Biodiesel An Industry Update For Those Interested In Using Biodiesel As A Home Heating Oil Blend sto

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BiodieselAn Industry Update For Those Interested
In Using Biodiesel As A Home Heating Oil Blend
stock
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Production Facilities
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Basic Production TechnologyFeedstock's
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Distribution Locations (December 04)
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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
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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.

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ASTM Standards
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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.

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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 gt for soy-based B20)
• Flash Point (gt300oF 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.

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Future of Oilheat

• No. 2 losing market share since 1970s 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.

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National Oilheat Vision Helping To Secure And
Expand Market Share

• Product and Service Offerings
• Change the publics 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

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Wheres 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

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Advantages Of5 Bioheat

• Imparts minimal stress to Biodiesel supply
• Heating oil industry likely to embrace low blends
• Potential operational snafus minimized
• Physical blending could be introduced at
  wholesale supply level.
• Balances supply and demand.

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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.

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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

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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
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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

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MOHC NORACombustion 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
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Educational Resources
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