Oregon Trucking Associations April 12, 2007

Pacific Northwest Truck Museum

BioFuels and Their Impact on Oregon Transportation

Mark Fitz

Presentation Overview

• Introduction• A Short History of BioDiesel• Why BioDiesel• What is BioDiesel• Frequently Asked Questions• The BioDiesel Mandates• Resources for Fleets• Conclusion

• StarOilco has been in continuous business since 1936.– Since 1936 as a company we have sold wood, coal,

solar heat, petroleum, and biofuels.– In the late 1970’s and early 1980’s StarOilco

experimented with alcohol fuels and solar panels.– In 2001 StarOilco began to actively develop a biofuels

program seeking to deliver BioDiesel and Ethanol with the same convenience to customers as petroleum.

– No other company in Portland can claim as much experience and leadership with biofuels as StarOilco.

StarOilco and BioDiesel

Oregon’s Only Commercial Biodiesel

Production Facility

• Patent awarded to Rudolph Diesel in 1893.

• Debuted at the 1900 World’s Fair in Paris, France.

• Initially designed and shown as a vegetable oil (i.e. BioDiesel) powered engine.

A Brief History of BioDiesel

“The use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in the course of time as important as petroleum and the coal tar products of the present time.”

-- Rudolph Diesel, 1912

Rudolph Diesel’s Engine

• Pre-Diesel Transesterfication• Commercially used in soap production.

• 1893 Rudolph Diesel invents compression ignition engine to run on vegetable oil

• 1930’s use in South Africa as a commercial fuel– WWII used by Germans as a fuel stock extender.– East German agriculture continued to produce BioDiesel after the war.

• The EU instituted widespread use of BioDiesel in the 1990’s as part of the renewable fuels initiative.

• In the US a movement of small “home-brewers” and small commercial producers begins to develop primarily around waste vegetable oil.– These small producers built the initial awareness that created the industry.

• 1992 the Soy industry forms the National BioDiesel Board to coordinate research and development programs developing the American BioDiesel industry.

• 2005 The US creates a tax credit of $.99 a gallon for virgin oils and $.50 for reclaimed oils produced and sold as BioDiesel blended with diesel.

• 2005 Minnesota is the first state to require BioDiesel mandate of B2 blend for all on road use of diesel.

A Brief History of BioDiesel

• 1880’s Henry Ford incorporated ethanol for power into earlier designs.

• 1908 – Henry Ford incorporates adjustable carburetor into Model T specifically for rural ethanol.

• Henry Ford directly owned stakes in ethanol production to bolster his vehicle’s position in the agricultural belt of the US.

• Prohibition and low petroleum prices eliminated ethanol until the 1970’s.

A Similar History for Ethanol

• Sustainability/Cleaner Burning– Renewable energy with little impact to the environment.– Significant CO2 Reduction (nearly green house gas neutral).– Reduces harmful diesel emissions such as particulate, carbon

monoxide, and others.

• Economic Development– Supports value added channels for American agriculture.– Creates jobs particularly in high unemployment agriculturally

dependent communities.– Keeps money inside the United States growing our economy.

• Energy Independence– American Made, American Grown, American Consumed.– Reduces foreign oil dependence.– Spurs further investments in other renewable energy technologies.– Less money paid to oil producing nations who oppose our

interests.

Why BioDiesel?

Markets for Crude Oil

Crude Oil

~80 million

~6 million

~20 million

MM of Barrels consumed

GLOBALLY each day

MM of Barrels consumed in the

U.S. each day

MM of Barrels consumed in China

each day

Markets for Diesel and Gasoline

Diesel Gasoline

~57 billion

~110 billion

~2 million

~4 million

~720 million

~1.4 billion

Gallons consumed in U.S. in 2002

Gallons consumed in Oregon each

year

Gallons consumed in Oregon each

day$4

million$8

million

$$$ Out of the Oregon

economy each day

BioDiesel: A diesel fuel refined from plant and animal oils and adhering to ASTM D 6751 specification.

What is BioDiesel

3 MeOH

NaOHCatalyst

O =O O

O =O

O =

Triglyceride

1 triglyceride + 3 alcoholcatalyst

O O OMe Me Me

O = O =O =

HO

HO

HO

Glycerol Biodiesel(Methyl Ester Alcohol)

Courtesy Dr. Jeff Woldstad, Oregon State University

3 ester alcohol + 1 glycerin

Chemistry of BioDiesel

• What are the different numbers?– BioDiesel blend descriptions start with the

letter “B” accompanied by the percentage of BioDiesel in the bled.

• B99 – 99% BioDiesel • B20 – 20% BioDiesel 80% Petroleum ULSD• B5 – 5% BioDiesel 95% Petroleum ULSD• B2 – 2% BioDiesel 98% Petroleum ULSD

BioDiesel Blend I.D.

B20 Emissions

B99 Emissions

• Cleaning Effect of BioDiesel– Cleans out tanks and fueling systems.– A good thing as long as your drivers and maintenance schedule

are prepared.– Be prepared to swap out fuel filters with next oil change after start.

• Compatibility of Components– BioDiesel is a natural solvent which can degrade natural rubber

parts.– Vehicles newer than 1995 should be compatible with higher blends

of BioDiesel.– Not a concern in blends of B5 and below.

• Cold Weather Operation– Similarly with ULSD only higher gelling temperatures.– In blends of B5 and below treat exactly the same as ULSD

operation. – In higher blends consult your fuel supplier about the need for a

more aggressive additive regiment.

