Grain Farmer Finds Field of Opportunity in Biofuels

By Ron Johnson, Dairy Editor
Friday, August 11, 2006 1:51 PM CDT

Five years ago you'd have found Jamie Derr in Colorado, living the life of a "snow bum." Today he's the chief operating officer of Great Lakes BioFuels and an articulate advocate of renewable energy.

He's also a no-till cash grain farmer with his parents, Bob and Diane. They operate 400 tillable acres near the Dane County community of Marshall.

Jamie doesn't just talk about biofuels. He's in charge of making biodiesel - a renewable fuel made from plant oil, such as soybean oil - for Great Lakes BioFuels.

It's no coincidence that Jamie is both a soybean grower and a biodiesel backer. After moving back to Wisconsin from Colorado, he and his father joined the steering committee of a group looking at building a soybean crush plant in southern Wisconsin.

Well, the plant was never built. But by being given the job of finding a use for the oil the crushing plant would produce, Jamie became intrigued with biodiesel. He believes it can do a lot for the environment, local economies, and farmers.

"The one thing I did bring back from Colorado was a desire for renewable energy - a desire for more sustainability," Jamie says. He's found that same mentality in parts of Madison, where Great Lakes BioFuels has its office.

Jamie has three partners in the company. Tony Hartmann is the chief executive officer. Rich Path is a vice president and in charge of outreach and education. Mark Daugherty is the chief technology officer.

Meanwhile, Jamie has drawn the title of chief operating officer. That means, he says, "I'm the guy getting his hands dirty."

By all appearances, Jamie likes getting his hands dirty. He grew up learning the basics and the fine points of growing corn, soybeans and winter wheat.

Now he's growing a couple of small test plots of canola at the family farm, to see how much oil - for biodiesel use, of course - they might yield. He's also busy in Madison, putting together a biofuel processor that will yield 350 gallons at a time of soybean oil that's been prepared to blend with regular diesel fuel.

In one corner of the company's third-floor office of an old brick building that's being used as a business "incubator" sets a smaller version of the oil processor. Jamie uses it to show Agri-View some of what's involved in converting vegetable oil into a product that can power diesel cars, trucks, tractors and combines.

On a small scale like this - just 50 gallons produced at a time - the process is simply dubbed "home brewing." In fact, the contraption might easily be mistaken for a 21st century version of Prohibition era moonshine still.

There's a heating oil tank cut lengthwise, with a copper coil lying in it. On a table next to the tank sit a couple of plastic tanks and a hydronic heater, all linked with hoses and fitted with valves.

Although the rig looks complicated, Jamie assures that it performs a simple process. It "reacts vegetable oil with alcohol and a catalyst." Jamie calls the device "small scale and technically unsophisticated."

But it does work. Here's what happens.

First the oil is heated in the tank with the copper coil. Last summer and fall, to test the setup more inexpensively, Jamie scrounged used oil that had cooked French fries. "Some came from Dairy Queen, some came from Edgewood College - a number of places," he says.

Once the oil is hot enough, it undergoes a chemical reaction with alcohol and a catalyst. The reaction "strips the glycerin out of the oil molecules. If an oil molecule is a triglyceride, you're stripping that glycerin molecule off and replacing the ends of each of those molecular chains with an alcohol molecule. That resulting chain looks a lot like diesel fuel and reacts a lot like diesel fuel," Jamie explains.

When the chemical reaction is finished, the glycerin that has been made from the alcohol settles out over the course of several hours. Then it's time to drain off the glycerol and starts washing the fuel.

This wash consists of a fine mist of water that falls through the fuel and removes any residual alcohol, other solubles and "undesirable components," Jamie notes. These undesirables are materials that do not burn well and which are not good for an engine.

With the washwater drained off, it's time to heat the biofuel again to further reduce its water content. The resulting liquid looks much like cooking oil, a nice, golden color.

Trouble is, the biofuel produced by this home brewing method does not meet American Society of Testing and Materials (ASTM) specifications, so it can't be sold.

"So we (blend it with diesel fuel and) use it on the farm. It burns in the engine just fine," Jamie says.

These days the home brew setup is only used to show and explain the process. The new, 350-gallon system from The Netherlands and called a BioKing boasts sophisticated instrumentation and controls that create a much more consistent fuel. "When you're making fuel, it's very important that you use the same process every time," Jamie says.

Once the new processor is on line, Jamie might not dash around Madison, picking up used frying oil, any longer. For one thing, it's not a pleasant task and it takes time and fuel to make all the stops.

