In The Media - Bioeneering Biodiesel

Location: Blogs

Posted by: Community Fuels

8/5/2005

Local Bay Area entrepreneurs bet on biodiesel to reduce our dependence on foreign oil and clean the air.

Local Bay Area entrepreneurs bet on biodiesel to reduce our dependence on foreign oil and clean the air.

North Bay Biz

by Laura McHale Holland and May Boeve

http://www.northbaybiz.com/coverstory.html

On her first day of business this spring, Lisa Stanley turned the Percolation Station off of West Sierra Avenue onto La Plaza, inched left and rolled to a stop in the Dos Amigos parking lot in downtown Cotati. She opened the doors and windows of her mustard-yellow catering truck, hauled out some wrought-iron tables and chairs and set them up on the pavement. Then she set to work in her mini kitchen, glancing across the street between tasks. People meandered through the park. Traffic hummed along Old Redwood Highway. Commuters at the Cotati Hub stood waiting for buses to whisk them to work.

Like all new business owners, Stanley hoped that curiosity would draw customers to her and that the quality of the product - in her case, coffee and light breakfast and lunch fare - would draw them back. She also had a unique selling point: her truck's engine and generator are powered by biodiesel, an increasingly popular alternative to petroleum diesel fuel.

"You know how nauseating the smell coming from a regular diesel engine can be. I didn't want my fumes to be offensive to my customers or to the people in the park," Stanley says. "You can actually sit right next to my truck and not smell anything. You don't see the exhaust; you don't smell it; you can't taste it or feel it. It doesn't pollute the environment; it's just the right choice for everyone."

What is biodiesel?

A renewable, easy-on-the-air fuel, biodiesel is a substitute for petroleum diesel, not for gasoline. Deemed carbon-neutral because its feedstock (e.g., the raw material used in the industrial process) is replanted each year, it is recognized by the U.S. Department of Energy as the fastest growing alternative fuel in the U.S. The National Biodiesel Board projects that production in 2005 will reach 40 million gallons; in 1999, only 100,000 gallons were produced. Biodiesel is certified by the American Society of Testing and Materials (ASTM) and is the only alternative fuel to meet both Tier I and Tier II requirements of the federal 1990 Clean Air Act. It also meets clean diesel standards established by the California Air Resources Board (CARB).

Biodiesel is produced by chemically altering vegetable oil to replace its glycerin with methanol, resulting in lower viscosity and higher lubricity. While any type of vegetable oil can be used - even McDonald's leftover fryer oil - soybeans are the source for most of the biodiesel manufactured in the U.S. today.

Biodiesel can power any diesel engine in any type of vehicle - from farm equipment to commercial fleets, school buses to small passenger cars - no modifications necessary. There are a few caveats, of course. The fuel has to be properly manufactured, and if a car has previously run on petroleum diesel, the car's fuel filters need to be replaced a couple of times during the transition to biodiesel because biodiesel acts as a solvent, cleaning out petroleum diesel residue in the tank. (Pre-1992 vehicles also need to have their hoses, seals and o-rings replaced to accommodate the fuel's higher solvent properties.) Biodiesel can also be combined with regular diesel fuel in any proportion. A common mix of 20 percent biodiesel and 80 percent petroleum diesel, called B20, is already widely available in farm states in the Midwest. One-hundred percent biodiesel is called B100.

Biodiesel isn't a new-fangled fuel. The first diesel engine demonstrated by Rudolph Diesel at the World Exhibition in Paris ran on peanut oil.

Supply scrambles to meet the demand

Kumar Plocher, who founded Yokayo Biofuels in Ukiah three and a half years ago, supplies biodiesel to customers throughout Northern California, including the North Bay. One of his clients is San Francisco Petroleum in Santa Rosa, where Stanley pulls in regularly to fill her catering van's tank. Another Yokayo Biofuels customer is the Sonoma County Biodiesel Co-op (SoCo), a group of 50 members (half of them active) nurtured by New College of California. Yokayo makes weekly deliveries to their 500 gallon tank in Santa Rosa. SoCo members receive a key to the tank that is accessible to them at any time. They write checks for the amount of fuel they take. They also contribute both an initial fee and sweat equity. "That way," says founding member Chris Murphy, "we were able to do something without needing so much financial capital. I had the 500-gallon tank to contribute."

