With the individual tax rate increases starting in 2013, now is a good time to take advantage of the many deductions and credits available. In addition to the tax rate increases in the American Taxpayer Relief Act of 2012 (ATRA) there are also two new taxes arising out of the 2010 health care reform legislation known as the Patients Protection and Affordable Care Act (ACA) that also become effective in 2013.

ATRA Tax Rate Increases

A 39.6 percent tax rate will now apply to individuals with income over $400,000 for single taxpayers or $450,000 for married couples. The top rate on capital gains and qualified dividends was kept at 15 percent for taxpayers with income below the $400,000/$450,000 levels, but for taxpayers with income above those levels the rate on capital gains and qualified dividends will be 20 percent.

New Medicare Taxes

Under the ACA there are two new Medicare taxes starting in 2013. The first one is a 0.9 percent increase to the current Medicare tax on wages and self-employment income from 1.45 percent to 2.35 percent on earned income above $200,000 for single taxpayers or $250,000 for married couples.

The other new Medicare tax is the 3.8 percent surtax on net investment Income (NII). This tax applies to the lesser of the taxpayer’s net investment income or adjusted gross income over $200,000 for single taxpayers or $250,000 for married couples. A taxpayer must have both NII and gross income over the applicable thresholds in order to be subject to the 3.8 percent surtax. NII is defined as investment income less otherwise allowable deductions properly allocable to such income. Under the proposed reliance regulations issued by the IRS, NII can come from one of following three categories:

• Gross income from interest, dividends, annuities, rents and royalties (other than such income derived in the ordinary course of an active trade or business).
• Gross income from any passive trade or business or business in the trading of financial instruments or commodities.
• Net gains attributable to the disposition of property (other than property held in an active trade or business).

The inclusion of passive activities in the definition of NII represents a huge shift in traditional tax planning. More emphasis will be placed on treating profitable activities as active instead of passive to avoid the 3.8 percent surtax. However, it is important to watch that passive losses do not go unused and be aware that net income from an active trade or business may be subject to self-employment tax.

Taxpayers should review their current structure to see if any passive activities can be grouped with non-passive activities to avoid passive income. The proposed regulations allow taxpayers a “fresh start” regrouping election to replace any previous grouping election.

When the new top rate of 39.6 percent is combined with the new surtax, taxpayers whose income is above the applicable thresholds will see ordinary rates go from 35 percent to 43.4 percent (39.6 percent plus 3.8 percent). Likewise, the tax on capital gains and qualified dividends will go from 15 percent to 23.8 percent (20 percent plus 3.8 percent).

Expensing Provisions

The $500,000 section 179 expensing provision was also extended by ATRA through 2013. The deduction begins to phase out when total qualified purchases for the year exceed $2 million.

The 50 percent bonus depreciation was also extended for 2013. Under the bonus depreciation provisions the original use of the property must begin with the taxpayer, therefore used equipment will not qualify. Qualified property must also have a recovery period of 20 years or less. The IRS clarified that unlike regular tax depreciation, bonus depreciation is not required to be allocated to long-term contracts for those contractors that use the percentage of completion method of accounting. This provision allows contractors to benefit from bonus depreciation even when a contract is not completed in the same year in which it began.

Domestic Production Activities Deduction

The Domestic Production Activities Deduction (DPAD) continues to be a popular deduction for the construction industry. The DPAD generally is equal to 9 percent of the lesser of the taxpayer’s “qualified” production activities for the year or taxable income (adjusted gross income for individual taxpayers).

In order to qualify for the deduction, taxpayers must have Domestic Production Gross Receipts (DPGR). The definition of DPGR is broad, but includes gross receipts from the lease, rental, license, sale, exchange or other disposition from a broad list of activities, including construction or substantial renovation of real property in the United States, including residential and commercial buildings and infrastructure such as roads, power lines, water systems and communication facilities. Revenue from civil engineering and architectural services performed in the United States for U.S. construction projects also qualify as DPGR.

179D Deduction

This deduction is often overlooked but could be beneficial for subcontractors who are involved in the design of energy efficient government-owned commercial buildings.

The deduction could be as high as $1.80 per square foot. Generally the owner of a commercial building would get the deduction but if the building is owned by a federal, state, or local government, such as a school or municipal building the IRS allows the deduction to be allocated to the person primarily responsible for creating the technical specifications of the building. This would include, for example, an architect, engineer, contractor, environmental consultant or energy services provider. The governmental entity is also allowed to allocate the deduction among firms if there is more than one designer.

Other Beneficial Provisions

Many provisions that were set to expire at the end of 2011 or 2012 were extended under ATRA through 2013, including but not limited to the following.

• 15-year, straight-line cost recovery for qualified leasehold improvements — for qualified restaurant property and qualified retail improvement property. (This type of property also qualifies for section 179 expensing up to $250,000 and the 50 percent bonus depreciation).
• Work Opportunity tax credit (WOTC) — for hiring persons who fall into one of the designated target groups, including qualified veterans.
• Empowerment Zone credit — for contractors hiring individuals who live and work within an empowerment zone.
• Research and Experimentation credit (R&E) — for design-build, fabrication, architectural, and engineering projects or activities.
• Railroad Track Maintenance credit — for taxpayers that provide railroad-related services to the railroad, including railroad track construction.
• Energy efficient new homes credit — for contractors that cut energy use for heating and cooling in constructed homes by 50 percent compared to the 2006 International Energy Conservation Code (IECC).
• Credit for alternative fuel vehicle refueling property — for the development and installation of the infrastructure needed to deliver alternative fuels to cleanfuel vehicles.
• Credit for biodiesel and renewable diesel used as fuel — for taxpayers that use biodiesel and renewable diesel as a fuel in a trade or business.

Tax planning is increasingly important for 2013. Subcontractors should review their current structures with their tax advisors and project their income for the year to see if they will be affected by the rate increases. Also, subcontractors should check that they are claiming all applicable deductions and credits to minimize their tax liabilities.

Cord D. Armstrong, CPA, CCIFP, is a managing director in the tax department of CBIZ & Mayer Hoffman McCann, PC, Phoenix, Ariz., where he is responsible for the supervision of staff in various tax compliance and research matters for both individuals and corporate entities. He has more than 20 years of experience in public accounting and is a member of the company’s National Architectural, Engineering, and Construction Practice Group. He can be reached at (604) 264-6835, Ext. 6274, or carmstrong@cbiz.com.

Giant meat company Tyson Foods has partnered in a new project to process its waste animal fat (left) into a renewable diesel fuel that has logistical advantages over biodiesel from soybeans.

by National Geographic:

The world’s largest meat company thinks the answer may have been congealing in its facilities all along: Animal fat.

Food-processing giant Tyson Foods, in partnership with the synthetic fuels research firm Syntroleum Corporation, has opened a plant in Geismar, Louisiana (map), that is testing the prospects for converting low-grade, inedible fats and greases into a renewable diesel fuel for transportation.

The partnership, called Dynamic Fuels, opened its plant in October and is already producing 105,000 gallons (397,000 liters) a day and says it has capacity to produce up to 75 million gallons (284 million liters) per year.

Dynamic Fuels aims to make a fuel quite different from the typical biodiesel alternative currently processed from soybeans. Soybean-based biodiesel has remained costly and is controversial in food security circles. And federal regulations prohibit its transport through most existing pipelines for fear it will mix with jet fuel. (Biofuel has been thought to degrade jet fuel, although industry studies now dispute that.)

To make biodiesel, fats in the vegetable oil are reacted with a form of alcohol—usually methanol—to form the biodiesel molecule. For renewable diesel made from animal fat, fats are hydrogenated by reacting the tallow with hydrogen under high pressure at high temperature. The result is a molecule that’s basically a pure—but synthetic—hydrocarbon, which means it’s chemically identical to regular diesel.

Renewable diesel can be blended with petroleum-based diesel or biodiesel. And, according to Syntroleum, it has a dramatically longer shelf life than biodiesel, measured in years rather than months.

National Geographic

I wonder if supermarkets can tap into this market since they already throw away unsold meats.

Energy is becoming expensive and private companies are looking for ways to cut costs. Looks like shareholders might be a new face for the green movement.

One of my Top 10 Energy Stories of 2009 involved the actions taken by the EU against U.S. biodiesel producers. U.S. tax dollars had been generously subsidizing biodiesel that was being exported out of the U.S. European producers couldn’t compete against the subsidized imports, so the EU effectively cut off the imports by imposing five-year tariffs on U.S. biodiesel.

This was a big blow to U.S. biodiesel producers, and was one of the factors leading to a disastrous 2009 for U.S. biodiesel production. How disastrous was 2009? Per the National Biodiesel Board (NBB), here are the statistics from the past 6 years of biodiesel production:

2004: 25 million gallons

2005: 75 million gallons

2006: 250 million gallons

2007: 450 million gallons

2008: 700 million gallons

2009: 300-350 million gallons (estimate)

The NBB also reports that domestic biodiesel capacity is now operating at only 15%. There have been a number of stories in the past few days covering these developments:

Bad start to 2010 after ‘rough year’ for entire biofuel industry

A federal tax credit that provided makers of biodiesel $1 for every gallon expired Friday. As a result, some U.S. producers say they will shut down without the government subsidy.

A one-year extension of the biodiesel tax credit was included in a bill that was approved by the U.S. House recently, but it never made it through the Senate.

Politics and Energy Policy

I have often complained about the chaos that political leaders cause with inconsistency on energy policy. I will get into the wisdom of this biodiesel tax credit in a moment, but government policy makers need to send clear, long-term signals so energy producers can plan. This has long been a problem for planning energy projects. Wind and solar developers have lived with this uncertainty for years. It seemed like at the end of every year, there was a tax credit that may or may not be extended. The uncertainty often froze project developers, and created unnecessary delays.

The same has long been true in the oil and gas industry. One of the reasons that it has been difficult to get a gas pipeline built in Alaska was government refusal to commit to long-term tax rates. Imagine that you are contemplating spending $26 billion on a gas pipeline, but the government can’t tell you what your tax rate is going to be. If my state income tax doubles, I can move to another state. But it isn’t like you can pick that pipeline up and move it, so it is important that you know that the government can’t double the tax rate in the event of a budget shortfall.

