CITY AND COUNTY OF SAN FRANCISCO
BIODIESEL ACCESS TASK FORCE REGULAR MEETING
TUESDAY, APRIL 6, 2010, 10:00 A.M.
CITY HALL, ROOM 278, ONE DR. CARLTON B. GOODLETT PLACE,
SAN FRANCISCO, CA 94102
TASK FORCE MEMBERS: VOTING: Eric Bowen (Chair), Eric Smith (Vice-Chair), Joe Burgard, Kevin Clark, Shannon Devine, Benjamin Jordan, and Michele Swiggers. Advisory: David Augustine (Treasurer/Tax Collector), Vandana Bali (Department of the Environment), Richard Berman (Port), Sarah Dennis (Planning Department), Mike Ferry (Fire Department), Laurence Kornfield (DBI), Vacant (MOCD), Marty Mellera (MTA), Virginia St. Jean (DPH), Karri Ving (PUC).
ORDER OF BUSINESS
1. Call to Order and Roll Call. The Biodiesel Access Task Force meeting convened at 10:05 a.m. Present: Chair Bowen, Vice-Chair Smith, Members Clark (11:00 a.m.), Devine, and Jordan; Excused: Member Swiggers; Absent: Member Burgard. Advisory Members Excused: Members Augustine, Bali, Dennis, Ferry, and Kornfield; Advisory Member Absent: Member Mellera.
2. Approval of the February 10, 2010 Biodiesel Access Task Force Regular Meeting Draft Minutes. (Explanatory Document: February 10, 2010 Draft Minutes) (Discussion and Action) Upon Motion by Vice-Chair Smith and second by Member Jordan, the February 10, 2010 Meeting Minutes were approved without objection. (AYES: Chair Bowen, Vice-Chair Smith, Members Devine and Jordan; Absent: Members Burgard, Clark and Swiggers)
3. Public Comments: Members of the public may address the Task Force on matters that are within the Task Force’s jurisdiction and are not on today’s agenda. There was no public comment at this time.
4. City Biodiesel Pilot Program discussion on the acceptance of biodiesel and biodiesel blends across the city to ensure all fleets are capable to run the Mayors minimum mandate and have sufficient support in determining higher blend pilot programs. (Discussion) Sponsor/Speaker: Member Jordan
Member Jordan reported that he has reached out to Members Mellera and Bali, Mr. Tom Fung and Dave Del Grande, fleet managers at Central Shops, to request their input into next steps on the City’s future plan for continued use of biodiesel in its vehicle fleet. He explained that engine manufacturer’s technology that they are using may have unintended impacts such as non-compatibility with current fuels used in municipal fleets and would affect the City’s mandate to use alternative fuel. Member Jordan stated that he is in a research phase and would provide a formal position about how the fleet managers are approaching this change in technology at the next meeting. He explained that the problem is strictly related to DPF filters and underground storage tank issues in the use of B20 and higher blends. Additional technical information is available at www.savebiodiesel.org.
5. Legislative update on the Biodiesel Fuel Tax Credit and discussion on Industry Impact. (Informational Report and Discussion) Sponsor/Speakers: Members Swiggers and Jordan
Member Jordan reported that at the last Task Force meeting, Mr. Robert Kirsten of Sirona Fuels provided information about the biodiesel fuel tax credit, which is a blender’s credit for $1.00 per gallon that was held up in congressional scheduling for some time and had lapsed. He had also discussed the negative impact the lapse in the tax credit was having on the biodiesel industry. Mr. Kirsten stated that the tax credit was passed by the Senate and the House and is currently in reconciliation. Chair Bowen reported there has been a lot of effort on this issue nationally, most significantly in the Midwest where most of the biodiesel plants are located. People are calling their Congress people and Senators on a daily basis, and there have been recent high-profile shutdowns for people who have been trying to stay in business as long as possible. It is now April and people were originally thinking it would be reinstated in February or March, so businesses are no longer able to justify running their plants. Chair Bowen explained that the plan is to have something passed between the Easter and Memorial Day recess, and all of the effort is currently focused on that issue. He explained that supporters of the tax credit have upped their rhetoric and pressure now that they have seen more plant layoffs in their states. He is optimistic that something will be accomplished before the May recess. If that does not happen, then the effort will continue until something is accomplished. He explained that the credit is only until the end of the year, but would be retroactive to January 1. Chair Bowen reported that there is a parallel process to create a five-year producer’s credit (not blender’s credit) to put into a larger energy bill.