Most of Yokayo's supply is shipped in from the Midwest, where the lion's share of biodiesel manufacturing takes place. Plocher has found that increased demand for his product, which at $3.25 to $3.50 per gallon costs consumers about $1 per gallon more than regular diesel, does not mean increased profit for him, especially since the petroleum industry controls most biodiesel distribution. "We've seen petroleum prices continue to go up, and the wholesale price of biodiesel keeps going up too. It's been difficult to turn a profit," Plocher reflects. The reasons, Plocher believes, are threefold: the petroleum industry's desire to have biodiesel prices parallel the petroleum market, soybean farmers' ability to demand more money for their product since it has become feedstock for biodiesel and the fact that biodiesel production has not increased to match the demand.

As a result, Yokayo Biofuels has recently embarked on a venture to manufacture biofuel locally from recycled vegetable oil. Plocher has collected over 12,000 gallons of used vegetable oil from over 200 restaurants in the region and will begin manufacturing biodiesel in a matter of weeks. "There are so many things that are desirable about that from a community perspective," Plocher says. "It keeps it regional, so it's local economy in action. And it's obviously good for our company because we're not at the mercy of suppliers and their price fluctuations. And it's good for the industry because it's a new business model. Every production plant in the past has sold to middlemen, and we're turning it around straight from the plant to the end-user." It also provides restaurants free disposal of their leftover grease.

Lisa Mortensen, CEO of Community Fuels, concurs. The company, headquartered in Rohnert Park, is on the verge of signing a lease for a site in Richmond where it will set up a small-scale, portable biodiesel production prototype. The company is also looking for a second production site in Sonoma County, with plans to replicate these facilities in other California communities. Mortensen sees two key challenges for the fledgling industry: public education and fuel quality. "Most individuals aren't familiar with biodiesel's benefits, so education and promotion will be critical to the success of anyone in this business," she says. "Inconsistency in fuel quality has plagued the industry too, so we recommend that people only purchase commercially produced biodiesel that meets ASTM standards. Most negative stories about biodiesel can be tracked to a bad batch with either too much water or alcohol in the fuel, neither of which is good for your engine. Biodiesel is, in fact, better for the engine because it increases lubricity, which extends engine life."

Biodiesel's primary market

Another challenge is that there is not enough recycled grease or virgin oil currently produced to fully replace petroleum diesel. Thus, Mortensen feels it can be only one component in an overall energy policy that could also include ethanol- and electric-powered vehicles and gasoline and diesel hybrids. Given that, Mortensen doesn't plan on converting drivers of gasoline-powered vehicles to diesel vehicles. She is focused on fleets currently using petroleum diesel, especially school buses. "Children riding inside petroleum diesel school buses are exposed to as much as five times the level of toxic exhaust as people outside the bus. It's disturbing that our children are not in a safe environment going to and from school," she says. In contrast to petroleum diesel, burning B100 greatly reduces carbon dioxide emissions, completely eliminates sulfur dioxide and sulfate emissions related to acid rain, reduces carbon monoxide emissions by about half and reduces hydrocarbon emissions, which lead to localized smog formation, by 67 percent.

One North Bay town that has begun using B100 in some of its school buses is Windsor, just north of Santa Rosa. Residents also voted to raise their garbage disposal rates slightly so that their six disposal trucks and street sweeper can run on B100 fuel. They accomplished the conversion last October. "The chance to prevent health problems in our children and to have cleaner air convinced us," says Windsor's mayor Steve Allen. "We had some one-time costs to make it work in older vehicles, but that won't be repeated, and there's very little maintenance."

Matt Mullan, Windsor's town manager, says the switch has already reduced their gas emissions. "By converting to biodiesel, we've already achieved a 3 percent reduction in greenhouse gases. Our goal is 20 percent. The challenge for us is, of course, the price, and biodiesel is not as readily available as standard diesel. We are hoping that with our action, other cities will follow suit, and the fuel will become more readily available," he says.

Regulatory hurdles

As often happens with new markets, government regulation has not kept up with the pace of innovation in the private sector. California, for example, passed legislation requiring solid waste fleets to develop alternative energy vehicles, but vehicles using biodiesel are not certified under this regulation, despite the fact that the administering agency, CARB, affirmed that biodiesel meets its own clean diesel standards. This fact has frustrated forward-thinking city officials like Mullan. "We're very disappointed because we don't get any credit under this particular legislation for having reduced our emissions by running on B100," he says.

