Todd,
Thanks for the reply.
If I understand you correctly, a reasonable strategy is to start at
lower blends, largely due to limited production (& demand?). Subsidies and a
premium added to blends help to make production profitable. As profit
stimulates production, blends can be increased to B-50, even B-75.
The lower blends also help establish a comfort level with consumers &
allow manufacturers of diesel engines, pumps, etc. to test their equipment
on various blends of BD.
I admit I'm still a bit baffled by the subsidies:
"B) Taking existing inventory of B-100 and dilluting it, to let's say 10%,
allows the blender to net the entire subsidy plus charge a premium of
several cents per gallon for the blended fuel. If that premium is $0.05 per
gallon, this amounts to $0.50 on top of the subsidy dollar, or fifty cents
if WVO is the parent stock."
Lower blends result in higher profits?
1 gal B-100 ---> 10 gal B-10 blend.
The subsidy doesn't change by lowering the blend. The increased profit
comes from the premium charges on the blend (regardless of % BD). Ex. 5
cents on 10 gal rather than on just 1gal. Have I got it right?
Won't subidies, as they now exist, and the premium that can be charged
on top of the subsidies actually discourage higher blending?
I'm impatient. I started making BD largely because of concerns about
CO2 emissions. The idea was to make it until it becomes available; then I'll
buy it. Now I want it to be made locally ..... I want it to be a part of an
energy strategy that includes diversification and starts with conservation.
I don't see how my demands for the commercial product will fit, given their
track record, with the philosophy of the powers that control fuel blending
and distribution.
Is there really any hope for commercially produced BD to become
available w/o involving the big oil companies in its blending and
distribution? ... sort of like the local bakery, corner deli, diner or
restaurant, local vegs in the local family-owned market, rather than
WalMarts, franchises and fast food ... can locally produced biodiesel be
part of our future, or should I plan on making my own forever?
I continue to write to my elected representatives and appreciate your
help in understanding the economics of BD from a commercial production view.
Additions/corrections are always appreciated.
Thanks again,
Tom
----- Original Message -----
From: "Appal Energy" <[EMAIL PROTECTED]>
To: <biofuel@sustainablelists.org>
Sent: Sunday, July 23, 2006 1:21 PM
Subject: Re: [Biofuel] Biodiesel and the Petroleum Industry
> Thomas,
>
> A) The subsidy is for blended fuel only, up to $1.00 per gallon for B-99
> from first use feedstock and up to $0.50 per gallon for WVO feedstock.
>
> B) Taking existing inventory of B-100 and dilluting it, to let's say
> 10%, allows the blender to net the entire subsidy plus charge a premium
> of several cents per gallon for the blended fuel. If that premium is
> $0.05 per gallon, this amounts to $0.50 on top of the subsidy dollar, or
> fifty cents if WVO is the parent stock.
>
> C) The biggest bang for the buck relative to environmental benefits is
> at approximately B-75. Running blends higher than that, up to B-99 or
> straight B-100 means that the ratio of emissions gains is reduced in
> comparison to B-75. The environmentally logical pursuit would be to not
> run anything more than B-75 until there is enough biodiesel for the
> entire market to run B-75. Unfortunately, the primary motivation in both
> the private and commercial sectors is often soley to reduce personal or
> corporate fuel costs. As home-brewers and most intermediate
> users/producers such as fleet operators are not set up for high ratio
> blending and aren't in the game for distribution, they simply run the
> B-99 and take the subsidy dollar.
>
> Money trumps environmental benefit in such cases. In commercial
> distribution cases, money is still the motivator, but the moderate
> blends become available to the market. Market wins and environment
> benefits.
>
> If this were about the environment, there would be legislation
> forbidding use of any biodiesel in blends above B-75 until the market
> was saturated enough for everyone to run higher blends.
>
> Todd Swearingen
>
>
> Thomas Kelly wrote:
>
>>Todd,
>> You wrote:
>> " There's greater profit in blending biodiesel rather than selling
>>straight."
>>
>> and later:
>>
>> "Unfortunately, economic benefits aren't in line with environmental
>>benefits. And the subsidy dollar doesn't help that matter either."
>>
>> Could you explain these two points?
>> Thanks,
>> Tom
>>
>>----- Original Message -----
>>From: "Appal Energy" <[EMAIL PROTECTED]>
>>To: <biofuel@sustainablelists.org>
>>Sent: Saturday, July 22, 2006 9:43 PM
>>Subject: Re: [Biofuel] Biodiesel and the Petroleum Industry
>>
>>
>>
>>
>>>Thomas,
>>>
>>>Why? You asked...