Member Jordan inquired as to what type of action the Task Force should take on this issue. Chair Bowen stated that the National Biodiesel Board would say for everyone in the biodiesel community to contact Speaker Pelosi’s office on a constant basis expressing the harm this is causing to local producers, the City biodiesel programs, and the City’s small biodiesel businesses and to state that this tax credit has bipartisan support and has been passed so it should continue. Member Jordan inquired whether the Task Force should take a proactive role in crafting a letter. Chair Bowen explained that given the Task Force meeting schedule and the timing of the legislative process, protocol may not allow. Member Jordan requested that review and approval of a letter to Speaker Pelosi’s office be placed on the June agenda if the bill is unsuccessful in the spring legislative cycle. He asked that language be included in the letter about Task Force support for the five-year producer credit.
6. Master Fuel Contract and City Biodiesel Program Update. (Continued Discussion from the February 10, 2010 Meeting) (Discussion) SPEAKER: Member Mellera
Vice-Chair Smith reported that at the February Task Force meeting, Member Mellera provided a thorough accounting of the City’s activities. Member Jordan suggested that the Task Force provide Member Mellera a list of specific questions to address so he could either respond remotely or at the next meeting.
Member Devine stated that she is in favor of the San Francisco Public Utilities Commission (SFPUC) making and producing fuel, but does not understand how the SFPUC Water Department can be bidding on the Master Fuel Contract. She stated that it does not benefit the City to pay for fuel produced at the Water Department that has already been paid for by rate payer’s monthly payments for water and by grants obtained in association with the City and County of San Francisco. She stated that there is no way for private companies to compete for the contract against the Water Department. Member Devine stated that the City should be using the fuel it makes and should have a municipality exchange program, but that it does not make sense for the City to buy fuel from itself.
Member Ving stated that the concept is not about making biodiesel, it is about co-locating a private biodiesel manufacturer within the walls of a treatment plant because that treatment plant can handle all of the bi-products. In this case, it is a pilot project for 9-12 months that would make 3-6000 gallons a month. The City consumes over 100,000 gallons a month of biodiesel. It can turn brown grease into biodiesel cheaply because the biodiesel manufacturer can take advantage of the infrastructure of the treatment plant. It is still the manufacturer that makes the biodiesel, it is not the City. It is a public-private partnership. Member Devine stated that she understands that the City has public-private relationships but putting that relationship in a competitive bidding market, which the Master Fuel Contract is, would be detrimental to local producers. Since the City is paying for production because of their facilities, the rate payers should not pay for the fuel.
Chair Bowen stated that he was unaware that the SFPUC was going to bid for the Master Fuel Contract. Member Ving stated that they are looking at the current vendor, Western States, which sources fuel from three different suppliers. These suppliers source fuel from manufacturers. SFPUC would be one more manufacturer that they would source fuel from. She explained that the City is intent on finding a market value for brown grease. If the pilot project makes the SFPUC a manufacturer that the City buys from, it would be recovering the cost of turning the grease into biodiesel. Chair Bowen explained that there are fixed equipment costs, labor costs, and energy costs of making waste into biodiesel so understands the concept. Member Berman stated that this program would not differ from the PUC’s role as an enterprise department for the production of electricity and then selling it to other departments. Member Devine stated that the City should not take up this type of venture again because ratepayers do not benefit from this type of scenario.
Member Devine proposed that the SFPUC not participate in the Master Fueling Contract to sell to Western States and then sell back to San Francisco, and that it should take the fuel that is being produced and give it to MUNI or put it into its own truck fleet and reduce the cost to rate-payers. Member Ving stated that the purpose was to provide the City access to its own fuel. It is not cost-effective to have an entire separate fueling infrastructure outside the City fueling infrastructure. Chair Bowen suggested preparing a cost study analysis to show that the cost of doing something at a very small scale in comparison to adding something of a small scale into a larger already operating system has less cost because you don’t have to repeat things and you have the economy of scale. He stated that Member Ving articulated that the PUC is setting up a fueling infrastructure around a few thousand gallons of biodiesel, and if it were being done on a larger production scale, the math might change. The small amount of profit that the private sector is making in handling the City’s fuel, which is a few pennies a gallon on a few thousand gallons, is vastly outweighed by the cost the City is avoiding from not having to create new systems to store and deliver fuel on its own. Member Ving stated that she is interested in hearing proposals since the project is in a pilot stage and is open for further discussion.
Member Jordan explained that the Office of Contract Administration may be able to provide a copy of the Master Fuel Contract language. He stated that the Task Force should make sure that the contract is sufficient and would provide an opportunity for local producers to provide fuel to the City’s fleet as long as it meets the criteria. He stated that he is not sure how producers are chosen and suggested that the Task Force review the contract language.
