The Future of Biodiesel

Texas Biodiesel Conference and Expo sells out, casts spotlight on the alternative fuel

The first-ever Texas Biodiesel Conference and Expo, held last Wednesday and Thursday in Austin to help jump-start the 6-month-old Biodiesel Coalition of Texas trade association, sold out its more than 400 tickets at $500 a pop. The event brought to town a crowd of business hard-liners from across the country that included oil men, agriculture industry players, investors, commodities traders, and truck fleet managers, among others – all looking to either break into or grow the exploding industry. Biodiesel is a renewable fuel that burns significantly cleaner than petroleum (see box). In Texas, it's often made from soybean oil and is chemically altered to run in regular diesel engines without modification. Although the fuel has been grabbing headlines lately, an event like this one – uniting close to a dozen established Texas biodiesel firms with moneyed interests – would have been unthinkable as recently as two years ago. So why, with Texas' biodiesel industry facing an end-of-year deadline to prove to the Texas Commission on Environmental Quality that biodiesel doesn't increase smog-forming nitrogen oxide emissions compared to petrol – which could cause the sale of popular biodiesel/diesel blends to be outlawed – are bipartisan business folks taking such an enthusiastic interest in biodiesel, investing liberally, and funding new, larger plants?

In his presentation Thursday, National Biodiesel Board CEO Joe Jobe showed a picture of Venezuelan President Hugo Chavez and President Mahmoud Ahmadinejad of Iran shaking hands and grinning. But realizations of our colossal oil dependence on increasingly anti-American nations is only part of homegrown biodiesel's appeal. As biofuels go, in addition to having exponentially more applications than ethanol – including 18-wheelers, ships, trains, and construction machinery – biodiesel has double ethanol's energy-yield ratio. With air quality and global-warming concerns on governments' agendas, even the emissions of common biodiesel blends such as B20 (20% biodiesel, 80% petroleum) have far more attractive fumes than petrol-diesel. But biodiesel's real boon is simple: "Economics drives everything," Jobe says. This year's record-high oil prices, plus favorable renewable-fuel tax credits, and the clumsy, costly switch to cleaner low-sulphur diesel that many states (including Texas) are making has equaled profitability for those dealing in biodiesel, Jobe explained. He estimated that U.S. biodiesel production will reach 250 million gallons from 86 plants, with 60 more under construction, and announced a goal of meeting 5% of the country's on-road diesel use by 2015 – the percentage of Iraqi oil the U.S. now imports, he said. According to the National Biodiesel Board, Texas is the nation's largest biodiesel-producing state, with an estimated capacity of 96 million gallons per year.

"I'm confident that biodiesel will play a major part in making Texas the renewable energy capital of the U.S.," said Jeff Plowman, BCOT vice-president and co-founder of Austin Biofuels, the local start-up that put Austin on the biodiesel map by stocking the city with the most B20 pumps in the nation (now up to 33).

Plowman downplayed biodiesel's approaching NOx ultimatum with the TCEQ. And Robert McCormick of the U.S. Department of Energy's National Renewable Energy Lab told guests that in new tests to be published this month, in which biodiesel's emissions are measured under driving conditions and compared to stationary tests, "Biodiesel has no significant impact on NOx." Drawing on the momentum from the conference, Plowman said he believes "the industry will continue to grow and come together."

Growth was an obvious theme at the conference. Aside from an industrywide uniform quality certification known as BQ-9000, now under implementation, speakers focused on the acquisition of new feed stocks or oil crops as the main stepping stone for growth. Texas Tech professor Dick Auld said there's an "urgent need for a million more acres of oil crops," looking to West Texas' half-million acres of abandoned farmland as a starting point. Both Auld and Beth Calabotta of biotech giant Monsanto's oil-seed division saw promise in cottonseed oil, which is more abundant in Texas than soy – and now much cheaper, following a recent decision by chip god Frito Lay, who previously consumed 85% of Texas' cottonseed-oil output, to abruptly switch to sunflower oil. State Sen. Todd Staples, R-Palestine, who's campaigning for agriculture commissioner, was Thursday's keynote speaker. He said the burgeoning industry will "be a big boost for rural communities." Asked about the common criticism that biofuel crops will one day compete with food production, he cited these figures: Of Texas' roughly 130 million available acres of farmland, about 229,000 farms have only 24 million acres in active production. "We have capacity for significant expansion," he said. Jobe, responding to the same question, said biodiesel's growth would add value to the historically undervalued oil portion of crops like soybeans, making the protein food cheaper while bringing farmers more overall income.

The other common biofuel criticism, that there's not enough U.S. farmland to facilitate our oil needs, is simply ridiculous, Jobe says. He compared it to saying that since we can't avoid using landfills, why bother recycling. BCOT President Jim Karlak, CEO of biodiesel producers SMS Envirofuels in Poteet, stated what many believe to be the fuel's true purpose. "I see biodiesel becoming a small but significant player in the fuel industry, not entirely replacing petroleum, but reducing its use … one step in finding a solution to our dependence on oil."

Biodiesel Emissions Compared to Petroleum Diesel

Pollutant: B100 / B20

Carbon Monoxide: –48% / –12%

Particulate Matter: –47% / –12%

Carbon Dioxide: –78% / –16%

NOx: +10 / +/–2%

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Biodiesel, Texas Biodiesel Conference and Expo, Biodiesel Coalition of Texas

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