"The downfall of French fry grease is it's inconsistent. It's incredibly inconsistent," he adds. "And it makes it hard to make a consistent product."

For the BioKing, Great Lakes BioFuels will press soybeans and canola seeds people affiliated with the young company have grown. They'll use that oil and most likely buy refined-and-bleached soy oil to process into biodiesel.

The plan is to sell that biodiesel through Prairie Fire Cooperative, which Jamie helped found. The co-op already has a pump along Madison's East Washington Avenue, where drivers can buy B100 biodiesel.

The 'B' in B100 signifies that it's biodiesel. The '100' means it's 100 percent plant or animal fat biodiesel and contains zero conventional diesel fuel, Jamie explains. By contrast, a B5 fuel is just 5 percent plant oil or animal fat-derived biodiesel and contains 95 percent regular diesel fuel.

There are ranges in between, too. B20 biodiesel contains 20 percent plant oil or animal fat biodiesel and 80 percent regular diesel. That's what Jamie and his folks use in their farm's tractors and combine. They buy B5 fuel and add enough refined biofuel to achieve a B20 blend.

"Twenty percent is a good number because you don't have to worry about anything with older equipment," Jamie notes.

Biodiesel acts as a solvent, so its first few uses in an engine that has run only on straight diesel will clean out the fuel system and might plug the fuel filter. Jamie says lower blends like B2 and B5 don't pose much of a problem.

Older vehicles - those built in the mid 1990s and earlier - can also suffer from biodiesel. In those, rubber components in their fuel systems can be degraded by a biodiesel that's higher than B20. "That's kind of why B20 is the magic number," says Jamie.

Once the BioKing processor is up and running, Jamie and his Great Lakes BioFuels partners want to investigate the possibility of setting up more small-scale biofuel processors close to where the feedstock - the soybeans and maybe canola - is grown. Can a small, local plant that sells its fuel locally compete against the big boys - say, those that make 30 million gallons or more a year? That's what they hope to find out, and it's something Jamie thinks can work.

One reason setting up smaller processors, sourcing the oil locally and selling the finished biodiesel locally might work boils down to fuel costs. Jamie points out that there's a lot of inefficiency in a system that burns fuel to haul fuel long distances.

He admits this concept of small processing facilities near the farms the grain is grown has it naysayers.

"If you talk to someone who has a 30-million-gallon plant, they'd say you're crazy to try to build a two-million or five-million gallon plant. It'll never work.

"We feel that if you're close to your feedstock and have the same producers supplying your raw material also using the finished product, you can keep the whole loop relatively closed and you're not wasting all that energy on transportation," he says. "We're investigating to see if that model works."

Jamie might be considered hypocritical if he did not use biodiesel in his own vehicles. But he does.

His old Mercedes station wagon and Chevy pickup both burn B100 during warm weather. He says the Mercedes smells like a popcorn wagon instead of a station wagon as it rolls down the road.

Come colder weather, he switches both vehicles to a B20 fuel, since it has better cold-flow properties.

He's not the only driver in and around Wisconsin's capital city using biodiesel. While the fuel still costs a little more than conventional diesel, it's popular for a number of reasons.

"People feel it's worth it," says Jamie. "In Madison it can be as simple as the environment. Or it can be disliking the Iraq War. You feel like you're not contributing to that."

Beyond making biodiesel, Great Lakes BioFuels is looking at other oil sources. That's where Jamie's test plots of canola fit in.

He explains that the average oil content of a soybean is 18 percent. But canola is 40 percent oil or higher. Jamie thinks a yield of about 35 bushels per acre would make canola seed a "viable" alternative to soybeans.

To test canola growing and its oil for biodiesel use, Great Lakes BioFuels is working with O'Brien Hybrid Seeds, AgVentures and Westby farmer Darin Von Ruden, who also has canola test plots.

Jamie is going to talk about Great Lakes BioFuels' work at the Sustainable Agriculture Research and Education (SARE) Conference Aug. 15 through 17 in Oconomowoc. He will be joined by some 140 other agricultural experts who are also schedule to give presentations.

For more information about the conference, go to: http://www.sare2006.org. Or, you can contact Diane Mayerfeld, Wisconsin SARE coordinator, 608-262-8188. Her e-mail address is: dbmayerfeld@wisc.edu.

Jamie's involvement in Great Lakes BioFuels is full-time, but he makes time to farm, too. Should Great Lakes BioFuels become a prosperous business, Jamie says with a laugh that he can "blow all my money farming."

So he must see a bright future for biodiesel?

"Absolutely," is Jamie's immediate answer. "What's the future for oil?"

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