce all these things,&rdquo; Tiffany says.
 &ldquo;Some people have some experience collecting stover for feed or livestock bedding, but not large amounts,&rdquo; Morey adds. &ldquo;I think developing this is a way of getting more people producing stover and starting to develop the technologies and markets for that. It&rsquo;s an interim step.&rdquo; Producers seem to agree with this approach as well. Poet LLC used some of the stover it collected in Iowa last year to feed the gasifier at its 100-MMgy plant in Chancellor, S.D. In August, Poet entered into a project focused on establishing energy grass sources near the Chancellor plant and said it plans to gasify the grasses while scientists perfect the complicated task of producing cellulosic ethanol from them.
Zurn says CVEC isn&rsquo;t really worried about potential feedstock competition from cellulosic producers. &ldquo;Cellulosic ethanol is coming along so slow and there&rsquo;s a variety of different uphill battles for the cellulosic folks,&rdquo; he says. &ldquo;We recognize there will be more demand for biomass, but will it be five years from now? Ten years from now? We think that if we can get the local biomass supply system set up, there&rsquo;s probably going to be room for all of us. The whole ethanol world is stacked up against the fossil fuel world. If fossil fuels are dirt cheap, renewable energy is going to be pretty hard pressed without any incentives.&rdquo; Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 <a href="mailto:kbevill@bbiinternational.com">kbevill@bbiinternational.com</a>

FRONT-RUNNERS: The Frontline Bioenergy gasifier at Chippewa Ethanol enables the plant to utilize corncobs and other biomass sources for power when natural gas prices skyrocket.

2011/11/13220015383776.jpg

Partnering to produce energy from stover could be an attractive option for corn ethanol plants.

Stover for Power—Not Just Biofuels

The U.S. Department of Veterans Affairs understands the need for national energy security and to reduce greenhouse gas (GHG) emissions and is quickly becoming a leader in renewable energy generation.
 Doubling the mandate imposed by President Obama and Congress, the VA adopted an internal goal of securing 15 percent of its electricity from renewable sources by 2013. While not quite there yet, the department is well on its way with biomass combined heat and power (CHP) playing a large role in its plans.
 VA invested $826 million to improve its energy infrastructure in 2010, pursuant to the American Recovery and Reinvestment Act of 2009. A total of $487 million was devoted to renewable energy projects, including biomass-fueled cogeneration systems.
 Behind the renewable push, the VA started the Green Management Program, a VA-specific initiative designed to achieve necessary government mandates and internal goals of the department, says Director C.J. Cordova.
 With the help of U.S. DOE funding, VA commissioned 75 feasibility studies, performed by the National Renewable Energy Laboratory, specifically focused on CHP. Since 2010, five VA biomass plants are being constructed and developed with plans to be operational by 2013.
 From the studies, VA initiated biomass-fueled CHP projects at the Togus VA Medical Center in Augusta, Maine; the Battle Creek VA Medical Center in Battle Creek, Mich.; the Canandaigua VA Medical Center in Canandaigua, N.Y.; the Chillicothe VA Medical Center in Chillicothe, Ohio; and the White River Junction VA Medical Center in White River Junction, Vt.
 In addition to biomass, the VA also has biogas-fueled CHP systems receiving landfill-derived methane at the James H. Quillen VA Medical Center in Mountain Home, Tenn., and the Alvin C. York VA Medical Center in Murfeesboro, Tenn.
 With all of its work on renewable energy, VA is well on its way to meeting the additional 25 percent by 2025 federal mandate.
 Green Management Program
 The VA leads the federal government in sustainable practices, and to do so, it relies upon the Green Management Program. The program was formed to organize and aid the VA in meeting federal mandates, such as the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.
 &ldquo;The most important VA commitment is to care for veterans and their families, and the Green Management Program advances this commitment by ensuring a healthy and sustainable environment, low-cost energy, and clean air for current and future generations,&rdquo; Cordova says. The five focus areas are energy efficiency and renewable energy, fleet, environment, sustainable building and GHG management.
 Notwithstanding federal mandates, the VA is considered a safe-zone where energy security is of utmost importance in case of emergency or catastrophe. Embracing renewable energy provides fuel diversity. Biomass plays into this equation by providing a locally derived sustainable fuel, according to Frederick Thielke, management analyst for the renewables program.
 This inherent function of VA facilities as a refuge may increase the urgency for the department to embrace alternative fuels. If a catastrophe hits, it is important for the facility to continue to operate. For the VA to have a diverse fuel supply means it can have continuity of operations, Thielke says.
The department&rsquo;s ambitious goals are honoring veterans through prospective sustainability. As an additional internal goal, the VA intends to reduce GHG emissions 30 percent by 2020. &ldquo;The VA is meeting these goals and targets by: aggressively implementing energy and water conservation measures; increasing the use of renewably fueled on-site electricity, steam, hot water and chilled water; tuning-up buildings to improve energy efficiency, comfort and indoor air quality; and increasing the use of alternative fuels in VA fleet vehicles,&rdquo; according to the Green Management Program.
 By counting as a renewable fuel, reducing GHG emissions and helping the department manage energy prices through fuel diversity, biomass supports VA renewable initiatives, according to Thielke.
 Combined Heat and Power Feasibility
 The VA began conducting renewable energy studies to determine which fuels best suited various locations. &ldquo;We expect this to lead to exciting opportunities for VA to reduce its environmental footprint,&rdquo; Secretary of Veterans Affairs Eric K. Shinseki said in April 2010. Findings from the studies help VA determine the ideal locations for renewably fueled energy plants, while ensuring cost savings. The studies viewed renewable fuels such as methane gas from landfills, agricultural waste such as decaying trees and landscape waste, scrap wood and other biomass. In addition, the studies assessed potential cogeneration technologies for existing facilities.
 &ldquo;In conjunction with the investments in clean energy generation and other environmental projects through our Green Management Program,&rdquo; Shinseki says, &ldquo;these assessments will help VA continue to lead in going green.&rdquo;
 Through the feasibility studies, the VA learned that CHP provides an efficient solution for energy, operation and cost. The research determined which facilities would be the most ideal for investigating CHP based on fuel availability, specific plant characteristics and local utility rates.
 Each facility is unique, and to determine whether biomass would work for a specific facility, the VA approached renewable energies in a systematic way, including prescreening for renewable resources, Thielke says. &ldquo;The 75 CHP feasibility studies showed that hospitals are an excellent candidate for CHP if the fuel resources are available,&rdquo; he adds.
 Cordova and Thielke mention the Battle Creek VA Medical Center as an example of applying biofueled CHP. &ldquo;With the help of the NREL, we wanted to know electricity rates for various fuel sources to try to determine whether CHP was economical in Battle Creek,&rdquo; Thielke says. The next step included investigation into technology application and feedstocks.
 VA then took the NREL recommendations and worked directly with the facility to determine the scope of the design. After all of the work was planned, the project went to the bidding process approximately one year ago.
 DeMaria Building Co. is providing general contracting services and Nexterra Systems Corp. will provide a biomass gasification system that will produce 28 million Btu (MMBtu) per hour, and supply the center with 2 megawatts of power and 14,000 pounds per hour of saturated steam. The system will allow the VA to cut emissions 80 percent, which is approximately 14,000 tons per year or the equivalent of removing 3,500 cars from the road annually, according to Nexterra.
 VA is utilizing biogas from landfills to create bioenergy at the center in Mountain Home, Tenn., which is fueled with processed waste methane. This facility alone contributes 0.5 percent to VA&rsquo;s renewable energy goal and saves approximately 11,500 metric tons of carbon dioxide annually. To put that in perspective, 1 metric ton of carbon dioxide equals emissions from 112 gallons of gasoline, according to VA.
 VA is hoping to get biomass projects up and running, analyze their performance, and use that information to determine whether it makes sense to utilize biomass for future projects.
 CHP Construction
 Construction of the CHP biomass project at the Canandaigua VA Medical Center started in April. Contractors were finishing up foundations and boiler equipment was arriving on-site at the end of October. The target date for completion is May with construction closeout in June.
 The CHP facility will produce 345 kilowatts of capacity and 22,000 pounds-per-hour of high-pressure steam. All energy produced will be utilized on-site. The facility has the ability to utilize multiple fuel sources. Biomass had a significant cost advantage to natural gas, which has now diminished, but biomass provides other benefits, according to Steve Bolewski, the VA network energy manager on the Canandaigua site.
 The boiler will consume approximately 15,000 tons of wood chips annually, with 400 tons per week in the winter and 150 to 180 tons in the summer. All chips will be stored on-site in a below-ground bunker with a four-day supply capability at peak times of the year.
 The woody biomass comes from a 60-mile radius of the facility, which is in the middle of an emerald ash borer quarantine region. This results in ample biomass supply, since wood cannot be shipped outside the quarantine boundary.
 The facility is designed to be state-of-the-art with a unique approach to the equipment. The design incorporated techniques that avoid screening and maintenance of the system. It utilizes oversized boiler and ash management equipment that processes large stones, Bolewski says.
 It was important for the biomass facility to be aesthetically pleasing and match the surrounding buildings, Bolewski says. The purpose of the design was to mimic the existing brick facade.
 In case of a catastrophe, the facility can hold and take care of multitudes of people and is considered a safe haven. Canandaigua is a 1-million-square-foot facility including its entire campus. If other fuel sources are cut off for any reason, the facility can utilize biomass reserves in case of emergency. Author: Matt Soberg Associate Editor, Biomass Power &amp; Thermal (701) 746-8385 <a href="mailto:msoberg@bbiinternational.com">msoberg@bbiinternational.com</a>

WASTE TO ENERGY: The Iris Glen landfill gas-to-energy cogeneration system at the VA facility in Mountain Home, Tenn., saves about 11,500 metric tons of carbon dioxide annually. 

2011/11/13220017078177.jpg

METHANATION GENERATION: Generators at the VA facility in Mountain Home, Tenn., are fueled by processed waste methane. 


2011/11/1322001735693.jpg

COUNTING ON COGENERATION: The James H. Quillen VA Medical Center in Mountain Home, Tenn., is one of several VA facilities utilizing biomass-based energy.

2011/11/13220017849072.jpg

The U.S. Department of Veterans Affairs is elevating its reliance on renewable energy by investing in combined-heat-and-power projects nationwide. 

Honoring Sustainability 

The Energy Independence and Security Act of 2007 established a goal of 36 billion gallons of biofuels by 2022. Today, just 12 billion gallons are produced annually in the U.S. Closing this gap will require innovation in the entire biofuels supply chain, not just feedstocks.&nbsp;
ThermoChem Recovery International, headquartered in Baltimore, Md., is commercializing the conversion of biomass into a broad range of end products. The company has developed proprietary gasification technology for both liquid and solid biomass that allows biorefineries to be feedstock-flexible in converting biomass to fuels, chemicals, power and energy.
The gasification process involves extreme temperatures to convert materials containing carbon, such as coal, petroleum coke (petcoke) or biomass, into synthesis gas. This so-called syngas has half the energy density of natural gas, and can be burned directly in boilers, internal combustion engines or gas turbines for power generation. It also can be used as an intermediate to produce other chemicals such as hydrogen and methanol. By using the Fischer-Tropsch process, it can be transformed into a synthetic petroleum substitute.
The temperatures at which gasification occurs, typically above 850 degrees Fahrenheit, drastically limit the available sealing options. When TRI was developing its initial commercial-scale units, there was no compressible sealing material suitable for use in this process. Graphite-based gaskets begin to oxidize above 850 degrees, eventually leading to rapid leakage. The only other option was a metal-sealing solution that required an extremely high-surface finish and higher-than-achievable bolt load requirements. This escalated the sealing costs of the project, and in one instance required on-line leak sealing when this gasket leaked.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequently, TRI began working on a pilot facility in Durham, N.C., to demonstrate the feasibility of producing syngas, Fischer-Tropsch diesel fuel and high-value paraffin waxes from a wide range of biomass feed stocks. Its fully integrated design included a biomass feeding and gasification system, primary gas clean-up, syngas compression, secondary gas clean-up and Fischer-Tropsch liquids and wax production.
TRI took its performance requirements to Palmyra, N.Y.-based Garlock Sealing Technologies, which concurrently was engaged in a development program for an ultrahigh-temperature gasket for service in applications with temperatures ranging from 850 to more than 1,800 degrees. These gaskets would potentially solve many of the fluid sealing problems encountered in the Norampac project in Niagara Falls, N.Y., which included the need for a high surface finish on industrial flanges and the ability to accommodate lower bolting loads on the gasket. TRI and Garlock Sealing Technologies collaborated on testing hundreds of these new gaskets in an extremely demanding application for an extended period of time. Garlock Sealing Technologies regularly visited the TRI plant to confirm the gaskets were performing as designed and to gather feedback for further improving their performance.
TRI has since been able to successfully demonstrate the production of syngas, diesel fuel and paraffin waxes at its pilot plant, and is currently involved in the development of several large-scale, commercial projects. The first is the Flambeau River Biofuels project in Park Falls, Wis., a demonstration biorefinery. When completed, it will gasify 1,000 dry tons of woody biomass per day to produce renewable hydrocarbon fuels, electricity and steam for the host paper mill. The second is NewPage Corp.&rsquo;s biorefinery in Wisconsin Rapids, Wis., which is capable of gasifying 500 dry tons of woody biomass per day for hydrocarbon fuels and steam for the host paper mill.
Garlock Sealing Technologies recently commercialized its extreme-, high-temperature gaskets used in these projects. Trademarked THERMa-PUR, they are designed to seal connections in applications with extremely high temperatures. By working closely with TRI, the company was able to field test and verify that its new gaskets exhibited long-term, reliable sealing.
The gaskets are made of a proprietary, nonoxidizing material with low organic fiber content and a flexible fiber core, allowing them to withstand extremely high temperatures, both continuous and in thermal cycling conditions. They also provide hydrophobic and electrical insulation properties to resist moisture absorption and the potential for galvanic corrosion between flanges of dissimilar metals.
Collaborations such as the one that facilitated Garlock Sealing Technologies&rsquo; ability to produce its new gaskets can help reduce the cost of commercializing renewable energy projects by providing the necessary supporting technologies and innovative solutions to challenges. As a result, the nation will be able to accelerate biofuel production, close the gap between targeted and actual levels, and move us all closer to energy independence and a greener future.&nbsp;&nbsp;&nbsp; Author: Sherwin Damdar Senior Product Engineer, Garlock Sealing Technologies (315) 597-4811 <a href="mailto:Info@Garlock.com">Info@Garlock.com</a>
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biorefining Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

A tech firm, seal maker work together to reduce biorefining commercialization costs

