Do Community Co-Ops Matter?

RFS2 mandates biodiesel production, but local communities need a cooperative approach
By Luke Geiver | July 15, 2011

Eric Williams used to work as a civil engineer in a building owned by a farmer co-op that, among many things, made soy biodiesel. Today, Williams works in energy efficiency in Omaha and every Friday night he joins up with the members of his own co-op, architects, graduate students, financial consultants and anyone else interested in making biodiesel. “We realized that it is more effective to process the fuels then it would be for any of us to work alone,” Williams says. With the help of those architects and financial consultants, he formed the Omaha Biofuels Coop, a licensed producer-consumer operation that touts the motto: producing, using and promoting biofuels. Back in 2006 as a civil engineer, Williams says he also realized that even with large biodiesel production facilities scattered across the country, “there were very few options for cars in the area to use biodiesel.”


Times have changed since 2006, and today the average driver has greater access to biodiesel than ever before (which, unfortunately in some cases, still isn’t that great). But, more gallons of available biodiesel haven’t put an end to stories like those of Williams and the Omaha Biofuels Coop. In fact, more biodiesel co-ops are meeting on Friday nights, sometimes on the loading dock of their industrial buildings, than ever before. For a nominal fee, co-op members can fill up their Volkswagen diesels, Ford F-250s or even their John Deeres, but don’t confuse their stories with a nice back-page feature in the Sunday Life section of the local newspaper.


Biodiesel co-ops are doing their part in the continued growth of the industry one 5-gallon jug of waste vegetable oil (WVO)  biodiesel at a time. If the 5 MMgy producers are working to provide an advanced biofuel for mass use, it’s the 5-gallon folks who are working to help the end-users understand why such a fuel is so special in the first place. Don’t believe it? Think about all the times someone you know, or have read about, has made a misinformed statement about a biofuel’s negative properties. Eric Williams speaks to people like that every day, and every day, he says, his co-op is growing.


Keeping it Rural Matters


Christian Thalacker wasn’t a civil engineer before he started the Louisville Biodiesel Cooperative, he was an energy consultant who bought and sold for a large wholesale energy company. And, unlike Williams, Thalacker doesn’t cater to urban drivers (although he would). Thalacker, along with co-founder Marc Verdi, is aiming to supply biodiesel and grow his cooperative by providing farmers, particularly family farmers, with biodiesel. His approach is to keep his fuel local, and help small cattle operations or horse ranchers in the region save a few dollars by purchasing biodiesel from his cooperative that he says will be priced lower than the going rate for petro diesel today. “You look at all the pressures that family farms have, and family ranchers have,” he says, “and $4 petrodiesel seems insane.”


Thalacker estimates that the average local farmer in his area uses roughly 3,000 gallons of fuel per season. Although his co-op is rather new, it started in November, he says that farmers in his area (about 70) would love to have biodiesel available and “as soon as it is ready,” he adds, “they are ready to buy.” The Louisville Biodiesel Cooperative offers up one of the greatest benefits of the growing number of co-ops across the country. Their model of staying local, and being as green and transparent as possible is one that nearly every co-op is adopting in its own way, and is a positive medium to create a network of public and private relationships of businesses and consumers, all holding the same opinion of biodiesel.


“There is a resonance with the restaurants,” he says of the places he collects the WVO used to produce his product. “There is a resonance with the big commercial-size kitchens,” a mutual feeling he says both parties believe in. Thalacker says he isn’t reinventing the wheel though, he’s simply trying to mimic the operational standards of arguably the most successful biodiesel co-op in the country, Piedmont Biofuels, a co-op he’s talked with several times. He’s also trying to take the same approach as people in places like Austin, Texas, or Chapel Hill, N.C., who he says are giving back to the restaurants that donate their WVO to the co-ops by performing as much marketing as possible for those establishments.


While Thalacker does say he has to compete in his area with “the big players” who collect WVO for use as animal feed, he might be encouraged to know that people like John Campbell, vice president of government relations for Ag Processing Inc., an original player in the biodiesel industry, and the model of how a successfully run, corporate cooperative should look, are in support of community-scale co-ops. “People like to hear and see small energy ventures,” Campbell says. “I think the neat thing about biodiesel is that there are a lot of different business models under the biodiesel tent and there isn’t just one size fits all.”



The Community Cooperative


As both Thalacker and Williams can attest, the model is based on sweat equity, finding funding and getting the word out. To do that, Williams and his team try to have information readily available for people with questions. He says having a Web presence has been helpful, as has sending out a weekly newsletter, “the scoop,” that lets people know about biofuels-related happenings in the area, including their own production reports and significant national stories. “We go to a number of different events, a number of person to person networking meetings,” he says. “Going out and actually meeting people in person, giving presentations, has been very effective for us.”


