Interview with Donnell Rehagen, Chief Operating Officer for the National Biodiesel Board - 5/19/06
Can you tell us a little bit about your background and your expertise?
I am the Chief Operating Officer for the National Biodiesel Board. Prior to this, I was the Fleet Manager for the Missouri Department of Transportation (MoDOT). While there, I was involved in overseeing the implementation of B20 in the department’s diesel fleet. I have an undergraduate degree in Computer Information Systems from Missouri State University and a Master of Public Administration from the University of Missouri-Columbia.
How did you get started in BioDiesel?
Through my responsibilities as Fleet Manager at MoDOT, I became familiar with biodiesel and all it offers as far as environmental and economic benefits for the United States. It became obvious at that time that this is a product that needed to become more apparent in the marketplace and I was excited to be able to join the National Biodiesel Board in their efforts to promote and help build awareness of and a market for this product.
Do you believe diesel engine manufactures will increase the bio-diesel blend they recommend from B20 to 100% B100 where we can see bio-diesel used in the U.S.?
We are working with the engine manufacturers now to increase their support for higher blends of biodiesel. Generally, that support has been limited to blends of 5% or less. That is changing. Diamler Chrysler and General Motors have expressed support for B20 blends in limited applications within their offering. New Holland has recently announced across-the-board support for B20 use in their equipment. So, we are pleased to see OEM support for higher blends. Regarding B100, support from the OEM community is not expected. With the use of B100 comes additional concerns from a storage and handling standpoint that would need a high level of attention. Realizing this attention would be required of the end-user of the product, it is unlikely that every potential user of B100, if it were widely available, would be educated to the level required to handle and use B100. Therefore, NBB does not actively promote the use of B100 although we do support its use and understand that in concentrated applications within well-informed users, B100 use does occur and does occur without problems.
What are the technical challenges preventing the use of B100 fuel currently by the diesel engine manufactures?
Biodiesel can be made from numerous feedstocks. Although typically made from soybean oil here in the United States other feedstocks such as canola, animal fat, cottonseed, recycled oil, among others, are all used as well. Each of these feedstocks results in a slight variation of final product in areas such as cold flow properties, cloud point, etc. These resulting variations can result in slightly different performance, especially in colder climates. Therefore, widespread support of B100 is not expected in the near future. Even in Europe, who has a much longer track record with biodiesel use, B100 use in not common as well.
Do you see the bio-diesel supply infrastructure increasing to the point everyone will have access to bio-diesel?
We do. NBB is working to provide education and resources to the petroleum industry to better understand the economic and technical issues related to biodiesel distribution. Current production capacity among the plants around the country total over 750,000,000 gallons annually. Sales of B100 in 2005 was approximately 75 million gallons. That is a big difference. We feel that the missing link is getting enough fuel distributors across the country to offer the product so that it becomes more widely available. That is the pure economics of supply and demand. If consumers are asking for the product at the pump then retailers will begin seeking it out. They have to be able to find distributors who can offer them that blended product. So, we have focused considerable resources to working with the distributors to get them comfortable with handling and distributing biodiesel blends. We see new distributors coming on board literally everyday. The key is to make sure that consumers are demanding the product. For your readers, that is the most important thing to take away is if they are supportive of biodiesel, the best thing they can do is to ask for it wherever they get fuel.
How long do you believe is will take for the supply infrastructure to get to this point?
As I said, it is really contingent upon demand from the consumer. Infrastructure at retail pumps and at distributor locations are not inexpensive investments. Therefore, neither will easily commit those resources without expectation that their investment will result in additional sales. That is totally understandable. Therefore, it is essential that the demand for the fuel start at the grass roots level and work its way up through the fuel distributors beginning at the retail sites.
With commodity prices increasing do you see much of an increase in the cost of production of bio-diesel produced from sources like soybeans?
No one is really able to predict the commodity market, as we have all found out with the crude oil commodity. Soybeans or other biodiesel feedstocks are no different. The one thing about biodiesel production costs that looks promising is that the industry has grown to the point that investment in research into improved production methods and oilseed production is well underway. Both of these fronts appear to offer improvements in the production processes and therefore, may result in the ability to produce biodiesel at a lower cost.
