SeQuential Blog Biofuels

Bring on the B-5 biodiesel

2011-02-16T23:03:00.000-08:00

Effective April 1st, 2011 all diesel road fuel sold in the state of Oregon will contain a 5% biodiesel blend.

The state of Oregon has achieved a biofuel milestone by reaching an annual production of 15 million gallons of biodiesel. Reaching this goal has set into motion the next phase of the Oregon Renewable Fuel Standard (RFS) which mandates a minimum of 5% biodiesel to be dispensed in all diesel fuels sold in the state.

This increases the current biodiesel mandate of 2% biodiesel (98% petroleum) blend. This measure not only assures the sustainable production of biodiesel fuel in the local Oregon economy, but also shows the state's logistical approach in addressing the need to lower our carbon emissions.

Exceptions to this mandate include:

1.) railroad locomotives

2.) marine engines

3.) home heating applications

Links:

Oregon Renewable Fuel Standard

B-5 notification (PDF file)

Biofuels Tax Credit How to claim the Oregon Biofuels Tax credit for B-99 and E-85 fuel blends

2011-01-30T20:55:00.000-08:00

It's tax season and we've had a few requests for more information on the biofuels tax credit for Oregon residents.

Passed in 2007, Oregon House Bill 2210 allows Oregon residents to claim a tax credit of up to $200.00 per year for purchasing B-99 biodiesel, and E-85 ethanol fuel blends.

"Governor Kulongoski, provides a package of measures to encourage greater development, distribution and use of agricultural and forest material for biofuels, for electricity and for other forms of biomass energy use. The bill expands property tax incentives for biofuel and certain fuel additive production facilities, establishes a new tax credit for producers and collectors of biofuel raw materials, based on Btu content of feedstock, and creates an income tax credit for consumer use of biofuel "

courtesy of Oregon.gov

How to claim the tax credit:

(For our example we will be using the standard 2010 Oregon 40 form.)
*click on form to download*

Claiming the biofuels tax credit is a pretty straight forward process. One quick thing to note is that a tax credit is not the same as a tax deduction. A tax deduction is an expense that lowers your total taxable income. In this case with a biofuels tax credit, it is a specific dollar amount that you can subtract from your liability to the state. In short, it's less money that you have to pay the state or more money that you would get back from the state.

1.) Gather all receipts for B-99 or E-85 fuel purchased in Oregon in the 2010 calendar year and add up the total amount of gallons purchased.

*If you purchased these fuels @ the SeQuential station in Eugene the receipts should have a dollar amount per gallon as well as a gallon amount that is specific to the thousandth of a gallon.

Ex: "10.132 gallons"

2.) B-99 tax credit is $.50 per gallon & the E-85 tax credit is for $.42 per gallon.

3.) Multiply your total gallons purchased by the appropriate credit for each fuel type.

4.) Go to box #39 on the 1040 form and plug the total into the box.

"Biofuel Consumer (code 744)"

5.) This is the total that you subtract from your debt to the state or money that the state may owe you as a refund depending on your individual situation.

6.) That's It!

Please note that the tax credit is ONLY for B-99 and E-85 fuel blends at this time.

The tax credit is eligible up to a maximum of $200.00 per vehicle registered in Oregon.

The tax credit is a consumer tax credit and does not fall under the business expense category

*If you are preparing your taxes on-line, most services already have the necessary information built into the program for you to fill out.

New E85 flex-fuel station app for Android smart phones

2011-01-11T15:16:00.000-08:00

The Renewable Fuels Association has released a free and useful mobile phone app for the Android smart phone line.

As many of you know, biofuels aren't always the easiest fuel to track down, especially when you're traveling or just in an unfamiliar area. This new app provides users with E85 station locations, prices, phone number, and most importantly -- directions.

I recently spent the holidays w/ my family in Arizona where we had rented a flex-fuel vehicle from the airport. I had installed the app a few days earlier and was excited to see it in action when I fired it up in a big city with hundreds of fueling stations. Within seconds a full map appeared on the screen displaying the stations in the area with an E85 pump.

With the mobile app becoming a growing standard in our daily lives, it is exciting to see an application designed specifically for the biofuel markets. No word yet on a biodiesel specific application, but I think it's only a matter of time until one is released.

“Being able to provide America’s consumers with more access to flex-fuel stations is helping raise awareness of the increasing amount of alternative fuels that are available to them,” said RFA Market Development Director, Robert White. “As more Americans fuel up with domestic fuel, we can reduce our dependency on foreign oil and increase energy security.”

Links:

Renewable Fuels Association

E85 locator app for Garmin & TomTom GPS systems

Zeachem Inc. secures financing for completion of Oregon cellulosic ethanol refinery

2010-12-13T12:26:00.000-08:00

Zeachem Inc, a leading developer for producing cellulose-based fuels, has announced that their new biorefinery will be completed on schedule and within their budget.

The news comes after the company recently secured a guaranteed maximum price (GMP) for the construction of the refinery and a $25 million grant from the US Department of Energy. The new 250,000 gallon facility broke ground this summer in Boardman OR, with fuel grade cellulosic ethanol expected come on-line in 2011.

Zeachem's Technology Overview

Links:

Press Release

Zeachem

Convenience Store News - Oregon bans alcoholic energy drinks

2010-12-03T12:57:00.000-08:00

The Oregon Liquor Control Commission (OLCC) has banned certain alcoholic energy drinks - effective immediately after a 4-1 vote at a special meeting last week.

These drinks have made recent headlines in the Eugene area with many UO undergraduates reportedly landing themselves in the emergency room after consuming several of the 24oz cans in one night.

“The OLCC has been concerned about the health risks of these products for some time,”says OLCC Chairman Philip Lang.

“It’s unfortunate that so many young people around the country were hurt by these products. We’re glad that we can play a role in preventing that from happening here in the future.”

Health experts confirm that the high level of caffeine can mask the effects normally felt from consuming alcohol in large volumes and the consumer therefore drinks more and more. Some cans have as much as 12% alcohol by volume, which puts one 24oz can equivalent to 4-5 regular sized beers. Combine that with the caffeine content and you are essentially drinking 4 beers and 2 cups of coffee at one time.

Why are we reporting on this?

Because "traditional" or "regular" convenience stores are the main retail locations for this controversial beverage. The drink is targeted at the youth market & people with smaller disposable incomes. It directly promotes rapid intoxication at the low cost.

These drink choices have no socially redeeming purposes & only go to illustrate the lack of ethics in convenience store management across the country. Just because you can make a profit off of something, doesn't mean that it's ok to sell it to your local community.

We're trying to be a better convenience store.

Our SeQuential retail station has adamantly refused to carry such products in our store because of these negative impacts of the drink. We love our community and there are so many better beverage choices that are readily available the Northwest. We feel this one is a no brainer because it only takes a little more effort to provide your customers with higher quality choices at different price points.

A short video by the Associated Press:

Links:

OLCC's overview

2010-11-14T17:52:00.000-08:00

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Real time info-graphic by the National Biodiesel Board.

2011 Ford diesel truck engines fully compatible w/ biodiesel blends

2010-11-07T17:35:00.000-08:00

Ford's new and improved 2011 Power Stroke® V-8 turbocharged diesel engines are tested and approved to run on B-20 biodiesel.

The new engine design has performance improvements across the board in comparison to older heavy duty diesel engine models. Even more exciting is the news that this engine has lower overall emissions + greater flexibility in fuel choices with the capability of running B-20 biodiesel blends at high performance levels. To put it simply, It's a whole lot of truck with decreased environmental impact.

This increased biodiesel application in the new heavy duty engines increases biodiesel's use in industrial applications and passenger vehicles. This is an encouraging sign because vehicle and engine manufacturers hold a responsibility to biofuels enhancement as an on-road & off-road vehicle fuel of the future. We don't have much say in how an engine is built, but we can have the buying power to choose what type of fuel source we want to operate it with. After market modifications can always be made, but those usually come with downtime & significant costs to the consumer.

