Oregon Legislature proposes an end to petroleum diesel

March 6, 2021 By , , , ,

What are the alternatives to petroleum diesel in Oregon?

If Oregon bans the sale of petroleum diesel, a rapid transition to biofuels such as renewable diesel and biodiesel would happen.

 

Oregon HB3305 explained

 

 

HB 3305 Petroleum Diesel ban

In Oregon, HB3305 is a House Bill proposed by Representative Karin Power to outlaw the sales of petroleum diesel to the public for use in motor vehicles.  HB3305 quoted below:

“Prohibits retail dealer, nonretail dealer or wholesale dealer from selling petroleum diesel for use in motor vehicle on or after specified dates. Requires public improvement contract to require that motor vehicles be powered by fuel other than petroleum diesel. Prohibits public body from using petroleum diesel in motor vehicle under control of public body”

The full text of the current version of HB3305 can be seen here.

HB 3305 mandates non-petroleum diesel be the only legal fuel for sale to diesel powered motor vehicles in Oregon.

Star Oilco has customers ask about this proposal and how real it is?  In Oregon the focus on low CO2 fuels in the legislature is so consistent we can expect this to not go away.  Even if HB 3305 does not move this Legislative session, this will not be the last of biofuel mandates.  For this reason Star Oilco has been working to be ahead of the curve with non-petroleum diesel substitutes. Star Oilco has been selling B99 biodiesel since 2002 and renewable diesel since 2015.  If your fleet has an interest in learning more about low CO2 fuels or try these fuels, Star Oilco is ready to serve you with both R99 renewable diesel and B99 biodiesel.

News coverage of Oregon HB 3305 is below

The Center Square’s Oregon, whose coverage of this has been syndicated to many other online news organizations, lead with the headline: Bill in the Oregon Legislature would ban diesel fuel sales by end of decade.

CDL Life had this to say: The bill would begin to ban the sale of “petroleum” diesel by “non-retail dealers” as soon as 2024 in Clackamas, Washington or Multnomah counties and state-wide by 2027.

Landline as well has following the story: Oregon bill would ban petroleum diesel. Later in the article they add this to the background of HB 3305’s origin: Power said in a statement that her goal is to phase out petroleum-based diesel and replace it with renewable diesel. She says she introduced the bill on behalf of Titan Freight, a local trucking company she says has already transitioned to renewable diesel.

KXL covered this local news quoting Oregon State Representative Shelly Boshart-Davis, a legislator who owns a trucking company and actually buys quite a bit of petroleum diesel.

Lars Larson radio interviews Rep. Shelly Boshart-Davis about HB 3305.

KQEN news radio in Douglas County also covered it with the headline: GOP says supermajority declares war on working class.

The Wildcoast Compass covered the story quoting Rep.Vikki Breese-Iverson (R-Prineville): “There is absolutely no way we can implement this legislation in accordance to these timelines without extreme disruption to Oregonians’ daily lives and the obliteration of our economy as we know it,” 

Oregon Public Broadcasting covered HB 3305 a few days after the bill dropped which might be an indication it’s moving forward. From the story: One bill, House Bill 3305, would set a staggered timeline for ending sales of diesel in the state — first in the Portland area, then throughout Oregon. Its backers hope to spur widespread use of “renewable diesel,” a product with far lower emissions that can be used in any diesel engine. They say the fuel could be an important and near-instant way for the state to cut into greenhouse gas emissions while other technologies emerge.

The Banks Post covered HB 3305 as well with the headline: Diesel fuel under fire in Oregon legislature.

What HB 3305 means in the real world?

HB 3305 means the petroleum diesel used by any commercial vehicles operated on Oregon’s highways will be replaced with biofuels.

Biofuels will replace on-road petroleum diesel at all Oregon:

  • Retail gas stations
  • Trucks stops
  • Commercial cardlocks (Pacific Pride and CFN)
  • Privately owned bulk tanks
  • Mobile on-site fueling (wet hose fueling), and
  • All other bulk deliveries of diesel fuel.

Given the media coverage of this law, which no doubt will grow if this bill progresses to hearings.  Star Oilco wanted to provide more background of what this law would mean for Oregon.  We hope this provides in depth information about what the options are for diesel fuels and a whole host of background information.  The news coverage so far fails to really provide this depth and background for those with concerns.  If you have questions, please do not hesitate to ask. Star Oilco seeks to be a neutral and accurate source of information.

Star Oilco sells renewable diesel in bulk and by our mobile on-site fueling service. It is worth mentioning from our first hand experience that users of it become raving fans.  Renewable diesel is a new fuel that many believe out performs petroleum diesel in every way. Many customers who have used it experienced improvements in horse power, fuel economy, and emission regeneration system performance.

