June 30, 2009 Biofuel infused into Mass. market Play video

(NECN: Peter Howe, North Andover, Mass.) - Green energy is set to take another big leap in Massachusetts as the state begins requiring blends of "bio fuels" into home heating oil and diesel fuel sold in the state. And that's giving new life to an old industrial site here that's being turned into part of New England's cleaner-energy future.

If you're a New Englander who heats your home with oil, probably you've seen or gotten a pitch to try something called bio heat, typically regular oil with some crop- or plant-derived fuel mixed in. Buying a blended fuel like that will actually become the law for everyone next year in Massachusetts, with a steadily growing requirement for how much green biofuel has to get mixed into the fuel supply.

Back when the 1600 North Osgood Street factory was a Western Electric telecom factory decades ago, up to 16,000 people worked here. Keeping them warm were huge oil tanks feeding four steam heaters, burning a thick, heavy oil.

Where some might have seen toxic scrap metal, Dr. Jesse Reich saw a huge opportunity. "We're going to use these tanks that are behind us to put in biodiesel," Reich said in an interview Tuesday. "It burns cleaner, it burns better, it reduces your greenhouse gas emissions."

Reich is a co-founder and chief executive officer of BayState Biofuels LLC., BayStateBiofuels.com. He describes biofuel as "a green, environmentally

friendly product that's made here in America as opposed to traditionally pulled out of the ground in the Middle East."

You might be amazed what you can use to replace oil. As Reich explains, "Waste vegetable oil turned into biodiesel. Chicken fat. Beef tallow. When it comes online, algae's the holy grail."

Reich's company is recycling the two 175,000 gallon tanks and piping as a distribution terminal for loading biofuels onto delivery trucks. What's driving it: A new Massachusetts law giving a big boost to biofuel by mandating some be mixed into both diesel fuel and home heating oil -- 2 percent next year, rising to 5 percent by 2013.

Ian Bowles, Massachusetts secretary of energy and environmental affairs, said, "On the diesel and home heating side, really the mandate is to distributors to get out and start adding some advanced biofuels into fuels they deliver to customers."

Bowles calls the North Andover project, which will create 30 jobs this year and maybe 300 as it expands, exactly what the law aimed to promote. "It's good for the environment and also creates jobs locally," Bowles said.

Reich, who also teaches chemistry at Massachusetts Maritime Academy, Maritime.edu, is already planning his next green steps: Reactivating an old rail siding to bring in biofuel to the distribution center by more energy efficient trains, not trucks.

And then, piping waste steam from the neighboring Wheelabrator trash-to-energy incinerator to help keep BayState's biofuel from freezing up in winter. (When it's stored as pure biofuel, the liquid can freeze up, but that is not a risk when it is blended into a mixture that is 95 to 98 percent heating oil or diesel fuel.) "Every little speck of steam that I see," Reich said, "is steam that i think we should be using in our tank."

And another part of that same biofuels law is a tax break on ethanol made as a supplement or replacement for gasoline, as long as it's made from cellulosic sources like weeds or wood, not food crops like corn. Starting next year, you won't pay the 21 cent a gallon tax on cellulosic ethanol in massachusetts, which officials hope will help drive growth of that biofuel source. (In North Andover, Jesse Reich said they are also very sensitive to concerns about biofuels driving up food prices. A lot of biofuel now is produced from soybeans or palm oil, but he says BayState will be handling only biofuel made from waste cooking oil or chicken fat or inedible plant oils.)