Biomass South

On Monday I went to my first board meeting of the NC Biofuels Center. Today I spoke at Biomass South. Tomorrow I’m talking to the kids at UNC.

Rachel is on her honeymoon. I’m off speaking. And Leif is at the plant commissioning the bio-refinery. The opening is on October 6th. Right now he is attempting to take it out for a spin around the block. I kinda wish I could be at his side. Maybe I could run an errand or something. But I find myself spending each day in my car. Driving long distances to talk to people. Outside the bubble. Today as I was leaving the plant I just wanted to drop down on the gravel and pull wire grass from the biodiversity project with Camille.

We call it our “wire grass dialogs,” in which we weed, and talk, and it somehow feels more important than all of the other things which sweep us away day to day.

I’m not sure I know the point where weeding apparel ends, and speaking apparel begins, but I know that clothes are an issue. Outside the bubble, at the podium, people expect crisp pleats and straight hemlines. It’s bad enough that I don’t wear ties.

I believe Biomass South was the brainchild of Kim Tungate, who we know around town as Dr. Fabulous. It was an amazing conference. At Raleigh’s cavernous new convention center. It’s been awhile since I have been on the program of these events. Here is what I said:

I always used to come to these conferences and sit in the audience and complain about the absence of leadership in what I referred to as our “renewables establishment.”

Then I started getting invited on stage as a speaker. At the time I was making biodiesel in my backyard. I would get up on stage in my coveralls with my mullet and explain how a bunch of us were making biodiesel with just a fifty-five gallon drum and a canoe paddle.

It wasn’t long before I became a fixture at conferences like this, and after a few incendiary remarks, it wasn’t long before I stopped being invited all together.

I work at Piedmont Biofuels, which is a little multi feedstock biodiesel plant in Pittsboro where we make about a million gallons of fuel per year, and build biodiesel plants for others, and do contract research and development on biodiesel, and where we have a toe in the fuel quality analytics part of the industry.

We are proud of the fact that we are the smallest BQ-9000 certified producer of biodiesel on earth. That’s a quality accreditation awarded by the National Biodiesel Board. Traditional wisdom dictates that such a thing is reserved for the big boys, which is one of the reasons we went for it. The poor old NBB had to change the way they put dots on their production maps when we came along.

So the years wear on, and Piedmont plods along, and before you know it we are part of the “renewables establishment.” And of course we’ve learned a few things along the way. Steven Burke, from the NC Biotechnology Center, and current president of the NC Biofuels Center, has graciously advised me for free. He’s suggested I wear socks on stage and outlined the difference between me as a “repellent,” and me as something lethal.

Thank you, Steven. That’s very helpful, and Piedmont Biofuels has had lots of help along the way.

Since I’m a liquid fuels guy, I thought it might be interesting to provide a brief history of biodiesel in America-and then twist the lens a bit to bring it down to something pertinent to the South.

Biofuels come from agribusiness. The commodities crowd created them to take the edge off the boom and bust cycles of their industry. Biodiesel was invented by “big soy,” in hopes that someone would still want their beans in times of vast surplus.

And sure enough, when the world is in caloric surplus, biofuels look like a brilliant idea. When I started making biodiesel in 2002, the universal refrain was “biofuels good.”

But when global caloric output is matched by global caloric consumption, it is very easy to move biofuels from “good,” to “evil.” Piedmont Biofuels went from being genius pioneers to guilty of crimes against humanity in six short years.

I’ve been “good.” I’ve been “evil.” “Good” is better.

Something we need to realize when agribusiness is our bedfellow is that they will only love us when the times are lean. They will leave us when the times are good. When we entered commercial biodiesel production virgin soybean oil was .15 a pound. It climbed steadily into the .30 per pound range, at which point we stopped buying it and switched to waste chicken fat.

Chicken fat was .20 a pound and looked like a viable feedstock until it to headed into the .30 and .40 cent a pound range.

Piedmont Biofuels has done a lot of innovation. And we have a lot of “firsts.” But we have yet to discover how to turn six-dollar oil into a five-dollar fuel.

Feedstock costs have risen constantly since our entry into biodiesel. In order to not have to bid against the purveyors of food, we have stayed in waste products. And in order to stay alive we have sought out niche anomaly markets where our fuel can be valued highly enough to keep our doors open.

A whole lot of biodiesel production capacity has closed down in the past year. With rising feedstock costs, plants are shuttered. I’m guessing that U.S. production hit a peak in 2007 of 450 million gallons and that that number will be either flat lined or reduced for 2008.

It appears that when agribusiness gets another date for the prom, they no longer return our calls. They don’t even text.

Something to realize is that the human animal has an inherent character flaw. If you can make a gallon, why not make 100 gallons? If you can make 100 gallons, why not make a million gallons? And if you can make a million gallons-why not make 100 million?

This thinking has led to the burning of Indonesian rain forests for oil palm plantations where we put palm trees all in a row. That blackened the industry’s eye. You know what happened to all that cheap plentiful palm feedstock that was headed our way? We ate it.

