Biofuels Montana Update- Havre Biofuels Summit: Biodiesel

1. Biofuels Montana Update- Havre Biofuels Summit: Biodiesel Department of Environmental Quality Energy & Pollution Prevention Bureau October 21, 2010 Howard Haines Montana Bioenergy Program Manager 406 841 5252 hhaines@mt.gov Camelina Chester MT, 3/07 Ringling MT 8/93

2. OVERVIEW • • Update on Ethanol • How much does Biodiesel cost • Benefits, Challenges of Biodiesel • Biodiesel Use & examples • Local resources – what is next

3. Ethanol Use (all retail may or may not)State FY MGY blend MGY ethanol2004 17 2.42005 30 3.12006 30 3.02007 12.6 3.12008 40.669 non-EtOH gas 491.902009 170.679084 non-EtOH gas 315.1752010 174.592936 all other non-EtOH gas 311.196848 • RFS l • 2022: 110 MGY starch, 25 MGY cellulosic

4. Proposed Ethanol Plants (Mont)Permitted MGY Feedstocks0 125 Wheat, corn, barley(expired Jul ’10, only 1 on MDT list)Recently studied1 ? Wheat, barleyTotal planned 125 MGY(383 MGY in July 2008)Operating/planned cellulosic pilot plants0 (Aug 2008 had 1 in Butte, @ 150k/year capacity)

5. Cost: Oilseed Value ChainBiodiesel is the low value product Livestock Feed Meal Oilseeds Crusher Composite Materials OIL Edible (culinary) Oils Pollution Control Adhesives Bio-Lubricants, cosmetics, pharmaceuticals Fertilizers, soil amendments Biodiesel

6. Cost of Biodiesel • Current federal excise tax credit WAS$1.00/gallon for biodiesel from virgin oil • Biodiesel should be $1.80-$3.50/gallon (without road tax). Actual price is set by the market. • Biodiesel is less than diesel in some areas (Portland Ore, June 2010).

7. Challenges for Biodiesel Price & Availability • Cost is feedstock sensitive (75-80%). • Beginning 2008, production cost was generally estimated to be about $0.55/gallon (small plant) to $0.30/gallon (large plant). • Production cost = 7.6 x [oil price, $/lb] +$0.50 per gallon. example, canola oil @ $0.28/lb gives $2.63/gal before tax

8. Challenges for Biodiesel

9. Cost for Biodiesel “It Depends” compared to Petroleum Diesel • Biodiesel cost is feedstock sensitive (75-80%). • Production cost is generally estimated to be about $0.95/gallon (small plant) to $0.55/gallon (large plant) increase in methanol. • Production cost = 7.6 lbs/gal x [oil price, $/lb] +$0.55 per gallon. example, canola oil @ $5.43/gal gives $5.98/gal before tax

10. Cost for Biodiesel • Oilseed Crushers/processors need to sell the other 60-to-70 percent by weight as meal at a profit (just like soy).

11. Challenges for Biodiesel

12. Biodiesel Use (variable, depends on cost)State FY MGY blend Gal B-1002004 0.345 70,0002005 0.347 71,0002006 0.348 71,149 2007 (thru Nov) nya 336,180**2008 946,3282009802,759 (t 245.243 mgy)2010 758,560 (ttl 207.931 mgy) • RFS – 1 • 2022: 74 MGY (1.8 million acres/year)

13. Proposed Biodiesel Plants(Mont)Permitted MGY Feedstocks1 0.1 Canola, safflower, camelinaListed 5 by MDT 0.029 camelina, canola, (39 in 2008) Juncea, safflower, sunflower, algae, otherTotal planned 0(for ref 238.089 MGY in 2008)Operating (FY 2010) 4 0.015 Used fry oil1 0.100 Canola, camelina, other* represented by engineering firms, contacting DEQ

14. Fleet Example: Yellowstone NP • “Mission” market • Reduces carbon footprint • Helps meet executive/policy mandates • Reduced odor & visibility issues (visitor complaints) • Blends in any proportion

15. MDT Evaluation of Biodiesel • Used “B20” with positive experience • Findings: • No motor fuel tax implications • Lubricity markedly improved w B20 • No new fuel related problems • Cost and availability November 2004 (field evaluation Dec 2003-June 2004)

16. Havre SD Evaluation of Biodiesel • No engine issues • Some additional time for blending • Improved fuel economy • Regulatory Mission • Underground mines (particulates) • Off-road equipment in areas of poor air quality (lubricity) • School year 2008-2009

17. Cold Flow • Not an issue if properly managed • Specific compounds in diesel fuel and biodiesel crystallize at low temperatures. • Crystals agglomerate to form large masses. • This can cause filter plugging and eventually the fuel will become a solid mass. • Soy biodiesel gels at 0°C. #2 diesel fuel gels at -10 to -12 °C. Biodiesel from saturated feedstocks can gel as high as 12-14°C.

18. Filter, filter, filter,… Oil Filter Filter Biodiesel plant Filter Filter Filter

19. Fleet Conversion: materialscompatibility • New Feedstocks for Biodiesel • Algae • Starch & cellulosic biomass, DOE-$3 million

20. Biodiesel is Food and Fuel: 18 million acres~5.5 m-acre/year planted 1.8~2 m-ac/yr in rotation

21. FOR MORE INFORMATION • Oil & Production costs: Joel Schumacher, MSU Bozeman Extension, (406) 994-6637, jschumacher@montana.edu • Biodiesel Tech Course. Jon Van Gerpen, 208 885-7891, jonvg@uidaho.edu • Safflower, Sunflower, Flax: Jerry Bergman, jbergman@sidney.ars.usda.gov 406 433 2208 • Canola, Camelina: Alice Pilgeram, pilgeram@montana.edu, 406 994 1986 • Taxes: Vanessa Olsen, MDT, volson@mt.gov, 406 444 7276 • Used Fry Oil: (Joe Blaine) 406 444 9879

22. FOR MORE INFORMATION • www.deq.mt.gov, select “bioenergy/biodiesel” • www.biodieseleducation.org • www.biodiesel.org • http://dli.mt.gov/WIRED/ • Energy & Pollution Prevention406 841-5200 hhaines@mt.gov

23. Summary: • Price & Availability • Problems with biodiesel usually come from “off-specification” fuel. • Fuel quality is important to prevent the most common operational issue with biodiesel: filter plugging. • Biodiesel does not void warranties. • Biodiesel doesn’t require anything special – just do those things you should have been doing all along! The End. Thanks for Listening, Questions?

24. The End. Thanks for Listening, Questions?