Maine Clean Communities Biodiesel Workshop for Fleets January 25, 2012 Steven J. Levy Sprague Operating Resources LLC 1
Sprague Overview Sprague has focused on the needs of energy consumers and wholesalers for 140 years. Our vast network of facilities and global expertise have made us a leader in the procurement, handling and delivery of fuel, unique products and management programs and services. Corporate headquarters in Portsmouth, New Hampshire Employs ~425 people Annually distributes/handles more than: ~1.3 billion gallons of petroleum products ~52 billion cubic feet of natural gas ~2.5 million tons of bulk materials Owns and operates 15 major oil terminals Throughputs and exchanges at 50+ additional facilities
Our Products and Services End Users Resellers Materials Handling Home Heating Fuels Natural Gas Fuel Oils Coal Motor Fuels Bulk Break Bulk Risk Management Clean Fuels Motor Fuels Lumber Liquid
Sprague s Commitment to Our Customers Fuel Manager Biodiesel/BioHeat Fuel management to afford customers fuel management controls to manage fuel transactions; up-to-the-minute tank monitoring, and expeditious operational maintenance repairs Fuel source derived from vegetable oils and/or animal fats - domestic, environmentally sound and sustainable The first petroleum distributor to earn biodiesel certification. Daily natural gas and oil commentaries help customers make informed energy decisions with the two MarketWatch reports Real-Time Pricing Sprague Real-Time is a web-based tool to allow certified customers access to their information on a real time basis The BTU Options program is designed to leverage the cost gaps between natural gas and oil to lower total cost of energy Premium product designed to help maintain and preserve diesel engine systems year round Premium product designed to help maintain and boost heating systems Specialty price protection program designed to allow customers to match real demand to financial instruments
Sprague Terminal Network Sprague s owned and throughput terminals hold over 300 million gallons of liquid storage Searsport R Oswego Portland Bronx Brooklyn R Binghamton Mt. Vernon Albany R Newburgh Bridgeport Springfield Hartford South Portland R Newington [2x] R Everett Newark Bayonne Lawrence Philadelphia New Haven Stamford New Bedford Quincy [2x] R Baltimore Trenton Linden Oceanside Providence R R Distillate Residual Liquid BioFuel Bulk Break Bulk 1. Does not include ~1.3 million barrels of storage capacity (43 storage tanks) currently out of service 5
South Portland Sprague Terminal 6
Art All Around Project US-based Sprague Tank Farm will soon become the world s largest public art painting The record is due to be eclipsed when the fifth tank, out of the facility s 15, is completed in 2012 Three tanks have been completed and two more will be painted this year by the Art All Around Project. 7
Benefits of Biodiesel and BioHeat Sustainability initiatives Outlet to market surplus agricultural crops and affording value to waste streams Job creation, energy dependence, emission reductions United States Environmental Protection Agency Renewable Fuel Standard RFS2 issued on February 4, 2010 America s first commercially nationally available advanced biofuel Northeast Low Carbon Fuel Standard (LCFS) 8
Benefits of Biodiesel and BioHeat (Contindued) State and/or local legislation or regulation New York State Climate Action Plan Goal to reduce greenhouse gas emissions in New York State by 80% below the levels emitted in 1990 by 2050 New York City s legislation for B2 (2% biodiesel, 98% No. 2 heating fuel) beginning October 2012 in conjunction with New York State 15 ppm mandate for heating oil July 2012 The use of No. 6 fuel oil will be prohibited in existing boilers in New York City upon expiration of current Certificates of Operation All newly installed boilers must use ULSHO/natural gas By 2030 No. 4 and No. 6 oil will be completely phased out New York State Residential BioHeat tax credit up to B20 (one cent per 1% bioblend) 9
Benefits of Biodiesel It is renewable It is energy efficient It reduces petroleum-derived diesel and heating oil It can be used in heating/diesel equipment with no or only minor modifications with high blends (drop-in fuel) It can reduce global warming gas emissions It can reduce tailpipe emissions, including air toxics It is nontoxic, biodegradable, and suitable for sensitive environments It is produced domestically from agricultural or recycled resources BioHeat is good for your home or business Burns more cleanly due to absence of sulfur and hydrocarbon impurities Acts as both a cleaning agent and lubricant resulting in cleaner and more efficient operation 10
Benefits of Tax Credits 800,000 700,000 Economic Recession 600,000 500,000 Tax Credit Lapsed 12/31/09 400,000 300,000 Tax Credit Effective 1/1/05 200,000 100,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 11
