Tag: oil companies

Oil Companies Serve Up Bio-Diesel

  • Tom Torre (pictured) is Chief Operating Officer at Metro Fuel Oil. (Photo by Brad Linder)

For years, environmental activists have been demonstrating that you don’t need gasoline to fuel a
car. Some people have been retrofitting cars with diesel engines that can be powered by
restaurant grease. But with the price of oil soaring in recent years bio-diesel’s been getting more
popular. Brad Linder reports that it’s moving from a fuel for hobbyists to an energy alternative
that’s even getting the attention of oil companies:

Transcript

For years, environmental activists have been demonstrating that you don’t need gasoline to fuel a
car. Some people have been retrofitting cars with diesel engines that can be powered by
restaurant grease. But with the price of oil soaring in recent years bio-diesel’s been getting more
popular. Brad Linder reports that it’s moving from a fuel for hobbyists to an energy alternative
that’s even getting the attention of oil companies:


From a distance, Metro Fuel Oil in Brooklyn, New York looks like an over-sized gas station. And
in a way, that’s what it is. Truckers pull up to a series of pumps, grab a hose and load their tanks
with oil. It’ll be distributed to heating oil and diesel customers throughout the area.


Tom Torre is Metro’s chief operating officer. He says starting next year, some of those trucks
will be topping off with a blend of oil and vegetable-based bio-diesel:


“Kind of like if you’ve ever seen a Sunoco gas station where they had the different octanes you
can buy, same thing with the bio. It’d be B5, B10, B20, B15s, whatever they might utilize.”


In other words, you can get a blend… For example, B20 is 80% diesel and 20% bio-diesel.


For more than six decades, Metro has provided oil to residential and commercial customers. A
few years ago, Metro began importing processed bio-diesel from nearby states to fuel its own
fleet of 40 trucks.


But next year, the oil company plans start taking in raw vegetable oil and processing it on-site.
Metro’s planned 110 million gallon bio-diesel processing facility will be one of the largest in the
country.


Torre says Metro doesn’t expect to get out of the oil business anytime soon. But the company
does see a future for domestically-produced fuels like corn-based ethanol and vegetable-based
bio-diesel:


“And it’s good for the economy as well. I mean, you know, the numbers are astounding as to
how much we spend a day, billions of dollars a day, that are being spent on foreign imported oils that are going back to the Arabs where… and
nothing against the Arabs, don’t get me wrong, but it’s money flowing out of the United States.”


When the processing plant opens, Metro will be able convert large quantities of soybean, palm,
and rapeseed oil into fuel. With a few modifications, the facility could also process restaurant
grease:


“I’ve been here, with the company, for 25, 26 years. Most exciting thing that’s happened in at
least the last 20, 25 years. We’re looking to push this thing going forward. And with our
association as well, the New York Oil Heat Association, to say, listen guys. We’d better start
thinking about this. We’d better be forward thinkers. Otherwise we’re going to be left behind.”


But as more and more facilities like Metro’s pop up around the country, what happens to the
nation’s food supply? Bill Holmberg heads the biomass division of the American Council on
Renewable Energy. As the demand for vegetable-based fuels rises, he says so could the price of
foods based on corn and soybeans.


“I think there will be an increase in price in those. But I think they’re beginning to level off now,
I think people are beginning to realize that you can find other resources to make those diesel- type
fuels.”


Holmberg says if you make bio-diesel out of soybean oil, there’ll be less soybeans available for
food processing. But that’s not the case if you use restaurant grease. And researchers are looking
at ways to cultivate algae as a fast-growing source of vegetable oil for bio-diesel.


If the economic impact of bio-diesel remains unclear, Holmberg says there’s no question it’s
more environmentally friendly than petroleum. Bio-diesel emits far less carbon monoxide, sulfur,
and particulate matter than petroleum-based diesel.


The U.S. bio-diesel industry is still young. Last year, it processed less than 300 million gallons
of fuel, which is just a drop in the 40 billion gallon transportation diesel market. Holmberg says
even large facilities like Metro’s aren’t going to change that overnight:


“We, in the world of bio-fuels, ethanol, and bio-diesel and other forms of bio-fuels, will be
making a major contribution if we just do not increase the amount of fuels used in the
transportation sector, which we’re doing now. If we can just keep that number steady for a few
more years, we’re providing a real service to the United States.”


Holmberg hopes that ten years from now, facilities will be in place to actually reduce the amount
of petroleum used. He says that could be from a combination of ethanol, bio-diesel, gas electric
hybrid vehicles, and other technologies that are just in their infancy.


Metro’s Tom Torre doesn’t think the oil industry is going away anytime soon. But he says the
company’s willing to invest 15 million dollars in its new processing plant to help the
environment and to get in on a growing industry.


