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|  | Willie Nelson to Participate in National Biodiesel Conference & Expo |  |
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 Musician and biodiesel advocate Willie Nelson will headline what promises to be the largest, most comprehensive event in the history of the biodiesel fuel industry: The 2006 National Biodiesel Conference & Expo, Feb. 5 – 8 in San Diego. With more people using biodiesel than ever before, the number of plants producing biodiesel doubling, and favorable legislation kick-starting the industry, the National Biodiesel Board (NBB) has made this ever-growing conference the single best source of biodiesel information.
This has been a landmark year for biodiesel, with production for 2005 expected to triple 2004 volumes. With sessions covering everything from fuel quality standards, legislation, and new marketing strategies, to trends in Bioheat and production forecasts of biodiesel, this will be the year to attend. Major attractions of the conference will include legendary entertainer Willie Nelson, partner in the company Willie Nelson’s Biodiesel, participating in a live Bill Mack trucking show broadcast on XM Radio during a general session. The conference will also serve as a launching pad for Biodiesel America, an engaging new book by Josh Tickell about the past and present biodiesel industry and its role in breaking America’s addiction to petroleum.
With six tracks - technical, markets, regulatory, fuel distribution, original equipment manufacturer (OEM) and user - and 40 sessions, attendees will have a rich variety of educational programs from which to choose. Some educational session examples are “Selling Americans on the Diesel Engine,” “Inside the Federal Biodiesel Tax Credit” and “Making Informed Biodiesel Purchasing Decisions.”
The conference will also feature a 125 exhibit trade show with the field’s latest products and services. Other events include valuable pre-conference training sessions, like a plant feasibility workshop, and networking and social events, including a golf tournament, Super Bowl reception and book launch party. A tentative schedule with more seminar details is at www.biodieselconference.org, and conference and pre-conference registration forms are available at www.biodieselconference.org/2006/conference/registration.asp.
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| | American Trucking Association Endorses B5 | |
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The American Trucking Associations’ (ATA) Board of Directors in October unanimously endorsed an energy resolution that includes promoting low blends of biodiesel as part of the organization’s efforts to help shape a strong national energy plan.
The resolution, sanctioned by the board members at ATA’s annual Management Conference and Exhibition in Boston, looks to increase the diesel fuel supply; improve the balance between environmental concerns and fuel efficiency; eliminate boutique diesel fuels; and “promote biodiesel use” of up to 5 percent (B5). The resolution says “biodiesel may be an effective means to extend the supply of diesel fuel.”
“ATA is proud to endorse the use of biodiesel in blends of up to 5 percent,” said Rich Moskowitz, ATA regulatory affairs counsel. “It fits in with our mission of ensuring an adequate diesel fuel supply – something important to the trucking industry. Promoting B5 is a step in the right direction.”
To see the ATA resolution, visit the ATA Web site at www.truckline.com.
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| | New Mexico, North Carolina Governors Employ Biodiesel | |
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In New Mexico recently, Governor Bill Richardson signed an executive order requiring cabinet-level state agencies, public schools, and institutions of higher education to meet 15 percent of their transportation fuel needs with ethanol or biodiesel by 2010. The order also requires those agencies and schools to buy alternative-fuel or hybrid vehicles for 75 percent of their vehicle purchases each year, and urges the rest of the state to follow suit.
In North Carolina, Governor Mike Easley signed a bill into law that will create a fund for state agencies to purchase alternative fuels, alternative fuel vehicles and infrastructure. The state currently earns credits through the Energy Policy Act of 1992 because of its purchases of B20 by its Department of Transportation. The new law allows the state to sell these credits, generating funds that will further increase the state's use of alternative fuels. It also extends to 2011 a 35 percent tax credit for renewable energy equipment.
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| | New Production for Arkansas, Missouri | |
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In October, Mid-America Biofuels, LLC, broke ground on the largest soy biodiesel plant in Missouri. The Mexico, Mo. plant, a partnership of Biofuels, LLC; Archer Daniels Midland (ADM); Ray-Carroll County Grain Growers, Inc.; MFA Oil Co.; and GROWMARK, Inc., will have an annual production capacity of 30 million gallons.
“Biodiesel demand is growing fast, and we believe Missouri is the right place to produce biodiesel and fill that demand,” said Warren Stemme, a Missouri farmer in St. Charles County and president of Mid-America Biofuels, LLC. “Additionally, we have an unbeatable team in place with each member providing resources and experience which is sure to make Mid-America Biofuels a huge success.” Stemme is also in the Missouri Soybean Association, as well as a director of the National Biodiesel Board.
The central Missouri majority farmer-owned plant includes nearly 400 farmers. Mid-America Biofuels plans to begin operating at full capacity within a year. There are currently 45 plants operating nationwide.
