No Matter what transportation modes eventually convey biofuels, tank trucks will haul each load to its final destination.
That was the message from John Conley, National Tank Truck Carriers president, at the Platts Refined Products Storage and Transportation conference October 16-17 in Houston, Texas.
Issues involving transportation, as well as storage and terminaling issues, were presented at the conference. Leading the discussions on transportation were Conley, Steven Boyd of Sun Coast Resources, Shirley Neff of the Association of Oil Pipe Lines, Jim Lelio of Kinder Morgan Energy Partners LP, Chad Zamarin of Colonial Pipeline Co, Casey Carmody of CSX Transportation, William Withers of Kirby Inland Marine LP, and Dan Jaworski of American Commercial Lines.
Discussing storage and terminaling challenges were Zamarin, Michael Burgett of NuStar Energy LP, Buster Brown of Colonial Pipeline, and Chris Pipkin of EPCO Inc.
“Almost every gallon ends up in a tank truck in the final leg,” Conley said. “The for-hire bulk highway industry serves communities and businesses. It is essential that all of the modes involved in transportation work together to improve distribution.”
In addition, Conley echoed other transportation representatives at the conference who said their companies are capable of handling the amount of biofuels that are now being produced.
He added that there are challenges for the tank truck industry that include driver recruitment and retention, the costs involved in transporting product in dedicated tank trailers, and safety and security issues.
Boyd discussed fuel transportation issues in emergencies brought by the onslaught of Hurricanes Gustav and Ike that struck the Gulf Coast area in September. Among the products distributed by Sun Coast was ethanol (E95). While the supply chain was disrupted, the carrier worked with the Texas governor's office to ensure emergency demands were met. Sun Coast supplied various fuels for hospitals, ambulances, and police and first responder vehicles.
Neff noted that tank trucks can haul about 8,000 gallons of product, unit trains about 3.4 million gallons, individual tankcars about 33,000 gallons, 15 barge tows about 6.8 million gallons, and individual barges about 450,000 gallons. Projections for pipelines would be about eight million gallons per day. While the conference included some discussion of various biofuels, the topics centered on the production and distribution of ethanol.
Lelio announced that Kinder Morgan has successfully performed tests on moving ethanol through its central Florida pipeline system and intended to offer this transportation service to customers by mid-November.
“Our customers want this product, and that is driving Kinder Morgan to expand ethanol handling,” Lelio said. “We are very encouraged by the results we have in Florida.”
The company also is assessing a similar process for biodiesel in a segment of the Plantation Pipe Line system that transports gasoline and diesel from Collins, Mississippi, to Spartanburg, South Carolina, and evaluating the transportation of biodiesel in its Portland-to-Eugene Oregon pipeline.
Zamarin noted that about nine billion gallons of ethanol will be produced in 2008 while 15.2 billion gallons will be produced for 2012 and 36 billion by 2022.
Moving large amounts of ethanol has presented the industry with a distribution challenge because the product typically is produced in the Corn Belt of the Midwest, but demand is thousands of miles away in the Northeast and along the West and Gulf Coasts.
“It is complex,” said Zamarin, listing issues that include politics, logistics, science, and economics. He noted that moving ethanol through a pipeline means it would be going the “wrong way” from the Midwest to markets in other areas since product typically moves from the south to the north.
The unknown aspects of transporting ethanol through pipelines remains a factor as are the economies involved. “It's a large investment with large uncertainty,” Zamarin said.
Carmody discussed ethanol transport via rail. He said unit trains consisting of as many as 80 tankcars haul about 35 billion gallons annually. They transport the product from production facilities to storage terminals, but the final destination must be able to handle the entire train.
“The biggest issue is the last mile,” he said. “The question is can the terminal handle it when we get it there.”
CSX plans to increase its transloading terminal locations from 65 today to 84 by 2010. “CSX is committed to the biofuels industry,” Carmody added.
At the same time, Withers said his barge company transported 1.4 million barrels of ethanol and 194,000 barrels of biodiesel in the first nine months of this year.
Nevertheless, he noted serious issues involved as a result of waterway infrastructure, naming lock conditions in the New Orleans area. If those locks were shut down, logistics could be severely impacted. Infrastructure improvements are on the drawing board, but they far exceed funding, Withers added.
Jaworski pointed out that the US lock and dam systems were built for a century of use and now are nearing 80 years in service. Another problem for barge transportation is its dependence on weather factors. The Mississippi River north of St Louis is closed because of ice from late November until early March.
Jaworski noted that some biofuel production facilities are being built on the banks of rivers so that they can take advantage of the services available.
Storage and terminaling
Managing and handling ethanol and other biofuels is a major hurdle for storage and terminaling facilities, but staying in the race is essential, according to the information presented at the conference. Congress has mandated that 15 billion gallons of biofuel must be blended into other fuels by 2012 and 36 billion gallons by 2022. With those regulations in force, the storage and terminaling sector, along with the transportation sector, will carry the baton for distribution.
Burgett said of storage challenges: “This is a time that is unprecedented. In Minnesota, the company had to bury and heat biodiesel storage tanks to compensate for low temperature effects on the product.”
Brown said his company has tested biodiesel blends that include soy and palm oils and is making further evaluations before any decision to handle the products. He added that the company also has certain storage tank constraints that prevent it from handling ethanol at this time. However, he pointed out that there are better future prospects for handling biodiesel based on the current understanding of the product.
Pipkin said that some of the challenges in managing biofuels include maintaining asset integrity. Ethanol has suspected affects on tank and pipe welds that call for methods to mitigate those issues. Final determinations will have to be made for how the product mix affects equipment selection.
Zamarin pointed out that experience shows that depending on many factors, ethanol can lead to stress corrosion cracking, first reported in the mid-1990s.
No matter the problems, the industry will be working to meet the challenges presented by biofuels. “The market will ultimately determine the blends, but our job right now is to serve the current demand,” Pipkin said.