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Biodiesel producers rejoice at new mandate for 2013

The renewable energy industry is applauding President Obama and the U.S. Environmental Protection Agency after the EPA approved a 28% increase in the amount of biodiesel mandated for use in trucks on the nation's highways for 2013. Biodiesel is made in a process that uses soybeans, while the production of ethanol is based on corn.
The president of the Iowa Renewable Fuels Association, Brad Albin, said, "I want to thank President Obama and his staff for listening to our concerns and recognizing the value and potential of America’s Advanced Biofuel—biodiesel.”
The biodiesel industry is celebrating because unlike mandates for the use of ethanol in the nation's fuel set forth in the 2007 Renewable Fuels Act, biodiesel didn't have a mandate until last year. That mandates set a goal of 800 million gallons. The new mandate for 2013 has been expanded to 1 billion gallons, and fell short of the 1.28 billion gallons that biodiesel producers wanted.
“This was an incredibly important decision, and the Obama Administration got it right,” said Joe Jobe, CEO of the National Biodiesel Board, the industry trade association.
“It will allow biodiesel plants across the country to invest and expand, creating thousands of jobs. At the same time, it sends a strong signal that the U.S. is standing firm behind its commitment to producing clean, American-made energy to strengthen our energy security and break our dependence on petroleum.”
When the mandate was introduced in 2011 at 800 million gallons, it helped prevent the closure of several of the nation's biodiesel plants.

Ethanol production has come under fire for driving up prices on the food crop, however, there is no indication that the same will happen for soybeans. 

Source: Desmoines Register

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By FITCamaro on 9/19/2012 9:02:06 AM , Rating: 5
I am all for bio-diesel.

I am not for mandates that ignore costs and demand. Nothing but another payoff for his green energy crowd.

RE: Ugh
By Spuke on 9/19/2012 9:57:54 AM , Rating: 3
Yeah, I have mixed feelings about this one. I'd much rather pay for this than ethanol but at the same time, I don't think this needs to be mandated.

RE: Ugh
By freedom4556 on 9/19/2012 10:18:16 AM , Rating: 3
I think this is pretty much equivalent to ethanol in terms of bad idea-ness. The only redeeming part really is that diesel engines tend to be more efficient than gasoline engines in the first place. But mandates are typically bad ideas, and laws hardly ever go away.

RE: Ugh
By kwrzesien on 9/19/2012 10:47:13 AM , Rating: 2
Yeah, but we have to look to the future where people need to start eating health food again instead of corn and soybeans. Then all the farmland that makes corn and soybeans can make fuel!

RE: Ugh
By quiksilvr on 9/19/2012 11:26:12 AM , Rating: 2
I don't know about soybean biodiesel but I do know corn based ethanol is less efficient and worse for the environment and more expensive.

RE: Ugh
By Argon18 on 9/19/2012 12:09:59 PM , Rating: 2
You're correct about corn ethanol, it takes more energy to make than what it contains. Its a net energy loss. There are several reasons why. Firstly, corn is one of the highest fertilizer and pesticide intensive crops out there. And secondly, ethanol is grain alcohol, so the only way to make it is to repeatedly boil and cool the liquid a dozen times or more, extracting the alcohol each time. How much energy do you think it takes to bring a trillion gallons of liquid to a boil, then cool it, a dozen times over? A LOT.

Biodiesel on the other hand requires only a single boil/coil of the liquid. This alone means it takes vastly less energy to create than corn ethanol. Secondly, soybeans are not very fertilizer and pesticide intensive. In fact, soybeans are used to return nitrogen into the soil, reducing the fertilizer costs for other crops in that field.

Biodiesel also contains more energy per gallon than corn ethanol. Ethanol has about 96,000 btu's per gallon, while biodiesel has around 136,000 btus per gallon.

Biodiesel is better in every measurable way than corn ethanol.

