OPERATORS of storage terminals and bulk plants were generally optimistic when Minnesota adopted a mandate in 2005 calling for a 2% blend of biodiesel in all diesel sold for on-road use. After all, Minnesota was taking a proactive step to promote the use of a renewable fuel made from soybeans grown by the state's farmers.
However, optimism faded quickly to frustration, anger, and panic with the on-set of the first strong cold snap in December 2005. Poor quality biodiesel contained high levels of glycerin that froze into large globs that plugged piping, valves, and filters. The contaminated fuel wrecked havoc at storage facilities and threatened to shut down thousands of diesel-powered tractor-trailer rigs, fire trucks, and school buses across the state.
Minnesota's biodiesel freeze-up was a prime topic of discussion among terminal operators and petroleum distributors attending the National Biodiesel Conference in San Diego, California, in February. Conference panelists provided an in-depth discussion of the Minnesota experience.
The National Biodiesel Board (NBB) and the Minnesota Biodiesel Council went to work immediately developing an action plan to address the biodiesel quality issues, according to Joe Jobe, NBB chief executive officer. First off, they called for a temporary waiver from the B2 mandate to allow terminals to test the biodiesel in storage and replace contaminated product. The waiver lasted through January 2006.
“We want Minnesota truckers, petroleum distributors, and other state residents to know that we take biodiesel fuel quality extremely seriously,” Jobe said. “We took an aggressive stance to ensure that the biodiesel produced and used in the state meets the national specification for the fuel and is trouble-free.”
Other recommendations included calling for all biodiesel producers to become accredited under BQ-9000, the industry's quality assurance program. The proposal also would require biodiesel suppliers to provide a certificate of analysis for each batch of fuel.
The quality requirements would be backed up with strong enforcement from the Minnesota Department of Commerce. Sanctions would include suspensions and fines for producers that sell out-of-spec biodiesel.
Cold weather and off-spec fuel were just part of the problem in Minnesota, according to Rick Neville, president of Western Petroleum Company in Eden Prairie, Minnesota. He outlined a variety of issues that contributed to the biodiesel difficulties this past winter, including customer demand for higher percentage blends (20% to 40% biodiesel) because petroleum-based diesel prices were soaring.
Solvent effect
Even before the onset of cold weather, problems cropped up due to the solvent effect of biodiesel at high blend concentrations. Fuel systems (bulk plants, fleet storage tanks, and truck stop storage tanks) downstream of the terminals were not adequately prepared before biodiesel was introduced. A University of Minnesota study found that some fuel filters were plugged with metallic particles (rust and scale).
“There is also the tank bottom theory,” Neville said. “Storage tank bottoms got into the fuel mix due to low diesel inventories. This is something that was vigorously denied by refiners and terminal operators, but it does seem plausible. Widespread terminal outages following the Gulf Coast hurricanes in 2005 resulted in empty storage tanks. When they were refilled, tank bottoms and sediment were disturbed and entered the fuel stream.”
All of these problems were aggravated by overall poor cold weather management of the biodiesel fuel. Neville criticized improper or inadequate use of pour point depressants and cold flow improvers. Number one diesel also was unavailable for winter blending at many terminals serving the Minnesota market.
Among the lessons learned: Storage tanks must be cleaned before biodiesel and biodiesel blends are introduced into the system. Terminal safeguards must ensure at least minimum use of cold flow improvers in the base diesel product. Biodiesel producers should sell only to distributors that demonstrate a commitment to quality.
“We need to view biodiesel quality the same way we do jet fuel quality,” Neville said. “We do an excellent job with jet fuel. There's no reason we can't succeed with biodiesel. We need to work with our customers to help them get through the hiccups. Let's face it, we're going to see even more distribution quality problems with ultra low sulfur diesel.”
Incentives top mandates
Matt Schrimpf, HWRT Oil Company LLC, provided a counterpoint to the Minnesota biodiesel mandate. He suggested that better results could come through state incentive programs, rather than mandates.