The Power of Collaboration

When the Clean Air Act was created by Congress in 1977, most of its statutory regulations and definitions were devised to accommodate the introduction and commercialization of corn-based ethanol, the only economically viable fermentation-based alcohol permitted to be sold and distributed in the gasoline pool at the time. Since then, the CAA has undergone a few amendments related to oxygen content limits and emission control levels allowed in certain vehicles&mdash;primarily centered on E10&mdash;with the most significant coming in 2007 when the renewable fuel standard was created as part of the Energy Independence and Security Act. As the sole federal authority regulating the lawful commercialization of new fuels and additives, the U.S. EPA subsequently approved E15 for 2007 and newer vehicles last October, and in January expanded it to include 2001 and newer vehicles.
Today, in an industry that&rsquo;s working to produce high-performance, fungible, drop-in molecules, some on the cusp of commercialization, many involved in the biorefining sector contend that the current regulatory regime needs to be altered to allow advanced biofuels, such as biobutanol, to compete with parity in the marketplace. The rapid evolution of advanced biofuels technologies may have outpaced the current regulatory framework that might have otherwise facilitated the introduction and commercialization of those fuels, which begs the questions: do we need to revisit the RFS2, and do we need to modify the CAA? According to Michael McAdams, president of the Advanced Biofuels Association, answering the latter may be critical.
&ldquo;As we enter this period in the country, in which we are having serious discussions about what our energy mix is going to be or if we&rsquo;re going to take a portfolio approach, we may have to, by necessity, revisit the CAA and other policy tools because the technology has moved so rapidly that they&rsquo;re out of date,&rdquo; McAdams tells Biorefining Magazine.
To not make changes to essentially allow advanced biofuels unfettered access to the infrastructure, McAdams argues, creates entry barrier for fuels that are, in many instances, better-performing. &ldquo;This is one example of the way we&rsquo;ve set up a system of rules to govern gasoline, which was primarily premised with one molecule that we used in gasoline other than a hydrocarbon, which was ethanol,&rdquo; he says. &ldquo;Now, we have a series of other molecules, including hydrocarbon molecules made from renewable feedstocks that were never even thought of when we did the original amendment to the CAA in 1990.&rdquo;
While reaching the CAA may be a high bar to climb, Timothy Slating, regulatory associate at the University of Illinois Energy Biosciences Institute and lead author on a paper titled &ldquo;Making Regulatory Innovation Keep Pace with Technological Innovation,&rdquo; which will appear in an upcoming issue of the Wisconsin Law Review in March, agrees that getting regulatory approval to commercialize new biofuels blends is currently a time-consuming and costly process. In the paper, Slating, along with co-author Jay Kesan, professor of law at the University of Illinois and program leader within the Energy Biosciences Institute, focus on biobutanol and discuss how regulatory innovations are needed to keep pace with technological innovations in the biofuels industry. Additionally, the authors discuss how the current regulatory framework might be burdensome for existing biobutanol developers trying to get their product to market. They also outline suggestions about how the current system could be simplified as an avenue to mitigate barriers to entry.
Choosing the Right Certification Path
Determining the extent of how time-consuming and expensive it can be to get regulatory approval for biobutanol fuel blends through the EPA, and be in compliance with the guidelines of the CAA, depends on which path a biobutanol company pursues to get its fuel certified, Slating says. Under existing regulations, biobutanol can lawfully be blended with gasoline in compliance with the CAA in a concentration of roughly 11.5 to 12.5 percent by volume, depending on the density of the finished fuel. Slating refers to this as the &ldquo;default&rdquo; regulatory path to commercialization.
Because the CAA requires detailed emissions testing and certification for on- and off-road vehicles and engines, Slating notes that the act also makes it unlawful for a fuel or an additive manufacturer to commercialize a fuel that isn&rsquo;t &ldquo;substantially similar&rdquo; to the fuel that the EPA uses in this emissions&nbsp; certification process. Since the CAA doesn&rsquo;t explicitly define what constitutes a &ldquo;substantially similar&rdquo; fuel, the EPA has issued its &ldquo;Substantially Similar Rule,&rdquo; which lays out detailed requirements that finished fuels must comply with to be considered &ldquo;substantially similar&rdquo; to certification fuel. Specifically, one of the requirements found in the rule says any fuel containing alcohol cannot have more than 2.7 percent oxygen by weight. It is this oxygen weight limitation that governs the amount of alcohol-based biofuels that can lawfully be blended in gas.
But where it gets complex, Slating says, is that although the rule specifies an oxygen-by-weight percentage limitation, this&nbsp; does not translate into a concrete volumetric blending limit for the new finished fuel.
&ldquo;Essentially, even if a fuel blend contains a set volumetric percentage of a biofuel, the blend&rsquo;s oxygen weight limitation will fluctuate as the density of fuel naturally changes,&rdquo; he explains, &ldquo;so if you&rsquo;re commercializing via this default path, the blending limit for biobutanol is based on this oxygenate limit, which roughly equates to anywhere between an 11.5 to 12.5 percent by volume limitation.&rdquo; Slating further explains that &ldquo;while the EPA has registered some forms of biobutanol with a producer-recommended blending concentration of 12.5 percent, the commercialization of a 12.5 percent blend would only be lawful as long as it contained no more than 2.7 percent oxygen by weight.&rdquo;
Another path would be to file a fuel waiver application to allow a blend higher than what is allowed under the Substantially Similar Rule. Regulations provide a mechanism whereby biobutanol producers can pursue a fuel waiver from the EPA to allow higher blending limits than what current regulation allow, but this can be a time-consuming and costly process due to extensive data submission to the EPA regarding how the fuels and additives interact with on- and off-road vehicles. While it may be legal to blend 16 to 17 percent biobutanol with gasoline based on preexisting waivers granted in the 1980s that allow some alcohol-based fuel blends to possess 3.7 percent oxygen by weight, Slating doubts that the EPA would permit the commercialization of 16 to 17 percent biobutanol blends under these waivers. But, since the EPA has a long history of granting alcohol-based fuel waivers on condition that the final blend contain no more than 3.7 percent oxygen by weight, Slating and Kesan contend that the default path should allow alcohol-based fuels to contain up to 3.7 percent oxygen by weight.
&ldquo;All the EPA would have to do is issue a new Substantially Similar Rule to update their interpretation of the term &lsquo;substantially similar,&rsquo;&rdquo; Slating says. &ldquo;Essentially, if they changed the 2.7 percent oxygen weight limitation in the rule to a 3.7 percent oxygen weight limitation, then the default path would allow for the lawful commercialization of 16 to 17 percent biobutanol blends in finished gasoline, which would facilitate the introduction of increased volumes of biobutanol&nbsp; into the marketplace.&rdquo;
Thankfully, for current biobutanol producers, like Colorado-based Gevo Inc., the commercial success of its product isn&rsquo;t exclusively dependent on how the regulation shakes out, according to Jack Huttner, executive vice president of commercial and public affairs. Huttner is also vice chairman for the Advanced Biofuels Association. Gevo is focused on producing isobutanol, a specific type of butanol isomer, derived from starch-based feedstock like corn, but its product can not only be used as an alcohol-based additive in gasoline, but also in chemical applications and as aviation fuel. In addition to Gevo, other biorefining companies such as Cobalt Technologies and Butamax (a joint venture between DuPont and BP) are also leading the biobutanol commercialization effort. Gevo, however, was the first company to have its isobutanol registered with the EPA nearly a year ago.
&ldquo;Clearly, there are rules and language that were put in place before there were viable alternatives to ethanol,&rdquo; Huttner says. &ldquo;Now that we believe there are viable alternatives, we&rsquo;re going to review all of those because unless they are changed, those would be barriers to new market entry. Now that Gevo and some of our peer group companies are moving to market, this issue has come to the forefront of our activity.&rdquo;
Slating and Kesan also suggest that a fast-track review process be created for new fuel waivers that involve biofuels with established fuel pathways for purposes of RFS2 compliance. The authors argue that if RFS2 is going to incentivize the deployment of advanced biofuels, then producers will need assurance that there will be no unnecessary delay or cost in the fuel waiver process to get their product sold and distributed into the fuel infrastructure. &ldquo;It wouldn&rsquo;t be an across-the-board fast-track review process,&rdquo; Slating explains, adding that the proposed regulatory change would reduce impediments biobutanol companies often confront during the application round. 1-Pound Waiver Issue
Another issue at the forefront of discussion by advanced biofuel developers like Gevo and supporting organizations such as the ABFA is specific language found in the CAA that prohibits the blending of biobutanol in E10 gasoline. Currently, fuel that contains between 9 and 10 percent ethanol is granted a 1-pound waiver on Reid Vapor Pressure, a common measurement of gasoline&rsquo;s volatility, measured in pounds per square inch (PSI). In order to control emissions of volatile organic compounds (VOCs), the CAA amendments of 1990 require all gasoline be limited to max RVP of 9 psi during the summer high-ozone season, which the EPA established as running from June 1 to Sept. 15. Some states have elected to require even more stringent restrictions to achieve local clean air goals.
According to Huttner, this is problematic for biobutanol producers because when another alcohol such as biobutanol, which has a lower RVP than ethanol, is blended with E10 gasoline, the ethanol gets diluted to less than 9 percent, rendering the finished fuel noncompliant with the 1-pound waiver. &ldquo;Right now,&rdquo; Huttner says, &ldquo;you basically can&rsquo;t blend E10 with any other alcohol.&rdquo;&nbsp;
To further illustrate how problematic this regulation is for existing advanced biofuel producers, McAdams provides the following scenario that highlights the point. &ldquo;Say I&rsquo;m a gas station owner and my tank in the ground with 89 octane is empty,&rdquo; he says. &ldquo;I now have a butanol supplier in my distribution network and they&rsquo;ve got gasoline with butanol in it. I want to drop that half-a-load of 89 octane gasoline with butanol on top of the half-a-load of 89 octane gasoline I&rsquo;ve got with ethanol. From a blending standpoint, one can do that. But when you put that half a tank of butanol on top of E10 gasoline, you end up with 5 percent ethanol. The requirement is 10 percent ethanol blended with gasoline to get the 1-pound waiver. So when you blend the low RVP butanol in a tank on top of E10, you&rsquo;re now out of compliance. Wouldn&rsquo;t it make sense to change it to where you didn&rsquo;t have to have 10 percent ethanol if you blended it with other molecules?&rdquo;
Despite the murky regulatory framework currently facing advanced biofuel developers, McAdams remains optimistic that the EPA will bring clarity and renewed regulatory guidance to help commercialize advanced biofuels. &ldquo;I have great confidence that the folks who work in the section of the EPA that has jurisdiction over this can thoughtfully work through this with the industry,&rdquo; McAdams says. &ldquo;They have a track record of over 20 years working with stakeholders. They&rsquo;re as good as any agency in the federal government, and I have great confidence that they&rsquo;ll work with us to address some of these issues, because they believe in advanced biofuels.&rdquo; Author: Bryan Sims Associate Editor, Biorefining Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>
&nbsp;
On the Web: To view the paper &ldquo;Making Regulatory Innovation Keep Pace with Technological Innovation&rdquo; by Timothy A. Slating &amp; Jay P. Kesan, visit <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1805008" target="_blank">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1805008</a>

Is the current regulatory regime hindering commercialization of advanced biofuels? 

A Call for Statutory Clarity

Cindy Thyfault is more excited about the biofuels industry than she&rsquo;s ever been. That is saying a lot for Thyfault, and more importantly, the biorefining industry. She has seen the boom years of the ethanol and biodiesel build-out, all as the founder of Westar Trade Resources, a Texas-based company specializing in the development of cutting-edge technologies and the financial solutions that make such technology economically feasible. &ldquo;I think technology is really advancing,&rdquo; she says. &ldquo;I see new technologies that are amazing every day, technologies that are finding ways to become more efficient.&rdquo; And she should know&mdash;when Sapphire Energy received $54.5 million from the U.S. DOE, the algae company had Thyfault and her team at Westar to thank. The same can be said for Ineos Bioenergy, Coskata Inc. and Enerkem, all Westar clients that used Thyfault&rsquo;s services to help in the process of seeking out and receiving government-linked funding.
Thyfault may know the financial ins and outs and project-to-policy match game that goes with government-based bioenergy funding more than anyone, but she isn&rsquo;t alone in her optimism about the growing biorefining industry. Thyfault speaks with Biorefining Magazine about the programs that have worked to fund the economic needs of companies such as Coskata or Enerkem; the positive indications she sees amidst a dysfunctional Congress heading into a critical year when the Farm Bill could be potentially overhauled; and simply, to get a positive perspective from someone who has firsthand knowledge of why the political agenda in the U.S. doesn&rsquo;t always equate to the financial well-being of anyone linked to biobased products and the energy production industries. But just to make sure, we spoke to others in the industries who&rsquo;ve dealt with government funding, and response is simple: it&rsquo;s hard work seeking funding, but the end result can transform a technology or idea into a thriving company. Because of BCAP&nbsp;&nbsp;&nbsp;
One of the programs Thyfault believes has worked is the Biomass Crop Assistance Program. &ldquo;The program has had some success in payments to producers,&rdquo; she says, &ldquo;but the goal of that program has been to incentivize cellulosic ethanol production. It&rsquo;s not been successful in incentivizing advanced biofuels because the plants haven&rsquo;t been built yet.&rdquo; But according to Scott Coye-Huhn, director of business development for Aloterra Energy, an Ohio-based energy crop developer, that doesn&rsquo;t matter. &ldquo;Aloterra Energy,&rdquo; he says, &ldquo;was formed because of BCAP.&rdquo;
Coye-Huhn and his partners at Aloterra come from the oil and gas industry, and before BCAP&rsquo;s inception in 2008, he says his team already had their eyes on energy crop production. &ldquo;When we saw BCAP pass,&rdquo; he says, &ldquo;we knew that was a game changer.&rdquo; For the Aloterra Energy team, that meant buying and designing crop handling and planting equipment, buying miscanthus gigantus seed and even a farm to plant and test different varieties.
In June, everything changed for Aloterra. USDA&rsquo;s Agriculture Secretary Tom Vilsack announced four BCAP project areas, one of which included 5,344 acres spread throughout Ohio and Pennsylvania. As the sponsor for that region, Aloterra Energy in one day became an energy crop company, and changed from a BCAP supporter to a BCAP beneficiary. And the biomass conversion facility in Ashtabula, Ohio, that the company developed became a soon-to-be bioenergy hotspot and, as Coye-Huhn can attest, a job creator. &ldquo;We are already creating jobs in Missouri, Arkansas and Ohio,&rdquo; he says, &ldquo;and we have some very large manufacturing contracts that we are about to announce. There are a lot of really exciting things in the works because BCAP has kind of set the table for all of these companies that have just been waiting for somebody to come out with energy crops.&rdquo;
For Coye-Huhn, people are starting to see the positives and believe in the story of companies like his. &ldquo;This is about more than just going green,&rdquo; he says. &ldquo;This is about America&rsquo;s next economy.&rdquo; Alex Johnson, CEO of Synterra Energy, would agree with Coye-Huhn and his beliefs on the impacts of bioenergy and the possibilities brought forth from government involvement. After working on a hydrolysis and syngas approach to produce renewable diesel and other biobased products for nearly five years, Johnson spoke with Biorefining Magazine about plans the company has already made to build a biorefinery in Ohio, possibly followed by a facility in California. All of those plans, Johnson says, happened because of a $25 million DOE biorefinery grant that made the necessary research and development build-out steps possible.
The 9007 energy grant and loan program used by Synterra was a successful program, Thyfault says. And the business and industry loan guarantee program under the USDA (the same program used by the likes of Coskata, Enerkem and Ineos to fund their facilities) has also been a successful program that people can look to for positive reinforcement that&mdash;while government funding may seem unattainable or not worth pursuing&mdash;there are success stories.
One of those with hopes for a profitable future is HCL CleanTech, a company that has an interesting past. The North Carolina-based company has developed a hydrochloric acid hydrolysis process to convert biomass into fermentable sugars, an idea that stems from World War II. According to the company, during the war, Germany developed a hydrochloric process to create fermentable sugars and, after the war, the U.S., Russian and British armies all sent teams of engineers to study the way the process was used by Germany. After gaining access and reviewing the government documents on the process, HCL CleanTech was formed to prove that a modern version of the process would be more efficient and economical. In June, the company was awarded $9 million to further develop the hydrochloric acid hydrolysis conversion method.&nbsp;
&ldquo;Being selected by the DOE is very important to us,&rdquo; says Philippe Lavielle, president and CEO of HCL CleanTech (also formerly with Genencor). &ldquo;The selection process in itself is a way to obtain an outsider&rsquo;s view on your technology and your process, and is like a seal of respectability.&rdquo; Now, Lavielle says the company can become the company he and others believe it can be. &ldquo;The DOE-funded program will help us optimize the process and the specification of our sugars for their use in renewable fuels,&rdquo; he said. &ldquo;It will finance part of our pilot plant operations that are scheduled to create 15 to 20 skilled jobs in the very short-term.&rdquo;
Those jobs will help the company make the refined cellulosic sugars &ldquo;the hottest new commodity&rdquo; on the market, according to Lavielle, and although he infers that there is no other company like HCL CleanTech, he does say others can learn how to approach or think about government-based funding. &ldquo;Each stage in the life of a company requires different kinds and amounts of financing. At an early stage, more than just pure financing, the DOE programs help you focus your activities, audit your processes and engage with the right partners.&rdquo; &nbsp;&nbsp;&nbsp; Policy in Action
Because of the allocation of BCAP funding to Coye-Huhn&rsquo;s sponsored region, he can now utilize the work of a 40,000-member-strong group of energy crop farmers Aloterra has enlisted in their movement to make miscanthus production a reality. And as he tells Biorefining Magazine the morning before the president of Ohio State University was set to visit its farm and speak before a crowd on the near-term promise of Aloterra&rsquo;s efforts, everyone, including politicians, is starting to see that.
But for all these success stories, there is always the strongly held and sometimes warranted belief that amounts given to date are just not enough. &ldquo;I think the government has been trying to provide support,&rdquo; Thyfault says. &ldquo;Where I think they have tried to build a bridge, it is really only like a little hand bridge, and we really need a San Francisco bridge.&rdquo;
Thyfault points to the plans by the DOE, Navy and USDA to join in a financial funding agreement, providing up to $510 million of matching dollars to renewable jet-fuel producing companies looking to build a facility, expand a demonstration plant or perform any other task that would allow those government entities to make good on their promise to utilize any renewable jet fuel that they can. According to Thyfault, the U.S. airline industry uses 16 billion gallons of jet fuel a year and it wants to buy 8 billion gallons of renewable jet fuel right now. But, for roughly $100 million, a plant could only produce 10 to 20 MMgy of renewable JP-8. Although, as she says, the push by the Navy, USDA and DOE is not going to make much of an impact, &ldquo;what they are hoping to do is get the first plants built and then multiply that, but there is still a tremendous need.&rdquo;
Coye-Huhn&rsquo;s dealings with Washington might, however, show what many companies in the biorefining industry can expect when seeking out government-based funding (or what many most certainly already know). The process was grueling, he explains, but it was that way for both sides. According to Coye-Huhn, the people in Washington spent many weekends and long nights trying to work out the details to make the BCAP program in his area all work, and to him, this shows that both sides are hoping for the same result.
There is no doubt that the process takes time, and Thyfault indicates that the bridge from where the biorefining industry is now to where it wants to be might be too small for the huge demands and promise of the industry. But, as each company finds a way to get that next round of funding or tweak that microbe in just the right way, those companies need to realize that, as Coye-Huhn says about his own financial future, &ldquo;this is much bigger than energy crops.&rdquo; In his estimations, the bioenergy developments of today are similar to an economic paradise of the past&mdash;the tech boom of the 1990s. Author: Luke Geiver Associate Editor, Biorefining Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

