US biodiesel leaders remain optimistic after Trump victory

From Ron Kotrba on Biodiesel Magazine:

After a stunning landslide victory for Donald J. Trump and his campaign in what easily could be described as the most contentious presidential election in recent U.S. history, the domestic biodiesel industry remains optimistic that a new Trump administration will work to further biodiesel’s role in growing the U.S. economy.

Although last month Larry Schafer, co-founder of Playmaker Strategies LLC and a senior advisor to the National Biodiesel Board, said during Christianson & Associates’ Biofuels Financial Conference that Hillary Clinton’s positions on renewable fuels policies would be easier to predict than Trump’s, it is clear the president-elect’s support of the U.S. biodiesel industry would be consistent with his campaign promises to bring back American manufacturing jobs and—as Trump’s website states on energy policy—“make America energy-independent … and protect clean air and clean water.”

The biodiesel industry currently supports 48,000 American jobs and its reduction of tailpipe and greenhouse gas emissions is well-established by government agencies and private institutions alike. Furthermore, unlike petroleum, biodiesel’s nontoxic chemistry poses no threat to the nation’s water resources.

In addition, Trump has made it very clear his intention to cut U.S. dollars being sent overseas to aid in foreign manufacturing at the expense of U.S. jobs. This position would be consistent with reforming the $1-per-gallon biodiesel blenders tax incentive to a domestic producers incentive, which would stop U.S. tax dollars from subsidizing foreign biodiesel production through a growing volume of biodiesel and renewable diesel imports—670 million gallons last year and potentially more than 800 million gallons this year.

The National Biodiesel Board congratulated Trump and other newly elected and returning leaders, and stated it looks forward to working them to promote local jobs, energy security and clean air through a growing biodiesel market.

“Biodiesel has long been a bipartisan issue and we are confident our new Congress will continue to support a smart solution that works for America on so many levels,” said Donnell Rehagen, the newly appointed CEO of the NBB. “President-elect Trump has expressed strong support for biofuels and support for the renewable fuel standard (RFS), so we are hopeful his administration will further strengthen opportunities for America’s advanced biofuel. By the time he takes office, we hope that the EPA will have announced biodiesel volumes that more closely reflect fuel availability and current production and that the critical biodiesel tax incentive will be extended and reformed to a production credit to ensure that American jobs are not put at risk yet again due to Congress’ inaction.”

“Biodiesel is a critical piece of our nation’s ambitions for energy security, greenhouse gas reduction and economic development,” said Grant Kimberley, the executive director of the Iowa Biodiesel Board. “We welcome the opportunity to work with a new administration in the White House, and appreciate the positive statements about biodiesel that President-elect Donald Trump made on the campaign trail. We are optimistic that he will support policies imperative to the growth of biodiesel, including the federal RFS, one of the most effective policies in history to diversify America’s fuel supply. The federal tax incentive for biodiesel is also critical to help us compete against petroleum, which had more than a hundred-year start on biodiesel.”

Kimberley added that the IBB’s immediate priority is the extension and restructuring of the biodiesel tax credit. “This is vital because the current structure allows foreign biodiesel producers to take advantage of the credit if their fuel is blended in the U.S.—not the original intent of Congress,” he said. “We look forward to the time ahead as we work to secure biodiesel’s future.”

From energy menu, America should order – ‘all of the above’

From an OpEd article published in the Raleigh News and Observer on October 27, 2016:


When gas prices rise, we routinely hear about the added costs rippling through the economy, hitting consumers and companies alike with the equivalent of a “gas tax.” By that logic, shouldn’t lower gas prices mean more expendable income and higher profits, creating a generally improved economic climate and bullish markets?

Yet throughout the year we’ve seen just the opposite, with counter-intuitive headlines like, “Oil Prices Slump, Markets Follow.” Now, as those same oil prices have begun to rise, the Dow Jones Industrial Average has flirted with record-setting territory.

Is this the new normal?

