Green Energy Powerhouse Seeks D.C. Help

Danielle Robinson Calloway PhotoA plant that turns vegetable oil and animal fat into millions of gallons a month of biodiesel fuel along New Haven’s harbor got a visit — and a promise of help — from one of Connecticut’s U.S. senators in a two-front threat: against competition from Argentina, and against eniornmental regulatory changes planned in Washington.

U.S. Sen. Murphy made that promise Thursday afternoon on a visit to American GreenFuels LLC, the New Haven-based biodiesel producer owned and operated by Kolmar Americas Inc. out of the New Haven Terminal on Waterfront Street.

Speaking to 11 of American GreenFuels’s 50 employees after touring a small section of the plant, Murphy said he had come to learn more about Connecticut’s growing role in the biodiesel industry, facing challenges as a new administration threatens to repeal renewable fuel standards set by the Environmental Protection Agency (EPA).

Biodiesel is a renewable fuel made from “feedstocks,” plant-based oils and animal fats that undergo a process called transesterification to become sustainable fuel sources. It is more commonly produced in the Midwest, but gaining a foothold in New England, where American GreenFuels is the largest producer.

Opened in 2013 and acquired by Bridgeport-based Kolmar in 2015, the plant churns out 25 million gallons of biodiesel each year. Kolmar is working to bring that number up to 40 million gallons of biodiesel each year, said Plant Manager David Astrauckas. The LLC has exported “some cargo” to Norway in the past year, but did not say how much. 

The problem, said Astrauckas, is that environmental and trade regulations are not working in the plant’s favor. As he, Kolmar President Rafael Aviner, and Kolmar Vice President Paul Teta seek to expand American GreenFuels’s cooking oil- and animal fat-based biodiesel production and distribution, they’re facing major competition from Argentine biodiesel companies, whose soybean-based biofuels are a major export to the U.S. At the same time, they’re facing troublesome changes to fuel regulations at home, that favor the gas and oil industry over newer environmental alternatives.

Argentina’s advantage over the U.S. biodiesel market is twofold. While lower in 2016 than prior years, the country’s soybean production is booming, allowing the biodiesel industry to draw on soybean oil for huge amounts of product. Further, the Argentine government gives biodiesel producers tax breaks on their exports—incentivizing export to the U.S., Astrauckas said. (Last year, Argentina produced 2.5 billion metric tons of biodiesel, and over half of them went to the U.S., according to Biofuels Digest.) Those kinds of exports result in limited U.S. biodiesel distribution here in Connecticut and New England, where domestic biodiesel use has stalled at 30 percent.       

Murphy can help, Astrauckas said, by supporting the EPA-sanctioned Renewable Fuel Standard (RFS2), which seeks to reduce carbon emissions and stimulate the renewable fuel industry by setting new renewable thresholds on petroleum-based fuels. Astrauckas said he’d also like to see Murphy’s support on a now-imperiled 2015 Senate bill that instituted a dollar-per-gallon tax credit for U.S. biodiesel producers starting last year. Prior to the bill, the credit had extended only to “blenders,” manufacturers who blend biodiesel with regular diesel before it is used.

Now both the credit and the RFS2 are up for potential repeal. American GreenFuels administrators and employees fear that a repeal could lead to layoffs and closure for the 50-person plant and its sustainability-driven mission. 

“Repealing RFS2 is like saying there’s no global warming,” said Aviner as he addressed Murphy in a small trailer outside the plant. “We’re going back in time. If RFS were to be repealed, we’d have to close. All the renewable fuels ... they disappear. We’re asking you to support this if RFS discussions come up.”

Listening to Aviner, then on the tour, and then addressing employees, Murphy pledged and re-pledged his support. While he is “not a fan of our new president,” he said to employees, he does believe that U.S. trade regulations need to change to help smaller, U.S.-based manufacturers stay afloat. He praised American GreenFuels’s focus on sustainability, round-the-clock operations (the plant is operational 24 hours a day, seven days a week, 365 days a year), and practice of actively hiring veterans, several of whom filtered into the room to listen to him speak and field questions. Biodiesel and fuel policy have become a hot topic in Washington, he added, with discussions on renewable energy sources often warring with concerns for gas and oil companies.

His new understanding of Argentina’s advantages in biodiesel exports, he said, have equipped him to speak more knowledgeably on the subject. 

