The Biodiesel Revolution
Consumption of vegetable oil is not an uncommon idea. Millions, perhaps billions, do it everyday. McDonald's has been selling us on the concept for decades. But try selling someone a truck that runs on vegetable oil, and they'll likely think you're from the same company that tried to sell us a digital clock that runs on a raw potato.
But these trucks already exist in fleets-along with boats, school buses, military vehicles, generators and countless other engines-and have since 1900. They are the brainchild of Rudolph Diesel, who fully intended for his diesel engine to run on vegetable oil and animal fat.
Truth be known, these engines don't exactly run on the stuff found in your Fry Daddy. That oil is converted into biodiesel through a fairly simple process known to chemists as 'transesterification.' With minimal modification, any diesel engine can run on 100 percent biodiesel, which, unlike petroleum diesel, is replenishable, clean and safe. The benefits of biodiesel over all petroleum-based fuels make it appear to be a miracle fuel. So why haven't we been using it for the past century?
"Mainly because of the oil industry," says John Long, president of SunFuels, which will soon be producing biodiesel in Northern Colorado. "After Diesel was murdered-or however he died-the oil industry modified his engine to run off of diesel, a bi-product of producing gas. For every one gallon of gas produced, there's two gallons of diesel."
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A Poor Boy's Dream
The man whose name is so closely tied with his engine and the fuel on which it commonly runs never intended the diesel engine to run almost exclusively on petroleum diesel. When he debuted the "diesel" engine at the 1900 Paris Exposition, where he took the highest prize, the Grand Prix, he ran the engine on 100 percent peanut oil.
Diesel's engine successfully solved the two problems he detested most with then-modern engines. Raised by a strict father in a financially unstable family, Diesel learned to detest waste. During an apprenticeship with a steam engine company, he witnessed how inefficient steam engines are, with nine-tenths of the fuel's energy wasted.
Diesel also wanted to create an engine that could run on a variety of fuels-kerosene and alcohol, for instance. With such an engine, people could use whatever fuel was readily available locally, empowering more isolated communities. Farmers often had trouble acquiring coal and petroleum in the farm belt, but vegetable oil was usually available, since most of the world's cultures grow something from which oil can be extracted.
"The Diesel engine can be fed with vegetable oils and would help considerably in the development of agriculture of the countries which use it," Diesel said.
The benefits of the diesel engine were never fully utilized, however. Sales were good in Europe, but in America, the land of plenty, there was little need for a multiple-fuel engine. And when Diesel was found floating in the English Channel, he was financially broke and mentally unstable, having been committed once for "nervous exhaustion" and violent headaches. Many believe that Diesel was pushed from the ship by either oil interests or a military tactic. At the time, the French navy had converted to diesel, and he was busy selling the English on the idea. Evidence points to suicide, but either way, the oil interests had their way.
After Diesel's death, the engine was modified to run best on petroleum diesel. Narrower fuel lines were used, disallowing the more viscous vegetable oil from flowing smoothly. While still efficient, Diesel's dream engine lost most of its versatility, a possibility Diesel may have foreseen.
"The use of vegetable oils for engine fuels may seem insignificant today," he said in 1911, "but such oils may become in the course of time as important as petroleum and the coal tar products of the present."
Diesel's observations in 1911 remained true for the greater part of the twentieth century, but it now appears the time has come for veggie-fuels.
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A Biodiesel Boost
"We are at the mercy of OPEC and other overseas oil producers. When they want to strangle the U.S. economy, all they have to do is turn off the spigot. Among other things, we need to look at increasing domestic energy production and reducing our reliance on foreign oil."-Senator Peter G. Fitzgerald (R-IL), July 7, 2000
According to a Department of Energy report, production of petroleum oil in the U.S. peaked in 1970, and today the majority of our oil is imported, while we scour our countryside for more. Such a dependence on foreign oil puts our economy in a precarious position.
With a third of our economy directly related to transportation, a shift in oil supply could have far-reaching, catastrophic consequences. And a look at the stability of the areas where we are getting our oil-oil strikes in Venezuela, our fourth largest supplier, and not-so-America-friendly Middle East countries like Iraq-shows potential for disaster. According to the U.S. General Accounting Office, Americans spent $33 billion a year (a tax not added at the pump) between 1980-1990 for our military to secure oil. And oil has been the aphrodisiac for relations with unlikely partners like Saudi Arabia. Such threats to our economy make Americans uneasy.
