This not-so-alternative fuel source is gaining fans among North Bay businesses.
People visiting Benziger Family Winery on the slope of oak-studded Sonoma Mountain in Glen Ellen do more than relax in the tasting room and enjoy the estate’s award-winning wines. Several times a day, they can board a tractor-powered tram tour of the terraced estate, which is situated within a volcanic crater. Wine enthusiasts learn about biodynamic farming, site-specific vine selection and management, as well as the family’s environmental preservation efforts. And the Massey 375 tractors that power the tours? They run on biodiesel fuel as do all of the estate’s off-road, farming vehicles.
“Biodiesel is biodegradable, nontoxic and essentially free of sulfur and aromatics. It’s a renewable resource, based on soybean and other oil crops that are grown anew each year. It’s produced domestically, reducing this country’s dependence on foreign oil. And it contributes to our own economy,” says winemaker Mike Benziger. “Using biodiesel to run our tractors on our biodynamic estate just makes sense.”
Currently, the winery is using a fuel blend called B20, which is 20 percent biodiesel and 80 percent regular diesel. By doing this, Benziger is decreasing the particulate matter it releases into the air by 31 percent, decreasing carbon monoxide emissions by 21 percent and total hydrocarbons by 47 percent, says Mimi Gatens, Benziger’s vice president of marketing. The goal is to eventually have the winery’s equipment running on 100 percent biodiesel (B100).
Benziger, which started using biodiesel in 2005, isn’t the only North Bay company to bite the biodiesel bullet. North Bay Construction, Ghilotti Construction Company and Clover Stornetta Farms are among the recent converts. And according to Jim Dalton, who co-owns Santa Rosa-based Royal Petroleum with Clif Hill, many other companies are also trying it out. Located in front of a stand of eucalyptus trees on Todd Road about a quarter mile west of the railroad tracks, Royal Petroleum, complete with pumps, tanks and a roof full of solar panels, provides fuel and lubricants to farm, industrial and commerical companies throughout the North Bay.
“We have more than 20 accounts using biodiesel right now,” Dalton says. “The stuff works; it’s that simple. We buy the biodiesel and blend it with California ultra-low-sulfur diesel, and we put in an additive that helps keep it suspended molecularly. It gives a nice clean burn.” Most of Dalton’s customers use blends ranging from B5 to B20. “Trucks using biodiesel blends are more efficient, the fuel burns better and there’s more lubricity,” he says.
Following the rules
Since Governor Schwarzenegger signed AB 32 in 2006, which mandates caps on greenhouse gas (GHG) emissions, the sulfur content in petroleum diesel fuel has been lowered. This has sparked interest in biodiesel’s lubricity because low-sulfur diesel has less lubricity than diesel with higher sulfur content. And without lubricity, an engine cannot run smoothly. This is spurring more businesspeople to seriously explore the use of biodiesel.
Steve Geney, president of North Bay Construction (NBC), co-owns the company with John and Andrea Barella, who founded it 30 years ago with $1,500 and just one backhoe. The enterprise has since grown to what Geney says is the largest engineering contractor in the North Bay. NBC’s 2006 volume was more than $100 million.
When Geney brought up the idea of using biodiesel fuel with his department managers, he recalls, “I got a lot of deer-in-the-headlight looks. But the more we talked about it, the more it started to make sense. Our vice president of equipment operations, Jerry Cossey, was the most reluctant, but then he took a trip back to the Caterpillar tractor factory in Illinois to discuss our ideas with them. He found out they supported it … and since he came back he’s been our biggest proponent for its use.”
NBC is using B20 in its hydraulic excavators, backhoes, bulldozers, motor graders, compactors, paving machines and other heavy equipment at Cannon Manor in the Penngrove area near Petaluma Hill Road. The company is preparing water, sewer and other infrastructure for homes that have used septic systems since the 1950s, which are now failing.
“NBC has more than 350 pieces of off-highway site work equipment, and it’s our goal to have all our diesel equipment running on some form of biodiesel within the next few years,” Geney says. “In addition, once we’ve been given the OK from the engine manufacturers of our 50-plus on-highway diesel vehicles, we want to utilize biodiesel in those as well.”