For all the gripes, some government-backed programs are working

The Good Side of Government

This summer&rsquo;s intense political standoff regarding the debt ceiling and reduction clearly indicates how difficult it is to get anything done in Washington right now, especially when it comes to programs and incentives that require additional spending. With the nation already gearing up for what promises to be an intense 2012 presidential race, it could be more than a year before federal lawmakers seriously address the extension, revision and funding of incentives and programs that benefit biorefiners.
The biodiesel blender tax credit and Volumetric Ethanol Excise Tax Credit are set to expire at the close of 2011. Even more important to second-generation producers, the tax credit for cellulosic ethanol production is set to expire at the close of 2012. Congress has yet to authorize funding for the next fiscal year, which starts Oct. 1, for the Energy Title programs of the Farm Bill, which includes the Biomass Crop Assistance Program. Furthermore, it remains unclear if Congress will reauthorize those programs in the next version Farm Bill. In other words, many of the programs, policies and incentives that the biorefining industry is relying on to help spur development and growth may soon be on Congress&rsquo; financial chopping block. Bringing one bright spot to the policy mix right now, the U.S. Department of Defense seems to be stepping up its efforts to support the development of renewable fuels. Tax Policy
While some in the industry doubt that a Congress so focused on debt reduction will extend VEETC and the biodiesel tax credit, Greg Jenner, a partner in Stoel Rives LLP&rsquo;s tax practice, offers a unique take on the situation. &ldquo;We are probably not at the point yet where Congress is ready to look at fundamental tax reform,&rdquo; he says. &ldquo;So, I would say that the chances of the various provisions getting extended are fair to good for awhile, but I think we are reaching a point where Congress is going to have to make some tough choices, including fundamental tax reform. If that happens, I think the prospects for those incentives will go down tremendously. Fundamental tax reform is by its nature inconsistent with providing all these incentives through the tax code.&rdquo;
Jenner helped write the Tax Reform Act of 1986, which was the last time Congress fundamentally reformed our nation&rsquo;s tax structure. As a part of that type of reform, incentives are virtually wiped out of the tax code. &ldquo;The way the dynamic works is that nobody will tolerate giving up their incentives if other people are retaining theirs,&rdquo; Jenner says. &ldquo;It becomes either we&rsquo;re all going off the cliff together, or nobody goes over the cliff. In other words, it fails. The nature of a fundamental restructuring of the tax code is these incentives go away. They have to go away, otherwise you can&rsquo;t do reform.&rdquo; However, Jenner adds that, over time, incentives do creep back into the tax code.
That being said, Jenner stresses that federal lawmakers likely wouldn&rsquo;t consider making such significant changes to the tax structure until 2013. This year is nearly over, and in 2012 the focus will be on the presidential election. There tends to be little appetite for major legislation in an election year, Jenner says.
Although the tax credit for cellulosic biofuels is on the books through the end of 2012, there is already concern that it may not be addressed for renewal next year. &ldquo;We are talking about a tax extension situation that will be during an absurdly contentious presidential reelection year,&rdquo; says Brooke Coleman, executive director of the Advanced Ethanol Council. &ldquo;That is no small problem. The other problem for our industry is even when you get tax incentives incrementally extended for one more year, or two more years, it doesn&rsquo;t erase the uncertainty of what happens when it expires.&rdquo; Those looking to invest in the advanced biofuels sector need certainty those credits will be around long enough to benefit their projects. A one- or two-year extension simply isn&rsquo;t enough.
The type of action the congressional super committee might be willing to take is less clear. The super committee was created by the Budget Control Actof 2011, which was passed in August to raise the debt ceiling. The committee is tasked with crafting a deficit reduction bill, which will then face an up or down vote in the Senate and House of Representatives. Once the bill reaches the congressional floor, lawmakers cannot filibuster or modify it with amendments.
While the super committee could eliminate tax incentives for biofuels in the bill it crafts, Jenner says he thinks that is unlikely. &ldquo;The one thing that I could see them taking on would be corn-based ethanol,&rdquo; he said. &ldquo;I could see that, but I wouldn&rsquo;t bet on it.&rdquo;
&ldquo;We are in a fairly volatile time, but at this point there doesn&rsquo;t seem to be any consensus on where we go&mdash;other than the fact that we&rsquo;ve got to do something to fix the budget program,&rdquo; Jenner says. If we are unable to get a handle on the budget, we will be in a long era in which Congress cannot afford to create new incentives, he adds, or even renew old ones. BCAP and Beyond
Tax credits are not the only federal incentives out there to support the biorefining industry. One obvious alternative includes the programs contained within the Energy Title of the most recent Farm Bill. Many of these programs, including BCAP, have been specifically designed to help the advanced and cellulosic biofuels industries move towards commercial production.
While BCAP got off to a somewhat rocky start, it finally began to gain traction this year. In July, the USDA announced four new BCAP project areas, bringing the total to nine project areas spanning an estimated 330,000 acres. Now, as the program finally seems to be hitting its stride, its future has become increasingly uncertain.
Funding for the current fiscal year has already been allocated, and Congress has yet to authorize funding for the program in fiscal year 2012 beginning Oct. 1. According to Todd Atkinson, chief of staff at the USDA&rsquo;s Farm Service Agency, the House has passed an agricultural appropriations bill that would zero out funding for BCAP. The Senate has yet to act on its version. Following an action by the Senate, the bills will move to a conference committee, where they are reconciled. It&rsquo;s impossible to guess whether the final legislation will include funding for BCAP. Congress will also soon begin work on the 2012 Farm Bill, which may or may not include the reauthorization of the Energy Title programs.
According to Brent Erickson, vice president of the Biotechnology Industry Organization&rsquo;s Industrial &amp; Environmental Section, it would set back progress in the biorefining industry if Congress does not authorize additional BCAP funding and reauthorize the program. &ldquo;I think it would be really unfortunate,&rdquo; he says. &ldquo;We&rsquo;re at a point where the [cellulosic and advanced biofuels industries] could become a reality and we need to help farmers who would produce those crops.&rdquo;
Coleman agrees, and adds that it would be detrimental to eliminate programs that haven&rsquo;t had sufficient time to benefit the industry. When the Energy Title was written, Coleman says it would have been impossible for lawmakers to anticipate we were about to enter a global recession that would push back development in many industries, including cellulosic biofuels. &ldquo;The Farm Bill anticipated that the cellulosic ethanol industry would be [building out] to commercial scale,&rdquo; he says. However, a lack of available capital led many projects to be delayed several years. &ldquo;Letting these programs die on the vine just because the industry didn&rsquo;t accelerate fast enough during a global recession to take advantage of them is just totally shortsighted,&rdquo; Coleman says.
Mary Rosenthal, executive director of the Algal Biomass Organization, adds that eliminating programs like BCAP would run counter to Congress&rsquo; imperative of job creation and economic development, to which both parties seem to be committed. &ldquo;It&rsquo;s our job to make the case that the return on the investment in these programs is significant,&rdquo; she says.
Ideally, Erickson says BIO would like to see Congress develop a robust tax credit for all advanced biofuels, followed by a robust energy title in the Farm Bill. &ldquo;That would not only help get commercial-scale biorefineries built, but also get the bioenergy infrastructure built in terms of the crops that we are going to need, which are really the crude oil in a sense, to [feed] these biorefineries that we are going to build to make fuels and chemicals.&rdquo;
The Military Advances
While the future of congressional action is unclear, the Department of Defense is stepping up its efforts to support the advanced biofuels sector. Inmid-August the USDA, U.S. DOE and Navy announced that they will invest up to $510 million over the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels. The initiative has been developed in response to a directive issued by President Obama last spring as part of the Blueprint for a Secure Energy Future, and is being steered by the White House Biofuels Interagency Work Group and Rural Council.
To accelerate the production of biobased jet and diesel fuels, Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu and Secretary of the Navy Ray Mabus have developed a plan to construct or retrofit several drop-in biofuel biorefineries. Under the plan, the three departments&rsquo; $510 million investment will be matched with at least a one-to-one cost share by private industry.
&nbsp;&ldquo;I think this has been a real paradigm shift where the military services have realized that, from a strategic point of view, biofuels are very important in terms of cost and security of supply,&rdquo; Erickson says. &ldquo;We are seeing a lot of robust interest on the part of all of the services now in trying to get biofuels developed. It&rsquo;s really important that we have domestically produced fuels for our national defense efforts, so the fact that the DOD is now throwing its weight behind biofuels, I think is going to give the industry a boost.&rdquo;
Rosenthal also notes that the initiative will be beneficial to industry. &ldquo;It&rsquo;s a shot in the arm, for sure, although I&rsquo;m not alone in wishing it could have been at least double that,&rdquo; she says. &ldquo;But we&rsquo;re grateful. For years the military has led in testing and sending a strong signal to the market that it will be the first customer. By bringing significant investment capital to the table, I expect that it will accelerate the development of several cutting-edge biorefineries that can produce renewable fuel at competitive prices.&rdquo;
Shortly before the announcement was made, Mabus appeared on Platts Energy Week, where he talked about the Navy&rsquo;s goals and ambitions for biobased fuels. During that appearance, Mabus noted that he has testified before congressional hearings in an effort to encourage the revision of military offtake agreements for fuels. The military is currently limited to five-year off-take agreements. A longer contracting horizon, of up to 30 years, could provide some market certainty that biorefining companies could leverage in an effort to secure capital.
According to Erickson, BIO has been very actively advocating for a revision of the military&rsquo;s contracting abilities. &ldquo;If you are going to get financing for a biorefinery and you can go to the bank and say you&rsquo;ve got a 20-year contract with the Department of Defense, that is going to go a long way to help get financing,&rdquo; he says.
Rosenthal calls the revision critical. &ldquo;Right now, the projects are too big for traditional venture capital,&rdquo; she says. &ldquo;With the debt markets and institutional funds still treading water in this investment climate, something must be done. A 15-plus year offtake agreement from the U.S. government significantly reduces the risk for private investment, so I think you&rsquo;d see a number of facilities be built sooner if there was this provision.&rdquo; Congress is one avenue through which that revision could be implemented, but Erickson notes it&rsquo;s not the only option. &ldquo;Some people have suggested that President Obama needs to make a presidential finding under the Defense Production Act,&rdquo; Erickson says, &ldquo;so that he could make biofuels a special category of strategic product, which would give it all sorts of special privileges in contracting and raising its visibility, and making it a strategic commodity.&rdquo;
No matter what actions Congress ultimately takes or does not take over the next year, the biorefining industry will face a challenge in educating Congress on the benefits of biofuels, and in working to overcome uncertainty associated with the current political environment. &ldquo;Congressmen, who are very busy, just tend to think about biofuels as being ethanol, but the technologies have proliferated and there are so many different advanced technologies right now,&rdquo; Erickson says. &ldquo;It&rsquo;s been a challenge and will continue to be a challenge, to educate policymakers on how advanced biofuels are being produced, what technologies are being used, how they impact specific lawmakers states.&rdquo;
Rosenthal adds that another challenge is that too many members of Congress think that tax credits and incentives are a handout rather than an investment. &ldquo;We all need to keep making the economic case for investments in new technologies,&rdquo; she says. &ldquo;As far as ABO is concerned, we need to make sure that Congress knows that our industry is a 50-state job-creating engine. We are literally striking oil in all 50 states, except ours comes from above ground and our wells never run dry.&rdquo; Author: Erin Voegele Associate Editor, Biorefining Magazine (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

Uncertainty from a challenging political environment, focus on debt reduction and cuts to tax incentives could slow the industry's progress

The Future of Biorefining Policy

Tatarstan, a Republic of the Russian Federation, and Wermuth Asset Management GmbH launched the Tartarstan Clean Tech Fund in July. According to information released by WAM, it will be the first ever cleantech fund with a specific mandate to focus on the needs of the Russian Federation, in general, and Tatarstan, in particular.
The Fund will be seeded with &euro;110 million ($157 million) by its founders and seeks to raise an additional &euro;90 million to reach its target size of &euro;200 million over the coming 18 months.
According to WAM, the TCT Fund will invest primarily into medium and small-size companies from Europe, particularly Germany, as well as the U.S., that have a proven record in clean technologies and are looking to expand their business. The fund will focus on a wide range of renewable and clean energy projects. Projects the fund already has earmarked for investment include those related to waste-to-energy processes and the growing and refining of biofuels.
&mdash;Erin Voegele

