As the cost of oil continues to rise in both price and strife, domestically produced bio-diesel looks better and better.
The United States imports about 12.5 million barrels of oil per day. Some 5 million of those barrels come from OPEC nations.
“Simple math tells us 5 million times $65 equals about $325 million per day going to OPEC,” said Tommy Foltz during a recent presentation by the Mid-South Clean Fuels Coalition and sponsored by Delta King Seed Company. “That means in January (when oil averaged $64.95 per barrel) this country exported over $10 billion of its wealth to OPEC.”
In 1996, the estimated cost to U.S. taxpayers for securing foreign oil militarily was $57 billion annually. And that was before the U.S. military was sent to Iraq and Afghanistan.
Future projections are also sobering. Some 64 percent of tomorrow's oil will have to come from the Middle East, said Foltz, the president of Stuttgart, Ark.-based Patriot Biofuels. Excluding North America and some areas of Europe, much of the remaining oil supply is in areas experiencing political turmoil with governments unfriendly to the United States.
There's a good reason why that's the case, said Foltz. “We've already gotten all the oil from places that were friendly to us with hospitable climates. It's not that oil was suddenly found there. It's that we've been able to drill in these other places because they've allowed us to.”
Adding to concerns is the Saudi Arabian oil infrastructure which is “extremely vulnerable to terrorist attack. Twenty-five percent of the global oil reserves are in Saudi Arabia. Fifty percent of that is produced by just one field in that nation.”
Foltz said it's “extremely scary” that two-thirds of all Saudi production moves through one processing plant and two terminals.
Bolstering his point, “the last time we gave this presentation (it was) to a number of legislators and their staffs. Two days later (Feb. 24), that Saudi processing plant was hit by a terrorist attack.”
Although well-guarded, the Saudi processing facilities are an obvious target. If terrorists ever strike them successfully, “we'd be looking at a major, massive global disruption.”
While world demand is soaring, production is decreasing or, at a minimum, leveling off. That's a recipe for high prices.
“There's a Saudi saying, ‘My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.’ Even the Saudis know the oil supply will run out. It is up to us to figure out ways around using oil. A good start is bio-diesel.”
Does bio-diesel have the ability to extend the petroleum diesel supply? David Fraser, Delta King Seed's “ambassador of bio-diesel” and president of the Memphis-based Fraser Group, certainly believes so. During his presentation, Fraser stressed the need to “bust” myths surrounding bio-fuels.
“We're not talking about displacing fossil fuels. We're talking about extending fossil fuels further into the future, easing the supply crunch. We have the capacity to do that.”
The first myth Fraser dispensed with is that bio-diesel doesn't have the same performance petroleum diesel has.
“If you look at fuel capacity comparisons using Btu measurements, petroleum diesel versus B20 (a fuel blend containing 20 percent bio-diesel) shows there isn't a statistically significant difference in power output.”
The United States uses approximately 58 billion gallons of diesel annually. If 5 percent of the diesel consumption could be replaced with bio-diesel, it would equal around 2.9 billion gallons.
“The industry is ramping up very fast and wants to be able to deliver that much manufacturing capability. This is where we need government support. (The government) needs to encourage bio-diesel blending and facilitate the development of additional manufacturing facilities.”
Fraser then attacked the second myth: To run on bio-diesel, an engine needs expensive modifications. This isn't true. Bio-diesel can be blended with petroleum diesel at any ratio desired and “no engine modification whatsoever is required. Making the switch to (bio-diesel) is as simple as adding the blended fuel to the tank.”
Stocks and conversion
There are three primary stocks for bio-diesel.
Animal fat, also known as “rendered oil,” consists of chicken fat, beef tallow, any animal fat from the slaughter process.
“Now, unless meat consumption rises dramatically over the next couple of years, that supply will be finite based on the slaughter rate. Likewise, the best supply will be (near) major feedlots, slaughter and processing facilities.”
Waste vegetable oil (WVO) also known as “French fry grease.”
“We have plenty of fast food restaurants around. When they change out their French fry grease it's available as a (bio-diesel) feed stock.