California's strict air quality regulations also make it difficult to purchase diesel-powered cars in this state because cars running on petroleum diesel have historically spewed more pollutants into the air than their gasoline-powered counterparts. But technology has been improving. Today's diesel engines can provide better fuel economy and offer more torque at lower rpm than their gasoline counterparts. Toyota is already developing a diesel car that meets the tough new anti-smog standards that are being phased in here through 2007 - running on standard diesel fuel. For now, however, individual Californians who want to jump on the biodiesel bandwagon have to be inventive.

Creative solutions

Dan Klepper, SoCo's acting treasurer, and his wife have two five-year-old, diesel-powered Volkswagen Beetle TDIs. They purchased one in Colorado, the other in Arizona. The cars get 40-plus miles to the gallon, and they have catalytic converters and particulate traps. "They burn very, very clean, even with regular diesel, and we have no trouble going back and forth from diesel to biodiesel," he says.

Fuel economy was just one reason why Klepper made the switch from his gasoline-powered Nissan Pathfinder. At the start of the Iraq war, he decided he wanted to do his part to reduce our country's dependence on petroleum. His research led him to many environmental fairs and conferences and a website called journeytoforever.org, which he dubs the best biodiesel site on the Web.

"Using biodiesel, you get to support American farmers instead of OPEC, so it reverses the balance of payments. We keep the money here. And it greatly reduces greenhouse gas emissions. Our cars have less emissions than gasoline hybrid cars," he notes.

Scientist Amory Lovins of the Rocky Mountain Institute is thinking along the same lines. In his book Winning the Oil End Game, he asserts that growing and refining biofuels to meet our needs, including biodiesel, would create 250,000 new agricultural jobs by 2025. And in May, President Bush visited the one-year-old Virginia Biodiesel Refinery and endorsed the fuel as a promising alternative fuel that could reverse our country's dependence on foreign oil.

Biodiesel vs. straight vegetable oil

Some alternative fuel advocates prefer to run their cars on straight vegetable oil, something a diesel engine has to be modified to use.

Because it contains triglycerides, SVO has to be heated to 150 to 180 degrees to reduce its viscosity before it can be used for fuel. An engine needs to be modified to heat the oil and requires another fuel tank to house it. Some people are learning to do this themselves in workshops led by SVO consultants like Santa Rosa-based Rusty Davis. Others find mechanics to do it for them. "You can buy kits to make conversions," says Mark Mulholland, shop foreman at Cazadero Supply in West Sonoma County. "We're also a hardware store, so we make our own kits and custom aluminum tanks. So far it's working out just fine for our customers. I'm going to convert my own truck to SVO soon, too."

Donovan Watt, owner of Watt Automotive in Santa Rosa, is more cautious about SVO conversions. "I've repaired engines that other people have converted, and it can get expensive. Cars and trucks are not made to deal with SVO. And even with biodiesel, once you put that in, you void the manufacturer's warranty. It's risky. I've seen failure in injector pumps from this, especially in Volkswagens and the Chevy diesel 6165s, and those pumps alone are $1,000 to $3,000," he says.

Klepper hasn't had any mechanical problems with his biodiesel cars. He likes the ease of biodiesel (just fill 'er up and go), though he does tinker with his fuel ratios a bit. During the summer, his cars run on B100, but his wintertime blend is B80 (20 percent petroleum diesel and 80 percent biodiesel) because biodiesel has a gel point of 27 to 32 degrees. "Adding 20 percent petroleum diesel brings the gel point down to about 7 degrees Fahrenheit, and it never gets that cold here," he says.

He has no interest in switching to straight vegetable oil. "People who are running on SVO are the folks who like to tinker with their cars. People running on biodiesel are the ones who like to just put the fuel in and drive," he observes.

"I'm also sticking with biodiesel because SVO throws off more particulate matter." The amount of particulate matter depends largely upon the quality of oil being used. SVO consisting of virgin olive oil, for example, will run cleaner than SVO comprised of recycled restaurant oil. The jokes about cars running on recycled fast food oil smelling like French fries as they drive by pertain to SVO, not biodiesel.