Biodiesel's natural ability to blend with petroleum diesel in any percentage is simple and beneficial common ground for engine manufacturers and consumers. I've personally met hundreds of die-hard B-20 drivers at the station who use and can attest to the performance & choice that B-20 has already given them. It's not just an easy way to go green, it's a proven way to get the job done.

I love the fact that Ford is promoting their new engine with a new Power Stroke® B20 emblem directly on the trucks. Hopefully we'll be seeing more of this is next year's models.

Links:
Ford Media Page w/ full engine info
Ford's green technology website
National Biodiesel Board
Edmund's review: 2011 Ford Super Duty
Ford's 2011 Super Duty website

Electric Car Charging Stations going to?

2010-10-25T15:36:00.000-07:00

We all know one of the major drawbacks to electric cars: limited driving range. Yet, if there was a charging station on every corner it wouldn’t be an issue. The Department of Energy (DOE) recently announced a program to invest in several charging stations throughout Oregon.
Naturally, SeQuential was very excited about this given our proximity to I-5 and our commitment to sustainability. DOE gave the placement logistics to a third party company, who we met with several times.
Much to our dismay, we learned last week that SeQuential will not be receiving a charging station. Instead or going to local businesses, the chargers will be going to Arco stations, and only Arco stations. If there’s a sustainability connection to Arco, I’m certainly not aware of it.
This raises plenty of issues: the reality that big corporations will inevitably end up in the sustainability business, the importance of continuing to support truly local businesses, and that even the noble sustainability movement will encounter shady, back-door dealings to test the patience of us who desire positive change.

100 Years From Now...

2010-05-21T15:50:00.000-07:00

Where do we want to be 100 years from now? You may ask, "Why do we care?" After all, we have serious problems now, and we need to deal with them right now. Forget this distant future stuff.

We care because currently, we lack a clear end-goal. For global warming, fossil fuels, and transportation, there's no obvious finish line anywhere in the near or distant future. When will we declare these problems solved? All we have is the ubiquitous Reduce-The-Bad mentality: "minimize the impact..." "reduce the consumption..." These are not clear end-goals.

Where do we need to be in 100 years? Take transportation: our cars and the fuel they run. The fuel needs to be made responsibly, using 100% renewable resources that don't add net-CO2 to the air. The fuel needs to be transported using 100% renewable resources, and produced using energy that is 100% renewable.

But it's much more than fuel. Take apart the car: the metal, paint, plastic, rubber, and fluids should all be easily produced and easily disposed of. They should fall into one of 2 "Cradle-to-Cradle" categories: 1) infinitely recycleable (like high-grade metals) or 2) truly biodegradable (meaning breaks down and nourishes the natural environment). There's no such thing as "acceptable pollution" or a law that says "you can pollute the earth this much."

Today, even our most sustainable cars like the Toyota Prius fall far short of these goals. The Prius runs on gasoline, a finite and CO2-emitting fuel. The plastic dashboard is made from petroleum-based plastic. The paints are not low-VOC or natural or non-toxic. The batteries are a mess from start to finish.

While it's true that progress is slow, that a silver bullet doesn't appear instantly, having these clear goals in mind helps drive our designs-pun intended. We don't need a scientific breakthrough like cold fusion to solve our problems. We can build cars now, today, using existing technology that meet all of the above criteria. If we could close our eyes and imagine driving a fun car made from recycled steel, non-toxic interior parts, recycled rubber tires, running on a clean local fuel, then maybe we would see that car when we open our eyes.

The 2 Big Questions

2010-04-23T14:36:00.000-07:00

As consumers, we drive the products available. If no one bought something, it would disappear quickly. On the flip side, whatever you buy a lot of will stick around for a while. There are 2 questions we need to ask about any product we consume:

1. What is it made from?

2. How is it made?

In our business, what are the biofuels made from? There are many choices: corn, soy, used cooking oil, algae, cellulose, expired soda pop, food scraps, palm oil, sugar cane, jaltropa seeds, camelina, hemp, canola, fish oil, animal fat, and many more. SeQuential has always had this question in mind. We source the best options from all of these: our biodiesel - made from used cooking oil - has the lowest lifecycle carbon footprint of any alternative fuel, including electric cars plugged into today's grid. Our ethanol is still evolving, but much of it now comes from food processing sugar waste. Produced this way, it shatters the conventional wisdom about ethanol being an evil fuel that will starve the world and destroy the environment.

How is it made?

If we made these cool biofuels using slave labor, coal-fired electricity, barrels of petroleum, and produced tons of waste by-products, the game is up. Fortunately, this isn't the case! Our plant in Salem uses a proprietary washing system that produces zero waste water and a high-grade fertilizer. Heavy fats and oils that can't be processed are burned for heat and power. We have a distilation column to capture and re-use our methanol. All employees are paid excellent wages and have full benefits.

Here's the bottom line: consumption is complex. Boiling this complexity down to simple triggers like "biofuel" or "organic" is not good enough. Shallow doesn't cut it, you have to go deeper.

Jealous of Europeans? You are now!

2010-04-13T12:13:00.000-07:00

Americans are all too familiar with gasoline engines. Our diesel engine experience is limited to big trucks, old Mercedes, and a handful of newer VW's. Yet we hear about this high mileage utopia called Europe, where stylish diesels are in every garage.

The message from car companies is "America isn't ready for diesel...we can't make cars that get high mileage...it's all too costly..." Without going to Europe, and hearing messages like these, we logically conclude European diesel cars exist from annonymous brands we've never heard of. Mythical companies shrouded in secret...wooooooh.

Let the truth shine in! Below are interesting links from your favorite car companies. Hopefully these are the cars we'll be driving in the near future.

Warning: the following may increase your desire to leave America.

Honda Civic w/ diesel engine getting 55mpg: http://www.honda.co.uk/cars/civic5door/#fullspecification

Subaru Outback w/ diesel boxer engine, getting 43mpg: http://www.subaru.co.uk/Subaru_co_uk/ViewMenu.qed?menuid=M0M0M1

Toyota Yaris w/ diesel getting 69mpg: http://www.toyota.co.uk/cgi-bin/toyota/bv/generic_editorial.jsp?deepLink=YA5_Specification_new&nodiv=TRUE&fullwidth=TRUE&edname=specSheet_YA5&carModel=Yaris&imgName=bv/CarChapter/YA5/Imagery/YA5_spec.jpg&zone=Zone%20YARIS&navRoot=toyota_1024_root

Expanded SeQuential-Pacific Biodiesel facility is online

2008-11-10T11:51:00.000-08:00

After a years work, the newly expanded SeQuential-Pacific Biodiesel facility has turned on and has started producing biodiesel. The facility has some major improvements in efficiency and production processes - making biodiesel even more sustainable.

The Statesman Journal did an interview with Plant Manager Tyson Keever - check it out:
http://www.statesmanjournal.com/article/20081110/NEWS/811100329/1001/NEWS

Lots of new FlexFuels in 2009

2008-10-20T10:07:00.000-07:00

I was just checking out the list of FlexFuel Vehicles (FFV) for model year 2009 and I have to give some big kudos to Chevy. Out of the 16 engine options they are offering, 13 are FFVs.

Vehicles that have FFV engines can use any ethanol blend of up to 85% ethanol, automatically adjusting engine timing to accomodate the fuel blend. Ethanol is much cleaner burning; a car running on E85 will decrease its Carbon Dioxide (CO2) emissions by about 41%. (This number takes into account the fact that there is less energy in a gallon of ethanol than in a gallon of pure gasoline, meaning you will use more ethanol to go the same distance.) 85% Ethanol is generally the cheapest fuel around; if you are an Oregon resident, you also qualify for a $0.50 / gallon tax credit!

Historically, most FFVs have not been labeled as such - especially if you drive an American made vehicle, you might have an FFV and not even know it. Check out a list of all FlexFuel Vehicles at http://www.e85fuel.com/e85101/flexfuelvehicles.php.

A list of all SeQuential E85 Ethanol pumps: http://www.sqbiofuels.com/locations.htm

More info on the Oregon Tax credit: http://www.sqbiofuels.com/tax_credit.html

High blends of biodiesel in newer vehicles

2008-10-10T12:45:00.000-07:00

Concerns have been raised about using B99 Biodiesel in cars model years 2007 and beyond. SeQuential is researching these concerns and will update you as we learn more. In the mean time, if you are uncomfortable using a high-blend biodiesel, consider using a lower blend of biodiesel such as B5 or B20.

