Domestic Fuel

The board of Renewable Energy Group (REG) today announced the succession plan for a seamless transition of the company’s leadership positions. The board offered unanimous approval of Jeff Stroburg’s request to transition from the dual position of Chairman of the Board and Chief Executive Officer to the sole role of Chairman of the Board. Daniel Oh, currently President and Chief Operating Officer, will transition to the role of Chief Executive Officer (CEO) and President and join the Board of Directors.

According to a statement from the board, “Mr. Stroburg and Mr. Oh have worked together closely throughout the last six years to manage the company’s strategic development. With more than twelve years at the helm of the company and an impressive resume of agricultural and energy industry leadership, we are pleased Mr. Stroburg will remain on the board to share his vision and leadership as the Chairman.”

“Working closely with Mr. Stroburg has been a remarkable learning experience,” said Oh. “More than a decade ago he had a vision for a value-added agricultural business that would move our country away from imported petroleum. I look forward to maintaining our relationship as he continues to lend his experience and expertise as the Chairman of the Board.”

Mr. Stroburg currently serves as the President and Chief Executive Officer of West Central Cooperative, one of the Midwest’s largest farmer-owned cooperatives.

REG recently re-opened a biodiesel plant near Albert Lea, MN. In a post from that event, you can listen to an interview with Dan Oh.

The Renewable Energy Group (REG) just hated to see the 30 million gallon capacity biodiesel plant standing idle near Albert Lea, Minnesota for the past three years, so the company decided to do something about it.

“It’s a great plant that needed to run,” Brad Albin, REG Vice President of Manufacturing, said at the plant’s re-opening on Monday. “It had no where to go but was a jewel just sitting here ready to run.”

REG originally built the plant in 2005 for SoyMor, which ran it for three years before shutting down in 2008. “We’re very lucky to have brought this plant up within about four weeks,” said Albin. “It was actually the largest 30 million gallon plant years ago and what’s great about it is that it’s highly efficient and we’ve already got it up to just about 90% throughput.”

Since Minnesota has a state requirement for biodiesel blends, Albin says it was important to get the plant back on line. “Minnesota is a great user of biodiesel so it was just natural that we build it, we’d run it, get back and get it going again,” he said of the plant which uses soybean oil as its primary feedstock.

Listen to or download interview with Brad Albin here. REG VP Brad Albin

REG Albert Lea Biodiesel Plant Photo Album

The biodiesel tax incentive is helping to create jobs across the country, according to testimony submitted to the House Ways and Means Committee today by the National Biodiesel Board (NBB).

“While we understand the pressures facing Congress, this is the wrong time to pull support from a growing American industry that is a rare bright spot in this economy,” said Anne Steckel, NBB vice president of federal affairs. “Our industry is having a record year of production, and the tax incentive is a key ingredient in that success. Stripping the incentive away this year would put thousands of jobs in jeopardy.”

Steckel’s written testimony was submitted to the committee for a hearing on energy tax policy and tax reform held today that focused on whether energy policy should be conducted through the tax code, and specifically on proposed tax credits for natural gas under the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011.

While, the biodiesel industry was not called to testify at the hearing, Steckel’s submitted comments highlighted the biodiesel industry’s rebound this year after the biodiesel tax incentive was reinstated following a one-year lapse in 2010 which caused production to drop dramatically last year as dozens of plants shut down and thousands of people lost jobs.

Since its reinstatement this year, the industry had produced roughly 475 million gallons as of July compared with 315 million gallons in all of 2010. This year’s increased production of at least 800 million gallons will support more than 31,000 jobs while generating at least $3 billion in GDP and $628 million in federal, state and local tax revenues, according to a recent economic study conducted by Cardno-Entrix.

“We believe the U.S. biodiesel industry offers a clear and compelling case that strong domestic energy policy can boost this economy,” she said. “Our production turnaround this year is creating good-paying jobs in nearly every state in the country.”

That claim was highlighted with the re-opening of a southern Minnesota biodiesel plant this week. Minnesota soybean farmer Jim Willers said reinstating the biodiesel tax incentive is one of the best jobs creation programs the government has done lately. “This plant’s put almost 25-30 people back to work, there’s usually 50 trucks that go through here and the spin off effect from this plant creates almost 2,000 jobs,” he said. “Between state and local and federal taxes, it’s way more than the tax credit so your return on investment for the government is just terrific with biodiesel.”

At the opening celebration of the Renewable Energy Group (REG) REG Albert Lea facility on Monday, Minnesota state representative Rich Murray (left) and local Chamber of Commerce Executive Director Randy Kehr (right) both congratulated REG president Dan Oh (center) on fueling the economy by creating new jobs.