As with most trends, many European countries recognized this weakness years ago and have been building an infrastructure to produce biodiesel since the late '70s. Europe's now the world's largest producer with 74 biodiesel plants and over 1500 biodiesel stations with prices equal or lesser than diesel fuel due to heavy taxation on petroleum fuels and biodiesel exemption.
In 1992, U.S. policymakers began to follow suit and passed the Energy Policy Act (EPAct), which required companies with fleets of at least 50 vehicles weighing 8500 pounds or more to acquire alternative fuel vehicles. To comply, these companies had to spend money on new vehicles when they already had vehicles that ran fine on diesel. Some fleets-like the New Jersey Highway Department and the U.S. Postal Service-were running their diesel trucks on biodiesel with little modification. So, in 1998, EPAct was amended to include biodiesel. The provision allowed fleets to earn one alternative vehicle purchase credit for every 450 gallons of biodiesel consumed in at least a 20 percent biodiesel/20 percent diesel blend, known as B20.
With three executive orders between 1998-2000, President Clinton further promoted the use of biofuels by setting specific goals for all the federal fleets to reduce petroleum consumption by twenty percent by 2005. Today, Congress is considering tax incentives similar to those in Europe.
The results of this legislative boost were almost immediately obvious. Between 1999 and 2000, biodiesel use in major fleets grew exponentially, while quality standards were set for commercial sales. In 2000, biodiesel also became the only alternative fuel to pass the EPA's (Environmental Protection Agency) Tier I and Tier II Health Effects Testing under the Clean Air Act. Other bio-fuels, like ethanol, have only passed Tier I.
Currently, a number of states are also considering or passing legislation promoting the use of biodiesel. Some states, like Minnesota and Kansas, have passed laws requiring either all or the vast majority of diesel consumed to be blended with at least two percent biodiesel. Other states, like Hawaii and Montana, are taking the initiative to offer tax incentives while federal incentives are pending.
While unstable foreign markets for petroleum certainly, in part, cause this slew of legislation promoting biodiesel, other factors are also driving the push. A surplus of vegetable oil has sent prices down, hurting an already struggling agricultural economy. Farming lobbyists have been touting biodiesel's potential to boost this sector. According to the National Biodiesel Board (NBB), rumored to be comprised mainly of soy farmers, even the slightest shift to biodiesel consumption would send significant waves through the agriculture economy. One percent of the diesel market using a one percent blend (B1) could increase the price of soybeans from $0.05 to $0.09 per bushel, yielding a total return to soybean farmers of $125 to $250 million a year, according to a 1999 NBB report.
In light of this, provisions were made in this year's Farm Bill, promoting production of bio-based fuels. From 2003-2006, the U.S. Secretary of Agriculture will reimburse producers who make products, other than food or feed, considered to be bio-based. The bill contains the stipulation that, in order to receive the incentive yearly, production must increase yearly.
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Got Clean Air?
Quite often economic benefits are granted more weight than other equally beneficial features. Whereas other alternative energy sources-wind power and solar power, electric cars, etc.-may be beneficial to the environment, they will not likely become the status quo without economic benefits attached. Plus, the means to produce some of these alternatives are just as harmful to our environment as the fuels they intend to replace. This is where biodiesel wins over environmentalists as well as capitalists.
Biodiesel has gone through a $2.2 million dollar testing regimen at the EPA and has passed with flying colors. According to the EPA, diesel fuel exhaust contains polycyclic organic matter (POM) that can harm the reproductive, developmental, immunological and hormone systems of humans and wildlife. Use of a two percent biodiesel blend (B2) would displace 700 million gallons of diesel and largely reduce cancerous impacts of POM.
Biodiesel use is also part of the life cycle, converting oxygen to carbon dioxide, which the oil-producing plant then uses and converts back to oxygen. It is also shown by the EPA to emit 44 percent less carbon monoxide-a contributor to global warming-than diesel, and particulate matter emission, a cause of cancer and lung disease, is 40 to 50 percent lower. While smog causing hydrocarbons are 68 percent lower for biodiesel than petroleum diesel, nitrogen oxides, another cause of smog, may increase. But the lack of sulfur in biodiesel allows for the use of nitrogen oxide control technologies not available for diesel.