Cold weather is here: keep your vehicle on line!

2008-10-09T13:10:00.001-07:00

It is time, once more, to switch to a lower blend of biodiesel.

For those of us who have been running B99 biodiesel thru the warmer months, now is the time to add some petroleum diesel to our fuel tanks to make sure there are no gelling problems.

Pure biodiesel will gel at colder temperatures; if you are having trouble starting your car in the morning, add some petroleum diesel to your fuel tank and let it mix in there. At the warmest part of the day, start up your car and then let it idle for a while.

SeQuential's recommendations are as follows:

45˚F, start blending with petroleum diesel

By the time temperatures reach 32F, you should be using 50% BIODIESEL and 50% diesel #2.

When temperatures get to 20F, you should be using 20% BIODIESEL and 80% diesel #2.

20% ethanol for every gas car?

2008-10-09T09:31:00.000-07:00

The Department of Energy released a report today with their initial findings on a project to identify the effects of higher blends of ethanol in engines not designed for the fuel.

Vehicle results include the following when E15 and E20 were compared with traditional gasoline:

Tailpipe emissions were similar;
Under normal operations, catalyst temperatures in the 13 cars were largely unchanged;
When tested under full-throttle conditions, about half of the cars exhibited slightly increased catalyst temperatures with E15 and E20, compared to traditional gasoline; and,
Based on informal observations during testing, drivability was unchanged.

It is a little confusing that tailpipe emissions were similar. From research I've seen, 10% Ethanol blended in with gasoline decrease carbon dioxide (CO2) emissions by about 5%. E85 Flex Fuel (85% ethanol) decreases CO2 by about 41%.

It will be interesting to see where this research leads - bringing more ethanol into the fuel supply would decrease overall mileage, but it would decrease dependence on foreign oil as well.

Camelina approved for feed in Oregon

2008-10-02T10:45:00.000-07:00

Good news on the better fuel front: the Oregon Department of Agriculture approved Camelina meal for cattle and hog feed. This opens the door for Camelina, an oilseed that grows with little to no water or fertilizer in poor soil, to be produced more widely for biodiesel production in Oregon.

Camelina meal is what is left over after seeds are crushed for oil; the ODA ruling means that now farmers can sell all parts of the seeds, making it worthwhile for them to grow on their marginal lands.

New oil dropoff sites for the public

2008-09-18T11:31:00.001-07:00

Do you have 10 gallons of oil you used to deep fry your turkey? Expired olive oil or salad dressing?

Now you can dispose of your vegetable oil responsibly, knowing that it will be turned into cleaner burning fuel!

Please call dropoff sites ahead of time for their hours:

Encore Oils: 503.954.2154
10111 NE 6th Dr, Portland

Salem Keizer Recycling & Transfer Station: 503.588.5169
3250 Deer Park Dr. SE, Salem

North Marion Recycling & Transfer Station: 503.588.5169
17827 Whitney Lane NE, Woodburn

SeQuential Retail: 541.736.5864
86714 McVay Hwy, Eugene

If you are a restaurant or a processing facility and have commercial levels of used cooking oil, Encore Oils will buy your oil from you! Call 503.954.2154 for more information.

Biofuels Northwest - City Club of Eugene 9/8/08

2008-09-12T10:19:00.000-07:00

City Club of Eugene 9/8/08 Friday Forum.

Ian Hill of SeQuential & Mark Kendall with the Oregon Department of Energy discuss biofuels in the Northwest. Download from KLCC here.

Ford: Americans don't want fuel efficient cars

2008-09-08T14:18:00.000-07:00

On Saturday I tabled at the Muddy Boot Festival in Portland and encountered the same supportive message that I've been hearing on a day to day basis for the four years I've been with SeQuential: "Biodiesel is a great idea, but I don't have a diesel car!"

I thought it fitting, with that in mind, when I read this article from Grist: Ford's Fiesta ECOnetic, which gets 65 mpg with a diesel engine, won't be sold in America. According to Ford America President Mark Fields, "We just don't think North and South America would buy that many diesel cars".

Now granted I know that the people I've talked to (from both sides of the isle) across little old Oregon don't represent the majority of the people in the US, but I don't understand why US automakers are so hesitant to offer reliable, long lasting, fuel efficient, diesel vehicles. Pass by any auto dealership and you'll see advertisements promoting "30+ MPG!", as if this is impressive and notable. If people are making purchase decisions based on mileage, which you would assume they are with the recent higher gas prices, why not offer US consumers the same car that is already in production elsewhere in the world?

All conspiracy theories aside, I'm baffled - the market is ripe for high mileage cars, especially diesel. Just look at the market for used Volkswagen TDIs - they consistently sell above their blue book values, especially older models that have smaller engines (and better mileage).

Grand opening of the new SeQuential-Pacific facility

2008-09-08T13:35:00.000-07:00

The newly expanded SeQuential-Pacific Biodiesel (SQPB) facility in Salem opened its doors on August 29th. The grand opening ceremony had SQPB investor Willie Nelson on hand and many local business partners like Kettle Foods, Tyree Oil, DeSantis Landscapes, Burgerville, Portland Greenheat, Star Oilco and Cherriots.

The new facility is a major step forward for biodiesel in Oregon - its capacity is five million gallons a year (up from one million) and uses a new technology to produce biodiesel. Traditional biodiesel production uses water during a cleaning process to "wash" the fuel, resulting in wastewater.

The new SQPB facility uses technology developed in-house based on silica; the only byproducts of our biodiesel production are now fertilizer and animal feed! Coupled with the fact that about 90% of our biodiesel comes from locally collected Used Cooking Oil, and you've got one of the most sustainable biodiesel facilities in the world!

Photos: Karen Rippey

Where does your gas money go?

2008-07-24T10:41:00.000-07:00

This chart shows where the cost of gasoline at the pump comes from as a percentage. This is not based on biofuel cost, but odds are that it would look fairly similar, since most costs are fixed. A fixed cost doesn't change when the price of fuel changes. Taxes, production, gas station and distribution costs are all generally fixed numbers. For example:

In Oregon, every gallon of fuel has $0.484 of State and Federal Road Tax on it, regardless of price.

When the price of fuel at the pump is high, credit card fees and crude prices take a larger slice of the pie.

Not shown: where geographically gas money goes. Oregon has zero oil refineries, but several biofuel production plants. It is very difficult (if not impossible) to track where individual gallons of petrol come from - it all gets pooled together in giant tanks before being distributed. That said, according the the Energy Information Administration, the US imports 55% of all petroleum it uses.

What irrigated crop takes up three times more US landmass than corn?

2008-07-16T10:27:00.000-07:00

What irrigated crop takes up three times more US landmass than corn?
Look no farther than your front lawn.

This is a story that was released a few years ago, but is still very relevant: people's lawns are slurping up a huge amount of water, fertilizer and herbicides, but giving very little back.

I'm going to try to keep this post from going too much into the benefits of urban gardens, and I know it leaves out those who live in apartments, but the impact of your (or your landlord's) lawn is something you should consider:

If you water your lawn, what time of day is it - think of evaporation.
If you water your lawn, is there runoff onto your driveway or sidewalk?
Could your lawn be doing more? Food, flowers and grass alternatives all make more of a positive impact than a lawn.

This is not to say that you should not have a lawn altogether - it is a very nice luxury - but think about how much water you use (dried out grass doesn't need to be mowed!) and if there are any areas in your yard that would work for flowers, bushes, vegetables or berries.

The world is facing many macro issues and quite honestly sometimes it makes you feel a bit helpless. But, as they say, change starts at home, and your personal water / land usage can make a positive impact on the world.

Other tips for saving water:

Turn off the faucet while shaving or brushing your teeth
Wash only full loads of dishes and laundry
Fix dripping and leaking faucets and toilets
Take shorter showers
Wash cars less frequently
Water lawns and gardens on alternate evenings, not every day
Raise your lawn mower blade height; longer grass needs less water

Get involved: Growing Gardens Portland
Bonus further reading: Sowing the Seeds of Urban Farming.