“They’re great green collar jobs,” said Kehr, who noted the importance of the agriculture industry to the region. “If you take the value-added in soybeans here in Freeborn county on the seven million bushels that were harvested last year, that represents nearly $1,750,000 into our community.”

Listen to the opening ceremony comments here. REG biodiesel plant opening ceremony

Rep. Murray said that job creation is the number one priority for lawmakers. “I’m excited about the jobs, that’s why I’m here today,” he told me. “It’s a great value add for agriculture and agriculture is the back bone of southern Minnesota and of the whole state.”

Minnesota has had an increasing biodiesel blend requirement since 2002, which is slated to go to 20 percent by 2015. “And this plant’s going to help us get there,” said Murray.

Listen to my interview with Rep. Murray here. Minnesota state representative Rich Murray

REG Albert Lea biodiesel plant photo album

Fields of soybeans surround the newly re-opened Renewable Energy Group REG Albert Lea biodiesel plant in southern Minnesota, serving as a reminder of where the renewable fuel is rooted.

Chris Hill, a soybean farmer who serves on the board of the Minnesota Soybean Growers Association and the Minnesota Biodiesel Council, is pleased to see the plant re-open because it really adds value to the soybeans he grows. “The National Biodiesel Board did a study taking into account the benefit of biodiesel, it can add approximately $2 to every bushel from the farm,” said Hill. “On a 500 acre farm, that’s roughly $5000 added income.”

Hill, pictured here on the left with REG president Dan Oh, says the economic benefits of biodiesel production in a rural community have a multiplier effect. “From the farmer, to the elevator to the tire salesman, to the people buying the biodiesel to blend it, for trucks and everything else, it just helps everybody,” Hill said, adding that it helps all of agriculture, including livestock producers who benefit because it helps reduce the cost of soybean meal.

Listen to or download interview with Chris Hill here. Minnesota Farmer Chris Hill

REG Albert Lea biodiesel plant photo album

The Renewable Energy Group (REG) celebrated the official opening of the REG Albert Lea biodiesel plant in Minnesota on Monday, with representatives of the state and local community and agriculture industry.

REG President and COO Dan Oh says they were involved in the construction and operations of the plant when it originally was built and opened by SoyMor. “We have worked together since 2003,” said Oh. The plant unfortunately got caught up in the economic issues that hit the renewable fuels industry back in 2008 and had to shut down, but REG felt it was a significant plant that needed to get back in operation, so they worked to make it happen for the local economy. “Think of a gallon of biodiesel in roughly every bushel of soybeans, this is a 30 million gallon biodiesel facility, so that really adds value back to a bean bushel,” Oh said.

Listen to or download interview with Dan Oh here. REG President Dan Oh

Representatives of the Minnesota soybean industry were on hand today for the grand opening, including Jim Willers, who is a farmer from Beaver Creek and a director on the United Soybean Board, as well as a member of the Minnesota Soybean Research and Promotion Council. After touring the plant, Willers said he was impressed with the shape it is in after being shut down for three years. “I found out that it was in excellent condition when they closed it down and the start up was way better than they thought,” he said. “It’s a state of the art facility and in six months they’re going to be a BQ-9000 plant.”

Listen to or download interview with Jim Willers here. Minnesota soybean farmer Jim Willers

Watch the ribbon cutting below and see photos in the REG Albert Lea biodiesel plant photo album

Biodiesel is now available via truck and rail from the Renewable Energy Group’s (REG) newly acquired Minnesota production facility, REG Albert Lea, LLC. The first truckload of biodiesel was picked up August 25 for the Trail’s Travel Center truck stop in Albert Lea along I-35.

REG VP Gary Haer says customers have the option to pick up either B99 or B100 at the 30 million gallon per year facility. “We are offering REG-9000/1 biodiesel ideal for harvest tank fills and meeting demand created by Minnesota’s B5 requirement and the Renewable Fuels Standard (RFS2),” said Haer.

REG bought the former SoyMor Biodiesel plant in July, after the plant had been idled since 2008. REG was the general contractor and manager for the refined vegetable oil feedstock biodiesel plant which originally began production in April 2005. Officials hope to upgrade the facility to process a wide variety of lower cost natural fats and oils including used cooking oil, inedible corn oil from ethanol production, and high free fatty acid materials.

REG is the largest biodiesel producer in the United States and the REG Albert Lea facility brings their total owned/operated capacity to more than 210 million gallons.

