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Biodiesel bill would support long-term market for renewable fuel

Sunday, April 6, 2008 | 4:57 p.m. CDT; updated 6:55 a.m. CDT, Tuesday, July 22, 2008
City of Columbia employee Derrick Ray fills up a Public Works Department service truck with B-5 biodiesel fuel at the city's Grissum Building. Last week the state Senate passed a bill requiring that by June 2010 all diesel fuel sold in Missouri be a five percent biodiesel blend, called B-5. Currently, 80 percent of the city's fleet of service vehicles use B-5.

COLUMBIA — The city’s been pumping a biodiesel blend into its fleet of diesel vehicles for the past six years.

“It was a transparent transition that worked well for us,” said Eric Evans, manager of city-owned vehicles. “Most of our users didn’t know we switched.”

The city’s blend is 5 percent of fuel derived from soybeans and 95 percent diesel that’s referred to as B5.

Legislation making its way through the state legislature would require all diesel fuel sold in the state after June 2010 to be the same 5 percent blend of biodiesel used by the city. The bill cleared the state Senate on March 27 and was sent to the House Transportation Committee.

Proponents of the bill say a B5 blend lowers emissions, puts downward pressure on the price of diesel fuel and spurs rural economies by creating jobs and raising the price of soybeans.

Some legislators opposed to the measure, which passed the Senate on a 20-11 vote, say biofuels drive up the cost of food.

The B5 bill is modeled after a law that went into effect in January, requiring all gasoline in the state to be a 10 percent ethanol blend.

Both the ethanol law and the biodiesel bill include a similar provision: If the biofuel is more expensive than the base fuel of gasoline or diesel, the blending requirement is waived.

The city uses 440,000 gallons of biodiesel each year. And even though it hasn’t necessarily saved the money, “on a whole, over the years, it hasn’t cost them anything different,” Evans said. “On a whole, it’s been a wash.”

If the bill becomes law, Missouri will become the sixth state to enact a biodiesel standard.

The biodiesel industry has strong roots in the state. MU began researching the fuel in the mid-1980s. The state’s 10 functioning biodiesel plants have the capacity to produce 125 million gallons a year — far more than the estimated 60 million gallons the state would require to meet the proposed 2010 mandate — and several other plants are under construction. And most biodiesel is made from soybeans, one of the state’s largest annual crops.

How it’s made

While most biodiesel is derived from soybean oil, it can be made from animal fat or vegetable oil at home or in a specialized facility. It works in any diesel engine without requiring alterations.

To make it, a bushel of soybeans is crushed and separated into its three components: hulls, oil and meal.

The oil is then mixed with lye and methanol, which is found in HEET gasoline antifreeze. When these products are mixed, they separate into glycerin and methyl ester, which is the scientific name for biodiesel.

“It’s a simple chemical reaction,” said Cliff Smith, plant manager for Mid-America Biofuels in Mexico, Mo.

The expensive part of production is the cost of soybeans, which has averaged $12 a bushel on the Chicago Board of Trade this month.

Farmers intend to plant an estimated 5.2 million acres of soybeans in Missouri this year, a 13 percent increase over 2007, in an attempt to cash in on the crop’s high prices, a National Agricultural Statistics Service report said.

Worldwide demand for cooking oil and biodiesel is expected to keep soybean prices high.

“Commodity prices have risen recently, and as farmers get more money for their commodities, they are a lot more likely to reinvest,” said Adam Buckallew, spokesman for the Missouri Soybean Association. “They keep their money in their local communities. Farmers are very proud of the areas they live and work in. They like to reinvest in the local community.”

Another way biodiesel helps to build rural economies is by providing jobs. The plant in Mexico, Mo., produces 30 million gallons of fuel a year and employs 20 people.

How much it costs

Buckallew said soybean meal, which is used as feed for poultry and pork, has historically made up a majority of the demand for and price of soybeans.

“Now we’ve seen a sort of role reversal, and oil is in demand and the price reflects that,” he said. “There’s still demand for meal, but oil has outpaced that.”

Buckallew said there are a lot of people who think biofuels are solely responsible for increases in food prices. While soybean oil prices have increased, he said, that only adds pennies to cooking oils on the grocery store shelf.

And more meal is produced when more oil is produced, increasing the supply of meal and lowering the cost poultry and pork producers pay for their feed, Buckallew said.

This is different than ethanol because corn kernels are used to produce that kind of fuel. Rising corn costs make feeding corn to livestock more expensive. In turn, livestock producers may reduce their herds, shortening the supply of beef and making it more expensive.

“I think it’s been poorly portrayed that biodiesel somehow cheats someone out of meal,” Buckallew said, noting that soybeans are not a diet staple like corn.

The cost of crude oil, and to a lesser extent commodity prices, has contributed to above-average food price inflation in 2007. In a small way, Buckallew said, biodiesel helps reduce dependence on foreign oil and stretch a limited fuel supply.

“Obviously, increases in those (crude oil) prices weigh heavily on transportation costs,” Buckallew said. “And a majority of those commodities are shipped by trucks that use diesel fuel. A B5 standard can help put additional fuel out there and help alleviate some of the problem. It’s not going to solve it by itself, but it’s a step in the right direction. It’s a piece of the puzzle.”

Evans said he’s not sure whether biodiesel will help lower the price of fuel because there are so many market factors involved. For example, as demand for soybeans rise, so does the price. Biodiesel producers pay more for the beans and biodiesel price may increase.

Why it’s viable

Evans said using biodiesel fits with the city’s plan to find alternatives that are better for the environment.

When Gov. Matt Blunt touted the biodiesel legislation in a February visit to Columbia, he said a 5 percent biodiesel mix would reduce particulate emissions by 15.4 million pounds per year and carbon monoxide emissions by 168 million pounds per year.

“It has to be an economically viable alternative,” he said. “Hybrid buses are expensive. Biodiesel is more economically viable than buying a hybrid bus.”

While they started using biodiesel regularly in 2002, Evans said Columbia was a “test bed” for MU’s development of biodiesel in the mid-1990s. He said they tested the fuels in several city vehicles for efficiency, mileage, maintenance and exhaust.

Leon Schumacher, an MU professor who has researched biodiesel’s effect on vehicles, said part of his work was evaluating engines after being run on biodiesel.

He said a few years ago the diesel formula changed to a low-sulfur variety to reduce emissions, but that switch increased friction in engines. Biodiesel works as a lubricant and balances out what was lost in the low-sulfur switch.

“After 100,000 miles, the engines were in just as good shape as engines that run on diesel,” he said. “Not better, not worse.”

Evans said there haven’t been any mechanical problems with city government’s vehicles because of biodiesel.

“MU was a founding institution in developing an economically viable biodiesel blend,” Evans said. “Our initial intimate knowledge with biodiesel helped us utilize alternative fuels as soon as they became commercially viable.”

The federal government passed the Energy Independence and Security Act in December, which mandates 36 billion gallons of biofuel be produced by 2022. The act includes a requirement of 1 billion gallons of biodiesel by 2015.

Buckallew said Missouri’s B5 mandate would complement the national policy.

“Missouri has long been a leader in the biodiesel field,” said Warren Stemme, a farmer who serves on the board of the biodiesel plant in Mexico, Mo. “The B5 bill shows continued support for biodiesel and means a long-term market for our product in our state.”


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