Encore Oils

2008-07-01T12:37:00.000-07:00

Encore Oils
SeQuential is proud to announce the startup of Encore Oils, a subsidiary of SeQuential-Pacific Biodiesel. Encore Oils collects used cooking oil, serving restaurants and businesses in the Pacific Northwest.

Restaurants used to have to pay to get rid of their used cooking oil – now Encore Oils will buy it by the gallon! All collected oil will be taken to Salem to be processed into high quality Oregon-Made Biodiesel. For more information: www.EncoreOils.com.

US Department of Energy: Biofuels Lower Gas Prices

2008-06-16T09:09:00.000-07:00

The US DOE went on the defense for biofuels in a press release last week. They tackled one of the hottest topics of today - price - but from a different perspective, the effect of biofuels on the price of petroleum. You can read the whole release here.

The release states that in the US for 2008, biofuels will have displaced the use of 5% of all petroleum.
This 5% decrease in demand amounts to a $0.20 to $0.35 reduction in price at the pump for petroleum products.

The report also stresses that this is the impact of "first generation" biofuels. Second generation technologies, like cellulosic-ethanol and algae-biodiesel, are much more energy efficient, which translates to increased volume at lower costs.

Other good quotes from the release:

Today’s Biofuels Account for Only a Small Percentage of the Increase in Global Food Prices.
Higher oil and gas prices leading to increased costs of fertilizer, harvest, and transportation
Increased demand as developing countries grow and people improve their diets
Two years of bad weather and drought leading to poor harvests in parts of the world
Export restrictions imposed by some countries

Bike Day at the Science Factory

2008-06-09T09:33:00.000-07:00

It feels like I've been talking about food vs fuel and high prices for quite a while now on the blog.
While these issues are still at the forefront of everyone's minds, tackling them is not the sole source of activity at SeQuential.

On Saturday I was at a booth at the Bike Day celebration at the Eugene Science Factory. The sun managed to peek through the clouds (much to everyone's joy) and it was fun talking with so many people about biofuels.

Besides showing our support for bicycles (and the Science Factory!) the main reason we go to events are to answer questions about biofuels. A person's car is one of their most valuable possessions (ignoring the intangibles, love and health) and people generally have a few questions before they start using biofuels.

The questions range from the simple, "Do I need a conversion to use biofuels?" (NO!), to the complex, "What are long-range sustainable fueling options for the world?", to questions on food vs fuel and price.

SeQuential is also working on the Sunflower Project, which is an educational program in partnership with Eugene schools and community gardens. The Sunflower Project's goal is to educate children on the lifecycle of plants and how you can create fuel in your own backyard. There is an initial planting of the sunflowers; then when the plants are grown and create seeds, SeQuential will help the children harvest, crush the seeds for oil and convert the oil into cleaner burning fuel!

Also as a bonus, here is a picture of the Eugene SeQuential team from the team meeting on Sunday.

High Prices are Bad for Business

2008-05-22T10:27:00.000-07:00

As all of you know, the price of biodiesel at the pump has hit record highs. Over the past few months by phone, email, blog responses, and in person, most people have been asking me "why?"

It is a complicated issue - take a look at previous posts - but there is one large piece that I've been leaving out: the impact high prices have had on SeQuential.

On the financial side of things,we have lost volume and customers. Some people are driving less and others have gone back to petroleum fuels. The price increases have reflected the rising cost of biodiesel - not rising profit margins. The lost volume means SeQuential is struggling .

On the other side of things, I have heard disbelief at the speed and intensity of price increases; questions on price gouging and comparisons to big oil have been made. This stings - SeQuential is a very small company (there are six of us in full-time administrative positions); both as a company and as individuals, we are committed to making cleaner burning, renewable fuels available. This is not an easy task given who and what we are up against and the only way we can do this is with help from our customers.

We are in business to make a difference: to move towards energy independence, to clean up the air, to give people a choice when they fuel their cars. Stay with the right biofuels. When you fuel up with SeQuential, you are supporting a different kind of fuel and a different kind of fuel company: local, cleaner, better.

Fuel Prices

2008-04-22T18:04:00.000-07:00

I've gotten many questions on what goes into the price - as you all know, the price of both petroleum fuel and biofuel has been going up and up. (While writing this article, the price of a barrel of crude oil has hit $118.28, a price far higher than forecasted.)

SeQuential has received numerous inquiries to why this is happening, and like everything in the world, there are many factors that go into the equation. This is not meant to be a complete list, but an overview of some of the key influencers. Feel free to post any comments or questions!

Limited Supply
Without getting into a discussion on how much oil is left underground, there is a very real constraint on oil output: refinery capacity. Since 2004, refinery output worldwide has not increased.

Demand from Developing Countries
The demand for petroleum by developing countries, mainly China and India, has put a strain on the already limited supply of petroleum. Classic economics shows that when there is a supply-demand imbalance, prices raise.

Weak US Dollar
The US Dollar has been loosing value as compared to other world currencies. Since the US imports about 60% of its petroleum, the dollar is not able to buy as much petroleum as it used to.

Effect on Biofuel
Like it or not, the price of petroleum has an effect on absolutely everything in our lives, even the price of locally produced biofuel. Every day in Oregon, only 0.7% (0.007) of the total fuel used is biofuel. SeQuential sources products from companies that use biofuels as much as possible, but the reality is that most companies use petroleum fuel, tying us and our prices to the rises in the price of petroleum.

Effect on Food Prices
There have been many articles in the news as of late on how the growing use of biofuel has impacted the price of food worldwide. This is an issue that SeQuential takes very seriously; there is a wrong way and a right way to produce biofuels. Wherever possible, SeQuential uses recycled or locally grown products and the most efficient processes for fuel production.

Our sourcing principle:

Best – regionally-produced from regionally-available feedstocks. Emphasis on waste products and recycled products.
Better – regionally produced from domestically sourced feedstocks.
Good – domestically produced from domestically sourced feedstocks.
Unacceptable – biofuels that have a negative energy balance or are produced from imported feedstocks. (Brazilian soy or Malaysian palm oil.)

The effect of petroleum prices, currency imbalances, worldwide crop failures and growing demand of developing nations for meat (which requires large amounts of corn and other grains) has been largely overlooked. Given the relative small size of the biofuel industry, these other macroeconomic factors have a much larger influence. For more reading: NY Times.

SeQuential is committed to finding ways to avoid competing with food crops, such as using Used Cooking Oil or Canola and Camelina grown regionally in rotation with grass seed and other crops.

SeQuential Carbon Challenge: Earth Month 2008

2008-04-02T10:02:00.000-07:00

In celebration of Earth Month (Earth Day is not enough!), SeQuential, along with local businesses, organizations, and the Mayor of Eugene Kitty Piercy, is issuing the first annual Carbon Challenge to the City of Eugene:

Cut carbon dioxide emissions by 1,000,000 pounds during April

This is an ambitious goal , but with everyone pulling together, we can make a huge difference!

Participating in the Carbon Challenge is easy - simply go to any of the following locations and fill out an entry form that describes how you are (or will) walk, bike, bus or use biofuels instead of driving on petroleum fuels, thereby cutting your carbon footprint.

Bike Friday
Hutch's Cycles
Revolution Cycles
Down to Earth Home & Garden
SeQuential Fuel Station Eugene

You can enter once per visit for the end of month raffle. The prizes are:

A Tikit folding bicycle from Bike Friday and Hutch’s Cycles
A commuter bike from Revolution Cycles
One of three $50 fuel gift cards from SeQuential
One of five one-month bus passes from Lane Transit District
A vine maple sapling from Down to Earth Home & Garden.

We are using how much fuel?!

2008-03-24T09:36:00.000-07:00

I was going to do a different sort of analysis about this... but the scale of these numbers just wowed me so I'll let them speak for themselves.