It doesn’t hurt that Metro can sell bio-diesel for almost the same price as oil. The federal
government provides a tax incentive for bio-diesel producers like Metro, and the state of New
York offers a tax credit to residents who purchase bio-diesel. Currently, that means it’s cheaper
to heat your house with a bio-diesel blend than with 100% petroleum-based heating oil.


Without those incentives, Torre says Metro would still be opening a processing facility — just a
much smaller one:


“It would definitely not have been a 110 million gallon plant. You know, we could have started it
off with 5 million gallons, let’s say, and just utilize it for people that really wanted to be green.
But when we took a hard look at it and saw that it could be competitive, especially last year as
the price of petroleum just soared, is when we really started to say you know what? Instead of
doing the 5 million, let’s just go right to the 110 million.”


Metro’s new bio-diesel processing plant – one of the biggest in the country – is scheduled to open
next fall.


For the Environment Report, I’m Brad Linder.

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Interview – Greening the Business World

Some businesses once considered
‘bad actors’ by environmentalists are now being
praised for leading the ‘corporate greening’
movement. Lester Graham spoke with an advisor who
helped some of those companies, John Elkington.
Elkington is the founder of the consulting firm
SustainAbility. He says not all corporations have
realized the importance of becoming more
environmentally-friendly at the same time:

Transcript

Some businesses once considered
‘bad actors’ by environmentalists are now being
praised for leading the ‘corporate greening’
movement. Lester Graham spoke with an advisor who
helped some of those companies, John Elkington.
Elkington is the founder of the consulting firm
SustainAbility. He says not all corporations have
realized the importance of becoming more
environmentally-friendly at the same time:


JE: Around the world, different regions are in very different places
and companies are in different places as a result of that. In the
United States you’ve had a period of, to some degree on issues like
climate change, denial. And that’s beginning to break down, and it’s
breaking down very rapidly. So you see companies, for example in the
financial sector like Goldman-Saks, talking about the environment and
green issues in a very, very different way than they would’ve done a
few years ago.


You see General Electric, which hasn’t been a great ally of
environmental movement, launching it’s Ecomagination initiative. And
initially, people dismissing that very much as greenwash, but when you
look at the numbers, very serious growth going on inside that business
and some of these areas. And then, perhaps to top it all, you see Wal-
Mart, most peoples’ sort of bogey company in a way, announcing some if
its initiatives around renewable energy, energy efficiency, sustainable
fisheries and so on. And in a sense, it almost doesn’t matter whether
Wal-Mart is serious or genuinely wanting to go green or whatever. This
stuff is starting to cascade through the supply chain. They have 61,000
vendors, these companies around the world. And the work that we do with
companies, they’re saying, whether they’re 3M, or Dupont, or Dow…
they’re saying this company is serious and it’s driving us to do things
we hadn’t previously thought were possible.


LG: Let’s look at consumer level. I think typically, most people are
not spending a lot of time researching which brand of corn flakes is
most carbon-free or sustainable. I think most people make their
decisions on commercials or packaging at the store. How can they make
better choices about sustainable products or companies?


JE: You’re absolutely right. I think most people rely on things like
brands. I mean, they trust a brand or they don’t and they hope a brand
will deal with environmental or fair trade or whatever issues
appropriately. But there are certain moments when things start to speed
up, and this is one of them, and then a different set of actors come
in.


I mean, traditionally, the activist campaigning groups, the NGOs, and
so on, play an incredibly important role in denting brands or building
the credibility of particular brands. And increasingly you get these
standards around environmental and fair trade issues. But I think
actually the key actors at the moment – this is certainly true in
Europe and my own country, the United Kingdom – you’re seeing
supermarkets getting involved again. They did it in the late 80s, early
90s, they played a very important role. That has a huge knock on
impact.


LG: Let’s talk about the energy sector for just a moment. We’ve seen a
lot of renewable energy being built around the world lately. But we
seem to see a lot of power companies, some oil companies still digging
in their heels and fighting tooth and nail to keep things just the way
they are. Are we going to see a sea change in the energy sector like we
are beginning to see in many of the other sectors of the economy?


JE: That’s a very difficult question to answer because I think you’re
going to see several different trends at the same time. You’re going to
see for example, the coal industry, Peabody and people like that,
digging in and saying basically, we’re going to burn a huge amount of
coal. Yes it’s going to have to be clean coal but you’re going to have
that trend. You’re going to have the Exxon Mobiles of this world trying
to look a bit more civilized and say we’ve been misunderstood, we’ve
got to communicate better and so on… But basically still, anti-
climate change is a big issue.


And then you’ve got a bunch of actors. In Europe, you’ve got companies
like Statoil, BP, Shell, who’ve actually gone through that tipping
point quite a number of years back, basically believe climate change is
a reality… Still thing fossil fuels is a very large part of our
energy future, but still starting to explore renewables and energy
efficiency and so on. So I think you’ve got a differentiation and I
don’t think this is an issue of leopards changing their spots. I mean,
some of the companies that are finding this very difficult to deal with
will continue to find it very difficult to deal with even if they
become a bit more sophisticated on the communication front.


