Biodiesel is winning acceptance in mining and marine markets as well as fuel oil, an expert says
By Maura Keller
These days, just about everyone in the fuel oil business may feel burdened by some kind of environmental challenge—from proper containment and transportation of fuels to understanding alternative fuel options. The industry faces pressures from environmentalists, government regulators, and customers to change their products and processes to better accommodate these earth-sensitive times. In fact, a fresh focus on products, such as biodiesel, is a sign that environmental considerations can be more than just “green” business. They can be good business.
Advancements in alternative fuels have taken the fuel oil industry by storm. Amid ongoing marketing and education efforts, fuel dealers and consumers are vetting these alternative fuels and determining their viability for both commercial and consumer use. Biodiesel, especially, has grown dramatically over the last 15 years. According to Michael Devine, chief executive officer of the Earth Energy Alliance, the U.S. a dozen years ago produced about 10 to 15 million gallons of biodiesel fuel. Today, the country produces over two billion gallons. The Earth Energy Alliance is an organization dedicated to reducing the nation’s carbon footprint and its dependence on foreign oil.
Simply defined, biodiesel is made from a variety of feedstocks such as recycled cooking oil, soybean oil and animal fats. Biodiesel is a renewable, clean-burning diesel replacement and is the first and only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an Advanced Biofuel—which means it is a fuel that reduces greenhouse gas emissions by more than 50% when compared with petroleum diesel, Devine says.
Biodiesel is winning acceptance in mining and marine markets as well as fuel oil, Devine says.
In September, Devine shared his insights on the growth of biodiesel in a presentation entitled, “Going Green by Selling Biodiesel” at the Southern New England Energy Conference in Newport, R.I.
There are several reasons for the growth of biodiesel, Devine says, including that it is domestically produced and renewable. Being made from byproducts—whether they be agricultural byproducts or other feedstocks—speaks to biodiesel’s sustainability and growing acceptance, Devine says.
“Its environmental benefits are significantly better than that of heating oil or diesel fuel,” Devine says. “And because of the advent of the Renewable Fuel Standard and the blender’s tax credit, there have been many moments when the price of biodiesel has been less than the cost of the heating oil or diesel that it is blended into. These are some of the top reasons why we’ve seen entities within the supply chain integrate and embrace biodiesel as a fuel.”
The Renewable Fuel Standard was passed in 2005, and took effect in 2006. The standard made it mandatory for producers and suppliers of motor transportation fuels to include a percentage of renewable fuel in their products. The RFS has created an opportunity for marketers to take advantage of subsidies that are associated with using renewable fuels.
There are equipment performance advantages to be gained from burning biodiesel blends, Devine says. Biodiesel acts as a solvent, helping to clean heating systems, he says. That means the cost of service-related calls can be mitigated by a biodiesel blend, Devine says. “Most of today’s full service dealers are offering service contracts,” he notes. “If you can reduce the number of fuel oil service calls, you are providing some real value-added benefits to the company and to the consumer.”
Biodiesel is not without its challenges, the biggest being that its cold-flow properties aren’t as strong as fuels that it is blended into. Higher-level blends tend to gel or freeze at higher temperatures than conventional diesel. The actual temperature at which biodiesel is affected depends on the type of oil or fat from which it is made.
“We always recommend companies use a ‘crawl before you walk’ mentality when it comes to biodiesel blended fuels,” Devine says. “Clearly a heating oil marketer in Long Island isn’t going to face the same challenges as a heating oil marketer in Maine. That said, if you are utilizing good fuel practices—monitoring your cold flow, etc.—you shouldn’t have any issues. But people need to be mindful of blending too aggressively.”
Another common mistake is misplaced confidence in biodiesel that meets specs, Devine says. Marketers who think they don’t need to worry about cold flow or monoglycerides because a biodiesel meets specs are courting trouble, he says.
“It is critical that you source the right biodiesel for where you are distributing,” he emphasizes. “If you are distributing in colder climates and you have outside tanks, you want to make sure you are purchasing a lower-cloud biodiesel and lower levels of monoglycerides.” The cloud point is the temperature of the fuel at which small, solid crystals can be observed as the fuel cools.
“Ultimately the distributor is responsible for the fuel they are distributing, so it is imperative that they understand the cold flow of their heating oil, diesel fuel and biodiesel,” Devine says. “It’s also important that they are sourcing the right material.”
The marketing of the fuel as a force for environmental good can strongly influence some consumers. The demographics of biodiesel aficionados tend to skew a bit on the younger side, and tend to be more female, Devine says. However, Devine sees biodiesel beginning to cross various demographics lines because it is domestically produced. In marketing biodiesel to customers, Devine says, dealers get out of it what they put into it. “If you make a commitment to biodiesel and bioheat and you make the investment to educate and do the outreach to your employees, customers and marketplace, they will understand the benefits. And you will see the benefits of your efforts,” Devine says.
Industry experts predict the increased use of biodiesel is going to continue long-term. Citing unused capacity and data showing that biomass-based diesel consumption in 2016 will significantly exceed 2.1 billion gallons, the National Biodiesel Board is calling for at least a 2.5 billion gallon requirement under the RFS for 2018.