Will there be enough crops produced at a low enough cost to transition our country away from depending on foreign oil? ***
“Transition” may not be the best word. There are not currently enough oilseed crops in the United States to offset our country’s dependence on foreign oil. The diesel market in the US is approximately 70 billion gallons a year. That does not include the gasoline market. We have considerably less oil from agricultural crops available. Therefore, biodiesel will not replace diesel fuel. But, it can help to reduce the amount of diesel fuel, and ultimately imported oil, that our country uses. If diesel fuel consumed in the United States contained just 2% biodiesel that would equate to 1.4 billion gallons of biodiesel! That 1.4 billion gallons of domestic produced biodiesel would replace a significant number of barrels of imported crude oil.
Is it a difficult process to convert a petroleum diesel fuel station to a bio-diesel fuel station?
It is not difficult at all. We do recommend that storage tanks be cleaned to make sure that any contamination in those tanks including microbial growth or water, be removed prior to biodiesel introduction. There are also some compounds such as rubber, copper, etc. that do not react well with higher blends of biodiesel. Therefore we would recommend that any retailer or distributor wanting to make the switch to biodiesel contact their storage and dispenser equipment company for any recommendations they may have specific to the equipment they sell.
Are there government grants available to offset the cost of converting a fuel station from petro-diesel to bio-diesel like there are with ethanol?
There are. Some are offered at the state level so retailers and distributors should check with their state government to see what might be available there. At the federal level, the Alternative Fuel Refueling Infrastructure Credit, which was part of the 2005 Energy Bill, contained legislation establishing a fueling infrastructure grant available to fuel retailers. The rules are still being written but it will apply to retailers offering blends of B20 and higher. More information is available at www.thomas.gov by looking up HR6.
Does bio-diesel meet the new government emission standards for diesel fuel required in the next coming years?
Biodiesel is an extremely clean burning fuel. Coupled with the upcoming ultra-low sulfur diesel fuel mandated by the federal government for introduction this year, biodiesel offers an exceptionally environmentally-friendly fuel. NBB is excited to see the introduction of cleaner burning diesel fuel as that is something that we have offered to the marketplace for many years now.
Do you see these new emission standards increasing the cost of petro-diesel?
That remains to be seen. Obviously, the petroleum industry has invested millions of dollars in developing these new fuels. One could only guess that those R&D costs will have to be seen in the cost of the product.
Is bio-diesel more susceptible to microbial organisms than petro-diesel?
Because biodiesel is a biologically-based product, microbial growth can be exacerbated. But, microbial growth cannot occur without the presence of water. Fuel testing and monitoring of storage tanks is essential to a good tank maintenance program which should be in place already at all retail and distributor locations.
On your website it is stated raw vegetable oil is “not” bio-diesel will the use of raw vegetable oil damage a diesel engine?
Studies show that long-term use of raw vegetable oil can cause engine failure. Coking of fuel injectors is the main result. That is one of the reasons NBB insists on the distinction between biodiesel which is processed vegetable oil and raw vegetable oil. The process of making biodiesel removes the glycerine from the vegetable oil. This glycerine is the main culprit in the engine problems experienced with use of raw vegetable oil.
Do you expect the bio-diesel industry go grow rapidly and make a difference in reducing our dependence on foreign petroleum?
We do expect rapid growth in the industry. We are seeing a lot of additional capacity coming on board in the next 6-18 months. As long as the distributors come on board to help get the fuel out to the marketplace, we expect biodiesel to be widely available in the coming years. Regarding the reduction in our country’s dependence on foreign oil, see question above.***
What can the general public do to promote the use of bio-diesel?
Ask for it at your local retail site. Tell your friends and family about it. Advocate for its use in your government fleets in your area. Support it politically by asking for your elected officials to support it. Buy a diesel vehicle and use biodiesel.
Donnell Rehagen is the Chief Operating Officer for the National Biodiesel Board - www.biodiesel.org
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