Back when Biofuel Oasis was just a mote in it’s mothers’ eyes, and they were still trying to figure out how to afford such a non-money-making business, Hope and Jennifer briefly considered the ‘mobile tanker’ fuel distribution model.
Apparently there was a used tanker for sale somewhere and it seemed easier to buy a tanker, rent a cheap parking spot, and sell from the tanker’s Weights and Measures certified pump, than it was to find a location suitable for a stationary set of tanks/going through the rigamarole of setting up a new certified W&M pump, etc.
I found that idea hilarious and teased them about running Fruitvale’s first Biodiesel Taco Truck. I assume everyone knows what I mean by Taco Truck (recently some Canadian on one of the biodiesel lists was quite mystified by our use of the term ‘Roach Coach’ to describe a mobile dining establishment)
The Biodiesel Taco Truck idea’s out there, and I think a few people have implemented it in various cities- buy a small tanker, or a trailer with a tank on it, plop it into various parking spots, and dispense fuel to co-op members or whatever, and, voila, less red tape at least for ’startup’.
Some of the headaches with biodiesel distribution come from our being tarred with the ‘flammable/toxic petroleum gas station’ brush- Hope and Jennifer had to spend a year in red tape, proving to their fire marshals that biodiesel didn’t require a petroleum gas station’s regulatory requirements fulfilled, and that it was OK to store commercial biodiesel in polyethylene tanks in a light industrial warehouse (I think in hindsight they think the poly tanks were a mistake).
Luckily they were able to run the ‘carboy exchange program’ the whole time, selling 5-gallon containers of fuel with strict instructions to the customers that they were not allowed to fuel up (and spill) directly outside the station. Kimber and Eric at Biofuel Station in Laytonville had to go through their own rural red tape, causing Mendocino County to create a new zoning category for sale of commercial biodiesel, called something like ‘fuel sales, non-toxic, non-flammable’ or something like that- it’s difficult to convince regulators that the stuff is a fuel and at the same time, nonflammable in storage conditions. Kimber and Eric also started their business delivering off a transfer tank and then a minitanker truck, before they had their red tape in place for the stationary fueling station.
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The Taco Truck idea lives on. I think a few people in the biodiesel small distribution world have bought a tanker and done distribution off of one without owning a fuel depot facility.
Piedmont Biofuels bought an old fuel oil tanker, inspired by Kimber’s example, and spent a couple of years taking it across the state to Charlotte to pick up 1500 gallons of fuel at a time for their B100-hungry community near Raleigh. They brought the fuel back to the Triangle area and delivered to customers right from the truck, without going through a stationary Weights and Measures certified pump morass (one appeal of tankers is that they come with certified pumps and double-walled containment already).
It’s probably quite a bit more economical to lose money in biodiesel that way, than to lose money in biodiesel via building a ‘landed’ biodiesel distribution depot with tanks and a Weights and Measures pump. Piedmont is now working on/has completed a pretty impressive tank project, but they’re working with quite different investment than the other biodiesel small-scale businesses I know of, so the project is within their reach.
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At the end of last month I packed up on a whim and flew out to North Carolina to check out Piedmont’s business, and the Blue Ridge Biofuels business, and ended up talking biodiesel business with a whole pile of people for about 5 days. My excuse to go out there was twofold- I’m planning a new renewable energy fair, so I wanted to see how the Southern Energy and Environment Expo is run, and because I’ve been diving into the biodiesel business world lately, I also wanted to go ’summit’ with various folks about their regulatory experiences and investment experiences. Basically, I wanted to go see how the non-bozos do it, after seeing lots of examples of how not to do it out here in that weird, weird West Coast place.
I got quite an earful on the East Coast for my trouble (and the Expo is amazing, but more on that later). I basically got a hotel room with Lyle for a couple of days during the Expo and we holed up and talked about biodiesel business and investment and regulations and strategy and The Big Picture and the Case Studies until my brain hurt.
We ended up going ’round and ’round about biodiesel distribution. Recently I’ve started to think it’s the death of some smaller biodiesel businesses who are trying to break into production as well- you can’t make money in it, there’s insane pricing instability from the wholesale level which customers dont’ understand. Many people look at Piedmont’s many-pronged approach (distribution, homebrewing, education/nonprofit arm/commercial/Piedmont Industrial) and decide to emulate it all right away- ignoring the fact that it took them years to develop all the prongs while they slugged away at the ‘30 gallon homebrew’ level. I suspect that before it all shakes out, we’ll have a lot of failed businesses (hell, Carolina Biodiesel is one already…)
In California ‘our’ people seem to be unable to get direct access to World Energy or other producers, so here the wholesale stuff is effectively ‘unavailable’ until a few middlemen take a cut and raise the price, and I’ve been watching Yokayo Biofuels lose their shirts on doing distribution for years now without getting anywhere. Now Piedmont is expanding their distribution operation beyond the tanker level- creating a fuel depot so they can eliminate the 1500 gallon runs to Charlotte and so as to be able to take delivery of the stuff direct from the fullsize tanker(s). They’re also building a plant and focusing on growth in distribution at the same time. Danger!!!