In neighboring Arkansas, Eastman Chemical has opened Arkansas Operations, located in Batesville. The company uses existing chemical manufacturing facilities for their biodiesel production, which began October 28. The facility uses soybean oil for its production of 3 million gallons annual capacity, with plans in place for waste vegetable oil as a potential future feedstock, and production expanded to 6 million gallons. Arkansas Operations, a manufacturing unit of Eastman Chemical Company, produces a variety of specialty organic chemicals and chemical intermediates used in detergents, pharmaceuticals and other applications.
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| | Washington Update: Renewable Fuels Standard | |
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 The U.S. EPA has begun its process of implementing the Renewable Fuels Standard (RFS) contained in the recently enacted federal Energy Bill. National Biodiesel Board (NBB) staff and contractors are monitoring the EPA’s rulemaking process and are in contact with agency staff to provide input on behalf of the industry.
Gene Gebolys, chairman of the NBB Regulatory Committee, in consultation with NBB Chief Executive Officer Joe Jobe and NBB Chairman Darryl Brinkmann, has appointed an industry ad hoc committee on this issue. The committee provides an industry coordination function to help identify issues and develop consensus positions relative to the implementation of the RFS. Members of the ad hoc committee are: (Chair) Jeff Nelson - Stepan Company; Kris Kappenman - ADM; Ron Heck - ASA; John Campbell - AGP; Mike Szady - Dow; Jim Conway - Griffin Industries and Fred Wellons - Baker Commodities. Scott Hughes, Alan Weber, and Mark Palmer are staffing the committee.
The committee has identified several issues for clarification by the EPA and are scheduled to meet with key decision makers at EPA in early November. Some of the identified issues include ensuring biodiesel’s applicability as a compliance option for refiners and terminal operators beginning January 1, 2006; and establishing an appropriate level of credit for biodiesel under the RFS’s credit trading program.
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| | TxLED, Mechanical Dye Injection Top Regulatory Update | |
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The National Biodiesel Board (NBB) is continuing to aggressively pursue its testing program on behalf of the industry to certify a 20 percent blend of biodiesel as Texas Low Emission Diesel program (TxLED) equivalent diesel fuel. The Texas Commission on Environmental Quality (TCEQ) has awarded three grants to the NBB to fund these tests in large part with significant additional financial resources being provided by the NBB.
The NBB’s test plan is to conduct the testing on behalf of the industry whereby a B20 blend utilizing biodiesel meeting ASTM D6751 specifications (regardless of feedstock) would be covered if the blend included one of the additive formulations approved by TCEQ. NBB is partnering with Octel-Starreon to test a B20 with one of their NOx reducing additives; a B20 blend utilizing a generic cetane improver (ethyl hexyl nitrate, aka EHN) which has shown to lower NOx through work done at NREL; and a B20 using a third additive which is yet to be selected.
Locating a reference diesel fuel that could be acceptable to both TCEQ and California Air Resources Board (CARB) has been difficult and has led to delays in starting the testing. (Note: NBB intends to work with CARB to utilize the results of this testing project for our ongoing CARB B20 testing project.) The potential reference fuel is scheduled to undergo required fuel analysis that will be reviewed by both TCEQ and CARB. Preliminary data has been sent to speed the approval process. Once we have approval of our reference diesel fuel, we can then move to the actual emissions testing. We have collaborated with Southwest Research Institute who will be conducting the testing. There will be a few days of pre-screens and then each additive formulation will take approximately one week to complete its tests.
IRS’ Transition Rules for Mechanical Dye Injection
The American Jobs Creation Act (JOBS Act) enacted in 2004 contained a provision that the tax exemption for dyed diesel fuel would not apply unless the fuel is dyed using a mechanical injection system. The IRS earlier this year published temporary and final regulations implementing this requirement. These regulations took effect October 24. Due to concerns that entities may not be able to comply with all requirements of the temporary regulations by October 24, the IRS has issued transition rules for blends up to B20.
We have reviewed the biodiesel related provisions and the following is our understanding. (Please note--the following is for informational purposes only and should not be construed as tax advice. Consult a tax professional for specific advice related to this subject.) A mixture of diesel fuel or kerosene and biodiesel will be treated as being dyed by mechanical injection if all the following requirements are met: the blend contains at least 80 percent diesel fuel (i.e. blends up to and including B20); the diesel fuel or kerosene in the blend was dyed by a mechanical injection system; the blend is created at a facility that is not a terminal; and the dye concentration of the finished blend meets the federal requirement when it is removed from the facility where it was made.
If the blend does not meet the concentration requirement, then the blender must ensure it meets the federal requirement when it is removed from the facility where the blend was made. It would appear that the blender can bring the dye concentration up to specification by manual dyeing in these circumstances. Please note the limitations on this transitional rule; in particular the requirement the diesel fuel component must have been dyed by mechanical injection. This means that a jobber cannot, for example, buy clear diesel fuel at a terminal (or elsewhere) and dye it manually.