Probably not. Some analysts believe that when oil prices recover, the markets will eventually decouple themselves from their attachment to “black gold.” Yet the market fluctuations do illustrate the destructive power oil price instability has on the American economy.

And the issue of volatile oil prices is unlikely to subside anytime soon.

In the utilities industry, no one energy source makes up more than a third of the electricity generated. Last year, about a third of our electricity came from coal, another third from natural gas, 20 percent from nuclear and another 13 percent or so from hydro and other renewable sources. For consumers, that means fluctuations in the costs of one fuel can be more easily offset by the diversity of sources employed by utilities.

On the other hand, the transportation sector illustrates how a lack of diversity in fuels spikes what Americans pay for their daily commute. Gasoline and diesel produced from petroleum dominate, making up a whopping 86 percent of the market; the rest comes from renewables, Compressed Natural Gas, electric vehicles, etc.

The petroleum industry doesn’t want the public, or policy makers, to focus on diversifying the market. Instead, they promise domestic drillers will simply unearth almost unlimited supplies of oil under our own soil. And, they say, awash in new oil, America’s petroleum industry will drive down the cost of gasoline.

But recent history tells us this can’t possibly be true. The past 20 months have clearly demonstrated that only OPEC has the means to shift the price of oil – higher or lower, depending on its motives.

In the fall of 2014, OPEC, led by Saudi Arabia, made the decision to flood the market with oil. Domestic drillers tried to keep up, but the price of oil – traded on international markets – dropped precipitously, causing the U.S. petroleum industry to lose hundreds of millions of dollars and shed thousands upon thousands of jobs.

The fact is that within our borders we only control less than 1 percent of the world’s proven oil reserves. The Middle East controls almost half. To make matters worse, it can cost 10 times as much to reach those U.S. reserves as compared to countries in the Middle East.

What America needs is an “all of the above” strategy when it comes to its transportation fuels. Yes to biofuels. Yes to electric vehicles. Yes to new technologies that have the promise of providing diversity to our portfolio of fuels.

Yet the powerful oil and gas lobby vehemently opposes any attempt to boost alternatives and voluntarily lessen its monopoly of the market. Ironically, they argue free-market principles should carry the day. The transportation fuels market should be unfettered, they exclaim.

There are two obvious issues with this position: First, there’s nothing “free” about their position in the transportation fuels market. According to Congress’ Joint Committee on Taxation, the U.S. oil and gas industry alone enjoys more than $4 billion in subsidies. Globally, it’s even worse.

The second issue is the suggestion that the transportation fuels market is unfettered. OPEC operates as an international cartel, making decisions as a group of nations to set production targets that influence the price of oil on global markets. Frankly, as a leader of a U.S. trade organization, if I suggested our group operate in a similar manner, I could go to jail.

The markets may sometimes react illogically to the conditions they’re presented, but policy makers don’t have to do the same. We need to change the headlines. I’d take one that reads, “Consumers and Economy Helped by Fuel Diversity.”

Zack Hamm is President of Triangle Biofuels, based in Wilson.

Read more here:

NC Biodiesel Highway Tax Drops to .34

Effective July 1st, 2016, the NC motor fuels tax rate will drop to .34 per gallon from .35.   The current .34/gallon tax rate will remain valid until December 31, 2016.


Saudi Arabia has declared an end to its oil war with the US

“Two years after quietly declaring war on upstart US shale, Saudi Arabia says the need for the fighting is over. In remarks to journalists while on a US visit, Saudi Arabian energy minister Khalid Al-Falih said that the worldwide oil glut has vanished, signaling an end to Saudi Arabia’s strategy of flooding the global market with oil to try to put American drillers out of business.”

The implication was that Saudi Arabia owned the victory. But a three-week-long resurgence of US oil drilling after 21 months of decline suggests that Saudi and the US fought to a draw.

Falih noted that a record volume of oil remains in storage in the US and around the world (paywall), built up during the glut, but once much of that is sold off, the kingdom can resume its traditional role managing supply and demand.

