Biofuels: North Carolina’s Growing Opportunity

Bob Leker

NC Budget Association

7/13/06

State Energy Office Advancing energy efficiency in industrial,

utility, transportation, government, and residential sectors.

Developing the state’s abundant renewable energy resources.

Accelerating use of alternative fuels and vehicles.

Responding to energy emergencies.

World Oil – In PerspectiveYou

YourChildren

YourGrand

Children

YourGrand

Parents

US Petroleum Production vs. Imports

New Oil?

Where The Oil Is

Katrina and Rita

29% of Refinery Capacity Brought Down 66% of Gulf oil production shut-in 54% of Gulf natural gas production out 16 Natural Gas processing plants down Impacts spilled over to national economy NC vulnerable: reliant on two pipelines

with little storage

Ozone Nonattainment Areas

Sea Level Rise –Climate Change

Ben Poulter, D

uke University; Sam

Pearsall, The Nature

Conservancy

Alternative Fuels in NC

Ethanol: 5,400 state vehicles/E-85 E-10 useable by anyone/MTBE Ban spurs

use Biodiesel: Soybean/Canola or Waste Oil 20% biodiesel blend can be used by

everyone State must cut petroleum use by 20% by

2010

Biofuels Potential

Ethanol Production Capacity

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Ethanol Production Capacity Capacity Under Construction

Renewable Fuels Association Industry Statistics http://www.ethanolrfa.org

Capacity under construction

equals 33% of existing capacity

Biodiesel

NC uses more than 1 billion gallons of diesel fuel annually

5% blend of biodiesel = 29 million bushels of soybeans

1 million acres soybeans»or 300,000 acres of rapeseed»or a combination of; waste vegetable oil, rendered

animal fats, and refined vegetable oil

NC BioethanolSwitchgrass (SG) example:

$270-540/acre/year product revenue Ethanol yield/ton of SG= 100-180 gallons Average 1120 gal/acre

(8tns/acre@140gal/tn) 40 million gal refinery (needs 40,000 acres)

»33 jobs averaging $36,000/year Corn would require 4X the acreage!!!

NC Tax Credits

35% for Renewable Energy Applications Up to $2.5 million/application for

industrial and commercial projects Up to $10,500 for consumers Can be stacked on federal credits 25% credit for alt. fuel manufacturing

plants 15% credit for alt. fuel infrastructure

Future Vision for North Carolina

Site biodiesel and ethanol plants in the state using soybeans and corn

Develop alternative crops: canola and barley Site cellulose-to-ethanol pilot plant in North

Carolina using NC biomass crops Research the use of algae for biodiesel

production Expand access by public to biodiesel/ethanol Expand biofuel/ethanol use by fleets

NC Legislation – S2051 “Energy Independence in NC”

Achieve a 20% reduction in petroleum product usage by state agencies by 2010

Individual tax credits for alt fuel or hybrid vehicles - $500

Develop a Biofuels strategic plan for NC by Feb 2007

North Carolina Innovators

Motor Fleet Management Department of Transportation Clean Cities Coalitions Local Governments & other biofuels

users Service Stations

Biodiesel Billboards A $19,000 grant from the NC Soybean Producers Association provides funds for billboards across NC to inform drivers about soy biodiesel.

The NC Outdoor Advertising Association is providing an in-kind contribution of $37,500 by donating space for billboard postings.

Over 40 billboards from Wilmington to WNC

Motor Fleet Management- Biofuels Plans

Motor Fleet Management: the “ rental car’ agency for the State

MFM has ordered 877 E85 capable FFV for 2006, bringing FFV fleet total over 5,400 out of 8,400 (2/3) passenger vehicles

Plans to expand E85 availability by serving as an ‘anchor fleet’ concentrating FFVs in locations across the state to encourage more service stations to offer E10 & E85

