Small-scale, community-owned biodiesel goes global

An honest, interesting statement from Piedmont Biofuels of North Carolina

Posted by Tom Philpott at 10:51 AM on 06 Mar 2008

I'm a fierce critic of biofuels, but I've always had a soft spot for small, region-based biodiesel projects that create fuel from local resources, providing jobs in the bargain. (I proudly ran Emily Gertz's feature on the topic in our 2006 biofuels series.)

The income from such projects remains within communities, rippling around and building wealth. Rather than being just another conduit for transferring cash from communities into the pockets of global investors, fuel becomes an engine for real economic development. Insofar as they involve community members in making and distributing fuel -- from the feedstock to the gas tank -- these biodiesel projects educate people that the liquid that runs their car is a precious, powerful substance that comes from real resources.

However, the global rush to jack up biofuel production, led by government mandates in the U.S. and Europe, has transformed the entire industry and essentially taken over community-based projects. That's the message of an extraordinary recent blog post by Piedmont Biofuels, a grassroots project based in the North Carolina's Triangle (Raleigh, Durham, Chapel Hill) area.

(Full disclosure: I know some of the people involved in the project. Hat tip to Spaceshaper for pointing me to the post.)

Piedmont Biofuels began as a grassroots cooperative transforming waste grease into biodiesel for member-owners. Buoyed by their success, the group opened an industrial-scale facility churning out fuel from whatever feedstock they could get their hands on, marketed to whomever would buy it. (They still run a small-scale cooperative facility based on locally collected waste oil.)

The post I've linked to above details Piedmont's wild ride since opening the new facility. Essentially, Piedmont makes money when it can buy feedstock in the "teens per pound" (i.e., 10-20 cents per pound), but its profit margins disappear when prices rise above that level.

In case after case, the blog post reveals, the company chose a feedstock, made money for a time, and saw the feedstock's price jump and profits drop. The post also expresses management's ambivalence toward the stuff they use to make biodiesel.

When we fired up our Industrial facility, virgin soybean oil was in the teens. Soybean oil is easy to work with, it is processed locally in Raleigh and Fayetteville, and North Carolina has over a million acres of soybeans under cultivation.

Great, but ...

If we forgot about our aversion to genetically modified organisms, or about the effect of monocrops on the environment -- and if we looked the other way whenever we see the massive petroleum subsidy which is embedded into conventional agriculture -- local soy oil looked pretty good.

But then the price of soybeans skyrocketed, driven up by the ethanol boom. (In response to high corn prices, farmers scrambled to plant corn instead of soy, and less soy meant higher prices).

Next Piedmont settled on chicken fat, bought in the "teens per pound" from North Carolina's booming (and ecologically and socially disastrous) industrial-poultry industry. There were kinks in the conversion from soy to chicken fat.

[Switching from soy to chicken fat] is easier said than done. The reality is that we re-plumbed portions of the plant, struggled with declining yields, re-tooled our recipe, made modifications in the lab, and figured it out. We are technically proud of that claim.

Great, but ...

If we forget about our contempt for meat as a converter of energy, or our distaste for the way conventional chicken meat is produced -- from the bird to the worker to the consumer -- local chicken looks pretty good. Not to eat-but to transesterify.

But then chicken fat, too, jumped in price, and the group came full circle to where it started: waste vegetable grease. But to make biodiesel on industrial scale, waste veggie grease has to be procured on an industrial scale -- not from local fast food joints.

Again, conversion was a headache:

While we were waving goodbye to chicken, we began re-tooling our operation over to waste vegetable oil. That's not trivial. New tanks, a new heat source, a new recipe, new processes to put in place -- but all in the realm of the possible.We started buying loads in Virginia, and D.C., and struck up relationships with waste vegetable oil sources up and down the eastern seaboard.

