American Ag Fuels Biodiesel

American Ag Fuels
Biodiesel: right here, right now

By Marci Hummel
Times Farm Editor

DEFIANCE-- Biodiesel isn't just a fuel for the future. Biodiesel is now. And it's here, at the plant and at the pump.
     American Ag Fuels in Defiance began processing soybean oil to produce biodiesel in 2005, meaning that, as a business, the company is in the toddler stage. But American Ag Fuels isn't holding anyone's hand. It's stepping out on its own and ready for the big race: American Ag Fuels is currently the only biodiesel plant in Ohio.
     The company began in the mind of Steve Lankenau of Napoleon, one of American Ag Fuels' three principals and its chief executive officer. Brent Damman, also of Napoleon, is chief operating officer, and Mike Kurivial of Bryan is vice president of sales.
     After reading an article about biodiesel, Steve said he began researching the fuel, and in June 2004 decided to build a processing plant. When a $500,000 renewable energy grant came through in the fall of 2004, he and the other principals obtained the former Zeller building in Greenler Street in Defiance. In July of 2005, the company began producing its first biodiesel fuel.
     "But we've made and sold over 250,00 gallons of biodiesel since then," Steve said, adding that plans are to have the capacity to produce 6 million gallons annually when the plant is completed.
     "We've looked at locating this company within the four-county area (Defiance, Fulton, Henry, and Williams). This was the best for us ... where they seemed the most interested in having this type of facility," Steve explained.
     The former business owner and entrepreneur (WDFM radio and real estate developer) and former mayor of Napoleon (three terms), said the more the principals investigated, the more possibilities they saw.
     When asked why he wanted to produce biodiesel, Steve said he was interested in doing something worthwhile. "It makes me feel good about what I do, " he said.
     The U.S. Environmental Protection Agency, and its Ohio counterpart, like what American Ag Fuels is doing because the manufacture of biodiesel is a clean process. Although Steve said there was no tax incentive at first, in 2005 the Internal Revenue Service began offering $1 tax credit for every gallon of biodiesel purchased by a fuel distributor.
     Biodiesel, unlike petroleum diesel, is processed rather than refined. Steve related it to the processing of food since biodiesel is made from soybean oil.

     American Ag Fuels obtains soybean oil from crushing facilities, and the biodiesel is processed at the Defiance facility.
     The company does not distribute its own product. The fuel is available through area distributors, such as Ney Oil and Saneholtz-McKarns, and can be purchased at several locations.
     The potential market for biodiesel is enormous. Steve said 44 billion gallons of diesel fuel are used every year in the United States. "And we are not one-tenth of 1 percent of the diesel market," he added.
      The majority of heavy equipment and trucks are powered by diesel fuel. Steve said some school systems-- whose buses are diesel-powered-- are also switching to biodiesel. Recent converts include Pettisville, Liberty Center and Delta, with more, undoubtedly, to come.
     School districts, gas stations or companies interested in using or offering biodiesel may contact their fuel distributor, Steve said. And individuals who would like to know which stations carry biodiesel may call American Ag Fuels at 419-784-FUEL (3835) for a list of locations.
     When asked about local demand, Steve said selling biodiesel is not one of the company's challenges, although right now demand is a bit seasonal. This could soon change. The CEO explained the government currently mandates a low sulfur content -- 150 parts per million -- for diesel fuel. A mandate for ultra low sulfur -- 15 parts per million -- will begin this fall.
     Sulfur is good for lubricity and bad for the environment, Steve said. Ultra-low sulfur lowers lubricity, " and biodiesel adds back lubricity."
     Biodiesel is blended with regular diesel fuel in varying percentages. B20 equals 20 percent biodeisel, B10 means it contains 10 percent and so on. Blends may vary from pump to pump, but no energy modification is needed to burn any blend of biodiesel, or to switch back to regulaor diesel fuel.
     Brent -- the engineer of the principals -- explained in simplified terms how biodiesel is produced. Soybean oil is dried before being chemically treated. The process produces biodiesel and glycerin, and the glycerin is stored for a later sale. The biodiesel is cleaned after chemical processing and sent to the storage tanks.
     Brent said the soybean oil is converted to biodiesel by means of molecular separation vs. petroleum, which utilizes more distillation in the production process.
     He said biodiesel, which is more lubricious than diesel fuel, causes less wear and tear on an engine. And it leaves no black clouds of smoke and no offensive odor. Biodiesel does have an essence, though: Brent said it smells something like buttered popcorn.
     The general public is not yet knowledgeable about biodiesel, Brent said. This may take time.
     But for American Ag Fuels, the chief operating officer sees the company branching out, upgrading and building right along with the market demand.

Courtesy of The Countyline, Sunday, March 2, 2006

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