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Bioenergy International Canada expo & conference review
In the nick of time
The second conference provided a timely opportunity for producers, regulators, oil companies and technology experts to come together and review the impact the new mandates will have on the market
The timing for this year’s Bioenergy International Canada expo & conference couldn’t have been better.
Just days before the second two day conference was held in Calgary, Alberta, in September, the Renewable Fuels Standard (RFS) went into effect, something the local industry had been waiting years for.
All presentations can be purchased at a price of €150 - for more information contact Margaret@biofuels-news.com
The mandate requires refiners to blend 5% renewable fuels into their petrol supplies, starting on 15 December this year.
Unsurprisingly much of the event focused on the impact the new regulations will have on producers and those looking to invest in the market.
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The event was well organised and I encountered an eclectic mix of speakers covering a broad range of subjects and geographies. What caught my attention was the differences in operating standards and regulatory requirements that exist between countries – the exposure to this I think adds tremendous value to a truly international event. |
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Martyn Lyons, Managing Director, Simon Storage
Bruce McEwen, senior adviser for Environment Canada, opened the event with a comprehensive overview of federal renewable fuels regulations.
The regulations require primary suppliers (petroleum fuel producers and importers) to have an average renewable content of at least 5% based on their volume of petrol, starting on December 15, 2010. There are also provisions for a 2% average renewable content requirement in diesel fuel and heating distillate oil, to be implemented by 2011 or earlier, subject to technical feasibility.
Exceptions to this include companies producing or importing less than 400 m3 of fuel a year or fuel for use in the Arctic.
The regulations include a trading system for compliance units so companies can acquire compliance units from other parties in lieu of having renewable content in their fuels.
A key aspect of the new regulations will be how the fuels are tracked and recorded and McEwen took delegates through what is required, including the fact that a third party audit is needed once a year.
Susan Carlisle, manager of alternative and renewable energy at Alberta Department of Energy then looked in detail at Alberta’s own Renewable Fuel Standard.
The regulation, also very recent, was only passed in March this year, and is due to take effect in April next year.
The main aspect of the rule is that transporation fuel sold in Alberta must contain on an annual average basis: 2% renewable diesel blend and 5% renewable fuel alcohol (ethanol) blend.
Fuel storage in Canada
What makes this event unique is that it is combined with Tank Storage Canada expo & conference.
This two day conference, organised by Tank Storage magazine, featured speakers from key terminal operators including Westway, Vopak and Simon Storage.
Westway and Vopak both gave a strategic overview of the terminal markets in Canada and the US, whereas Martyn Lyons, managing director of Simon Storage in the UK gave a more technical viewpoint.
Owned by Canadian Interpipeline Fund, but based in the UK – home to the Buncefield disaster – Lyons was able to give an insight into new requirements for terminals since the incident, and provide an update on containment policy.
The presentation was very timely, given that the deadline for UK terminals to formulate a plan to meet the Process Safety Leadership Group’s (PSLG) requirements post-Buncefield, was the end of September.
Lyons took delegates through the main issues to come from the investigations into the incident – overfill prevention requirements, secondary containment and emergency response planning.
He also told of the companies own plans regarding overfill prevention. Simon Storage has now installed new alarm annunciators at each terminal capable of SIL 1 integration, in order to output level alarms onto the terminal radio system.
The company installed two non-critical level alerts onto the radio system from the SCADA tank level display via the annunciator.
One is a topping off level – to alert the operator that a tank is approaching normal fill and the other is a normal fill level – to alert the operator that a tank has met this level.
It also installed two critical alarms onto the radios via the annunciator. A level alarm high (LAH), to tell the operator of a tank high level alarm and level alarm high-high (LAHH) to tell the operator of a tank high high-level trip
Interestingly the radios are configured as having male voices for the non-critical alerts and alarms and female voices for the critical alarms that need instant action.
As well as terminal operators the two day conference also featured a variety of presentations from terminal experts. A key theme that emerged was the need to maintain tank integrity through inspection, spill prevention and also analyse why tank failures occur.
Back in 1988 storage tank owners had little guidance on how to maintain tanks, but of course now all that has changed.
John Cornell, an API trainer explained several best practices terminal operators should follow. These include that owners should calibrate their tanks, at least once. The API – 2350 committee has stated that inaccurate calibration has caused overfills. Further recalibration may also be required when a major change occurs to the tank such as relating to floating roofs, seal retrofits or tank modifications.
