Buying biodiesel ‘off the rack’
CHS investing in new injection technology
to streamline biodiesel blending process
By Steve Richter
Editor, Cooperative Partners
re-blended biodiesel may
soon become as easy to
buy as a pair of pants
now that it is available
off the rack-- the bulk
fuel load-out rack, that is.
Continuing to forge the way in
building the biodiesel distribution
infrastructure, CHS Inc. has installed
injection equipment at McPherson,
Kan., and Council Bluffs, Iowa, and
bulk fuel terminals and injection equipment
at McFarland, Wis. At these locations,
Cenex Ruby Fieldmaster now
can be blended with biodiesel as it is
pumped into fuel transports.
CHS has long been a proponent of
soy biodiesel. To help propel its use, the
cooperative has developed loading facilities
and supported marketing and education
efforts through the United Soybean
Board and state checkoff boards.
Introduction of biodiesel injection
technology at terminals by CHS is an
industry first. Until now, cooperative
fuel suppliers have been required to
add soy methyl ester, the basis of
biodiesel, to diesel fuel at local loadout
locations after it was transported from
terminals.
Building critical mass
To Hays, Kan., producer Harold
Kraus, pre-blended biodiesel is a significant
development for producers,
their co-ops and other industry players.
He predicts the new capability will
drive more critical mass for the
biodiesel market, making broader use
of soybeans.
Besides providing greater efficiency
and economy for local cooperative fuel
dealers as they supply their rural customers,
terminal biodiesel injection
makes it more likely the steadily growing
soy-based fuel will be offered at
non-farm outlets. Wider availability at
truck-stop pumps, for example, will
help the budding biodiesel industry tap
the much broader,over-the-road diesel
market, Kraus points out.
A member of the National Biodiesel
Board representing the Kansas Soybean
Association, Kraus says his local fuel
supplier, Midland Marketing Cooperative,
is into biodiesel sales and supply
in a big way, after taking the first
steps more than a year ago.
Stan Maskus, Midland Marketing
petroleum manager, says the board
developed a long-range plan that
includes a focus on crop-based fuels--
both ethanol and biodiesel. The directors
have several overriding reasons to
promote the plan: Alternative fuels
make more use of crops produced by
co-op customers, they lessen dependence
on foreign oil, and they provide
clean-burning, renewable alternatives
to the finite fossil-fuel supply.
Biodiesel also offers a realistic
option for replacing the lower lubricity
levels in reduced-sulfur diesel fuel,
mandated for off-road use by 2006.
In everyday use on farms, biodiesel
already has proven to be equal or better
than conventional diesel fuels.
There’s no detectable difference in
equipment operation, particularly at
the 2-percent level, says Kraus, who
practices no-till in his irrigated operation
on the western edge of the Kansas
soybean belt. A confirmed premium
diesel fuel user for a number of years,
he particularly likes Ruby Fieldmaster
B2, the biodiesel version of the Cenex
premium fuel.
Advocates for expanded capacity
Kraus and his co-op have been
ardent advocates for expanding the
capacity and capability of the cooperative
fuel distribution system.
Bob Metz, chairman of the National
Biodiesel Board who grows 2,000 acres
of soybeans, corn and wheat on both
sides of the South Dakota/Minnesota
border, applauds the enthusiasm coming
from Kansas and everywhere soybeans
are grown.
Both Kraus and Metz would like to
see biodiesel receive more federal support
to help boost the fledgling industry
so it can eventually begin soaring
like its older sibling, ethanol. Last
year’s proposed energy bill, which fell
short of passage in the Senate by two
votes, contained tax provisions beneficial
to biodiesel.
These tax-incentive provisions,
which amount to $1 per gallon of soy
ester, have survived in a proposed
highway spending bill that would
provide six-year funding for road improvements
across the country. The
first-ever biodiesel tax incentive would
be available to diesel excise taxpayers
and other fuel distributors who purchase
biodiesel and blend it into diesel
fuel. The end result would be reduced
cost for end consumers in both taxable
and tax-exempt markets.
Al Anderson, CHS vice president,
governmental and public affairs, says
record-high oil prices have heightened
the urgency of discussions involving
the energy and transportation bills,
which could improve the prospects for
passage of biodiesel incentives.
CHS will be well positioned when
the biodiesel tax incentive is passed
because the incentive will likely be
taken at the terminal level, says Metz.
This latest investment by CHS in
improved distribution infrastructure
further demonstrates the company’s
commitment to biodiesel and the soybean
farmers who grow the seedstock
to make this new fuel.
Farmers burn more of what they grow with E85
Around Danvers, Minn., John Carruth is known as a
standup guy. Honest and hard working, a pillar of the
community who has built a 4,000-acre farming operation
that is now run by his three
sons. Over his 71 years, he’s been on
more local, state and national boards
than he can remember.
But when it comes to promoting
and using ethanol and the new E85
blend, Carruth has been known to
engage in a bit of subterfuge.
“My wife Elaine doesn’t know it,
but she’s running on E85 in her
LeSabre,” says Carruth. “We’ve got a
couple of flex-fuel vehicles and I use
it about half and half in my Ford
Ranger pickup that isn’t equipped for
it, and it works just fine.”
E85 — “E” stands for ethanol and
“85” for 85 percent content — is a
blended fuel made from domestically
produced corn. Extensive testing has
shown that its performance is similar
to that of gasoline, and its price is
usually well below unleaded regular.
Octane ratings for E85 are between 100 and 105.
Joel James, assistant manager at Glacial Plains
Cooperative, Benson, Minn., where Carruth buys his
fuel, is also enthusiastic about the growth and future of
E85. “We pumped our first gallon of E85 in January
2000,” James says. “Even before we put the pumps in
Appleton (Minn.) this year, we were pushing 200 customers.
“It’s the flex-fuel vehicles we’re going after. One
big potential is government and post office vehicles.
There are some company motor pools that can use it
and, of course, farmers.” The potential customer
base grows every year as auto makers produce more
flex-fuel vehicles. “There are a lot of people driving
flex-fuel cars that don’t know it,”
James adds.
A big incentive for local cooperatives
that opt to offer E85 is
minimal infrastructure change.
“Basically we installed a new
tank in Benson,” James says. “It’s
double-walled and in Appleton
we’re using an existing, belowground
tank. And there’s some
signage that has to change when
you offer E85.”
Ethanol-gasoline blends also
change with the seasons, says
James. More gasoline is in the mix
during winter to help with starting.
But E85 can be transported in
existing tank trucks with some
minor precautions throughout the
year.
“I really like promoting E85,”
James adds. “It’s good for the
farmers and the environment, and I’m really proud of
the co-op system for taking the lead in this.
I’d much rather have the price of corn go up than the
price of foreign oil.”
“As farmers, we know how to grow corn,” adds
Carruth. “I was just over looking at some of our irrigated
corn and it’s going to run 200-plus. The only problem
we have with ethanol is knowing how to market it. And
we’re doing a lot better at that.”
— By Mark S. Johnson, Managing Editor,
CHS-Land O’Lakes
