Wisconsin Legislative CouncilWisconsin Legislative Council
September 16, 2008September 16, 2008
Presented by Hoon GePresented by Hoon Ge
Summary of TopicsSummary of Topics
• Adequacy of Current Fuel Distribution Adequacy of Current Fuel Distribution System of Ethanol and BiodieselSystem of Ethanol and Biodiesel
• Prospects for Biofuel Pipelines from Prospects for Biofuel Pipelines from Midwest to Population CentersMidwest to Population Centers
• Infrastructure StudiesInfrastructure Studies• Concerns of Biodiesel UsersConcerns of Biodiesel Users• Minnesota Ethanol and Biodiesel Minnesota Ethanol and Biodiesel
Mandate ExperienceMandate Experience
Energy Independence & Security Act of 2007
Biodiesel RequirementBiodiesel Requirement– 500 million gallons used by 2009500 million gallons used by 2009– 1 billion gallons used by 20121 billion gallons used by 2012
Ethanol Requirement (corn-based)Ethanol Requirement (corn-based)– 15 billion gallons by 201515 billion gallons by 2015– 36 billion gallons by 202236 billion gallons by 2022
Current U.S. Biofuel ProductionCurrent U.S. Biofuel Production
Biodiesel is already meeting 2009 goal at Biodiesel is already meeting 2009 goal at 550 million gallons 550 million gallons
Ethanol is estimated at 13.5 billion gallonsEthanol is estimated at 13.5 billion gallons
Midwest Biodiesel Production Midwest Biodiesel Production FacilitiesFacilities
Over 40 throughout MidwestOver 40 throughout Midwest
Midwest Ethanol Midwest Ethanol Production FacilitiesProduction Facilities
Ethanol Pipeline Feasibility StudyEthanol Pipeline Feasibility Study
Sec. 243 in the 2007 Energy ActSec. 243 in the 2007 Energy ActStudying the feasibility of the construction of an Studying the feasibility of the construction of an
dedicated ethanol pipelinededicated ethanol pipeline
Study:Study:
Existing potential barriers to the construction of pipeline Existing potential barriers to the construction of pipeline (technical, financing, regulatory)(technical, financing, regulatory)
Market RiskMarket Risk
Financial Incentives that may be necessaryFinancial Incentives that may be necessary
Technical factors that may compromise safe Technical factors that may compromise safe transportation of ethanoltransportation of ethanol
Transportation of Renewable FuelsTransportation of Renewable Fuels
Sec. 245 in the 2007 Energy ActSec. 245 in the 2007 Energy ActStudying the Adequacy of Transporting Bio-fuelsStudying the Adequacy of Transporting Bio-fuels
Study Includes:Study Includes:
Infrastructure/equipment CapabilitiesInfrastructure/equipment Capabilities
Cost of Transportation (and Fuel increases due to it)Cost of Transportation (and Fuel increases due to it)
Distribution IssuesDistribution Issues
Transportation Competition (and federal regulations)Transportation Competition (and federal regulations)
Addressing Transportation Service ProblemsAddressing Transportation Service Problems
Total Cost of all Programs to regulate transportationTotal Cost of all Programs to regulate transportation
Bio-fuels Infrastructure StudyBio-fuels Infrastructure Study Sec. 9002 in the 2008 Farm BillSec. 9002 in the 2008 Farm Bill
Federal Procurement of Bio-based ProductsFederal Procurement of Bio-based Products
Study:Study:
Into the use of bio-based products by Procuring Into the use of bio-based products by Procuring AgenciesAgencies
Effects of bio-based products on functionality of Effects of bio-based products on functionality of AgenciesAgencies
Bottom Line:Bottom Line: Preference for Contracts that implicate Preference for Contracts that implicate more Bio-based products (as long as products don’t more Bio-based products (as long as products don’t affect Operability of the Agency)affect Operability of the Agency)
Biodiesel Pipeline?Biodiesel Pipeline?75,000 barrels of B5 moved on the 75,000 barrels of B5 moved on the Colonial Pipeline from Houston to New Colonial Pipeline from Houston to New JerseyJersey
DOE supported the testDOE supported the test
Test was completed and successfulTest was completed and successfulOnly issue is trail-back of biodiesel into Jet-fuel… Only issue is trail-back of biodiesel into Jet-fuel…
must be less than 10 ppmmust be less than 10 ppm
Other test scheduledOther test scheduled
Ethanol Pipeline?Ethanol Pipeline?
Magellan Midstream Partners/Buckeye Partners - Magellan Midstream Partners/Buckeye Partners - proposed pipeline would run 1,700 miles for a cost of $3 proposed pipeline would run 1,700 miles for a cost of $3 billion and take several years to build. The pipeline billion and take several years to build. The pipeline would have the capacity to take 10 million gallons of would have the capacity to take 10 million gallons of ethanol per day produced in IA, IL, MN and SD and ethanol per day produced in IA, IL, MN and SD and deliver it to Pittsburgh, Philadelphia and New York. deliver it to Pittsburgh, Philadelphia and New York. Colonial Pipeline Company - using geographic Colonial Pipeline Company - using geographic information systems to build business models for ethanol information systems to build business models for ethanol pipelines. Using the business models, the company can pipelines. Using the business models, the company can compare production capacities of ethanol plants, compare production capacities of ethanol plants, proximity to existing pipelines, population centers for proximity to existing pipelines, population centers for distribution, geographical concerns and other modes of distribution, geographical concerns and other modes of transportation. transportation.