A different kind of government interference – a tendency to attempt to pick technology winners – resulted in cancellation of what I believe was a promising 2nd generation renewable diesel process. I documented the saga in several posts, but the gist was that because an oil company was involved – my former employer ConocoPhillips – Congress voted to specifically deny the biodiesel tax credit for a process that was both more efficient and more cost-effective than conventional biodiesel production.

By killing the credit, COP was placed at a $42/bbl disadvantage relative to biodiesel producers who received the credit, and thus COP decided to cancel the project. I documented that sorry saga here. I also explained the differences between ‘green diesel’ and biodiesel here.

Where to Now?

So where to go from here? We now have a classic dilemma created by the government. Through government fiat, an industry was created. Investments were made and infrastructure was put in place. The problem is that the particular industry that sprang up had little hope of ever really competing without the subsidy. The reasons are alluded to in the link above:

“By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit,” Francis said. “We won’t be producing any without the tax credit.”

I have long believed that there is no future for 1st generation biodiesel. I wrote in an August 2007 essay: “I have said it before, and I reiterate: Biodiesel’s days are numbered.” Note that the year after I wrote that the U.S. biodiesel industry had their best year ever. But the handwriting was on the wall for very fundamental reasons, and the prediction I made in 2007 is playing out now.

There are multiple problems that will make it difficult for biodiesel to ever compete without subsidies. In a nutshell the key problem is that the feedstock costs are linked to fossil fuel prices. The feedstock is generally a vegetable oil and methanol – an alcohol typically produced from natural gas. A second big problem is that biodiesel is an inferior fuel to hydrocarbon diesel (especially in cold weather). Further, the by-product of the biodiesel process is glycerin, which has limited value (especially at the volumes produced when biodiesel production is ramped up).

But this story is worse than simply a fuel that can’t compete. As evidenced by the opposition of the NBB to the extension of the tax credit for COP’s 2nd generation process, 1st generation biodiesel isn’t even a bridge to 2nd generation biodiesel – it is a barrier. Not only is biodiesel chemically different, but 1st generation producers have pulled out the stops to protect themselves against 2nd generation competition. So now we have a 1st generation industry that was already in trouble even with the subsidies that it was receiving, and a 2nd generation industry that could have been much further along were it not for 1st generation interference (which was aided by Congress).

If instead of picking technology winners, Congress had simply raised fossil fuel taxes, we wouldn’t be in this dilemma. With the high level of embedded fossil fuels, biodiesel would have been unable to compete and an industry with no future would not have been created by the government. Green diesel, on the other hand, would start to look a lot better because of the lower level of fossil fuel inputs (particularly for gasification), and we might find plants starting up to produce green diesel from both hydrocracking vegetable oils (the COP process I described) and gasification of biomass (e.g., the Choren process).

What I expect to happen is that Congress will eventually extend the credit, and it will be applied retroactively. But there are no guarantees, so producers are once again left with uncertainty. What should happen – in my opinion – is announcement of a phaseout schedule. I wouldn’t simply eliminate the tax credit cold turkey. That would be a blow to producers who invested on good faith that government support would be continued. But they also need to receive a message that this tax credit will be phased out over the next 3-5 years. At that point, prospective investors will be fairly warned that projects whose economics hinge on continued government subsidies are to be avoided.

This, by the way, is the sort of metric I try to apply to projects. I am looking for projects that can be viable without government support and can operate with low/no fossil fuel inputs. The first item means that governments have much less ability to wreck my project by withholding support, and the latter means that the project should become more attractive in the higher oil price environment that I expect.

That doesn’t mean that initial government support isn’t often helpful, but unless the underlying economics are sound then government support is a crutch I will never be able to throw away. In my opinion this is the case for most U.S. biodiesel producers, which helps explain why industry capacity is presently at 15%.

Disclosures

I want to make two very clear disclosures. First is that as noted, I worked for ConocoPhillips, and I was very pleased at the efforts we were making to commercialize green diesel. The fact that the government caused the project to be aborted by favoring one technology over another was a bitter pill to swallow. Again, I favor projects that are viable without government subsidies, but in this particular case the competing projects did get the subsidies.

Second, as I announced previously I now work for the company that owns the majority of Choren. I came to work for this company because I believe gasification has a long-term future, and I had written favorable articles long before this job opportunity arose. I have, however, had some suggest potential bias toward green diesel because of my link to Choren. What I say to those who might feel that way is the bias toward green diesel was because of my assessment of the technology. That is what led to my link to Choren, not vice-versa.

The Potential

Jatropha has many qualities that make it an attractive biofuel option. One, it is tolerant of dry conditions and marginal soils. This is a big plus, because it opens up areas for cultivation that would otherwise be unsuitable. The type of land with great potential is land that is being degraded, or turned into desert. Desertification is a significant problem worldwide, and occurs when dry land is overexploited. Think of the Dust Bowl in the 1930′s and you start to get a picture of how desertification impacts and threatens lives.

There are techniques for combating desertification. Plants that can grow on dry, marginal land have the potential to start providing a matrix for the soil to prevent the soil from being eroded by the wind. There are a number of candidate plants that can be used to combat desertification. However, there has to be adequate incentive to grow plants for combating desertification. I suppose the ideal plant would be one that can supply food while at the same time rehabilitating marginal soil. I am unaware of candidate plants in that category, but I presume some exist. A close second, however, would be a plant that can provide a quality fuel – and thus a cash crop – on marginal soil. Jatropha curcas is such a plant.

Comparison with Palm Oil

Where can jatropha be used in such a role? Have a look at the graphic below:

It is true that the African Oil Palm, from which palm oil is derived, is a much more prolific producer of oil than is jatropha. In fact, palm oil yields – as high as 5 metric tons per hectare – places the African Oil Palm as the world’s most productive lipid crop. But there are significant disadvantages/risks that go along with palm oil. First is the fact that the range of the African Oil Palm is a narrow band close to the equator (see the graphic above). While this is fine for countries like Malaysia, Indonesia, and Thailand – where it has provided a valuable cash crop for farmers – it means that India and most of Africa is unsuitable for cultivation.

Of a more serious nature is that expansion of oil palm plantations – driven by biofuel mandates in Western countries – has led to a dramatic expansion in many tropical countries around the equator. In certain locations, expansion of oil palm cultivation has resulted in serious environmental damage as rain forest has been cleared to make room for new oil palm plantations. Deforestation in some countries has been severe, which negatively impacts sustainability criteria, because these tropical forests absorb carbon dioxide and help mitigate greenhouse gas emissions. Destruction of peat land in Indonesia for oil palm plantations has reportedly caused the country to become the world’s third highest emitter of greenhouse gases.

Because the range of jatropha is much greater, there is substantial potential to alleviate poverty throughout Africa, India, and many poor countries by providing a valuable cash crop for farmers. Further, it is unlikely to contribute to deforestation as more productive oil producers provide greater incentive to go that route. (Note: While the range is clearer greater than for palm oil, native jatropha is not frost resistant, which means the range shown in the figure above is overstated. The graphic indicates that jatropha could be grown in the Dallas area, and we certainly get hard freezes and frost here.)

Reality Check

The essay up until now may make jatropha sound like a real silver bullet for addressing fossil fuel dependence. Alas, there are no silver bullets. And in fact, the hype for jatropha has gotten out of hand. As I noted in the essay describing my trip to India, I found the present situation with jatropha to have been overhyped.

Jatropha has negatives just like every other energy source. First, it is toxic to humans and livestock. As pointed out in the previous essay, the Western Australian government banned jatropha as an undesirable, invasive species in 2006. Second, because it has not been domesticated, yields are highly variable and the fruits ripen over a broad time range. Third, it is labor intensive to gather the fruits and extract the oil. Finally, while it can be grown on marginal land, there has to be a logistical infrastructure in place to economically get it to the market. Much of the world’s marginal land lacks such an infrastucture. For instance, when I was in India last year, I saw great swaths of borderline desert land that might be used to grow jatropha. The problem is that it was all remote, with no infrastructure.

The answer to many of these concerns potentially lies in the fact that jatropha is still a wild plant. Selective breeding and/or genetic engineering likely have great potential to address many of these issues. Because the world is just now beginning to seriously experiment with jatropha, there is naturally a learning curve to climb. It may turn out that some of the issues are indeed insoluble, but I wouldn’t bet on it. What is needed is a serious, dedicated investigation into the genetics of jatropha, in conjunction with a major plant-breeding effort. We need some modern-day Luther Burbanks working on this problem. By doing so, jatropha may one day live up to the hype.

Additional Resources

There are numerous jatropha resources out there. Here is a sampling.

The Jatropha System

The site is quite a rich source of jatropha information, and if you are interested I would encourage you to explore it. It is devoted to the concept of providing renewable energy while creating new opportunities for farmers in poor nations

Jatropha Comes to Florida (3 minute video from Time Magazine)

Jatropha Potential for Haiti

Chhattisgarh plants 100 million jatropha saplings in 3 yrs

Mali’s Farmers Discover a Weed’s Potential Power

Toxic jatropha not magic biofuel crop, experts warn

Yield Per Hectare of Various Lipid Producers

UP to cultivate Jatropha for bio-diesel production

The Potential

Jatropha has many qualities that make it an attractive biofuel option. One, it is tolerant of dry conditions and marginal soils. This is a big plus, because it opens up areas for cultivation that would otherwise be unsuitable. The type of land with great potential is land that is being degraded, or turned into desert. Desertification is a significant problem worldwide, and occurs when dry land is overexploited. Think of the Dust Bowl in the 1930′s and you start to get a picture of how desertification impacts and threatens lives.

There are techniques for combating desertification. Plants that can grow on dry, marginal land have the potential to start providing a matrix for the soil to prevent the soil from being eroded by the wind. There are a number of candidate plants that can be used to combat desertification. However, there has to be adequate incentive to grow plants for combating desertification. I suppose the ideal plant would be one that can supply food while at the same time rehabilitating marginal soil. I am unaware of candidate plants in that category, but I presume some exist. A close second, however, would be a plant that can provide a quality fuel – and thus a cash crop – on marginal soil. Jatropha curcas is such a plant.