Tatarstan, Wermuth Asset Management announce the Tatarstan Clean Tech Fund

New Funding Source Launched in Russia

For years, scientists around the world have tried to figure out how to efficiently break down plant-based material to better access fermentable cellulosic sugars for conversion to advanced biofuels. Two researchers at the University of York in the U.K. have discovered a novel method for overcoming the chemical intractability of cellulose that allows for efficient conversion to ethanol.
Working with scientists in Novozymes laboratories at Davis, Calif., and Bagsvaerd, Denmark, as well as researchers at the University of Copenhagen and the University of Cambridge, professors Paul Walton and Gideon Davies at York University&rsquo;s department of chemistry identified the molecular mechanism behind an enzyme secreted by brown rot fungus&mdash;called TaGH61&mdash;that&rsquo;s capable of degrading the cellulose chains of plant cell walls to release short-chained sugars. Their work is published in the Proceedings of the National Academy of Sciences.
&ldquo;This now unlocks the potential of enzyme degradation of cellulose for cellulosic ethanol production,&rdquo; Walton tells Biorefining Magazine. &ldquo;Once cellulose becomes available and once you can convert it efficiently enough through to more soluble sugars into ethanol, then you&rsquo;re in business because the availability of cellulosic biomass is just vast.&rdquo;
According to Walton, Novozymes discovered the TaGH61 enzyme a few years ago, but the Danish enzyme developer was unable to fully unlock its true potential for degrading cellulose. Walton and Davies managed to determine the full structure of the TaGH61 enzyme and figure out how it works. More importantly, the researchers found a way to initiate oxidative degeneration of cellulose by using copper on the enzyme in order to overcome the chemical inertness of the material.
&ldquo;Imagine ironing your clothes,&rdquo; Walton explains. &ldquo;The enzyme is shaped like the iron and sits down on the cellulosic surface, which are comprised of long chains of polyglucose that are difficult to break down. What happens is that the enzyme essentially forms a very reactive copper oxygen species that cleaves the cellulose, we think, at random points.&rdquo;
When polyglucose chains are cleaved by copper, according to Walton, soluble sugars peel away from the surface of the cellulosic surface that ultimately end up in solution where traditional cellulases can then be utilized for fermentation into biofuels and other biochemicals. Walton says that the majority of cellulose obtained and used for the research was derived from pretreated corn stover that was used as a substrate in tests. The enzyme, he adds, isn&rsquo;t capable of deconstructing lignin.
Novozymes&rsquo; copper-dependent TaGH61 enzyme is a breakthrough in cellulose degradation and is a key feature of its Cellic CTec products. In July 2010, the company launched its new Cellic CTec2 enzymes that can break down cellulosic biomass such as corn cobs, wheat straw, sugarcane bagasse or wood chips for conversion to cellulosic ethanol.
&ldquo;Fully understanding the mechanism behind GH61 is important in the context of commercial production of biofuel from plant waste and a true scientific paradigm shift,&rdquo; says Claus Crone Fuglsang, managing director for Novozymes&rsquo; research labs in Davis. &ldquo;This discovery will continue to drive advances in production of other biobased chemicals and materials in the future.&rdquo;&nbsp;
&mdash;Bryan Sims

Converting cellulosic sugars to advanced biofuel just got more efficient

Cracking Cellulose

Arizona-based Nutracea is in the business of rice bran, and because of the biorefining segment of the company, business is good. In the early 1990s, the company found a way to effectively process bran, the outer portion of a rice kernel after the husk has been removed, and create a value-added product. For second quarter 2011, 70.6 percent of the revenue generated by the company came from Nutracea&rsquo;s efforts to provide rice bran-based human nutrition and animal feed.
According to the company&rsquo;s second quarter statements, biorefining related revenues increased &ldquo;due to the overall favorable pricing environment and increased volume in animal feed and oil products.&rdquo; Compared to the same period in 2010, revenues are up 21.8 percent, based on plant efficiencies associated with a shift in sales mix and higher plant production throughput driven by volume contributed to the margin expansion, according to the company. Nutracea has targeted several markets including nutraceuticals, animal nutrition, rice bran oil, meat inclusion and as a food ingredient, and the company has operating facilities in Louisiana, Montana, Arizona and Brazil.
Although the company has endured a reorganization play, Nutracea is still a prime example of a company that has taken financial advantage of a number of markets with a biobased approach. W. John Short, CEO of the company, says, &ldquo;Our investments in biorefining are starting to pay off handsomely. We expect continued improvement.&rdquo;&nbsp;
&mdash;Luke Geiver

This value-added producer has rice bran to thank

Nutracea Up Big on Biorefining

At the National Clean Energy Summit 4.0 in Las Vegas in August, Vice President Joe Biden praised the efforts of five innovative cleantech companies that obtained seed funding from the U.S. DOE&rsquo;s Advanced Research Projects Agency-Energy in 2009 and 2010, and attracted more than $100 million in outside private capital investment to advance their commercialization efforts.
Among those receiving both private and federal funding was Colorado-based biotech outfit OPX Biotechnologies Inc., which was awarded a $6 million grant by the DOE in April 2010 and subsequently secured $36.5 million in a Series C investment round in July. &nbsp;&nbsp;&nbsp;
OPXBio&rsquo;s immediate focus is the production of biobased acrylic acid, an estimated $8 billion market that&rsquo;s growing 3 to 4 percent per year. Acrylic acid is a key chemical building block used in a wide range of consumer goods including paints, adhesives, diapers and detergents.
Together with project partners, the National Renewable Energy Laboratory and Johnson Matthey Catalysts LLC, OPXBio is leveraging federal funding to concurrently develop its second product, a biodiesel-like fuel processed from carbon dioxide and hydrogen via a fermentation pathway. Biden said the private sector financing reflects the progress companies such as OPXBio have made over the past two years toward developing new technologies that could transform the way Americans use and produce energy.
&ldquo;These five companies are swinging for the fences, pioneering new technologies that could help answer the energy challenge and create jobs,&rdquo; Biden says. &ldquo;They illustrate how a small but strategic investment by the federal government can pay big dividends down the road and bring into the market groundbreaking new technologies.&rdquo;&nbsp;
&mdash;Bryan Sims

Leveraging private and government funding to accelerate growth

Columns of Support

When the U.S. DOE released the updated version of the Billion Ton Study, the algae world had reason to be alarmed. The 2011 version, like the first version released in 2005, provides a detailed analysis of the potential biomass available for bioenergy use throughout the U.S., and most importantly to algal biomass developers, the report did not include algal biomass as a viable option for biomass utilization. A source at DOE said that although algal biomass met most of the original criteria created for the 2005 study, &ldquo;it did not meet this new criterion.&rdquo; The new criteria, in part, were based on a county-level study of available biomass. For algal biomass, the source says, &ldquo;there was insufficient information and data to estimate and project the availability of algal feedstocks at a county scale with any degree of accuracy.&rdquo;
Unlike the existing millions of metric tons of agricultural residues and woody biomass, the source says very little algae is being produced today at a commercial level. &ldquo;As a result, actual field data on the productivity for a variety of different possible algae strains is not available,&rdquo; the source tells Biorefining Magazine. &ldquo;But that doesn&rsquo;t mean the DOE believes algae isn&rsquo;t worth the effort.&rdquo;
The DOE Biomass Program is funding an initial strategic national assessment of the resource potential of algae grown for biofuels, although the source says this set of studies will require additional work as agronomic data for the productivity of different algal strains under different climate and cultivation system environments are developed. &ldquo;This data will be complex as productivity will need to be evaluated under different daily and seasonal temperatures and solar resource regimes,&rdquo; adding, &ldquo;the aquatic algal cultivation and processing systems are still being designed, which may further add or subtract from current productivity estimates.&rdquo;
The study will be based, or at least start, on a Pacific Northwest National Laboratory study conducted earlier this year by Mark Wigmosta and his team at PNNL. The study indicates that the U.S. potential for algae used for renewable fuels is in the several billion gallons range. The combination of results from the PNNL study and the early work done by the DOE, while encouraging, are in the early stages, with more work needed before &ldquo;there is enough credible public data to consider algal biomass grown for biofuels to the same level of detail as lignocellulosic feedstock in the Billion Ton Update.&rdquo;
Of course, many algae developers may argue that at some level algae biomass is available (on a small scale), but regardless, the recent biomass update appears to show two things. One, the devil, in this case, really is in the details and lack of detailed data available at the county level. And two, the algae industry simply needs to produce more biomass to avoid skirting the line of being in, or being out.&nbsp;
&mdash;Luke Geiver

The 2011 U.S. DOE's Billion Ton Study left out algae—here's why

2 Simple Reasons for 1 Major Absence

Kior Inc. is trading between $14 and $16 a share, but if Kior&rsquo;s common stock doesn&rsquo;t quite have what a trader is looking for, several other biorefining companies are currently available. Gevo Inc. is going for around $10, Amyris around $20, and Solazyme is in the high $11-per-share range. What does the stock pricing for each biorefining company say about the industry? Not much, but the fact that so many biobased companies are currently available on the stock market does.
Cindy Thyfault, president and CEO of Westar Trade Resources, a company that helps biorefining companies seek out and obtain funding, has been following all of the companies that have gone public in the past two years. &ldquo;What I&rsquo;ve learned is that you have to show a long track record of investment up to the point of the IPO,&rdquo; she says, adding that most of the companies that have gone public have had at least $100 to $150 million in investment money. In addition to a successful IPO, she also points out that a company needs to show the backing of some serious venture capitalists, but it&rsquo;s her last point that might show why the biorefining sector is poised for growth. A company, she says, &ldquo;has to show a broad range of products, not just fuels.&rdquo;
Although Thyfault mentions that some investors are uneducated on the number of technologies and products biorefining firms can offer today, her assertion that an IPO must be preceded by the possibility of multiple product offerings could indicate one reason for the IPO trend in the industry. Under the general assumption that venture capitalist investment dollars are tight, the idea of investing in a single company that can generate revenue via multiple markets might make sense.
California-based butandiol company Genomatica announced it was going public in August, and the firm can produce biobased alternatives for at least nine different chemical products. Solazyme can produce renewable diesel, airplane deicing fluids and skin care products, and Amyris, like Solazyme, can produce fuels along with a large suite of other products that includes malaria-fighting drugs. Given the number of product and market offerings in which these types companies can operate, the reason so many biorefining companies have issued IPOs seems pretty clear. Of course, these innovative firms need the funding dollars an IPO brings, but if these companies know that they can offer more bang for the buck to investors looking to spend wisely, why wouldn&rsquo;t they join the IPO craze?&nbsp;
&mdash;Luke Geiver

More Bio-Bang for the Buck

On Aug. 10, the Blackjacks of Air Test and Evaluation Squadron (HX) 21 successfully flew a Marin Corps MV-22 Osprey at altitudes of up to 25,000 feet on a 50/50 blend of camelina-based and petroleum-based JP-5 aviation fuel. The test flight took place at Naval Air Station Patuxent River, Md.
&ldquo;This is the first Marine Corps and tilt rotor aircraft to fly on biofuels,&rdquo; said Navy Secretary Ray Mabus. &ldquo;This brings us one step closer to reducing our dependence on foreign oil and becoming more energy secure and independent.&rdquo;
The MV-22 Osprey is a multimission aircraft flown by the Marine Corps that combines the functionality of a helicopter with the long range and high speed of a turboprop aircraft.
&ldquo;As these types of biofuel certification tests continue on the Osprey and other aircraft, we continue to make steady progress toward the energy goals I laid out in October 2009,&rdquo; said Mabus. &ldquo;Those goals are aimed first at improving our warfighting capability and reducing our vulnerabilities, but they will also increase our energy efficiency and help lead the nation toward a clean energy economy.&rdquo;&nbsp;
&mdash;Erin Voegele

The U.S. Navy, Marine Corps complete test flight in Maryland

MV-22 Osprey Flies High on Biofuel

A project led by Roger Chang, a Ph.D. candidate in the bioinformatics and systems biology program at the University of California-San Diego, could lead to significant benefits for the algae biofuels industry. Chang and his colleagues have reconstructed the genome scale metabolic network for the model alga species Chlamydomonas reinhardtii. The results of the project where recently published in the scientific journal Molecular Systems Biology.
&ldquo;We did this by integrating functional annotation of its genome as well as using sequence-based analysis and literature curation and large-scale transcript verification experiments,&rdquo; Chang says. &ldquo;While we were doing this, we gave special attention to precise representation of photon usage, and also chemical accuracy of representing lipid species.&rdquo;
According Chang, prior research has well-established that these metabolic network reconstructions and computational methods have become instrumental in engineering efforts, both in terms of developing production strains and for developing bioreactors. &ldquo;Using computer-aided approaches like this enables prediction of specific genetic manipulations that can be used to increase production of desirable chemical products and also productions of more cost-effective growth conditions for these strains and industrial applications,&rdquo; he says. &ldquo;Where our network fits in is that it&rsquo;s the first such network to be developed for a eukaryotic algae. So, it sort of represents establishing these sorts of capabilities within the study of eukaryotic algae. It&rsquo;s also the first to enable specifically the analysis of light source parameters that are used for growth.&rdquo;
It is unlikely that Chlamydomonas reinhardtii will be used to generate production strains, Chang notes, because it is a laboratory model species. Other known strains of algae are known to be more productive. &ldquo;As a model eukaryotic algae, the most knowledge exists for this system, which is why we chose it in the first place,&rdquo; he adds. &ldquo;Having enabled computer-aided analysis of metabolism in this alga, we expect it to serve as a development platform for the whole industry, and likely set sort of a new precedent for incorporating computational analysis into engineering designs for biofuels, whether it be for this species, or other alga, or other photosynthetic species.&rdquo;&nbsp;
&mdash;Erin Voegele

Researchers reconstruct the genome scale metabolic network for a model alga strain

Aiding Algae Development

When the U.S. DOE, USDA and the U.S. Navy jointly launched a bold effort together with the private sector in August to invest up to $510 million over the next three years to build or retrofit existing industrial facilities for drop-in biofuel production, the news was generally well-received by the biorefining community. Questions remain as to whether the investment is enough to support this commitment over the long-term and, even if it is, the one-to-one matching fund ratio from the private sector may prove challenging, especially during a recovering economy.
&ldquo;It may not be a lot [of money] in terms of changing the energy environment of the country, but it&rsquo;s a good start,&rdquo; says Ken Eickmann, a retired lieutenant general who worked at the Aeronautical Systems Center at Wright-Patterson Air Force Base. Eikmann is currently deputy director of the Center for Energy Security at the University of Texas, state vice chairman for the Texas Engineers Taskforce on Homeland Security and serves on CNA&rsquo;s military advisory board.
&ldquo;We&rsquo;ve got to step forward and start producing some of these different types of alternative fuels to solve some of the technical issues that are associated with them and to incentivize industry to get involved,&rdquo; Eickmann explains.
According to Gary Luce, CEO of Houston-based Terrabon Inc., the federal program should prompt private equity and debt financing entities to more stringently evaluate where funds are to be directed to support project and technology developments for drop-in biofuels. Terrabon optimizes a proprietary biorefining technology called MixAlco to convert biomass into biochemicals such as acetic acid, ketones and alcohol-based jet fuel and gasoline.
&ldquo;One of the challenges with this [federal investment] is just as private companies try to interface in with federal programs, it&rsquo;s a different operating mentality,&rdquo; Luce tells Biorefining Magazine. &ldquo;If the government is putting up $500 million and the capital markets have to match that, then it&rsquo;s not really about the advanced biofuel developers, it&rsquo;s about whether the capital markets see the structure in such a way that&rsquo;s worth their risk to deal with the government risk in the implementation of the program.&rdquo;
In July, Terrabon was awarded a $9.6 million grant by Logos Technologies Inc. and the Defense Advanced Research Projects Agency to create 6,000 liters of jet fuel using its MixAlco process. Luce says that his company&rsquo;s alcohol-based jet fuel is undergoing certification process and anticipates breaking ground on a commercial production facility sometime next year.
&ldquo;What this [federal program] will do is separate the men from the boys,&rdquo; Luce says, &ldquo;because I think the capital markets will allocate their equity a little bit differently than the federal government will.&rdquo;&nbsp;
&mdash;Bryan Sims

Challenges, opportunities loom as biorefining industry develops biojet infrastructure

Build-Out Bust or Boom?

