Biodiesel vision — 5 percent of petro-diesel market

In the days when every American farm family grew a little patch of corn for fuel to power the mules that plowed their fields, the farm was pretty much a self-contained unit, capable of providing for the farm family and a little extra for a rainy day.

Can such a self-sustaining paradigm be modernized and applied in a larger sense, if you will, to encompass all of America? Or perhaps we should ask, “Can we plant enough corn and soybeans to power not only our farm tractors and trucks, but an entire nation of automobiles?”

There are Americans, both rural and city folks, who like to think it’s possible. Who wouldn’t love to see biodiesel made from U.S. grown soybeans put the Middle East oil sheiks out of business and U.S. soybean producers back in control of their economic destiny.

However, a pedal to the metal approach is not going to work. Biodiesel needs baby steps, according to Tommy Foltz, a biodiesel manufacturer located in Stuttgart, Ark. Foltz spoke at a Webinar for legislators and congressional staff presented by the Mid-South Clean Fuels Council and Delta King Seed.

Foltz is president of Patriot Biofuels, Inc., which produces about 3.5 million gallons of B-100 (100 percent biodiesel) annually. He is a former U.S. Department of Energy official and was co-director of the National Clean Cities Program from 1994 to 1997.

His vision is for biodiesel to replace 5 percent of the annual consumption of petro-diesel, potentially a 3-billion gallon market. While it’s just a small step for the biodiesel industry, it could extend the supply of fossil fuel in the world while reducing some of the U.S. dependence on foreign oil.

Foltz says the world fuel crisis has almost reached a tipping point. “Most energy crises of the past have been driven by political events. They are artificial supply disruptions. Prices go up, oil is put back on the market and prices go down.”

But today’s problems are chronic. “What Americans should be worried about is not that OPEC (Organization of Petroleum Exporting Countries) is setting the price of oil too high, but that they have lost the ability to control the price. Today, it’s about real supply and demand and structural deficiencies in the petroleum delivery systems.”

Foltz sees a three-pronged attack to reduce U.S. fossil fuel dependence — replacement fuel, conservation and more domestic production of oil. While it’s almost certain that one day, the world will run out of oil, “there is still a lot of oil left in the ground. Nobody is suggesting we stop using petroleum because that’s just not reality. But as discovery of oil continues to decline and the production of oil continues to decline, it will send the price of that oil soaring. The gap between discovery of oil and demand is widening every day. We have to do something to fill that gap, and that’s replacement fuel.

A diversity of feedstocks for biofuels is paramount, according to Foltz. “The U.S. soybean crop in America can’t do it all.”

Foltz pointed out that an average acre of soybeans will yield about 50 gallons of oil, while an acre of palm trees will produce 1,200 gallons of oil. “Rapeseed yields two times more oil that soybeans. Rapeseed is not something that is typically grown in this area of the country, but we are doing some research on growing it down here as a winter crop.

“There is also rendered animal fat, canola oil and sunflower oil. The bottom line is that there is no one feed stock today that is going to get us there. In order to get very far down the road, we’re going to have to start producing energy crops.”

In addition, “the United States needs to think about producing ethanol from corn and sugar.”

Conservation of fuel should not come at the expense of cutting back on transportation, rather developing more fuel-efficient vehicles, according to Foltz. “It’s a lot easier to advance technology than it is to change people’s behavior.”

Part of the challenge to reach the goal of replacing 5 percent of the petro-diesel market with biodiesel is lack of production capacity, according to Foltz. “It takes a while to gather the investment necessary to build plants. We started writing the business plan for Patriot Biofuels at the end of April 2005. It took 10 to 11 months from idea to producing a product, which is about as quick as it can happen.”

Foltz doesn’t think it will be long before highway drivers will have an option at the pump to put biodiesel in their tanks. “That day could very easily come in the next six months. They’re already selling biodiesel at truck stops and elsewhere. It’s not widespread, but it’s happening.”

Today, biodiesel is competitive with petro-diesel with the help of a tax rebate. Foltz explained, “If diesel is $1.85 a gallon at the rack (the terminal), before taxes, soydiesel is around $2.85 a gallon. If you take the dollar tax credit, you can provide the product to the marketplace at no additional cost to the consumer.”

In March, the U.S. Senate took action to extend the tax credit to Dec. 31, 2010. “I feel confident that the tax credit will be extended. There is strong support in Congress to keep it going.”

Currently, engine manufacturers do not warranty engines that use blends higher than B-20, but it’s just a matter of time before that changes, too. “We’ve seen instances in Germany and in the United States where drivers are using blends well in excess of B-20, even up to B-100, with no ill effects whatsoever. In fact, the engines run smoother and the efficiency is there.

“We would never recommend that someone use a blend higher than what their manufacturer guarantees, but we think that in a few years, the engine manufacturers will realize that there is no ill effect on the equipment. In fact, it’s just the exact opposite.”

Patriot Biofuels uses soybean oil exclusively for the time being, but it set up to receive and use other feedstocks. The facility receives refined, bleached and deodorized oil. Glycerin is separated from the oil to create soydiesel.

e-mail: [email protected]

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