The EPA now requires that 97 percent of sulfur emissions, the primary cause of acid rain, be eliminated by 2006. Problem is, diesel without sulfur is very dry, and without the lubricity provided by sulfur, diesel engines don't run very well. Biodiesel, with an extremely high lubricity, is a prime candidate for a sulfur-free diesel additive. One percent biodiesel blend improves lubricity by 65 percent.
Biodiesel is also non-toxic, or at least less toxic than table salt. And biodiesel biodegrades four times faster than diesel, so oil spills are more easily managed. Storage and transportation are also non-issues, since biodiesel has a much longer, more stable shelf-life compared to diesel, and the point at which it ignites is double that of diesel. Tests have been done during which lit matches were thrown into vats of biodiesel, and propane torches directly pointed at it, yet the biodiesel didn't light.
Plus, it smells good.
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Fuel from the Sun
"I'd like to see you try this with a diesel engine," John Long says as he bends down to smell the exhaust from his 1982 Volkswagen Westphalia, a diesel-of course-affectionately named Amelia. "It smells like French fries."
He goes on to say that, prior to Yellowstone National Park deciding to fuel vehicles and generate power with biodiesel, they were concerned the smell would attract bears. In response, Montana's Department of Environmental Quality tested the emissions on bears, showing that bears apparently don't like the smell.
Long and a handful of other entrepreneurs comprising SunFuels plan to ride the biodiesel revolution into commercial success by building the largest biodiesel processing plant in America-right here in our region. SunFuels' plant will begin producing ten million gallons of biodiesel a year in 2004, increasing by ten million gallons a year-and taking advantage of Farm Bill credits-until they reach their peak at thirty million a year in 2006, the last year for credits. Their processor will also be the only one in the country equipped to produce biodiesel from a variety of feedstocks, including recycled vegetable oil and animal fats. This allows them to shift production based on market costs.
SunFuels now has a thorough business plan, an office and, most importantly, investors, but a little over a year ago it was still a dream.
Long began experimenting with biodiesel early last spring with equipment he bought for $50. He began by collecting recycled deep-fryer oil from local restaurants, which will pay for this service, and converting it into biodiesel to feed Amelia. After dozens of road trips, including a couple cross-country, his faith in the miracle fuel grew, and he began to assemble a team to form SunFuels.
Along with biodiesel, SunFuels plans on selling byproducts of biodiesel production, like glycerin. Another appealing thing about biodiesel is that all byproducts can be used; nothing is wasted. Glycerin, if purified to over 99 percent and made kosher, can be sold in bulk on the global market for a nice price ($4/gallon), offsetting biodiesel costs. Biodiesel can also be sold in spray bottles for use as a solvent and a fuel additive, among other things.
"We're kind of doing it backwards," says Ryan Lafferty of SunFuels. "We want to sell the fuel first, while other producers are selling the products first."
SunFuels will primarily sell their biodiesel to already established distributors, like Hill Petroleum, who is receiving requests for biodiesel from fleets like those at Peterson Airforce Base in Colorado Springs. Currently, there are no biodiesel producers in Colorado. But producers of biodiesel are as hard to count as basement brewers. There appear to be only twelve producers in the nation, but, as Lafferty says, "They often open up uncelebrated. There's no way of knowing."
The SunFuels team is also confident that "big oil" won't try to hold them down, as many predict. "They are going to need us once they need to improve their fuel because of the EPA's requirement to remove sulfur from diesel," Lafferty says. "The big boys let the little boys-like us-hash it out, work out the kinks, then buy us out. It's a common trend."
SunFuels' mission sees biodiesel as a player in a larger goal of sustainability, and the team plans on exploring other fuel alternatives and building ties with farmers by starting cooperatives.
SunFuels also has plans to open a biofuel service station that pumps 100 percent biodiesel, as well as a B20 blend and E85, a blend of 85 percent ethanol (a biofuel/gasoline blend) and gasoline. The convenience store will also carry healthy alternatives to Big Bites.
"We need to think of our energy needs," says Tony Falbo, vice president of marketing and sales for SunFuels. "This is not new graffiti, but the tendency is to continue with status quo rather than consider replenishable energy."
"I wonder if this would make Rudolph Diesel laugh," says Long.
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