The National Advanced Biofuels Consortium, led by the U.S. DOE&rsquo;s National Renewable Energy Laboratory and Pacific Northwest National Laboratory, has selected Virent Energy Systems Inc. to advance to stage two of its cellulosic biomass feedstock-to-biofuels program.
Working with 17 partners representing industry, academia and national laboratories, the NABC is working to investigate the effectiveness of a variety of process strategies that have the potential to convert corn stover or wood chips into drop-in biofuels.
Virent successfully created renewable gasoline from both feedstocks during stage one of the project, and has been selected to move forward. According to Andrew Held, Virent&rsquo;s director of feedstock development, the second phase of the program kicked off in September, and is expected to last 24 months.
&ldquo;What is happening, is the [process] strategies that have been advanced to stage two are initiating the project scope, with the intent that at the end of phase two the NABC can make a recommendation to the DOE regarding technologies that are ready to be advanced to a pilot-ready or a process demonstration unit scale,&rdquo; Held says.
Held also notes the participation in the NABC has been beneficial to his company as a mechanism to create constructive collaborations, and for generating a meaningful supply of deconstructed biomass materials that Virent can use to demonstrate and optimize its conversion processes. Although the NABC project focuses exclusively on renewable gasoline, Virent is working to develop process technology that can produce a range of fuels and chemicals. &ldquo;Virent has the viewpoint that to make us economical at scale, and to make a meaningful contribution to the marketplace, biorefineries need to be capable of taking in more than one feedstock and producing more than one product,&rdquo; he says.&nbsp;
&mdash;Erin Voegele

Virent selected to advance in the NABC program

The Next Phase

Lisa Colosi might be an assistant professor of civil and environmental engineering at the University of Virginia, but she knows what it is like to be a 1-acre farmer and an environmentally conscious driver. Colosi, along with a team of researchers at UVa, has completed a report that details whether algae-derived sources are more energy efficient and greenhouse gas (GHG) friendly compared to biofuels from switchgrass or canola. The purely hypothetical report based on engineering calculations and database impact factors indicates that although algae-based biofuel contains more energy per acre, the GHG levels are higher than other biofuels.
&ldquo;We have this clear tradeoff,&rdquo; Colosi says. &ldquo;If I&rsquo;m going to have a 1-acre farm and I wish to know what I should grow so that I can make biofuels to drive a certain distance in my car,&rdquo; she adds, &ldquo;I actually get the most, or the largest amount of usable transportation energy, if I grow algae.&rdquo; Why? Because algae grow quicker and can be harvested multiple times a year. But, on the flip side, she says, if a person is concerned about their environmental impact incurred while driving, algae isn&rsquo;t as favorable as other biofuels. Why? Because the more time a fuel is handled (heated up, stirred, upgraded) the more energy is used, she says, taking away from the overall energy efficiency related to that biofuel&mdash;an occurrence commonly associated with algae-based fuel.
&ldquo;From our perspective, we are intrigued by the fact algae gives better overall energy yields, but we are puzzled by the fact that it doesn&rsquo;t do as well on an environmental performance basis,&rdquo; she says. But that isn&rsquo;t all the team at UVa is intrigued by. &ldquo;We are also interested to see how the energy analysis tracks with the financial analysis because there is very interesting decision-making when environmentally the right thing to do is A, and financially the right thing to do is B.&rdquo;
Although Colosi and her team are still working to figure out the GHG impact shortfall of algae, the more important work may have nothing to do with GHGs but instead, money. Colosi says they are working to find out if current algae systems will be attractive enough &ldquo;for people to make a living on,&rdquo; and, if they aren&rsquo;t, what policy or implements can be introduced to make sure they are.&nbsp;
&mdash;Luke Geiver

UVa researchers look at energy yields, GHGs and the financial appeal of algae

Exploring the Algae Tradeoff

1. Spain-based Neuron Bio recently announced it has commissioned a pilot-scale fermentation plant that will be used to scale up the production of yeast, bacteria and algae as part of its own research and development efforts. It will also be used to scale up biorefining processes for third-party companies. The pilot plant employs a batch process, and can produce 400 liters (106 gallons) of culture at a time. It also provides for the subsequent recovery and purification of the bioproducts cultivated in it. Information released by the company states that it has invested &euro;500,000 ($706,550) in the plant. The equipment will be installed provisionally in the the Og&iacute;jares industrial park until construction of Neuron Bio&rsquo;s new building in the Granada Heath-Sciences Technology Park is complete. 2. Nidus Partners LP announced that Denmark-based Novozymes has joined Nidus as a corporate partner. Novozymes will collaborate with Nidus and its other partners Bunge Ltd. and Monsanto Co. to select and develop early-stage energy technologies. Launched last September, Nidus takes a novel approach to commercialization by using its partners to identify market opportunities and experienced entrepreneurs to find and develop technologies that address these market needs. To date, Nidus has reviewed hundreds of technologies resulting in three startups: Electrochaea LLC, Six Convert LLC and Xtend Energy. Partners have a right of first offer for the innovations developed through Nidus. A limited number of additional partners with the appropriate market and technical expertise will be invited to participate in the partnership. 3. U.K.-based bioplastics company Biome Technologies plc has announced interim financial results for the six-month period ending June 30. According to the company, it experienced a 132 percent sales revenue growth within its U.K. bioplastics division, Biome Bioplastics, making the division profitable for the first time. Revenue for the entire Biome group increased by 55 percent during the period, to &pound;10.4 million ($16.6 million). Its biodegradable and compostable bioplastic materials are made from renewable feedstocks, such as potato starch and cellulose. The company&rsquo;s website lists a range of 10 bioplastic materials it has developed. Information published by Biome as part of its interim financial results states that its materials are produced at Biotec, an advanced manufacturing facility in Germany that has been developed as a 50/50 joint venture. The dedicated bioplastic production facility has an annual capacity of 20,000 tons. The facility is currently operating at 60 percent of its capacity. 4. BioAmber Inc., through its subsidiary Bluewater Biochemicals, has identified Sarnia, Ontario, Canada, as the site for its first North American biobased succinic acid production facility. The plant will have an initial annual production capacity of 17,000 metric tons and is anticipated to be commissioned in 2013. Permitting work for the facility began in June. The company leveraged $35 million in combined grants and loans provided by the Ontario Ministry of Economic Development and Trade, Sustainable Development Technology Canada and the Canadian Sustainable Chemistry Alliance to locate its facility in Sarnia. BioAmber plans to double production capacity in Sarnia by 2014 through the introduction of a next-generation yeast being developed with Cargill Inc. While biosuccinic acid will be the product of focus for BioAmber at its Sarnia facility, the company also intends to produce 1,4 butanediol (BDO)&mdash;a chemical with a $4 billion existing market&mdash;using technology exclusively licensed from DuPont Applied Biosciences. At peak production, according to BioAmber, the goal is for the Sarnia plant to produce 35,000 metric tons per year of biobased succinic acid and 23,000 metric tons per year of BDO. 5. The algae and biochemical sectors are becoming more interwoven as Houston-based biochemical firm Glycos Biotechnologies Inc. and Ft. Collins, Colo.-based algae developer Solix BioSystems Inc. reported that their early-stage research and development collaboration yielded positive results, demonstrating the potential for Solix&rsquo;s algae oil to be converted into a range of high-value specialty chemicals through GlycosBio&rsquo;s novel microbial platform. Solix&rsquo;s crude algae oil, obtained from the company&rsquo;s pilot facility located in the Southern Ute Reservation near Durango, Colo., was found to be nontoxic, easily metabolized and upgraded by GlycosBio&rsquo;s proprietary biocatalysts at the company&rsquo;s research facilities in Houston. While the production of ethanol may not be a focus of the research and development collaboration, the alcohol acts as a viable springboard for getting to the basic building blocks of producing the chemicals such as isoprene, a chemical of specific interest for GlycosBio. 6. Emeryville, Calif.-based Amyris Inc. has signed a multiyear supply agreement for several hundred tons of its renewable squalane with Nikko Chemicals Co. Ltd. for distribution in the Japanese market. Squalane, a high-end moisturizing ingredient used in a range of cosmetics, is traditionally sourced from shark liver or refined olive oil. Amyris&rsquo; squalane, which is produced using its renewable platform building block farnesene&mdash;trademarked Biofene&mdash;is made using sugarcane of high purity and has better stability. According to Amyris, its biobased squalane is now EcoCert certified and has been successfully tested and integrated in end products by its partners and products. Earlier this year, Amyris received a purchase order from the company&rsquo;s collaboration partner Soliance, a French biobased ingredient provider to the cosmetic industry, for its biobased squalane. The company also produces biobased squalane as part of a manufacturing contract arrangement with Glycotech Inc. at a plant in Leland, N.C. 7. North Carolina-based Avjet Biotech Inc., a developer of distributed refining systems and parent company of Red Wolf Refining, has released an overview of its biorefining process. The company&rsquo;s patented RWR System uses a thermal catalytic process to refine triglycerides into biobased aviation fuels. The objective of the RWR process is to produce fungible drop-in replacement transportation fuels from a wide variety of renewable oils, including those sourced from oilseed crops, animal fats or algae. Fats, oils and lipids are mixed with hot water and hydrolyzed, breaking the fatty acids from the glycerin backbone. A thermocatalytic process then deoxygenates the fatty acids. The two oxygens are driven off as carbon dioxide and unsaturated bonds within the fatty acid are saturated. The result is a straight chain, saturated hydrocarbon, an ideal molecule to reform into transportation fuels. The next step is to change the structure of the molecule to either increase the flash point or suppress the freeze point. Some cracking is also done, which means some of the longer molecule chains are broken into shorter chains. Competing processes are generally based on a technology that uses additional hydrogen to drive off oxygen from the triglyceride feedstocks. The RWR process has been specifically designed to be cost-competitive at smaller, distributed scales. 8. Novamont, an Italian company that produces a biodegradable plastic from waste materials, and Genomatica, a California-based biobased chemical maker, have formed a joint venture to build an industrial biorefinery to produce Genomatica&rsquo;s butanediol (BDO) for use in Novamont&rsquo;s bioplastic products. While Genomatica will provide an engineering design package and technology transfer help to Novamont, the terms of the agreement have put Novamont in charge of financing the future facility. The company will also purchase the BDO produced at the plant, which is expected to reach roughly 40 million pounds per year when it goes online by the end of 2012. Novamont has indicated the company will convert an existing facility in Italy and will also run the facility once complete. The partnership between the two companies is not the first for either. Genomatica has already partnered with Tate &amp; Lyle, Mitsubishi Chemical, Gruppo M&amp;G and Waste Management. Novamont has partnered with Eni, an Italian oil and gas company, to build another biorefining facility, located at a petrochemical plant owned by Eni. Novamont has also opened a North American facility in Connecticut. 9. Lakewood, Colo.-based biorefining firm ZeaChem Inc. signed a memorandum of understanding with Chrysler Group LLC to accelerate the development and market adoption of cellulosic ethanol. One of the primary goals of the strategic alliance with Chrysler is to help the company promote positive consumer perception about the concept of cellulosic ethanol. ZeaChem&rsquo;s first commercial plant, expected to have an annual capacity of 25 MMgy, is planned for location adjacent to its 250,000-gallon-per-year demonstration facility near Boardman, Ore., currently under construction and intended to use woody biomass as feedstock. The company is also considering Michigan or Canada as potential sites for future commercial production facilities where abundant concentrations of woody biomass are plentiful. The company stated that the Boardman biorefinery project is progressing on time and on schedule for a fall start-up, adding that the first phase of construction was 80 percent completed in late July. The biorefinery will produce and test quantities of ethyl acetate by the end of the year with significant volumes of cellulosic ethanol volumes projected to follow shortly thereafter. Testing of its acetic acid is expected to follow. 10. UOP LLC, a Honeywell company, announced that it has begun construction in Hawaii of a biofuels demonstration unit that will convert forest residuals, algae and other cellulosic biomass into green transportation fuels using rapid thermal processing&nbsp; (RTP) technology. Backed by a $25 million U.S. DOE award, the Honeywell UOP Integrated Biorefinery will upgrade biomass into high-quality renewable gasoline, diesel and jet fuel. The project is part of the DOE's efforts to help spur the creation of the domestic biofuel industry, drive domestic job creation and reduce U.S. dependence on foreign oil. The project will also support the Hawaii Clean Energy Initiative goal to achieve 70 percent clean energy by the year 2030. Located at the Tesoro Corp. refinery in Kapolei, the Integrated Biorefinery will be used to demonstrate viability of the technology, test the fuels produced and evaluate the environmental footprint of the fuels and the process technology. The project is scheduled to begin initial production in 2012 and be fully operational by 2014. The RTP technology converts biomass into a pourable, liquid biofuel. This liquid biofuel will then be upgraded to green transportation fuels using hydroprocessing technology from Honeywell's UOP. In 2008, UOP partnered with Ensyn Corp. to form a joint venture business, Envergent Technologies LLC, to offer RTP technology and equipment.
&nbsp;
Share your industry briefs: To be included in Business Briefs, send information (including photos and logos if available) to: Industry Briefs, Biorefining, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-8385, or e-mail it to <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>. Please include your name and telephone number in all correspondence.