MN Ethanol MandateMN Ethanol Mandate
Phase SeparationPhase Separation
Remedy was to remove all the free water Remedy was to remove all the free water from fuel tanksfrom fuel tanks
MN Biodiesel ExperienceMN Biodiesel Experience
Complaint filed by Flint Hills Pipeline of off Complaint filed by Flint Hills Pipeline of off quality product: Oct 27, 2005quality product: Oct 27, 2005– Dept of Commerce Wt/Measures finds Dept of Commerce Wt/Measures finds
biodiesel out of spec for flash pointbiodiesel out of spec for flash point– Dept rules that blending out of spec biodiesel Dept rules that blending out of spec biodiesel
is illegal by statuteis illegal by statute– NBB is notified to determine the purpose of NBB is notified to determine the purpose of
flashpoint testing and lab error analysis: flash flashpoint testing and lab error analysis: flash point for diesel is 50 – 75 C, Biodiesel is 130 point for diesel is 50 – 75 C, Biodiesel is 130 C.C.
MN ExperienceMN Experience
Mandate suspended for 10 daysMandate suspended for 10 days
Out of spec flashpoint product found at 5 Out of spec flashpoint product found at 5 terminal locations in the stateterminal locations in the state
Dept of Commerce began sampling at Dept of Commerce began sampling at terminals and Mn producersterminals and Mn producers
November 8, mandate reinstatedNovember 8, mandate reinstated
Cooperation of stakeholders allowed Cooperation of stakeholders allowed blending to beginblending to begin
MN ExperienceMN Experience
Root causeRoot cause– Flash point test is variableFlash point test is variable– Some biodiesel from producers may have been below ASTM Some biodiesel from producers may have been below ASTM
specspec– Downstream tests of cross-contamination from ethanol or diesel Downstream tests of cross-contamination from ethanol or diesel
was not conductedwas not conducted– Plants must meet 130C to ship, terminals 100C to blendPlants must meet 130C to ship, terminals 100C to blend– Some biodiesel was retrieved by producers and brought back to Some biodiesel was retrieved by producers and brought back to
specspec– Specification has since been changed in ASTMSpecification has since been changed in ASTM
130 C flash or 100 C flash with GC proof of methanol content130 C flash or 100 C flash with GC proof of methanol content
MN ExperienceMN Experience
Terminals began to institute procedures Terminals began to institute procedures for approval of suppliersfor approval of suppliers
Nov 2005, task force began to investigate Nov 2005, task force began to investigate cold weather plugging complaints, cold weather plugging complaints, discussion of possible filter plugging from discussion of possible filter plugging from in-spec productin-spec product
Feb 2006, filter plugging issues found out Feb 2006, filter plugging issues found out of spec biodieselof spec biodiesel
MN ExperienceMN Experience
Plants shipping out of spec product Plants shipping out of spec product retrieved all product impactedretrieved all product impacted
Dept of Commerce inspected all in-state Dept of Commerce inspected all in-state producers for complianceproducers for compliance
Suggestion of BQ-9000 and additional “Mn Suggestion of BQ-9000 and additional “Mn cold soak test” implemented to catch cold soak test” implemented to catch suspect product at terminalssuspect product at terminals
What was happening?What was happening?
Terminals were receiving product without proof Terminals were receiving product without proof of analysis, retains to determine offender not of analysis, retains to determine offender not always presentalways presentSome production facilities were still filling tanks Some production facilities were still filling tanks while trying to certify the productwhile trying to certify the productProduct tanks on average met standards, but Product tanks on average met standards, but individual loads were suspectindividual loads were suspectSediment above cloud point was identified as Sediment above cloud point was identified as potential issuepotential issue– Either high mono-glycerides or sterolsEither high mono-glycerides or sterols– ASTM std does not indicate mono-glyceride limit, only ASTM std does not indicate mono-glyceride limit, only
free and total limitsfree and total limits
Concerns of Biodiesel UsersConcerns of Biodiesel Users
Microbial Growth – Microbial Growth – Exposure to air and waterExposure to air and water
Icing of Filter – Icing of Filter – Excess water in tankExcess water in tank
Oxidation – Oxidation – Hot fuel return to fuel tankHot fuel return to fuel tank
Monoglyceride Build Up – Monoglyceride Build Up – Off specification of Off specification of Total & Free GlycerinTotal & Free Glycerin
Paraffin Wax – Paraffin Wax – Temperature at or below cloud Temperature at or below cloud pointpoint
Breakdown of Filter Plugging SourcesBreakdown of Filter Plugging SourcesFrom April 2007 to March 2008 - Filter Plugging Problems From April 2007 to March 2008 - Filter Plugging Problems
Addressed by the National Biodiesel HotlineAddressed by the National Biodiesel Hotline
Microbial OnlyMicrobial Only 21%21%High Water and MicrobialHigh Water and Microbial 18%18%High Water OnlyHigh Water Only 15%15%Biodiesel ContaminantsBiodiesel Contaminants 10%10%No problem FoundNo problem Found 10%10%Improper blendingImproper blending 8% 8%OtherOther 8% 8%
Oxidation, Oil ContaminantsOxidation, Oil ContaminantsBiodiesel Didn’t Meet SpecificationBiodiesel Didn’t Meet Specification 5% 5%Outside Temperature Was Below Cloud PointOutside Temperature Was Below Cloud Point 5% 5%ULSD Paraffin’sULSD Paraffin’s 3% 3%