June 2004 Newsletter

Biodiesel: Is it Oregon's next cutting-edge crop?

Friday, June 25, 2004
By John Schmitz, Freelance Writer

SALEM - It's way too long for a bumper sticker, but the slogan goes something like this: "Support American ag, improve the environment, clean up Oregon grass seed and wheat fields and help bring peace to the Middle East ... BUY BIODIESEL."

For several years now biodiesel fuel, which is made up - in whole or in part - of primarily soybean or canola oil, is growing in popularity. Last year it's estimated that at least 1 million gallons were sold in Oregon and Washington.

Biodiesel definitely helps U.S. agriculture, and it reduces fossil fuel pollutants in the air. It also serves as a good rotational crop for some grass seed and wheat species.

Another benefit, many feel, is that because biodiesel lessens the need for foreign oil, and may in fact help eliminate it altogether some day, the United States need not maintain such a heavy, violence-inciting presence in the Middle East.

"It's doing great," said Steve Cordah, biodiesel sales manager for Albina Fuel Co. in Portland. Albina introduced the product, which is refined in the Midwest, 2 1/2 years ago. Today it makes up about 5 percent of the company's revenue.

"We're getting more and more calls every day," Cordah said. "People are using it for a number of different reasons."

One of the biggest, he said, is the public's dislike of what's going on in Iraq and Saudi Arabia and the willingness to try something produced in America.

One of the huge selling points for biodiesel is that it is a much more air quality-friendly fuel compared with petroleum-based fuel.

Cordah said B100, pure biodiesel, reduces the amount of unburned hydrocarbons in the air by 67 percent, carbon monoxide by 48 percent and particulate matter by 47 percent. Albina Fuel sells B20, which is a blend of 20 percent biodiesel and 80 percent petroleum diesel, at one retail station in Portland and one in Aurora. The company also delivers B100 to commercial accounts.

"We're selling more B20, but in the agricultural area I would say it would be more B100," Cordah said.

"We are big believers in this product," said Mark Fitz, operations manager at Star Oilco in Portland. "It crosses the urban-rural divide. We've had a lot of positive response from farmers."

Star Oilco started offering B20 at a single cardlock B20 station three months ago in partnership with SeQuential Biodiesel and hopes to open another soon. It also co-owns with SeQuential a B100 pump at a third location.

Fitz hopes to be doing several hundred thousand gallons of B20 a year. "Right now it's hardly anything. We've issued a whole lot of cards, but have very little usage."

"I see biodiesel following in the steps of ethanol (a corn-based fuel), which is an additive for gasoline," said Tomas Endicott, co-owner of Portland distributor SeQuential Biodiesel.

He added that while there's not much of a future in Oregon for growing canola oil simply as a commodity to be used in biodiesel production, value-added operations are another story. "Farmers have to get out of the commodity industry. They need to own that value-added processing."

Endicott said the biodiesel industry will no doubt get a real boost in September 2006, when refiners must reduce sulfur levels in fossil-based diesel oil from normal levels of 500 ppm to 15 ppm.

To accomplish this, refiners will have to greatly reduce the all-important lubricating properties of the oil and will no doubt turn to biodiesel to provide the lost engine lubricity, Endicott said. "Two percent lubricity (from biodiesel oils) replaces that loss of sulfur."

Should this occur, Endicott sees Oregon's biodiesel market jumping "overnight" to 12 million gallons annually.

There's also high expectation that federal legislation in the works will be passed that will grant excise tax relief to diesel producers of 1 cent per 1 percent biodiesel content. State tax relief for handlers is also a good possibility. "What that will do is basically make biodiesel blends cheaper than straight diesel," Endicott said.

If and when canola oil production for biodiesel use does jump, this will improve prices for all crops that will have to share more ground with canola.

OSU agronomist Daryl Ehrensing said that while biodiesel crops like canola oil do not offer high returns to growers, they are excellent rotational crops, especially in the north Willamette Valley, used to clean up grass seed and wheat fields.

On the subject of biodiesel, Ehrensing says: "It's an interesting topic. It's one of the few I've come across in a while where we can get people with wildly divergent political views to agree on something: that growing our own fuel is probably a good idea instead of importing it all."

He and others have been looking at the feasibility of operating a mobile biodiesel seed crusher/refinery within the state. "If we supplied enough biodiesel to put 2 percent in all the (petroleum diesel) fuel sold in Oregon right now, that would be enough to justify a 15- or 16-million-gallon plant."

One concern about growing biodiesel vegetable oils is that they must be kept separate from other commercial vegetable seed crops in the same family, such as cabbage and radish, so that cross-pollination cannot occur, Ehrensing said.

Molalla, Ore., nurseryman Jim Gilbert has switched all of his farm equipment to B100 biodiesel. "It's a lot nicer to be around," he said. "It smells like a hot frying pan. It's not the most economical fuel to use, but it's a statement for us."

B20 costs around 20 cents a gallon more than straight diesel. B100 runs around 50 cents more. Cordah said that both can also be used as a home heating oil.

There are around 15 biodiesel-producing plants in the United States producing 25 million gallons, Endicott said. Europe produces 20 times that amount.