RE: Ugh
By Solandri on 9/19/2012 2:40:52 PM , Rating: 2
And secondly, ethanol is grain alcohol, so the only way to make it is to repeatedly boil and cool the liquid a dozen times or more, extracting the alcohol each time. How much energy do you think it takes to bring a trillion gallons of liquid to a boil, then cool it, a dozen times over? A LOT.

No it doesn't. You don't just throw away all the heat energy after you boil it once. You use a heat exchanger to transfer that heat energy to a second batch which needs to be boiled. You do lose thermal energy at the periphery, but for most processes no more heat is lost compared to doing just one heating cycle. This is chemical engineering 101.

Corn ethanol is a boondoggle because the only reason we have excess corn is because it's subsidized to insure there are no food shortages. That means we always have excess corn, which we're always trying to think of new ways to use. Corn ethanol is a good use for excess corn. Corn that was going to grow moldy in a grain elevator, or be eaten by rodents. But it's a terrible crop to grow for the explicit purpose of making ethanol. Sugar beets are a much better crop to convert into ethanol at North American latitudes.

Biodiesel also contains more energy per gallon than corn ethanol. Ethanol has about 96,000 btu's per gallon, while biodiesel has around 136,000 btus per gallon.

The amount of energy per gallon is irrelevant except for fuel tank size/weight. All biofuels are solar energy. Plants capture sunlight, store it as sugars and oils. Sugars can be converted into alcohol, or oil with a lot of finagling. Oils can be converted into biodiesel. So the fact that biodiesel has about 40% more energy per gallon just means that 40% more plant matter went into making a gallon of biodiesel than ethanol.

Biodiesel is better in every measurable way than corn ethanol.

Oils like biodiesel don't burn as cleanly as alcohols. The primary motivation for storing energy as a liquid chemical fuel is for transportation applications. And if you're burning it in a vehicle, that means it's harder to attach scrubbers and filters. Consequently, lower byproduct emissions are a desirable trait in your fuel. Alcohols easily beat oils in this regard.

The problem with alcohols as fuel is that they tend to dissolve most gaskets and sealants.

RE: Ugh
By GotThumbs on 9/19/2012 12:26:56 PM , Rating: 2
While I do not agree with the mandate itself....Bio Diesel has always been an alternative.

There's one key oversight about the fuel sources. Producers don't need to grow soybeans to get the oil they need. They just need to take the millions of gallons of used cooking oil restaurants use each day. Taking a single product (cooking oil) and using it twice is a smart and economic approach. Regarding the efficiency of bio-diesel against ethanol... Diesels were originally designed to run on oils such as peanut oil and there is zero degradation in power/efficiency. Now with bio-diesel, there is an issue with older fuel lines not suited for high % of bio-diesel. Most newer diesels are not affected. It's a fuel alternative that's been long overlooked in the US, but not Europe. Europe has more diesel powered cars per-capita.

RE: Ugh
By dgingerich on 9/19/2012 11:08:25 AM , Rating: 2
Yeah, just as ethanol has increase the price of gas, biodiesel will and has increased the price of diesel fuel. These mandates are just stupid.

They're driving up the costs of transportation, a vital component of the US economy, right when the economy is weak, curtailing job growth. It impacts every single industry. This is probably the biggest way Obama's damaged the economy. The fuel prices alone have probably cost us a million jobs or more in the last 4 years.

RE: Ugh
By Reclaimer77 on 9/19/2012 11:15:11 AM , Rating: 4
They're driving up the costs of transportation, a vital component of the US economy

That's been the plan all along.

"Under my Administration, energy costs will necessarily skyrocket"

RE: Ugh
By dgingerich on 9/19/2012 11:28:42 AM , Rating: 2
Combine energy cost increases, regulation increases, government money spent inefficiently, and increased costs of the government borrowing money, and you get the huge unemployment problem we have today. The costs behind running a business have gone way up, while government fat cats (regulators, administrators, and other generally useless positions) raking in great paychecks. It's inevitable that we'll have prolonged unemployment.

