Follow-up: Webinar dissects state policies' role

By Luke Geiver | September 20, 2010
Posted Sept. 22, 2010

State policies and mandates continue to play an important role in the growth of the biodiesel industry, and during a webinar titled Biodiesel Policies and Mandates: What's Really Involved, the issue was addressed by several speakers with state-level experience. Sponsored by the Diesel Technology Forum, the webinar featured Shelby Neal, director of state governmental affairs for the National Biodiesel Board. Neal pointed out that in 2010, 180 to 230 MMgy of biodiesel has been mandated or incentivized for use at the state level. For 2015, he noted an expected increase, roughly between 430 to 490 MMgy.

Neal said that "the two really big phenomena that have the potential to significantly increase the market share for biodiesel and also provide significant environmental benefits" are related to bioheat mandates and low carbon fuel standards at the state level. As both a marketing and practical perspective, the heating oil industry has benefited from biodiesel-based heating oil, and will continue to do so, he said. During the past year, 12 states considered bioheat mandates, and most notably for 2010, New York City passed a B2 mandate. The possibility of a low carbon fuel standard requiring a certain level of greenhouse gas reduction may also play a large role for the industry, because as Neal stated, biodiesel is currently the only readily available, American-made advanced biofuel.

Along with the two main state-level factors affecting the industry, Neal also pointed out the unique situation the biodiesel remains in. "In my view," he said, "the petroleum industry is the most powerful and profitable industry that has ever existed on the face of the earth and they pretty much control the fuel in many cases from the time it leaves the ground to the time it hits your tanks." This situation is difficult Neal said, because "we are in the awkward position of being Pepsi and asking Coke to sell our product in their vending machines… and they aren't really interested in selling out product in their vending machines."

Ralph Groschen, senior marketing specialist for the Minnesota Department of Agriculture, also spoke during the webinar about the effect of the petroleum industry. Groschen, who helped lead the most successful state-led mandate program for biodiesel in the U.S., said that during the implementation of the Minnesota biodiesel mandate program he recognized an aspect of the petroleum industry's role in fuel transportation and use he believes the biodiesel industry could learn from. "The petroleum industry only addresses issues and problems very quietly and that is something the industry needs to look at."

A mandate, he added, does not happen in a vacuum, however. The problems with the Minnesota-led mandate of biodiesel use never had any significant amount of problems to be dealt with, he pointed out. In 2005 for example, there were reports of high flash points and high glycerin amounts in the B100. The high flash points he said could have occurred due to gasoline contamination from transport or truck, and the batch of fuel with high glycerin levels were removed from terminal storage tanks by the producers. "In each case, the product was removed and the mandate resumed." The main issue with problems that arise because of the expanded biodiesel use in state, he said, are difficult to respond to because in most cases the reporting and details used to decipher the real problem are hard to fully obtain.
 
 
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