Oregon's 2006 consumption of petroleum fuel:
4,314,400 gallons per day of gasoline (source)
2,266,600 gallons per day of diesel (source)

Oregon's 2006 consumption of biofuel:
38,356 gallons per day of ethanol (source)
10,959 gallons per day of biodiesel (source, which is a estimate)

Now with that in mind, how much of this is actually being produced in Oregon?

Oregon's 2006 production of petroleum fuel:
121 gallons per day of production capacity (source, I don't know if this is actually being produced)

Oregon's 2008 production of biofuel:
405,479 gallons per day of ethanol (source)
7,547 gallons per day of biodiesel (source)

So... what is the take away message here? Only a fraction of the fuel we use in Oregon is made from biofuel, but the impact has been huge:

Bringing fuel production back in state
Giving farmers access to a new market
Decreasing carbon dioxide emissions
Proving that not only is there an alternative to petroleum fuel, there are thousands of people who want this alternative

Everyone who has chosen to fuel up with biofuel is part of this change; we are still at the beginnings of it, but there is nowhere to go but up from here!

Thought leaders piece; Where gas money goes

2008-03-13T09:26:00.000-07:00

C3 Press [Carbon Constrained Communications] recently released their first issue of "Thought Leaders of the New Energy Economy", which included a piece by SeQuential CEO Dave Garten, as well as by leaders in other industries. Check it out here (255k pdf).

-----------------------

The latest NACS (a gas station / convenience store association) magazine published some interesting facts regarding where money goes on a gallon of gas, using 2007 average prices.

58%: Crude Oil
17%: Refining
15%: Taxes
9%: Distribution and Retail (20% of which goes to credit card companies)
1%: store income

This is slightly misleading though, since taxes ($0.484 is Oregon + Federal tax), distribution and retail (a set few cents per gallon), and store income (a set few cents per gallon) are all fixed numbers that don't change with gas prices. Simply put, when you read of crude oil prices hitting all time highs, gas stations aren't making any more money, the people pulling oil out of the ground are.

For users of pure biofuel, the taxes, distribution and retail, and store income would all be about the same. I'm not sure how the rest of it goes, but my guess is that the raw materials (raw oil and other production inputs) would make up by far the largest percentage.

Follow-up on food prices

2008-03-11T09:59:00.000-07:00

The New York Times published an interesting (and albeit disturbing) article about food prices and how they are going up because of demand and worldwide crop shortages. One quote pretty much sums it all up:

“Everyone wants to eat like an American on this globe."

As the lives of people in developing nations stabilize, they move away from "traditional" crops and import more food. Supply and high demand at work, plus a little drought and failed crops equals higher prices. America's high production and the weak dollar are also at play.

[As an aside, I just have to mention that biofuels were not once mentioned in this article.]

What is really disturbing, something that I haven't been able to internalize yet, are the comments about how cheap food is not going to be reality for much longer. As a child of the 80's, I've never seen high commodity food prices, and I know that I've been taking this for granted.

Beans and rice have always been cheap, because they are beans and rice...

If these basic commodity prices go up, what happens to everyone who is depending on cheap food to feed their families? What happens to people who gave up farming because they can import cheaper grains?

This really is one more argument for local: take control of your food and take control of your fuel by sourcing from your region. When you need to augment your supply, import.

The search for better fuel starts with better plants

2008-03-07T09:29:00.000-08:00

There is a new player on the local scene for biofuels - a plant called camelina. Camelina is part of the brassicaceae family along with canola, whose oil SeQuential uses in biodiesel production. Other more familiar brassicaceae are cabbage and turnips.

Camelina has been more or less overlooked in this region (with the exception of Montana) but its value as a rotational crop is starting to be realized. Rotational crops are used to break pest cycles and to revitalize soil that has only seen one crop grown on it season after season. Breaking pest cycles means that fewer pesticides have to be used, which is better for the health of farmers, laborers and the rest of us. This also decreases costs, as taken from the Eastern Oregonian:

... research shows [camelina] is well suited to conditions in the Pacific Northwest, requires low inputs of water and nutrients, and reduces disease, insect and weed pressure in wheat fields planted the following year.

"We are all painfully aware of the recent cost increases of inputs to grow conventional crops," he said, noting the cost of glyphosate, the main ingredient in products such as Round-Up, for example, increased significantly recently.

"If you are concerned about these costs, you should look at a crop like camelina," Johnson said. 'It can provide a net return equal to spring wheat without the high initial outlay of pesticides and a far lower need for nitrogen and we can harvest in July."

Camelina, just like canola, produces seeds that have a high oil content. These seeds get crushed by a crusher (Willamette Biomass Processors for example) that squeezes out the oil, which is turned into cleaner-burning biodiesel. The leftover crushed seed is a meal that goes to livestock as feed. I don't know what livestock think about camelina meal, but I know cows love canola meal - it was once described to me as 'cattle crack'.

So why am I excited about camelina? Both camelina and canola are rotational oilseed crops that don't require much water or fertilizer and canola actually has a higher output of oil per acre. More oil = more biodiesel, but because camelina is better on the land and can be grown on marginal soil, it pulls ahead as a better choice in my book.

The price of biodiesel

2008-02-28T16:06:00.000-08:00

Fellow Biodiesel Drivers ::

We have all noticed the increase in fuel prices over the last six months. During this period, SeQuential and our network of distributors have not changed margins on biodiesel, meaning that these price increases are from the increased costs for producing biodiesel.

About 40% of the biodiesel SeQuential distributes comes from recycled cooking oil and most of the rest comes from soybean oil grown in the Midwest. This will continue to be the case in the short term, as local production from recycled oil increases; as Oregon production of oilseed crops increases (currently about 10% of our supply); and as technology companies develop alternative feedstocks, such as algae. As demand for soybean oil has increased of late, so has the price. In addition, a major ingredient in biodiesel production is methanol, which increased in price by about 300% since September 2007. We will do everything we can to get price relief.

We understand that these price increases are hard on your wallet, so we want to take a moment to say that we appreciate your dedication to and support of biofuels. We are all in this together, and together, we are growing a renewable fuels industry and bringing better fuel options to Oregon.

Register Guard Opinion Piece

2008-02-26T16:08:00.000-08:00

The Register Guard just published an opinion piece by Ian Hill, a co-founder of SeQuential, in regards to recent articles about biofuels:

Oregon’s lower carbon biofuel industry

by Ian Hill

In response to recent articles claiming that the use of biofuel leads to increases in global warming, we would like to point out that not all biofuels are crated equal. The biodiesel and ethanol sold through our SeQuential retail station here in Eugene is some of the most sustainably-produced fuel currently available in the country.

The SeQuential-Pacific Biodiesel (SQPB) production plant in Salem uses recycled cooking oil from sources such as Kettle Foods, Burgerville etc. A small but growing percentage of the SQPB facility uses Oregon-grown canola oil that is grown as a rotational crop with wheat. Canola is typically grown one year in four to enhance soil quality, breaks up pest cycles and increases wheat yields. Other oilseed crops that can be grown on land not suitable for food production or in rotation with food crops are being currently researched by OSU.

It is important to note that the SQPB facility’s technology can efficiently produce quality biodiesel from a wide range of vegetable oils. This gives SQPB the ability to adapt to new sources of oil as they develop, such as certain types of algae which are the most efficient photo-synthetic producer of oil on the planet and can be grown using agricultural & municipal waste streams.

The majority of the ethanol that is sold through our retail station is sourced from Pacific Ethanol’s facility located in Boardman OR. This facility does use corn as its primary feedstock for producing ethanol. What makes this facility different is that they use ~30% less energy then most contemporary ethanol production facilities. They do this by selling most of their wet distiller grains (or WDGS the main by product of ethanol production) directly into a local livestock feed market.

Another item of interest about Pacific’s Boardman facility is that they recently received a Federal Department of Energy grant to build a pilot scale cellulose to ethanol production facility. This facility will focus on technology allowing the production of ethanol from local feed stocks such as wheat straw, corn stover & wood chips.

On a County level, there are a number of research projects underway that are looking at a variety of renewable energy sources. Such as anaerobic digestion utilizing food waste for energy production and pyrolysis technology for converting carbon based waste material into different forms of usable energy including liquid forms like butanol (a gasoline replacement).

