A National Perspective on the Biodiesel Industry

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BIODIESEL
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5-yr anniversary of 911 anti-American
conference of 100 countries in CubaPlatform
Chavez for UN Security Council to support Irans
Nuclear programFun Facts Iran and Venezuela
are ranked 3rd and 7th for proven oil
reservesThe US borrows 1B per working day to
finance its consumption of foreign oil much of
those dollars going to directly or indirectly
fund terrorism. (US paying for both sides of war
on terror)

• Chavez Ahmadinejad 9/11/06

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The Good.
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US Biodiesel Demand
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What does the biodiesel tax incentive really cost
U.S. taxpayers?

• Centrec analysis addressed the question of where
  would soybean prices (and thus farm program
  payments) be without biodiesel.

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What if biodiesel production did not increase
from 2003 levels?

• Reduction in SBO demand by 0.28, 1.63 and 2.1 B
  lbs SBO per MY, respectively
• Negative demand shocks of 1.5, 7.0 and 2.1
  for MY04, MY05 and MY06 respectively

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Prices

• Soybean prices would decline by 6, 35 and 51
  cents in MY04, MY05 MY06, respectively
• SBO prices decline
• SBM prices increase

MY06 estimated
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Government Program Payment Savings Compared to
Biodiesel Tax Incentive

• Resulting decrease in government program outlays
  for LDP due to biodiesel production (thus higher
  soybean prices) offsets about 90 of the
  Biodiesel Tax Incentive outlays for all three
  years

Total Estimated Biodiesel Tax Incentive outlays
for all 3 years - 561M
Total Estimated decrease in LDP outlays for all 3
years - 498M
Assuming Biodiesel Tax Incentive became
effective Jan 1, 05 1/gal of soy-based
biodiesel produced
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Biodiesel Demand Estimates
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Annual Economic Impacts
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Production Locations (9/7/07)
165 Plants
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Industry Plant Size
Production Capacity 1.85 billion gallons per
year Average Plant Size 11.2 million gallons per
year
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Production Capacity by State (9/7/07)
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Biodiesel Plants Under Construction Expansion
(9/7/07)
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Size of Plants Under Construction Expansion
Construction Capacity 1.38 billion gallons per
year Average Plant Size 16.3 million gallons per
year
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US industry goal 5 x 15

• 5 on-road displacement by 2015 1.85bgy
• (met in various blend levels)
• 5 amt of US diesel refined from Iraqi crude
• 5 ¼ of diesel equivalent refined from Persian
  Gulf Crude.
• 5 blend which addresses lubricity, BPT,
  pipeline movement, universal OEM acceptance (B20
  blends will remain important market)
• 5 a volume relevant to greenhouse gas
  reduction, energy security, and feedstock supply

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The Bad.
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Challenges

• Boom and Bust cycles..Bust
• Public Policy Platform
• Feedstock supply
• Fuel Quality
• OEM, Petroleum, Customer awareness/acceptance

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According to 8/23/07 issue of Alternative Fuels
Index

• Average diesel price 2.21
• Average biodiesel price 3.52

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Biodiesel and Diesel Prices
Sources Energy Management Institute and The
Energy Information Administration
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Public Policy Platform for Ethanol
Ethanol
Renewable Fuel Standard
Countervailing Duty
(insurance policy)
(Import Protection)
Tax Credit
(economic driver)
Bioenergy Program 02 Farm Bill
Continues for cellulosic 07 Farm Bill
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Public Policy Platform for Biodiesel
Biodiesel
Bioenergy Program
RFS for Biodiesel
(insurance policy)
(Domestic Production)
Tax Credit
(economic driver)
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The Ugly.
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RD Process
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Fuel Quality - Enforcement

• Encourage Government adoption enforcement of
  ASTM D 6751
• State Divisions of Weights and Measures
• Internal Revenue Service (IRS), EPA, others.

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The Good (again).
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Heavy Duty Transient Test Results

• Installation of DPF (base fuel)
• 98 CO, 99 THC, 94 PM, 1 NOx, 2 BSFC
• B20 results in 25 PM reduction w/o DPF, 67
  reduction w/ DPF

Source National Renewable Energy Lab
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BPT/Regeneration Rate Results
BPT ULSD 360ºC B20 320ºC B100 250ºC

• BPT is 40ºC lower for B20
• Soot is more easily burned off of filter
• B20 can be used for lower temperature duty cycle

• Regeneration rate increases with increasing
  biodiesel content
• Even at 5, biodiesel PM measurably oxidizes more
  quickly

Source National Renewable Energy Laboratory
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National Biodiesel Conference Expo
Join us in Orlando for the National Biodiesel
Conference Expo 2008 February 3 - 6, 2008 at
the fabulous Gaylord Palms Resort and Convention
Center.
www.biodieselconference.org