Comparison with Palm Oil

Where can jatropha be used in such a role? Have a look at the graphic below:

It is true that the African Oil Palm, from which palm oil is derived, is a much more prolific producer of oil than is jatropha. In fact, palm oil yields – as high as 5 metric tons per hectare – places the African Oil Palm as the world’s most productive lipid crop. But there are significant disadvantages/risks that go along with palm oil. First is the fact that the range of the African Oil Palm is a narrow band close to the equator (see the graphic above). While this is fine for countries like Malaysia, Indonesia, and Thailand – where it has provided a valuable cash crop for farmers – it means that India and most of Africa is unsuitable for cultivation.

Of a more serious nature is that expansion of oil palm plantations – driven by biofuel mandates in Western countries – has led to a dramatic expansion in many tropical countries around the equator. In certain locations, expansion of oil palm cultivation has resulted in serious environmental damage as rain forest has been cleared to make room for new oil palm plantations. Deforestation in some countries has been severe, which negatively impacts sustainability criteria, because these tropical forests absorb carbon dioxide and help mitigate greenhouse gas emissions. Destruction of peat land in Indonesia for oil palm plantations has reportedly caused the country to become the world’s third highest emitter of greenhouse gases.

Because the range of jatropha is much greater, there is substantial potential to alleviate poverty throughout Africa, India, and many poor countries by providing a valuable cash crop for farmers. Further, it is unlikely to contribute to deforestation as more productive oil producers provide greater incentive to go that route. (Note: While the range is clearer greater than for palm oil, native jatropha is not frost resistant, which means the range shown in the figure above is overstated. The graphic indicates that jatropha could be grown in the Dallas area, and we certainly get hard freezes and frost here.)

Reality Check

The essay up until now may make jatropha sound like a real silver bullet for addressing fossil fuel dependence. Alas, there are no silver bullets. And in fact, the hype for jatropha has gotten out of hand. As I noted in the essay describing my trip to India, I found the present situation with jatropha to have been overhyped.

Jatropha has negatives just like every other energy source. First, it is toxic to humans and livestock. As pointed out in the previous essay, the Western Australian government banned jatropha as an undesirable, invasive species in 2006. Second, because it has not been domesticated, yields are highly variable and the fruits ripen over a broad time range. Third, it is labor intensive to gather the fruits and extract the oil. Finally, while it can be grown on marginal land, there has to be a logistical infrastructure in place to economically get it to the market. Much of the world’s marginal land lacks such an infrastucture. For instance, when I was in India last year, I saw great swaths of borderline desert land that might be used to grow jatropha. The problem is that it was all remote, with no infrastructure.

The answer to many of these concerns potentially lies in the fact that jatropha is still a wild plant. Selective breeding and/or genetic engineering likely have great potential to address many of these issues. Because the world is just now beginning to seriously experiment with jatropha, there is naturally a learning curve to climb. It may turn out that some of the issues are indeed insoluble, but I wouldn’t bet on it. What is needed is a serious, dedicated investigation into the genetics of jatropha, in conjunction with a major plant-breeding effort. We need some modern-day Luther Burbanks working on this problem. By doing so, jatropha may one day live up to the hype.

Additional Resources

There are numerous jatropha resources out there. Here is a sampling.

The Jatropha System

The site is quite a rich source of jatropha information, and if you are interested I would encourage you to explore it. It is devoted to the concept of providing renewable energy while creating new opportunities for farmers in poor nations

Jatropha Comes to Florida (3 minute video from Time Magazine)

Jatropha Potential for Haiti

Chhattisgarh plants 100 million jatropha saplings in 3 yrs

Mali’s Farmers Discover a Weed’s Potential Power

Toxic jatropha not magic biofuel crop, experts warn

Yield Per Hectare of Various Lipid Producers

UP to cultivate Jatropha for bio-diesel production

First, what happened in Minnesota?

Biodiesel fuel woes close Bloomington schools

All schools in the Bloomington School District will be closed today after state-required biodiesel fuel clogged in school buses Thursday morning and left dozens of students stranded in frigid weather, the district said late Thursday.

Rick Kaufman, the district’s spokesman, said elements in the biodiesel fuel that turn into a gel-like substance at temperatures below 10 degrees clogged about a dozen district buses Thursday morning. Some buses weren’t able to operate at all and others experienced problems while picking up students, he said.

And in case you think this was an isolated incident:

The decision to close school today came after district officials consulted with several neighboring districts that were experiencing similar problems. Bloomington staffers tried to get a waiver to bypass the state requirement and use pure diesel fuel, but they weren’t able to do so in enough time, Kaufman said. They also decided against scheduling a two-hour delay because the temperatures weren’t expected to rise enough that the problem would be eliminated.

What is Biodiesel?

Biodiesel is defined as the mono-alkyl ester product derived from lipid¹ feedstock like SVO or animal fats (Knothe 2001). The chemical structure is distinctly different from petroleum diesel, and biodiesel has somewhat different physical and chemical properties from petroleum diesel.

Biodiesel is normally produced by reacting triglycerides (long-chain fatty acids contained in the lipids) with an alcohol in a base-catalyzed reaction (Sheehan 1998) as shown in Figure 1. Methanol, ethanol, or even longer chain alcohols may be used as the alcohol, although lower-cost and faster-reacting methanol² is typically preferred. The primary products of the reaction are the alkyl ester (e.g., methyl ester if methanol is used) and glycerol. The key advantage over straight vegetable oil (SVO) is that the viscosity is greatly reduced, albeit at the cost of additional processing and a glycerol byproduct.

The key thing to note here is that biodiesel contains oxygen atoms (the ‘O’ in the biodiesel structure above), but petroleum diesel and green diesel do not. This leads to different physical properties for biodiesel.

Biodiesel Characteristics

Biodiesel is reportedly nontoxic and biodegradable (Sheehan et al. 1998). An EPA study published in 2002 showed that the impact of biodiesel on exhaust emissions was mostly favorable (EPA 2002). Compared to petroleum diesel, a pure blend of biodiesel was estimated to increase the emission of NOx by 10%, but reduce emissions of carbon monoxide and particulate matter by almost 50%. Hydrocarbon emissions from biodiesel were reduced by almost 70% relative to petroleum diesel. However, other researchers have reached different conclusions. While confirming the NOx reduction observed in the EPA studies, Altin et al. determined that both biodiesel and SVO increase CO emissions over petroleum diesel (Altin et al. 2001). They also determined that the energy content of biodiesel and SVO was about 10% lower than for petroleum diesel. This means that a larger volume of biodiesel consumption is required per distance traveled, increasing the total emissions over what a comparison of the exhaust concentrations would imply.

The natural cetane³ number for biodiesel in the 2002 EPA study was found to be higher than for petroleum diesel (55 vs. 44). Altin et al. again reported a different result, finding that in most cases the natural cetane numbers were lower for biodiesel than for petroleum diesel. These discrepancies in cetane results have been attributed to the differences in the quality of the oil feedstock, and to whether the biodiesel had been distilled (Van Gerpen 1996).

A major attraction of biodiesel is that it is easy to produce. An individual with a minimal amount of equipment or expertise can learn to produce biodiesel. With the exception of SVO, production of renewable diesel by hobbyists is limited to biodiesel because a much larger capital expenditure is required for other renewable diesel technologies.

Biodiesel does have characteristics that make it problematic in cold weather conditions. The cloud and pour points⁴ of biodiesel can be 20° C or higher than for petroleum diesel (Kinast 2003). This is a severe disadvantage for the usage of biodiesel in cold climates, and limits the blending percentage with petroleum diesel in cold weather.

Green Diesel

Definition

Another form of renewable diesel is ‘green diesel.’ Green diesel is chemically the same as petroleum diesel, but it is made from recently living biomass. Unlike biodiesel, which is an ester and has different chemical properties from petroleum diesel, green diesel is composed of long-chain hydrocarbons, and can be mixed with petroleum diesel in any proportion for use as transportation fuel. Green diesel technology is frequently referred to as second-generation renewable diesel technology.

There are two methods of making green diesel. One is to hydroprocess vegetable oil or animal fats. Hydroprocessing may occur in the same facilities used to process petroleum. The second method of making green diesel involves partially combusting a biomass source to produce carbon monoxide and hydrogen – syngas – and then utilizing the Fischer-Tropsch reaction to produce complex hydrocarbons. This process is commonly called the biomass-to-liquids, or BTL process.

Hydroprocessing

Hydroprocessing is the process of reacting a feed stock with hydrogen under elevated temperature and pressure in order to change the chemical properties of the feed stock. The technology has long been used in the petroleum industry to ‘crack’, or convert very large organic molecules into smaller organic molecules, ranging from those suitable for liquid petroleum gas (LPG) applications through those suitable for use as distillate fuels.

In recent years, hydroprocessing technology has been used to convert lipid feed stocks into distillate fuels. The resulting products are a distillate fuel with properties very similar to petroleum diesel, and propane (Hodge 2006). The primary advantages over first-generation biodiesel technology are: 1). The cold weather properties are superior; 2). The propane byproduct is preferable over glycerol byproduct; 3). The heating content is greater; 4). The cetane number is greater; and 5). Capital costs and operating costs are lower (Arena et al. 2006).

A number of companies have announced renewable diesel projects based on hydroprocessing technology. In May 2007 Neste Oil Corporation in Finland inaugurated a plant that will produce 170,000 t/a of renewable diesel fuel from a mix of vegetable oil and animal fat (Neste 2007). Italy’s Eni has announced plans for a facility in Leghorn, Italy that will hydrotreat vegetable oil for supplying European markets. Brazil’s Petrobras is currently producing renewable diesel via their patented hydrocracking technology (NREL 2006). And in April 2007 ConocoPhillips, after testing their hydrocracking technology to make renewable diesel from rapeseed oil in Whitegate, Ireland, announced a partnership with Tyson Foods to convert waste animal fat into diesel (ConocoPhillips 2007).