Currently renewable diesel is in extreme high demand, limited production, and commands a high premium over petroleum diesel with few sources of supply.  Renewable diesel has some major backers in the trucking industry as well as OEMs.  As the availability of this next generation fuel grows, the number of plants manufacturing it expands, and it’s price comes down, this type of law may make far more sense.

If petroleum diesel is no longer legal for sale in Oregon, what does that mean diesel vehicles will use?

There are two immediately available diesel rated biofuels that can replace petroleum diesel.  These are two very different fuels. Renewable Diesel and Biodiesel have differences in their properties.  So please don’t confuse biodiesel and renewable diesel as the same fuels.

Biodiesel and Renewable Diesel are very different fuels.

Biodiesel is a proven and longtime available fuel in Oregon.   Biodiesel is not actually a hydrocarbon diesel though, it is a diesel like biofuel made from vegetable oil usually sold in a 5% to 20% blend with petroleum diesel. It is not recommended to run pure biodiesel in late model diesel engines if they have a particulate trap.  This differs from Renewable Diesel which is a next generation synthetic hydrocarbon diesel made from various feedstocks including vegetable oil.  It is actually diesel, it can be used as a pure drop in fuel without any blending with petroleum diesel.

What are non-petroleum diesel fuels?

Oregon HB 3305

Biodiesel or B99 (99% Biodiesel + 1% Petroleum Diesel)

Renewable Diesel or R99 (99% Renewable Diesel + 1% Petroleum Diesel)

Blends of Biodiesel and Renewable Diesel (branded REG UltraClean Diesel)

HB3305 allows for biofuels in replacement for diesel.  We assume that change would be from a current Oregon fuel mandates of B5 or R5 biofuel diesel blend to a B99 or R99 mandated fuel.   Under current Oregon law all diesel fuel must contain a 5% blend of biodiesel or renewable diesel.  Oregon’s biofuel content law can be read at ORS 646.922 and we can assume this would change that to a 99% mandate. Why 99% instead of 100%, that is a good question relating to Federal regulation of the US diesel and gasoline markets.

 

Why does this require a 99% blend (B99/R99) instead of 100% biofuel?

The reason biodiesel and renewable diesel are sold at a 99% blend is because of Federal rules associated with how petroleum companies must handle these fuels.  For this fuel to be used under the US EPA’s Renewable Fuel Standard program biodiesel and renewable diesel must be blended at a minimum 1%.  When fuel is blended at 1% with diesel, the EPA enables it to generate a “Renewable Identification Number” or “RIN” which is regulated to ensure a minimum amount of biofuels is used in the stream of commerce for fuel in the United States.  This Federal program is separate and unrelated to any program in Oregon, though the law recognizes and seeks to align with the framework created by the EPA.

What are the fuels HB 3305 would allow to be used by diesel motor vehicles in Oregon if this bill was passed into law?

The two fuels immediately available if this law was passed into law are B99 Biodiesel and R99 Renewable Diesel.

Both of these fuels exist today but have their own drawbacks.  In a nutshell, B99 is not a drop in substitute for petroleum diesel.  It is recommended to be blended at 20% with petroleum diesel (NOTE: B99 biodiesel can be used in modern diesel with an up-fit kit provided by Optimus Technologies).  On the upside, biodiesel is plentiful and competitive with petroleum diesel in cost.  If HB 3305 passed though this plentiful fuel wouldn’t be a ready substitute beyond a 20% blend with renewable diesel or with mechanical changes to existing trucks.  Contrast this with  R99 renewable diesel as a drop in ready to go substitute for petroleum diesel.  It is ready to use without blending, but has the downside of being in short supply and at a cost premium above petroleum diesel.

If Oregon’s over 2,000,000 gallons of diesel usage a day (or 750+ million gallons a year) was mandated to renewable diesel no doubt that premium would probably exceed $2 a gallon over petroleum diesel given R99’s lack of ready additional supply.  This $5 a gallon presumes that Oregon would have to pay more for the existing renewable diesel supply finding it’s way to California with several dollars a gallon of value paid for it’s lower CO2 baseline value.  California has a Clean Fuel Standard and a CO2 Cap and Trade program which provide a monetary value for renewable diesel’s lower CO2 numbers.  Oregon has a Clean Fuel Program as well, but it’s program does not pay as much for low CO2 fuels as California, making low CO2 fuels such as renewable diesel more expensive in Oregon.

B99 Biodiesel in depth.

Blends of biodiesel below 20% are extremely common in Oregon.  All fuel must contain at least 5% biodiesel content and many retail outlets, cardlocks, and major truck stops commonly sell a 10% to 20% blend of biodiesel around the state.