When Congress returned from its August recess, it passed the America Invents Act. The act represents the most sweeping rewrite of the U.S. patent code in 60 years. The solution proposed by the act to many of the problems associated with the patent system is for the U.S. Patent and Trademark Office to assume greater responsibility for the quality of U.S. patents.
Congress, however, has not expressly coupled greater responsibility with increased funding. Because the USPTO already has a sizable backlog, such news is troubling. The director of the USPTO stated in a recent interview that if the office does not have complete access to the funds it collects, then the USPTO has &ldquo;no hope of implementing this legislation.&rdquo;
Without a doubt, the USPTO has made significant progress recently in reducing its backlog, but more than 680,000 applications are still presently pending. As a consequence, the time it takes for an application to make its way through the examination process from filing to issuance, appeal or abandonment is approximately three years. If you decide to appeal the examiner&rsquo;s rejection of your application, then expect the process to take an additional three years from the filing of the appeal to the decision.
One of the fundamental changes brought about by the act is the shift from a first-to-invent patent system to a first-to-file patent system. In the future, most disputes between competing inventors will be resolved simply by comparing application filing dates. The earliest filer will obtain the right to seek a patent. Executing such a straightforward procedure should result in time- and cost-savings for the USPTO generally, and for the newly-constituted Patent Trial and Appeal Board that will be responsible for handling inventorship disputes, in particular.
The act also gives the PTAB responsibility for three new programs that can be used to challenge an issued patent&rsquo;s validity. If these programs are used extensively as alternatives to litigation, as intended, then this workload will represent a sizable burden for the PTAB, in addition to the considerable appellate backlog the PTAB will inherit from its predecessor, the Board of Patent Appeals and Interferences.
As to these three programs, inter partes review is essentially a reworking of an existing procedure, the inter partes reexamination. The BPAI, however, did not handle this program, so the new program represents a workload gain for the PTAB. The PTAB would also be responsible for post grant review, a completely new program that addresses a range of validity challenges that the USPTO has never decided previously. Additionally, the PTAB will be responsible for a transitional program used exclusively for challenging business method patents.
Furthermore, there will be a period during which existing programs dealing with inventorship disputes and validity challenges will co-exist with the new programs established by the act. For example, the USPTO will be handling inventorship disputes under the old first-to-invent law as well as the new first-to-file law for at least the next several years.&nbsp;
The USPTO is not funded like other agencies, but rather is funded by user fees, meaning that each applicant is assessed an amount that the agency determines is necessary for examination of the application. According to such a system, one would expect that the USPTO could simply adjust fees to address the increased workload, as necessary.
The USPTO is not permitted, however, to spend every dollar that it collects. Like other agencies, the USPTO is dependent upon Congress to approve its expenditures through the appropriations process. Consequently, the same budget compromises that affect other federal agencies generally affect the USPTO in a similar fashion. Many commentators suggest that Congress has been essentially diverting USPTO funds to address other budget issues for some time now; the backlog suggests there may be some truth to these suggestions.
So where does that leave patent applicants? That depends on how strongly you trust the assurances of those in Congress who removed a provision of the act that would have given the USPTO the ability to avoid the appropriation process and spend all of the fees collected. The representatives who removed the provision asserted that such action was necessary to prevent circumvention of Congressional oversight and an out-of-control USPTO. At the same time, the USPTO was promised whatever access was necessary to carry out its operations. With the country&rsquo;s confidence in Congress at a new low, patent applicants may have good reason to be concerned instead of reassured. Author: Paul Craane Partner Attorney, Marshall, Gerstein &amp; Borun LLP (312) 474-6623 <a href="mailto:pcraane@marshallip.com">pcraane@marshallip.com</a>

The USPTO's new workload raises a red flag—why can't a user-funded agency just spend what it needs to keep up?  


Patents in Transition

Are you are considering purchasing a biofuel plant or new equipment to expand or upgrade an existing facility? Don&rsquo;t miss the opportunity to take advantage of depreciation deductions since these federal tax advantages sunset this year on Dec. 31.
Section 179 deductions enable small businesses to deduct 100 percent of the cost of an asset or portion of an asset in the year the asset is placed in service. To qualify for this deduction, the property must be tangible section 1245 property (not buildings) and can be new or used; income limitations may apply. Any excess section 179 is carried forward to future years. The section 179 expensing limits and thresholds are as follows:
&bull; For years beginning in 2010 and 2011, the expensing limit is $500,000. This limit is reduced by the amount of which the cost of section 179 property placed in service in the tax year exceeds $2 million.
&bull; For years beginning in 2012, the expensing limit is $125,000 and the threshold is $500,000.
&bull; For tax years beginning after 2012, the expensing limit is $25,000 and the threshold is $200,000.
Bonus depreciation allows 50 percent of the cost of an asset to be deducted in the year placed in service. To qualify for this deduction, the property must be new and have a recovery period of 20 years or less. This would not apply to most buildings as they typically have a recovery period of 39 years. The expensing percentages and dates are as follows:
&bull; The 2010 Tax Relief Act provided for 100 percent bonus depreciation on new assets placed into service from Sept. 9, 2010 to Dec. 31, 2011.
&bull; 50 percent bonus depreciation will be available on new assets placed into service from Jan. 1, 2012 to Dec. 31, 2012.
Regarding the 100 percent bonus depreciation, there is an election available for the tax year that includes Sept. 9, 2010, which allows a taxpayer to elect to use 50 percent bonus depreciation for dates both before and after Sept. 8, 2010.
What does this mean to biorefining plant owners? According to Wayne Lee, CEO of Lee Enterprises Consulting, &ldquo;It means that those in the industry that are looking at purchasing equipment for expansion, renovation, and those buying plants, should all be exploring the opportunities that exist in 2011 that might not exist in the future.&rdquo;&nbsp;&nbsp;
Christianson &amp; Associates PLLP is a strategic partner of Lee Enterprises Consulting, and handles accounting services for the group&rsquo;s clientele. &ldquo;As the world&rsquo;s largest biodiesel consulting firm, it is important to us to have someone within our group that stays abreast of tax matters and upcoming changes,&rdquo; Lee said. &ldquo;These kinds of changes can have very significant impacts on our clients, and keeping us informed is precisely why we chose Christianson &amp; Associates as a strategic partner,&rdquo; he said. Lee notes that everyone in the industry should make certain to enlist the services of those accountants and attorneys that understand the tax code as it relates to biofuels.&nbsp;&nbsp;
Plant owners and purchasers should get competent advice to ensure that their purchases are structured correctly. For those purchasing biofuel-related equipment, there is an opportunity available this year that will not be available after Dec. 31.&nbsp;&nbsp;&nbsp;&nbsp; Author: Sherry Jean Larson Manager of Assurance and Advisory Services, Christianson &amp; Associates PLLP (320) 441-5513 <a href="mailto:sherry@christiansoncpa.com">sherry@christiansoncpa.com</a>

Cash in now on expiring tax deductions before it's too late

Depreciation Opportunities Sunset Dec. 31

10/11. Pittsburgh in the fall. That&rsquo;s where you need to be to get the latest information on biodiesel-blended heating oil, the most promising residential heating alternative on the market. The oilheat industry has latched onto biodiesel as THE No. 1 green path forward for its industry. In order for this to happen&mdash;and in order for the oilheat industry to outperform natural gas on performance and environmental bases&mdash;there are technical questions that must be addressed. The experts presenting in Pittsburgh on Oct. 11 at BBI International&rsquo;s Bioheat Northeast are the ones to answer them. The one-day workshop, in conjunction with the National Biodiesel Board and co-located with BBI&rsquo;s Northeast Biomass Conference &amp; Trade Show, will kick off with a general session conversation between NBB CEO Joe Jobe and the National Oilheat Research Alliance President John Huber. Following this, the seminar will feature four highly relevant panels in the Bioheat sector.
Policy: The policy environment for biodiesel-blended heating oil is strong on all levels: National, state and local. Learn from the experts what policy opportunities exist today, what to expect tomorrow, and how to maximize your company&rsquo;s bottom line with biodiesel.
Technical: The biodiesel and oilheat industries have formed a Bioheat Technical Steering Committee to spearhead the technical effort needed to support higher levels of biodiesel in the Bioheat market. What are the industry plans for moving forward with higher levels of biodiesel in ASTM D396?&nbsp; What levels can be used in existing burners without changing equipment? What&rsquo;s the industry&rsquo;s progressive, &ldquo;move forward&rdquo; blend and why? How does biodiesel affect NOx in home heating oil applications? Come hear from this panel of industry insiders and technical masters to discover biodiesel-blended heating oil&rsquo;s path forward.
Distribution: As an oilheat dealer, do you want to follow your industry&rsquo;s call to make heating oil cleaner than natural gas, but don&rsquo;t know where to start? Then this is a do-not-miss panel. Hear from those who have ridden the biodiesel learning curve and offer their experience and expertise to get you onboard with the revolutionary reinvention of heating oil. The essentials of success in this market will be revealed.
Markets and Use: Building managers and property owners, learn what your peers are doing to go green with Bioheat. While wood pellets or other biomass-derived heat and power are gaining popularity in industrial and niche applications, the seamlessness of integrating biodiesel-blended heating oil to green city buildings and complexes makes Bioheat a ready-to-use fuel. It&rsquo;s about cleaning the air around you, being a responsible property owner and attracting the growing population of environment-conscious tenants. Hear from biodiesel suppliers and building owners who have made the switch to cleaner-burning Bioheat.
Register today for the one-day Bioheat Northeast workshop Oct. 11 in Pittsburgh at <a href="http://www.biomassconference.com/northeast" target="_blank">www.biomassconference.com/northeast</a>.

Steel City to Host Bioheat Northeast Show 

It was nearly a year ago that I asked the White House in the November issue of this magazine, &ldquo;Where&rsquo;s the beef?&rdquo; Well, this August all of us got a &ldquo;whopper&rdquo; of an answer as the Obama Administration announced that the U.S. Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation. The new initiative is part of President Obama&rsquo;s Blueprint for a Secure Energy Future, the Administration&rsquo;s framework for reducing dependence on foreign oil. As the U.S. writes a check for nearly $1 billion to foreign countries to pay for oil every day&mdash;that&rsquo;s right, $365 billion each year&mdash;drop-in biofuels could replace or supplement existing gasoline, diesel and jet fuels, and have a significant impact on America&rsquo;s balance of payments by reducing our dependence on foreign oil.&nbsp;
I have expressed before that I believe the administration&rsquo;s investment in commercializing advanced biofuels is a matter of national security. Here are the facts. The U.S. Defense Department is a one of the world&rsquo;s largest consumers of fuel, representing close to 2 percent of annual U.S. petroleum use. In 2008, DOD purchased $16 billion worth of fuel, using 119 million barrels (nearly 5 billion gallons) of petroleum. Together, with the private commercial airline industry, DOD uses 1.5 million barrels (63 million gallons) of jet fuel per day. Armed with just these few facts, you can see that our nation&rsquo;s defense is at the mercy of the market just as much as we are when we pull up to the pump.
The departments subsequently issued a request for information (RFI) laying out the administration&rsquo;s goals, assumptions, and tools and requesting specific ideas from industry on how to leverage private capital markets to establish a commercially viable drop-in biofuels industry. The RFI specifically enumerates a number of relevant considerations in terms of their awarding support to a particular project. Some of these include: the DPA is concerned with only domestic sources. Foreign capabilities will not be considered; a drop-in replacement fuel requires no change in systems configuration, engine architecture, fuel infrastructure or fuel handling; the maturity of specific technologies and biorefining operations that could be deployed to achieve commercial-scale production; recognition that 50 percent (1-to-1) is the minimum level of industry cost sharing that the government will entertain. There are many other points that are specifically itemized, which can be found at http://bit.ly/rojNJk.
As you can see from the RFI document requirements, the administration ultimately wants to build or retrofit several domestic commercial- or precommercial-scale advanced drop-in biofuel refineries to produce military spec fuels located throughout the U.S. for ready market access. They should also have no significant impact on the supply of agricultural commodities for the production of food.
USDA Secretary Tom Vilsack said the day of the announcement,&ldquo;By building a national biofuels industry, we are creating construction jobs, refinery jobs and economic opportunity in rural communities throughout the country. As importantly, every gallon of biofuel consumed near where it is produced cuts transportation costs and, for the military, improves energy security.&rdquo;
He is preaching to the choir to those of you reading this column, but it&rsquo;s an important stake in the ground for the future and to garner greater support from Democrats and Republicans alike.
The president added, &ldquo;Supporting biofuels cannot be the role of government alone. That&rsquo;s why we&rsquo;re partnering with the private sector to speed development of next-generation biofuels that will help us continue to take steps towards energy independence and strengthen communities across our country.&rdquo;
The joint plan calls for the three departments to invest a total of up to $510 million, with a cost share from private industry of at least a one-to-one match for a total of more than $1 billion of investment. The USDA will work on securing feedstocks while the DOE will look for the right technologies. The Navy, which, as you know, is readying its Great Green Fleet, will be the customer. Fuel produced from the initiative also will be used by the private sector. But the government is emphasizing the needs of the military to have a strong source of domestic fuels.
The administration should be commended for continuing to demonstrate great foresight as it makes smarter investments in drop-in advanced biofuels, investments that will ultimately strengthen America&rsquo;s economic and national security. The president&rsquo;s leadership in renewable energy will help in commercializing advanced biofuels and successfully deliver ready-to-use replacement fuels for jetfighters, battleships, as well as commercial airliners and cars on the road today.
The outstanding question for the package is the ability to fund the full $510 million. It appears at this point the Navy and the USDA have the money in place for the first phases of the project. The DOE, I am told, has put in $6 million and plans to anti up its share of a $170 million in year three. All of this will require those of us who believe in the program to call on Congress to support this approach and fully fund it moving forward. Not an easy task in the current environment, but one that is essential for us to move the industry forward at this time.&nbsp;
So ladies and gentlemen, get your pens and keyboards ready to write those trusty folks in Congress in support of this effort. We will need your emails, cards and letters, and visits back home when your members return, to reinforce the importance of building the advanced biofuels industry of the future, right here in the U.S. Author: Michael McAdams President, Advanced Biofuels Association (202) 469-5140 <a href="mailto:Michael.McAdams@hklaw.com">Michael.McAdams@hklaw.com</a>

White House serves up a “Whopper” and puts money where its mouth is

There's the Beef

Sometimes an issue of the magazine comes together in such a harmony that it amazes even me, the editor who develops the monthly theme, assigns the articles and solicits column contributions. This is one of those issues, and its focus is on one of the hottest, most up-in-the-air topics right now: biorefining policy. This is a very uncertain time in the policy arena. Rising national debt, the development of a super committee to do what Congress has failed to do, pay-go rules, changing appetite for biofuel subsidies in Congress with an administration whose directives favor development and funding of advanced biorefineries to produce fungible drop-in biofuels, and a contentious presidential election in 2012 altogether are making the passing of tax incentives and biorefining policy very difficult right now.
In this issue, our Biorefining Magazine editors and contributors cover it all. We bring you featured articles on what the future of biorefining policy appears to be, with comment from industry insiders who know better than anyone what the coming months and years may hold; government programs that have worked well, despite all the negativity that surrounds the federal political landscape right now; and regulations that must be revisited as biorefining technology and fuel products have developed faster than the regulations under which their uses are governed. In Michael McAdams&rsquo; monthly column, he discusses the administration&rsquo;s plan to help build out the biorefining industry with funding and commitment from the U.S. DOE, the USDA and the U.S. Navy, and how the legislative branch ties into this executive directive. Attorney Paul Craane gives us a Legal Perspective article on changes taking place within the U.S. Patent and Trademark Office, and how although the office is funded by user fees&mdash;not taxpayer dollars&mdash;it is not allowed to spend every dollar it collects and is still subject to congressional oversight. Finally, Sherry Jean Larson with Christianson &amp; Associates authors the Talking Point this month on expiring tax deductions that biofuel plant owners should cash in on before Dec. 31.
Thank you to the editors and contributors for highly relevant, cohesive material in this issue on policy.
Author: Ron Kotrba Editor, Biorefining Magazine <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

Policy Issue

In this record year of U.S. biodiesel production, there have been fewer instances of biodiesel plant fires making headlines than in previous high-volume production years, but the industry isn&rsquo;t entirely without its black marks in 2011. A sampling of the plant fires reported in the news this year include a blaze this May at the co-located facilities of American Biodiesel Energy Inc. and North American Powder Coatings near Erie, Pa.; a fire at Viesel Fuel in Martin County, Fla., in late May; and a late July fire at Tennessee Bio Energy in Coffee County, Tenn.&nbsp;
 Despite the biodiesel conversion process being relatively straightforward and, for lack of a better word, simple, biodiesel plants are chemical processing facilities. The same precautions, safety protocols and preventative maintenances that are required at petrochemical refineries are also necessary at biodiesel production facilities. The industry has come a long way in improving its safety image over the years, but there is always room for improvement. I&rsquo;m reminded of a presentation given in Houston at the International Biorefining Conference &amp; Trade Show, where Rich Chmielewski, the biofuels marketing manager for Siemens Industry Inc., said his father always told him to remember the five Ps of life: proper planning prevents poor performance. What a great line, and surely those are words to live by.
 Preventative maintenance is a good way to avoid process downtime, and everyone knows that when your plant isn&rsquo;t running, you&rsquo;re not making money. And although safety protocols and training are huge factors in helping prevent accidents, maintenance is not just about running a profitable business, it can nip potential safety issues in the bud. As Jatrodiesel President Raj Mosali, this month&rsquo;s Talking Point columnist, says, maintenance logs are a knowledge base and they should be kept as current and detailed as possible. Mosali also says a common point of failure for automation instrumentation is not the actual instrument, but the wiring. Poor wiring at a chemical processing plant where methanol and vapors may be present is a serious hazard. &ldquo;At a minimum, automation devices and instruments should be looked at periodically as part of a maintenance schedule,&rdquo; he says. &ldquo;Regular checks have to be performed to make sure the wiring is intact and no process liquids are leaking onto the wiring.&rdquo; In his column on page 8, &ldquo;Don&rsquo;t Overlook Plant Maintenance,&rdquo; Mosali gives a line-item account of what should be done to which pieces of equipment, and how often. Thanks Raj, for your expertise.
 And remember, be safe as we cap off the industry&rsquo;s most productive year yet.