Mr. Robert Kirsten, Sirona Fuels, stated that the Master Fuel Contract language states that local producers should be brought in, but that is not what he has experienced. He discussed his unsuccessful attempts to sell fuel to Western States and explained that the process they use to purchase fuel costs the City more than petroleum diesel. The language exists but there is no mechanism for making it a reality. He described the obstacles local producers are facing in doing business with the City.
Chair Bowen stated that his understanding is that when the bidding process was in progress, those petroleum companies talked to biodiesel suppliers and said they wanted to competitively bid, and in order to do that, they would need supply and price-assurance. He stated that it does not surprise him that Western States is not purchasing fuel through Sirona Fuels because they have a deal with another vendor that provided this assurance. Chair Bowen stated that there is a lesson for future versions of the Master Fuel Contract. The City’s bid process requires people to pick biodiesel partners in advance in order to provide price certainty. That makes it difficult for a local producer to jump in if they are not up and running when the bidding process takes place. He suggested that something could be done in the interim period where the City could request that Western States allocate some of its purchasing to local producers.
Mr. Kirsten stated that he has had success with other municipalities, but there is no mechanism in this contract. Member Ving discussed creating an audit system that would contain Local Business Enterprise (LBE) requirements. Vice-Chair Smith suggested limiting the length of the contract in order to address these issues and to also make sure that there is a percentage of local hiring when the contract is renewed. Mr. Kirsten asked the Task Force to address the Master Fuel Contract language in order to provide for a mechanism to incorporate local producers. Member Jordan inquired whether other municipalities have this type of language in their contract that the Task Force could reference. Mr. Kirsten stated that the language was built into the Request for Proposal(s). Mr. Kirsten explained that the Master Fuel Contract language states that the City can buy outside and buy from a local producer as required.
Member Jordan stated that he will ask Member Mellera to provide a report on the following issues (1) other MUNI sites that are not using B20 and types of upgrades, infrastructures, costs and timelines for achieving their participation and what the constraints are; (2) update on the Master Fuel Contract and summary of Vendor Quality Survey Report—report on the City’s Master Fuel Contract process; (3) comment on existing Master Fuel Contract provisions for local producers and viewpoints and incorporation of language to provide more access to local producers; and (4) clarify MUNI’s success in the last three years and next steps. Member Ving would provide additional information into the SFPUC’s pilot project.
Public Comment: Mr. Brian Denninger, Incredible Adventures, stated that the Master Fuel Contract specifies that local producers should provide a certain percentage of fuel (5%, 11%, or 25%). He understands in the current budget time why this requirement would make sense, but for a long-term sustainability project, he suggested outsourcing to people outside of the region only if local producers cannot provide the product any more. He suggested that five percent of the fuel should be sourced from outside and 95 percent from local producers if they can produce within that range. This would provide an opportunity to create programs to help producers create jobs, which in the long term benefits the city and is far more important than short-term goals. Chair Bowen stated that he likes the idea of moving toward local, but local is not there yet, so price is driving the contract. Mr. Denninger suggested writing incentive programs into the contract language in order to help local producers.
7. State Water Resources Control Board Underground Storage Tank (UST) Update. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKER: Chair Bowen
Chair Bowen stated that there is a program in place that is working reasonably well. However, the State Water Resources Control Board is not allowing everyone to sell B20, and there are problems for the B100 community in Southern California. The California Biodiesel Alliance along with the National Biodiesel Board is doing a fair amount of outreach to get biodiesel flowing again, and it will continue to be a collaborative process. The California Environmental Protection Agency issued a fueling document that summarizes the legal requirements for all conventional and all fuel in the state of California for folks who want to be in the market or operate around it that would be a good reference tool for the Permitting Work Group.
8. Update on the Local Biofuels Permit Work Group. (Continued Discussion from the February 10, 2010 Meeting) (Discussion) SPEAKER: Member Jordan (Explanatory Documents: Planning Department memorandum on current requirements for permitting a gas station and Fueling Scenarios)
Member Jordan reported that the Work Group would be meeting from 9:00 a.m. to 10:00 a.m. before every Task Force meeting to identify ideas for dispensing biodiesel in San Francisco. The Work Group in the next two months will be working on modernizing a Planning Department document on current requirements for permitting a gas station and working with each City department to acquire information on fueling scenarios and creating a stand-alone document. Six different fueling scenarios are being reviewed (see explanatory document), and the group has identified one or two more scenarios for biodiesel production related to small and large volume of material on site. The goal is to provide documents and have them readily available for people who are interested in approaching biodiesel access. Additional information will be provided at the June Task Force meeting.