We went through the numbers on that a little, Lyle had a pretty convincing argument that their company has the focus and the people to keep up with the perils of distribution. I’m aware of several other folks who are starting up businesses trying that model- distribution and building a plant at the same time- and who dont’ have the numbers of people, the track record of success, and the developed focus, that Piedmont has. In many cases I suspect it’s a great way to fail in this business.
Small distributors provide a valueable service- they’re the first biodiesel usage and handling education for various unwitting consumers- and we’ve seen examples over and over again of how easy it is for petroleum gas stations to fail to deliver that, with resulting problems. I’m not going to go into that right now- I’ve written about the ‘Fairfax NAFT Gas experience’ at biodieselnow and elsewhere a few years ago- but it’s certainly a pain when something goes wrong and consumers dont’ know who to go to, to troubleshoot the problems (at NAFT we had a quality control problem from a big commercial producer). In many cases the problem gets blamed on ‘biodiesel’ in general rather than ‘bad biodiesel’ or inadequate cold weather performance information or something like that.
But to provide this valueable service of dedicated B100 distribution and education, folks are doing a serious cut in their potential earnings. I think Hope and Jennifer were trying to make enough (retailing at 15 cents a gallon over the wholesale cost) to pay themselves a salary of $200 a month or something like that last year. Yes, they had day jobs, and a business like ‘breaking new ground within the Berkeley Fire/Building Departments Bureaucracy’ was a pretty full-time job in itself and a gigantic ‘life savings’ drain.
They seem to be doing a lot better this year, having morphed into a co-operatively owned group (5 owners, all women from the Berkeley Biodiesel Co-op who’d worked together extensively before going into business).
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Lyle wrote up the following silliness about our trip to the SEE Expo (and don’t ask me what I actually said about that heat exchanger cause he got it wrong).
I’d basically told him and Leif what I know of the story of biodiesel distribution in the Bay Area- there was quite a sordid tale of gas stations carrying and discontinuing biodiesel sales, and a lot of weirdness that’s unique to our part of the world.
Lyle wrote:
Once everyone was in the car, Leif, Girl Mark and I started geeking out on all things biodiesel. By Winston Salem my interest was starting to fade, but they came alive with a spirited discussion of vacuum pumps. We stopped for dinner at a bizarre Italian place in the middle of nowhere, and the conversation was re-ignited when Girl Mark remarked that it was easy to file out the bumps on the reducing end of the average heat exchanger.
Her comment snapped Leif to attention, and as they waded into the concept, Evan and I proceeded to reflect on how our dinner guests were in fact beyond hope.
Back in the car, I was ready to fall asleep as I drove into Asheville, but the conversation cam around to the history of biodiesel distribution in Northern California, and this time it was me who hung on every word. Girl Mark talked about card lock systems gone by, and gas stations that carried B100, and brokers who flipped loads of fuel, and the community in general.
It was a remarkable and epic story, sort of like one that Homer might have recited in a theatre in the park, and Leif and I found ourselves riveted.
Leif would say, “Go back to the part where you were talking about territories,”
And I would say, “Back up a second. Did you say Achilles son of Peleus brought sorrow to the Acheans?”
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Well, today I was reading a non-biodiesel-related email list, and the following amusing observation was posted by someone (who needed biodiesel, NOW, and had an empty tote sitting around)- this guy had no idea of all about all the shenanigans that the small-scale biodiesel distributors have to go through to get the stuff in the first place:
Liam wrote:
“I’ve been noticing a pair of funky looking tanker trucks that meet up on the
old R.R. tracks ever so often. Today I decided to stick my nose in their
business and see what these hose ranglin’ hippys with tankers were up to.
Turns out they are from the “Peoples Fuel Cooperative” And they meet up at
the R.R. tracks every two weeks to exchange fluids. The driver of the
smaller tanker truck was more than happy to stick around and fill our tote
for us.
He also said he clould supply us with a regular fuel deliverys. The
trucks meet up every two weeks alternating tuesdays and ***days the next
meeting is ****day the *th. They are charging 3.60 per gallon.”
Yep, the scene of the crime was a really desolate piece of railroad track real estate in Berkeley. The fuel being exchanged was ASTM stuff direct from a major producer I think. The activity? Biodiesel Taco Truck goes to the next level- someone finally bought that scruffy tanker Oasis had looked at, and had become the next player in the Bay Area distribution scene. Somehow the ‘you guys are too small for big companies to deal with you’ problem is being solved- another newish player in town’s making it happen- a middleman with a cell phone and good “people skills". This guy owns no infrastructure himself. The Shadow Broker guy’s arranging the meetup, and other meetups like, to make it worth the producers’ time selling the entire truckload. He’s presumably making a cent or two, and making it possible for some of the B100 distributors to have ASTM fuel available from this producer. The hippies who bought the Scruffy Tanker are working at becoming the SF fueling station, doing delivery off their Biodiesel Taco Truck, and dreaming big with a nice big group of folks over there. Their plan seems to be working well and to be built on a solid ‘people’ base.
Since no one locally has a fueling depot for tankers to load and unload at (I was on the phone this week trying all my connections trying to find real estate for one), we’ve got the big producer linking hoses with the small distributor hippie operation at a random railroad siding near you.