“Economics should dictate biodiesel demand, not mandates,” he said. “Incentives have been very beneficial for us. Our first experience with biodiesel was in 2000, long before the federal excise tax break and Illinois sales tax break. We marketed primarily to farmers, and annual demand for our B100 product grew to just 800,000 gallons by 2004.
“Illinois passed its sales tax break for biodiesel in 2003. Users of B1 to B10 blends got an 80% tax break. Blends of B11 to B99 were exempt from the sales tax. This boosted interest and demand, but more was needed to attract the broader on-road market. The additional help came in 2005 with federal incentives for alternative fuels.
“Biodiesel is now cheaper than petroleum-diesel in some parts of Illinois. We now sell over 1.2 million gallons of B100 monthly through our Illinois terminals in Norris City and Hartford.”
Quality importance
One of the earliest lessons learned by the managers at HWRT Oil Company was the importance of biodiesel quality. The focus on quality has to start with the biodiesel producer and extend through every link of the distribution chain. “Quality doesn't improve in transit,” Schrimpf said.
Petroleum marketers and storage terminal operators need to test all biodiesel coming in from producers to ensure that it complies with ASTM 6751. Many new plants are coming on line, and they do not have a track record. They need oversight.
“At a minimum, I would suggest that you spot check even loads from the most trusted supplier,” Schrimpf said. “One faulty load of biodiesel could potentially contaminate more than 600,000 gallons of blended fuel. The total level of contamination could approach one million gallons when you add in product already in a customer's storage tank.”
Through trial and error HWRT Oil Company managers have developed a biodiesel infrastructure that can accommodate growing demand for the product without sacrificing quality. Storage at its terminals is sized for three to five days of operating inventory.
Pump contamination
At the Hartford terminal, the company even installed its own stationary pump for offloading in-bound shipments of biodiesel. “Due to multiple tank truck carriers bringing product into the terminal, we were concerned about potential contamination from their pumps,” Schrimpf said. “Our pump offloads a truck in 20 minutes and eliminates the potential for gasoline, dye, or water to be introduced into our system.”
Temperature protection is a serious concern at HWRT Oil Company. Storage tanks, piping, and product pumps are all insulated and heated to ensure that biodiesel is kept above 45° F.
“We take precautions to ensure that product never gets below that 45° F minimum, Schrimpf said. “We even require carriers to haul biodiesel in insulated tanks from November 1 to March 1.”
The petroleum marketer chose a sequential blending system at the loading rack because it ensures proper blending of biodiesel with petroleum diesel and additives. “The technology we specified for biodiesel is essentially the same as that used for ethanol blending,” Schrimpf said.
HWRT Oil Company uses a fully automated system. Petroleum transport drivers choose the desired blend; enter the gallons, and the system loads the biodiesel first, followed by petroleum diesel.
Terminal and bulk plant operators must make sure the system is capable of handling the number of blends needed by customers. In the HWRT Oil system, each blend equates to six products and that will increase to eight once ultra low sulfur diesel enters the market. HWRT Oil offers the following biodiesel blends: B2, B5, B11, B20, and B99.
Winterizing additives are injected during the blending process for many HWRT Oil customers. Schrimpf cautioned that some customers experienced fuel problems when they mixed aftermarket additives with the pre-additized biodiesel blend.
Storage program
Vince McBroom, vice-president of the Northwest Division for SC Fuels, agreed that the biodiesel quality process must extend across the entire supply chain, from production to handling and storage to transportation. “You have to realize that you can't store and handle biodiesel like you would petroleum diesel,” he said SC Fuels has developed detailed procedures for biodiesel handling. It requires dedicated, heated tankcars for inbound shipments of biodiesel. Tankcars are sampled before product is offloaded into a storage tank. The inbound product is piped through a 25-micron filter to remove contaminants before going into a storage tank.
A biodiesel storage program is a crucial part of the quality process at SC Fuels. Storage tanks used for biodiesel are thoroughly cleaned twice a year. Biodiesel tanks are heated and have dedicated piping and pumps. Silicon and Viton seals, gaskets, and hoses are mandatory.