It's going to take a decade or more to correct this, even if we get a new President in January.

RE: Ugh
By Ringold on 9/19/2012 11:20:47 AM , Rating: 2
Already can see what an apologist will chime in with: But oil and nat gas output is up on his watch!

Yes, but look at the numbers, and the gains are in spite of him because the vast majority of expansion took place on privately owned land, not federal land. The left has looked on at cheap nat gas in horror; they liked natural gas as a mythical lower-carbon bridge fuel right up until the moment it became economically viable..

If he wanted robust energy sector growth, he'd of given the green light to Keystone, for example, and generally thrown open the doors to bidding on new plots of federal land, onshore and offshore, for exploration and extraction, and leaned on California and Florida to allow for more as well. There's been none of that.

RE: Ugh
By FITCamaro on 9/19/2012 11:54:58 AM , Rating: 2
The new wells were also issued permits under the Bush administration. Not Obama's.

The sole area where Obama hasn't blamed Bush.

RE: Ugh
By dlapine on 9/19/2012 11:41:21 AM , Rating: 2
I don't follow you. If the mandate for biodiesel was only started last year, how could it possibly have driven up the price of diesel for the last four years? Or cost us a million jobs?

Anyone here have an idea as to how much a gallon of biodiesel costs to make? Y'all keep saying that it'll raise the price of diesel, but could you give me some numbers on that? Ethanol costs 60% of whatever the price for a bushel of corn is, plus markup. I'm not sure what the price to produce a gallon of Biodiesel is.

Biodiesel at least has the advantage (vs ethanol) that it produces the same energy as a gallon of fossil diesel, and that no changes are required in any diesel engine to use it.

RE: Ugh
By FITCamaro on 9/19/2012 11:55:56 AM , Rating: 2
He didn't say this mandate did. Obviously that isn't the case.

He said higher fuel prices have. This will just drive diesel prices up further.

RE: Ugh
By dlapine on 9/19/2012 12:07:35 PM , Rating: 1
Ok, but blaming Obama for the higher fuel costs when the EPA mandates don't apply is unreasonable. OPEC might also have something to do with it.

As I noted, biodiesel is about $4.35 a gallon. That's a small increase over current costs, and a definite limit to how much pain the Arabs can inflict on us in the future.

RE: Ugh
By FITCamaro on 9/19/2012 1:19:38 PM , Rating: 2
I don't blame Obama for all the increases in fuel costs over 4 years. I do however blame Obama for doing nothing to help fuel costs from going up in the past 4 years.

As stated yes there are more onshore, private wells now than 4 years ago. But thanks to permits issued under Bush. Under Obama, offshore drilling has drastically decreased(while we're subsidizing other nations offshore drilling), EPA mandates have skyrocketed, coal mining is down, coal power plants are being shut down from the EPA mandates, E15 is coming which will void many car's warranties, etc.

$4.35 might be a small increase in current costs where you are. But here diesel is $3.80ish a gallon. So $0.55 is almost a 15% increase.

RE: Ugh
By JediJeb on 9/19/2012 6:31:04 PM , Rating: 2
There was a report this week that a major coal mining company was shutting down several mines in the eastern mountain region( West Virginia, Virginia, Pennsylvania) because they are changing from mining energy/fuel coal and are going to move operations to where they can mine coal for steel production which will be shipped to Asia. Thousands of jobs may be lost in that region alone because of many of the "mandates" that have been added in the past few years. The company said it is now more profitable to stop mining coal for fuel and move their entire operations over to the other type of coal that they can ship overseas. I am not even sure their operations will remain within the US, I need to look that up to be sure.

RE: Ugh
By Ringold on 9/19/2012 10:11:16 PM , Rating: 2
West Virginia isn't really a state that can afford to lose those jobs, either.

This is exactly what Obama promised the LA Times before he was elected, though; he said he'd destroy the coal industry.