Like biodiesel production, which normally utilizes fossil fuel-derived methanol, hydroprocessing requires fossil fuel-derived hydrogen⁵. No definitive life cycle analyses have been performed for diesel produced via hydroprocessing. Therefore, the energy return and overall environmental impact have yet to be quantified.

Biomass-to-Liquids

When an organic material is burned (e.g., natural gas, coal, biomass), it can be completely oxidized (gasified) to carbon dioxide and water, or it can be partially oxidized to carbon monoxide and hydrogen. The latter partial oxidation (POX), or gasification reaction, is accomplished by restricting the amount of oxygen during the combustion. The resulting mixture of carbon monoxide and hydrogen is called synthesis gas (syngas) and can be used as the starting material for a wide variety of organic compounds, including transportation fuels.

Syngas may be used to produce long-chain hydrocarbons via the Fischer-Tropsch (FT) reaction. The FT reaction, invented by German chemists Franz Fischer and Hans Tropsch in the 1920s, was used by Germany during World War II to produce synthetic fuels for their war effort. The FT reaction has received a great deal of interest lately because of the potential for converting natural gas, coal, or biomass into liquid transportation fuels. These processes are respectively referred to as gas-to-liquids (GTL), coal-to-liquids (CTL), and biomass-to-liquids (BTL), and the resulting fuels are ‘synthetic fuels’ or ‘XTL fuels’. Of the XTL processes, BTL produces the only renewable fuel, as it utilizes recently anthropogenic (atmospheric) carbon.

Renewable diesel produced via BTL technology has one substantial advantage over biodiesel and hydrocracking technologies: Any source of biomass may be converted via BTL. Biodiesel and hydrocracking processes are limited to lipids. This restricts their application to a feedstock that is very small in the context of the world’s available biomass. BTL is the only renewable diesel technology with the potential for converting a wide range of waste biomass.

Like GTL and CTL, development of BTL is presently hampered by high capital costs. According to the Energy Information Administration’s Annual Energy Outlook 2006, capital costs per daily barrel of production are $15,000-20,000 for a petroleum refinery, $20,000-$30,000 for an ethanol plant, $30,000 for GTL, $60,000 for CTL, and $120,000-$140,000 for BTL (EIA 2006).

While a great deal of research, development, and commercial experience has gone into FT technology in recent years⁶, biomass gasification biomass gasification technology is a relatively young field, which may partially explain the high capital costs. Nevertheless, the technology is progressing. Germany’s Choren is building a plant in Freiberg, Germany to produce 15,000 tons/yr of their SunDiesel® product starting in 2008 (Ledford 2006).

Straight Vegetable Oil

Unmodified vegetable-derived triglycerides, commonly known as vegetable oil, may also be used to fuel a diesel engine. Rudolf Diesel demonstrated the use of peanut oil as fuel for one of his diesel engines at the Paris Exposition in 1900 (Altin et al. 2001). Modern diesel engines are also capable of running on straight (unmodified) vegetable oil (SVO) or waste grease, with some loss of power over petroleum diesel (West 2004). Numerous engine performance and emission tests have been conducted with SVO derived from many different sources, either as a standalone fuel or as a mixture with petroleum diesel (Fort and Blumberg 1982, Schlick et al. 1988, Hemmerlein et al. 1991, Goering et al. 1982).

The advantage of SVO as fuel is that a minimal amount of processing is required, which lowers the production costs of the fuel. The energy return for SVO, defined as energy output over the energy required to produce the fuel, will also be higher due to the avoidance of energy intensive downstream processing steps.

There are several disadvantages of using SVO as fuel. The first is that researchers have found that engine performance suffers, and that hydrocarbon and carbon monoxide emissions increase relative to petroleum diesel. Particulate emissions were also observed to be higher with SVO. However, the same studies found that nitrogen oxide (NOx) emissions were lower for SVO (Altin et al. 2001). On long-term tests, carbon deposits have been found in the combustion chamber, and sticky gum deposits have occurred in the fuel lines (Fort and Blumberg 1982). SVO also has a very high viscosity relative to most diesel fuels. This reduces its ability to flow, especially in cold weather. This characteristic may be compensated for by heating up the SVO, or by blending it with larger volumes of lower viscosity diesel fuels.

Conclusions

In order to understand the potential problems with biodiesel under cold weather conditions, it is important to understand that biodiesel is chemically different from petroleum or green diesel – and thus should not be expected to have the same chemical properties. Biodiesel is an ester, while petroleum and green diesel are hydrocarbons. The only reason it is called ‘diesel’ is that it can fuel a diesel engine. Likewise vegetable oil, butanol, and even ethanol blends could be called ‘diesels’, as each of these can be used to fuel a diesel engine.

Finally, it should also be noted that petroleum diesel is not immune from cold weather gelling. It is just that these problems don’t begin to occur until the temperatures are much lower than those at which biodiesel begins to gel. If extremely cold weather conditions are likely, then petroleum diesel is blended differently. More kerosene is put into the mixture, which is a lighter diesel (and has a shorter carbon chain length and is just a little heavier than gasoline) and is referred to as #1 diesel.

Footnotes

1. Lipids are oils obtained from recently living biomass. Examples are soybean oil, rapeseed oil, palm oil, and animal fats. Petroleum is obtained from ancient biomass and will be specifically referred to as ‘crude oil’ or the corresponding product ‘petroleum diesel.’

2. Methanol is usually produced from natural gas, although some is commercially produced from light petroleum products or from coal. Methanol therefore represents a significant – but often overlooked – fossil fuel input into the biodiesel process.

3. The cetane number is a measure of the ignition quality of diesel fuel based on ignition delay in a compression ignition engine. The ignition delay is the time between the start of the injection and the ignition. Higher cetane numbers mean shorter ignition delays and better ignition quality.

4. The cloud point is the temperature at which the fuel becomes cloudy due to the precipitation of wax. The pour point is the lowest temperature at which the fuel will still freely flow.

5. Hydrogen is produced almost exclusively from natural gas.

6. Companies actively involved in developing Fischer-Tropsch technology include Shell, operating a GTL facility in Bintulu, Malaysia since 1993; Sasol, with CTL and GTL experience in South Africa; and ConocoPhillips and Syntroleum, both with GTL demonstration plants in Oklahoma.

References

Altin, R., Cetinkaya S., & Yucesu, H.S. (2001). The potential of using vegetable oil fuels as fuel for Diesel engines. Energy Convers. Manage. 42, 529–538.

Arena, B.; Holmgren, J.; Marinangeli, R.; Marker, T.; McCall, M.; Petri, J.; Czernik, S.; Elliot, D.; & Shonnard, D. (2006, September). Opportunities for Biorenewables in Petroleum Refineries (Paper presented at the Rio Oil & Gas Expo and Conference, Instituto Braserileiro de Petroleo e Gas).

ConocoPhillips. (2007). ConocoPhillips and Tyson Foods Announce Strategic Alliance To Produce Next Generation Renewable Diesel Fuel. Retrieved July 21, 2007 from the ConocoPhillips corporate web site: http://www.conocophillips.com/newsroom/news_releases/2007+News+Releases/041607.htm

EIA, Energy Information Administration. (2006). Annual Energy Outlook 2006. DOE/EIA-0383, 57-58.

EPA, U.S. Environmental Protection Agency. (2002). A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions. EPA420-P-02-001.

Fort, E. F. & Blumberg, P. N. (1982). Performance and durability of a turbocharged diesel fueled with cottonseed oil blends. (Paper presented at the International Conference on Plant and Vegetable Oils as Fuel, ASAE).

Goering C.E., Schwab, A. Dougherty, M. Pryde, M. & Heakin, A. (1981). Fuel properties of eleven vegetable oils. (Paper presented at the American Society of Agricultural Engineers meeting, Chicago, IL, USA).

Hodge, C. (2006). Chemistry and Emissions of NExBTL. (Presented at the University of California, Davis). Retrieved July 21, 2007 from http://bioenergy.ucdavis.edu/materials/NExBTL%20Enviro%20Benefits%20of%20paraffins.pdf

Hemmerlein M., Korte V., & Richter HS. (1991). Performance, exhaust emission and durability of modern diesel engines running on rapeseed oil. SAE Paper 910848.

Kinast, J. NREL, National Renewable Energy Laboratory. (2003). Production of Biodiesels from Multiple Feed-stocks and Properties of Biodiesels and Biodiesel/Diesel Blends. NREL/SR-510-31460.

Knothe, G. (2001). Historical perspectives on vegetable oil-based diesel fuels. INFORM 12 (11), 1103–7.

Ledford, H. (2006). Liquid fuel synthesis: Making it up as you go along. Nature 444, 677 – 678.

Neste Oil Corporation. (2007). Neste Oil inaugurates new diesel line and biodiesel plant at Porvoo. Retrieved July 21, 2007 from http://www.nesteoil.com/default.asp?path=1,41,540,1259,1260,7439,8400

NREL, National Renewable Energy Laboratory. (2006). Biodiesel and Other Renewable Diesel Fuels, NREL/FS-510-40419 Sheehan, J. NREL, National Renewable Energy Laboratory. (1998). An Overview of Biodiesel and Petroleum Diesel Life Cycles, NREL/TP-580-24772.

Schlick M. L., Hanna, M. A., & Schinstock, J. L. (1988). Soybean and sunflower oil performance in diesel engine. ASAE 31 (5).

Van Gerpen, J. (1996). Cetane Number Testing of Biodiesel. (Paper presented at the Third Liquid Fuel Conference: Liquid Fuel and Industrial Products from Renewable Resources, St. Joseph, MI).

West, T. (2004). The Vegetable-Oil Alternative. [Electronic version]. Car and Driver. Retrieved June 28, 2007 from http://www.caranddriver.com/article.asp?section_id=4&article_id=7818

Book Chapter Outline

While I have posted extended excerpts from my book chapter, I covered quite a bit more material in there. Here is the full chapter outline:

Renewable Diesel by Robert Rapier

1. The Diesel Engine

2. Ecological Limits

3. Straight Vegetable Oil (SVO)

4. Biodiesel

4.1.1. Definition/Production Process

4.1.2. Fuel Characteristics

4.1.3. Energy Return

4.1.4. Glycerin Byproduct

5. Green Diesel

5.1.1. Definition/Production

5.1.1.1. Hydroprocessing

5.1.1.2. BTL – Gasification/Fischer-Tropsch

6. Feedstocks

6.1.1. Soybean Oil

6.1.2. Palm Oil

6.1.3. Rapeseed Oil

6.1.4. Jatropha

6.1.5. Algae

6.1.6. Animal Fats

6.1.7. Waste Biomass

7. Conclusions

8. Conversion Factors and Calculations

8.1. Conversion Factors

8.2. Calculations

9. References

First, what happened in Minnesota?

