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					Wisconsin Legislative Council

       September 16, 2008
      Presented by Hoon Ge
     Summary of Topics

• Adequacy of Current Fuel Distribution
    System of Ethanol and Biodiesel
•   Prospects for Biofuel Pipelines from
    Midwest to Population Centers
•   Infrastructure Studies
•   Concerns of Biodiesel Users
•   Minnesota Ethanol and Biodiesel
    Mandate Experience
      Energy Independence &
       Security Act of 2007
Biodiesel Requirement
– 500 million gallons used by 2009
– 1 billion gallons used by 2012


Ethanol Requirement (corn-based)
– 15 billion gallons by 2015
– 36 billion gallons by 2022
Current U.S. Biofuel Production
Biodiesel is already meeting 2009 goal at
550 million gallons

Ethanol is estimated at 13.5 billion gallons
Midwest Biodiesel Production
         Facilities
       Over 40 throughout Midwest
 Midwest Ethanol
Production Facilities
  Ethanol Pipeline Feasibility Study
       Sec. 243 in the 2007 Energy Act
  Studying the feasibility of the construction of an
             dedicated ethanol pipeline

Study:
  Existing potential barriers to the construction of pipeline
  (technical, financing, regulatory)
  Market Risk
  Financial Incentives that may be necessary
  Technical factors that may compromise safe
       transportation of ethanol
Transportation of Renewable Fuels
       Sec. 245 in the 2007 Energy Act
 Studying the Adequacy of Transporting Bio-fuels

Study Includes:
  Infrastructure/equipment Capabilities
  Cost of Transportation (and Fuel increases due to it)
  Distribution Issues
  Transportation Competition (and federal regulations)
  Addressing Transportation Service Problems
  Total Cost of all Programs to regulate transportation
   Bio-fuels Infrastructure Study
        Sec. 9002 in the 2008 Farm Bill
     Federal Procurement of Bio-based Products
Study:
Into the use of bio-based products by Procuring
  Agencies
Effects of bio-based products on functionality of
  Agencies

Bottom Line: Preference for Contracts that implicate
 more Bio-based products (as long as products
 don’t affect Operability of the Agency)
        Biodiesel Pipeline?
75,000 barrels of B5 moved on the
Colonial Pipeline from Houston to New
Jersey
DOE supported the test
Test was completed and successful
   Only issue is trail-back of biodiesel into Jet-fuel…
    must be less than 10 ppm
Other test scheduled
          Ethanol Pipeline?
Magellan Midstream Partners/Buckeye Partners -
proposed pipeline would run 1,700 miles for a cost of $3
billion and take several years to build. The pipeline
would have the capacity to take 10 million gallons of
ethanol per day produced in IA, IL, MN and SD and
deliver it to Pittsburgh, Philadelphia and New York.
Colonial Pipeline Company - using geographic
information systems to build business models for ethanol
pipelines. Using the business models, the company can
compare production capacities of ethanol plants,
proximity to existing pipelines, population centers for
distribution, geographical concerns and other modes of
transportation.
     MN Ethanol Mandate
Phase Separation
Remedy was to remove all the free water
from fuel tanks
   MN Biodiesel Experience
Complaint filed by Flint Hills Pipeline of off
quality product: Oct 27, 2005
– Dept of Commerce Wt/Measures finds
  biodiesel out of spec for flash point
– Dept rules that blending out of spec biodiesel
  is illegal by statute
– NBB is notified to determine the purpose of
  flashpoint testing and lab error analysis: flash
  point for diesel is 50 – 75 C, Biodiesel is 130
  C.
         MN Experience
Mandate suspended for 10 days
Out of spec flashpoint product found at 5
terminal locations in the state
Dept of Commerce began sampling at
terminals and Mn producers
November 8, mandate reinstated
Cooperation of stakeholders allowed
blending to begin
              MN Experience
Root cause
– Flash point test is variable
– Some biodiesel from producers may have been below ASTM
  spec
– Downstream tests of cross-contamination from ethanol or diesel
  was not conducted
– Plants must meet 130C to ship, terminals 100C to blend
– Some biodiesel was retrieved by producers and brought back to
  spec
– Specification has since been changed in ASTM
     130 C flash or 100 C flash with GC proof of methanol content
          MN Experience
Terminals began to institute procedures
for approval of suppliers
Nov 2005, task force began to investigate
cold weather plugging complaints,
discussion of possible filter plugging from
in-spec product
Feb 2006, filter plugging issues found out
of spec biodiesel
         MN Experience
Plants shipping out of spec product
retrieved all product impacted
Dept of Commerce inspected all in-state
producers for compliance
Suggestion of BQ-9000 and additional “Mn
cold soak test” implemented to catch
suspect product at terminals
      What was happening?
Terminals were receiving product without proof
of analysis, retains to determine offender not
always present
Some production facilities were still filling tanks
while trying to certify the product
Product tanks on average met standards, but
individual loads were suspect
Sediment above cloud point was identified as
potential issue
– Either high mono-glycerides or sterols
– ASTM std does not indicate mono-glyceride limit, only
  free and total limits
 Concerns of Biodiesel Users

Microbial Growth – Exposure to air and water
Icing of Filter – Excess water in tank
Oxidation – Hot fuel return to fuel tank
Monoglyceride Build Up – Off specification of
Total & Free Glycerin
Paraffin Wax – Temperature at or below cloud
point
Breakdown of Filter Plugging Sources
From April 2007 to March 2008 - Filter Plugging Problems
       Addressed by the National Biodiesel Hotline

Microbial Only                                21%
High Water and Microbial                      18%
High Water Only                               15%
Biodiesel Contaminants                        10%
No problem Found                              10%
Improper blending                              8%
Other                                          8%
 Oxidation, Oil Contaminants
Biodiesel Didn’t Meet Specification             5%
Outside Temperature Was Below Cloud Point       5%
ULSD Paraffin’s                                 3%

				
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