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American Biodiesel nA%J Silo S-1 Stockton,CA g ^?= Out of Service Inspection 4.0 Inspection Report American Biodiesel has contracted Petroleum & Refractory, Inc. to perform an Out of Service Inspection on Silo S-1 located in Stockton, CA. This inspection was performed in accordance with the current criteria set fourth in API Standard 653 (3rd Edition, Addendum 2, November 2005). Silo S-1 is a 3 course (2 shell courses and 1 cone section)Above Ground Storage Silo in various vegetable and nut oil service. This tank is 14 feet in diameter, and 31 feet in height (approximate height from top of head to bottom of cone) and is equipped with a fixed top head plate. The following details all inspection findings and recommendations. 4.1 Shell The shell on Tank S-1 consists of 3 courses (2 shell courses and 1 cone section) and all joints are Butt Welded. A visual inspection and ultrasonic examination of the shell was conducted, the following details all findings. The silo was laid on its side at the time of this inspection. Due to the silo being externally insulated, the visual and ultrasonic inspection was performed from the interior of the silo only. It is noted that the internal shell, cone, and all welds were covered in a thick layer of scale and residual product. All areas inspected were thoroughly cleaned with the aid of mechanical grinders and wire brushes. Visual inspection of the butt welded joints revealed no visible defects, significant corrosion issues, or notable deterioration. Approximately 15-20% of all accessible vertical and circumferential welds were also inspected by dry magnetic particle examination. This NDE examination did not reveal any linear indications, rounded indications, or excessive porosity. The included magnetic particle inspection report further details the findings and equipment used. It is noted that due to the silo being laid on its side, the two vertical shell welds were directly overhead and not accessible for MT inspection or visual inspection. However, taking into consideration the serviceable condition the remaining weld joints were found to be in, no items of concern are expected in these two welds. Visual inspection of the internal shell plate material and the cone showed widely scattered pitting throughout the majority of the silo. The worst of this corrosion is located along the top 3 feet of the shell (where the shell is welded to the top head plate). The pit type corrosion in this area was more general and slightly more pronounced. The pitting ranged in depths from 0.010"— 0.050", with the deepest pitting being located in the upper 3 feet of the silo shell. This minimal amount of corrosion was not found to be detrimental to continued service and does not warrant any repairs. It is recommended that the entire internal portion of the silo be thoroughly cleaned to remove all scale and residual product build up prior to placing the tank in service. The shell plates and the cone were ultrasonically inspected along the three accessible sides (bottom, left, and right). A total of ten single point UT thickness readings were obtained along the length of each side. The included silo layout drawing details the location of each UT reading. Also, (4) 1'x1' areas of the shell and cone were randomly selected to be 100% UT scrubbed. This inspection was to determine the extent, if any, of external corrosion and pitting. This UT scrubbing inspection did not reveal any abnormal deviations from nominal plate thickness. The lowest remaining thickness reading was obtained during this survey. Section 8.1 and 8.3 of this report details all thickness readings obtained, detailing all the UT thickness readings obtained and the low readings per section (course) of the silo. This UT survey revealed the overall low remaining thickness to be 0.210 inches. Report Date Petroleum&Refractory, Inc. Page 6 of 21 March 6,2007 TankReporter 13.91