Thalacker takes farm visits and spends plenty of time speaking with the farmers that come into his wife’s food co-op to drop off their produce. “It is a tough business at the co-op level until you are making money, and even then you are looking at any ways to make as much revenue as possible.” To start the co-op in Louisville, Thalacker decided to go the nonprofit route, but even for community-scale cooperatives, the old adage in biodiesel is still true, feedstock is king. To make the fuel, some use reactors like those made by Springboard, but both Williams and Thalacker chose to reuse or make their own reactors that work in a batch process.


Starting an average-size co-op costs, Thalacker estimates, between $50,000 and $75,000 on the low side. The model for growth all happens (after finding feedstock of course) by adding members. But, for each co-op, the type of members will determine the success of the project and the project’s goals. For an urban-based co-op, the more members, the better. But for those like Thalacker, who cater to rural drivers and farmers, finding the right members is key. “If we got 300 club members, that would be great,” he says, but would be more costly to get the word around. From Thalacker’s perspective, the large farm operations or corporate partners that will come to fill up in the hundreds and thousands of gallons would be better than giving a Volkswagen driver three 5-gallon jugs.


Regardless of who the members are or how many gallons they are using, the significance of the community-scale biodiesel cooperative to the overall biodiesel industry may best be seen by what Campbell points out about his company’s history. Back in 1995-’96, Campbell says there was really no reliable supply of biodiesel. “Our board and management elected to go out on a limb and build the first purpose-built biodiesel plant in North America,” adding that “there was an enthusiasm for it at our company to take the risk early.” Other people obviously came along, he points out, “but those first steps were inspired by our pretty close connection to the farmers.”


In Louisville, it’s the same. “The more connected we get to consumers and producers who care, the better,” Thalacker says.


“It doesn’t hurt for us to have those kinds of things (small-scale co-ops) around,” Campbell says, “because it has a certain amount of appeal and that helps all of us.”  That appeal may be growing from different sources—one, the industry’s large producers ramping up to meet the RFS2’s mandate calling for the use of massive amounts of biodiesel, and the other, from places like William’s biodiesel shop on the southeast part of Omaha on a Friday night where members can watch the crew preprocess the oil before production, only to drive off in their cars or trucks fueled by a sustainable fuel and have a first-hand understanding of how biodiesel works—and more importantly, what to tell others about it.

Author: Luke Geiver
Associate Editor, Biodiesel Magazine
(701) 738-4944
lgeiver@bbiinternational.com

 

 

Revo International may have Japan’s largest biodiesel production facility (30,000 liters per day) and Revo International may have supplied biodiesel to one of the world’s most famous races (Dakar Rally), but nothing can top what the company did in the aftermath of the Tohuku earthquake and tsunami that rocked Northern Japan earlier this year. At the request of the Kyoto Co-op, a regional cooperative in the affected area, the Kyoto-based biodiesel producer provided nearly 500 gallons of biodiesel for use in the disaster relief efforts in the Iwate region. “We heard that Iwate Co-op delivered relief supplies to the victims using C-Fuel in the disaster area,” says Atsushi Yoshiike of Revo.


The C-Fuel Yoshiike refers to is a waste vegetable oil-based biodiesel that Yoshiike also says has been appraised as an alternative energy by Japanese officials during the time of the disaster. The relief efforts by Revo didn’t end with the supply of C-Fuel to the Iwate region, however. The company also answered the request of Ukyo Katayama, a former F1 driver and friend of Revo International President Tetsuya Koshikawa, who formed his own relief efforts in the wake of the disaster. Katayama has been very interested in the prevention of global warming after his retirement, Yoshiike says, and after the earthquake, “he knew there would be a lack of fuel in the disaster area.” Katayama and Koshikawa had participated in the Dakar Rally race in the past, but, as Koshiike says, they worked to help supply biodiesel in other regions of the area.


That Revo’s biodiesel was used during the relief efforts should come as no surprise though. Since 2002, the company has been fueling Kyoto city buses and garbage trucks. In addition to WVO sourced from restaurants, Yoshiike says the company also collects from food factories and general households. The feedstock is pretreated before entering the production process, and the glycerol coproduct is used to fuel the boilers that provide power for the production process. “We aim to not discharge waste into the environment,” Yoshiike says, and the fuel produced by Revo has been approved in Japan for use much like the ASTM process is in the U.S. “Many companies and communities in Japan have shown interest in C-Fuel that reduces CO2 emissions,” he says. After recent events, it might be hard to argue that those interests will only grow even after the relief efforts have been completed.

 
 
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