With annual production volumes still being measured in the millions of gallons, the biodiesel industry is in its infancy. (Google File Photo)

A few years ago, biodiesel and bioheat were poorly understood and often ridiculed by the average fuel marketer. However, with the increasing cost of petroleum and the demand for cleaner fuels on the rise, it’s no surprise that serious consideration is being paid to a fuel that is not only cleaner, but requires no equipment modifications and has the added benefits of being domestic and renewable.
With more interest coming from fleets, government, industry and the public, many fuel dealers are getting involved with biodiesel and bioheat, and rightly so. After all, a gallon sold is a gallon sold.
With annual production volumes still being measured in the millions of gallons, the biodiesel industry is in its infancy. This can offer some advantages to those companies who are the first in their area to offer biofuel blends, but the downside is that there is also an underdeveloped infrastructure. Although it is expected that future supply and blending will eventually move upstream to terminal operators, currently this is often not the case. Anyone considering entering the biodiesel market at this time should be aware that innovation and ingenuity are necessary if the nearest biodiesel rack isn’t just across town, solaraccess.com said.

Buying It
There are various ways to purchase biodiesel or bio-blended fuels. If there is a rack close to you that offers biodiesel, it can be just as easy to fill up and make deliveries as it is with conventional fuels.
Unfortunately, currently this is not often the case. Few terminals offer biodiesel at this time. An alternative is to purchase B100 (pure biodiesel) from a separate biodiesel distributor, proceed to the petroleum terminal, add the distillate component and deliver to the customer or to storage for later delivery.
The third, and currently most common method is to purchase a full load of B100, store it in a heated area and blend it with the appropriate distillate fuel before delivery to the customer. This also leaves some B100 to be sold to the purists, or to those who seek a non-toxic dust suppressant, paint thinner or wood preservative (honest).
Blending It
Because B100 biodiesel gels at a much higher temperature than distillate fuel, (30 to 50 degrees F) it must be kept in a warm environment. The high cloud point is usually an initial concern for most fuel dealers, but it is important to remember that we have dealt with the poor cold weather characteristics of petroleum diesel for decades. Biodiesel blends must be treated the same way, by blending with a quality winter diesel and a chemical additive package when necessary.
Blended biodiesel will assume a cold-flow profile in direct ratio to the fuel components of the resulting blend. For instance, if a B20 blend of biodiesel is made from No. 2 diesel with a cloud point of 5 degrees F and B100 that clouds at 35F, the resulting blend will have a cloud point of 11F. Add a cold-flow additive to this and you’re good to go.
It is important that the respective fuels be at a proper temperature prior to blending. In warm weather, or if both fuels are above the cloud point of the biodiesel, blending can be as easy as mixing a cocktail: shake and pour. However, it is not a good idea to add warm biodiesel to cold distillate fuel; doing so could result in an unpleasant experience.

Getting There
Eventually, biodiesel and bioheat blends will be available at most terminal racks. For this to become commonplace, it will take strong demand from the market. Thanks to recent federal tax provisions, that’s beginning to happen. Meanwhile, each dealer will need to approach the biodiesel storage and blending issue in a way that makes the most sense to them.
It is important that marketers do this in ways that are innovative and creative, utilizing as much existing infrastructure as possible.