HOST TAG: John Elkington is the founder of the consulting firm
SustainAbility. He spoke with the Environment Report’s Lester Graham.

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States Slow to Pump Up Ethanol

  • As the price of gasoline rises, many states are looking for alternatives. One of those alternatives is the ethanol blend, E-85. But, some states (like Ohio) are not keeping up with the trend. (Photo by Lester Graham)

The federal government is focusing new attention on research and development of ethanol. Some states – especially those in the corn belt – are getting into the act too. The GLRCs Karen Kasler reports:

Transcript

The federal government is focusing new attention on research and
development of ethanol. Some states – especially those in the corn belt –
are getting into the act too. The GLRC’s Karen Kasler reports:


Now that gasoline is near or above three dollars a gallon, ethanol seems
to be everywhere. The Renewable Fuels Association says more than a
third of the gasoline in the U.S is blended with ethanol, an alcohol based
fuel made with the sugar found in corn and other grains. A 10 percent
ethanol/gasoline blend can be used in every vehicle on the road, but
many politicians and consumers are very interested in the 85 percent
ethanol blend – E-85 – as an alternative fuel for cars and trucks. But
getting E-85 to drivers who have cars which can use it isn’t that easy.


Tadd Nicholson with the Ohio Corn Growers Association, says part of
the problem is the big oil companies have banned E-85 pumps under the
canopies at branded stations.


“Oil companies don’t own ethanol production. They own oil refining,
and so that’s their profit center and that’s where they get their fuel and so
they have a lot of control over that. They don’t own ethanol. I don’t
know why. They should, but they aren’t in the ethanol ownership
business yet. I say ‘yet’.”


The governors of Wisconsin and Minnesota have asked the big oil
companies to change their E-85 policy, and some states have been
encouraging independent gasoline dealers to put in E-85 pumps for a few
years.


But others, such as Ohio, have been lagging behind in the trend. Only
recently has Ohio launched a new energy action plan that sounds
ambitious, when it comes to providing access to ethanol to drivers.


LeeAnn Mizer is with the Ohio Department of Agriculture.


“The goal is to triple the amount of E-85 pumps available to Ohio
consumers by the end of 2006.”


That sounds like a lot – but it’s not, says Dwayne Seikman heads up the
Ohio Corn Growers Association.


“Tripling’s a nice start. There’s six… that would go to 18. But with over
150,000 vehicles in the state of Ohio, that’s not enough to cover the
effort.”


Since corn is Ohio’s top crop… it would seem to make sense. But unlike
other states in the corn belt, there are no ethanol plants in operation in
Ohio, though there are at least three under construction, and ethanol
supporters say the state is way behind its neighbors when it comes to
getting ethanol pumps at service stations.


Sam Spofforth is executive director of Clean Fuels Ohio.


“I’ll be honest, we’d like to see a lot more and we think a lot more is
certainly very possible. Indiana, they’re up to about 25 to 30 stations.
Illinois has over a hundred. Minnesota has almost 200 at this point.
Even places like Arizona are putting in E-85. They don’t make any corn
in Arizona. We think Ohio can do a lot more.”


Some critical studies have found that ethanol has a high energy cost with
low benefits – ethanol supporters say that’s been debunked. Whether
ethanol makes economic or ecological sense or not is still not certain.
But one thing is certain – cars using ethanol blends need to fill up more
than those using regular unleaded gasoline.


Robert White with the National Ethanol Vehicle Coalition says that’s
offset because typically ethanol-blended fuels cost less than regular
unleaded gas.


“Well, no doubt the fuel economy is the only negative with E-85, and we
tell folks that is where the price differential hopefully is there to make
E-85 use a wash.”


Part of the reason the price is lower is because the ethanol industry is
heavily subsidized by the government. Those lower costs would quickly
disappear if the subsidies were removed. Because ethanol is cleaner
burning, many support further development and use of the renewable
fuel.


General Motors is increasing the number of vehicles it produces that can
burn ethanol. Ford already produces E-85 burning cars and trucks.
However, many believe for ethanol production to be truly efficient,
farmers will have to start growing crops such as switch grass for ethanol
because corn requires too much fossil fuel based fertilizer and other
inputs to make it a permanent solution.


For GLRC, I’m Karen Kasler.