Biodiesel fuel woes close Bloomington schools

All schools in the Bloomington School District will be closed today after state-required biodiesel fuel clogged in school buses Thursday morning and left dozens of students stranded in frigid weather, the district said late Thursday.

Rick Kaufman, the district’s spokesman, said elements in the biodiesel fuel that turn into a gel-like substance at temperatures below 10 degrees clogged about a dozen district buses Thursday morning. Some buses weren’t able to operate at all and others experienced problems while picking up students, he said.

And in case you think this was an isolated incident:

The decision to close school today came after district officials consulted with several neighboring districts that were experiencing similar problems. Bloomington staffers tried to get a waiver to bypass the state requirement and use pure diesel fuel, but they weren’t able to do so in enough time, Kaufman said. They also decided against scheduling a two-hour delay because the temperatures weren’t expected to rise enough that the problem would be eliminated.

What is Biodiesel?

Biodiesel is defined as the mono-alkyl ester product derived from lipid¹ feedstock like SVO or animal fats (Knothe 2001). The chemical structure is distinctly different from petroleum diesel, and biodiesel has somewhat different physical and chemical properties from petroleum diesel.

Biodiesel is normally produced by reacting triglycerides (long-chain fatty acids contained in the lipids) with an alcohol in a base-catalyzed reaction (Sheehan 1998) as shown in Figure 1. Methanol, ethanol, or even longer chain alcohols may be used as the alcohol, although lower-cost and faster-reacting methanol² is typically preferred. The primary products of the reaction are the alkyl ester (e.g., methyl ester if methanol is used) and glycerol. The key advantage over straight vegetable oil (SVO) is that the viscosity is greatly reduced, albeit at the cost of additional processing and a glycerol byproduct.

The key thing to note here is that biodiesel contains oxygen atoms (the ‘O’ in the biodiesel structure above), but petroleum diesel and green diesel do not. This leads to different physical properties for biodiesel.

Biodiesel Characteristics

Biodiesel is reportedly nontoxic and biodegradable (Sheehan et al. 1998). An EPA study published in 2002 showed that the impact of biodiesel on exhaust emissions was mostly favorable (EPA 2002). Compared to petroleum diesel, a pure blend of biodiesel was estimated to increase the emission of NOx by 10%, but reduce emissions of carbon monoxide and particulate matter by almost 50%. Hydrocarbon emissions from biodiesel were reduced by almost 70% relative to petroleum diesel. However, other researchers have reached different conclusions. While confirming the NOx reduction observed in the EPA studies, Altin et al. determined that both biodiesel and SVO increase CO emissions over petroleum diesel (Altin et al. 2001). They also determined that the energy content of biodiesel and SVO was about 10% lower than for petroleum diesel. This means that a larger volume of biodiesel consumption is required per distance traveled, increasing the total emissions over what a comparison of the exhaust concentrations would imply.

The natural cetane³ number for biodiesel in the 2002 EPA study was found to be higher than for petroleum diesel (55 vs. 44). Altin et al. again reported a different result, finding that in most cases the natural cetane numbers were lower for biodiesel than for petroleum diesel. These discrepancies in cetane results have been attributed to the differences in the quality of the oil feedstock, and to whether the biodiesel had been distilled (Van Gerpen 1996).

A major attraction of biodiesel is that it is easy to produce. An individual with a minimal amount of equipment or expertise can learn to produce biodiesel. With the exception of SVO, production of renewable diesel by hobbyists is limited to biodiesel because a much larger capital expenditure is required for other renewable diesel technologies.

Biodiesel does have characteristics that make it problematic in cold weather conditions. The cloud and pour points⁴ of biodiesel can be 20° C or higher than for petroleum diesel (Kinast 2003). This is a severe disadvantage for the usage of biodiesel in cold climates, and limits the blending percentage with petroleum diesel in cold weather.

Green Diesel

Definition

Another form of renewable diesel is ‘green diesel.’ Green diesel is chemically the same as petroleum diesel, but it is made from recently living biomass. Unlike biodiesel, which is an ester and has different chemical properties from petroleum diesel, green diesel is composed of long-chain hydrocarbons, and can be mixed with petroleum diesel in any proportion for use as transportation fuel. Green diesel technology is frequently referred to as second-generation renewable diesel technology.

There are two methods of making green diesel. One is to hydroprocess vegetable oil or animal fats. Hydroprocessing may occur in the same facilities used to process petroleum. The second method of making green diesel involves partially combusting a biomass source to produce carbon monoxide and hydrogen – syngas – and then utilizing the Fischer-Tropsch reaction to produce complex hydrocarbons. This process is commonly called the biomass-to-liquids, or BTL process.

Hydroprocessing

Hydroprocessing is the process of reacting a feed stock with hydrogen under elevated temperature and pressure in order to change the chemical properties of the feed stock. The technology has long been used in the petroleum industry to ‘crack’, or convert very large organic molecules into smaller organic molecules, ranging from those suitable for liquid petroleum gas (LPG) applications through those suitable for use as distillate fuels.

In recent years, hydroprocessing technology has been used to convert lipid feed stocks into distillate fuels. The resulting products are a distillate fuel with properties very similar to petroleum diesel, and propane (Hodge 2006). The primary advantages over first-generation biodiesel technology are: 1). The cold weather properties are superior; 2). The propane byproduct is preferable over glycerol byproduct; 3). The heating content is greater; 4). The cetane number is greater; and 5). Capital costs and operating costs are lower (Arena et al. 2006).

A number of companies have announced renewable diesel projects based on hydroprocessing technology. In May 2007 Neste Oil Corporation in Finland inaugurated a plant that will produce 170,000 t/a of renewable diesel fuel from a mix of vegetable oil and animal fat (Neste 2007). Italy’s Eni has announced plans for a facility in Leghorn, Italy that will hydrotreat vegetable oil for supplying European markets. Brazil’s Petrobras is currently producing renewable diesel via their patented hydrocracking technology (NREL 2006). And in April 2007 ConocoPhillips, after testing their hydrocracking technology to make renewable diesel from rapeseed oil in Whitegate, Ireland, announced a partnership with Tyson Foods to convert waste animal fat into diesel (ConocoPhillips 2007).

Like biodiesel production, which normally utilizes fossil fuel-derived methanol, hydroprocessing requires fossil fuel-derived hydrogen⁵. No definitive life cycle analyses have been performed for diesel produced via hydroprocessing. Therefore, the energy return and overall environmental impact have yet to be quantified.

Biomass-to-Liquids

When an organic material is burned (e.g., natural gas, coal, biomass), it can be completely oxidized (gasified) to carbon dioxide and water, or it can be partially oxidized to carbon monoxide and hydrogen. The latter partial oxidation (POX), or gasification reaction, is accomplished by restricting the amount of oxygen during the combustion. The resulting mixture of carbon monoxide and hydrogen is called synthesis gas (syngas) and can be used as the starting material for a wide variety of organic compounds, including transportation fuels.

Syngas may be used to produce long-chain hydrocarbons via the Fischer-Tropsch (FT) reaction. The FT reaction, invented by German chemists Franz Fischer and Hans Tropsch in the 1920s, was used by Germany during World War II to produce synthetic fuels for their war effort. The FT reaction has received a great deal of interest lately because of the potential for converting natural gas, coal, or biomass into liquid transportation fuels. These processes are respectively referred to as gas-to-liquids (GTL), coal-to-liquids (CTL), and biomass-to-liquids (BTL), and the resulting fuels are ‘synthetic fuels’ or ‘XTL fuels’. Of the XTL processes, BTL produces the only renewable fuel, as it utilizes recently anthropogenic (atmospheric) carbon.

Renewable diesel produced via BTL technology has one substantial advantage over biodiesel and hydrocracking technologies: Any source of biomass may be converted via BTL. Biodiesel and hydrocracking processes are limited to lipids. This restricts their application to a feedstock that is very small in the context of the world’s available biomass. BTL is the only renewable diesel technology with the potential for converting a wide range of waste biomass.

Like GTL and CTL, development of BTL is presently hampered by high capital costs. According to the Energy Information Administration’s Annual Energy Outlook 2006, capital costs per daily barrel of production are $15,000-20,000 for a petroleum refinery, $20,000-$30,000 for an ethanol plant, $30,000 for GTL, $60,000 for CTL, and $120,000-$140,000 for BTL (EIA 2006).

While a great deal of research, development, and commercial experience has gone into FT technology in recent years⁶, biomass gasification biomass gasification technology is a relatively young field, which may partially explain the high capital costs. Nevertheless, the technology is progressing. Germany’s Choren is building a plant in Freiberg, Germany to produce 15,000 tons/yr of their SunDiesel® product starting in 2008 (Ledford 2006).

Straight Vegetable Oil

Unmodified vegetable-derived triglycerides, commonly known as vegetable oil, may also be used to fuel a diesel engine. Rudolf Diesel demonstrated the use of peanut oil as fuel for one of his diesel engines at the Paris Exposition in 1900 (Altin et al. 2001). Modern diesel engines are also capable of running on straight (unmodified) vegetable oil (SVO) or waste grease, with some loss of power over petroleum diesel (West 2004). Numerous engine performance and emission tests have been conducted with SVO derived from many different sources, either as a standalone fuel or as a mixture with petroleum diesel (Fort and Blumberg 1982, Schlick et al. 1988, Hemmerlein et al. 1991, Goering et al. 1982).

The advantage of SVO as fuel is that a minimal amount of processing is required, which lowers the production costs of the fuel. The energy return for SVO, defined as energy output over the energy required to produce the fuel, will also be higher due to the avoidance of energy intensive downstream processing steps.

