Biodiesel and Alternative Fuel Programs in New York State Long Island Biodiesel Workshop Patrick Bolton

Established in 1975 by State Legislature Mission: To identify solutions to State’s energy challenges in ways that benefit the State’s economy and environment Forge public/private partnerships with businesses, municipalities, residents, and other energy stakeholders to accomplish this goal. New York State Energy Research and Development Authority (NYSERDA)

NYSERDA Responsibilities Research and Development System Benefits Charge Administrator West Valley Demonstration Project Energy Planning & Analysis Energy Efficiency Services

What is the appeal of Biodiesel? It works in existing diesel engines with no modification. It can achieve emissions reductions across an entire diesel fleet. It is an immediate solution. It works in heavy duty applications. It can work in conjunction with any new vehicle program It requires no new refueling infrastructure. Biodiesel is as easy to transition out of as it is to implement. Biodiesel can be used in conjunction with Ultra Low Sulfur diesel, particulate traps, catalytic converters, or diesel hybrid electric vehicles. Biodiesel provides direct aid to US farmers. It is available right now anywhere in the country. It has a closed carbon cycle 3.2:1 production value (highly efficient)

Strategies that aid Biodiesel Growth in NY Demonstration Program Favorable tax treatment – Bioheating, Tax Exemptions for on-road use In-State production capability Working with distribution system Support for research and development of potential feedstocks. Syracuse Center of Excellence State Executive Orders

Western New York Biodiesel Initiative: A total of 158 vehicles are participated in the program over a period of 24 months Variations in engine type, manufacturer, model year and vehicle style cover nearly all of the available options currently used in heavy-duty New York State diesel fleets. A total of 1,200,000 gallons of B20 used while driving approximately 5,550,000 miles.

B100 product has been exclusively produced from virgin soy oil and was tested to meet ASTM D6751 and was consistently stored at 60 deg F. The diesel was tested to ensure it met ASTM D-975 All of the vehicles are stored outside except the NFTA buses. Coldest day on record during test period in Buffalo was -37 deg F. Coldest sustained temperature over a three day period was -15 deg F. Warm weather blend for B20 consisted of 80% #2 diesel and 20% B100 Cold weather blend consisted of 40% #1 Diesel, 40% #2 Diesel and 20% B100. This blend has a cloud point of -10 deg F and a plugging point of -30 deg F. Typical for Western New York. The biodiesel was splash blended with the diesel to make the B20 blend. Western New York Biodiesel Initiative:

Western New York Biodiesel Initiative Results There were not any occurrences of cold weather operability problems while using the B20 fuel. Measured fuel economy for the vehicles was the same as when operating on straight diesel. There was not any reported loss of power from any of the engines. Routine maintenance events over the 24 month project period were similar in nature and cost to the previous 24 months. None of the vehicles have shown a need to repair or replace injectors, pumps, or elastomers over the project period in a manner that was different from the previous 24 month period. Use of the fuel did not create any warranty issues with engine manufacturers. Transition to use of the B20 fuel has been characterized as “seamless”.

Western New York Biodiesel Initiative Results “Niagara Frontier Transit Metro Systems Inc. participated in a demonstration project, sponsored by NYSERDA, which utilized B20 bio-diesel in 90 buses during a four month period at each of Metro’s three bus facilities. During the demonstration period, Metro did not experience any differences in operations or performance due to the use of bio-diesel. The project was publicized and Metro received no unfavorable comments with regards to the use of bio-diesel. Based on the favorable outcome of this project, Metro will continue to consider the use of bio-diesel as a viable alternative fuel.” -Walter D. Zmuda Director, Surface Transportation Niagara Frontier Transportation Authority

Tax Incentives Fed Tax Credit for retail sites 30% capped at $30,000 State tax credit for E85 and B20 retail sites 50% with no cap $0.15 per gallon State biofuel production tax credit Bioheat tax credit $0.01 per % capped at B20 or $0.20 per gallon E85 exempt from all NYS taxes approximately $0.42 per gallon Fed Tax credit of $0.51 per gallon of Ethanol at blending point Biodiesel Blenders Credit B20 exempt from 20% of NYS taxes approximately $0.08 per gallon

In State Production - Statewide Feasibility Study With NYS Dept. of Ag & Markets Targeted, strategic approach Focus on NYS needs and opportunities Specific Recommendations

Feedstocks in NYS Soybean oil Other Oilseeds Yellow Grease Brown (or “Trap”) Grease Animal fats

Soybean Production

Biofuel Supply In-state Production? Only small plants so far. Small scale funding for advanced biofuel production technologies. Establish relationships between producers and mid-stream suppliers Conferences bringing the groups together Trade Groups to disseminate information – Empire State Petroleum Association

Biofuel Program Support Mid stream distributors Funding programs making available approximately $2 million to install storage and distribution equipment at the terminal level. Buffalo, Rochester, Syracuse, Binghamton, Albany, NYC, Long Island

Biofuel Distributor Program Funds available to New York State petroleum terminals to install B100 and Ethanol storage, blending, and rack dispensing equipment. 50% of the eligible costs capped at $150,000 per terminal

Biofuel Station Program PON 1093 Extended until May 2009 $9 million dollar initiative $50,000 for new equipment installation Technical support cost shared up to $3,000 QA/QC contractor performing final inspections Estimate 300 new biofuel stations

Executive Orders Governor reaffirmed Executive Order 111 that required all executive branch entities to purchase increasing amounts of light-duty alternative fuel vehicles up to 100% in Agencies must also develop strategies to reduce use of petroleum in heavy- duty vehicles. Governor reaffirmed Executive Order 142 that requires executive entities to use biodiesel in 10% of their diesel fuel use and 5% of all heating oil use by 2012.

Contact Patrick Bolton NYSERDA - AFV's 17 Columbia Circle Albany, New York (518) ext 3322 (518) fax