These examples of Oregon-made biofuels are derived from raw materials that do not compete with food-producing acres. As a result, these biofuels reduce life cycle carbon emissions by 40 to 80 percent compared to standard petroleum-based fuels.

Oregon (and the Pacific Northwest) leads the nation with our use of high blends of biodiesel, specifically B99 (99.9% biodiesel). Oregon & Washington have the largest markets in the country for retail biodiesel. Government & business fleets in Oregon such as the City of Eugene, the City of Portland, Rexius, Sanipac, LTD and Tri-Met to name a few have proven that they are willing to vote with their fuel budgets to support Oregon made biofuel. This kind of support is critical to building a better, localized biofuel industry. From our municipal governments, to businesses with fleets, to the individual consumer the Northwest is leading the way in the development of a localized biofuel industry.

The work to build a localized, cleaner, sustainable energy economy is an important incremental step, not an overnight miracle. Our company is named SeQuential for this very reason. There is no single panacea to our current energy crisis. Rather we are faced with a diversity of solutions that must be pursued simultaneously. Conservation taking the form of higher efficiency diesel & gasoline vehicles, increasing the use of electric vehicles, greater use of public transit systems, riding bikes and walking are all solutions that must also be employed.

As a company we are committed to helping build an Oregon based, lower carbon biofuel industry that is cleaner burning and that supports our local economy. SeQuential can only do this in partnership with our customers.

Ian Hill is a Co-Founder of SeQuential Biofuels, an Oregon-based retail biofuels company that provides biofuel blends for every vehicle.

The daily commute

2008-02-18T11:22:00.000-08:00

We all have to work, be it in an office, a service job, or caring for the family and getting around requires some sort of transportation. There are many ways to get around; driving, biking, busing, etc., all of which have their own trade offs in terms of convenience and emissions.

Driving can be the most convenient way of getting around (baring traffic jams), but out of all of the alternatives, driving weighs in at the high end of emissions. There are, of course, many jobs and situations where driving is essential, so it is fortunate that cleaner-burning biofuel is available!

On a per-person basis, the more people you can get into a car, the better. The average car, over the course of a year, emits about 12,100 pounds of carbon dioxide (calculate your CO2 emissions here - for gas burning cars using petroleum only). Carpooling can cut this number down significantly - one person per car emits 12,100 pounds of CO2 per person. Four people in that car would only emit about 3,025 pounds of CO2 per person. Talk to your co-workers and see if you can organize a carpool!

Speaking of emissions per person, riding the bus (or light rail) is another great option with most buses fitting 40+ people on board. The tradeoff is that buses are on a fixed schedule and have fixed routes. That said, bus routes go along major arterials and chances are that there is a bus heading to where you need to go. If you factor in the time it takes to find a parking spot, buses can be faster than driving. Plus, most public buses use biofuels!

I am an avid bicyclist, so I love having the opportunity to ride into work. Having put in substantial hours driving for work in the past (pizza delivery), I realize how lucky I am to live close to work (4 miles) and to drive so infrequently. Riding a bike is a non-polluting way to get around and is good exercise to boot! Biking is slower than any of the other options (and there is always the chance of getting caught out in the rain), but since it is so clean, it is a winner in my book.

Carshares like Zipcar (who recently acquired Flexcar) are another great option - even if you mainly use an alternative to driving, there are sometimes where you just need a car. Being able to rent a car for a few hours works great for a lot of people, but it does require some planning for your reservation.

Here at SeQuential, almost all of us own cars, but we don't always use them. Having our office be in downtown Portland means there are lots of transportation alternatives that we are very lucky to have. On the average day, these are the main ways SeQuential's administrative staff get to work:

Alan, retail manager: biodiesel car
Bo, development: bus, bike
Ciara, retail manager: biodiesel car
Carrie, accounting: bus, bike
Dave, CEO: bike, running
Gavin, sales: bus, biodiesel car
Gloria, accounting: walking, ethanol car
Ian, founder: bus, walking, biodiesel car
Sasha, marketing: bike
Sue, marketing: bike
Tomas, founder: bus, biodiesel car
Tyson, founder: bus, biodiesel car
Will, marketing: bus

Not all biofuels are made the same

2008-02-08T16:01:00.000-08:00

(This is a quick response to the New York Times article that came out today http://www.nytimes.com/2008/02/08/science/earth/08wbiofuels.htm)

As you know, not all biofuels are made the same; cutting down the rainforest to grow biofuel crops is a terrible idea. Growing crops locally has been proven thru many studies to create lowered emissions and a net gain of energy over the life cycle of the fuel. Life cycle assessments follow a product from "cradle to grave" and all the inputs in between; for biofuels, this would be taking everything from planting, to fertilizing, harvesting, transport, conversion, distribution and combustion, into consideration.

Soybean-based biodiesel (grown in the US) has a lifecycle impact of lowering carbon dioxide emissions by 78% as compared to petroleum diesel. (http://www.nrel.gov/docs/legosti/fy98/24089.pdf)

SeQuential has always relied upon government laboratory research; we feel it is the least biased source we can find. If you want to do some further reading, here is a page with a whole bunch of links to documents that support the benefits of biofuels: http://www1.eere.energy.gov/biomass/publications.html.

Most studies are done with Midwest grown soybean based biodiesel. The SeQuential-Pacific plant in Salem primarily makes biodiesel out of used cooking oil, adding the element of recycling into the mix. I have not seen any studies on how many times better this makes the environmental impact, but I imagine it is many-fold.

The ever fluctuating price of fuel

2008-01-30T09:04:00.000-08:00

Drive by almost any gas station and you'll see one common link - they advertise the price of their fuel in big numbers right out front.

With no other product are people as price sensitive. Back before I knew I had a choice, I would fill my car with the cheapest gas I could find, or would choose a station that was a penny less than its neighbor. I doubt I ever saved more than a dollar on any one transaction, but that was important to me.

Nowadays, because the fuel I buy is cleaner burning, the price is much less important. To me, just being able to use cleaner burning makes paying more worth it. I drive a diesel Jetta TDI and use biodiesel (B20 BLEND for the winter, B99 BIODIESEL in the summer). (In case you are wondering, I pay the retail price for my fuel - the SeQuential employee discount is only valid at the Eugene biofuel station and I live in Portland).

Recently the price of biodiesel has been increasing and has prompted many email questions. For those of you who are wondering, here is a breakdown of the price increases from the SQ Newsletter January 2008:

Biodiesel Price Increases

As many of you are aware the price for biodiesel at the pump has been increasing. We have been working diligently to keep costs down, however certain areas are out of our control. As a small local company that was built by our loyal customers, one of our goals is to be as transparent and open as possible. In an effort to keep everyone informed of the industry trends we would like to address some of the causes of this price increase.

1 – METHANOL: The cost of methanol has gone up over 300% since September 2007. Methanol is a key ingredient in biodiesel production and this increase affects not just the SeQuential-Pacific Biodiesel plant in Salem but also biodiesel producers throughout the country. Two of the world’s largest methanol plants experienced unplanned outages due to mechanical and technical production problems which caused this spike in prices. Global supply forecasts are expecting for prices to begin falling by early spring

2 – SOYBEANS - The most common feedstock for biodiesel in the United States is soybean oil and soybean oil prices have increased over $0.90 since September. The SeQuential-Pacific Biodiesel plant in Salem has a capacity of one million gallons per year and primarily uses used cooking oil or Oregon-grown canola. The demand for biodiesel well exceeds capacity and we are importing soy based biodiesel, which is affecting the price at the pump. The SeQuential-Pacific facility is currently under expansion to five million gallons per year.

We appreciate your commitment to locally sourced, cleaner-burning biofuels. We are doing everything we can to keep prices down and to continue offering you a choice in your fueling needs.

It is important to note that SeQuential only owns one station, the solar-powered biofuel station in Eugene; SeQuential can not set prices at any other locations or with distributors. (See all locations and distributors).