2011 Volume Requirements (800mg) RFS-2 requires 800m gal biomass-based diesel in 2011 2012 requires 1B gallons of biomass based diesel 2013 RFS2 = 1.285 billion gals.? RINs trading at $2.26-$2.35 per gal 12
State Regulatory Environments 2012 State Policy Type Gallons (in millions) Minnesota Statewide Mandate 28 Oregon Statewide Mandate 28 Pennsylvania Statewide Mandate 30 New Mexico Statewide Mandate 26 New York City Citywide Mandate 20 Illinois Incentive 110 Iowa Incentive 20 Others (TX, CT, MD, NY, etc.) Incentive/Mandate 20 California LCFS 45 TOTAL 327 13
State Regulatory Environments Growing Markets California Low Carbon Fuel Standard 700 million gallon market by 2017 Illinois Biodiesel Tax Incentive Renewed until 2018 120 million gallon market Texas No NOX mitigation needed B20 markets now open! New York City BioHeat Mandate October 2012 20 million market 14
Registered EPA RINS Program Production Locations Production Capacity of 2.6 billion gallons per year 2.2 Billion Gallons Registered w/epa RINS Program 140 Plants BQ-9000 Accredited Producers 15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (est) 2011 (est) 2012 (est) Gallons Biodiesel Production Volumes 1,000,000,000 Estimated U.S. Biodiesel Production (Jan 1 - Dec 31) 800,000,000 600,000,000 400,000,000 200,000,000 0 16
BioHeat Overview 7 billion gallon market 5% BioHeat by 2012 = 350 million gals. 15% BioHeat by by 2030 = 1.05 billion gals. 100% BioHeat by by 2050 = 7 billon gals. New York expanding the BioHeat mandate. New York extended the BioHeat tax credit. Vermont just passed a BioHeat mandate. 17
OEMs Supporting B20 18
OEM Status Boilers Fulton Thermal Corporation Is introducing a laboratory-tested B100 capable commercial/industrial condensing boiler R.W. Beckett Company Supports the use of B5, as specified in ASTM D396. Reference Beckett Technical Bulletin, January 2009 for all Alternative Fuel recommendations Riello Endorses B5 blends and lower percentage blends which meet the requirements of ASTM D396 Carlin Endorses 5% blend Suntec Endorsements of Suntec products for use with Biodiesel fuels are only for fuels blended with biodiesels meeting ASTM D6751 and petroleum meeting ASTM D396. B5 is certified if specifications are above are in check 19
Biodiesel s First National TV Spot 20
Other Exciting News in 2011 Railroad OEM Acceptance Mechanic Training Canadian Renewable Fuel Standard New Energy Balance 5.5: 1 New Land Speed Record 21
Biodiesel: Stringent ASTM Specifications Biodiesel is the only renewable fuel with approved ASTM specifications that can be used for distillate blending Specific blending options: D6751: B100 prior to blending D975: On/off road blends up to 5% biodiesel D7467: On/off road blends B6 to B20 D396: Home heating oil up to 5% biodiesel (BioHeat ) ASTM D6751-11 ASTM D6751 ASTM 975 ASTM D7467 ASTM 396 22
The BQ-9000 Advantage The Biodiesel Accreditation Commission endeavors to promote the commercial success and public acceptance of biodiesel Helps guarantee that biodiesel fuel is produced and maintained at ASTM D 6751 levels Provides a mechanism to track biodiesel in the distribution system, identifying biodiesel which meets ASTM standards There are three possible accreditations for companies: BQ-9000 Accredited Producer BQ-9000 Certified Marketer BQ-9000 Certified Laboratory 23
Online Promotion: www.bq-9000.org 24
Albany, NY Terminal - Biodiesel Storage System 25
Does This Process Meet Your Needs? 26
The Fuel Marketer Must Have access to product quality, meeting ASTM D6751, D975, D396 or D7467 latest revision Develop and follow a supply, distribution, and quality control plan Practice excellent fuel handling measures for both biodiesel and BioHeat Share knowledge on biodiesel benefits and handling procedures to educate the consumer 27
What to Look for in a Biodiesel Supplier Confidence in supplier Reputable experienced supplier with multiple sources of supply Financially secure BQ-9000 Certified Marketer Strict and followed quality control program Conforming to NBB storage and handling guidelines Rack Injection Blending Homogeneous blend Precise metering to ensure correct % blend/quantity Product specifications meet all ASTM specifications plus OEM lubricity requirements (ASTM D6751, ASTM D975, ASTM D396, ASTM D7467) Multiple supply terminal network Winterization process 28
Renewable Energy The Role of BioFuels in the US National Interests Environment Foreign dependence Price volatility of crude oil Trade deficit Improved air quality Will be cleaner than natural gas Becoming part of the solution 29
Summary America s first commercially available advanced biofuel Creates green jobs Displaces petroleum Reduces green house gas emissions Produced domestically Can be used with no or only minor equipment modifications Widely available today 30
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