Open Biodiesel

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A bubble in liquid

I’ve had a number of career changes. I went from poetry to technology to metal sculpture to the Internet to biodiesel. And I must admit that although I have brushed against open source a number of times, I have had a hard time getting my head around it.

I was working the show floor of USENIX in San Antonio in 1998, when Free BSD was released. It created quite a buzz. But I wasn’t sure what to do with such a thing.

I later ended up as the CEO of an Internet company. The “bubble” had burst; the company I was to run was pretty much bankrupt; and my job was to fix it. As part of the turnaround I invested in OpenNMS, which is an open source network management company. At the time I still didn’t know what open source meant.

OpenNMS was (and still is) run by Tarus Balog. He’s a charismatic champion of the movement and I quickly fell under his spell.

Tarus told me to read The Cathedral and the Bazaar, which I did. Then he took me to the Triangle Linux Users Group. For a moment in time, open source was my life.

I’m not really a “turnaround” guy. My brother Mark used to joke about my work on the Internet, saying, “They wanted a ‘turnaround artist’ and all they got was an ‘artist.’”

During my time with OpenNMS I was migrating toward biodiesel. Biodiesel is a cleaner-burning renewable fuel that is made from fats, oils, and greases. I was making the stuff in my backyard and signed up for the fledgling Bio Fuels program at Central Carolina Community College.

I was busy scaling up biodiesel and scaling down my life in the technology sector. Technology was making me narcoleptic. Biodiesel was lighting my fire. Tarus and OpenNMS went on to build an open source success story, while I abandoned them for a fifty-five gallon drum and a canoe paddle.

I jumped in with Leif and Rachel (my instructors at the college), and together we founded Piedmont Biofuels. We had some early successes making fuel and were immediately confronted with a critical decision: Should we tell the world what we had learned or keep it a secret in order to parlay our knowledge into cash?

We decided to take an open approach, and instead of applying for patents and sealing our lips, we published our successes and failures on Energy Blog. Our work was free for the entire world to see.

At the time the biodiesel industry in America was in its infancy, and as such it was shrouded in proprietary secrets and great advances, plus complicated licensing schemes.

Our work stood in stark contrast to an evolving industry, in which charlatans came and went, and black box solutions regularly emerged and disappeared. It was the Wild West for biodiesel, and no one was sure which stories to believe.

Piedmont’s notion of open source biodiesel immediately got traction in the grassroots biodiesel community and became the standard for how small projects should interact with one another. We had our flops. We had our successes. And we published them all.

In no time we found ourselves with an active consulting business. Our rates went from being a member of our co-op ($50 per year) to $50 per hour to $100 an hour to $200 dollars an hour in order to slow things down a bit. I’ve often thought, “Tarus would be proud.”

As public money started flowing into our project in the form of grant awards, we stuck to the knitting. We offered free tours and free information to anyone. Interest in our project grew rapidly. Part of our message to public funders was this: We would tell anyone anything they wanted to know.

The fact that we were open source appealed to those with public money. I’m not sure any of us clearly knew what it meant, but funders wanted to know that if they bestowed grant money upon us, our stewardship of that money would benefit others. As a result we accidentally became a frequent recipient of both federal and state grants.

But our commitment to openness had a broader benefit. The biodiesel industry has had a bruising ride since its inception. The public doesn’t really understand biofuels, and the industry doesn’t tend to be open in an effort to make itself clear.

When we were making fuel in the backyard, we were quirky. For a moment there, when biofuels were going to save the world, we were sexy. We had a moment as rock stars. But when global commodity markets climbed to record highs in the summer of 2008, biofuels became evil. That’s when our industry made the cover of TIME magazine as a sham. And that’s when the United Nations expert accused those responsible for making biofuels of being guilty of crimes against humanity.

We went from quirky to sexy to evil, and we continued to publish our stories along the way. As a result, we had credibility that allowed us to survive where others died. As biofuels projects collapsed under the weight of “evil,” we persevered.

It might have been transparency. Or the fact that we were open. Or it might have been our ability to adapt. When we opened our plant in the fall of 2006, we were making fuel out of virgin soybean oil. When soybean oil became too expensive to turn into fuel, we retooled our plant to make fuel out of poultry fat. When poultry fat became too expensive, we switched to used cooking oil from area food service establishments.

Sometimes when fuel production was faltering, our consulting business was thriving. We accidentally found ourselves in the design-build business, leveraging our expertise into building small-scale biodiesel systems for others. And along the way we found ourselves landing research and development contracts. Which meant that sometimes when fuel production was down, engineering billings carried the day, and when both fuel making and design-build was soft, our research group would deliver the revenue we needed to keep the doors open.

When we entered the biodiesel business, we naively thought we would simply make fuel, put it on trucks, and ship it to market. It turns out the energy business is considerably more complex than that, and we have successfully adapted our business model to the changing landscape that is biofuels.

We have been open at every step along the way, and we feel that our openness has been critical to the success of our enterprise.

At Piedmont Biofuels we have a lot of “firsts.” We have a number of breakthroughs under our belt. And we have shared both our firsts and our breakthroughs freely with the world. Meanwhile, we have watched our industry rise and fall as it fumbles about with policy decisions that will determine the role of biodiesel in our energy mix.

By some measures it is fair to characterize community-scale biodiesel as an industry that is open. Surely we get as many good ideas as we contribute. And there is no doubt that we have benefited greatly from the community of small-scale producers.

Just as the small open source software company can successfully compete with much larger proprietary rivals, our small biodiesel company looms larger than life because of its many contributions to industry knowledge.

This might not matter in the least. We still haven’t figured out how to eat fame. And we are still paying off the vast “tuition” we have paid as pioneers in the biodiesel industry. But we are resilient. We are open. And we wear both of those monikers with pride.

Lyle Estill is a traveling salesman who accidentally became an environmentalist, stumbled into being an activist, and went on to become a “social entrepreneur.” He has founded companies, grown enterprises as an intrapreneur, and has traveled successfully throughout the business world for several decades.


At the OSBC last week I ran into Jason Hibbets (one of the editors here) and I suggested that he contact you for a story. Proactive as ever, you beat me to it.

I can't think of a better example of applying open source ideals to life as with your project. Thank you for sharing.

this is such a great illustration of the abundance principle... there is enough to go around for everyone, no need for hoarding! When we share, more people get their needs met! When you give away the power, you actually become more powerful.

Keep telling this potent story, Lyle.
Over & over again until you're blue in the face.

Inspire the open sharing of information and the collaboration of humanity!

Heh - Lyle's wife started this:


Your story proves how much Open Source benefits from exponential participation. I am delighted you were curious enough to learn about open source on your own, and skeptical enough to keep asking questions until you were satisfied. And I am even more delighted that you give some credit to open source for your own discoveries and innovations. (You and your team deserve your share of credit, too!) But I am most delighted that you are doing the important work of proving that every process, every idea is subject to improvement, and that your successes can come back to encourage the open source community to think even bigger about what we can all accomplish if we all choose to really work together--software developers, biodiesel refiners, farmers, muscians--everybody.

I look forward to seeing what's next!

Hello, my name is Michael, I'm attending a MBA program in Murcia Spain, my project pretends to colect and refine used vegetable oil, in order to sale it as raw material for the biodiesel industry, of course is not a big deal but we are planning to colect it in south america (where costs are really low, for example this oil will cost us 0) and sale it world wide with the resulting margin of benefits.
Well I need to know if can tell me (as consumers of my product) what could be a reasonable competitive advantage for my business, thanks in advance.

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