>>>
>>>1) There's greater profit in blending biodiesel rather than selling
>>>straight.
>>>
>>>2) Scrap all the misinformation about engine problems at higher blends.
>>>
>>>3) Also scrap his misinformation about emissions benefits tapering off
>>>at 10%. They actually do little until after B-10, rising sharply to
>>>approximately B-75, where it plateaus.
>>>
>>>4) Although his ratios on benefits are quite off, he is right in the
>>>environmental benefit of everyone running a blend, rather than some
>>>people running B-100. It's better for the environment (greater emissions
>>>benefits across the board) if everyone runs B-10 until the market-wide
>>>supply is sufficient for everyone to run B-15, then B-20, etc
>>>
>>>Essentially, if people were looking out for the planet first and their
>>>wallets second, anyone producing biofuel for personal use should share
>>>with others who don't have it. One vehicle at B-100 achieves less
>>>emissions benefits than two vehicles, one running B-25 and another at
>>>B-75.
>>>
>>>Unfortunately, economic benefits aren't in line with environmental
>>>benefits. And the subsidy dollar doesn't help that matter either. Then
>>>again, if there weren't a subsidy it's rather doubtful that the industry
>>>would be growing leaps and bounds as it is.
>>>
>>>Todd Swearingen
>>>
>>>
>>>Thomas Kelly wrote:
>>>
>>>
>>>
>>>> I attended a public forum on Biofuels a while back. One of the
>>>>speakers, the head of a biodiesel co-op, had me perplexed by his
>>>>repeated assertion that biodiesel can be used in 2, 5%, " even 10% or
>>>>20% blends", but above these levels engine problems and gelling can
>>>>occur. He had graphs showing the benefit of using biodiesel to improve
>>>>exhaust emissions, but pointed out that above a 10% blend improvement
>>>>tapers off .... "better to have 10 people driving with B10 than 1
>>>>person driving with B100."
>>>> I questioned his assertions regarding gelling of fuel and pointed
>>>>out that I drop from BD100 to BD70 in winter months w/o gelling. I
>>>>explained the cleansing effect of BD and how this may clog fuel
>>>>filters during initial use, but mentioned that this will also happen
>>>>w blends as low as 5%. Actual engine damage is more a function of
>>>>fuel quality than the nature of the fuel itself ... even homebrewers
>>>>can make quality fuel .... shouldn't commercial producers be
>>>>expected to do the same? I conceded that at BD10 there is a 10%
>>>>reduction in hydrocarbon emissions and that at BD100 there is "only a
>>>>70% reduction", but suggested that I'd like to see all 10 drivers
>>>>using BD100 to achieve the 70% reduction.
>>>>
>>>> There were 60 - 70 people at the forum; some from local newspapers,
>>>>others from Community Action Groups, most were just curious about
>>>>biofuels. Their enthusiasm was palpable, their questions polite.
>>>>Before responding to a question, the speaker asked each person their
>>>>name, and then spoke as if he was having a friendly, heart-to-heart
>>>>conversation. To my questions he simply shrugged his shoulders and
>>>>moved on.
>>>>
>>>> I contacted the friend who told me about the forum. He emailed me
>>>>the actual invitation he had received.
>>>>Re: the Biodiesel guy:
>>>> " .....Jerry ------- has over 20 years of domain expertise in the
>>>>petroleum distribution and marketing and is presently a member of a
>>>>biodiesel business development team at a major independent energy
>>>>supplier. ....... Jerry does consulting in building biodiesel
>>>>refineries and advocacy work in promoting alternative and sustainable
>>>>fuels.
>>>>
>>>>Jerry brings over 25 years of experience in the petroleum industry in
>>>>technology in the distribution, logistics and terminal operations
>>>>areas. Jerry has been personally involved in the alternative energy
>>>>arena for the past 15
>>>>years, operating his personal car on biodiesel more than 10 years ago
>>>>and presently driving a van powered by CNG (compressed natural gas) as
>>>>well as a car on home made biodiesel."
>>>>
>>>> He was clearly advocating 2%, 5% blends. Why? Is it simply
>>>>because the auto manufacturers will void warrantees at higher blends?
>>>>If so, why not just say so.
>>>> Somehow I know I should be following the money. It must involve
>>>>dollars and cents.
>>>> Any ideas?
>>>>
>>>> Thanks , I've been mulling this over for weeks.
>>>> Tom
>>>>
>>>>
>>>>------------------------------------------------------------------------
>>>>
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>>>>
>>>>
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>>>>
>>>>
>>>>
>>>>
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>>
>>
>>
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>
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