If you find the price of biodiesel is too high for you, you can mitigate this is by using biodiesel / petroleum diesel blends. Just fill up partly with petroleum diesel and then top off with biodiesel - the fuels will mix in your tank and it can save you some money. Also, driving less cuts down on fuel costs - try to combine errands into one trip, carpool and when able, take public transportation or ride your bike!

Bang for the buck or personal connection?

2008-01-23T22:46:00.001-08:00

The other day I took a call from a small bookstore, asking for one of us to give a presentation on biofuels. After looking at schedules and the hours people will be putting in at the Good Earth Home and Garden show this weekend, I turned the bookstore down; I haven't been able to stop thinking about this since.

Recently, I have been pushing to get more 'bang for the buck' out of events - with limited time and resources, it makes more sense to talk to 500 people at a trade show instead of 15 at a bookstore. That said, turning the bookstore down felt wrong. After all, these people wanted to learn about biofuels!

Traditionally, SeQuential has done a ton of educational events, from tabling at the Muddy Boot Festival, to having a full tradeshow setups, to giving small talks at various Rotary chapters. I personally have put in hours and hours at events (as have many of us at SQ) and really appreciate the value of face-to-face contact; it gets more across that a pamphlet ever will.

When it is all boiled down, the hard truth is that there are only so many hours in the day; there are more opportunities to present than we have time to. To make the largest impact as possible on greenhouse gases, energy security and local economies, you have to educate as many people as you can on the simple fact that they have the choice to use a cleaner burning fuel.

This is no criticism against smaller events - I would wholeheartedly prefer to be at them, but it just reflects the situation the world is in and the potential for communities to make change on a global scale. By talking to 500 people at a home show, I feel SQ can help make a bigger impact, faster. Even though the connection isn't as deep, the education component is strong enough to drive change.

Count your victories, not your problems.

2008-01-16T10:19:00.000-08:00

One of the downsides of the information age is that we have access to a ton of troubling news from every corner of the globe - everything from cloned food (label it please) to melting glacial ice (less personal but equally ominous), to war, political scandals, etc. In light of all this, it can be hard to stay positive.

About a month ago I took a phone call on the main SeQuential line from a young woman who was feeling buried by all the negative news of the world - she felt there was nothing she could do to solve all the problems of the world, so why should she even bother trying? We talked about how there is no silver bullet that will fix everything and how by taking small steps and leading by example, large ripples can be created that eventually create real, tangible results.

One such of these ripples tuned into a wave yesterday as the Oregon Renewable Fuel Standard (RFS) started phasing in, just one part of the 2007 Biofuel Bill. This bill passed thanks to the efforts of a small coalition of non-profits, private business, industry organizations and dedicated individuals, not to mention government leadership. This bill is creating a huge positive impact on such daunting issues as local economic strength, energy security and climate change.

In 1992, Portland and other cities around the country were mandated by the EPA to use gasoline blended with ethanol to improve air quality during winter months. As of Tuesday, nine Oregon counties are now mandated by the Oregon RFS to use gasoline with 10% ethanol year round. Another nine counties are shifting over April 15; the rest of the state on September 16.

The impact of this is huge. Ethanol is cleaner-burning and the RFS was kicked into effect by Pacific Ethanol's in-state ethanol production, moving Oregon one step closer to energy independence.

In 2006, Oregon used 3,571,000 gallons per day of gasoline. Once the whole state is switched over, the ethanol RFS will, on an annual basis, approximately:

Reduce carbon dioxide (CO2) emissions by 198,735,000 tons (CO2 is a greenhouse gas)
Avoid the use of 95,149,000 gallons of petroleum fuel (scaled for the lower BTU content in ethanol

There is also a portion of the RFS for blending biodiesel in with petroleum diesel; this will go into effect when in-state production reaches the five million gallon per year mark. (The SeQuential-Pacific Biodiesel plant in Salem is currently under expansion from one to five million gallons per year.)

The Oregon RFS timeline for blending ethanol in with gasoline:

January 15th: Multnomah, Clackamas, Washington, Clatsop, Columbia, Tillamook, Yamhill, Polk and Marion counties.
April 15th: Linn, Lane, Benton, Lincoln, Douglas, Coos, Jackson, Josephine, and Curry counties.
September 16th: all remaining counties.

SeQuential and Oregon Lottery TV ad

2008-01-08T11:31:00.000-08:00

The Oregon Economic and Community Development Department along with the US EPA, Lane County and SeQuential, helped remediate the contaminated soil (known as a brownfield) left behind by the previous tenant at the now SeQuential station in Eugene.

In recognition of these efforts, the Oregon Lottery put together this ad:

Product Offerings: Values vs Customer Demand

2008-01-04T09:36:00.000-08:00

Whenever I go back to Buffalo to visit family I take at least one trip to a Wegmans, a grocery store chain of 71 stores on the east coast. (Lets face it - you can't get real rye bread in Oregon.) Wegmans is kind of like Safeway, but with a strong and extensive pre-prepared food section and a focus on consumer health.

Wegmans is nothing close to a New Seasons or Whole Foods (although they were given an Ethics Award), so I was surprised when I read that they are no longer selling cigarettes or tobacco products. Wegmans does have a track record of enacting food safety policies (Belize farmed shrimp) but organic only gets a small mention.

This ban on tobacco is noteworthy because Wegmans is a large, established grocery chain and based on their consumer health values, bottom line be damned, they are eliminating an entire product category.

The potential impact of Wegmans' decision:

Wegmans reinforces their values surrounding consumer health, creating more trust from their consumer base.
Tobacco using consumers will have to change their purchasing habits to buy tobacco elsewhere, which might make Wegmans loose total sales volume.
Although convenience stores sell more tobacco products than grocery stores, the loss of the category will still effect Wegmans' bottom line.

To me, improving our customer's lives is an amazing goal; it is the reason every one of SeQuential's fuel products are cleaner-burning, and there is such a focus on fuel for every vehicle, not just for hard-core biodiesel users. Our focus is inclusive - we will meet consumers at the level they want to engage, from 2007 Dodge Caravan E10 gasoline users to '78 Mercedes B99 BIODIESEL users.

All this raises some questions about our own product selection:

Does our inclusive approach mean that we should continue to offer the "better choice" additive-free tobacco products, or should we eliminate tobacco altogether?
Would our customer's lives change for the better if we stopped carrying tobacco or would we be forcing our customers to buy potentially additives-laden products elsewhere?
If we know something is unhealthy, should we walk the high road and say, "we will not enable you to live an unhealthy lifestyle"? If so, where do we draw the line on what is "healthy"? (High fructose corn-syrup, GMO, trans-fat, processed foods, plastic packaging, etc.) Could we find adequate substitutes for the products our customers want, but still meet all our standards?

What to do with conflicting information (Food Vs. Fuel)

2007-12-12T09:38:00.000-08:00

We all have seen lots of articles recently stating how corn ethanol is making the price of food go up.
For the purpose of this blog, I will use two articles that directly conflict each other. One, written by Forbes, says corn-based ethanol is directly causing food prices to rise. The other, written by informa economics, states that corn-based ethanol has a very small impact on food prices.

We all know that there are better feedstocks to use besides corn for ethanol production - feedstocks that takes less energy to grow and create more ethanol per acre, but that doesn't mean that corn is a bad choice for right now. While everything is connected and the rise in food costs has something to do with rising ethanol demand, we shouldn't be quick to demonize the fuel and look to some basic facts like food surplus, exports and production costs (farmers have to pass high diesel costs on to their customers, just like any delivery company).

Ethanol driving up food prices is largely presented as fact. To counter this, an ethanol trade group, the Renewable Fuels Foundation, commissioned Informa economics to do a study based on statistical analysis of the Consumer Price Index to see what is actually happening. We can, of course, assume that the Informa report is biased, but it provides a much more holistic view of the issue as it breaks down what goes into a bushel. Here is what each had to say about the issue:

The boom in ethanol, a heavily subsidized replacement for oil... is behind the doubling of corn prices over the past 15 months and the knockon effect on basic foods from milk to bread. - Forbes

...the statistical evidence does not support a conclusion that the growth in the ethanol industry is driving consumer food prices higher... only 4% of the change in the food CPI is “explained” by fluctuations in nearby corn futures prices. Even when the corn price is lagged to allow for the effects to work their way through the food supply chain, the statistical results do not improve. - informa economics

So... lets see what industry experts say on surplus and export (we don't need an industry expert to tell us that gas prices have gone up). World-Grain:

U.S. corn exports are projected to reach a record 62 million tons in trade year 2007-08, up 2 million tons this month. The U.S. marketing year is also a record at 2.45 billion bushels, up 100 million bushels. According to U.S. Census data, October 2007 corn exports were up almost 20% over those of the previous year. The report also indicated that feed grain supplies for 2007-08 are unchanged from November and are up 55.3 million tonnes from 2006-07.

