Running on the good oil

A Te Kuiti contractor, in a classic case of Kiwi DIY, decided to manufacture his own biofuel to save on fuel costs, and he’s delighted with the performance of his machinery now they’re running ‘green’.   BY ALAN TITCHALL


Biofuel.jpgWarren Holden smiles down on his 30 tonne bulldozer as it rips up a seam of limestone with diesel-deep snarls and growls.

“That’s my baby,” he says, watching the Cat D7H effortlessly push a mound of broken stone towards an excavator loading a dump truck.

It’s a typical day for his contracting team and a typical quarry operation, but there’s something missing. Every time the big cats are throttled hard, there’s no diesel smoke fuming out of their exhausts.

“Notice how clean burning they are? The dozer has been running on different blends of biodiesel for over 1000 hours, and the excavator for over 1500 hours.”

Holden Brothers, a contractor based in Te Kuiti, runs its 40 tonne dump trucks, two bulldozers, four diggers (one 20 tonne and three 12 tonne), three truck and tailer units, and auxiliary units all on blends of biodiesel. They manufacture the fuel themselves, under a subsidiary called Environ Fuels; one of just a handful of Kiwi companies producing and selling high-grade biofuel.

Environ Fuels makes between 200,000 and 300,000 litres of high-grade biodiesel a year from a small plant in Te Kuiti. Holden Brothers consumes around 60 percent of this production and the rest is sold to local tourism operators and businesses operating diesel powered vehicles and equipment.

“We got into making biodiesel because waste oil used to cost us around 20 cents a litre,” says Holden. “That cost has gone up to between 70 cents and $1.00, but we now realise other benefits – the machines run so much better.”

The performance of biodiesel depends on the feedstock. Overseas, this is mostly crops such as soybean and canola. In New Zealand, we use waste vegetable oil from the food industry and tallow from meat processing, producing a more potent brew.

“Popular wisdom says there’s a seven percent net loss in power with biodiesel, but our results show the opposite and performance on all our gear has improved. The D7 bulldozer normally chews through 34 litres of mineral diesel an hour. Working on 100 percent biodiesel that is reduced to 30 litres an hour.”

The rising cost of waste oil has seen production go from100 percent biodiesel (B100) to a blend of 30 percent biodiesel and 70 percent mineral diesel (B30) from Caltex. What is not used in the contracting business is sold for around three or four cents below the cost of mineral diesel at the pumps.

Kiwi ingenuity

The Holden family has worked the Waikato region for more than 100 years, mostly farming, with an intense interest in heavy equipment.

“We love it – we have heavy metal disease,” says Holden, who worked in Australia – mining and contracting – before coming home and investing into the earth moving business with his brother. The business is spilt, with Warren focusing on the bigger jobs – landfills, diary conversions and the quarry operation – while his brother looks after civil works.

Warren Holden admits his biodiesel education was short, but effective.

“I learnt it all on internet and made a prototype fuel using a block of Chefade [commercial cooking oil] and the resulting fuel was crystal clear. I then bought a little three cylinder Japanese diesel engine and was so surprised that it ran so well on my fuel.”

That was in early 2006 and the experiment motivated him to put together a business plan and submit it to Industry NZ for funds. He was knocked back because his plan uses existing technology and didn’t create new opportunities.

“I thought bugger you – I can do it without your help. I set up with support from a very understanding bank manager, a good accountant and a supportive wife. My other companies suffered a bit getting things started, but we got there.”

Having got this far on his own, Holden then designed and built a lot of his own equipment.

“You can pay around $60,000 just for that piece of equipment,” he says pointing to the reactor. “I won’t tell you how much my homemade version cost me, but lets just say it wasn’t anything like $60,000.”

Making biodiesel is not exactly rocket science. Oil is heated, methanol and caustic soda are added, and the glycerol sinks to bottom to be drained off. After the impurities are filtered out, you are ready to fire. However, making biofuel to international and New Zealand standards is a much harder process, and
Environ Fuels has invested much time and money in testing its product and producing a very hi spec fuel.

I am talked into doing something my instincts say will result in asphyxiation  – stick my nose in front of the exhaust of Environ’s ute, which has travelled over 40,000 kilometres on B100 fuel. The smell of the B30 blend is strangely sweet and anything but unpleasant.

“The B100 smells different again, like an old fish shop. Working in a confined spot with a digger or other diesel equipment, the emissions are much more comfortable than fossil diesel.”

Holden never tires of plugging the virtues of biodiesel; even the mechanics of Te Kuiti are in love with the stuff. One day a customer drove in with an old 4WD diesel with a rooted engine that needed an expensive overhauling, according to
her mechanic. 

“Well, she filled up the tank with biodiesel and took it back and the mechanic couldn’t believe it. The vehicle is still running around. Once they try it – they love the stuff.”

In the long term, Holden is worried by the escalating cost of making biofuels. Until alternative feedstock is grown here, the cost of tallow (now $1000 a tonne) and waste oil continues to rise through demand from Asia. The Government talks big on biofuels obligation, says Holden, but does nothing to help local production. The methanol he uses, for instance, has to be imported from Saudi Arabia, yet a few hours away in oil rich New Plymouth barrels of the stuff are produced for export.

“It might get to the point that we have to sell all of our production and won’t be able to afford to use it ourselves.”

It’s the reason why Holden doesn’t see a big future for biofuels in the larger contracting industry, where discounted diesel is far cheaper for large companies.
There are areas where it can make a difference to winning a contract. Holden Brothers uses its biofuel as a selling point for contracts with Environment Waikato, for instance. And then there’s the health of the equipment. Holden looks down on his snarling baby D7.

“It blew an injector pipe recently, which sprayed diesel straight onto the turbo. Because of the biodiesel’s high flash point there was smoke, but no fire. Had it been mineral diesel, the engine would have surely caught alight.”


Contractor Vol.32  No.2  March 2008
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