Re: Co-op vision - some ideas

On 10/13/07, Leo Frishberg / Susan Zeidler <[email protected]> wrote:
>
>   gobiodieselers!
>   It's a toss-up whether Sue and I can make it to the meeting this
>   afternoon - but we've been giving a lot of deep thought to how the
>   co-op can move forward with the energy it's generated these past few

Dave and I also would have liked to have made it .. but we had a batch
in process and there is just no way you can leave it once you start.

>   Executive Summary
>   In this vision of the future, gobiodiesel coop establishes a broader
>   presence in the supply chain of biodiesel through establishing a
>   network of independent home-brewers who take advantage of the coop's
>   buying, distribution and waste management capabilities.
>   gobioidiesel takes on the following really hard problems:

When we first started making biodiesel in February 06' we started to
see the need for an organization like this. I think we called it the
Oregon Small Biodiesel Producers Alliance.

>     * establishes a fair, auditable and ASTM certified testing process
>       for all of its homebrewer members

This is one of the main reasons I thought we needed this type of organization.

Full blown ASTM tests run around $900-$1400, so sending out a sample
for certification without even the hint that it will pass is a bit
risky for most of us.

There is a local company in Vancouver called FuelOnly, they provide
certified testing results that could be submitted to the EPA for
registration.

I spoke with the company and they are willing to do select individual
tests for much less than the full blown suite of tests required by
ASTM-D6751-07a. Like $60-$100 for a GC test.

It would be nice to have an individual or university provide this
service, but unfortunately the testing results are only relatively
accurate. Labs usually will conduct round-robin validation with a
group of labs to make sure they are all getting the same results and
they do this on a regular basis.

I imagine that a university could participate, but I feel that the
amount time and resources we would be asking for is a bit excessive.

>     * establishes bulk-buying and distribution for all biodiesel raw
>       materials, including WVO, lye, methanol, etc.

Excellent, I already do group-buy's with Methanol ... The only
stumbling block will be meeting the storage requirements. This is
going to be really important as the Methanex index has almost doubled
this last month due to some natural gas shortage combined with a
regional shortage.

A group like this with sufficient inventory and approved storage could
reduce expense by $0.18/gal just by getting some stainless totes
(provided by supplier) for bulk dispensing to homebrewers.

I would imagine if volume was sufficient we could get an even better price.

>     * establishes an environmentally sustainable process for collecting
>       and dispensing of homebrewer waste products

Another big deal .... this would really help alot of people out who
currently just have a mass store of 5 gal glycerol cubies in their
garage.

>     * establishes an web-based coop members-only buying/selling "market"
>       to match homebrewers with member buyers

This sounds good .. I certainly don't have the answer to this, but
great thought must be put into this topic.

>     * providing at-cost (perhaps negotiates a deal on) appleseed
>       processors to all interested homebrewers

Interesting idea, but I think this might be extending the vision a bit.

I need to think of it more like Wilco I guess.... No matter your
biodiesel homebrewer needs, you can get it at the co-op!

Pushing a particular processing method might be a stretch, but you
could certainly recommend one like the Graham Laming's Eco Processor.
It is based on the Appleseed design and has quite a few benefits over
the stock Appleseed, check it out.

http://www.london-electronics.com/bd/ecosystem/ecosystem.htm

>   In return, homebrewer coop members agree to be "certified" by
>     * demonstrating competency in processing safety, either by
>       completing a coop training course or demonstration

I think an apprenticeship style system would work best. I don't think
you can train people to make biodiesel without actually making it.
When you make biodiesel out of waste ... there is no consistency, you
have to have a feel for it, in my opinion.

We always welcome people to hang out during processing .. the downside
is that most people aren't into hanging out for 3 or 4 days to
actually go from start to finish.

>     * agreeing to have their product tested by coop testing agents

Once again I think the FuelOnly company is our best bet. I see the
"testing agent" more as an auditor than a tester.

>     * provide a portion of their brew for coop member purchase, amount
>       and pricing to be determined, but likely cost-based

This is really tricky, everyone loves cheap fuel ...

The problem is that producing small amounts of fuel (< 55gal) usually
takes just as much time as producing large amounts of fuel (<
1000gal).

This will all depend on the type of producer this organization is
supposed to help.

The larger the producers, the smaller your margins are. Usually the
small producers need large margins to be successful since they can't
make up for it in volume. The largest profit producer a small producer
can wield is free vegetable oil... hands down.

So once again .... alot of thought needs to be put into this one. You
can make it cheap, but not too cheap.

>   In addition to producing, opportunities for membership include:

>     * collection - continuing the great tradition gobiodiesel has
>       established

This is important ... although I don't think the organization should
need to handle the oil beyond collection. De watering, filtering, etc
is a nice service, but I think the biodiesel producer is competent
enough to handle this on their own. Plus energy wise it is more
conservative to let the producer handle it.

>     * testing - becoming a test "agent" - participating in an auditable
>       test-trail from producer to lab to

Interesting concept, this is ever increasingly more important for
liability purposes. You end up with a room of test samples that can be
traced to a particular producer / batch in the event of a quality
problem. We already do this to an extent. I must admit we don't keep
test samples nearly as long as other larger distributors.

Most are around 6 months.

>     * transport - raw materials, finished product, etc. - moving product
>       in one form or another around the region may be needed depending
>       on the model

Good ... just about anyone with a decent size truck can carry 275 gallons.

>     * training - new producers, test agents

This may sound silly to some people..... but it is important to me ...
in addition to fuel testing I would like to see an accurate account to
just how much impact a producers process has compared to others. This
will encourage people not to just make quality fuel, but also to make
it using as few resources as possible and will potentially lead the
way for technological improvements in homebrew processing.

Here are few examples...

  * How much transportation fuel was needed to move the oil around?
  * How much electricity, natural gas, propane, water was needed?
  * Were excess chemicals recovered?

In my opinion resource accountability is the biggest issue in biofuels
currently. We could set quite an example by developing a benchmark for
this.

Biofuels are only good if they are made in a responsible way, people
need to know that.

>     * policy and education - speaking opportunities, engaging new
>       partners

>     * into the coop's offers for non-producing volunteer members. To
>       improve efficiencies transactions are handled through a robust
>       web-based process.

Hrmm ... I just don't know what to think about this web-exchange
thing... Buying fuel shouldn't be complicated ... and involving the
Internet to put fuel in your car is definitely a complexity to most
consumers. Unless it is kiosk based.

I would like to point out that over the last couple of years we have
sold like 20,000 gallons of B100.

Keeping accurate accounting of all that fuel is actually tricky to do.
Especially when fuel prices change but you still have inventory
purchased at a different price.

Plus somehow ... the tank always goes dry before you think it should,
suggesting your meter is wrong, but .. nope it dispenses 5 gallons to
the ounce. Where did it go?

When you only make $0.10/gal or less on fuel, this can really blow
away all your profit. I would be more comfortable with a really
accurate meter with no user interaction at all other than pumping and
paying a total.

I've noticed when filing taxes with the State of Oregon that they give
you a 4% credit on your tax due as a fuel reseller. I think this must
be built in because they figure that there are almost always
accounting losses they allow you to discount.

--
Jeff Brandt
Sun Break Biofuels, LLC
http://www.sunbreakbiofuels.com
mailto:[email protected]