MFA Incorporated
Changing America's oil: Fuel from the field
By James D. Ritchie

Some of those soybeans you are growing this year could wind up in someone's fuel tank--maybe in your own diesel truck or tractor.

Biodiesel (blends of plant oils and petroleum diesel fuel) is among the fastest-growing alternative fuels in the country. In 2002, Missourians burned the equivalent of 600,000 gallons of soybean oil in various blends with diesel.

Across the U. S., Americans used more than 25 million gallons of soybean oil as biodiesel. That's the oil from about l7 million bushels of soybeans; the production of some 450,000 acres. If the average fuel blend was 20 percent soybean oil and 80 percent conventional diesel, those 25 million gallons of soy oil went into 125 million total gallons of fuel.

"Biodiesel use is up substantially, but we've only scratched the surface of the fuel potential," said Dale Ludwig, executive director of the Missouri Soybean Merchandising Council. "Biodiesel has been accepted well in Missouri, and we're working to generate additional demand for the fuel."

Incidentally, virtually any plant- or animal-derived oil can be used to fuel compression-ignited (diesel) engines, at any percentage. Soybeans, being relatively abundant and widely available, are the most common feedstock. Biodiesel is designated by the percentage of soyoil in the blend. For example, B20 indicates a blend of 20 percent soybean oil and 80 percent petroleum diesel. The most common blend uses 2 percent biofuel.

As Ludwig noted, the merchandising council, with strong support from legislators at both the state and federal levels, has used soybean checkoff funds to successfully promote biodiesel as an alternative fuel in Missouri. In fact, Missouri growers were present at the birth of biodiesel; checkoffs helped fund some of the initial biodiesel research at the University of Missouri. The United Soybean Board, made up of 62 farmer-directors and chaired by David Durham, soybean grower at Hardin, Mo., oversees $32 million worth of soybean checkoff investments nationally.

Burning beans in the bus
For the past several months, St. Louis-area residents following in the wake of a BTA (Bi-State Transit Authority) bus may have gotten a whiff of something that reminded them more of cooking French fries than the typical exhaust from a diesel engine. Two years ago, BTA switched to B20 biodiesel in its 650 metro-area buses, which burn about 6 million gallons of fuel per year.

About the same time, Lambert International Airport switched to B20 biodiesel for their 200 or so diesel-powered vehicles.

At that time, St. Louis was under scrutiny by the Environmental Protection Agency (EPA) as being near "non-attainment" of federal Clean Air Act standards. Biodiesel is the only alternative fuel to have passed the health-effects testing by EPA.

But Bi-State didn't make the move to biodiesel for that reason alone.

"Before we made the fuel switch, we gave biodiesel a 100,000-mile test," said Lyle Howard, Bi-State's manager of product development. "At the end of 100,000 miles, we sent the injectors out of the test bus back to the manufacturer for inspection. Their tests showed the injectors were still within specifications and showed less than normal wear."

In January 2003, EPA reported that the St. Louis area had re-gained clean air attainment status, based on permanent emission-reduction measures.

Paying the price
Unfortunately, when Bi-State contracted fuel for the upcoming year, price reared its head. Soybean oil was higher, but petroleum diesel fuel prices went up by even more.

"Straight diesel fuel was priced at 7 cents per gallon below B20 biodiesel, so we had to go that way," said Howard. "Even so, we'll need to spend $18 million on fuel this year.

"I'm still a believer in biodiesel, and we'll go back to biodiesel when economics let us," he added. "Right now, we are just not in financial position to use it."

Prices vary, but typically, a gallon of biodiesel costs an extra half-cent for each 1 percent of soybean oil in the blend. Dale Ludwig believes biodiesel is at an unfair disadvantage, compared with petroleum-derived fuels.

"Fossil fuels have several incentives built in when they reach the pump; the oil depletion allowance, for example," he said. "One of our main priorities is to work for an exemption of part of the fuel excise tax on biodiesel. We need that as an incentive to make us more competitive with fossil fuels."

The farm potential
"Agriculture is a huge potential market for biodiesel," said Ludwig. "Farmers are steadily increasing their use of biodiesel, but this is a big market. Agriculture is the second largest user of diesel fuel in the U.S. [commercial trucking is No. 1]."

Consider this: Farmers and ranchers use some 3.5 billion gallons of diesel fuel each year. If they went to B20 (20 percent soybean oil) for all of that usage, it would require about 470 million bushels of soybeans--more than the combined annual production of Missouri, Arkansas, Kansas and Oklahoma. At an average yield of 38 bushels per acre, that would take the soybeans from about 12.3 million acres.

But that would be a renewable, home-grown fuel source. The U.S. Energy Department forecasts that if current trends continue we'll be relying on imported oil for two-thirds of our energy needs by the year 2020. Much of that foreign oil lies under lands that are politically unstable and not overly friendly toward the United States. Indeed, America's oil may need changing.

  MAY 2003
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