Biodiesel is a diesel like fuel manufactured by a chemical reaction called transesterfication, typically from vegetable oil or recycled cooking oil.  It is made by a relatively simple process and biodiesel has been a proven fuel in use in Oregon for nearly twenty years.  Star Oilco started handling and selling biodiesel in 2002.  Prior to 2007, B99 was commonly used by many commercial fleets due to it’s huge reductions in tail pipe emissions.  Vehicles manufactured after 2007, are clean diesels.  The US EPA required new clean diesel emissions systems which are impressive in their ability to make modern diesel engines extremely clean, but they can only handle biodiesel blends below B20 or 20% biodiesel unless an upgraded system is added.

Today B99 is a possible fuel for a modern clean diesel fleet with an upgrade to existing vehicle fuel supply system.  Optimus Technologies has an approved technology to enable a modern diesel aftertreatment system to operate without problems on B99.   Star Oilco has purchased five of these systems and is currently fielding them in the Pacific NW.  We expect these systems to be mainstream in coming years, but just like Renewable Diesel the technology is newly available and scaling up.

For more information about biodiesel please see our biodiesel FAQ titled Every question Star Oilco has been asked about biodiesel.

If you are interested in using biodiesel in your fleet, you can contact Star Oilco with questions or if you want to start researching we highly recommend starting with this US Department of Energy handbook titled Biodiesel Use and Handling.

 

R99 Renewable Diesel in depth.

Renewable Diesel is a next generation biofuel made from fats, oils, and greases. It is not an alternative diesel, renewable diesel is a petroleum free hydrocarbon diesel fuel. It is diesel! Renewable diesel not only less than half the CO2 of diesel refined from petroleum fuel, but it is cleaner burning and has shown evidence of reducing the cost of maintenance in fleets using it. Renewable diesel is a profound technology which has the potential to use the lowest grade trap greases, sewer materials, rendering wastes, municipal garbage, and a host of other refuse products making them into this high performance, sustainable, low CO2 diesel.

There are two categories of technology that renewable diesel is made from.  Hydrogenation and Fischer Tropsch process.

Renewable Diesel from Hydrogenation or Hydrotreating

Hydrogenation derived renewable diesel is very similar in manufacture to modern petroleum diesel in that the molecules of a the feedstock is cracked and reformed in the presence of a catalyst to form a very specific series of hydrocarbon molecules.  These being diesel and propane range fuels. The feedstocks used by renewable diesel plants are vegetable oils and animal fats.

The hydrotreating plants providing renewable diesel to Oregon currently are Neste from a plant in Indonesia, Diamond Green (in a joint venture with Valero), Sinclair, and Renewable Energy Group. All of these plants are over subscribed and 100% of their production is being taken at a premium primarily by the California low CO2 fuels market.   There are several new renewable diesel plants under way though.  Holly Frontier, Marathon, CVR Energy, and Phillips 66 are converting existing petroleum refineries into renewable diesel plants.  This process costs billions of dollars, will take years to complete, and also will be likely destined for California’s low CO2 fuel market with smaller markets like Oregon being an afterthought.

Renewable Diesel from Fischer Tropsch process.

Currently there are a number of smaller demonstration facilities making renewable diesel from wood waste and other feedstocks.  The largest proposed project currently on the books is Illinois Clean Fuels which will be collocated with major CO2 capture facility making their product negative CO2.  Fischer Tropsch renewable diesel is expected to be the future of refining given it’s flexibility of feedstock.  It’s process enables the use of municipal garbage, agricultural waste, woody biomass, and other low value plentiful materials as feedstock.  Given that the United States is called by some the “Saudi Arabia of garbage” we have plenty of supply waiting for a higher and better use as low CO2 transportation fuel.  Illinois Clean Fuels has a great explanation of how Fischer Tropsch makes renewable diesel and jet fuels.

Where can you get Renewable Diesel in Oregon?

Star Oilco currently is selling R99 Renewable Diesel for commercial use.  We can deliver to fleets seeking it in bulk or mobile onsite delivery (wet hose R99 diesel service begins Spring 2021).  If you fleet wants to trial renewable diesel, Star Oilco can work with you on a loaner tank for a 90 day demonstration of the fuel.  Call Star Oilco if you have an interest in Renewable Diesel for your fleet 503-283-1256.

If you have questions about renewable diesel, Star Oilco wants to provide answers.  Feel free to reach out if we do not have the answer we will research it.

For more information about renewable diesel please see our renewable diesel FAQ titled Every question Star Oilco has been asked about Renewable Diesel.

 

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