Posted on 11/01/2006 5:45:45 AM PST by Red Badger
Neil Rich (left), Don Miksch (center), and Darin Rich switched from homemade fuel to managing a 10-million-gallon-a-year biodiesel plant near Crawfordsville, Iowa. The tank behind them holds 150,000 gallons of biodiesel made mostly from soybean oil.
Smelling is believing. At least it was for Don Miksch, a Washington, Iowa, farm kid trained as an accountant. He doubted that his friends, Neil and Darin Rich, could make fuel on their farm from used French fry grease.
"Until they made their first batch and physically showed me they were running a vehicle on it, I was skeptical," Miksch admits. "I watched them pour it in and start it up, and I stuck my head by the tail pipe." It smelled like French fries. Continue article
From tinkerers to executives
The Rich brothers started concocting biodiesel fuel three years ago to cut costs. They help their dad, Phil, raise 500 acres of corn and soybeans, custom farm 2,500 acres, and run a manure-hauling service that puts waste on 8,000 acres. At times they burn 500 gallons of fuel a day.
That need soon led them to shift from scrounging restaurant grease to buying rendered animal fat for 12¢ a pound. That's about $1 a gallon for the main ingredient. To make biodiesel, they mixed 10% methanol and inexpensive lye into a 275-gallon plastic tote of fat. (Methanol adds another 20¢ to the cost of a gallon of fuel.) Methanol, which is highly flammable, and lye break fatty acids into methyl ester, or biodiesel, and a by-product called glycerin.
"That was cost-competitive when diesel was $2 a gallon," says Neil Rich. Adds Miksch, "At $3 a gallon, it's extremely competitive."
Those compelling numbers and good results running trucks and tractors on 100% biodiesel led the Rich brothers and Miksch to ramp up to commercial production. In April 2005, they formed Riksch BioFuels, LLC. They sold stock to 27 investors, including family, in six southeast Iowa counties. "Our plan was to provide biodiesel to the local area," Miksch says. Adds Neil Rich, "We insisted on having producers and people in agriculture tied to the project."
This fall, their 10-million-gallon plant was slated to begin producing fuel. Neil Rich says he's less concerned about selling fuel than getting sources of oil. So the plant is located near three grease recyclers and two soybean crushers. Since it relies on trucks and not rail, it can source and sell widely. Most of the biodiesel will be made from soy oil.
The $7.5 million plant also got a boost from a $500,000 renewable energy grant and a $3.25 million USDA guarantee on its bank loan.
"It seems like they're attempting to cover all marketing and production bases. They're delightful young kids," says USDA Under Secretary for Rural Development Tom Dorr.
The plant's corporate brass really is young. Neil Rich, 26, is its CEO. Miksch, 27, is treasurer and chief financial officer. Darin Rich, 21, is chief operating officer.
A young industry
The biodiesel industry is also young. In 2004 it produced just 25 million gallons of fuel, says Joe Jobe, CEO of the National Biodiesel Board. Since then, production has tripled annually, to 75 million gallons last year and 225 million projected for 2006.
That's still less than half of 1% of the nation's 58-billion-gallon diesel fuel market. The ethanol industry now supplies about 3% of the 140-billion-gallon gasoline market.
"Our industry vision is 1 billion gallons by 2015," Jobe says. Continue article ADVERTISEMENT
The industry took a big step in that direction this year when several investor groups and Bunge North America raised $100 million in new capital for the Renewable Energy Group, Inc. (REG). The biodiesel and biodiesel plant construction business evolved from West Central Cooperative in Ralston, Iowa, and has been in the biodiesel business for a decade. By 2009 it plans to build 12 new plants in addition to the three it already owns or manages. The 15 plants will produce 640 million gallons of biodiesel, the largest expansion yet for the industry.
Jeff Stroburg, CEO of REG, says he believes smaller plants like Riksch BioFuels can compete, especially if they supply a local fuel market.
"Being in the business we're in, rural development is near and dear to our hearts," Stroburg says.
Biodiesel economics
Biodiesel can be made from animal fats and many vegetable oils, but the industry is currently dominated by fuel made from soybeans.
The price of the feedstock makes up about 80% to 85% of the cost of production, says Iowa State University economist Roger Ginder. Recently, with biodiesel selling for $3.10 a gallon and soy oil costing 25¢ a pound, the return on investment on a 30-million- gallon plant was about 35%.
