ATKINS, Ark. — The combines cutting rice this fall on Stobaugh Brothers Farms are powered, in part, by another of the farm's crops — soybeans. All farm equipment on Stobaugh Brothers Farms runs on B5, a blend of 5 percent biodiesel and 95 percent conventional diesel fuel.

"We weren't lucky enough to have an oil well on our farm," said Robert Stobaugh, who operates the farm with his brother, Barry, and nephew, Bart. "But we can grow soybeans. One day the oil man's wells will run dry, but we can plant more soybeans."

Biodiesel refers to diesel fuel made from animal fat or vegetable oil, said Pat Manning, agricultural economist for the University of Arkansas Division of Agriculture. Diesel engines can run on pure biodiesel, but most is used in a blend of 1 percent to 20 percent with petroleum-based diesel fuel. Most biodiesel is made from soybeans. It's easy to produce and requires no modification of existing diesel engines.

The Stobaughs run nearly 40,000 gallons a year of B5 biodiesel in about 30 engines, ranging in age from brand new to more than 20 years old. It powers tractors, combines and stationary power units.

Manning said federal emissions regulations may require removing lubricating additives from diesel fuel because they emit sulfur dioxide. Biodiesel blends have no sulfur emissions and actually have better lubrication. According to the National Biodiesel Board, he said, a 20 percent biodiesel blend reduces total unburned hydrocarbon emissions by approximately 20 percent and carbon monoxide and particulate matter emissions by 12 percent, compared to pure petroleum diesel.

Michael Popp, UA agricultural economist, said that on average, blended fuels cost 1 cent more per gallon than conventional diesel for every 1 percent of biodiesel added to the blend.

The U.S. Senate and House of Representatives are negotiating a bill that would balance the difference in cost by offering a break in the excise tax charged for fuel, Popp said. If passed, such a bill may reduce the excise tax 1 cent per gallon for each 1 percent of biodiesel in a blend.

Popp and Manning said development of biodiesel production plants in Arkansas would provide new jobs, enlarge the tax base for state revenues and have other impacts on the state's economy. The Arkansas Legislature passed two bills in 2003 — Act 182 and Act 187 — to provide tax incentives or grants for biodiesel producers and distributors.

"If Arkansans don't build these plants here, they will likely be built in other states," Popp said. "If that happens, we'll lose part of the economic benefit from biodiesel processing plants. For those interested in investing in biodiesel, you need to get busy planning right now."

Popp said studies indicate that if biodiesel use in the U.S. were increased by 2 billion pounds of soybean oil, the price of soybeans would increase about 3 percent. "That's an additional 15 cents per bushel for $5 soybeans," he said. Another study shows soybeans rising as much as 35 cents per bushel if all U.S. on-road diesel was blended at 1 percent biodiesel, Popp said.

He said, "Biodiesel offers an environmentally friendly, agriculturally based alternative fuel that may well represent an opportunity for agricultural producers to improve their bottom lines and for the state to improve its economy."

Biodiesel isn't available at the corner gas station although it is increasingly available at agricultural coops. Stobaugh purchases it through the agricultural cooperative in Morrilton. "If it's not available in your area, ask your supplier to get it for you," he said.

"We like the fuel because we grow soybeans," Stobaugh said. "The more demand there is for biodiesel made with soybean oil, the more demand there will be for soybeans. It's a nice little circle that I can understand and appreciate."

Fred Miller is science editor for the Arkansas Agricultural Experiment Station. e-mail: fmiller@uark.edu.