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Published on February 24, 2008

Author: Alien

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Biodiesel An Industry Update For Those Interested In Using Biodiesel As A Home Heating Oil Blend stock:  Biodiesel An Industry Update For Those Interested In Using Biodiesel As A Home Heating Oil Blend stock Production Facilities:  Production Facilities Basic Production Technology Feedstock's :  Basic Production Technology Feedstock's Distribution Locations (December 04):  Distribution Locations (December 04) Historical and Projected Sales:  Historical and Projected Sales *Unofficial projections based on biodiesel mixture credit implementation. 70% of 30 million gallons or 21 million gallons used by EPACT fleets Defining Biodiesel:  Defining Biodiesel ASTM D 6751 - “mono alkyl esters of long chain fatty acids derived from vegetable oils and animal fats” Biodiesel refers to the pure or neat fuel, B100 B20 is a blend of 20% biodiesel and 80% home heating oil or diesel fuel, B2 or B5 as well. ASTM Standards:  ASTM Standards BQ-9000 Objectives of Quality Assurance:  BQ-9000 Objectives of Quality Assurance To promote the commercial success and public acceptance of biodiesel. To help assure that biodiesel fuel is produced to and maintained at the industry standard, ASTM D 6751. To avoid redundant testing throughout the production and distribution system. To provide a mechanism to track biodiesel in the distribution system, identify biodiesel which meets industry standards, and provide a means to reduce the probability of product reaching the marketplace which does not meet ASTM D 6751. Biodiesel Properties & Attributes:  Biodiesel Properties & Attributes Seamless and transparent with existing petroleum infrastructure Completely miscible with middle distillate fuel pool High Cetane (50 vs 40) High Lubricity (300 HFRR) – (HFRR, High Frequency Reciprocating Rig, accepted ASTM test standard) BTU Content (128,000 comparable to kerosene) Cold Flow (5-7o F > for soy-based B20) Flash Point (>300oF vs 117o F) Safety – Health Effects tests confirm it is 10x less toxic than table salt and biodegrades as fast as sugar. No nitrogen or aromatics Biodegradable and non-toxic Virtually sulfur free Fuel efficiency is the same as diesel or #2 oil. Future of Oilheat:  Future of Oilheat No. 2 losing market share since 1970’s when 20% of households heated their homes with oil. Last year alone 37,000 homes converted to gas heat Industry recognizes the need to modernize and develop marketing campaigns to compete against gas National Oil heat Research Alliance (NORA) is funding the “new” oilheat industry, Biodiesel could very well be part of the rebirth of home heating oil if not an integral part of slowing market share erosion. National Oilheat Vision “ Helping To Secure And Expand Market Share”:  National Oilheat Vision “ Helping To Secure And Expand Market Share” Product and Service Offerings “Change the public’s perception of oilheat, from a dirty, inefficient, and environmentally damaging fuel source, to a clean environmentally friendly, versatile, efficient and cost competitive fuel” (page 11, Strategic Goals, 10-01) Environmental Improvements “Develop a clean fuel specification by 2002, and make it available to dealers by 03” “Reduce sulfur from oil burning to .05 by 2006, and to .005 by 2010” “Commercialize low-NOx burners by 2006” (page 11, Strategic Goals, 10-01) Growth in Market Share Distribution System Improvements Enhanced Customer Base Equipment Improvements Where’s The Market ?:  Where’s The Market ? No. 2 heating oil consumed by 7.7 million homes 69% or 5.3 million homes located in Northeast. Residential consumption of #2 in 2000 was 6.7 billion gallons of which 88% or 5.5 billion gallons were consumed in the 11 Mid-Atlantic & Northeastern States Advantages Of 5% Bioheat :  Advantages Of 5% Bioheat Imparts minimal stress to Biodiesel supply Heating oil industry likely to embrace low blends Potential operational snafu’s minimized Physical blending could be introduced at wholesale supply level. Balances supply and demand. Handling & Operations:  Handling & Operations Cold Flow Stability of Blends Solvency of Biodiesel Storage, blending and distribution strategy Establish analytical laboratory relationships. Communicate with mechanical and electrical engineering companies relating to infrastructure improvements. Enhancing Distillate Quality The BioHeat Advantage:  Enhancing Distillate Quality The BioHeat Advantage Reduces sulfur emissions, maintenance costs and CO2 (Warwick field study), (MOHC, NORA Sponsored Project) Batey presentation, Green Fuels for the Oilheat Marketplace . Reduces air toxics and carcinogenic compounds associated with distillate exhaust Renewable, recyclable (if manufactured from yellow grease/tallow promotional issue) Unparallel lubricity impact Biodegradable and non-toxic Reduces the “odor” caused by sulfur Higher flash point – 300 F Extends distillate supply pool during turbulent times Pricing Projections Heating Oil & BioHeat (April 5, 2005):  Pricing Projections Heating Oil & BioHeat (April 5, 2005) Current #2 wholesale rack price $1.75 Reasonable forecast for future heating oil . per gallon wholesale, (best answered as this is dot com markets) Prevailing neat cost biodiesel $2.30 per gallon, FOB Homeowner delivered price for B-5, $1.86 All increases can be averaged out in heating oil contract programs. Visit www.nymex.com and www.cbot.com for base value research. Biodiesel mixture credit may impact final costs. Economics Valid For This Day Only Warwick Public School Department Biodiesel Blending Project :  Warwick Public School Department Biodiesel Blending Project Project timeline March 2001 to February 2002 Medium to large boilers. Selected blends -10%, 15% & 20% Monthly sampling and evaluation of critical fuel properties Physical tear down of equipment for annual clean-up Summer fill program encountered MOHC – NORA* Combustion Testing Of A Bio-Diesel Fuel Oil Blend In Residential Oil Burning Equipment:  MOHC – NORA* Combustion Testing Of A Bio-Diesel Fuel Oil Blend In Residential Oil Burning Equipment NOx reductions Combustion stability with the Biodiesel blend is as good as conventional oil Sulfur Oxide emissions reduced by 83%, (blended 20% Smoke numbers are lower with Biodiesel blend than the home heating oil when the same burner air setting is used Fuel oil and combustion odors are improved with the biodiesel blend Massachusetts Oilheat Council, National Oilheat Research Alliance A B20 Study Educational Resources:  Educational Resources

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