Supports current E85 availability through http://www.ncmotorfleet.com/

NC Department of Administration

• Motor Fleet Management used

242,000 gallons of E85 in 2005 from 2 E85 stations

in Raleigh,

•Initiated a state purchasing contract for

E10 that is available now is ALL 100 counties,

•over 530,000 gallons of E10 used in 2005

E10 can operate in ANY gasoline engine, E85 requires a FFV

NC Department of Transportation

•Used 2 M gallons of B20 in 22 locations in 2005

•Sponsored studies at NC State on B20 & diesel emissions on-road and off road vehicles and equipment

• funding for 3 year $1.6 Clean Fuel Advanced Technology grant project in 23 NC counties for biofuel pumps & Tanks

NC Dept. of Transportation

DOT plans to expand B20 to over 100 fuel sites by 2010

Who Uses Biodiesel in NC?NC-Department of Transportation (DOT)Camp Lejuene Marine Corps BaseRDU International AirportThe NC ZooDehaven’s Transfer and StoragePitt County Memorial HospitalChatham and Durham Public SchoolsUNC-CH, Duke, and NC State UniversitiesTowns of Chapel Hill, Carrboro, Cary, and GarnerCities of Greensboro, Wilmington, Monroe, and Raleigh Guilford, Forsyth, and Wake Counties

Retail Stations ( B20) Durham

Shelby

Asheville ( B99)

Statesville

Salisbury

Charlotte

Retail Stations- Ethanol

E10 - 23 Crown Stations in

Raleigh ( United Energy ) E10- 12 Hotspot gas stations. Most are

in Asheville Area/WNC

E10 & E85 in Shelby, Charlotte

and Statesville (Thomas

Petroleum)

Contact Ray Thomas : 800-262-

5453

Homer’s Truck Stop- Statesville

North Carolina’s 1st truck stop with B20, E85, and E10

Has 6 B20 pumps, 6 diesel pumps

Statesville NC ( Exit 146 on I- 40)

Clean Cities Coalitions

US DOE initiative to build public/private partnerships to accelerate the use of alternative fuels, idle reduction technologies and conservation

Developed in response to 1992 Energy Policy Act 88 US coalitions ; 3 in NC :

Triangle & Charlotte officially designated; Asheville working on it

Biodiesel Success Story: Gaston County Schools

Currently producing B100 from GSC’s waste grease & used cooking oil

Making 175 gallons at a time- produced 8,000 gallons so far using existing labor. Estimating $30,000 savings at current diesel prices

Within 3 months plan on producing 800-1000 gal batches expanding biodiesel production to 60,000 gals with ultimate goal of 250,000 annually

Grady Truett- GCS Transportation Director 704-866-6118

NC Zoo - Asheboro Produces its own biodiesel from

used vegetable oil from the Zoo's five restaurants.

estimates that the fuel produced will provide about 40% of its biodiesel need.

Once the processor is working well, the Zoo will seek other sources of used vegetable oil in order to meet all of its biodiesel need and move toward using B100 instead of B20.

NC Biodiesel: varying markets and production plans

Developing markets: Low blends B2-B5 ~ farmers ( NC Soybean Assoc/Grain Growers

Coop) B20 ~ state local govt, schools, private fleets, retail pumps (Clean

Cities, SEO) B100 ~ co-ops, biodiesel enthusiasts ( Piedmont Biofuels, Blue

Ridge Biofuels)

What’s next: Untapped market - home heating oil Expanded distribution points- currently only 2 major suppliers,

limited bulk storage Expanded awareness and access- more stations selling B20 &

more fleets and individuals to support them In state biodiesel production

Stay informed! Follow NC Clean Transportation news at

http://www.ncsc.ncsu.edu/resources_by_sector/clean_transportation.cfm

Subscribe to free Biodiesel Bulletin and become a Biodiesel Backer at www.biodiesel.org

Subscribe to free National Ethanol Vehicle Coalition FYI newsletter at http://www.e85fuel.com/indes.html

For More Information

State Energy Office1830A Tillery PlaceRaleigh, NC 27604919-733-2230800-662-7131 (NC only)Website - www.energync.netBob.Leker@ncmail.net

Contributors/Acknowledgements

Rocky Mountain Institute Florida Solar Energy Center NC Solar Center at NC State University U.S. DOE NC A&T’s Center for Energy Research

and Technology ASU Energy Center