9. Status update on correspondence to engine manufacturers that educates them that the technology that they are using may have unintended impacts such as non-compatibility with current fuels used in municipal fleets, state mandates and others. (Continued Discussion from the February 10, 2010 Meeting) (Discussion) SPEAKER: Member Jordan (Explanatory Document: Letter to Engine Manufacturers)
Member Jordan reported that the post combustion injection of fuel in cylinders can cause problems with the Mayor’s mandate to use alternative fuel in the City’s vehicle fleet as has been discussed. He is trying to obtain specific language from fleet managers as it relates to the City and County of San Francisco. The Task Force at their last meeting, voted to create and send a letter to engine manufacturers about this problem and ask the Mayor’s Office or Board of Supervisors to also send some form of communication about the City’s mandate. Member Jordan provided a letter that is addressed to engine manufacturers that he had prepared for Chair Bowen to sign on behalf of the Task Force. Chair Bowen indicated that he would edit the letter and send it back to Ms. Fish to mail out. Ms. Fish reported that Mr. Owen, Deputy City Attorney, provided legal advice that the Department would be able to mail out the letter on Department letterhead.
Member Jordan also encouraged Task Force members to go online to www.savebiodiesel.org to sign a petition as individual members of the Task Force. The Task Force approved this action at their last meeting. He reported that the Deputy City Attorney suggested that in order to provide more influence into this topic, that the Task Force could prepare a Resolution for the Board of Supervisors to adopt that would take a position on the type of technology that should be selected for their fleet to make sure it is compatible with the City’s alternative fuel program. This topic would be discussed at the June Task Force meeting. Chair Bowen suggested starting a conversation with the Purchasing Manager because the Supervisors will ask what impact it would have on the City and the availability of vehicles to do the work that needs to be done. He suggested identifying what the City is buying now that could be identified as problematic, identifying whether there are vehicles that are not problematic, and if there is anything available on the market that is not problematic. If nothing is available in the market, there should be reference made to the engine manufacturers frustrating the city’s carbon footprint reduction efforts. Member Ving suggested holding discussions with Member Bali on this topic. Member Jordan asked that this item be continued to the next meeting to provide additional direction.
Member Clark stated that in addition to sending the post-injection letter to the engine manufacturers, it might be useful to "cc" the people behind the annual Green Car of the Year Award. Last year, they awarded it to Volkswagen and this year to Audi, both of which cannot burn biodiesel higher than B5. The automotive journalists completely omit any mention of biodiesel, which seems a glaring omission regarding so-called "green cars". Consumers often buy diesel cars just for the present or future ability to use biodiesel and need guidance on this very technical issue they're not being informed about.
Public Comment: Mr. Denninger suggested that the Task Force consult his fleet manager as a resource. He explained that Incredible Adventures is not purchasing newer vehicles and has modified its purchasing protocol as a result. `
10. Green Depot Program Report. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKER: Vice-Chair Smith
Vice-Chair Smith reported that Green Depot and Biofuels Recycling recently signed a lease with Literacy for Environment Justice (LEJ) and now has an office with LEJ in the Bayview neighborhood at 800 Ennis. He stated that Green Depot continues its efforts to do advocacy work. Vice-Chair Smith stated that he would be attending and speaking at a Green Jobs forum at the Bayview Opera House on Friday and participating in forums that Global Exchange is hosting during the Green Festival this weekend in San Francisco. There are plans for Green Depot and Biofuels Recycling to journey to Washington D.C. to meet with their funders as well as others that are interested in replicating the programs that are in San Francisco.
11. Dogpatch Biofuels Update. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKER: Member Swiggers
Vice-Chair Smith reported that he regularly visits Dogpatch Biofuels and things are going well--staff is busy and happy. More and more customers are joining, signing, and people are dropping off their grease at the GreaseCycle bin located there. Dogpatch is continuing their work on the engine manufacturer technology and its non-compatibility with current fuels used in municipal fleets issues with www.savebiodiesel.org.
12. Fat Free Biofuel LLC Refinery Update. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKER: Member Devine
Member Devine reported that Fat Free Biofuel is still located at 280 Bayshore. She stated that she is trying to locate biodiesel partnerships and described Fat Free Biofuel’s current status and future plans. Member Devine stated that she may be implementing a drive-through coffee shop and fueling setup, a multi-service station to offset the cost of biodiesel and blending.