Eventually, Geney would like NBC’s equipment to be running on B100, but right now, manufacturers such as Caterpillar and John Deere are unwilling to warranty their products if contractors use blends higher than B40. NBC hasn’t gone up to B40 because the California Air Resource Board (CARB) only recognizes biodiesel blends of B100 and B20 or below as being compliant with its regulations pertaining to NOx (nitrous oxide) emissions. If the company used B40, CARB could impose fines. “Their policy is discouraging higher blends because of the potential NOx penalties involved with the higher blends. Kind of self-defeating if you ask me.”
(Studies have shown that biodiesel use reduces all regulated emissions except NOx. However, when certain additives are used, NOx emissions are reduced as well.)
Milking a good thing
In August 2006, Petaluma-based Clover Stornetta Farms started using B10 in its fleet of approximately 100 vehicles, including its bobtail trucks, axle tractors and refrigerated trailers. Clover Brand dairy products have existed since the early 1900s and were bottled by the California Co-op in Petaluma until it was destroyed by a fire in 1975. Clover Stornetta was formed in 1977 when the co-op’s distribution business and Stornetta’s Dairy in Sonoma were purchased and merged. “Thus far, we’ve been very pleased with our decision to convert to biodiesel, and we haven’t experienced any significant vehicle problems from using the B10 blend,” Mkulima Britt, the dairy’s vice president of finance, reports. “In the future, we hope to move to a higher blend of biodiesel with all of our fleet.”
Britt says Clover chose to convert to biodiesel because “a consistent supply became available to us on a regular basis from our local supplier, Royal Petroleum; the use of biodiesel fits with Clover’s core values of sustainability and support of agriculture; biodiesel improves air quality and reduces greenhouse gas emissions; biodiesel mitigates Clover’s exposure to dramatic increases in oil prices; and the use of a B10 blend was approved by our vehicle manufacturers and didn’t require any engine conversion or modification.”
Damon Calegari is equipment manager for Ghilotti Construction Company in Santa Rosa. It’s a heavy construction engineering company begun in 1992 when it was spun off from San Rafael-based Ghilotti Brothers, a North Bay institution since 1914. Ghilotti Construction now has branches in San Rafael and American Canyon and does earth moving, site work, utilities, water, sewer, storm, paving, concrete work and soil stabilization. All of the company’s off-road equipment is using a B10 blend. Calegari plans to have Ghilotti’s on-road vehicles using biodiesel as well in the first quarter of this year. The company uses about a million gallons of diesel fuel each year.
“We started in July with B10 and then went to B20, but there were some fears that maybe, as cold weather came up on us, that the fuel would gel, so I backed down a little bit to B10. I’ll do that for a month to see what happens. Then I might kick it back up to B20,” Calegari says. “I think because, basically, biodiesel started out as a garage fuel, and people were making it on their own, there was some concern about quality. But the fuel we’re buying from Royal Petroleum is standardized fuel certified by the ASTM [American Society for Testing and Materials]. I wanted to be safe because we’re talking millions of dollars of equipment.”
A pretty penny
While Calegari acknowledges that right now biodiesel fuel costs more than regular diesel, the B10 blend he’s using only comes out to 3 cents per gallon more. “That’s not too bad, especially when you consider the environmental factors of reducing pollutants. We live in this town. And anything we can do to lessen the impact of our work is important.”
The fact that there’s no local manufacturer of biodiesel affects its price because the fuel has to be transported from other states. “It comes from the Midwest, and some even comes from Florida. We’re hoping to get a manufacturing plant here in California,” Calegari says. “I think people worry about having industry in their backyard. But it’s not going to be a huge refinery. It’s not a large-scale operation. If people want to support biodiesel, they need to support this.”
Lisa Mortenson, CEO of Community Fuels, emphasizes that the company will build plants only where industrial activity is appropriate. Founded in Sonoma County, the company maintains offices in the Sonoma Mountain Business Cluster at Codding Enterprises’ Sonoma Mountain Village project in Rohnert Park as well as in Encinitas in Southern California. And at the Port of Stockton, it has a three-acre parcel on which it is building a 40,000 square foot biodiesel processing room and laboratory with a two-acre yard area/tank farm.
