At some point, you have to achieve closer
cooperation between biofuel suppliers and
petroleum suppliers, and then we can start
to sketch out a joint vision for the future.
“The two largest players in the space
really weren’t plant builders. They were
plant acquirers,” he said.
Through good days and bad, Gebolys
has maintained a strong belief in the
future of biodiesel. “I don’t think we’re
going back to a pure fossil fuel world.
There is a greater and greater awareness
of the need to move towards cleaner,
more renewable sources of convective
energy. Biodiesel is very important in
the diesel side of the equation. As the
leading advanced renewable energy
in America, biodiesel is really at the
forefront of where growth is going to
happen.”
Biodiesel’s growth is tightly tied to
pipeline access, and the future looks
bright now that ASTM has revised the jet
fuel specification to allow up to 50 parts
per million (ppm) of biodiesel in jet fuel.
The former limit of 5 ppm had forced
shippers to keep biodiesel blends out of
pipelines that also shipped jet fuel.
“Pipelines are by far the most efficient
way to move fuels from one point to the
other,” Gebolys said. “Biodiesel really
has not been moving by pipeline in any
significant way throughout its history.
Now pipeline shippers are increasingly
looking at shipments up to B5 in the
mainstream pipelines of the country. As
that effort continues to progress, we will
be in a dramatically different spot where
we can move biodiesel as efficiently as
we move diesel fuel.”
Pipeline shipments can dramatically
reduce biodiesel cost, he said. “If you can
get 25 cents per gallon taken out of your
costs, you can really change the industry.
It took a long time to get here, but this
is about to become a very important
part of the emergence of this industry.”
World Energy is poised to capitalize on
the pipeline opportunity with a plant
in Galena Park, TX connects to a Kinder
Morgan pipeline.
Biodiesel blending is poised to shift
from a source of economic advantage for
some suppliers to an economic necessity,
according to Gebolys. “It’s binary. There
is some point at which adoption of
moving B5 in pipelines is something
you just have to do to keep pace.
Biodiesel always trades, net of RINS
and net of tax credits, at a discount
to heating oil, so if you can move
product up the pipe that has the
discounted materials blended in
at its origination points, that’s an
opportunity. But if the competitor
is doing it every day, at that point it
becomes ubiquitous. Nobody is worried
about what they might gain; they stress
out over what they might lose.”
That change has already happened at
truck stops, Gebolys notes. “If you’re a
truck stop operator in the United States
and you have not maximized biodiesel
blends in your fuel, you’re just marking
time until someone buys you.” Trucks
stops in the south are already maxing-out
at B20 six months a year.
“I don’t think we’re going to be B20
everywhere all the time, because you
have seasonal, logistics and supply chain
constraints, but I think we’re going to be
pretty standard B5 virtually everywhere,
and in a 60-billion-gallon distillate
market, that’s 3 billion gallons a year,
with a fair amount of blending up to B20
beyond that. Certainly, an on-average
B10 market is within our sights in the
foreseeable future.”
While the future looks bright,
Gebolys doesn’t think it will be easy. Big
petroleum has fought hard to guard its
market share, but he believes renewable
energy has secured its place in the world
economy. “Are we better off using more
fossil fuel? No. So they are arguing for
their own benefits, and that’s fine, but
we just shouldn’t be hoodwinked to
thinking that is a wise thing for society
to do.”
B5 the blend home heating oil
appliances can burn without
any modifications
The debate has been particularly
pitched in 2018, with some politicians
stoking a passion for annihilation of the
RFS and the biofuels industry. “I think the
outcomes will soon provide clarity about
where we go from here. It’s becoming
increasingly clear that we’re just not
going back to a world where we don’t
put renewable fuel into our fossil fuel.
If we are going to grow the concept of
renewable fuel in our fuel supply, the
question becomes how do we it most
efficiently.
“It is not efficient to have constant
policy squabbles, because then you can
only attract the most expensive capital.
At some point, you have to achieve
closer cooperation between biofuel
suppliers and petroleum suppliers, and
then we can start to sketch out a joint
vision for the future,” he said. “I really
do think we’re going to get to a better
place.”
Biodiesel Success Stories 35