The 3 C’s of BioDiesel

• Higher Lubricity• Increased Cetane Rating• No Petrochemical Smell• Reduced Emissions• Renewably Made in Oregon • Stable Price• Supports Farmers/Domestic Economy• More Loads for Oregon Trucks

BioDiesel’s Positives

• Your drivers and mechanics are likely unfamiliar with it.

• It will clean out your systems in an unpredictable timeframe.

• The cost this summer may go up.

• The availability of supply this summer may be short.

BioDiesel’s Negatives

• What do I need to change?– B5 requires little consideration

• No change required other than routine maintenance considerations.

– B20• Be prepared. Unlikely, but potential that fuel system

parts might see failure or premature wear.• Schedule to change the fuel filter either before first

tank of BioDiesel or with next oil change.

– B99• Train your fleet in preparation of B99• Be prepared for fuel system parts that might fail.• Increase changing of the fuel filters in line with the

preventive maintenance schedule for your fleet.

BioDiesel F.A.Q.

• How much does BioDiesel cost?– Typically more today– Probably less tommorow– Most stable fuel available

• Retail prices have stayed within pennies in the Portland metro area for 20 months at roughly $3.00 a gallon PUC.

BioDiesel F.A.Q.

• What about the OEM’s and Warranty?– B5 and under is approved and has a long track

record of safe and consistent use.– B20 is approved with many newer engines and has

millions of miles of use in many mixed fleets.• All Portland garbage haulers since March 1st, 2007.

– B99 is currently case by case• Ask and you’ll be told maybe• Several B99 fleets currently served by SeQuential

BioDiesel:– Organically Grown Company– City of Portland Water Bureau– C-Tran– Neil Kelly and others

BioDiesel F.A.Q.

• Vehicle and engine warranties cover “Materials & Workmanship”

– The Manufacturer warrants their product only– The Manufacturer does not cover any fuel

• A Warranty CAN NOT be denied just because BioDiesel was used• Watch for the “Flat-Tire-Syndrome” associated with BioDiesel

Warranty – Why Maybe?

Flat tire huh….Golly!

Must be that new BioDiesel fuel.

BioDiesel F.A.Q.

• Oxidative Stability– The inside of the new engines is a hot place.– Stability of fuel left in engine over long periods of time

• Compatible Materials– Long term wear and tear on parts coming into contact

with BioDiesel.

• Specifying BioDiesel– Get product from a reputable company willing to

speak with your OEM about fuel quality.– Ensure you are getting quality, consistent, fresh

ASTM BioDiesel

The OEM’s Worries

• State of Minnesota– B2 since 2006

• State of Washington– Volumetric, 2% usage Statewide passed in 2006

• State of Oregon (in session)– B2 expected this session

• City of Portland– Renewable Fuel Standard passed in 2006– B5 starting July 1, 2007

• United States (proposed)– B2 jointly proposed by the National BioDiesel Board and

the American Trucking Association to supersede all boutique BioDiesel mandates.

BioDiesel Mandates

• Business Energy Tax Credit (BETC)– Justin Klure, Oregon Dept. of Energy

• City of Portland Biofuel Grants– Michele Crim, City of Portland Office of

Sustainable Development

Financial Programs

Business Energy Tax Credit

Business Energy Tax Credit• 35% Tax Credit Available• Must be Pre-Approved• Pass-Through option allows you to sell the tax credit for 25.5% of value• Business Energy Tax Credit to those who invest in energy conservation, recycling, renewable energy resources and less-polluting transportation fuels.•Justin Klure at the Oregon Department of Energy at 503-373-1581 or at justin.klure@state.or.us

Retail and Fleet Biofuels Infrastructure Grant• Up to $10,000 per project available• Awarded on a first come first served basis• Requires application and award • Can be taken in conjunction with BETC• Limited funds still available• Contact Michele Crim with the City of Portland Office

of Sustainable Development at 503-823-5311

Portland Biofuels Grants

B5 and lower blends of BioDiesel should not alter your fleets operation at all.

Conclusion

• National BioDiesel Board– www.BioDiesel.org

• US DOE Alternative Fuels Data Center– BioDiesel Information Page

• www.eere.energy.gov/afdc/afc/bio_vehicles.html– BioDiesel Document List

• www.eere.energy.gov/afdc/progs/dsearch3.cg?BIOD– 2006 BioDiesel Use and Handling Manual

• www.eere.energy.gov/afdc/progs/vwbs2.cgi?9521

• Oregon Department of Energy (Justin Klure 503-378-4040)– www.oregon.gov/ENERGY/index.shtml

• Business Energy Tax Credit– www.oregon.gov/ENERGY/CONS/BUS/BETC.shtml

• Alternative Transportation Fuels page– www.oregon.gov/ENERGY/TRANS/altfuels.shtml

• City of Portland (Michele Crim 503-823-7222)– www.Portlandonline.com

• Office of Sustainable Development’s Biofuels Grant Programs– www.portlandonline.com/osd/index.cfm?c=43793&

• SeQuential Biofuels (Gavin Carpenter 503-978-3210)– www.SQBiofuels.com

• Frequently Asked Questions– www.SQBiofuels.com/faq.htm

• StarOilco (Mark Fitz 503-283-1256)– www.StarOilco.com

BioDiesel Resources