2011/11/13219113289328.jpg

The 5 Ps

Biofuel refineries have a good working understanding of the steps needed to avoid workplace accidents and damage to the refinery infrastructure. The insurance to cover these claims is also well understood. Workers&rsquo; compensation insurance covers injuries to employees; liability policies cover injuries to visitors, contractors, and third parties who are injured while at the facility; and property casualty insurance and business interruption insurance covers damage to the facility. But what about the risks posed by the transportation of goods both to and from the site? Some of these risks arise from transporting products and other risks arise from the products themselves. In either case, these risks may be excluded by many of the standard policies.
 The transportation of biofuels usually requires the use of train cars or trucks. Liability can arise if a carrier&rsquo;s vehicles are damaged on the facility grounds. As an example, poor road conditions and unclear signage can contribute to accidents on the facility. Releases of sulfuric acid and methanol (used to refine biofuels) can escalate the size and complexity of the claim. The facility&rsquo;s management should make sure that it has adequate insurance. Standard property casualty policies may not cover damage to trucks and trains owned by third parties because that property is not owned, controlled or leased by the facility.&nbsp;
 Standard liability policies frequently exclude incidents involving train derailments or collisions. If the facility owns railroad tank cars, then management should check to make sure that there is insurance in place to cover not only the cost of repair but also any liability or demurrage claims that may arise if an injury or derailment is caused by a defect in the tank car. If coverage for damages to or caused by railroad trains is excluded, then the company should buy a special endorsement or policy.&nbsp;
 Transportation of finished biofuels and byproducts can also pose a liability risk. This risk is greatly reduced if the product is being carried by a common carrier's equipment. Generally, the common carrier will be liable for accidents involving its own equipment and drivers. However, depending on the tariff or contract, the shipper may have a duty to secure the load properly. If the facility owns the trailer or tank car, then any equipment problem that contributes to an accident or release of product can also generate secondary liability, even if it is being transported by a common carrier.
 If product is released during transport, there are possible civil, administrative, and criminal penalties that can be assessed by state and federal agencies if the release can be traced back to a failure of the refinery to properly load and secure the product. For releases that are large enough to require removal and remediation, then there may also be liability to state and federal agencies that respond and third parties whose property may be affected. Standard policies may specifically exclude any claims arising from the release of a &ldquo;pollutant.&rdquo; Finding environmental insurance that will cover those claims can be very challenging. Lower tier environmental insurance policies contain so many exclusions that they are nearly worthless. There is also no point in buying an environmental insurance policy if it excludes releases that take place during transport or cleanup costs. It is hard to believe that an environmental policy would exclude emergency response and removal costs, but they are out there.
 The story does not end with the identification of an insurance policy that appears to cover a given claim. There is an old adage that insurance companies are in the business of collecting premiums and not paying claims. If the claim is small, insurance companies reject the claim knowing that the cost of litigation for the insured to recover on the claim will consume any recovery. If the claim is large, they reject the claim knowing that when faced with the prospect of costly and drawn-out litigation the insured may capitulate and take less than the full value of the coverage. In either case, the refinery may have to go to court in order to get the coverage that it has paid for. Author: James Pray Attorney, BrownWinick (515) 242-2404 <a href="mailto:pray@brownwinick.com">pray@brownwinick.com</a>

2011/11/13219121024472.jpg

Liability, Insurance  Issues in Biofuel Transportation

Anything that moves in a plant experiences wear and tear and needs upkeep. Plant maintenance is analogous to preventive maintenance. Whether a plant is retrofitted, new, or even running for a long time, the following guidelines are all applicable. The best approach to any maintenance task is to first identify plant equipment that needs maintenance. Whether the required maintenance is minor or major, it needs to be identified and specified so. The equipment manufacturer&rsquo;s recommendations should be incorporated into the maintenance documentation. Identify the timeline of maintenance and address downtime. This could also help identify critical path items if a plant goes down and personnel need help with troubleshooting.
 Once the schedule is put into motion, an often overlooked but critical item is keeping the logs. Logs should not only include the maintenance tasks performed on a piece of equipment, but also any failures and associated fixes. This enables the staff to quickly identify and take corrective action. Logs act as the knowledge base. If they are computerized, you can quickly search for a specific issue and find a solution to it, instead of troubleshooting all over again. The major advantage with preemptive checking and maintenance is substantial reduction of downtime.
 The typical biodiesel equipment that need regular checks, calibration or maintenance are pumps, reactors, heat exchangers, condensers, filters, boiler, cooling tower, compressor, vacuum system, automation instrumentation and calibration, scale (if used), pipelines, automated valves and actuators, check and manual valves, chiller (if used), and lab instrumentation and equipment. This is just a starting point; every aspect of the plant should be closely looked at and put on a maintenance schedule as needed.
 Pumps: A proper pump needs to be used for function. Mismatched pumps that are not fit for a specific application cause failure. Pumps are built robustly and rarely fail if operated correctly. Two critical items for a smooth pump operation are installation and operating within parameters. Pumps usually fail over a period of time, so closely monitoring the performance will enable identification of the problem before the actual failure.
 Heat exchangers: Heat exchangers (HEs) are the hardest working equipment, after pumps, in a biodiesel plant. Any drop in HE performance is apparent right away. HEs need to be monitored for any drop in their efficiency. There is not a lot to maintain, but monitoring performance (drop in heating efficiency or increased time to heat a specific liquid) will enable you to identify any impending issues and address them before the failure point.
 Reactors: The most overlooked items in a plant are the reactors. One of the main reasons to check reactors is for sediment. It&rsquo;s often not thought of, but consider your reactor holds 1,000 gallons; if you get 0.5 percent sediment, that&rsquo;s 5 gallons worth of sediment that, when heated, drops into the reactor. Now consider getting one bad load of feedstock with 2 percent moisture, insolubles and unsaponifiables that contains 1.5 percent sediment&mdash;you can do the math. Every few months reactors need to be checked for deposits, whether your process is continuous or batch. The only time increasing reactor check intervals is advised is if you have a preprocess that removes sediment.
 Filters: Whether for finished goods or for incoming feedstock, filters must be examined for any tears in the filter trapping mesh, if being used. Not addressing the issue will result in sediment seepage into end product.
 Regular maintenance: Air compressor, boiler/ancillary equipment, cooling tower, and chiller, regardless of size or model, require some form of periodic maintenance.
 Automation and Electrical: At a minimum, automation devices and instruments should be looked at periodically. A common failure point for automation instrumentation is not the actual instrument, but the wiring. Regular checks have to be performed to make sure wiring is intact and no process liquids are leaking onto the wiring; and instruments are not experiencing any stresses from mechanical equipment such as piping and reactors. Also, relief valves must be checked regularly to perform to specifications.
 Lab equipment: It&rsquo;s a good practice to clean the entire lab once a year of all the liquids, calibrate all the instrumentation outside of the regular requirements, and swap out the chemicals used for various standards.
 The goal of maintenance is to build confidence in the equipment and process&mdash;and peace of mind helps too. Author: Raj Mosali President, Jatrodiesel Inc. (937) 847-8050 <a href="mailto:rmosali@jatrodiesel.com">rmosali@jatrodiesel.com</a>

2011/11/13219123158467.jpg

Don't Overlook Plant Maintenance 

Neste Oil is done with renewable diesel, and that&rsquo;s not a bad thing. As the final component of a &euro;1.5 billion investment program, the company has completed the program with the startup of its four renewable diesel plants. The final plant, located in Rotterdam, Netherlands, has an initial capacity of 800,000 tons per year but will eventually increase to 2 million tons per year. The Rotterdam facility will be the largest renewable diesel refinery in the world, and the others&mdash;one in Singapore and two in Finland&mdash;aren&rsquo;t far behind. All of the plants are feedstock flexible, capable of using any vegetable or waste oil in the hydrotreating process.
 Matti Lievonen, Neste Oil&rsquo;s president and CEO, says the Rotterdam facility will help his company meet Europe&rsquo;s demand, &ldquo;the world&rsquo;s largest,&rdquo; for renewable diesel. The final plant has already put 150 people to work, the company says, and every gallon of fuel produced at the facility will reduce greenhouse gas emission by 40 to 80 percent compared to fossil fuels.
 With four renewable diesel plants up and running, there is no denying Neste Oil is the world leader, but there might even be something more impressive about Neste Oil than its global position in renewable diesel production. According to the company, &ldquo;The plant [in Rotterdam] was completed on-schedule and on-budget.&rdquo;
&mdash;Luke Geiver

WORLD LEADER: Neste Oilâ€™s recently completed renewable diesel plant in Rotterdam, sized at 800,000 tons per year, will eventually expand to 2 million tons per year. 

2011/11/13219136645054.jpg

Rotterdam refinery completed on-time and on-budget

Neste Oil's Most Impressive Feat Yet

For the fifth year in a row, the Biodiesel Quality Management Association (AGQM) has held its annual biodiesel conference. The 2011 event took place in Berlin and companies participating included Evonik Industries AG, Albermarle Catalyst BV, Shell Global Solutions GmbH and Volkswagen AG. Topics covered at the event included a presentation based on a comprehensive study that evaluated the contents of metals in exhaust aftertreatment systems. The study showed that the metals in the aftertreatment systems were &ldquo;comparatively low,&rdquo; according to AGQM, compared to the original source, engine oil.
 Also addressed at the conference were the negative impacts of export practices of both Argentina and Indonesia, which have hindered Spain's biodiesel industry, limiting its production to only 17 percent of capacity, according to AGQM.
 The major car manufacturer, PSA Peugeot Citroen, stated its support of the use of higher blends (B30), inferring that engines could handle such blends, and UFOP stated that it is currently investigating the expanded market potential for biodiesel-blended heating oil.
&mdash;Luke Geiver

Fifth annual conference takes place in Berlin

AGQM Biodiesel Event Completes Year 5 

For the past several years, residential oilheat customers in New York have been able to benefit through an innovative incentive that allowed them to claim a tax credit for using biodiesel-blended heating oil. The program, which allows Bioheat users a 1-cent-per-gallon credit for each percent of biodiesel blended with traditional heating oil they purchase, up to a B20 blend, was set to expire Jan. 1, but has been extended.
 On Oct. 14, New York Gov. Andrew Cuomo signed legislation into law extending the credit, formally known as the Refundable Clean Heating Fuel Tax Credit, for five years. The current law permits both corporate owners of residential developments and individual homeowners to claim the credit. Due to technical oversight, the bill that was presented to Cuomo failed to extend the provision of the law that extended the tax credit to individual homeowners. As a stipulation of his approval of the bill, Cuomo noted that both houses of the legislature have agreed to amend the bill to fix that technical oversight. In effect, the tax credit has been extended in its current form through 2017.
 According to Danny Falcone, regional wholesale manager of Ultra Green Energy Services, the tax incentive not only financially benefits Bioheat customers, but it also clearly benefits industry by helping to drive interest in and adoption of biodiesel-blended heating oil. In fact, Falcone notes that several of his wholesale customers have announced their intent to sell B20 at a discount this fall. For the past six months, Falcone says, biodiesel has actually been cheaper than petroleum-based diesel or heating oil. &ldquo;These suppliers are going to continue to offer standard heating oil because they have to give people a choice, but they are going to offer B20 at a discount,&rdquo; he says. Due to the current price levels, we can tell our retailers that they can purchase B20 at a lower price and sell it to their customers at a lower price than traditional oilheat, Falcone says. In addition, those retailers can tell their customers about their eligibility to claim the tax credit. Taken together, the reduced price and tax credit can significantly reduce the price consumers pay for fuel, encouraging more people to try Bioheat.
 The power this tax credit offers to consumers is particularly unique. Many other incentives, such as the federal biodiesel tax credit, actually benefit those in the middle of the supply chain, Falcone says. Those entities, such as blenders and wholesalers, bleed off a significant portion of the credit before it reaches the consumer level. &ldquo;This is a very exciting credit,&rdquo; Falcone says. &ldquo;It goes right to the consumers.&rdquo;
 While the benefits of the Bioheat tax credit are particularly pronounced right now with the relatively low price of biodiesel, it will be even more integral to the Bioheat market in the event the federal tax incentive for biodiesel expires or RIN prices are depressed. If the price of biodiesel increases in the future, this tax credit will help ensure Bioheat remains affordable.
 Falcone applauds the state of New York for extending the credit. Incentives are needed to help an immature market, like that of Bioheat, compete, he says. &ldquo;This incentive became vitally important to the biodiesel market in New York and still is today,&rdquo; adds Falcone. In addition, the credit helps encourage investment in biodiesel infrastructure by providing potential investors with added certainty.
&mdash;Erin Voegele

BIOHEAT STATE: New York Gov. Andrew Cuomo extended for five years New York Stateâ€™s tax credit that gives B20 Bioheat customers back 20 cents per gallon, which was set to expire on Jan. 1, 2012. 