While in the midst of that conversion, something crazy happened. Buyers from Europe "came knocking," with an offer that Piedmont Biofuels couldn't refuse: essentially, a contract arrangement, where the buyer owns the feedstock and the fuel that emerges, paying the manufacturer a fee for producing. The arrangement really isn't so different from the contracts poultry farmers sign with big packers like Tyson. The Piedmont folks signed on -- ambivalently.

This was a stunner. While it was long way away from what we set out to accomplish, it appeared to offer us financial stability, and isolate us from the fickle feedstock markets. The same ones which have been inviting us into the thirties [per pound] and buffeting us about.

The plant is now producing exclusively for export to Europe, with chicken fat as the feedstock. (Again, Piedmont's small coop plant still produces for the local market from local wast veggie oil). The arrangement works mainly because of the ever-falling dollar. "People shopping in euros today can handle higher priced feedstocks," the blog author notes.

I admire the Piedmont folks for their honesty -- and for this clear-eyed portrait of what has become of small-scale U.S. biodiesel production.

I can't resist offering a commodity-chain analysis of Piedmont's European deal. To meet their Kyoto commitments, the Europeans are buying "green" biodiesel that bolsters the profits of carbon-intensive U.S. meat giants like Tyson, et al. The Europeans are able to afford it because the ever-sinking dollar -- brought low, largely, by the U.S. appetite for foreign oil.

For story: Small-scale, community-owned biodiesel goes global
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A few points

Note that the "energy independence" argument for supporting biofuels takes a hit. There are no guarantees that biofuel produced here will be used here, unless the government mandates it. Imperium biodiesel is fueling Branson's jets (does anyone know if our dollar-a-gallon tax is going into Branson's company coffers?).
Now that they have commandeered the chicken fat waste stream (by paying the highest price for it), what are the other companies that were using it, now using? If they have turned to virgin vegetable oil, displacement effects will nullify the GHG advantage of even this feedstock because someone, somewhere, will plant a crop on arable land (created from an existing carbon sink) to meet the new demand.
If the European customer, who owns the feedstock, decides to switch the feedstock to say palm oil because it becomes much cheaper than chicken fat, will Piedmont continue to produce biofuel for them or martyr themselves in the name of the planet? How does the dollar a gallon subsidy play into this? Is that subsidy going to Europe?
The only way out is to find ways to use much, much less liquid fuel, period. The era of wasting cheap liquid fuels in internal combustion engines is ending because the earth cannot replace oil with photosynthesis and there aren't enough wasted resources around to even come close.

We are not going to run out of oil for a long time, however, the price is going to continually rise. It has been demonstrated that the price of biofuels tend to rise right along with it.

So,

a) Biofuels are not going to be an answer for high energy prices.
b) They obviously are not doing squat for energy independence.
c) The latest science has demonstrated that the purported GHG advantage is a chimera.
d) In short, we won't need to accept all of their downsides at this point in time.

We won't for decades because we have enough oil for decades, and if the ones we are producing (sans those from true waste) are worse than oil, why are we using them again? We should stop subsidizing biofuel production and turn our attentions to energy efficiency. We will have answers in place long before we use up our oil many decades from now and if we find a biofuel that does not do more harm than good as part of that answer, great. We are jumping the gun producing them. We should be researching them.

I suspect that using chicken fat for biodiesel is better than some other uses for it, like making it into pig, fish, cat and dog food. Are cars a better place to use it than meat?

One key to making any biofuel a success from a GHG perspective, will be its ability to use a feedstock that is presently going to waste--not already being put to use by another user. That's a tough one. For example, if cellulosic escapes the lab, it could end up robbing the wood waste from paper plants etc already burning it to cogenerate energy, thus forcing them to use a fossil fuel. The goal of course is to put to use wood (cellulose) that is going to waste without further damaging the environment--an unknown at this time.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

by biodiversivist at 12:16 PM on 06 Mar 2008

"The King, the Mice & the Cheese"

Wow, reminds me of a Kid's book I read to my son when he was little. A King had a big problem: MICE were eating his CHEESE. So he thought bringing some CATS into the Castle would solve the problem.