A lot of us ate it in movie theatres, which is why their popcorn tastes so good.

All of which is to say that the giant 60 million to 100 million gallon biodiesel plants in the United States have “for sale” signs in the yard.

Greed gets you twisted.

We’ve seen it in North Carolina. Our biodiesel industry is characterized by a series of small-scale producers across the state. We are a small community of biodiesel processors who exploit the niches we can exploit, and find our way to profitability through adaptation.

Every now and then we see the press releases for the monster production plants. This one is going to crush 30 million gallons of soy oil in Mount Olive that one is going to spin 30 million gallons of palm oil into fuel in Wilmington’s harbor.

We might want to make sure we don’t believe our own press releases.

After laboring for two years to get a million gallon facility spinning like a top I read that an impending 30 million gallon plant had decided to become a 60 million gallon plant and as a result their opening would be delayed three months.

At Piedmont Biofuels it takes three months to get a condenser working for our bio-refinery. We must be different from them.

By the way, we are opening North Carolina’s first bio-refinery on October 6, and you are all invited. Politicians speak at 4:00. Party at 5:00. We are commissioning it as I speak, and if it is not working properly by October 6th, I will re-use the “almost open” sign that we used for our first “Grand Opening.”

I believe that when it comes to successful biodiesel production it is a matter of scale. The next 100 million gallons will not come from a single producer. It will come from many processors who are located on feedstock anomalies. I say this as a guy who has spent his entire biodiesel life in a world of rising feedstock costs.

Waste chicken fat fell .15/pound last week. Word on the street is that it is headed back to .20/pound. That changes everything. A big harvest in the former Soviet Union is cratering world commodity markets. Even soy oil is coming back into biodiesel’s reach.

Hurricane Ike shut down refineries on the gulf coast, which has left diesel prices sky high. And feedstocks have fallen. Looks like this month might be a good year for biodiesel production.

Suddenly agribusiness might need us again. It could be the world has shifted back into caloric surplus. Might we be “good” again? I want to go to the prom. Or at least, I want to be asked.

I’ve been poor. I’ve been rich. Rich is better.

Which brings up the question of what shall we do as an industry if the world moves back to affordable feedstock? My suggestion is that we skip the “greed” step, and build sustainable businesses based on sustainable practices that can provide us with a little hometown security.

When you log into the Chicago Board of Trade and find yellow grease at a fraction of diesel fuel, don’t think of it as a license to print money. Think of it as an opportunity you can exploit in a small way to make a little money.

Think of becoming the fuel maker to your community. Imagine a world in which local fuel is derived from local resources. Imagine a world in which we are powered by a micro-nodal engine of energy production.

The South used to be a rather self-reliant place. We ought to take stock of our resources. We have the sun, and lord knows we have the fat. I’m thinking we should harness the energy we have and deploy it to where it is needed.

We live in a world that is incomprehensibly complex. I don’t care it if is “peak oil,” climate change, or financial instruments deployed by Wall Street such that securities are underwritten by sub-prime mortgages. In a world of incomprehensibly complex problems, I suggest we build “knowable” solutions.

Go meet your own fuel needs. Then meet the fuel needs of your community. And if you have some left over, you’ll find a taker for every drop you can produce. Focus on sustainable biodiesel.

Sustainability is not that hard. Simply put as much energy into the pot as you take out of the pot.

Be good. Don’t be evil.
Be rich. But not greedy.

And if you want to make the big time on the speaker’s circuit, wear socks on stage.

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3 Responses to Biomass South

  1. Camille says:

    Thank you Lyle, for continually making the sacrifice to go out and spread the word about life inside the bubble. Somebody needs to garner local support for our project and inspire other communities to follow suit. There is no one better suited for this than you. You are a master at making the unthinkable ‘doable.’

    I’ve been telling people outside the bubble that I’ve decided to walk away from the pyramid like the Mayans did when their empire began collapsing. I see the fear in their eyes as they consider what this might mean. They can’t imagine life without TV, McDonalds and the freedom to spend long hours each day in their vehicles. They have no idea how pulling weeds can feel like a worthy pursuit.

    But as I go on to describe some of the aspects of Life in the Bubble, I see their curiosity blossom. One day I expect some of these people will have an opportunity to hear Lyle speak and I hope I’m around to see their eyes when he shows them the big picture!

  2. Kim says:

    Lyle,
    We need to hold all conferences in gardens from now on if we have any intention of bringing creative solutions to fruition…I’m not sure how creative we can be when we’re wearing restrictive clothing.

    Thanks for being willing to share, time and time again.

  3. kim says:

    Lyle,
    We need to hold all conferences in gardens from now on if we have any intention of bringing creative solutions to fruition…I’m not sure how creative we can be when we’re wearing restrictive clothing in cavernous buildings.

    Thanks for being willing to share, time and time again.

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