“We are out of it,” Falih told the Houston Chronicle. “The oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”


Saudi Arabia has declared an end to its oil war with the US

Production Increases, Upgrades Coming

2014 and 2015 were tough years for biodiesel.  The lack of an established tax credit and delayed policy implementation for the EPA RFS program created uncertainty in the biodiesel  market, and many smaller plants suffered for it.   Even for 2016 the tax credit took over a month and a half to be established where plants could send in the forms to claim credits.   That old saying about the 9 most terrifying words:  “I’m from the government and I’m here to help”, sure seems to fit.

InProcess Biodiesel after reacting and settling.

In-Process Biodiesel After Reacting and Settling.

But things are picking up, and demand for biodiesel is increasing for the second quarter of this year.   We have several upgrades underway to improve our production efficiency and throughput.  We will be making some improvements to our boiler, adding another resin column, installing additional heat exchangers to scavenge heat and improve process temperatures, and improving our wash process to reduce the bottleneck we have there.  We should have these improvements completed in the next few weeks, expecting an almost instant realization of efficiency savings and improved production capacity (assuming Murphy doesn’t step in and rear his ugly head).

On the longer term, we are revisiting our original master site plan for consideration of a major expansion at the facility.  We have been looking at two different production paths for this upgrade, using the enzymatic biodiesel production process, or supercritical.  They both have their advantages and disadvantages, and both will be expensive to convert the plant to.  We are still in the evaluation stages but intend to move forward with one of them in the future, hopefully realizing an increase in our nameplate capacity while also reducing our cost per gallon production costs.

The fuel industry is on its heels right now, and while most are probably thinking of getting out of the business, it feels more like it’s time to double down while things are cheap.   It wouldn’t take much for the oil industry to spike above $50/barrel again, or even $100.  A war in the middle east, Iran and Russia, or our own US production going bankrupt because of the recent oil glut.  There is no quick fix for oil, we don’t have any readily available replacement for it so it’s going to be with us for a while, always in demand; and biodiesel will be right there beside it.



M35A2 2½-Ton Truck for Sale – $6500.00

We are selling out 1970 AMG M35A2  2½-ton truck.   This is a also known as a “Deuce and a Half”.
M35A2 on Biodiesel
The engine is a multi-fuel inline 6-cylinder motor with turbocharger (D series, or “whistler”) that will run on biodiesel, diesel, gasoline, motor oil, kerosene, or transmission fluid.   Of course we have run it on biodiesel for a while, currently it is running B20 biodiesel.

The truck operates as a 6X6, with an air shifted front axle (just flip a switch to engage front wheel drive). It has been newly re-upholstered.  New batteries installed.   Air windshield wipers work. Black out lights installed. Two speed transfer case. No rust. This vehicle has a clean North Carolina title and is street legal. You do not need a CDL to drive it. Drive this thing anywhere, we were never able to get it stuck in even the thickest mud.

Price is $6,500.00 (negotiable), and includes a tank of B20 biodiesel fuel.   Buyer must arrange any shipping and pay all shipping costs. Vehicle is in excellent working condition but is sold AS-IS.  Get this truck and have fun with it!

You can view a video of this great running truck here.

Biodiesel Tax Credit Passed!

The Biodiesel Tax Credit passed and was signed into law on December 18th. 

The bill was for retroactive production of 2015, and forward production of 2016 will be eligible for a $1.00 per gallon subsidy for each gallon of biodiesel produced and sold.  The credit was originally designed to be a producer’s credit for 2016, but was modified to remain as a blender’s credit.   This initially spelled a problem, but at the same time the oil export ban was lifted, meaning that a significant portion of exported diesel fuel may now contain biodiesel.  That could mean an expanding market for US biodiesel.

Coupled with the recent EPA RFS mandates volumes being finalized for previous and upcoming years, this should mean a good year in 2016 for the biodiesel industry.    If the politics further sway towards Republicans in the 2016 election, it would ironically point to better times for the renewable fuel industry.

