One TechTown entrepreneur's biodiesel dreams for Detroit

Inside a small office on the third floor of TechTown, where many of the city's hopes are nurtured, Oliver Baer is deciding your fuel choice for the next three to four years. He could be even determining what kind of car you buy. The decision will be easy assuming Clean Emission Fluids and its friends in the production industry can further decrease and stabilize the price of biodiesel, making it less expensive than diesel fuel.  

In other words, Detroit will be the center of the fashionable biofuel industry, if Oliver Baer and associates have their say. While we're clinking the nozzles at petroleum gas stations, Baer is masterminding a puzzle that could help redefine Detroit's economy.

"If you build biodiesel today, in Detroit, if you produce it, where are you going to sell it to? The major fleets, that's about the only market you have ... you can't very easily sell it to the consumer market, which includes the truck drivers, commercial industries, and the passenger cars," Baer says. "But you will be able do it with our system."

When you pull up to the pump, you'll have an option to use clear slimy biodiesel at $1.50 a gallon, or traditional good smelling gasoline at $2 a gallon. With petroleum prices likely to rise in the next 5-10 years, innovation and stabilization might be what the biodiesel industry needs.

But for now we have seedlings of the US clean energy industry, theorists and practitioners like Baer and associates spending their days discussing potential sales of their patented FAST (Fluids Affordably Stored) units. More importantly for Detroit, how to centralize the biodiesel industry and encourage investment by government and private companies is the key to their success in the local market. What they are trying to create is something big, something that will bring jobs, and tax dollars, and more national focus to Detroit, all in large quantities.  

Baer says education is one of the first steps towards the goal. For instance, he says that in some places biodiesel is less expensive than regular diesel. And that engines have successfully used 100 percent biodiesel. In fact, right now CEF is helping to run a tugboat on the Detroit River using all biodiesel fuel, or B100 as it's called.

$1 million investment, so far

CEF doesn't just talk the talk, they walk it. The company owns the patent to a device that mixes biodiesel after it arrives to the station. Normally, from production plant to gas station the biodiesel must stop at least twice for treatments and mixing. The FAST unit mixes the fuel on site, removing the stops between plant and station. This lowers the production cost, which lowers cost at the pump. It also mixes the biodiesel at whatever ratio the driver wants. Right now biodiesel mixtures are found mostly at 5 percent and 20 percent. In a future world with most cars diesel ready, a person can pull up to one of CEF's pumps and fill up at 10, 25, up to 100 percent.                

Recently U.S. Commerce Secretary Gary Locke announced the creation of a Detroit area office that will tend to the needs and give advice to new clean energy businesses. Two alternative energy companies, Clairvoyant Energy Solar Panel Manufacturing Inc. and Xtreme Power, were just awarded $125 million in tax credits for their plans to invest $1.3 billion in the redevelopment and move to the old Ford Wixom Plant. So where do Oliver Baer and Clean Emission Fluids stand in all of this?

"The industry is somewhat speculative because it's a little cart before the horse, there's no demand (yet). What we'll do is help to enable demand," Baer says. "There's going to be a growth process where supply will notch up, demand will notch up, supply will notch up, demand will notch up -- until you get to a point that it's sustainable."

CEF has already invested roughly $1 million in research and development. What they have is a successful patent, clear thinking, a very intense leader (Baer sleeps 3-4 hours a night), and what they hope will be a city and state friendly to the development of companies like CEF.

Recently Baer and his team met with Pittsburgh Clean Region Cities, a coalition aided by the US Department of Energy that works with the local government to create an infrastructure friendly to clean energy companies. This program, called Clean Pump Initiative, has helped CEF receive grants for three of their units.

Baer's company works from the premise that with increasing fuel emission standards, rising gas prices, and an eco-friendly public, the critical mass needed to support a biodiesel industry is on its way. The fact is that people who want to use biodiesel now have very few places to go. So they're trying to increase those places.  And the increase partly depends on local government, or land allocations, as the case in Pittsburgh.

What will happen is Pittsburgh Region Clean Cities will be granted or leased the land for a small amount of money, allowed use of the land to install clean pumps, says Ryan Walsh, director of PRCC.  

"Until there is a critical mass of consumers there is no way I can convince the commercial gas stations (to install the units)," Walsh says. "It will look more like a commercial fueling station for the time being." But, he also adds an important caveat: "The government fleets are huge and they will use it."

The next wave

So why should Detroit care about a company that's asking for resources, but currently has no economic impact on the city? Baer tells us at least 150 jobs are on the way, that given more cooperation and nudges from city government, biodiesel production companies will start building plants in and around the city. Then the spiderweb of dependents, like parts manufacturers, will spread.

"I was in Brazil in October. They're the most progressive biofuel company in the world, and they invested 15 years ago regardless of the price of oil," says Baer. "Now they've got the infrastructure in place, and now all of a sudden instead of doing flexible vehicles here, 5 percent, 10 percent, they're doing from 25 percent to 100 percent and they're paying a lot less for fuel than we are, because they invested in infrastructure 15 years ago."    

Right now though, what can CEF bring to Detroit? In the eyes of Baer and CEF, if vacant land is re-allocated for installment of FAST units, then Detroit has 10 less brownfields and 10 sleek biodiesel stations. It also signals to the other clean energy companies around the world that Detroit is a player on the high stakes, high tech scene. Detroit has lots of land, not enough people, and a huge opportunity to create successes.

"Why not," Baer asks. "Michigan lost workers in the auto industry.  Why not get on the leading edge of something new? Windmills have kind of already moved through Michigan, solar panels are hot in California. We have some companies here in Michigan that build solar panels. Biofuel is the next wave, lets get on the leading edge of that…establish an economy around biofuel and help bring revenue into the region."

Ryan Kelly is Model D's fall intern. Send feedback here.

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