There are several disadvantages of using SVO as fuel. The first is that researchers have found that engine performance suffers, and that hydrocarbon and carbon monoxide emissions increase relative to petroleum diesel. Particulate emissions were also observed to be higher with SVO. However, the same studies found that nitrogen oxide (NOx) emissions were lower for SVO (Altin et al. 2001). On long-term tests, carbon deposits have been found in the combustion chamber, and sticky gum deposits have occurred in the fuel lines (Fort and Blumberg 1982). SVO also has a very high viscosity relative to most diesel fuels. This reduces its ability to flow, especially in cold weather. This characteristic may be compensated for by heating up the SVO, or by blending it with larger volumes of lower viscosity diesel fuels.

Conclusions

In order to understand the potential problems with biodiesel under cold weather conditions, it is important to understand that biodiesel is chemically different from petroleum or green diesel – and thus should not be expected to have the same chemical properties. Biodiesel is an ester, while petroleum and green diesel are hydrocarbons. The only reason it is called ‘diesel’ is that it can fuel a diesel engine. Likewise vegetable oil, butanol, and even ethanol blends could be called ‘diesels’, as each of these can be used to fuel a diesel engine.

Finally, it should also be noted that petroleum diesel is not immune from cold weather gelling. It is just that these problems don’t begin to occur until the temperatures are much lower than those at which biodiesel begins to gel. If extremely cold weather conditions are likely, then petroleum diesel is blended differently. More kerosene is put into the mixture, which is a lighter diesel (and has a shorter carbon chain length and is just a little heavier than gasoline) and is referred to as #1 diesel.

Footnotes

1. Lipids are oils obtained from recently living biomass. Examples are soybean oil, rapeseed oil, palm oil, and animal fats. Petroleum is obtained from ancient biomass and will be specifically referred to as ‘crude oil’ or the corresponding product ‘petroleum diesel.’

2. Methanol is usually produced from natural gas, although some is commercially produced from light petroleum products or from coal. Methanol therefore represents a significant – but often overlooked – fossil fuel input into the biodiesel process.

3. The cetane number is a measure of the ignition quality of diesel fuel based on ignition delay in a compression ignition engine. The ignition delay is the time between the start of the injection and the ignition. Higher cetane numbers mean shorter ignition delays and better ignition quality.

4. The cloud point is the temperature at which the fuel becomes cloudy due to the precipitation of wax. The pour point is the lowest temperature at which the fuel will still freely flow.

5. Hydrogen is produced almost exclusively from natural gas.

6. Companies actively involved in developing Fischer-Tropsch technology include Shell, operating a GTL facility in Bintulu, Malaysia since 1993; Sasol, with CTL and GTL experience in South Africa; and ConocoPhillips and Syntroleum, both with GTL demonstration plants in Oklahoma.

References

Altin, R., Cetinkaya S., & Yucesu, H.S. (2001). The potential of using vegetable oil fuels as fuel for Diesel engines. Energy Convers. Manage. 42, 529–538.

Arena, B.; Holmgren, J.; Marinangeli, R.; Marker, T.; McCall, M.; Petri, J.; Czernik, S.; Elliot, D.; & Shonnard, D. (2006, September). Opportunities for Biorenewables in Petroleum Refineries (Paper presented at the Rio Oil & Gas Expo and Conference, Instituto Braserileiro de Petroleo e Gas).

ConocoPhillips. (2007). ConocoPhillips and Tyson Foods Announce Strategic Alliance To Produce Next Generation Renewable Diesel Fuel. Retrieved July 21, 2007 from the ConocoPhillips corporate web site: http://www.conocophillips.com/newsroom/news_releases/2007+News+Releases/041607.htm

EIA, Energy Information Administration. (2006). Annual Energy Outlook 2006. DOE/EIA-0383, 57-58.

EPA, U.S. Environmental Protection Agency. (2002). A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions. EPA420-P-02-001.

Fort, E. F. & Blumberg, P. N. (1982). Performance and durability of a turbocharged diesel fueled with cottonseed oil blends. (Paper presented at the International Conference on Plant and Vegetable Oils as Fuel, ASAE).

Goering C.E., Schwab, A. Dougherty, M. Pryde, M. & Heakin, A. (1981). Fuel properties of eleven vegetable oils. (Paper presented at the American Society of Agricultural Engineers meeting, Chicago, IL, USA).

Hodge, C. (2006). Chemistry and Emissions of NExBTL. (Presented at the University of California, Davis). Retrieved July 21, 2007 from http://bioenergy.ucdavis.edu/materials/NExBTL%20Enviro%20Benefits%20of%20paraffins.pdf

Hemmerlein M., Korte V., & Richter HS. (1991). Performance, exhaust emission and durability of modern diesel engines running on rapeseed oil. SAE Paper 910848.

Kinast, J. NREL, National Renewable Energy Laboratory. (2003). Production of Biodiesels from Multiple Feed-stocks and Properties of Biodiesels and Biodiesel/Diesel Blends. NREL/SR-510-31460.

Knothe, G. (2001). Historical perspectives on vegetable oil-based diesel fuels. INFORM 12 (11), 1103–7.

Ledford, H. (2006). Liquid fuel synthesis: Making it up as you go along. Nature 444, 677 – 678.

Neste Oil Corporation. (2007). Neste Oil inaugurates new diesel line and biodiesel plant at Porvoo. Retrieved July 21, 2007 from http://www.nesteoil.com/default.asp?path=1,41,540,1259,1260,7439,8400

NREL, National Renewable Energy Laboratory. (2006). Biodiesel and Other Renewable Diesel Fuels, NREL/FS-510-40419 Sheehan, J. NREL, National Renewable Energy Laboratory. (1998). An Overview of Biodiesel and Petroleum Diesel Life Cycles, NREL/TP-580-24772.

Schlick M. L., Hanna, M. A., & Schinstock, J. L. (1988). Soybean and sunflower oil performance in diesel engine. ASAE 31 (5).

Van Gerpen, J. (1996). Cetane Number Testing of Biodiesel. (Paper presented at the Third Liquid Fuel Conference: Liquid Fuel and Industrial Products from Renewable Resources, St. Joseph, MI).

West, T. (2004). The Vegetable-Oil Alternative. [Electronic version]. Car and Driver. Retrieved June 28, 2007 from http://www.caranddriver.com/article.asp?section_id=4&article_id=7818

Book Chapter Outline

While I have posted extended excerpts from my book chapter, I covered quite a bit more material in there. Here is the full chapter outline:

Renewable Diesel by Robert Rapier

1. The Diesel Engine

2. Ecological Limits

3. Straight Vegetable Oil (SVO)

4. Biodiesel

4.1.1. Definition/Production Process

4.1.2. Fuel Characteristics

4.1.3. Energy Return

4.1.4. Glycerin Byproduct

5. Green Diesel

5.1.1. Definition/Production

5.1.1.1. Hydroprocessing

5.1.1.2. BTL – Gasification/Fischer-Tropsch

6. Feedstocks

6.1.1. Soybean Oil

6.1.2. Palm Oil

6.1.3. Rapeseed Oil

6.1.4. Jatropha

6.1.5. Algae

6.1.6. Animal Fats

6.1.7. Waste Biomass

7. Conclusions

8. Conversion Factors and Calculations

8.1. Conversion Factors

8.2. Calculations

9. References

Qld farmers invest in diesel-producing trees

Farmers in North Queensland are doing their bit to be environmentally friendly by investing in a tree that produces diesel.

Over 20,000 trees have been sold to farmers in the tropics by the man who introduced the diesel tree from Brazil.

The tree produces an oil that can be extracted, filtered and used to power vehicles and farm machinery.

It is estimated a one-hectare crop could produce enough fuel for an average-sized family farm.

That’s promising if true. Of course questions are going to abound. Here are some of the preemptive answers from the article:

Mr Jubow says one hectare can produce around 12,000 litres of fuel per year.

“Last year we sold around about 20,000 of these trees. This year we’ll sell probably similar figures, but we could sell more except that we can’t get enough seed out of Brazil,” he said.

He says the trees need a lot of water to grow.

So, there’s the yield (at least one man’s opinion of yield) and the fact that they take a lot of water. So, not a good option for areas that don’t receive a lot of rainfall.

“There is a world-wide database on plant species that have been known to become pests. This plant is not on that list.”

For reference, Australia has placed jatropha on its invasive species list.

He says farmers who want to grow the trees need to know what they are doing.

“It is a very difficult tree to grow from the point of view of a nurseryman like myself – it is not something where an amateur could just grab a handful of seeds and go and grow them,” he said.

“It is not that simple. They are a very difficult seed to germinate.”

So the average person is unlikely to grow and produce their own diesel. Of course the average person doesn’t do this now, so that’s not necessarily a problem.

So, what do you do when the tree has reached the end of its life?

“Not only that, when the tree reaches its use-by date, you’ve got plantation-grown timber which is a very high-grade timber that is suitable for cabinet-making. It is a very ornamental timber.

“You are still keeping it out of the CO2 system by harvesting the timber and milling it and putting it into high-quality furniture.

That all sounds quite interesting. I wonder what the range of the tree is? The biggest disadvantage, though, is that it requires the kind of long-range energy planning that society has been so poor at:

“If I’m lucky enough to live that long enough – I’m 64 now – it is going to take about 15 to 20 years before they are big enough to harvest the oil so that I can use them in a vehicle,” he said.

We can’t even plan 5 years ahead, so it is going to take some real long-term thinkers with a lot of patience to get this idea going.

What are some other options? I think soybean, rapeseed, and palm oil are all out because of land usage issues, and competition with food. What is needed is a high oil producing crop that can be grown on marginal land. Of course that’s what they say about jatropha.

Unfortunately, jatropha seems to have been exaggerated. When I went to India, everyone had heard of it, but nobody knew where any was actually being grown. So there has been a nagging concern in that back of my mind that some other plants mentioned as potential options – Chinese tallow, for instance – may also have had their potential exaggerated. I want to know what’s likely, not some best case scenario.

