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Colonial Okays Biodiesel Pipeline Shipments in Georgia

November 9, 2011 Colonial Pipeline will allow biodiesel to ship along Line 17 of its system, the first pipeline company to allow commercial biodiesel shipments via pipe.

Although no company has yet nominated a B100 or less shipment, it represents a breakthrough for the biofuels' fungibility and commercial success.

Line 17 runs from Griffin North to Bainbridge South in Georgia and is beyond the point where Colonial ships jet fuel to Atlanta-Hartsfield Airport, explained Steve Baker, Colonial's spokesman. There will be no jet shipped on Line 17 and that is key to allowing biodiesel nominations since as of yet, jet fuel cannot contain even a trace of biodiesel.

In earlier tests, biodiesel was found to trace back into jet fuel even though it was separated by a slug of heating oil. World Energy, Magellan, Explorer and others have tested 5% biodiesel shipments in the past five years.

Although commercial and military aircraft have successfully tested biojet flights, the international spec for jet fuel does not yet allow for even a "de minimis" amount of biodiesel in jet. The unknown effect of mixing trace amounts of biodiesel with jet fuel is one of several factors keeping the biofuel out of pipelines.

Not being able to ship on pipeline was seen as a factor stalling the further growth of biodiesel. To be competitive with traditional forms of diesel such as ultra-low-sulfur diesel, more biodiesel needs to be moved by pipeline, industry observers noted.

"This is us getting the preliminary paperwork done so that companies will be able to nominate B100 and lower mixtures," Baker told OPIS.

"Colonial filed FERC 98.3.0 today in order to update Colonial's Rules and Regulations Tariff to reflect changes to Colonial's product specifications located in our Shipper Manual. The effective date of the tariff is Dec. 9, 2011," the company announced yesterday.

Among the changes are:
--Created grade 49 fungible B100 Bio-Diesel Blendstock.
--Added note to 51 and 55 grades clarifying 51 and 55 grades may contain trace amounts of Bio-Diesel if shipped on line #17.
--Added note to 54 grade clarifying that 54 grade is not allowed to be delivered on line #17.

Written by Robert Gough
Director - Renewables, East of The Rockies Refined Spots, Conferences
Publisher - Oil Express Oil Price Information Service Two Washingtonian Center