In the photo, supplied by REG, Trails Travel is the first fill for REG Albert Lea – left to right, Steve Klingman, General Manager, Trail’s Travel Center, Albert Lea, Minn; Myron Danzer, General Manager, REG Albert Lea, REG; Rocky Trail, owner, Trail’s Travel Center; Tom Schroeder, Biodiesel Sales Manager, REG; Debbie Morgan, Trail’s Travel Center; Bob Knutson, Knutson Oil, Glenville, Minn (biodiesel hauler)

Renewable Energy Group (REG) is the new owner of the SoyMor Biodiesel LLC facilities located in Albert Lea, Minn. The purchase included SoyMor’s biodiesel plant as well as its soy lecithin facility. The 30 million gallon per year (mmgy) biodiesel plant has been idle since 2008 and REG is already in the process of hiring 20 full-time employees for the various positions including administration, plant operators and load-out staff.

“Renewable Energy Group is proud to add this production-proven, strategically-located facility to our network of owned and operated biorefineries,” said REG’s CEO Jeff Stroburg. “With nationwide demand for biodiesel growing steadily through implementation of the Renewable Fuels Standard (RFS2) and Minnesota’s continued biodiesel consumption leadership, we expect to quickly ramp up production at REG Albert Lea, LLC.”

REG is currently the country’s largest biodiesel producer and this addition brings the company’s annual biodiesel nameplate production capacity to more than 210 mmgy. Prior to the purchase of SoyMor, REG was the contractor and manager for the 30 mmgy refined vegetable oil feedstock biodiesel facility that began production in April 2005. As part of its strategy, REG will upgrade the plant’s technology to enable the facility to produce biodiesel from a multitude of feedstocks such as lower cost natural fats and oils including used cooking oil and inedible corn oil produced by corn ethanol plants.

Stroburg added, “With a foundation in agriculture and expertise in domestically-produced, renewable energy, REG is proud to bring green-collar jobs to this rural economy while supporting ag producers in Minnesota and across the Midwest. Our REG manufacturing team is already on-site at the facility to re-start the biodiesel process in order to have high quality, REG-9000® biodiesel available in the market very soon.”

There are few people who know the biodiesel industry like Brad Albin, vice president of manufacturing for REG. Albin has been in the industry for more than 20 years – before many of us even knew what biodiesel was. Albin was on hand for the briefing and tour of REG’s Newton, Iowa biodiesel plant by USDA Ag Secretary Tom Vilsack and EPA Administrator Lisa Jackson. Vilsack is the former governor of Iowa and in this role, played an important part in growing Iowa’s renewable fuel industry. However, Jackson is much newer to the industry and she was very animated and engaged throughout the events.

Since Albin has such a colorful history with biodiesel, I first asked him how the industry has evolved over the past 20 plus years.

“Over the last ten years I have seen the industry go from a few different feedstocks such as soybean oil to using 30 to 40 different feedstocks all the way from the used cooking oil that comes from McDonalds or Burger King all the way to inedible corn oil that is now being produced on the back-end of an ethanol plant,” said Albin. “So the amount of feedstocks we use are reducing the price, the quality is outstanding and the industry is going forward at a great pace.”

Listen to my full interview with Brad Albin: The Changing Face of Biodiesel

Albin said that the future of the biodiesel industry is taking lower cost feedstocks that are inedible and changing those into biodiesel versus using higher cost refined oils. REG believes they have conducted the largest feedstock study ever. The study looked at emerging feedstocks such as camelina oil, to future feedstocks such as jatropha and algae. He is excited for the potential of algae, which REG was able to convert into biodiesel in their feedstock study. He explained where you get a certain amount of oil per acre from soybean or canola, there is the potential to get 10,000 times that much oil per acre with algae.

Albin said that you could see EPA Administrator Lisa Jackson’s eyes opening up quite a bit she saw the possibilities for feedstocks to be converted to biodiesel. This is key because confidence in the biodiesel industry is essential as the EPA continues to raise the fuel goals each year to meet the Renewable Fuels Standard (RFS2).

I asked Albin what the next step is for REG and he said it is to continue the path. “To push the envelop. Use new feedstocks. We’re building plants and upgrading plants all across the United States. It’s just continuing that effort. We need the support from everyone because its all about energy security. We’ve got these great renewable products that are a huge competitive benefit for the United States of America and I think if everyone gets on the same bandwagon it’s just a great thing.”

Click here to see photos from the USDA/EPA REG biodiesel plant briefing and tour.

All eyes are on the biodiesel industry including those of the USDA and EPA. Last week, USDA Ag Secretary Tom Vilsack along with EPA Administrator Lisa Jackson, stopped by REG’s Newton, Iowa biodiesel plant for a little learning and a hands-on biodiesel tour. During the event, the big question: will the biodiesel industry be able to meet RFS2 goals this year? The resounding answer is yes.

