Let the Journey Begin: Biodiesel Takes Off

Berwick Co-op Oil will be leading the way

By Patty Locher

Sabetha Herald News Editor

A renewed interest in biodiesel is growing, thanks to rising fuel prices, growing national security concerns, a new biodiesel tax incentive and the environmentally friendly character of this clean burning alternative fuel that is produced from domestic, renewable resources. Attendees heard this news at the National Biodiesel Convention and Expo 2005 held Jan. 30 to Feb. 2 at Fort Lauderdale, Fla.

Jim Kaeb, general manager of Berwick Co-op Oil, was one of those attendees, and he is excited about the potential growth of this alternative fuel that "supports the Midwest rather than the Middle East." Kaeb said the concept of biodiesel was originated by a group of Midwest farmers to try to improve the soy oil market.

According to the official web site of the National Biodiesel Board (NBB), "Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. Biodiesel can be used in compression-ignition (diesel) engines with little or no modifications. Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatic compounds."

NBB members learned at their annual board meeting in St. Louis in November that DaimlerChrysler planned to introduce the diesel Jeep® Liberty CRD later that month. The NBB members were among the first in Missouri to test drive the much-anticipated Jeep Liberty CRD as DaimlerChrysler hosted a Ride-and-Drive experience at the board meeting. Each 2005 Jeep Liberty CRD leaving the factory will be powered by B5—a five percent blend of biodiesel fuel.

John Deere announced to more than 850 biodiesel enthusiasts from across the country gathered for the recent National Biodiesel Convention and Expo 2005 that it plans to use B2, a blend of two percent biodiesel fuel, as the preferred factory-fill in its diesel-powered machines made in the United States.

John Deere plans to transition the B2 biodiesel fuel into its U.S. plants before the end of 2005. The John Deere tractor assembly plant, Waterloo Works in Waterloo, Iowa, and its combine manufacturing plant, Harvester Works in East Moline, Ill., will be the first to begin using the B2 fuel, with implementation by March 1.

All agricultural tractors and combines will be shipped with the B2 biodiesel fuel to dealers and customers direct from the factory.

Biodiesel offers similar fuel economy, horsepower and torque compared to petroleum diesel while providing superior lubricity, according to the NBB. Twenty gallons of B100 (raw 100 percent biofuel) in 980 gallons of sulfur diesel gives a two percent blend, or B2, Kaeb said.

Berwick Co-op has grown from a $2.1 million gross sales fuel supplier three years ago to more than $4 million in gross sales last year, and will announce at the annual stockholders meeting, scheduled for Feb. 21, that the Co-op is "going to step up and be a leader" in the use of biodiesel, Kaeb said.

He said an announcement also will be made at the meeting about how Berwick Co-op will handle blending, distribution and pricing. Berwick Co-op, which is a licensed blender, has been blending B2 for 18 months, using B100 biofuel purchased from a processor in Iowa, Kaeb added. The product is trucked in and stored at the Berwick plant.

He continued, "I expect 100 percent of Berwick Co-op's diesel customers will be going to biodiesel after the announcement at the Annual Stockholders' Meeting. "

Quality matters, and it is important that quality control is there, Kaeb said. Bio Quality standards set by the NBB, called BQ9000 standards, are in place for processing, blending and distribution, including tank maintenance, employee training and ratio blending.

Berwick Co-op will become BQ9000 certified very soon, Kaeb said, which means that he and the staff will be qualified on tank maintenance and ratio blending and will have received the required employee training. Kaeb said that when fuel bids are let for government projects, preference is for BQ9000-certified companies.

He said quality is his main concern, and that "quality is everything," from processor to the end user (the farmer), including end-user tank maintenance. Momentum in biodiesel use is picking up, Kaeb said—five of Berwick's top 10 customers are already using biodiesel—and he thinks the time is right to have a Northeast Kansas users' group conference on biodiesel.

Berwick Oil wants everyone to be part of the biodiesel system, Kaeb reiterated, adding, "It's important that before customers make the decision to switch, they contact Berwick Oil or their fuel supplier."

Kaeb's goal is to get biodiesel blended and delivered in perfect condition.

He said that because of the cleaner emissions issue, the state of New York is blending 20 percent on all government vehicles and uses three million gallons of diesel per day now. He also said Governor Kathleen Sebelius has announced that all government vehicles are to use a two percent biodiesel blend.

More than 500 major fleets use biodiesel nationwide, according to the Missouri-based NBB, including the Missouri Department of Transportation, St. Louis Lambert International Airport, all four branches of the military, NASA, Harvard University, the National Park Service, U.S. Postal Service, L.L. Bean and many others.

About 300 retail filling stations make various biodiesel blends available to the public, and more than 1,000 petroleum distributors, including Berwick Co-op, carry it nationwide.

In addition to fewer harmful emissions, the benefits of using biodiesel include using up feedstocks from the Midwest, the pleasant smell—Kaeb said it smells like popcorn cooking—and it has better lubricity for diesel pumps. Problems include limited supplies and the cost of processing.

A downside to biodiesel, Kaeb said, is its cloud point (24 degrees Fahrenheit, as compared to 14 degrees for regular diesel) and pour point. He said biodiesel will start to gel at a higher temperature than will regular diesel. Since cold weather issues are still a problem, Berwick does not bio-blend in the winter, but will start again on March 1, he added.

Future technology will include the capability for the fuel truck driver to blend biodiesel on site— the customer's farm—to get the blend the customer wants, instead of having to blend before the biodiesel is loaded into the delivery truck, Kaeb said.

Bolstered by growing acceptance of biodiesel among Original Equipment Manufacturers and the opportunities offered by a new biodiesel tax credit that went into effect on Jan. 1, 2005, the NBB expects to see a significant increase in demand for biodiesel over the next few years.

According to a study by the U.S. Department of Agriculture, the tax incentive could increase demand for biodiesel from 30 million gallons per year to more than 124 million gallons per year over the next few years. However, depending on a number of other factors, including crude oil prices, demand could grow much higher than that.

"Every gallon of biodiesel we use will be one less gallon of petroleum we need to import from the Middle East," said Joe Jobe, executive director of NBB. "Energy security and national security go hand-in-hand. We have a direct interest in taking steps to promote renewable fuels that lessen our dependence on foreign oil."

According to statements made at the NBB conference, Kaeb said, if we could blend 100 percent of all the diesel at 5 percent blend, we would use all the soy oil produced in the United States today, based on past production in the U.S.

Citing examples of other countries' use of biodiesel, Kaeb said Canada is processing canola oil into biodiesel. South America uses soy oil. Europe, which has been using biodiesel for 30 years, according to Kaeb, has many small processing units, which process used cooking oil into biodiesel. Animal fats can also be used, he said.

Readers can learn more about biodiesel by visiting www.biodiesel.org.

Sources: Interview with Jim Kaeb, general manager of Berwick Oil Co-op; press releases from the National Biodiesel Board, DaimlerChrysler and John Deere; and other biodiesel Internet sources, some of which are sponsored by the USDA Biodiesel Education Program.