More-stringent highway diesel fuel regulations, which begin in 2006, could lead to expanded production of renewable fuels, namely biodiesel.
Diesel fuel consumed in the US will have a 15 ppm sulfur limit starting in mid-2006. Refiners, due to concerns over product pipeline commingling, may have to produce a 10 ppm diesel from the refinery.
Meanwhile, the nonroad diesel debate rages on. One proposal under active consideration would place a 500 ppm sulfur limit by 2007 and a further reduction to 15 ppm by 2010 (OGJ, Oct. 14, 2002, p. 26).
And while a US energy bill is still not finalized, both the Senate and House versions retain the "renewable fuel" mandate for transportation fuels.
Refiners, embroiled within the ethanol debate, are understandably wary of any renewable fuel due to political factors. However, biodiesel does not suffer from some of the negative characteristics that exist with adding ethanol to gasoline.
First and foremost, biodiesel is a diesel fuel from a nonpetroleum source, as is ethanol. But the existing infrastructure for transporting diesel can be used for biodiesel. Ethanol has drawbacks with pipeline transportation because it blends easily with water. Most refiners blending ethanol must truck it to the terminal, which adds to its already high costs. That's not the case with biodiesel.
Biodiesel
Pure biodiesel (B100) is designated an alternative fuel; it is an ester-based diesel derived from renewable re- sources such as soybeans, rapeseed, peanuts, and other vegetable oil sources.
Biodiesel blends, however, are not designated as alternative fuels. The most commonly used blend is 20% biodiesel (B20).
Earlier this year, ASTM International issued a biodiesel standard (D6751), which may lead to more acceptance for the alternative fuel among consumers and the oil industry.
Biodiesel also enjoys advantages compared with other alternative fuels. It does not require special storage or fueling facilities and is compatible with currently manufactured diesel engines.
In addition, it is the first alternative fuel to complete the health testing requirements of the 1990 Clean Air Act Amendments (OGJ, Aug. 7, 2000, p. 53).
According to the National Biodiesel Board (NBB), the official trade organization for biodiesel in the US, "use of biodiesel in a conventional diesel engine results in substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter."
It also contains no sulfur or aromatics.
Future
A recent study from the Freedonia Group predicts that biodiesel demand will experience 30%/year growth during 2001-06 (OGJ, May 20, 2002, p. 7). The current market value for biodiesel is about $35 million, which will grow to $130 million in 2006.
Although biodiesel is not currently competitive with petroleum-based diesel on a one-to-one price basis and has nowhere near the processing capacity to compete on a volume basis, it is already being blended into conventional diesel. Some premium diesels use 2% biodiesel as a lubricity enhancer.
In addition, conventional diesel supplies face a distinct possibility of rising prices. Current technologies for producing a 10 ppm sulfur diesel are expensive. Some US refiners will decide to exit the highway diesel business and focus on producing nonroad diesel, which does not yet have the stringent specification.
Reduced diesel supply will naturally lead to increased prices, which could make biodiesel more competitive on a price basis. Biodiesel prices have typically run $1.33-1.90/gal.
Recent academic research results have the potential to substantially lower biodiesel feedstock prices. Scientists at the Agricultural Research Service developed a biodiesel from soybean soapstock, which reportedly can cost as little as 10% of the price of refined vegetable oil.
Currently, some US cities are experimenting with biodiesel. NBB reports that "more than 40 major fleets use biodiesel." Major cities such as Cincinnati and St. Louis have used biodiesel in their city buses.
The subject of biodiesel is indeed fuel, and food, for thought.