To learn more about the state of the biodiesel industry, I spoke with REG’s Gary Haer, the company’s VP of sales and marketing. “Right now all the biodiesel producers in the U.S. are getting back on their feet,” said Haer. “Two thousand and ten was a very disruptive year for us because we had the lapse in the blenders tax credit. There was some question about the RFS2 being enforced and implemented and there was a legal challenge from the petroleum industry but that’s been resolved.”

“And so for 2011, we have the blender’s tax credit back in place. We have the renewable fuels standard in force and we’re starting to see the petroleum industry respond to that,” continued Haer. “We’re seeing an increase in demand and that’s very good for our industry. It took a little while for us to see the demand in the Renewable Fuels Standard for biodiesel, but now we’re starting to see that demand and the industry is responding by ramping up and production is going well.”

Listen to my full interview with Gary Haer: REG Insights on Biodiesel State of the Industry

Exactly how much biodiesel does the industry need to produce and the obligated parties (Renewable Volume Obligation or RVO) need to blend for 2011? According to the EPA, 800 million gallons. Haer noted that the industry is not currently adding pace at a monthly production level where the industry can achieve the RFs goal, but he assured the USDA and EPA that the industry will respond. In fact, back in 2008 the industry nearly produced 800 million gallons so the capabilities are there.

Since fuel prices are on everyone’s minds, I asked Haer about the economic benefits of biodiesel. He answered, “Biodiesel does provide some economic benefits to blenders. So because of the energy increase in fuel prices, gasoline and diesel prices, we’re seeing some economic advantages to biodiesel blends. That enables the blending of biodiesel to take place widespread across the country. We’re also seeing people and fleets that are searching for alternatives to recognize the value of biodiesel and what the opportunities are there as well. It’s really been nice to see our industry respond in a way we can produce more gallons, as well at times, provide an economic benefit through cheaper fuel to customers across the country.”

Click here to see photos from the USDA/EPA REG biodiesel plant briefing and tour.

The Advanced Biofuels Leadership Conference held in Washington, D.C. last week was a meeting of the minds. During one of the sessions on hot technologies, Jeffrey Stroburg, Chairman and CEO of REG, gave a presentation on advanced partnership strategies for development and commercialization. REG has been the driver in helping to commercialize corn oil extracted from the back end of a corn ethanol plant. I was able to sit down with him for a few minutes after his presentation to get more information about the process to commercialize emerging feedstocks.

Stroburg said that the biodiesel industry in the United States started off with the idea to use soybean oil. At the time, the industry felt like soybean prices were stable enough and that it would create a good feedstock.

“Little did we know that we’d go into such volatility not just in soybean oil, but in all commodities,” said Stroburg. “Which led us to believe that we needed to have a wider suite of products that we could go to so that if one was not economic, we would have another we could go to. And the cheaper the feedstock, it seems like, the harder it is to convert. We then had to increase our capabilities and improve our technology so that we could convert some pretty junky stuff. That has given us the opportunity to go into a number of different markets to try to source feedstocks.”

Listen to my full interview with Jeffrey Stroburg: Developing Partnerships for Biodiesel Feedstocks

One of the emerging feedstocks is inedible corn oil but Stroburg said it is difficult to convert.
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The synergies between the biodiesel, ethanol and advanced biofuels industries are growing. One of the things that’s been happening over the past few years is the ethanol industry creating a new feedstock for the biodiesel industry – inedible corn oil.

Inedible corn oil was one of the feedstocks that REG highlighted during USDA Ag Secretary Tom Vilsack and EPA Administrator Lisa Jackson’s biodiesel plant tour in Newton, IA. To learn more, I spoke with David Elsenbast, vice president of supply chain management for REG.

“Our industry is always looking for new, commercialized feedstocks to meet our growing Renewable Fuels Standard (RFS2) requirements for biodiesel. We are trying to produce nearly 800 million gallons of biodiesel this year,” said Elsenbast. “We typically use the traditional feedstocks, animal fats, waste cooking oil, and of course soybean oil. We’ve been working for several years now with the ethanol industry to create a market, and a market that has good value for the ethanol producer, to provide them a reason to separate the oil out of the DDGs and sell that to the biodiesel industry.”

Listen to my full interview with David Elsenbast: Cornoil - A Growing Feedstock for REG

As demand for biodiesel feedstocks continue to grow, the market for inedible corn oil continues to grow. Today, about one-third of the corn ethanol industry has corn oil extraction technology. The amount of inedible corn oil in the market will grow significantly now that POET has announced its corn oil extraction technology, VOILA. The company intends to install the technology in all 27 plants this year.