Petroleum transports used to haul outbound shipments of blended biodiesel also get close scrutiny. Trailers are inspected visually and the tank compartments are flushed with clean diesel before loading commences. A product sample is collected during loading.
SC Fuels has bottom-loading capabilities, and the biodiesel is loaded first, followed by petroleum diesel. Loading rates of 300 to 400 gallons per minute ensure a good blend of the product.
Brian P Gerhart, chief operating officer of Independence Biofuels Inc in Middletown, Pennsylvania, said that terminals must have both truck and rail access for in-bound biodiesel shipments. Pipeline movements are not practical at this time.
Biodiesel blends will be bottom-loaded at most terminals. Splash blending will be most common even though it is more reliant on the truck driver. The biodiesel is added first in bottom loading, which promotes better mixing during cold weather.
Splash blending is used by Tri Gas & Oil Co Inc in Federalsburg, Maryland. One hundred percent biodiesel is stored in underground tanks with a total capacity of 50,000 gallons, according to Seth Powell with Tri Gas & Oil Co. Product in the underground storage tanks is maintained at 50° F to 60° F year-round.
The petroleum marketer blends B2 and B99 in tankwagons and transports for shipment to customers. The fuel is winterized with additives from October 15 to March 15. The blends must be agitated to ensure a proper mix.
Wildstream blending
Wildstream injection blending is a better approach, according to David C Schildwachter Sr, Fred Schildwachter & Sons Inc, The Bronx, New York. The benefit of wildstream blending is that biodiesel and any additives are injected into the petroleum diesel stream during loading. It is a very precise and thorough blending process.
The Schildwachter 4.5-million-gallon barge terminal uses wildstream blending for B20 biodiesel. The company also plans to produce B2 blends if lubricant additives are mandated at the terminal level for ultra low sulfur diesel.
Biodiesel blends are dispensed at two racks outfitted with Toptech Systems Inc computerized controllers. Each rack has two lanes with a total of seven loading arms for biodiesel blending. Metering and control hardware are skid-mounted and are enclosed in a compartment that is fully insulated and heated.
The water heating and recirculation system is designed to keep the biodiesel handling system at a minimum of 60° F. A B20 biofuel-fired boiler maintains temperature with continuous circulation from a heat exchanger to the loading racks and the 250,000-gallon biodiesel storage tank.
Other threats
Heated storage tanks and loading rack systems can protect biodiesel from cold winter weather, but that isn't the only threat the fuel faces. Gary Weinberg with Haycock Petroleum Co in Las Vegas, Nevada, listed three additional threats to biodiesel quality.
Algae/bacteria can grow more quickly in biodiesel than in petroleum diesel. Water bottoms in underground storage tanks allow bacteria to grow at a much faster rate — four to six weeks in many cases. The result is a slimy deposit that plugs fuel filters.
Entrained water at 500 parts per million and higher in biodiesel gives the fuel a cloudy appearance.
Higher heat from diesel engines with exhaust gas recirculation seems to cause destabilization in biodiesel. Basically, the biodiesel is turning black. Weinberg said Cummins Inc is examining the problem, which turned up in school buses with Cummins ISC engines.
“We've solved most of the problems over the past 24 months by working with an additive supplier on custom packages,” Weinberg said. “We're using a stabilizer to prevent oxidation, a bug-out product to prevent algae and bacteria, an anti-gel to protect the fuel down to 0° F, and a dehazer to disperse entrained water.”
Tim Keaveney, Sprague Energy Corporation, said that the biodiesel distribution problems can be overcome and the market will grow. “We're seeing a perfect storm of political, environmental, and economic events that support further expansion of biodiesel distribution,” he said.
He added, however, that petroleum terminals are the missing link in the biodiesel distribution process. Terminals are essential to the growth of the biodiesel marketing effort. A proper terminal-blending infrastructure must be put into place to ensure that adequate volumes of biodiesel reach consumers.