Founded in 2007 by Erie, Pennsylvania businessman Samuel P. “Pat” Black III, HERO BX has grown over the past decade to become one of the biggest domestic biofuel producers and suppliers in America.
In late 2016, the company entrenched itself in the New England market, with the opening of an automated injection blending terminal in North Hampton, New Hampshire, and the launch of the HERO BX Branded Bioheat® Program.
In late 2017, as HERO BX celebrated its 10-year anniversary, Oil & Energy spoke with company Vice President of Sales Tim Keaveney for an article about HERO BX’s North Hampton facility and Branded Bioheat® Program. Look for that story in the January/February 2018 edition of Oil & Energy, in print and online next month.
O&E: What kinds of oil companies is the HERO BX Bioheat® Branded Program attracting?
Keaveney: It’s for that dealer who wants to tell a new and different story about Oilheat. That’s who we’re signing up, the forward-thinking, full-service dealer, maybe in a third-generation business — they are dedicated to the future
HERO BX is interested in extending the branded partnership to any fuel oil dealer who is interested in offering Bioheat to consumers and who will commit to a supply agreement. In exchange, we provide our logo, regulatory assistance, a cooperative advertising program, and of course, full access to a terminal that does biodiesel blending right. We’re growing the program step by step, one dealer at a time.
Since we sit on the eastern side of New Hampshire, local dealers in Rockingham County are a natural fit. North Hampton borders Massachusetts to the south and is located just 15 miles from the southern Maine border, so we are attracting interest from distributors in both Essex County, MA, and York County, Maine, as well. Geography naturally has an impact, but there are no true borders with the program. We even have one Bioheat client in Handcock County, Maine, over 200 miles away.
HERO BX’s New Hampshire blending terminal can store up to 5,000 barrels of heating oil and biodiesel, and HERO BX has a total annual production capacity of up to 75 million gallons. Can you describe how biodiesel makes it to the NH facility: by what mode(s) of transportation and how often?
HERO BX ships biodiesel from our Erie, PA production plant to North Hampton, NH by rail car and truck. Biodiesel is loaded into 24,500 heated and insulated rail cars at our plant in Erie, PA. It’s about seven-day rail car delivery from PA.
Rail Cars are sent each week to the Grafton/Upton Railway, an experienced intermodal facility located in Central Massachusetts. The Grafton/Upton Railway has helped us serve our wholesale clientele for several years, and has become our exclusive business partner as a result of their excellent service. At the Grafton/Upton facility, HERO BX biodiesel is stored, heated, then shipped by truck to our terminal in North Hampton. During the heating season, we store adequate inventory in Massachusetts in order to avoid supply disruptions when degree-days are at maximum.
We have a systematic schedule in place that coincides with demand at the plant, whereby we are able to keep up with ratable deliveries. We stockpile railcars in Central Massachusetts, within trucking distance of the terminal, so as heating season ramps up, we’re ready. We watch closely, monitor tanks and ship accordingly, taking no risks. I would rather be long on product than scurrying for a railcar in the middle of the night.
What can you tell us about the facility’s on-site blending process and method? Is any blend level available from B2 to B80, or pre-set increments only?
The terminal is unique in that it has the capability to injection blend the two ingredients necessary to make Bioheat® at the rack: heating oil and biodiesel. The result is a product that is blended to exact heating oil-biodiesel ratios, assuring the highest level of quality.
We run the Top Tech System with TMS 6000 software, resulting in a powerful hardware/software package designed to make the loading process easy and Bioheat blends precise. Our customers like it, because it is user/driver-friendly, and since injection blending is automated, it takes the guesswork out of creating biodiesel splash blends. It’s the answer to the infrastructure issue, it eliminates the burdens of splash blending, and it’s an example of how with the proper system in place, a ready and reliable Bioheat® fuel supply is possible.
Although the system has the capability to offer blends from B1 to B99, HERO BX offers pre-programmed ‘recipes’ of B2, B10, B15 and B20 for clients wishing to adhere to the ASTM D396 specification for heating oil. For dealers who blend in their own storage or desire higher blends, we sell B50 and B80.
With the automation system, blending occurs at the terminal, enabling HERO BX to separate Renewable Identification Numbers (RINs), removing that burden from the fuel oil dealer while also eliminating administrative costs and compliance headaches. It’s everything the industry didn’t have a decade ago.
