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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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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.
http://www.eia.gov/tools/faqs/faq.cfm?id=10&t=10
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.


"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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