13. Update on the Greasecycle Program and San Francisco Public Utilities Commission (SFPUC) Pilot Plant. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKERS: Members Jordan and Ving
Member Ving discussed latest developments on the GreaseCycle program and the PUC’s work on green jobs with the Green Academy who has a number of trainees in different stages of workforce development. The focus is on environmental literacy for those who are not ready for a full-time occupation. Member Jordan reported that the Mayor’s Office of Economic Workforce Development runs a Green Academy which has a Recycling sector. The Recycling sector has four sessions a year and the participants receive quite a bit of training and exposure to the recycling program. He stated that part of the green jobs program, which is a result of the first round of stimulus funding and a grant from the Mayor’s Office, is to move into more of a citywide program, not just for public agencies but for local-private industries. Vice Chair Smith reported that part of the grant work that Green Depot and Biofuels Recycling have been involved with is to work in conjunction with the green jobs program.
Member Ving reported on the success of the GreaseCycle restaurant recycling program, which seems to be out of its pilot stage. She explained that there are 850 restaurants participating and it is strictly cooking oil that is collected. She explained that there are two kinds of grease being produced, cooking oil and restaurant track waste, which is brown grease. In addition to the brown grease and biodiesel program, there is a cooking oil and brown grease conversion program. Member Ving described the Ordinance which has just been launched with full support of the Golden Gate Restaurant Association, which will require every restaurant in San Francisco to install the latest technology in grease removal devices and the associated grant program that would help restaurants with the cost of the devices. She stated that the objective is to ensure that grease does not end up in sewers and would ideally end up in the renewable energy program. Vice-Chair Smith stated that SFPUC and Water Department programs produce cost-savings benefits and opportunities to create jobs and other community benefits.
14. Update on the Status of Darling’s Proposed Biodiesel Manufacturing Plant in San Francisco. (Continued Discussion from the February 10, 2010 Meeting) (Informational Report and Discussion) SPEAKER: Vice-Chair Smith
Vice-Chair Smith reported that he has been working closely on Darling’s proposed biodiesel manufacturing plant in San Francisco with Member Berman. He stated that Darling is continuing with their plans for the plant, and the California Environmental Quality Act (CEQA) process is near completion. There will be several more community meetings in which Darling will be presenting their plans (air quality, emergency, etc.) and working to satisfy environmental, community and the Port’s concerns. Several community meetings were previously held in the Bayview as well as Southern Advisory Waterfront Committee (SWAC) meetings at the Port about this facility, its potential, and jobs in the community. Vice-Chair Smith stated that there is some opposition to the plan, and that he does not know if all concerns have been satisfied, but answers have been provided to questions.
15. Hazardous Material Classification of Biodiesel. (Continued Discussion from the February 10, 2010 Meeting) (Discussion) SPEAKER: Member St. Jean
Member St. Jean reported that there has been no change to the hazardous material classification of biodiesel to date and asked that this agenda item be placed back on the agenda when new information becomes available.
16. New Business/Future Agenda Items. (Information and Discussion)
Vice-Chair Smith extended an invitation to LEJ’s Eco Center grand opening on Sunday, April 18th, from 10-3:00 p.m. He stated that the Eco Center is the first potentially off the grid LEED certified building in San Francisco, with the help of the Port and the Department of the Environment. He announced that Sunday Streets will be going through the Bayview on the same day and there will be many activities and events. Member Jordan suggested a future agenda item to discuss the biodiesel retail location mandate. Vice-Chair Smith stated that he has discussed this issue with Supervisors, but that the engine manufacturers’ technology issue complicates progress on this issue. This topic would be discussed at the next meeting.
Ms. Fish inquired about the status of the request for membership revisions to the Planning, Tax Collector’s and Fire Department representatives. Vice-Chair Smith reported that he would follow-up with Supervisor Mirkarimi’s office. Member Jordan requested that the Fire Department representative be maintained. Ms. Fish reported that Member Ferry stated that he may be recommending an alternate member and provided information on the process for Department head appointments of Task Force members.
17. Public Comments: Members of the public may address the Task Force on matters that are within the Task Force’s jurisdiction and are not on today’s agenda. There was no public comment at this time.
18. Adjournment. The Biodiesel Access Task Force meeting adjourned at 12:00 p.m.
Respectfully submitted by,
Monica Fish, Task Force Secretary
**Copies of explanatory documents are available at (1) the Biodiesel Access Task Force Office, 11 Grove Street, San Francisco, California between the hours of 9 a.m. and 5 p.m., (2) upon request to the Task Force Secretary, at telephone number 415-355-3709 or via e-mail at Monica.Fish@sfgov.org, or (3) on the website with each agenda or meeting minutes at https://sites.google.com/a/sfenvironment.org/commission/biodiesel-access-task-force.
*Approved: August 3, 2010