RE: Ugh
By FITCamaro on 9/19/2012 1:22:51 PM , Rating: 3
Obama has also rejected the Keystone Pipeline resulting in the Canadians agreeing to build a pipeline that will ship crude to China instead. Even his own union supporters are mad at him about that one. They're just to stupid and afraid to speak out loudly.

RE: Ugh
By dgingerich on 9/19/2012 2:20:34 PM , Rating: 2
I blame Obama for the restrictions on building new refineries and the ethanol mandates that did, in fact, drive up both gasoline and diesel prices over the last 4 years. He's doing the same thing all the time: you must buy ethanol in your gas, you must buy health insurance, you must buy "renewable" energy, you must buy biodiesel.

“There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.”
? Robert A. Heinlein, The Moon is a Harsh Mistress

Obama is, in fact, a big tyrant.

RE: Ugh
By Ringold on 9/19/2012 10:14:03 PM , Rating: 2
We're a slight net exporter of distillates, but more refineries would still be great -- we've had a trade deficit for ages, and exporting gasoline and diesel is as good a way as any to bring it down! Plus, refineries create scores of high-paying, high-skilled jobs, from all sorts of different branches of engineering and craftsmen.

RE: Ugh
By Moishe on 9/20/2012 5:06:38 PM , Rating: 2
This administration might want jobs, but they want something else more than jobs. I say this because every opportunity there has been to create jobs has resulted in the opposite choice of what a sane person would do.

I don't know what the issue is, but they're either stupid or doing it on purpose. Either way, I would rather vote for my dog because he is just as likely to produce jobs.

Inaction would be better than Obama.

RE: Ugh
By dlapine on 9/19/2012 12:00:09 PM , Rating: 2
Ah, found it.

"Operating costs other than the cost of feedstock currently average approximately 59¢ per gallon. By-products of biodiesel production (glycerin, fatty acids, and filter cakes) provide revenues of perhaps 8¢ per gallon. Most U.S. biodiesel plants operate on soybean oil. It takes approximately 7.6 pounds of soybean oil to produce a gallon of biodiesel."

So, I'd make that out to be $0.50 fixed cost plus 7.6 times whatever the cost per pound of soybean oil is. Looks like that's currently ~$0.55. The commodity folks list soybean oil prices by pound, so it's easier to find.

So the cost to make a gallon of biodiesel from soybean oil is about $4.35, at the moment.

I'm seeing diesel prices at the local stations right around $4 a gallon.

Yes, mandating the use of this would seem to push diesel prices higher at the current crop prices. It would also set a ceiling for the cost of foreign diesel, so that it wouldn't be able to go much over $4.35.

RE: Ugh
By bah12 on 9/20/2012 5:24:51 PM , Rating: 2
You don't have a clue do you. The $4 you are seeing at the pump is not the raw ingredients cost that you are comparing to biodiesel. There is an average of $.47 / gallon of stand and federal fuel tax in that $4 you see.
So the cost of producing normal diesel is closer to $3.50, and bio would be closer to $4.83. So no biodiesel is not even close to a viable option.

And don't even start with an argument that points to a subsidized (aka lower) tax rate on biodiesel, as that is just shifting numbers to support a flawed logic. Suppose there were no tax on biodiesel, you would have to raise taxes elsewhere to recoup the massive shortfall in revenue, or cut spending (yah right!!).

Look people there is a reason why Big Oil is so damn BIG, and it has nothing to do with conspiracy. Fact is good ole petroleum and coal are still far and away the logical source of energy on this planet. Any delusions you have that these propped up "green" alternatives are anywhere close to competitive, borders on pathological denial or flat out ignorance.

Not even are they not in the ballpark, they are at home on the couch unaware the game is even being played. Yes quite literally they are that far from being anything more than a niche.

RE: Ugh
By FITCamaro on 9/19/2012 11:53:56 AM , Rating: 2
Yup. Which then increases prices on every other good. Food being the main one.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer
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