"If you raise soy oil prices 2¢ a pound, the return drops to 25%," he says. Unlike ethanol plants, which buy corn from farmers, biodiesel plants get oil from a smaller group of processors. "Where you're going to get your feedstock is a big issue."
Biodiesel quality
Biodiesel has pros and cons. On the plus side, it has higher cetane (similar to octane) than diesel, for better combustion and smoother performance. It has high lubricity and low particulate emissions -- good for older engines.
It also cleans the fuel system, a long-term benefit. But at first, "it takes that scum right out of the system and, of course, the fuel filter catches it and tends to plug up," says Don Borgman of John Deere, which fills new tractors with B2 (2% biodiesel). Improperly stored biodiesel absorbs water, a threat to new high-pressure injectors. Biodiesel oxidizes (turns rancid). Don't store it past 90 days. Manufacturers like B20 or lower. Deere requires its biodiesel to meet ASTM6751 specs and come from a BQ9000 (a quality assurance program) supplier.
Learn more
Riksch BioFuels 3187 320th Street, Crawfordsville, IA 52621 www.rikschbiofuels.com
National Biodiesel Board www.biodiesel.org
Photographs: Bob Modersohn
Diesel Ping List
If you want on or off the DIESEL "KNOCK" LIST just FReepmail me........
Do you know how soybean oil diesel compares with corn (or even sugarcane) ethanol. How many miles per gallon and how many bushels to make a so much fuel, etc.?
Ping (or knock) to send to my dad... his truck smells like doughnuts thanks to home made bio fuel.
Some people say vehicles which use biodiesel smell as though they are full of french fries (or freedom fries, if you insist on that).
I don't know the gallon/bushel or gallons/acre for either corn or soy made ethanol or biodiesel oil. But I do know that a gallon of biodiesel will go much farther in a vehicle than a gallon of ethanol simply because of the energy content of the substances involved and the method of combustions used. Ethanol is a complicated process to make and requires lots of water and energy to achieve. Biodiesel is much simpler and requires a lot less energy and time. Most of the time, simply extracting the oil from the seedstocks is enough. In the case of used frenchfry oils, filtering and cleaning is needed.......
Seems that the United States should more more toward biodiesel instead of ethanol, then. Much appreciated.
Oh, bad move, Dude! Cops will be following him everywhere!.........
B-I-N-G-O!................
Buy American. Buy BIO fuels!
I received this from my Detroit Diesel rep.
"Biodiesel fuels are alkyl ester’s of long chain fatty acids derived from renewable resources. Detroit Diesel Corporation highly recommends biodiesel fuels made from soybean or rapeseed oil through the proper transesterification reaction process. Other feedstock source of biodiesel fuels such as animal fat and used cooking oils are not recommended by DDC. Biodiesel fuels meeting AS’rM D 6751 specification, prior to blending can be mixed up to 5% maximum by volume in petroleum diesel fuel. The resulting mixture must meet the fuel properties listed in Table 5-I and AS’TM D 975 specification. Failures attributed to the use of biodiesel fuel will not be covered by Detroit Diesel product wananty. Also, any engine performance problem related to the use of’ biodiesel fuel would not be recognized nor considered DDCs responsibility"
That's okay. They just want to cover the bases for warranty purposes. After the warranty has expired, though, I would have no problem with the full 100% biodiesel fuels, B100. In a few years, I expect DD and Cummins, et al will have enough data to allow larger and larger proportions of Bio-D used in their engines even under warranty. I can't blame the for being skittish at first. After the Bio-D industry has had time to mature, then we'll see them embrace it with no disclaimers.......
Bio-D isn't so much and alternative fuel, as it is an alternative source for fuel. It works and has no noticeable major differences in engine performance, unlike ethanol.................
S/B:
SAVE, America! Buy BIO fuels!
The young fellas live about 30 miles from me. They really GOOD KIDS!
I can imagine that one reason they don't warranty the "animal fats and used cooking oils" versions of Bio-D is because of the possibility of higher wear from acids produced in the combustion process. This, too, can be eliminated with the right "blend" of fuels. I love blended whisky and blended Bio-D!..............
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