But the CATS became as big a nuisance as the MICE had been, & they wouldn't leave the Castle. So, the King brought in some DOGS to take care of the NEW problem, & chase the CATS out of the Castle...

The story goes on, & the King's life in the Castle becomes more & more crazy, with each NEW "Solution" the King thought up leading to a NEW Problem. The Story ends with the King solving the ORIGINAL problem, by bringing BACK the MICE... and SHARING his CHEESE with them!

I guess the Moral of the Story is beware of the Law of Unintended Consequences! (A Law which our present "KING", George W. Bush, deliberately broke, it now is clear)

Vice Pre. DICK Cheney gloating over the IRAQ WAR's being a "CATASTROPHIC SUCCESS" as he described it! BUSH "aping" like a Chimp for the Cameras, as he pretends to "SEARCH for Saddam Hussein's evil "WEAPONS OF MASS DESTRUCTION" in the OVAL OFFICE!

We can only hope that Americans choose a WISER, more HONEST King in November, in the Presidential Election. One who can see the FOREST not just the CHEESE...

In the meantime, how about JAPANESE KUDZU? It's a VINE originally imported to stop EROSION, but has now spread like crazy all throught the South, like in Western KENTUCKY where I live, like a strange Tropical Jungle in the Heartland of America!

by AtomicWarBaby at 2:19 PM on 06 Mar 2008

Bio-diesel

I don't know if bio-diesel advocates ever (realistically) claimed they could replace conventional fuels. Instead it was meant as a boutique fuel so as to diversify the market.

For example the Bahamian government figured it was collecting over 300,000 gallons of waste cooking oil a year, and all of that was being transported to their landfills. What a waste! If some entrepreneur wanted to turn that into bio-diesel that would be great. It's a drop in the bucket but every drop helps.

So good on the Brits for capitalizing on at least something ... that waste chicken fat would have been rendered and the scrap dumped, anyway. Do I detect some technology snobs here?

Onward through the fog

by Sam Wells at 3:02 PM on 06 Mar 2008

Remind me

Remind me, since when is SoyBean feedstock BioDiesel a good thing?

"Small Scale" or otherwise?

http://greyfalcon.net/svlglca.png
http://greyfalcon.net/n2o.png

-David Ahlport

by GreyFlcn at 3:31 PM on 06 Mar 2008

Clarification

I did not mean to advocate use of agricultural crops such as soy, rapeseed, switchgrass, and others.

But I drive by these huge landfills making mulch and compost and thing "gee, they could be mining that for methane, making ethanol, and esterizing biodiesel." No way they can sell those huge mountains of composting waste, which is mainly clearings and cuttings from residential use. The commercial stiff just comes in bigger mountains of cellulose waste. It's a nationwide problem I suspect.

Kudzu, now there's a ripe idea, and I'd add phragmites (invasive pond reeds) to the list.

I don't know if the waste recycling route is ecologically sound for greenhouse gases but diverting those huge mountains of compost and waste tree and bush cuttings sure if better than having them catch on fire.

And we've had some spectacular fires at compost landfill operations. One fire in Harlingen TX burned for over a month before they could finally drown it. Another huge commercial mountain of ground mountain juniper west of Austin started smoldering and by pyrolysis, black leachate leaked out the bottom and impaired many miles of pristine streams.

Perhaps some of you have a more national perspective. Many people moved into forests, brushy country, other fire danger area and cut the heck out of everything for a fire protection zone, a good idea. Well, that added to the problem rather than really solving it.

I rest my case. What would you do with mountains of that cellulose and ground up plant matter?

Onward through the fog

by Sam Wells at 5:19 PM on 06 Mar 2008

An editor please?

Sure would be nice if we could edit our stuff on Grist but I think you can figure out my salient points. Peace,
/sam

Onward through the fog

by Sam Wells at 5:21 PM on 06 Mar 2008

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