Department of Environmental Quality Energy & Pollution Prevention Bureau October 21, 2010 Howard Haines Montana Bioenergy Program Manager Biofuels Montana Update- Havre Biofuels Summit: Biodiesel Biofuels Montana Update- Havre Biofuels Summit: Biodiesel Camelina Chester MT, 3/07 Ringling MT 8/93

OVERVIEW Update on Ethanol How much does Biodiesel cost Benefits, Challenges of Biodiesel Biodiesel Use & examples Local resources – what is next

RFS l 2022: 110 MGY starch, 25 MGY cellulosic Ethanol Use (all retail may or may not) State FYMGY blendMGY ethanol non-EtOH gas non-EtOH gas all other non-EtOH gas

Proposed Ethanol Plants (Mont) Permitted MGY Feedstocks 0125 Wheat, corn, barley (expired Jul ’10, only 1 on MDT list) Recently studied 1 ? Wheat, barley Total planned125 MGY (383 MGY in July 2008) Operating/planned cellulosic pilot plants 0 (Aug 2008 had 1 in 150k/year capacity)

Cost: Oilseed Value Chain Biodiesel is the low value product Oilseeds Crusher Meal OIL Livestock Feed Composite Materials Adhesives Edible (culinary) Oils Biodiesel Bio-Lubricants, cosmetics, pharmaceuticals Fertilizers, soil amendments Pollution Control

Current federal excise tax credit WAS $1.00/gallon for biodiesel from virgin oil Biodiesel should be $1.80-$3.50/gallon (without road tax). Actual price is set by the market. Biodiesel is less than diesel in some areas (Portland Ore, June 2010). Cost of Biodiesel

Cost is feedstock sensitive (75-80%). Beginning 2008, production cost was generally estimated to be about $0.55/gallon (small plant) to $0.30/gallon (large plant). Production cost = 7.6 x [oil price, $/lb] +$0.50 per gallon. example, canola $0.28/lb gives $2.63/gal before tax Challenges for Biodiesel Price & Availability

Challenges for Biodiesel Extraction/ process efficiency 70% oil removal, crush eff. 20% removal, crush eff. Seed, $/lb0.15 % oil30% Oil/$/lb$0.714$2.5 Oil-per gallon, for processing $5.43$19.00

Biodiesel cost is feedstock sensitive (75-80%). Production cost is generally estimated to be about $0.95/gallon (small plant) to $0.55/gallon (large plant) increase in methanol. Production cost = 7.6 lbs/gal x [oil price, $/lb] +$0.55 per gallon. example, canola $5.43/gal gives $5.98/gal before tax Cost for Biodiesel “It Depends” compared to Petroleum Diesel

Oilseed Crushers/processors need to sell the other 60-to-70 percent by weight as meal at a profit (just like soy). Cost for Biodiesel

Challenges for Biodiesel Extraction/ process efficiency70% oil removal Seed, $/lb0.21 % oil40% Oil/$/lb (34# oil/100#seed) $0.75 Oil-per gallon, to process$5.70 (5.43 oil 5.99 BD) 60% $0.095/lb (240/tn-$60 truck~190/ton) $6.84/cwt Price oil/gal-meal credit$4.79 ($3.25/gal BD $3.50/gal BD, 98% recov)

RFS – : 74 MGY (1.8 million acres/year) Biodiesel Use (variable, depends on cost) State FYMGY blend Gal B , , , (thru Nov) nya336,180** , ,759 (t mgy) ,560 (ttl mgy)

Proposed Biodiesel Plants (Mont) Permitted MGY Feedstocks Canola, safflower, camelina Listed 5 by MDT camelina, canola, (39 in 2008)Juncea, safflower, sunflower, algae, other Total planned 0 (for ref MGY in 2008) Operating (FY 2010) Used fry oil Canola, camelina, other * represented by engineering firms, contacting DEQ

Fleet Example: Yellowstone NP “Mission” market Reduces carbon footprint Helps meet executive/policy mandates Reduced odor & visibility issues (visitor complaints) Blends in any proportion

MDT Evaluation of Biodiesel November 2004 (field evaluation Dec 2003-June 2004) Used “B20” with positive experience Findings: No motor fuel tax implications Lubricity markedly improved w B20 No new fuel related problems Cost and availability

Havre SD Evaluation of Biodiesel School year No engine issues Some additional time for blending Improved fuel economy Regulatory Mission Underground mines (particulates) Off-road equipment in areas of poor air quality (lubricity)

Cold Flow Not an issue if properly managed Specific compounds in diesel fuel and biodiesel crystallize at low temperatures. Crystals agglomerate to form large masses. This can cause filter plugging and eventually the fuel will become a solid mass. Soy biodiesel gels at 0°C. #2 diesel fuel gels at -10 to - 12 °C. Biodiesel from saturated feedstocks can gel as high as 12-14°C.

Filter Filter, filter, filter,… Biodiesel plant Filter Oil Filter

Fleet Conversion: materials compatibility New Feedstocks for Biodiesel Algae Starch & cellulosic biomass, DOE-$3 million

Biodiesel is Food and Fuel: 18 million acres~5.5 m-acre/year planted 1.8~2 m-ac/yr in rotation

FOR MORE INFORMATION Oil & Production costs: Joel Schumacher, MSU Bozeman Extension, (406) , Biodiesel Tech Course. Jon Van Gerpen, , Safflower, Sunflower, Flax: Jerry Bergman, Canola, Camelina: Alice Pilgeram, Taxes: Vanessa Olsen, MDT, Used Fry Oil: (Joe Blaine)

FOR MORE INFORMATION select “bioenergy/biodiesel” Energy & Pollution Prevention

Summary: Price & Availability Problems with biodiesel usually come from “off-specification” fuel. Fuel quality is important to prevent the most common operational issue with biodiesel: filter plugging. Biodiesel does not void warranties. Biodiesel doesn’t require anything special – just do those things you should have been doing all along! The End. Thanks for Listening, Questions?