The transition rule is silent on what mechanisms are allowable for use in adding dye to blends greater than B20 and up to the point at which the blend is no longer “diesel fuel” (i.e. the point at which the blend no longer contains 4 percent normal paraffin). B100 and blends containing less than 4 percent normal paraffin are considered “excluded liquids” by the IRS and do not require the addition of dye when used in tax exempt applications.
These transition rules are in effect until a date that is 180 days after IRS publishes final regulations in the Federal Register. The transition rules are contained in IRS Notice 05-80 (n-05-80). This Notice can be found on the IRS website at www.irs.gov/pub/irs-drop/n-05-80.pdf.
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| | First B20 Pump in Northeastern Indiana Opens for Business | |
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This week Indianans will have even more biodiesel availability and choice, with the opening of Northeastern Indiana’s first B20 station. Governor Mitch Daniels will help open the pump, selling a blend of 20 percent biodiesel and 80 percent diesel, November 3 in Fort Wayne. The governor will fuel his traveling office, RV1, at the Energy PLUS 24 pump owned and operated by AgPlus. Indiana Soybean Promotion Board Executive Director Chris Novak will also take the opportunity to kick-off the state’s growing number of school districts using a B20 blend of biodiesel in their buses. For a map of other public pumps selling biodiesel nationwide, please visit www.biodiesel.org/buyingbiodiesel/retailfuelingsites.
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| | Hurricane Relief: Farmers Helping Farmers | |
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The soybean checkoff, the major developer of the biodiesel industry, has partnered with several organizations to bring biodiesel to farmers in regions hit by Hurricanes Katrina and Rita. The soybean checkoff, along with West Central, biodiesel producer in Iowa and member of the National Biodiesel Board (NBB), and TransMontaigne, biodiesel distributor and NBB member, has provided those regional farmers with a 20 percent blend of soy biodiesel at a reduced cost to meet fuel needs and get farmers back in their fields. The checkoff also helped provide much needed animal feed, partnering with the Louisiana Cattlemen’s Association to provide cattlemen with a soy meal blend of feed for livestock at significantly reduced costs.
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| | Delta King Seed to Use Biodiesel in All Sales Trucks | |
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Delta King Seed, www.deltakingseed.com, has switched to biodiesel in the company’s fleet of six sales trucks, and has set up procedures for the sales representatives to routinely fuel with a blend of biodiesel. An extra fuel tank will be installed on each pickup to carry B100. These vehicles will join the fleet of Delta King delivery vehicles that has already been using biodiesel for four years.
“Our entire fleet of Lawhon Farm Services’ delivery trucks has been burning a soy biodiesel blend for years and we’ve had nothing but success with it from day one,” said Noal Lawhon, President and owner of Delta King. “It helps reduce our dependence on foreign petroleum, it’s better for the environment, and it adds to the demand for soybeans. With all that going for it, we figured it just made sense to get the sales guys using biodiesel,” said Lawhon, who also will drive a diesel truck powered by biodiesel.
Delta King Seed Company® is a family-owned seed business based in McCrory, Arkansas. It is one of the largest privately-owned soybean companies in the United States, offering Roundup Ready® seed.
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| | Environmental Award Given for Biodiesel Use in School Buses | |
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 The Environmental and Energy Study Institute (EESI) recognized six state and local initiatives for their leadership in deploying cleaner bus fleets. Three of these six received The National Clean Bus Leadership Recognition Program awards for their biodiesel use in school bus fleets, though the award extends to any type of bus fleet. The EESI views efforts to use cleaner technologies and fuels in buses as especially important for air quality and public health improvements, in the over 500,000 school bus or public transit fleets in the nation.
Medford Township Public School District, Medford, N.J., is recognized for pioneering fleet-wide use of biodiesel for the past eight years. The district operates 62 school buses on a B20 blend transporting 3,500 students daily. Through its use of biodiesel, the school district has displaced more than 70,000 gallons of petroleum diesel and significantly reduced toxic emissions. Joe Biluck, the district’s Director of Operations, received the National Biodiesel Board’s Inspiration award at the National Biodiesel Conference this year.
Cook-Illinois Corporation, Chicago, Ill., is recognized for demonstrating corporate environmental stewardship through the use of biodiesel in 500 of its buses. The decision to use biodiesel in its fleet was done in the absence of government grant funding or mandates.
Colorado Springs School Districts 11 and 12, Colorado Springs, Col., are recognized for their cooperative efforts to clean up their school bus fleets through the use of biodiesel and other methods reducing emissions and increasing efficiency. The districts have a partnership that helps them leverage resources and provide a model for other school districts.
Visit www.eesi.org/programs/CleanBus/Leadership/index.htm to learn more about these awards. The EESI is a non-profit organization dedicated to promoting environmentally sustainable societies.
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