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Energy for a new century

November 3, 2007
The Altoona Mirror
By Hans Gehman


The Susquehanna Valley Center for Public Policy


Biodiesel, produced mostly from soy-beans in the United States, provides many advantages over conventional, petroleum-based diesel. According to Race Miner, Founder and Chairman of Keystone Biofuels, Inc. in Cumberland County, "Biodiesel can improve the environment, enhance public health, and help Pennsylvania achieve energy independence."


Like the most commonly-discussed alternative fuel-bioethanol, biodiesel is derived from plants, making it a renewable resource. Like ethanol, biodiesel production helps to support crop prices. Pennsylvania currently exports more than half its soy-beans each year. With another market for their crops, soy-beans growers' benefit. "We know that Pennsylvania farmers see soy-bean biodiesel as a high quality product and as a positive source of new business," according to Ben Wootton, president of Keystone BioFuels in Shiremanstown, PA, and co-founder of the Pennsylvania Biodiesel Producers Group (PABPG).


Biodiesel is much more biodegradable and less toxic than petroleum-based diesel. It doesn't have conventional diesel's characteristic pungent odor when burned, due largely to its near absence of sulfur content. "Compared to petroleum-based diesel," continues Wootton, "it reduces known cancer-causing compounds by 80-90 percent, and significantly reduces unburned carbon, particulate matter, and carbon dioxide."


Simply replacing conventional diesel fuel with pure biodiesel, or "B100," can, however, be problematic. Biodiesel tends to "gel" at much higher temperatures than does conventional diesel. Because of this, most biodiesel is blended with conventional, petroleum-based diesel at various concentrations, ranging from B2 (2 percent biodiesel) to B20 (20 percent biodiesel). Because B100 contains over 91 percent the energy content of petroleum-based diesel, power loss is negligible with blends as high as B20. As a practical matter, a diesel vehicle powered by this blend, known as B20, would lose less than 2 percent of its theoretical fuel economy.


In March 2007 the American Society of Testing and Materials (ASTM) issued the D6751-07a standard, which standardizes the B100 used for blending into conventional diesel fuels. Because of this standard, many vehicle manufacturers have agreed to include B5 as a valid alternative to conventional diesel fuel for engine warranty purposes. Cummins recently approved B20 for their engines. When produced under strict ASTM guidelines, biodiesel has the advantage of operating well in existing, unmodified diesel engines, and blends as low as B2 may even increase engine longevity by improving lubrication.


Early adopters of biodiesel have included agricultural, commercial, and governmental fleets, such as mass-transit busses. In September 2007, for example, Cumberland County announced that all of the county's mass-transit busses would be fueled with B20, blended from biodiesel produced at Keystone BioFuels. John W. Gleim, Jr. Excavating operates the pumps that fuel the busses, and the company uses the same fuel to power its vehicles and heavy equipment.


Despite these many benefits, total U.S. B100 production output amounted to only about 500,000 gallons in 1999. By 2004, five years later, production expanded about fifty times to 25 million gallons. By 2006, production reached approximately 225 million gallons. "Fully operational biodiesel producers are ready to serve our state's needs," says Wootton.


Why isn't more being produced? The most daunting barrier to the widespread adoption of biodiesel is production cost. Conventional diesel costs about one third as much to produce as its soy-based counterpart. Because of this, most of Pennsylvania's biodiesel production capacity sits idled. "I am running about 8 percent of what I was doing last year. The industry is producing at about 10 percent capacity," continues Wootton, "We're all bleeding money."


Recognizing this problem, the federal government offers a $1.00 per gallon incentive for the production of B100. In 2004, Pennsylvania passed the "Alternative Fuels Incentive Bill," which offers a five cent per gallon tax credit toward the production of up to 12.5 million barrels per year. These combined incentives have already encouraged local firms to build biodiesel infrastructure, and biodiesel is produced, blended, and consumed within 30 miles of the soy bean fields.


But even with Pennsylvania's abundant soy-bean crops, growing biodiesel infrastructure, and localized supply chain, more than 80 percent of the biodiesel consumed in Pennsylvania is currently imported. "It's not just about having biodiesel at the fuel pump," continues Wootton, "It's about having biodiesel made in Pennsylvania, from Pennsylvania crops and sources, at the fuel pump." Other states make larger biodiesel production incentives available, making it cheaper to buy fuel produced in those states, even after accounting for the additional transportation costs. For example, Indiana offers biodiesel producers a $1.00 tax credit per gallon, or twenty times the Pennsylvania incentive.


As with any new technology, biodiesel cannot yet stand on its own. Absent competitive incentives to produce biodiesel in-state, Pennsylvania will largely lose the economic benefits of this rapidly-growing industry. The National Biodiesel Board estimates that, once the output reaches 650 million gallons, the industry will have directly created 39,100 new permanent jobs across the country along with the indirect creation of approximately 117,300 new jobs, expanding the national economy by a minimum of $24 billion. "If we don't stay competitive," says Wootton, "Pennsylvania could miss the creation of hundreds of new jobs, and the generation of hundreds of millions of dollars in additional revenue." Pennsylvania's General Assembly needs to weigh if it wants to be part of America's solution to energy independence and the national creation of approximately 156,400 jobs by approving the temporary $1/gallon state subsidy for biodiesel or it wishes to continue to send America's’s treasure to the home of international terrorism.


 
 

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