What other steps does HERO BX take to ensure the quality of its biodiesel, from production to storage to blending?
HERO BX works diligently and takes great pride in the quality and integrity of its products. HERO BX is an accredited BQ 9000 Producer, a program designed to assure that biodiesel fuel is produced in a way that maintains and exceeds the industry standard, ASTM D6751.We also carry QAP certification, a voluntary Quality Assurance Plan, administered by EPA under the Renewable Fuel Standard. It’s a voluntary program where independent third parties audit and verify that RINs have been properly generated and are valid for compliance purposes. This practice serves as a guarantee that our clients are receiving ‘gold standard’ RINs that meet all EPA compliance regulations.
Our commitment to quality combined with the professionally engineered storage system for B100 assures the integrity of the biodiesel stored in North Hampton is never threatened. The 1,000-barrel biodiesel tank is insulated on the exterior and contains an electronically controlled heating probe inside, designed to keep the biodiesel heated to 70ºF/21ºC during winter. In addition, the receipt and delivery lines to the rack are heat traced and insulated. This closed heated system allows the temperature-controlled biodiesel to blend into the heating oil at precisely the proper temperature to maximize quality.
It creates the perfect cocktail — the setup addresses all the challenges biodiesel has had. All the piping coming into the tank is heat-traced, so there are no threats of product lockup or gelling, and the cloud point is never threatened. We’ve also gone through the process of training drivers who carry the product inbound to make sure they understand how the product goes in and that they’re properly pumping it and taking the necessary precautions for safety and inventory management.
How have you seen the biodiesel markets grow or change in the 10 years since HERO BX opened for business?
In 2007 when HERO BX manufactured its first gallon in Erie, PA, the industry was just beginning to take shape. Back then we referred to biodiesel as a “boutique fuel,” since demand was low and most users were inspired solely by its environmental benefits. Although there were a few market drivers in place, including the $1.00 biodiesel blenders credit, along with Minnesota’s landmark B2 mandate, the Nation consumed just over 300 million gallons that year.
In 2010, the Renewable Fuel Standard II went into effect. The same year, passage of legislation in Pennsylvania calling for a B2 mandate in retail diesel fuel helped get our company off the ground domestically. Soon oil companies throughout the U.S., which were obligated to participate in the RFS, began to make investments in terminal infrastructure to handle biodiesel, resulting in over 1 billion gallons of US production in 2011. All the while, HERO BX focused its effort on production efficiencies, plant engineering, multi-feedstock development, fuel quality, and customer biodiesel education: key aspects in the building blocks of our company success.
We have come a long way since our humble beginnings. Today, HERO BX is among the nation’s leaders in biodiesel production and technology. We got here through the advocacy efforts of the National Biodiesel Board and our constituent domestic producers, and a lot of hardworking employees within our organization. As evidence of how far we all have come, the U.S. consumed over 3 billion gallons of biomass-based diesel in 2016.
What does HERO BX have planned for the next 10 years?
We expect growth through M&A and the construction of new biodiesel plants, especially in geographies that lack production. A good example: we found the Southeast U.S. was deficient in terms of biodiesel production, which led to HERO BX’s 2015 acquisition of the Moundville, Alabama plant (HERO BX Alabama, LLC). Today, we are expanding HERO BX Alabama, LLC, with a production target of 20M gallons annually (from 6M). Construction of storage tanks, pretreatment, and improving utility efficiencies are all in progress.
HERO BX also recently started construction on a new research laboratory at Penn State Erie – The Behrend College, which will be dedicated to biodiesel related R&D. First and foremost on the lab’s agenda is learning about the reduction of sulfur relative to feedstock. We’ll be looking at what is coming down the road in terms of feedstocks: algae and any vegetable oils that can be used to make biodiesel.
We are gaining traction in the downstream biodiesel/distillate blending business with our New Hampshire investment. We expect to continue this model as opportunities arise, particularly in the Oilheat sector.
Also on the horizon is The Biodiesel Solution, authored by HERO BX CEO Samuel P. “Pat” Black III. The official book launch is January 22, 2018 at The National Biodiesel Board Conference in Fort Worth, Texas. The book provides a historical perspective on the biodiesel industry, packed with accounts from the early pioneers who helped take an idea from a laboratory to a commercial success. It’s quite a story!