So, US production and exports are up, suggesting that there is a strong market abroad for American-grown corn. Feed grain stocks are steady or going up, suggesting feed (and therefore meat prices) would be unchanged as well. Ranchers are reporting raised costs, up to 20%, which I am suspicious of, given that there is not a decrease in supply. This means that either there is some price gouging and blame shifting, or farmers are using higher-value feed (a bi-product of ethanol production).

Bottom line: everything is connected, don't be reactionary and quick to pass judgment, take everything you read with a grain of salt and check references.

There Is No Easy Answer

2007-12-10T10:01:00.000-08:00

First off - congrats to Team SQ on winning the Governor's Gold Award for small business - now, lets get back to work!

Sometimes it can be hard to see through the green bubble that covers certain Oregon and NW cities and identify national trends. There is certainly greening that is happening at the local level and with large players like Walmart who are under scrutiny from every angle. Now it seems the mid-level of the US is greening as well. As reported by the Environmental Leader, Arby's is installing solar water heaters at 33 locations in North Carolina. To be fair, one of Arby's justifications is that it will save them $12k a year on their natural gas bill, but they also mention that they are reducing CO2 as well.

Solar water heaters that not only save money, but decrease a building's carbon footprint as well, are a no-brainer. Unfortunately, not everything is that clearcut and everything has a trade off - like I've said time and time again, there is no silver bullet.

Nalgene bottles, once heralded as the reusable, indestructible and non-chemical-leaching, are now being banned at a Canadian outdoor store due to questions on a chemical used in the plastic. This may not come as a complete surprise - many people have developed an overall suspicion of all plastics (I recently bought and am very happy with a Sigg thermos).

On the food front, some researchers at UC:Davis have started to do some research on the carbon impact of locally-grown food vs centrally-grown food. As a company, we of course have a local bias, but there are some very valid questions raised by the article based on economies of scale.

They use the example of a strawberry, grown in either: a large scale farm in California or a small scale farm locally. On a per-strawberry basis, the impact of transportation, fertilizer, labor, etc. has the potential to be lower on the large scale farm, due to the sheer quantity of strawberries they can produce, even when transporting them thousands of miles. The research isn't done, but it will be interesting to see what the answer is.

Close to home, wave power is getting some press. "Free energy", like solar, geothermal and wind, comes from global forces that are not tied to human activities (like biofuels are).
The big question surrounding all these energy alternatives are: what is the unintended impact on natural systems and are they a worth-while alternative?

Will wave power disrupt sea life?
How much energy does it take to produce the solar panels?
How many birds and bats get chopped up by wind turbines?

Every new technology has drawbacks; you can't have a silver bullet without having to worry about gun control. At least we can be sure of one thing: is renewable alternative energy overall better than conventional fossil fuels like coal and natural gas? Yes.

Statistics and Eye Candy

2007-11-27T15:52:00.000-08:00

The Environmental Leader daily had a good summary of some market research that was done to identify consumer's perceptions on "green" terms like "energy conservation, energy efficiency, demand response, smart energy, and clean energy".

Below are some highlights of adjectives that tested well with the parent word, with positives (>50% agree) in black, negatives (>30% agree) in red.

Energy efficiency

easy to use
forward looking
fun
futuristic
reliable
smart
valuable

Smart Energy

forward looking
fun
futuristic
reliable
smart
valuable
visionary

Clean Energy

expensive
forward looking
fun
futuristic
reliable
smart
valuable
visionary

Demand Creation

annoying
authoritative
boring
expensive
old fashioned
unhelpful
unpopular

It is good to note that "smart energy" and "energy efficiency" have no strong negatives associated with them and that "fun" is present in most of these lists. "Clean energy", is perceived to be expensive and "demand creation" is just plain negative.

In lighter news, Verdier is keeping the dream alive with a next generation, solar-powered Westfalia. Take 60's ideals and merge them with high-technology and you get a beautiful $69,000 camper.

As pretty as it is, it seems they haven't actually built one as their site is mainly comprised of computer-graphics; before sinking that much cash into something I know I'd like a generation or two on the road so any bugs could be worked out.

Feedstock and Scaling

2007-11-21T11:42:00.000-08:00

The Oregonian wrote a pretty good article on Imperium on Tuesday touching some of the larger questions about biodiesel surrounding scale. The US uses a lot of fuel; biodiesel is better, but damn you have to grow a lot of oil producing crops for it.

Using a recycled product, as we all know, is great for biodiesel production but there is a very limited supply of it. Originally, Imperium was going to lean heavily on palm oil for feedstock, but due to negative publicity, backtracked and now are primarily using Canadian Canola. While I was under the impression that Imperium wasn't going to be using any palm oil, it seems otherwise:

'Tobias says the company will buy only palm oil that is sustainably produced. Imperium is a founding member of an international roundtable that's trying to come up with the appropriate criteria, but has struggled to do so.'

I have no idea what could be considered "sustainable palm"... in fact, I'm pretty sure I have no idea what would be considered "sustainable anything", but that is another discussion entirely.

A little perspective on market scale

'Even Imperium's 100-million-gallon plant will make just a tiny dent in U.S. diesel use, which totaled 64 billion gallons in 2006.'

Running at full capacity and offtake, Imperium's facility will offset 0.64% of the US's diesel use. If using soy exclusively, the crops for Imperium's plant would take up 'an area of 2.5 million acres, or about 68% of the Willamette Valley'. The environmental impact of such a venture would undoubtedly be significant; mono-cultures are never good for the surrounding ecosystem, fertilizer, pesticides, water, etc.

As a comparison, soy produces about 50 gallons of oil per acre, Canola produces about 100 and algae-based biodiesel is projected to create 250 times more gallons of oil per acre than soy [12,500 gallons per acre] according to the dubious Wikipedia.

It is obvious that biofuels are better, but is also obvious that if we don't pay attention to where our biofuels come from and how they are produced, we could wind up with a whole new set of issues. It would benefit us all to also support conservation and increased fuel economy: 50% increased fuel economy translates to 50% less fuel used. Reduced fuel consumption will help everything, including increase the percentage of biofuels that are being used.

Grease is gold; Ethanol market saturated

2007-11-19T10:55:00.000-08:00

Over the weekend there was an Oregonian article on "Grease Wars", outlining the market shift of used cooking oil being waste to wanted. SeQuential-Pacific got a few mentions and Tyson got a quote.

It is a little off topic, but there is one snippet in the article that is sure to result in some sort of legal action:

"I have so much oil," said David MacKay, owner of a Northeast Portland fish house, Halibut's. "If they don't take it, I'll dump it on the grass."

In light of the falling ethanol market, Pacific Ethanol is losing some of their biggest investors, the Gates Investment Fund. The falling ethanol market isn't coming as much of a surprise; I'm not entirely sure why the big money is pulling out of functioning plants.

Fuel has an inelastic demand curve - we use a lot of it and there is a ceiling to how much we can use. If too much is produced, we won't be able to use it all.

There was so much buzz around ethanol that everyone with a spare $10m started invested in plants. Industry insiders knew that at some point there was going to be too much supply and some of these plants opening wouldn't be able to get off-take agreements and therefore go belly up.

The only potential negative of all of this is if it stifles cellulosic ethanol research, much like cheap oil in the early nineties stifled algae-BIODIESEL research.

Net effect - once again supply-demand economics wins the day and more alternative fuel is available. Also once again, there are no silver bullets to kill the looming werewolf of all our problems and people are writing reactionary news articles.