Life-Cycle Assessment of Energy and Greenhouse Gas Effects of Soybean-Derived Biodiesel and Renewable Fuels

I have just skimmed the report so far, but noted a few items of interest. Table 2-1 shows “Current and Planned Renewable Diesel Facilities.” If I had time, I would convert to a table, but I don’t:

Company Size (bpd) Location Online Date

ConocoPhillips 1,000 Ireland 2006
ConocoPhillips 12,000 United States To be determined
British Petroleum (BP) 1,900 Australia 2007
Neste 3,400 Finland 2007
Neste 3,400 Finland 2009
Petrobras 4 × 4,000 Brazil 2007
UOP/Eni 6,500 Italy 2009

In Table 3.3, they list the energy inputs into soybean farming from three different sources. The lowest input? Surprisingly, it came from Pimentel and Patzek.

Also, note this very important note on Page 4 that could throw all of these results out the window:

Note that this study does not consider potential land use changes. Increased CO2emissions from potential land use changes are an input option in GREET, but it was not used in the current analysis since reliable data on potential land use changes induced by soybean-based fuel production are not available. Furthermore, the main objective of this study is to concentrate on the process-related issues described above.

I presume this is in response to the recent Science articles that looked at land use changes from ethanol, and concluded the carbon footprint was worse than for gasoline. For soybeans, it is likely to be worse, because soybean farming is reportedly encroaching into the Amazon.

One thing that would have been a lot more reader-friendly would have been an actual energy balance equation. That is, for 1 BTU of energy input, X BTUs of energy is returned for the various fuels.

Off to Switzerland tomorrow until Friday evening, but I will post something if I get a chance.

Quality of life to me starts with the basics: People have enough food and clean water, they have shelter, they live and work in safe conditions, and they have adequate access to affordable energy. At various stages of my life I have had involvement in projects in all of these areas, but most of my career has been focused on the energy portion – both in providing adequate supplies, and in urging conservation efforts to stretch our supplies.

The affordable energy piece is becoming more challenging, and we need more people working on this issue. As I transition into my new “green” job, I intend to step up my efforts on the sustainable energy front. There are a number of ways I can do this. First, my new job directly impacts on this. The technology we are engaged in – described briefly in the final section – promises significant environmental and sustainability benefits. But that isn’t the sole contribution I can make. I can also help bring promising sustainable technologies together with highly-motivated and talented people to enhance the odds of success. Up to this point I have done this by calling attention to technologies that I felt were promising, as well as by providing technical advice for some projects on an ad hoc basis.

With this essay, I am attempting to marry talent/passion with need by publicizing vacancies for some specific “green jobs.” I have had a series of conversations over the past year or so with Choren, a renewable diesel company that is now looking to scale up. Google contacted me last week to inform me of some of their vacancies in their new renewable energy efforts. Vinod Khosla has informed me several times that many of the companies he is involved with are looking for talent. And my new company is recruiting as well. I don’t think these jobs will be competing for exactly the same talent pool, because the job locations are geographically diverse. So, if you are looking for a green future and decent job stability (a recent story from Yahoo identified jobs in the energy and environmental sectors as “recession proof”) – here are some opportunities of which I am currently aware.

Choren

I have had a series of discussions over the past year or so with some of the Choren staff, including the president of Choren USA, Dr. David Henson. During the course of these discussions, I formed the opinion that Choren is ideally positioned for long term success in the renewable energy sphere. I think they are focusing on the right technology (biomass-to-liquids) for sustainable liquid fuel production, and they are on the leading edge of that technology. Dr. Henson will be hosting me at Choren’s new BTL plant in Germany in a month or so, and hope to make a report on the visit.

Their opportunities are described from their website as follows:

For the expansion to “world”-scale 600 MWth “Sigma” production facilities and the exploration of additional applications of CHOREN’s technologies we are now seeking highly motivated engineering specialists in the areas of Mechanical Engineering, Process/Chemical Engineering and Energy Technology, preferably with long or short-term experience in any of the fields of gasification, Fischer Tropsch Fuel Synthesis and/or in the Petrochemical Industry.

Choren is looking to fill the following positions in Houston:

Project Manager CHOREN USA, Job Description

Senior Process Engineer CHOREN USA, Job Description

Process Engineer CHOREN USA, Job Description

You can learn more information about the job opportunities at Choren by visiting their Employment Opportunities USA page.

Google

I have admired Google for a long time. They seem genuinely motivated by a desire to help humanity. You may also be aware that they have topped CNN Money’s list of 100 Best Companies to Work For for the second year in a row.

Recently, they announced their intent to help power a clean energy revolution. I was aware of, and supportive of their efforts, and in a different time and place I might jump at the opportunity to work for them. Recently, they contacted me about just that, and I replied that while the timing is not right for me, I would help them publicize their vacancies.

Here is a short description of their vision, and what they are looking for:

Our thinking is that business as usual will not deliver low-cost, clean energy fast enough to avoid potentially catastrophic climate change. We need a clean energy revolution that will deliver breakthrough technologies priced lower than carbon-intensive alternatives such as coal. Google is launching an R&D group to develop electricity from renewable energy sources at a cost less than coal.

We are looking for extraordinarily creative, motivated and talented engineers with significant experience in developing complex engineering designs to join our newly-created renewable energy group. This group is tasked with developing the most cost-effective and scalable forms of renewable energy generation, and these people will play a key role in developing new technologies and systems.

…if you know other outstanding engineers who may be interested, I encourage you to pass along this information as we are hiring for multiple positions. If you prefer that I reach out to them directly, I am more than happy to do so.

Their specific job opportunities at the moment, mostly at their Mountain View, California site:

Renewable Energy Engineer
Head of Renewable Energy Engineering
Director, Green Business Strategy & Operations
Director of Other
Investments Manager, Renewable Energy

They are also asking for people with the following experience:

If you have relevant expertise in other areas beyond these specific positions, please send an email with your resume to energy@google.com . Areas of interest include, but are not limited to:

• regulatory issues
• land acquisition and management
• construction
• energy project development
• mechanical and electrical engineering
• thermodynamics and control systems
• physics and chemistry
• materials science

Khosla Ventures

Vinod Khosla has built quite a renewable energy portfolio. See this PowerPoint presentation for his complete (or at least what’s public) renewable portfolio. Opportunities range from corn ethanol (which I don’t recommend) to cellulosic ethanol (some promising opportunities there) to advanced biofuels, electrical power, and even water desalinization. There are far too many companies to give details on all of the job vacancies, so I will just pick out one of the most interesting (to me), LS9. They describe themselves as the Renewable Petroleum Company™, and have this description on their website:

LS9 DesignerBiofuels™ products are customized to closely resemble petroleum fuels, engineered to be clean, renewable, domestically produced, and cost competitive with crude oil.

LS9 is the market leader for hydrocarbon biofuels and is rapidly commercializing and scaling up DesignerBiofuels™ products to meet market demands, including construction of a pilot facility leading to commercial availability. While initially focusing on fuels, LS9 will also develop sustainable industrial chemicals for specialty applications.

They are looking for the following for their South San Francisco location:

Current openings at LS9 are listed below. Please submit your resume stating qualifications and relevant experience to hr@ls9.com and include the job title in the subject line. We look forward to hearing from you.

Bioprocess/Engineering

Director, Bioprocess Development
Scientist, Fermentation
Scientist, Fermentation
Associate Scientist, Fermentation
Research Associate/Senior Research Associate, Fermentation
Downstream Recovery Scientist

Chemistry/Biochemistry

Biochemist / Bio-organic Chemist Scientist
Research Associate/Senior Research Associate, Biochemistry

Instrumentation

Automation Laboratory Specialist

Metabolic Engineering

Scientist, Metabolic Engineering
Associate Scientist, Microbiology
Senior Research Associate, Microbiology

Corporate Development

Corporate Planning Analyst

What LS9 is attempting is Holy Grail stuff, but what they are trying to do should be technically feasible. However, it won’t be easy and it’s going to take some very talented people.

Don’t forget that this is only one of the Khosla Ventures’ companies. There are numerous job opportunities there if you dig a little.

Accsys Technologies

As I have mentioned previously, I left the oil industry on March 1, 2008 to become the Engineering Director for Accsys Technologies. While we are not creating energy as was the case with the previous companies I described, we are saving energy and attacking the problem of rainforest destruction. Here is a brief summary of what appealed to me about the company and my desire to make a difference:

Growing concerns about the destruction of tropical rainforests, a declining world stock of high quality timber and increasingly restrictive government regulations regarding the use of wood treated using toxic chemicals have created an exceptional market opportunity for the Company. Accsys believes that its technology will transform the use of wood in existing applications where durability and dimensional stability are valued, both halting the decline in the use of wood in outdoor applications and substituting plastics and metals.

Wood acetylation is a process which increases the amount of ‘acetyl’ molecules in wood, thereby changing its physical properties. The process protects wood from rot by making it “inedible” to most micro-organisms and insects, without – unlike conventional treatments – making it toxic.

I think you can see why that might appeal to me – this technology enables a sustainable replacement for tropical hardwoods, and can replace plastics and metals in some applications.

We are working on getting our job opportunities posted, but for now I will just mention a few. We are filling a wide variety of positions at our plant in Arnhem, in the Netherlands. If you are a citizen of an EU country, I believe you are eligible to work in the Netherlands. We should soon have a complete listing of jobs at our Titan Wood site (Titan Wood is a subsidiary of Accsys), but some of the current vacancies in Arnhem include Process Control Engineer, Project Manager, Supply Chain Manager, and process and mechanical engineers.

We are also filling jobs in our new Dallas office that are global in nature. For Dallas we are looking for a Global Process Improvement Manager (reports to me), Global Procurement Manager (reports to CEO), and a Panel Products Manager (reports to Panel Products Director). These positions require travel (got to break a few eggs to make a cake) to places like the Netherlands and China (where we are building a large facility in Nanjing). Required qualifications for these jobs include an engineering or chemistry degree, 7-10 years of relevant experience, and a preference for an MBA. Further, I want my Global Process Improvement Manager to share my passion for making the world a better place.