Related Links

Drivers Delay the Sting of High Gas Prices

Gas prices are as high as they’ve ever been in the U.S. But there’s one place in the country where people are fueling up for under a dollar a gallon. The GLRC’s Mark Brush explains:

Transcript

Fuel prices are as high as they’ve ever been in the U.S. But there’s one
place in the country where people are fueling up for under a dollar a
gallon. The GLRC’s Mark Brush explains:


Some drivers in one part of the country are not feeling the bite of high
gas prices, but they planned for it. They pre-paid for thousands of
gallons of gas when prices where cheap and now they’re filling their
tanks with the fuel they banked ahead of time. These drivers are filling
up at First Fuel Banks in St. Cloud, Minnesota.


Jim Feneis is the CEO of First Fuel Banks. He says they have some
pretty happy customers these days:


“We have better than 300 members still fueling at sub one dollar per
gallon, and we have thousands of members fueling at sub two dollars per
gallon.”


Feneis says he has no plans to expand the business to other parts of the
country. Unlike oil companies who are reaping record profits he says
retailer’s profit margins are slim and getting slimmer.


For the GLRC, I’m Mark Brush.

Related Links

Proposed Pipeline Divides Community

A Findlay, Ohio-based oil company says it needs a new petroleum pipeline to help get gasoline and jet fuel products to market in the Great Lakes states. But Marathon-Ashland’s proposal has sparked opposition from environmentalists and some small business owners in Southeast Ohio who fear possible contamination of waterways and disruption of some pristine areas. The Great Lakes Radio Consortium’s Tom Borgerding has the story:

Transcript

A Findlay, Ohio based Oil Company says it needs a new petroleum pipeline to help get gasoline and jet fuel products to market in the Great Lakes states. But, Marathon-Ashland’s proposal has sparked opposition from environmentalists and some small business owners in Southeast Ohio who fear possible contamination of waterways and disruption of some pristine areas. The Great Lakes Radio Consortium’s Tom Borgerding reports.


The proposed 149-mile long pipeline will cross the Ohio River from Kenova, West Virginia and snake through parts of the Wayne National Forest and scenic Hocking Hills in Southeastern Ohio and South Central Ohio. Company spokesman Tim Aydt says the project will help stabilize gasoline prices in a region stretching from eastern Illinois to western New York.


“The existing pipeline infrastructure that serves us today is decades old and it was designed when there was only one grade of gasoline and one grade of diesel fuel. And it was designed to serve a population about half the size it is today. Over time, with the growth we’ve had in the Midwest we’ve outgrown that pipeline capacity and as a result we’ve witnessed the last two summers where we’ve had constrained supply that’s resulted in price spikes.”


The pipeline might help stabilize gasoline prices in the region by adding a second source of supply for refined petroleum products. Currently, The Great Lakes region is dependent solely on pipelines running out of refineries in the Gulf Coast states such as Louisiana and Texas. But, Marathon-Ashland’s proposal also presents a potential environmental risk. The pipeline will cross 363 streams, 55 wetlands, and parts of three watersheds. For some, the prospect of a pipeline carrying gasoline and jet fuel through environmentally sensitive areas has sparked fears. Jane Ann Ellis is a founder and trustee of Crane Hollow…. a privately owned, dedicated state nature preserve in the path of the pipeline.


“If this pipeline would be built and if there was any kind of leak this would decimate the clean water that we have. It is easier to keep your drinking water clean than it is to clean it up afterwards. And it’s cheaper in the long run for the general public.”


Michael Daniels also opposes Marathon-Ashland’s project. He owns a country inn that attracts tourists from Ohio and surrounding states. He says many of his customers come to the region to hear chirping birds, babbling brooks, and to see the fall foliage. Daniels says both construction and operation of the pipeline will have a negative effect on his business.


“Certainly! Who would want to come as a tourist and be exposed to that kind of noise and intrusion into their experience? So, there’s no question that it will impact my business.”


But company spokesman Tim Aydt says the pipeline route through parts of a national forest and other environmentally sensitive areas is the best possible route.


“We wanted to avoid population centers. We wanted to avoid residential or commercial developments and we wanted to avoid flood plains where we could. So, when all of that was put into the mix we came up with the best route overall. Obviously it’s not the cheapest route because it’s not a straight line between two points. But, about 80 percent of the route follows existing utility corridors or those areas that are less prone to development.”


Marathon-Ashland says without the pipeline the Great Lakes could soon face shortages of gasoline, lines at the pump and greater fluctuations in gas prices. The tension between the company and pipeline opponents turns on the question of whether Marathon-Ashland will be required to submit an “environmental impact statement.” The U.S. Army Corps of Engineers is expected to make that decision early this year following a recommendation from the Ohio Environmental Protection Agency. Corps spokesman Steve Wright says there’s no question such a requirement will delay the project.


“That will take longer. You know they take varying lengths of time but certainly they can’t be done very quickly.”


Marathon-Ashland contends an environmental impact statement (EIS) is unnecessary. But, opponents of the plan say the EIS is critical since the pipeline puts so many streams and wetlands at risk for potential pollution.


For the Great Lakes radio Consortium I’m Tom Borgerding