“The plant is being built with an initial infrastructure capacity of 10 million gallons per year, with the opportunity to expand it to a significantly larger plant,” Mortenson says. “The plant site is rail-served and has the opportunity to have a pipeline direct to the deep water channel.” Mortenson expects the facility to be in production by mid-2007.
Closer to home, Community Fuels and the Sonoma County Water Agency are studying the feasibility of manufacturing biodiesel at one of the agency’s wastewater treatment plants. The facility would initially use recycled restaurant grease and vegetable oil to produce small batches of fuel. It would also explore the use of algae, which plagues wastewater treatment systems, for feedstock. Both of these options would likely be less expensive than soy, which is used as feedstock (raw material) for 70 percent of biodiesel produced today.
Community Fuels plans to design, build and operate multiple biodiesel production facilities, and Mortenson is pleased with the level of enthusiasm the company has encountered thus far. “These facilities will help support regional economies by developing easier access to biodiesel and by helping develop regionally appropriate feedstock supplies,” she says.
Rod Martin, sales and marketing manager at San Francisco Petroleum in Santa Rosa, says he sells B20 at the pump for $3.19 a gallon and regular diesel for $2.79. “When money’s the bottom line, it’s hard to justify paying more for diesel,” he says. “Once we get more producers here in California, it’ll definitely bring the cost down because it’ll be a lot less freight.” Royal Petroleum recently won a contract to provide B20 to San Francisco’s MUNI buses as well as part of a bid to provide biodiesel to PG&E operations in parts of the Bay Area.
Joining together
Dave Erickson, a technical analyst for Graton-based Climate Protection Campaign (CPC), sees biodiesel use as an important piece in the region’s efforts to reduce GHG emissions and allocate resources more efficiently. Co-founded in 2001 by Mike Sandler and Ann Hancock, CPC has helped Sonoma County make history: All nine cities in the county have pledged to reduce GHG emissions, making it the first county in the nation to have 100 percent of its local jurisdictions commit to climate protection, according to CPC. CPC is helping the cities complete a five-step program, which includes calculating GHG emissions, setting a target for reducing them, making a plan for meeting the target, implementing the plan, and monitoring and adjusting as appropriate.
CPC has also formed the Cool Business Alliance to help businesses go through the same five steps. Sonoma Wine Company, North Bay Construction and Codding Enterprises are among the first to join the alliance.
“We offer to help businesses do an accounting of their emissions and set a target for reduction. Then we help them hook up with state-funded energy efficiency programs and subject matter experts to help them zero in on where the emissions are occurring in their operations and help improve efficiency and, basically, save energy and money,” Erickson says. “That’s what our value proposition is for the businesses.”
Companies participating in the alliance also benefit in other ways. “There’s a huge opportunity for them to be apprised of the regulatory development process and, to whatever extent possible, give input to that process,” Erickson says. “Second, they’ll be able to position themselves to participate in the future carbon market, which is basically a certainty at this point. There will be a carbon market in California.”
A carbon market is a trading mechanism that allows people to buy and sell carbon credits. As AB 32 is implemented, carbon allocations will likely be made to different industrial sectors, which will be defined in the next few years. “To the extent that a business reduces emissions below its cap, that creates a carbon credit,” Erickson explains. “That has value that can be traded or sold in the market. And businesses that exceed their cap are then obligated to buy those credits on the market. This creates a compelling argument to proactively assess your carbon footprint.”
Erickson thinks the need to do something about climate change is becoming increasingly obvious. “The companies in the alliance are in the forefront,” he says. “I have all the respect in the world for them because they’re really taking the bull by the horns and making a difference.”
NBC’s Steve Geney says being environmentally concerned is just part of his company’s nature. “A lot of NBC’s employees have children and grandchildren, and if operating an environmentally responsible company will let them enjoy the worldly joys that we have, then that’s what we’re going to do.”
So, next time you see a paving machine alongside the road, remember its exhaust could be more of an environmental solution than an emissions problem. And maybe in the not too distant future, the refrigerated trailer pulling up to your favorite supermarket will be powered by biodiesel derived from algae that was filtered out of your drinking water. Investors might want to think about banking on that.
