New Crop of Fuels: Biodiesel Ignites Show Growth

By Margo McCall -- Tradeshow Week, 2/20/2006

If you haven't heard of biodiesel yet, you probably soon will. High gas prices, federal tax credits and concern about reliance on foreign oil have combined to accelerate interest in alternative fuels as never before. And nowhere else is that more apparent than at the Natl. Biodiesel Conference & Expo.

Produced by the nonprofit Natl. Biodiesel Board, the event — devoted to fuel made from vegetable and animal oils — has doubled in size with each passing year. The show's 2004 launch in Palm Springs, Calif., drew 600 attendees and 30 exhibitors. The 2005 show in Fort Lauderdale, Fla., attracted 1,100 attendees and 70 exhibitors. And more than 2,000 attendees and 140 exhibitors participated in this year's Feb. 5–8 show at the San Diego Convention Center.

While such growth is obviously welcome for the Jefferson City, Mo.-based trade organization, it's not without its challenges. For instance, more than 400 people registered on-site at this year's show, creating long registration lines. And arrangements for next year's Feb. 4–7 show at San Antonio's Henry B. Gonzalez Convention Center might have to be adjusted to accommodate a larger crowd.

"When you plan so far in advance, you just don't know," said Donnell Rehagen, director of operations for the NBB. "We're growing by leaps and bounds."

But nobody was complaining on the exhibit floor, where foot traffic was heavy even when attendees flocked to popular sessions on fuel quality and market dynamics. Organizers helped make sure the floor remained busy by serving coffee and lunch there. As it turned out, they probably didn't have to, since attendees already had a big appetite for information about the growing biodiesel industry.

"It's just been incredible," said Joe Anzalone, product support manager for Davco Technology, a Saline, Mich., producer of fuel processors. "For every person I talked to, two more were lined up. We were lucky we brought enough literature. A lot of people had to get more shipped out."

Exhibitors included mainstream energy industry suppliers, as well as those serving markets for other alternative fuels, such as ethanol. Faust Miraglia said his company, Energy Merchant, sees big opportunities to provide market advice for fledgling players. Australia's Safer Energy Group and Axion Energy Group, meanwhile, were at the show touting their plans to build the nation's largest biodiesel plant in Houston.

The industry's growth has also caught the eye of financial players looking for investments. One such player was William Mackey, CEO of United EcoEnergy, a Cocoa, Fla.-based firm interested in backing small biodiesel production facilities.

"We're trying to find smaller companies that need capital," he said. "The big banks want the 300-million-gallon producers. Our target is the 1- to 10-million-gallon producers."

Mike Finn, sales manager for Granger, Ind.-based Lazar Scientific, said his company only realized last year that some of its fuel test equipment could be useful to biofuel producers. Although the equipment drew a lot of attention at the show, Finn said many buyers didn't realize that testing biodiesel for at least 18 different characteristics could require an investment of $250,000 to $500,000. "I think some of the people are realizing it's more complicated that they initially thought," he said.

A provision contained in the energy bill passed last summer by the U.S. Congress allows tax credits of up to 10 cents per gallon for small biodiesel producers through 2008. The bill also provides for 30-percent credits to be applied through 2010 to refueling stations for a variety of alternative fuels, including diesel fuel containing at least 20 percent biodiesel.

Although biodiesel could be ready for widespread adoption by the trucking industry as soon as enough production plants are built and an adequate distribution system established, mass adoption by everyday drivers will have to wait until diesel vehicles become more available in the United States.

BMW, Mercedes-Benz and Volkswagen produce many diesel models in Europe, where the biodiesel industry is more advanced. Few diesel models are expected in the United States until at least 2007, however. Still, according to the NBB, the amount of biodiesel produced last year will turn out to be triple the 25 million gallons produced in 2004.

Automakers have worked with the NBB for years on joint research projects. But Rehagen said they've lately stepped up their participation in the conference and expo. The event featured displays of Daimler Chrysler's diesel-powered Jeep Liberty, Ford's diesel-powered F-350 and a Volkswagen Jetta.

Celebrities are also doing their part. Actress Daryl Hannah has appeared at all the conferences, and this year she was joined by actor Luke Perry. Singer Willie Nelson, who's a partner in a biodiesel company, did a live XM Satellite Radio broadcast with radio host Bill Mack to close the event. Environmental Protection Agency Administrator Stephen Johnson delivered a keynote speech.

There's no shortage of biodiesel sources. In rural areas, it can be made from soybeans and sunflowers, as well as animal remains. In urban areas, used fryer oil from restaurants is a plentiful source. Although batches can be cooked up in the garage for use in diesel vehicles, wide-scale production is a little more complicated.

Biodiesel's sustainability has made it a favorite among environmentalists. However, this year's conference catered to a business-minded audience. "I get a lot of inquiries from the fringe element back in the office, not that that's a bad thing. Here, by and large, these are real customers," said Anzalone.

Matthew Spoor, advertising manager for Biodiesel Magazine, said the increased business focus reflects a changing industry. "Now, you're seeing more of the business people. It's taking off, especially in the last year since the energy bill was passed. If you can make money saving the environment, so much the better," he said.

Because it serves an industry interested in sustainability, the NBB took pains to produce a green conference by hiring green marketing and promotion company Spitfire Agency. Besides reusable coffee cups sponsored by CoreVentures, the event featured cups and plates made with Bagasse, derived from sugar cane stalks. Organic cotton tote bags, bioplastic cutlery, recycled paper napkins and biobags were among the other elements reducing the event's impact on the environment.

Organizers placed bins throughout the facility for general recyclables and compostable materials, such as cups, plates and napkins. Their efforts extended to signs with soy-based ink, eco-friendly toilet paper and recycled paper from the facility's FedEx Kinko's outlet. And don't forget the sustainable beer at the Super Bowl party. It was produced by New Belgium Brewery, which uses wind energy to power its brewery and biodiesel in its delivery trucks.

"I think we got more applause for that than for some of the other things we were talking about," said Rehegan, adding that the board intends to further its environmental efforts next year.

The Super Bowl party, which drew 800 people to plasma screens and couches set up on a turf-covered showfloor, reflected the board's desire to make the event more fun. In previous years, organizers placed so much emphasis on conference content that food and festivities took a back seat.

"Everybody's going to conferences all the time. We want to make sure that ours is seen as the most valuable," said Joe Jobe, CEO of the NBB.