The biodiesel industry has suffered not from lowering oil prices or increased feedstock  prices.  Well… okay, it has, but not nearly as much as it has suffered at the hands of an indecisive Legislative body that will not consistently pass a biodiesel tax credit subsidy, AND from an ever more indecisive Executive branch that will not implement and enforce RFS policy that has already been established.   Both of these issues are resolved for 2016 finally, so perhaps we can get on with the process of making biodiesel now (and making money).


EPA RFS Volumes Finalized

Today, the EPA released final RFS volumes for the periods 2014 – 2017.   A welcomed relief, these volumes are higher than earlier proposed volumes for biodiesel and should be good for spurring on biodiesel demand.  The D4 Biomass-based Diesel volumes are as follows:

2014 – 1.63 billion gallons
2015 – 1.73 billion gallons
2016 – 1.90 billion gallons
2017 – 2.00 billion gallons

Also included are the D5 Advanced Biofuel volumes which also increased:

2014 – 2.67 billion gallons
2015 – 2.88 billion gallons
2016 – 3.61 billion gallons

EPA Website Information:



Status of the Biodiesel Tax Credit – 2015

Biodiesel Turnaround?

2014 and 2015 have been difficult years for the biodiesel industry.   Indeed, many of the producers that are comparable or smaller in size to TBI have experienced significantly reduced production, idling, or even closure.   Many biodiesel plants have been forced to just collect WVO and sell it into the feed industry, thus not really acting like a biodiesel refinery as much as they are waste vegetable oil aggregators.  Of particular concern is the lack of consistency in the regulatory standards and subsidies that have been in play for 2014 and 2015.  That appears to all be changing soon however.   Calls into congressional offices and information from the NBB leads us to several conclusions (or assumptions, depending upon who you ask):

What’s in play:

  1. The EPA will finalize volume requirements for 2014 and 2015 and resolve a pending waiver petition for 2014, and also finalize RFS volume requirements for 2016 .   This has already yielded a slight increase in RIN pricing for 2015 and a premium for 2016 RINs (2016 Biodiesel RIN futures might be a good thing to buy right now, if you can get them).
  2. The Biodiesel tax credit is expected to be voted on under the Tax Extenders package as a part of the Omnibus bill.  This is expected to be put on the floor of both the Senate (S 1946) and the House (H.R. 4040, et. al.).

Biodiesel Tax Credit

As this is the most important to biodiesel producers, we’ll start here.   These bills are expected to go to the floor sometime after Thanksgiving, most likely in the December short session.  This gives roughly 12 working days on the Congressional calendar for Congress to pass the bill in both the House and Senate.  The good news is that they have passed through the committee, and are ready to go to the floor.

Assuming we don’t have more important pressing bills that need debate (such as blocking Syrian refugee aid or not), it appears we might have the tax credit passed as part of the Omnibus package by the end of the year.   This currently is set as a “back one, forward one” credit for retroactive sales in 2015 and forward for 2016.  Further, the 2016 year would be a producer’s credit, limiting the credit to be only available to active biodiesel producers.  Needless to say the petrochemical industry does not like this, as they no longer get to put their hand in our cookie jar, but I predict Congress in it’s usual ineptitude will leave enough loop holes in the legislation to allow for Big Oil to get it’s fair share of our revenue stream.   For now at least, 2 years looks to be about the most we can get for the biodiesel tax credit.  This is far below the needed 3 to 5 years for a reliable tax credit program to bring stability to the biodiesel industry.  But when I’ve asked specifically what was impeding a multi-year tax credit more than  2 years, I was informed that the primary concern was the Obama administration’s repeated claims that they would veto any multi-year tax credits which would impede funding their programs.   So the most likely and high probability beneficial outcome for our industry is to be conservative about the timeframe and stuff it into a large, encompassing package such as Omnibus to ensure that there’s enough pork for everyone to get passed.   And there you have it, Beltway gridlock at it’s finest.