Yet despite its growing availability, not all biodiesel facilities have the technology to convert corn oil into biodiesel. Elsenbast explained that it’s harder to convert.
Read the rest of this post…

This year is poised to be a great year for the biodiesel industry. The EPA upheld the Renewable Volume Obligation (RVO) for this year and along with the return of the tax credit, the industry is busy getting back online and producing quality fuel.

However, despite the RVO, there are still some challenges that need to be addressed to ensure success and during USDA Ag Secretary Tom Vilsack and EPA Administrator Lisa Jackson’s visit to REG’s biodiesel facility in Newton, Iowa, these challenges were discussed along with solutions.

I sat down with REG President and COO, Daniel Oh, to learn more about what it will take from the biodiesel industry, the obligated parties and agencies such as EPA to ensure the country’s goals are met.

Listen to my full interview with Daniel Oh: REG's Daniel Oh Talks RVOs

“Well its early days in the year. As we look at national biodiesel data we don’t yet see the volume being purchased that if you extrapolate that, would cause the obligation that the obligated parties have to buy biodiesel to be fully completed by the end of the year,” said Oh. “Now this doesn’t concern us in that we see volumes increasing every month. However, the obligated parties have different positions and in good faith I think they’re all trying to comply but some of them have the distribution base to buy biodiesel others don’t. Some are figuring out how to sell. Some are even trying to figure out how to even purchase and handle biodiesel.”

Oh continued, “So what we really need moving ahead is to get to a point over the next two-to-three years where we have a new market equilibrium. Where those plants that deserve to be around and our highly competitive, produce great fuel, are running at high utilization and the obligated parties are being served in low cost efficient way. In this year, what we really need to see is greater buying sooner so that the right plants can get up and running and provide the RINS (Renewable Identification Numbers) that are necessary for the full year obligation.”

Oh noted that the obligated parties are their customers and they are delighted to serve them. He said that what REG is doing all day is providing them with not only a compliance opportunity but also the opportunity for energy security, cleaner air and lower carbon emissions.
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Renewable Energy Group (REG) executives hosted USDA Ag Secretary Tom Vilsack and EPA Administrator Lisa Jackson as well as leaders from the ethanol industry at their REG Newton biorefinery to discuss the role of advanced biofuels in meeting the President’s energy independence goals. Also on hand for the event were representatives from Green Plains Renewable Energy (GPRE) and POET. Both companies have advanced biofuels projects located in Iowa and are working with REG to develop symbiotic efficiencies and products between the various forms of biofuels. Vilsack and Jackson along with local and regional members of their teams, engaged in both a briefing session highlighting the role biofuels play, including new technological advances in the industry, as well as a biodiesel plant tour.

REG President and COO, Daniel Oh, opened the roundtable discussion: “We applaud Secretary Vilsack and Administrator Jackson for their roles in implementing energy independence and clean air programs focused on enhancing advanced biofuels production and utilization. We appreciate our partners in the ethanol industry, Jeff Broin, CEO of POET, and Todd Becker, President and CEO of Green Plains Renewable Energy for joining us in highlighting the opportunities and challenges in the biodiesel and ethanol industries.”

The biofuel leaders highlighted the importance of continuous process advancement for creating new opportunities. As the group headed to see REG’s 30 million gallon per year biorefinery, Oh said, “Our production facility is proof that next‐generation advanced biofuel is commercially-available today. Our Newton biorefinery is supporting 23 full‐time green collar jobs, regional economic development and Iowa agriculture.

While on the tour, REG showcased the wide variety of raw materials it uses to produce biodiesel and highlighted one of the industry’s more recent feedstocks, inedible corn oil, which is an emerging co-product from the ethanol industry and also an emerging feedstock to create biodiesel. Less than two weeks ago, POET announced it’s new corn oil product, VOILA, and plans to install the technology at all 27 of its plants. REG has been working with corn oil since 2007.

While at REG’s facility, Jackson was impressed with how the biofuel industry has evolved. She noted the industry has not stood still and has continually adapted. She highlighted the biodiesel industry’s recognition that they needed to change and diversify its feedstocks and acknowledged their accomplishments in this arena.

Vilsack agreed and added that the industry has showcased continued success and continued innovation and commended both the agricultural industry and biofuels industry for always stepping up to plate. He concluded that the industry has never let the country down and will rise once again to meet the country’s and the world’s food, fuel and fiber challenges.

Click here to see photos from the USDA/EPA REG biodiesel plant briefing and tour.