For now, you may send a cover letter and your resume or CV to JOBSUSA “at” accoya “dot” info (edited to slow the spambots) for positions in the U.S., or JOBSEurope “at” accoya “dot” info for positions in Europe. You may want to indicate that you are responding to this essay, and then the resume may be circulated to me.

Conclusion

Rest assured that I am not going to get in the habit of using my writing as a platform for promoting my new company. I do think it is directly topical to what I write about, and I plan to do one post in the future about the technology. However, most of my posts will be as they have been in the past: Covering energy, sustainability, and environmental responsibility. I do plan to shift more in the direction of “problem solving”, and this post was one aspect of that. It is an attempt to bring together talent and passion with a critical need, and it also will hopefully provide needed job stability in a fragile economy.

I am really interested in writing more about promising technologies, especially those that haven’t received much attention, but I first have to figure out a way to manage this. I tend to get about 19 bad or unworkable ideas e-mailed to me for every 1 that shows promise. I can’t afford the time at present to work my way through that sort of volume (and some of the proposals I see are very extensive), so I will continue to focus for now on those that are already on the radar.

At $100 Oil – What Can the Scientist Say to the Investor?

Nate wrote:

This paper, along with 16 others (including 2 by theoildrum.com contributors), will be part of an upcoming book edited by Professor David Pimentel, “Renewable Energy Systems: Environmental and Energetic Issues“. (I’ll provide links when published). The paper by Professor Hall et al. is a thoughtful preliminary treatise on the impact that projected lower net energy for petroleum might have on the economy and investments.

So, there you have the title and publisher. Later on, Nate lists the Table of Contents:

RENEWABLE ENERGY SYSTEMS: ENVIRONMENTAL AND ENERGETIC ISSUES

Authors and Titles of Chapters

1) David Pimentel, College of Agriculture, Cornell University, Ithaca, New York: RENEWABLE ENERGY SYSTEMS; BENEFITS AND ENVIRONMENTAL COSTS
2) Tad Patzek, College of Engineering, University of California (Berkeley): CAN THE EARTH DELIVER THE BIOMASS-FOR-FUEL WE DEMAND?
3) David Swenson, Department of Economics, Iowa State University: A REVIEW OF THE ECONOMIC RISKS AND REWARDS OF ETHANOL PRODUCTION
4) Doug Koplow, Earth Track, Inc., Cambridge, MA and Ronald Steenblik, Research Director, Global Subsidies Initiative International Institute for Sustainable Development, Geneva: SUBSIDIES FOR ETHANOL PRODUCTION IN THE UNITED STATES
5) Charles Hall, Department of Environmental and Forest Biology, College of Forestry and Environmental Science, State University of New York, Syracuse, NY: PEAK OIL, EROI, INVESTMENTS AND THE ECONOMY IN AN UNCERTAIN FUTURE
6) Andrew Ferguson, Optimum Population Trust, Manchester, England: WIND POWER: BENEFITS AND LIMITATIONS
7) Robert Rapier, [RR comment: affiliation deleted], Aberdeen, Scotland: RENEWABLE DIESEL
8) Mario Giampietro, International Nutrition Institute, Rome, Italy, K. Mayumi, Tokushima University, Japan: COMPLEX SYSTEM THINKING IN RENEWABLE ENERGY SYSTEMS
9) Marcelo E. Dias de Oliveira, The Brazilian Alcohol Programme, Brazil: SUGARCANE AND ETHANOL PRODUCTION AND CARBON DIOXIDE BALANCES
10) Tom Gangwer: BIOMASS FUEL CYCLE BOUNDARIES: CURRENT PRACTICE AND PROPOSED METHODOLOGY
11) Edwin Kessler, Department of Meteorology, University of Oklahoma, Norman: OUR FOOD AND FUEL FUTURE
12) Nathan Hagens, University of Vermont, Burlington, VT, Kenneth Mulder, Green Mountain college: A FRAMEWORK FOR ANALYZING ALTERNATIVE ENERGY: NET ENERGY, LIEBIGS LAW AND MULTICRITERIA ANALYSIS
13) Robert M. Boddey, Embrapa-Agrobiologia, Rio de Janeiro, BR: ETHANOL PRODUCTION IN BRAZIL
14) Roger Samson, Resource Efficient Agricultural Production Canada (REAP-Canada): CELLULOSICS FOR THERMAL ENERGY
15) Maurizio Paoletti, Department of Biology, University of Padova, Italy, Tiziano Gomiero, (please provide affiliation and location): ORGANIC AGRICULTURE AND ENERGY CONSERVATION
16) Sergio Ulgiati, Department of Chemistry, Sienna University, Italy: BIODIESEL PRODUCTION IN ITALY: BENEFITS AND COSTS
17) Kenan Unlu, Pennsylvania State University, University Park, PA: CURRENT RESEARCH ON NUCLEAR ENERGY

I deleted my affiliation, because I have indicated I won’t publicly divulge that here. Nate did divulge it, which is fine as it is out in the public domain anyway. But I deleted it here, because as I have indicated before I don’t discuss the identity of my employer here.

I will provide another update when the book has actually been published, and will provide some extended excerpts from my paper. I think my paper was definitely balanced and objective (and easily readable even for someone who doesn’t know anything about these issues). In fact, Professor Pimentel thought I was too generous on several of my arguments, and was the person who pointed me to the toxicity issue that caused the Australian government to ban jatropha. Up to that point, I hadn’t really come up with anything negative on jatropha.

But in the paper I was pretty upbeat on 2nd generation renewable diesels, and first generation renewable diesels that can be produced at low cost by hobbyists. But I did clearly lay out pros and cons.

Mali’s Farmers Discover a Weed’s Potential Power

It will be archived pretty soon, but here are a couple of excerpts to chew on:

But now that a plant called jatropha is being hailed by scientists and policy makers as a potentially ideal source of biofuel, a plant that can grow in marginal soil or beside food crops, that does not require a lot of fertilizer and yields many times as much biofuel per acre planted as corn and many other potential biofuels.

When I was working on my renewable diesel chapter, it was pretty clear to me that jatropha has significant potential as a source of renewable diesel. I did some calculations examining potential yields of a massive jatropha effort. It is still not a silver bullet, but could be one of the better silver BBs.

The only major down side, pulled straight from my chapter:

Jatropha has one significant downside. Jatropha seeds and leaves are toxic to humans and livestock. This led the Australian government to ban the plant in 2006. It was declared an invasive species, and “too risky for Western Australian agriculture and the environment here” (DAFWA 2006).

A bit more from NYT:

Jatropha’s proponents say it avoids the major pitfalls of other biofuels, which pose significant environmental and social risks. Places that struggle to feed their populations, like Mali and the rest of the arid Sahel region, can scarcely afford to give up cultivable land for growing biofuel crops. Other potential biofuels, like palm oil, have encountered resistance by environmentalists because plantations have encroached on rain forests and other natural habitats.

But jatropha can grow on virtually barren land with relatively little rainfall, so it can be planted in places where food does not grow well. It can also be planted beside other crops farmers grow here, like millet, peanuts and beans, without substantially reducing the yield of the fields; it may even help improve output of food crops by, among other things, preventing erosion and keeping animals out.

Jatropha is worth a long, hard look. In my opinion, it is one of few sustainable options we currently have with significant long-term potential.

Reference

DAFWA, Department of Agriculture and Food, Western Australia. (2006). Jatropha Banned in WA. Retrieved August 3, 2007 from http://www.agric.wa.gov.au/content/sust/biofuel/191006jatrophe.pdf

But it wasn’t a group of farmers in Iowa. It was an oil company in Texas, and so Congress is attempting to stop the credit and protect the first generation biodiesel producers.

Measure targets fatty fuel tax break

WASHINGTON — In language buried deep in an energy tax bill approved Saturday night, the House took direct aim at a plan by ConocoPhillips and Tyson Foods to take advantage of a federal tax credit that could save them $175 million a year.

On page 46, under Sec. 203. Extension and Modification of Credits for Biodiesel and Renewable Diesel, paragraph (b), subparagraph (1), the bill would strike language from the Energy Policy Act of 2005 that reads “using a thermal depolymerization process.”

In April, ConocoPhillips and Tyson announced they were teaming up to use Tyson’s beef, pork and poultry waste to produce 175 million gallons — or 4.2 million barrels — of renewable diesel fuel annually at existing ConocoPhillips refineries.

But the partners insist the project would not be economical without the tax credit.

Don Duncan, ConocoPhillips’ vice president for federal and international affairs, said company officials were “stunned” that lawmakers, who have criticized the oil companies for not doing enough to promote use of renewable sources, would throw up a roadblock to a project that would help reduce the nation’s dependence on foreign crude.

“They chastised the industry for doing nothing, and then they want to stop us when we do propose doing something,” Duncan said.

To be honest, I have been expecting this. After watching the energy policy debates play out over the past several years, I have become very cynical of the motives (and energy IQ) of our leaders. By providing a credit for biodiesel, and denying a credit for green diesel, congress is attempting to pander to various constituencies, and pick technology winners. What they are not trying to do with this measure is diversify the energy supply and encourage new technologies.

I think first generation biodiesels will (and should) go the way of the dinosaur. The product has very inferior cold-weather properties, has lower energy density than conventional diesel, and loses part of the energy content during processing as a low-value glycerin by-product. Second generation diesels – the so-called “green diesels” are identical to petroleum diesels in cold weather properties and energy density (and can therefore be mixed in any proportion), and the by-product is propane. (Biomass gasification is also called “2nd generation diesel”, but I would really call it 3rd generation). But none of the renewable diesels are cost-competitive with petroleum diesel, so Congress can attempt to pick technology winners by offering a credit to one technology and denying it to another.

So, due to special interests, we will discourage oil companies from the biofuels market and tell them we would rather they continue to produce oil. But let’s also put punitive measures in place that make them think twice about producing more oil. Then, let’s convene again in 2 years and try to figure out why we still have high energy prices and why we depend on petroleum more than ever before.

We have a completely disjointed energy policy. Major projects have long lead times and ultimately long completion times. Adopting a new energy bill every two years in which there is no long-term consistency on energy policy just ensures that many projects will not go forward. How can they, when the economics are liable to drastically change in the middle of construction?