Mark, Good points. But i'm still unclear about the economics of large-scale commercial production. Whether you're using oil that is a byproduct of the livestock feed industry or getting biodiesel as a byproduct of making soap, I don't see why that should matter. The point I'm making is that this is a relatively new use for what was heretofore a by-product, and that therefore the economics of centralized production shouldn't be so unfavorable.
Sure, if you're trucking soybeans or the oil from afar to a central facility just to make biodiesel and then shipping it out again to hither and yon for sale, that would hurt. When you describe making biodiesel on a large scale as an "inefficient process," I assume that you're referring to the shipping aspect. (Or are there other inefficient aspects?) But if you're ALREADY bring the oil or beans to one place for a different purpose, I would think that cost is subsumed in that primary purpose. And actually, in conversations with others I've been told that the economics of small-scale commercial production are unfavorable. You don't get economies of scale of collecting WVO or whatever your feedstock is. For example, if I wanted to open a facility in Seattle, how much time and $ would it cost me to collect WVO from all over town? I can see that being prohibitive. Am I totally off-base here? Any thoughts anyone? The best business-model for local production I've heard of, and this came from Tomas Endicott at Sequential Biofuels, is for an oil-leasing business. You "rent" virgin oil to restaurants and then take it back to produce vegetable biodiesel. Your delivery trucks run full both ways. It's very "Cradle-to-Cradle." If you run the oil-supply business just as a break-even venture, then you have essentially "free" WVO for your biodiesel production. THAT would cool. Anyone want to invest some $ to see how this would work in Seattle. No pushing now, one at a time. ;) I just think that $3.00/gallon is a lot for something that is a byproduct. thor skov Message: 8 Date: Thu, 11 Dec 2003 20:36:11 -0000 From: "skillshare" Subject: Re: price of world energy BD going up? --- In biofuel@yahoogroups.com, Thor Skov wrote: > > > Here's my question though. I thought that US virgin > oil biodiesel production was largely a bi-product of > the soap industry. If true, I would expect this > by-product to be somewhat insulated from price shocks. > It;s a byproduct of the livestock feed industry actually- most soy in this country is grown for livestock feed, and the oil is pressed out of it first in the process of making the soy meal that goes into the feed. > Since I have no idea what the market is like for > biodiesel, I don't know what demand is doing. > Growing, presumably, since a number of big plants are > coming on line in California. But then, I would hope > to see a fall in the price once that production hits > the market. I think a lot of people expect this to happen but the opposite is the case. But the profit margin for commercial producers is tiny- they aren't getting rich off of this, just wasting a lot of money in the inefficient process by which biodiesel goes from being raw oil to actually fueling a vehicle. This is where local production realy shines- the economics of it are spectacular compared to centralised big production. But I think it takes a mental shift for many people to see this (ie such as potential investors)- since we're used to the paradigm in this economy that says that "economy of scale" leads to cheaper prices. I don't htink it applies as well to biodiesel, (at least WVO-sourced biodiesel, which is the primary California feedstock, etc...). mark ------------------------ Yahoo! Groups Sponsor ---------------------~--> Buy Ink Cartridges or Refill Kits for your HP, Epson, Canon or Lexmark Printer at MyInks.com. Free s/h on orders $50 or more to the US & Canada. http://www.c1tracking.com/l.asp?cid=5511 http://us.click.yahoo.com/mOAaAA/3exGAA/qnsNAA/FGYolB/TM ---------------------------------------------------------------------~-> Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuels list archives: http://archive.nnytech.net/index.php?list=biofuel Please do NOT send Unsubscribe messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