The dangers of moonshine biodiesel

Some biodiesel enthusiasts have even learned how to manufacture the fuel on a small scale in their own garages. This obviously cuts the cost, but Plocher cautions that this is fine for personal use but not a good idea for the entrepreneurial-minded: "Home production is similar to brewing beer at home. There's a low level of expertise needed and a fairly low level of danger. But if an individual decides they're going to expand to sell beer, then if something goes wrong in the fermentation process, you're looking at a serious danger. A Budweiser facility looks a lot different than a home brewer's set-up. You need regulations in place to control the dangers. The point of the analogy is to give a sense of scale. Add to that the fact that when you're making biodiesel, you're not just using benign things like water, grain and yeast. You're using methyl alcohol, sodium hydroxide and vegetable oil, and even though vegetable oil is perfectly safe, any fire district is going to heavily regulate storage of large amounts of vegetable oil because it is combustible. Methanol is extremely toxic and extremely flammable, and sodium hydroxide is a serious skin hazard; it's lye. When you make biodiesel, you're creating a chemical reaction that involves those ingredients. It involves heat and often involves pressure, so someone who doesn't know what they're doing could blow the place up. And even people who do know what they're doing make mistakes. Hence, the distinction between a biodiesel commercial plant and a home brewing plant. Home brewing on a small scale is great; it just can't be easily upscaled."

A rosy future

Despite sometimes costly mishaps, lack of governmental support and no real enforcement of ASTM standards for biodiesel fuel, enthusiasm for the fuel is high, and the prospects for the future look excellent. Business is already booming at San Francisco Petroleum. "We're getting calls from all over the Bay Area, and a lot of people are signing up; we get two or three applications a day from people who want to use our B20 and B100 pumps," says Doug Seams, the plant manager. Credit-worthy individuals get a type of credit card that allows them to fill up anytime, night or day, seven days a week. And since San Francisco Petroleum is part of the Pacific Pride network, their customers can use the cards at locations throughout the U.S. and Canada. Not all of these locations carry biodiesel - not yet, at least. But as gasoline prices and the political costs of our dependence on foreign oil continue to climb, biodiesel will become more attractive, and the number of stations offering biodiesel will rise. In fact, local biodiesel fans may soon have another spot for their fill-ups. Jim Dalton of Royal Petroleum, a longtime petroleum jobber based in Santa Rosa, says he intends to distribute the biodiesel produced by Community Fuels as soon as that company's prototype is up and running. "We'll have B100 and a blend with our regular diesel. And we hope to introduce biodiesel for construction, farming and industrial use. It's the right thing to do. We really believe, as a company, that we have to be progressive. We all live in this environment, and biodiesel is a better product, a safer product to use, and it can be generated here at home," he says.

As biodiesel use increases, better regulations will come to improve the fuel's consistency. And as for lack of feedstock to fill our fuel needs, promising research done by the University of Vermont shows how algae can be used to produce oil. Algae grows about 37 times faster than soy, and almost 40 percent of its weight is oil. It can also be grown in otherwise non-arable land. The University of Vermont's pilot project used land by the Salton Sea in Southern California. "They were able to use saltwater, waste methane from cows for running generators to run pumps to keep the water aerated, and they figured that in an area of about 11,000 square miles, that's just about 100 miles by 100 miles square, they could grow enough algae to produce enough oil to create enough biodiesel to run all our cars if they were converted to hybrid diesels," Klepper notes. "That's because if we were to transform our transportation base so that all vehicles are diesel vehicles and diesel hybrids, our total amount of fuel usage would go down just because they're 35 percent to 40 percent more efficient."

It's going to take some effort to get politicians such as Governor Schwarzenegger to see the biodiesel light. He's promoting the use of hydrogen vehicles now, but Klepper says it is impractical. "Hydrogen technology doesn't exist yet for practical purposes, and if all the cars in the U.S. were run on hydrogen, we'd have to quadruple our electrical generating capacity," says Klepper. "I see diesel hybrids as a complete solution. They are 35 to 40 percent more efficient than gas engines. Gas hybrids are getting about 51 miles per gallon right now; a diesel hybrid will probably get about 70."

In the meantime, Lisa Stanley's customers pull up to her Percolation Station in gasoline-powered cars, but they are pleased when they learn about her very green alternative fuel, a fuel that is available right now for use in any diesel engine. Who knows? Several years down the road, maybe Stanley's customers will all be stepping out of diesel hybrids to order their cup of joe in the morning.

by Laura McHale Holland and May Boeve

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