“I can see how complicated this is and what it takes to do this,” he said. “I’m going to go back to Washington and work on that. It’s why I do my job ... You’re putting Connecticut on the map. So I’m going to go to work and see how I can help Connecticut companies.”

He also promised that he would take their concerns on the RFS2 and the producer credit back to Congress with him, and engage with both Democratic and Republican legislators willing to protect it.

Maintenance Manager Chris MacMichael said he hopes that “he [Murphy] might have some influence” in discussions around the tax credit, which may be the difference between whether he’s employed or not in a year. And to American GreenFuels’s Manager Mick Gasparik, whose final question lingered over Murphy as he headed to his car. 

“Biodiesel is a cleaner fuel,” Gasparik said. “But how do we get the word out, and this business off the ground? Without support, it’s going to disappear.”

Murphy considered the question on his way to the parking lot, chatting with Gasparik as he walked. Ultimately, he said, that very challenge—getting the word out, and keeping manufacturers going—is the reason government needs to incentivize producing renewable fuel. While he still has questions about the efficacy of soybean-based fuel, he added, he fully supports the feedstocks that American GreenFuels uses in its production.

“Renewable fuels are going to dramatically increase,” he said. “If the U.S. doesn’t incentivize [production], someone else will.”

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posted by: Noteworthy on March 17, 2017  8:37am

Litter the Tax Code Notes:

1. If Green Fuels can’t make a profit without taxpayer funded welfare, it should go out of business. Bio-fuels have been around for decades. If it’s not profitable now, it never will be. In the meantime, pay your fair share.

2. Consumers do not need yet another government mandate that irrationally raises fuel standards, mandates the mixing of plant based substitutes that hurt certain motors, in order to fan the flames of the special interests like Green Fuels.

3. The use of crops for fuel has hurt the countries and even some in our country by making consumers pay more for food because they are competing with the bio-fuel industry for supply.

4. It is a heroic leap to believe that this has any energy savings (carebon footprint decrease) net value. It may burn cleaner in the end - but what about all the energy it takes to truck it for distribution because you can’t pipe it? Or to make it to begin with? I highly suspect it’s a net negative for the environment.

5. Perhaps our Senator Murphy, when he’s not posing and preening for cameras and TV time, could spend some time studying and actually working on things that really matter - cutting out corporate welfare, simplifying the tax code, executing a thoughtful, practical rescue plan for the ACA and a host of other things. When one spends time in photo ops, or another presser of outrage, or another TV appearance to denigrate or criticize - it leaves precious little time to actually get anything done or to educate oneself on the underlying issues like the ones surrounding this photo op.

posted by: HenryCT on March 17, 2017  9:11am

It’s really long overdue for the US to stop subsidizing the fossil and nuclear fuel industries. it’s long overdue to stop allowing these industries to charge the public and the environment for their pollution - from source to sewer - instead of their bottom line. It’s long overdue to stop the pollution of our precious water and land with wastes and tailings. It’s long overdue to stop invading oil-rich and pipeline located countries with our military money, youth, the various mercenaries - including terrorists -  in order to ensure that the oil giants control cheap oil. 

Yes, we can stop massively subsidizing the fossil and nuclear fuel industries with our tax dollars and put them to work repairing our broken infrastructure and supporting the desperate needs of our cities and rural areas.

posted by: Phillip h on March 18, 2017  2:02am

Renewable fuels are great for our environment and our economy. Do you guys know that biodiesel alone provides over 70,000 US jobs and could potentially double that number with exported biodiesel out of the US market? It also provides billions of dollars that will circulate back through our economy. The reason that the government must subsidize renewable fuels is because there is such a positive effect on greenhouse emissions. To say that that there is a net negative for the environment is rediculous. Would you rather send your money to Saudi Arabia or one of the other big oil countries rather than keeping it here in ours? Where is the proof that the price of food has increased due to competition with biofuels? I have seen no such information. As a matter of fact, the price of corn and soy beans are down since biodiesel production has increased. Some people should do some research before they come on here and blast biodiesel because there are so many benefits. We need to take a step forward and subsidize biodiesel. If we don’t, we are making a mistake that future generations will ultimately deal with. If you are not familiar with this topic, do your own research. You will discover that biodiesel helps our economy and environment in numerous ways. If our government lets this industry fail, it would be a travesty.

posted by: Phillip h on March 19, 2017  2:27am

I meant imported biodiesel. After reading I also noticed that I spelled ridiculous wrong. I have to stop posting things after 2 AM.