The EPA Renewable Fuel Standard drama seems to be coming to a businesslike conclusion, with some reasonable expectations for production in the biodiesel spectrum (I won’t address the blend wall issue craziness for ethanol.  Not my circus, not my monkeys).  The incremental increases while not substantial relative to the domestic production capability, at least ARE increases and can be met by the industry and consumed by the obligated parties without much suffering and stress.

Similar to the biodiesel tax credit loophole, particular interest needs to be pointed at the EPA program allowing imported biodiesel to be permitted to generate renewable fuel credits and cashing them in at the expense of the taxpayer.  That creates an uneven playing field for domestic producers, and effectively functions as a subsidy to foreign countries at the taxpayer’s expense.  The regulatory logic is that it benefits the consumer by providing a renewable carbon neutral fuel supply to help offset diesel emissions, but the net effect is that it strangles domestic producers who not only have higher input costs to consider, but also a larger regulatory burden by the same entities that are enabling the foreign competition in the first place.

The Short Version

If you’re still reading and haven’t fallen asleep, or just skipped to this section to find out what all the above ranting really means, it means the biodiesel industry appears to be coming into a turnaround phase rather soon.   With higher than expected soybean oil surpluses in 2015, expected increases in demand from the RFS program finalizing incremental increases, and the biodiesel tax credit looming, biodiesel should expect a boom for at least 2016, and probably beyond.


Source: FDD and OPIS.

Source: FDD and OPIS.


Obama Administration – Biodiesel Friend or Foe?

Reuters: Pelosi to Obama: boost U.S. biofuels program ahead of Paris talks

NEW YORK | By Chris Prentice

U.S. House Democratic Leader Nancy Pelosi and three other lawmakers are pressing President Barack Obama not to back-peddle on the country’s biofuels program just days ahead of global climate change talks in Paris.

The Democratic Representatives – Pelosi from California, Steny Hoyer from Maryland, Collin Peterson from Minnesota, and David Loebsack from Iowa – asked the administration to rethink a proposal for the controversial Renewable Fuel Standard and to keep the program “robust” in a letter dated Nov. 18.

The push comes just over a week ahead of a Nov. 30 deadline for the U.S. Environmental Protection Agency to finalize mandates for renewable fuels use through 2016. That date coincides with the start of the Paris discussions.

The EPA in May proposed requirements for the amount of biofuels blended into the country’s transportation fuel stream that were below requirements set by Congress in 2007.

“We hope you will keep in mind the need to reduce carbon pollution, and not expand it in the transportation sector in the days leading up to the President’s historic efforts” in Paris, they said in a letter to Brian Deese, an assistant to the president and senior adviser.

EPA reduced the mandates around the principle of the “blend wall,” which oil groups say is the saturation point for ethanol use in the fuel stream without greater infrastructure change.

The plan drew ire from both biofuels groups and oil companies alike, and both groups have been ratcheting up their lobbying and advertising spending ahead of the EPA’s deadline to finalize the rule.

The lawmakers, who met with Deese on Oct. 29, also emphasized the importance of correcting errors in the mandates related to “more accurately reflect” gasoline demand projections and biofuels exports.

Politico: Biofuels Group Touts GHG Analysis

Just days before EPA is slated to release its latest Renewable Fuel Standard mandate, the Renewable Fuels Association is touting an analysis concluding that the program has saved over 354 million metric tons of carbon dioxide so far. It’s the latest salvo in the environmental war in which the RFS’s critics argue that corn ethanol, which makes up the bulk of RFS biofuel requirements, has little climate benefit over petroleum fuels. The report, from the consulting firm Life Cycle Associates, said the reductions were higher than expected despite the slow growth of cellulosic because corn ethanol technology improved and EPA underestimated baseline petroleum emissions.

Center for Regulatory Solutions begs to differ

The anti-RFS non-profit will release a report looking at the greenhouse gas impact of the RFS on Illinois today, the fifth in a series by the nonprofit. The report says corn ethanol production and consumption added 4.1 million tonnes of CO2 emissions in Illinois between 2005 to 2014.