In a situation where the UK is crying out for reliable sources of energy that do not threaten the environment, one option, the hydrogen fuelcell has been relatively neglected through insufficient support from industry and government. This emerges from a new study funded by the Economic and Social Research Council (ESRC).
“Fuelcells are a genuine ’clean’ technology,“ says one of the study’s investigators, Professor Chris Hendry of the Cass Business School, London. “But re-investment in nuclear technology is likely to squeeze out the investment necessary to make fuelcells competitive with existing energy sources and with other non-nuclear alternative energy options.“
The study, co-written by Prof. Hendry, Dr. Paul Harborne, James Brown and Prof. Dinos Arcoumanis, gives a strong clue to one of the major obstacles to development by referring to fuelcell technology as a disruptive innovation. A disruptive innovation, if successful, eventually overturns the existing product on the market. Recent examples include the digital camera and the compact disc. Disruptive innovations are radically different from the existing dominant technology and to begin with they are often not as good. The result is two-fold. First the proponents of existing technology are likely to fear and so resist the new development. Second, because profits are unlikely to be immediate, funding can be problematic, pollutiononline.com said.
The automotive industry and stationary power provide examples of fuelcells as a disruptive innovation. However, while their potential is being pursued in the UK, Germany, North America and Japan, interviews with seventy companies in these countries show the UK fuelcell industry is lagging behind.
The UK is comparatively strong in developing hydrogen as a fuel source, reflecting the interests of the oil and gas companies, and in fuelcell components. Indeed, university research has led to the establishment of a number of new firms. Nevertheless the industry supply chain for fuelcells is generally underdeveloped and there have been few efforts by government to support the creation of a market.
In stark contrast, the study finds, Germany has more medium and large firms along the supply chain as well as technological excellence in engineering and electronics to support the overall design of fuelcell systems. It has energy supply companies committed to testing fuelcells, and there are active government incentives. As a result, Germany has 75 per cent of the installations in Europe. Germany and Japan offer the most favorable conditions for fuelcells in residential combined heat and power and, the authors say, may well become ’lead countries’ in technology and market development.
Buses seem a promising test-bed for fuelcells but, as Hendry and his co-authors point out, large technical systems like transport and power generation are embedded in institutional and economic commitments which fuelcells will have to overcome. Bus manufacturers and operators are lukewarm and, with the exception of Iceland, there is little evidence of coherent government transport and taxation strategies anywhere in the world to encourage the transition to low emission buses. As a result, the bus market is failing to provide a viable niche for fuelcells, let alone a foothold for wider automotive applications.
This shows the limitations imposed by framing demonstration projects as ’technological’ rather than ’social’ experiments and the need for continuing public procurement to provide a bridge beyond demonstrations. “The role of a clear guiding vision and political will,“ the authors say, “is illustrated by Japan, which has bypassed bus demonstrations in favor of building a fuel infrastructure that can be used by the automotive industry to support the development of cars.“

South Korea is studying strategic gas storage to guard against future shortages, an official with the state energy company said on Wednesday.
The world’s second-largest importer of liquefied natural gas (LNG) already has strategic oil storage, both on its own and as part of agreements with major producing nations and oil firms, to bolster its energy security. But it has limited storage capacity for natural gas.
A month ago state-run Korea Gas Corp. (KOGAS) , now the country’s sole LNG importer, signed an initial pact with the Oman government to jointly build and operate an LNG storage facility, likely to be sited in Oman, which exports the fuel.
“Gas supply is becoming a topic of security,“ said Joonbeom Lee, head of research at Korea National Oil Corporation (KNOC), which runs the country’s strategic oil reserves, according to yahho.com.
“In the long term (reserves) are very possible--technical feasibility studies are being done,“ he told Reuters at an industry conference in the Laotian capital, according to Reuters.
South Korea now has capacity to store about 36-37 days of average natural gas consumption, and inventories are almost full, a government official said. Its government-held oil stocks cover over 35 days of demand, although the total is nearly twice that including commercial stocks held by refiners.
KOGAS has said it will invest nearly $900 million by 2011 to boost its LNG storage and regassification capacity to meet steady demand growth and better cope with disruptions.
South Korea plans to double capacity by 2017.
The price of LNG, natural gas-super cooled to a liquid state for tanker transport, soared last winter as buyers in the northern hemisphere such as South Korea and top importer Japan scrambled for extra supplies amid the coldest winter in decades.
Production hiccups last year from Nigeria to Egypt to Australia, coupled with a shortfall in output from number-one exporter Indonesia, added to the market’s tightness and reinforced the risks of imported power plant and heating fuel. While LNG supplies have been generally regarded as secure in the past, growing interest from major consumers like the United States, China and India--all minor importers until recently--has heightened worries about competition for the fuel.
“If the United States starts importing a lot of LNG it will make the market very tight,“ he said.
“If the LNG market situation changes from long-term contracts to short term, we’ll need to look at (gas storage).“
Few countries have strategic natural gas stocks, although most companies keep some reserves to meet demand fluctuations.
He said negotiations for further oil storage contracts were proceeding between KNOC and crude producers from the Middle East and North Africa, though he declined to name the countries.

A dam wall at the Three Gorges Dam hydro-electric project in Sandouping, China. (AFP File Photo)