Terminal operators also need to know where failures are likely to occur, so they know what to look out for. Possibilities include brittle fracture, which is the sudden fracture under stress (residual or applied), where the material exhibits little or no evidence of ductility or plastic deformation; corrosion under installation; and atmospheric corrosion to name a few.
Fire safety was another hot topic. Storage tank fires are not as uncommon as one might think – or hope. Around 15-20 occur each year and one third can be attributed to lightning, explained Joseph Lanzoni, VP of operations at LEC Global.
Lanzoni went through the API 545 primary recommendations which include that terminals should install submerged shunts every 10 feet around roof, on existing tanks relocate shunts to under the liquid and submerge by one foot or more.
Terminals should also insulate all seal assembly components and gauge poles from the tank roof to encourage lightning currents to travel through shunts and bypass conductors.
Additionally bypass conductors should be short as possible and should be installed every 30 meters/100 feet around the tank circumference.
Qualifying renewable fuel must show at least 25% less GHG emissions than the equivalent fossil fuel. Although the renewable fuel can be locally produced or imported the aim is to create a local biofuels market.
As well as the presentations covering what still needs to be done in Canada, many speakers also presented on those facilities already in production. There are now nearly 30 ethanol and biodiesel plants across the country and the market is growing fast.
Notably just days before the event Canadian producer Enerkem announced it had started building the world’s first industrial scale waste-to-ethanol plant in Edmonton. Marie-Hélène Labrie, vice president of Government affairs and communications at Enerkem expanded on this at the conference, taking delegates through the steps to commercialisation.
The company already has a plant in Westbury, Canada, with a capacity of 5 million litres a year, which is claims is the first in the world to use a negative cost feedstock.
Production at the Edmonton plant is due to begin during Q4 2011, with an initial capacity of 36 million litres a year. There is also a possibility of doubling this capacity with a second module in the future.
Labrie concluded that the secrets to the company’s success have been extensive testing of the technology, efficient plants, a sustainable business model and perhaps above all – government support for the first plants.
Canada’s total petrol pool is approximately 40 billion litres a year (11 billion gallons), so the 5% mandate will require 2 billion litres (528 million gallons) of renewable fuel to be blended into the nation’s fuel.
The Canadian ethanol industry currently produces a total of 1.7 billion litres of fuel. This puts Canadian ethanol producers in the strong position of needing to build out its supply to meet demand.
When it comes to biofuels markets, Canada and the US could not be more different. The US market grew quickly and as a result created an environment of overcapacity where some producers struggled to survive.
In contrast the market in Canada is fairly nascent, yet it enjoys exceptionally high public and government support. This gives Canada the perfect opportunity to learn from the US and ensure the industry grows into a thriving and successful industry.
Pacific Ethanol is an example of one US producer which suffered from unfavourable market conditions last year and was forced to file for bankruptcy. However the facility quickly resumed operations and has just released its Q2 financial results stating that net sales grew 9% and totals gallons sold grew 88% compared to Q2 last year.
This is the sort of success story producers in Canada need to learn from in order to survive in today’s tough market conditions.
Paul Koehler, VP of corporate development at Pacific Ethanol, covered the company’s survival strategies as well as its tactics for success including perseverance, leadership and teamwork.
The company has now successfully constructed and operates four ethanol plants with 200 million gallons a year of capacity.
Koehler spoke about how it is imperative that producers really know the market they are working in. Companies should spend time analysing the demand required by the renewable fuel standard compared to the installed capacity, as well as the market penetration of renewable fuels in different areas to determine where the gaps and potential lies.
Koehler also covered the importance of strengthening the balance sheet, notable by significantly reducing the company’s selling, general and administrative expenses.
It is not enough to just expand the production capacities in Canada, infrastructure to transport and store the fuel is also required.
Bridging the gap between the bulk liquid storage sectors and the biofuels markets Matt Griswold, president of Blendstar Terminals spoke on an efficient logistics strategy for biofuels once they have been produced. The future of biofuels distribution, he concluded, was via petrol pipelines. This consolidates the distribution points and reduces the overall transportation costs.
Next year’s conference will again return to Calgary around the same time of year – check www.biofuelsinternationalexpo.com/canada for further details
