On January 16th, 2012 California Biodiesel Alliance vice-chair and conference MC, Russ Teall, welcomed over 180 attendees to the California Biodiesel and Renewable Diesel Conference at the San Francisco Marriott Marquis. This first annual conference brought together technical and policy experts to give attendees an unprecedented and in-depth look at California's biodiesel and renewable diesel industries.

Starting with a history of how we got here, keynote speaker and California Biodiesel Alliance (CBA) board chairman, Eric Bowen, detailed the history of biodiesel's boom and bust years in the state, citing the drop in production from 20 million gallons in 2006 to 5-10 million gallons in 2010. He described 2011 as a stabilizing year and made the upbeat prediction that most biodiesel producers will make money this year and production levels will reach 20-25 million gallons.

Bowen pointed out that the downturn in California's biodiesel industry resulted from a perfect storm that included the national economic downturn; poor fuel quality by a few in-state producers that hurt the reputation of biodiesel statewide; State Water Board regulations that resulted in unexpected and massive closures of fueling around the state in early 2008; and the 2010 federal tax incentive lapse, which caused a one dollar a gallon increase in the price of biodiesel. With the worse of those problems behind us, Bowen pointed out the critical need to self regulate for fuel quality and to counter a new threat-the boycotting by obligated parties of RINS from small producers.

Before introducing the first panel on California's Low Carbon Fuel Standard (LCFS), Bowen weighed in with his personal opinion on the temporary injunction, which just weeks previous was issued to the California Air Resources Board (ARB) in a lawsuit arguing that the LCFS violates the Commerce Clause of the US Constitution. He stated his belief that ARB will prevail and told producers in the audience to keep complying. He expressed his confidence that ARB will find a regulatory fix regardless of the outcome of the lawsuit. Details of his remarks on this topic can be found in an article in the January issue of BIodiesel Magazine.

Richard Corey, deputy executive officer of the California Air Resources Board, while expressly not commenting on the lawsuit, did made the point in his presentation that the judge's ruling applies to enforcement, not implementation of the regulation. He stressed that ARB feels good about the program, which in its first year is seeing over-compliance by companies, an accrual of credits for ethanol and CNG, and new pathways proposed.

The enthusiasm and innovation suggested by those facts were evident in an impressive array of conference presentations detailing feedstocks and production technologies aimed at producing biodiesel and renewable diesel with low lifecycle carbon intensity values (CI), which is currency of LCFS. A few among them were: using inedible oil extraction solids and liquid biodiesel by-products to produce combined heat and power and using wash water and raw glycerin bottoms for algaculture (Russ Teall); growing diverse bio-crude oil plants and making bio-crude oils into biodiesel using crude oil refinery processes (James Latty); thinking of biofuel crops in a cropping systems context as in growing canola as bee pasture in orchards (Stephen Kaffka). 

Bob Brown, special projects manager at Western States Oil Company, and a long-time marketer of biodiesel, expressed his concerns about hidden costs and challenges to the petroleum marketing community, but said he looks forward to being part of what he believes will be a successful program.

Panelists throughout the day presented information on the legislation, research, and programs behind California's unique commitment to supporting innovation and providing funding to meet the state's energy goals, specifically the transition to low carbon fuels.

Karen Ross, secretary of the California Department of Food and Agriculture, reported that the Bioenergy Work Group of California State Agencies now has jurisdiction over kitchen grease under the state's Bioenergy Action Plan, which requires the state to produce a minimum of 20 percent of its biofuels within California by 2010, 40 percent by 2020, and 75 percent by 2050. She discussed the value of monetizing the social and environmental benefits of biofuels.

Jim McKinney, manager of the Emerging Fuels and Technologies Office of the California Energy Commission (CEC), presented a comprehensive look at diesel substitutes from that agency's perspective. He cited $37.69 million in total funding for biodiesel and renewable diesel funding to date under the AB 118 program with $11.9 million just released in a solicitation applying to production plants.

Peter Ward, of Alternative Fuels Advocates, praised the State Alternative Fuels Plan, but argued that the policy debate needs to be revisited. He recommended a new approach that would replace petroleum use with existing alternative fuels and emphasize them for their economic potential to reduce consumer and fleet costs and develop business. He also argued for a repurposing of petroleum subsidies for low-carbon alternative fuels development.

Glenda Humiston, California state director for USDA rural development, presented information on capital available though her agency for biofuel projects. She detailed the range of products from biomass and their job creation potential stressing the importance of partnerships both public-private and urban-rural. She made the point that by standard investment measures, equity capital in rural areas is as successful as equity capital in technology-oriented urban regions.

With potential demand for low CI fuels as high as half a billion gallons per year in the state, California's biodiesel industry remains what Bowen calls underweight. This is due in significant part to continuing regulatory uncertainty. Shelby Neal, director of state governmental affairs at the National Biodiesel Board, pointed out that the top producing states have the best policies and that those state governments work with industry as full partners. CBA has made great strides since 2006 in developing relationships with state agencies and meeting regulatory requirements, but much more is needed.

In order to grow the biodiesel industry and to bring the full environmental and economic benefits of biodiesel to the state, CBA must continue its active engagement with state agencies on policy issues including emissions, the UST issue, LCFS, and AB 118 funding, especially for infrastructure where the lack of bulk transfers stations is a serious industry problem.

Bowen ended his keynote by expressing his confidence that California will become a national leader and that this will include a mix of sustainable palm from Asia, used oil stock from the mid-west, and renewable diesel. The ready aviation market for renewable diesel had been enthusiastically explained by speaker Wallace Walrod of Fueling California. Bowen pointed out that renewable diesel, as it comes on the market, will be subject to all the regulatory requirements for new fuels, which biodiesel has been working through for some time.

CBA wishes to extend special thanks to Biodiesel Magazine for the successful collaboration in organizing and producing the California Biodiesel and Renewable Diesel Conference.