2011/11/13219138734792.jpg

Every Penny Counts

Sometimes for small-scale biodiesel producers, the best way to expand or augment sales of their biodiesel is to align with major oil and gas companies. This is exactly what Promethean Biofuels Co-op Corp., a 1.2 MMgy multifeedstock facility located in Temecula, Calif., did when it was acquired by Canada-based oil and gas company Empire Oil Refineries Corp. As a result, Promethean became a wholly-owned subsidiary of EOR. According to EOR spokesman Rick Wilson, the company engaged Promethean six or eight months ago. &ldquo;We really liked the facility,&rdquo; he says.
 Promethean&rsquo;s 17,000-square-foot plant, which started up in February 2010, is located adjacent to a community recycling facility where it collects the majority of its waste vegetable oil feedstock for processing into biodiesel.
 While Promethean Biofuels also distributes its own biodiesel produced at the Temecula facility, as part of the acquisition, EOR intends to offer expertise on the sales side that could augment its customer base for capturing more of the market, Wilson says. &ldquo;We&rsquo;ll bring in our management team, not to run their business, but to look at the business that they&rsquo;re capturing and work more on sales-oriented ventures to get more product to refine,&rdquo; he says.
 EOR is relatively new to the renewable energy sector, having formed its Clean Fuels Division in September, which will initially focus on the development and funding of clean energy production, namely farm-based manure-to-electricity projects. Seeing growth in the biodiesel industry, Wilson adds EOR is looking at acquiring additional plants. &ldquo;We&rsquo;re really looking at expanding that side of the business big time,&rdquo; Wilson says. &ldquo;It&rsquo;s a huge future for us.&rdquo;
&mdash;Bryan Sims

Why one oil company sees profit in a California cooperative

Empirical Acquisition  

Last year, a newly appointed National Biodiesel Board committee began to meet relative to its goal of analyzing all possible constraints to the production, transportation and consumption of biodiesel in the U.S. to develop recommendations to the U.S. EPA regarding future renewable fuel standard (RFS2) volumetric compliance levels. The group would then advise the NBB on what recommendations it should make to EPA.
 The committee made its recommendation to the NBB this summer, outlining a sustained growth of the volume mandate over a five-year period that would start at 1.3 billion gallons in 2013 and increase by 300 million gallons per year. This would increase the volume requirement for biomass-based diesel to 2.5 billion gallons by 2017.
 Gene Gebolys, CEO of World Energy and chairman of this NBB working group, stresses that the volume mandates recommended by his committee are conservative by design. &ldquo;The group took a constrained approach to determining what these numbers should be,&rdquo; Gebolys tells Biodiesel Magazine. &ldquo;The objective was to determine volume levels that will allow for sustainable growth for the biodiesel industry without overreaching our ability to meet them. At our first meeting we talked about what we wanted to accomplish and what we wanted to avoid. We are very clear that we wanted to avoid creating periods of feast and famine in the industry. We didn&rsquo;t want to overreach, and we didn&rsquo;t want to be so cautious [as] to not allow for meaningful growth.&rdquo;
 Econometric modeling was used to help the committee determine what a sustainable path forward would be. According to Gebolys, the committee looked at issues spanning every component of production, from feedstock to processing, distribution and end use.
 Alan Weber, partner at Marc-IV Consulting and lead economic advisor to the committee, explains that conservative data was used to populate the model. For example, the committee only evaluated feedstocks that the EPA has approved pathways for. &ldquo;We also felt like we wanted to be very conservative as we looked into the future,&rdquo; he says. The group took a hard look at world gross domestic product growth and made a special effort not to minimize potential impacts of global policy. In addition, Weber notes that when the group looked at technology advances, it only accounted for those that have already been proven.
 &ldquo;There were those amongst us that would have liked to get to the 2.5 billion gallons faster, but at the end of the day the consensus of the group was that getting there in a more measured, methodical, and conservative way was the way to go,&rdquo; Gebolys says.&nbsp; He also notes that the NBB&rsquo;s recommendation for 2013 is almost identical to the 1.28 billion gallons the EPA has approved, showing the two groups have come to similar conclusions independently.
 In addition to encouraging the EPA to step up biomass-based diesel mandates in a sustainable fashion, the committee has also asked that the agency provide industry with nonbinding indications of where they anticipate volume mandates could be set over a five-year period. That outlook is meant to help the obligated parties, biodiesel producers, and distribution providers to become more efficient through additional market transparency.
 It is likely that the committee will continue its work on an annual basis. While its current numbers are conservative, Gebolys stresses that this doesn&rsquo;t mean the NBB can&rsquo;t modify its recommendations in the future. In fact, it may do so if future analysis indicates a faster rate of sustainable growth is possible.
&mdash;Erin Voegele

NBB recommends a moderate, steady approach to RFS2 volumes

Encouraging Sustainable Growth at 300 MMgy 

There are 15 to 20 commercial biodiesel facilities within 165 miles of the U.S./Canadian border, and, for the first time, those plants that want to use Canadian-based canola as a feedstock and generate renewable identification number (RIN) credits through RFS2 can do so. It took the U.S. EPA nearly seven months to review and decide that the feedstock from Canada qualifies for the RFS2, a review process that included aerial photography, agricultural land surveys and other methods to prove that the 123 million acres that will qualify for canola will not alter the growing patterns or agricultural practices already in place in Canada.
 The inclusion of canola might sound like a classic case of using what we already have to solve a problem&mdash;in this case feedstock acquisition&mdash;instead of searching for new answers, but the approval by the EPA might have many more implications. &ldquo;We are thrilled that we have this opportunity to increase our exports of canola into the U.S. for use in biodiesel production,&rdquo; says JoAnne Buth, president of the Canola Council of Canada.
&mdash;Luke Geiver

2011/11/13219142967305.jpg

The oilseed grown north of the U.S. border now qualifies for RFS2 	

EPA Opens Door for Canadian Canola 

The biodiesel industry is prepared to ramp up production volumes to fulfill the 1 billion gallon biomass-based diesel mandate in 2012 prescribed under RFS2, and once-dormant biodiesel plants, or those resuming construction on past projects, will contribute.
 The future of the idled Beatrice Biodiesel LLC will be revealed in November as the 50 MMgy facility in Beatrice, Neb., was scheduled for auction Nov. 29, according to Norm Husa, soybean farmer in nearby Barneston and former member of the Nebraska Soybean Board and United Soybean Board.&nbsp;
 The soybean oil-based facility broke ground for construction in 2007 and was scheduled to start up in 2008, but mounting financial pressures and rising soybean oil prices inevitably prompted the plant&rsquo;s parent companies U.S. Biofuels Inc. and Australian Ethanol Ltd. of Perth, Australia, to suspend construction, which led to the plant filing Chapter 7 bankruptcy in late 2008. The plant has been mothballed ever since.
 According to Husa, the plant features a rail loop for inbound and outbound product and a novel process technology developed by Axens North America. One drawback, however, is that the plant is without a co-located soybean crushing operation.
 &ldquo;In my book it was dead to begin with,&rdquo; Husa tells Biodiesel Magazine. &ldquo;If you can&rsquo;t start a biodiesel plant from the very beginning, your chances of being profitable are pretty slim. If somebody were to offer 10 percent on the dollar, it might be sold.&rdquo;
 The plant was about 98 percent complete, Husa says. If a buyer doesn&rsquo;t purchase the plant to restart, its components may be auctioned piecemeal by prospective purchasers, he says.
 Producers&rsquo; Choice Soy Energy LLC resumed construction of its 5 MMgy biodiesel plant and co-located soybean crushing facility in Moberly, Mo., partnering with South Roxanna, Ill.-based biodiesel producer Midwest Biofuels Products LLC to help complete the project. The project originally broke ground in 2008, but construction delays coupled with rising feedstock prices caused the company to indefinitely suspend completing the project.
 According to PCSE chairman Jim Beckley, plans are to double the installed production capacity from 5 MMgy to 10 MMgy and install frontend technology that&rsquo;s capable of processing multiple feedstocks. The plant and soybean crush facility are expected to begin production in December, according to Beckley.
 &ldquo;We&rsquo;re very optimistic that we&rsquo;re going to meet our goals,&rdquo; Beckley says. &ldquo;We&rsquo;re very fortunate that we had some great financial partners that have helped us develop this model and had patience to help us see this through.&rdquo;
&mdash;Bryan Sims

RESILIENT PLANS: After a long hiatus, Producers' Choice Soy Energy resumed construction on its plant and crush facility in Moberly, Mo. 

2011/11/13219144686165.jpg

Biodiesel plants re-emerge from tough economic times

Out from the Shadows

The Bioheat Northeast Workshop took place Oct. 11, and the group of panelists was a who&rsquo;s who in biodiesel-blended heating oil. A recurring theme throughout the one-day event was the battle between oilheat and natural gas. Despite natural gas being marketed as cleaner and domestic, it is still a fossil fuel&mdash;one that consists largely of highly potent greenhouse gases. John Huber, NORA president, said, &ldquo;It gets harder and harder to get hydrocarbons out of the ground. Methane is one of the world&rsquo;s worst greenhouse gases, but the natural gas industry ignores that.&rdquo; And despite all of the new natural gas Marcellus shale deposits recently found, that abundance of fossil fuel will be gone in 30 years. At a B12 level and higher mixed with ULSD, Bioheat can begin to outperform natural gas on all fronts, the speakers said. But to get there, a great body of work is underway (particularly at Penn State University, a study in year two) to determine what the legacy safe level is. Victor Turk with R.W. Beckett Corp. said a big driver in this study is the fact that up to 7 million oilheat furnaces exist in residential homes, and expecting those to be replaced to allow use of Bioheat blends greater than 5 percent is unrealistic. Removal of sulfur in addition to incorporating higher blends of biodiesel is a major part of becoming cleaner than natural gas. Tom Butcher from Brookhaven National Lab said 99 percent of the sulfur exits the flue as SO2, while 1 percent remains in the system as sulfuric acid and corrodes the heat exchangers. Carcinogenic particulate matter, sulfate particulates, is from sulfur as well. Removal of sulfur from heating oil plus zero-sulfur biodiesel will eliminate this issue. And after ASTM approves higher Bioheat blends, there is no guarantee the market will accept it. Therefore, leveraging the wealth of field experience as well as continued education and marketing&mdash;such as the huge New York City campaign Michael Devine with Earth Energy Alliance spoke of, which includes radio spots, bus wraps and much more identifying Bioheat as the Evolution of Oilheat&mdash;are critical components, and will be for years to come.
&mdash;Ron Kotrba

Bioheat event highlights oilheat vs. natural gas competition 

Ongoing Marketshare War 

It is common knowledge that the cellulosic biofuels industry has taken longer to ramp-up production than originally anticipated. This can be attributed to many factors, including the inability to secure financing during the global recession. To accommodate the realities of industry, the U.S. EPA is able to modify the original compliance volumes outlined in the legislation that established the renewable fuel standard (RFS2) for each year&rsquo;s compliance period. For example, the agency has proposed significantly reducing the 2012 cellulosic target to accurately reflect the current state of the industry.
 In October, the National Research Council released a report that claims the U.S. is likely unable to meet some mandates set under the RFS2, unless policies are changed or new innovative technologies are developed. Specifically, the report states that the biofuels industry is expected to produce enough conventional biofuels and biomass-based diesel to meet targets, but questions how the cellulosic mandate will be met.
 The report further addresses the impact of biofuels on greenhouse gas emissions. According to the report, feedstock production of dedicated energy crops will probably either require the conversion of uncultivated land to farm land or displace commodity crops and pastures. The authors of the report also touch on land use change, noting that the RFS2 program can neither prevent market-mediated efforts nor control land use or land cover changes in other countries.
 While the report did not show cellulosic biofuel production in a positive light, it did highlight several positive attributes of biodiesel. The National Biodiesel Board spoke out thanking the authors of the report for recognizing the wide variety of environmental and economic benefits that biodiesel achieves. For example, the study pointed out that soy biodiesel can have a positive impact on livestock feed prices by helping to hold costs down.
 The NBB has also pointed out that there are significant uncertainties associated with the hypothetical modeling used to calculate indirect land use change. According to Anne Steckel, vice president of federal affairs for the NBB, the EPA has determined through its own analysis that biodiesel reduces greenhouse gas emissions by 57 to 86 percent, depending on the feedstock used.
 &ldquo;We were pleased to see the authors reaffirm that biodiesel is an advanced biofuel that can meet the biomass-based diesel targets under the EPA's renewable fuel standard,&rdquo; Steckel said. &ldquo;In fact, biodiesel&mdash;as an advanced biofuel under RFS2&mdash;is also well-positioned to help fill the program's general volume requirement for advanced biofuels.&rdquo;
&mdash;Erin Voegele

2011/11/13219146744118.jpg

Biodiesel fares comparatively well in controversial RFS2 report

Better for Biodiesel

Quality is the name of the game for biodiesel producers, and Schroeder Industries recognizes this full well as the Leetsdale, Pa.-based lubricant purification specialist is offering a novel backend purification technology, called GlyceRx, that delivers several significant advantages for current dry wash finishing systems.
 GlyceRx is a custom-produced, synthetic absorption media with significant surface area, modified to ensure that a large concentration of reaction functional groups are present on the surfaces to attract water-soluble compounds such as glycerin, soaps and glycerides. The contaminants are held strongly in the matrix as the hydrophilic media are specifically designed to allow methyl esters to pass through. GlyceRx was specifically designed to meet ASTM and EN quality specifications, be easy to use and work equally well within a full range of feedstocks. In existing systems, product manager Ed Naugle says GlyceRx media can be housed in equipment once used for dry wash, including resin towers, other dry wash media tanks and activated carbon vessels. For typical applications, treatment costs are estimated at approximately 3 cents per gallon of biodiesel processed.
 Naugle says the media can absorb excess methanol, but he recommends methanol removal prior to the GlyceRx process to ensure the longest bed life possible.
 &ldquo;The lifespan of GlyceRx, like any other thing you using in biodiesel, depends on what you&rsquo;re putting through it,&rdquo; Naugle tells Biodiesel Magazine. &ldquo;We had a target number in mind where we thought we&rsquo;d be with efficiencies, and we pretty much hit it dead on, so we think we have a good product.&rdquo;
 In addition to its GlyceRx product offering, Schroeder Industries is offering the ICF and QCF diesel coalescing filters for diesel engines. Both the ICF and QCF are designed to remove water from diesel fuel that have been stored in bulk fuel tanks and for use in single-pass fuel-dispensing or multipass reservoir clean-up and continuous maintenance. Biodiesel acts as a surfactant when mixed with diesel that draws water, which can be problematic when stored in bulk fuel tanks mixed with ULSD diesel fuel because water can promote microbial growth in the tanks. Both of these issues can lead to plugged fuel filters that cause contamination to the entire fuel system in diesel engines.
 The ICF and QCF coalescing filters circumvent this issue by utilizing proprietary media that are able to remove approximately 98 percent of emulsified or finely dispersed water in a single-pass, according to Naugle. The QCF is also available in a skid version packaged with a separate, 3-micron particulate filter that helps protect the coalescing component. &ldquo;They can be used for diesel mixed with biodiesel too,&rdquo; he says.
&mdash;Bryan Sims

NEW OFFERINGS: Schroeder Industries now offers coalescing filters for diesel engines. 


December 2011

Business Briefs

Business Briefs

Business Briefs

Business Briefs

Columns

Federal Policy Holds Key to Significant Progress in 2012

Waking the Sleeping Giant

Controlled Spontaneous Reactor

Biomass 2012: International Growth and Domestic Obstacles

Patents in Transition

Depreciation Opportunities Sunset Dec. 31

There's the Beef

Policy Issue

The 5 Ps

Liability, Insurance Issues in Biofuel Transportation

Don't Overlook Plant Maintenance

Featured

Digging In

Industry Insight

Stover for Power—Not Just Biofuels

Honoring Sustainability

A Call for Statutory Clarity

The Good Side of Government

The Future of Biorefining Policy

Changing Hands Safely

A Safe Trajectory

An Education in Safety

Contributions

The Power of Collaboration

December 2011.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

Business Briefs

Business Briefs

Columns

Federal Policy Holds Key to Significant Progress in 2012

Waking the Sleeping Giant

Controlled Spontaneous Reactor

Biomass 2012: International Growth and Domestic Obstacles

Patents in Transition

Depreciation Opportunities Sunset Dec. 31

There's the Beef

Policy Issue

The 5 Ps

Liability, Insurance Issues in Biofuel Transportation

Don't Overlook Plant Maintenance

Featured

Digging In

Industry Insight

Stover for Power—Not Just Biofuels

Honoring Sustainability

A Call for Statutory Clarity

The Good Side of Government

The Future of Biorefining Policy

Changing Hands Safely

A Safe Trajectory

An Education in Safety

Contributions

The Power of Collaboration

December 2011