“But think about this: From a commercial standpoint there isn't a huge supply in one location. If you hit the Wendy's and McDonald's in town, you're aren't going to pick up enough supply to be commercially viable.”
There are a number of manufacturers that have looked at the viability of WVO as a feedstock and shelved the idea. It may become more commercially viable in the future, but not anytime soon.
Soybeans. “This is the most viable source of bio-diesel feedstocks. This source results from oil crushed from the soybeans, which are grown almost everywhere in the United States.”
What about soybeans to soy-diesel conversion?
There are 60 pounds of soybeans per bushel at 18 percent oil content. A bushel yields about 10.8 pounds of oil. It takes 7.6 pounds of oil to make a gallon of pure soy-diesel. So, about 1.4 gallons of pure soy diesel is generated per soybean bushel.
To replace the aforementioned 5 percent of 58 billion gallons of diesel consumed by the United States annually would translate into 2.08 billion bushels of soybeans. In 2005, USDA estimates show production was 3.09 billion bushels.
“So, we're already growing enough soybeans today to be able to make the switch. We have the supply.”
No longer alternative
At Patriot Biofuels “we don't see ourselves as an ‘alternative’ fuel anymore,” said Foltz. “Bottom line is we make diesel fuel — we just don't make it out of petroleum sources. We make an ASTM- (American Society for Testing and Materials) certified diesel fuel just like Exxon or anyone else does.”
To help with the environment, EPA has mandated that diesel fuel must be “ultra-low sulfur diesel. I believe 90 percent of the diesel sold on the highway is ‘ultra low sulfur.’ That means we'll have gone from 500 parts per million sulfur to 15 parts per million. That's great for the environment but not for lubricity. When you remove the sulfur from the fuel, a tremendous amount of lubricity is also removed.”
Bio-diesel adds lubricity back into the fuel.
“Ultra-low sulfur diesel will have to have an additive to put lubricity back into the fuel. Everyone in the petroleum industry understands that's a necessity. With your voice, your request, that additive can be bio-diesel.”
While bio-diesel is a legally registered fuel and fuel additive with the EPA, Foltz said not all is created equal. Anyone considering bio-diesel should be careful of their supply.
“We're in a business that's growing extremely rapidly,” said Foltz. “There's a lot of demand for this fuel and, right now, there's not enough supply. So there are a lot of people making bio-diesel who may not meet that ASTM specification.
“The one thing I'd caution you on is to be aware of those suppliers who can't prove they have an ASTM-certified bio-diesel. The last thing you want — the last thing those of us in this industry want — is to have some bad fuel clog up a filter or engine and strand you on the highway.
“There is some of that going on. One of goals of the Mid-South Clean Fuels Coalition is to try to ferret out those making bad bio-diesel.”
Bio-diesel performance is at least equal to petroleum-based diesel, claimed the men. While there is a slight reduction in energy content of the fuel, the added lubricity means “we've seen a number of cases around the country and in the Mid-South with substantial increases in fuel mileage,” said Foltz.
“One I'm familiar with is the Little Rock School District. They were getting 7 miles per gallon on straight diesel. When they used B20, they jumped to 8.1 miles per gallon. That's a 12 percent to 15 percent increase in fuel efficiency. Bottom line: You need to purchase less fuel when using B20.
“I know there are two or three people a week telling you how to use magnets and other gizmos to get better efficiency. But the more I get out and speak with (bio-diesel users), the more compelled I am to make this point. There are lots of fleet operators that come back with stories of increased fuel efficiency.”
Increased utilization of bio-fuels also results in significant societal benefits. In 2001, the USDA found that an average annual increase of the equivalent of 200 million gallons of soy-based bio-diesel demand would boost total crop cash receipts $5.2 billion. Average net farm income would see an increase of $300 million per year and soybeans prices would increase an average of 17 cents annually over a decade.
“If you live in the Mid-South, the people that grow soybeans are your neighbors,” said Fraser. “For that reason alone, we should be using bio-diesel. We believe a food and fiber industry can now become a food, fiber and fuel industry.”
(For more on Delta King's work, see http://deltafarmpress.com/mag/farming_delta_king_names/index.html)