ASEAN energy ministers called for cooperation to boost renewable energy use amid soaring oil prices which cast a shadow over one of the world’s most dynamic regional economies.
The 10-member Association of Southeast Asian Nations (ASEAN) called for more investment and research to raise the region’s capacity in renewable energy such as biofuels and hydro-power as alternatives to oil.
“Reliable, adequate and affordable energy supplies are essential for strong and sustainable economic growth and competitiveness,“ the ministers said in a joint statement.
Communist Laos, which hosted the one-day ministerial meeting, took the opportunity to appeal to ASEAN nations for financial and technical support to upgrade its low energy capacity, AFP reported.
“I would like to request the ASEAN energy ministers to assist Laos in harnessing its existing energy potential by encouraging their entrepreneurs to invest in hydropower and thermal power development in Laos,“ Prime Minister Bouasone Bouphavanh said in an opening address.
Laos, one of the poorest countries in ASEAN, depends solely on hydro-power plants for its electricity.
Another poor ASEAN member, Cambodia, made a similar appeal.
“Cambodia has an abundant potential of hydro-power resources but development is hampered due to the lack of technical expertise and high investment cost,“ Cambodian Energy Minister Suy Sem said.
Even for oil-rich Brunei, current high prices have put pressure on the government, which subsidizes motor fuel and electricity.
“This is a dilemma for us as any removal or partial removal of the subsidies on the pump prices or on electricity would have a negative impact on the economy,“ Brunei’s Energy Minister Pehin Dato Haji Yahya Bakar said.
Oil prices, which were just around 20 dollars per barrel at the beginning of 2002, now stand at around 75 dollars.
Experts said current high oil prices were mainly driven by tensions in the Middle East, home to 80 percent of global oil resources, and soaring demand in the United States, China and Japan, the world’s top three oil consumers.
Tensions have risen with the ongoing violence between Israel and Hezbollah militants in Lebanon, Iran’s nuclear standoff with the West and worsening sectarian violence in Iraq.
The ASEAN ministers said high oil prices were “clear risks“ to the region’s economy, which is expected to grow by a brisk 5.7 percent this year despite rising energy costs, according to the Asian Development Bank.
“The ministers agreed that ASEAN member-countries should strive to stay resilient and address the challenges of soaring oil prices,“ they said.
The ASEAN bloc’s economy has a market of 500 million people.
To reduce ASEAN dependency on imported oil, the ministers also called for further cooperation to improve emergency responses such as oil stockpiling in the event of supply disruptions.
Currently, ASEAN has 14 cross-border interconnecting power projects, and the ministers said the region should develop more to ease the impact of soaring oil prices.
The ministers of ASEAN, which controls 40 percent of oil and natural gas resources in the Asia-Pacific region, then held talks with energy officials from China, Japan and South Korea.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Indonesia is ASEAN’s largest oil and natural gas producer, as well as the region’s top oil importer, while Singapore, Thailand and the Philippines are the most oil-dependent ASEAN economies.

Qatar Petroleum and Royal Dutch Shell announced Thursday the launch of the world-scale integrated Pearl Gas to Liquids (GTL) project in Qatar.
The Pearl GTL project includes the development of offshore natural gas resources in Qatar’s North Field, transporting and processing the gas to extract natural gas liquids and ethane, and the conversion of the remaining gas into clean liquid hydrocarbon products through the construction of the world’s largest integrated GTL complex in Ras Laffan Industrial City.
Upstream, some 1.6 billion cu ft per day of wellhead gas will be produced from the North Field and transported and processed to produce approximately 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane, tradearabia.com said.
The North Field is considered to be the largest single non-associated gas reservoir in the world with estimated recoverable resources in excess of 900 trillion cu ft. Over its lifetime the integrated project will produce upstream resources of approximately 3 billion barrels of oil equivalent.
Downstream, dry gas will be used as feedstock for a new onshore integrated GTL complex which will manufacture an additional 140,000 barrels per day of liquid hydrocarbon products. The Pearl GTL complex will consist of two 70,000 bpd GTL trains and associated facilities. The plant will produce a range of clean liquid products and fuels, comprising naphtha, GTL fuel, normal paraffins, kerosene and lubricant base oils.
GTL fuel is the largest component of the product slate and can be used in existing light and heavy-duty diesel engines. With lower emissions at point of use, it can play a major role in reducing local air pollution in cities and provide a strategic diversification of liquid transport fuel for importing countries. GTL blended fuels can also enhance engine performance as demonstrated by the historic Audi R10 TDI win at this year’s Le Mans 24-hour race, said a spokesman.
The fully integrated Pearl GTL project is being developed under a Development and Production Sharing Agreement with the government of Qatar, covering offshore and onshore costs, with Shell providing 100 percent of project funding.
The award of various engineering, procurement, construction and management contracts for execution of the project has now begun. Production from the first Pearl GTL train is anticipated to begin around the end of the decade, with the start up of the second train following within a year.
“GTL opens a new global market for Qatari natural gas and allows Qatar to contribute constructively to improving the local environment by supplying a cleaner alternative transport fuel. Shell has extensive expertise in all aspects of the GTL value chain and I am pleased to have them as partners on our journey to become the GTL capital of the world,“ said Abdullah Bin Hamad Al-Attiyah, Second Deputy Premier and Minister of Energy and Industry of Qatar.