Dealers Can Manage B20 Transition

Experts from REG discuss management of fuel blends

As the heating oil industry awaits ASTM approval of a higher blend level of biodiesel in Bioheat® fuel, a major biodiesel supplier is offering guidance on how to manage biodiesel blends effectively.

ASTM, the internationally recognized standard setting body for fuels and many other materials, is currently weighing a proposal to create two new grades of B20 heating oil, which is 80 percent petroleum diesel and 20 percent biodiesel. ASTM has previously expanded the definition of heating oil to include up to 5 percent biodiesel.

The performance of biodiesel blends is critically important to heating oil dealers. They succeed by maintaining long-term relationships with customers, and they do not want to jeopardize accounts by delivering fuel that will cause heat outages or equipment problems.

Ensuring positive experiences in the heating oil market is a high priority at Renewable Energy Group Inc. (REG), the nation’s largest producer of biodiesel. Jon Scharingson, REG’s Executive Director of Sales & Marketing, said REG has had a lot of customers use B20 blends in heating and transportation, and the product performs almost identically to unblended petroleum diesel and heating oil.

Kelsey Erickson, Team Leader for Quality Support at REG, said the switch to B20 should be a seamless transition for most heating systems in the Northeast, because they have already been running on B5 Bioheat fuel.

Less CO2

The B20 Bioheat fuel option is particularly important, because B20 generates lower carbon dioxide emissions than pure petroleum oil. The National Biodiesel Board’s emission calculator shows that B5 has 3.82 less CO2 than petroleum diesel, and B20 has 15.28 percent less CO2. As states like Massachusetts (see article, Page 28) move to penalize CO2 emissions and drive customers away from heating oil, biodiesel blending can make heating oil a less conspicuous target for regulators.

Scharingson said dealers can use Bioheat® blends with confidence, provided they take a few prudent steps along the way. First, they need to buy from a reputable supplier who is providing biodiesel that conforms to the ASTM D6751 specification. That means being meticulous to avoid non-specification biofuels that do not meet the biodiesel standard and might result in a poor quality blended fuel. NORA also cautioned dealers on this point in a recent press release: “There may be financial incentives for blending raw vegetable oils or non-ASTM specified fuels. Unfortunately, there is a small percentage (hopefully a very small percentage) of these individuals willing trade off the risk of selling off-spec product for a pricing advantage,” NORA wrote. “The NBB, NORA and the state association can only inform those who wish to know the facts. With these facts, we hope that the industry understands the negative fallout associated with being buyers and sellers of anything less than ASTM grade fuels.”

Treat for Cold Weather

Another important step for the heating oil dealer is to make sure their blended fuel comes with a Certificate of Analysis, according to Scharingson. The certificate will identify the cloud point of the fuel, and dealers can use that information to manage the fuel properly for cold weather. He recommends that dealers work with fuel quality professionals who can guide them on the use of fuel additives. They should also maintain high standards for storage and handling just as they do for heating oil in order to minimize water contamination, he added.

REG uses both vegetable- and animal-based feedstocks to make biodiesel, and different batches of biodiesel have different cloud points based on which feedstocks were used. As long as dealers check the cloud point on the Certificate of Analysis and use additives to adjust cloud point properly, Bioheat blends can be expected to perform just as well as pure heating oil, the REG executive said.

For an extra level of quality assurance, dealers can seek out biodiesel produced by BQ-9000-certified producers like REG, who have submitted their production procedures to intense scrutiny. Many government and institutional buyers insist on BQ-9000 fuel, he said.

B20 Blends in New York

REG is increasing its support for the heating oil industry this winter by expanding REG Energy Services, LLC, its division that sells heating oil and petroleum diesel along with biodiesel blends, by offering additional biofuel blends in New York, Minnesota and Iowa.

REG Energy Services will offer ultra-low sulfur heating oil and diesel blended with up to 20 percent biodiesel at its New Hyde Park, N.Y. terminal. In addition, ULSD blended with biodiesel will be offered at Minnesota terminals in Alexandria, Mankato, Roseville and Rochester and Iowa terminals in Mason City and Des Moines.

This is the first time REG Energy Services will offer biodiesel fuel blends along the Magellan Midstream Partners terminal system in Iowa and Minnesota. Iowa has a 4.5-cent per gallon incentive for retailers utilizing blends of 5 percent and above. Minnesota has a B5 requirement in the winter when using ULSD and B10 during the summer months.

“This expansion of REG Energy Services provides further access to our fuel portfolio in the Northeast and Midwest markets where we will now offer biodiesel fuel blends in addition to REG-9000™ biodiesel,” said Gary Haer, REG Vice President, Sales and Marketing. “Biodiesel blended fuel provides a convenient solution that further improves REG’s ability to better meet our customers’ needs and growing demand, while enhancing America’s energy and food security, and our environment.”

REG now offers fuel at 34 locations across the U.S. For more information, visit the REG website at www.regi.com.

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