US on-farm biodiesel use seen surging in spring
Date: 07-Mar-02
Country: USA
Author: Sue Schwendener
Sources estimate use of biodiesel - a non-petroleum fuel made from chemical reactions of alcohol with vegetable oils, fats or greases - will rise by more than 100 percent as growers work to shake their dependence on foreign oil supplies and boost dragging U.S. soy prices.
"Biodiesel has gotten a life of its own lately," said Brad Glenn, an Illinois farmer and president of the Illinois Soybean Association. "We've seen the growth without (tax) incentives, and with incentives, it's just going to continue to grow."
Use of biodiesel across the United States grew from 500,000 gallons in 1999 to 20 million gallons last year, despite a scarcity in fueling sites, he noted. The renewable fuel, which is nontoxic, biodegradable and free of sulfur, is most commonly used in blends of 2 percent or 20 percent (B20) with petroleum diesel.
Farmers are embracing the soy fuel partly in response to the Sept. 11 attacks, which heightened the desire for the United States to develop its own energy sources, and also because it provides another market for their product.
Biodiesel offers similar fuel economy, horsepower and torque to petroleum diesel, said Jenna Higgins, communications director for the National Biodiesel Board.
"Biodiesel and ethanol are not competitors," Higgins said, adding that U.S.-produced ethanol - which is mainly derived from corn - is for gasoline engines, while biodiesel is for diesel engines. Farm machinery is mostly diesel-powered.
"It's as easy to use as petroleum, but it's been the delivery that has been the problem so far," Glenn said. Biodiesel proponents claim the supply problems have been solved, after users and suppliers united in meetings across the Midwest this winter.
"When we started these meetings, we had about 60 distributors in Iowa selling B2 soy-biodiesel," said Jim Legvold, an Iowa farmer and president of the Iowa Soybean Promotion Board. "We now have 223 distributors."
Last December, Moline, Illinois-based Deere & Co. approved the use of biodiesel in its conventional diesel engines, changing its formal warranty to say use of the soy-based fuel in engines would not void the company's engine warranties.
In January, Bloomington, Illinois-based Growmark Inc., a regional agricultural cooperative serving farmers across Illinois, Iowa, Wisconsin and Ontario, Canada, announced it would make biodiesel available to its Illinois farmers.
The projected increase in soybean-derived biodiesel use arrives at a crucial time for U.S. farmers, who last year harvested a record soybean crop of 2.89 billion bushels.
"We have 2.8 billion pounds of excess soyoil in the United States," said Robert Metz, a South Dakota soybean farmer who is also president of the National Biodiesel Board. "If we were to go to a 2 percent biodiesel in the U.S., we'd use up the excess vegetable oil and it would be much more balanced."
And as economies of scale kick in, farmers may not even need to pay extra for biodiesel compared with petroleum, Metz said.
In top U.S. soy-producing state Iowa, some farmers can purchase B2 for the same price as petroleum diesel, Legvold said, noting he pays 2 cents premium for the renewable fuel, and knows of other farmers who have to pay more than 5 cents per gallon premium. For a farmer who uses 3,000 gallons a season, typical for someone who farms about 750 to 800 acres, a 2 cent premium would cost $60 per season, he noted.
NATIONWIDE USE EYED
While biodiesel proponents are hoping for a surge this spring in use among farmers, they are working toward national acceptance of the soy fuel. Already, many school bus and government diesel fleets fuel up on mostly B20 blends.
Legislation has been introduced in most Midwest states to encourage the use, and on Feb. 14, the U.S. Senate Finance Committee said it would include a biodiesel tax provision in the federal energy tax bill that would provide a 1-cent per gallon reduction in the diesel excise tax for every percentage level o