Biodiesel without a subsidy?

Biodiesel producers say the reduced Renewable Fuel Standard (RFS) is hurting the business.

Reduction in the RFS means less mandatory use of biofuels and the tax biodiesel tax incentive expired Jan 1.  Investments in biodiesel were made based on tax and other incentives such as the RFS.  Producers might go out of business without them.  In other words, the biodiesel business is floated on subsidy and as positive as the hype, isn’t really a competitive fuel.

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8 responses to “Biodiesel without a subsidy?

  1. Imagine that – they lose money without handouts. Wonder what will happen when the wind handouts end?

  2. This administration has turned ‘subsidy’ into an industry of its own.

  3. Biodiesel has increased the cost of corn tremendously. The ripple effect has raised the cost of many foodstuffs hurting consumers in the US, solely to benefit this industry.
    Even worse, the ripple effect raised the cost of other grains upon which many poorer nations rely, resulting in increases in poverty, food shortages and deaths,
    But it makes certain people feel good while filling their cars with a product that hurts so many lives.
    If any subsidized industry deserves to die – this is it.

  4. I knew a supply store owner who wanted to make biodiesel. He cobbled together a plant with an old propane tank as a reactor vessel. He had some oil presses from China, and some conveyors which were running along wooden guides. I asked him one day if his insurance company had inspected all this as I thought it was likely to burn down one day.
    He sold coal which provided cash flow to finance this whole misadventure. I liked his coal, it burnt well in my furnace.
    As I predicted his store burnt down when he left the equipment running unattended one day.
    Dirty Coal provided him with a profitable business. Attempted production of a renewable fuel, destroyed his business. Quite ironic really. I suspect that the insurance company never payed out. He never rebuilt.

  5. You can’t expect an emerging industry to compete on a level playing field with a well established one. It’s just not possible. If the tax rate on mineral oils was the same in 1886 as now, how do you think the auto industry would have taken off? The disparity doesn’t lie with the amount of tax levied on road duty, but in the ease and cost of obtaining mineral oils, combined with the lack of accounting system for the cost of removing the greenhouse gases they emit when burnt. If governments didn’t rely on BP and co for the ridiculous amounts of money they inject, maybe the cost of the drilling rights wouldnt be so suspiciously similar – Fuel cost would go up, biodiesel would look cheaper in comparison. Equally if you levied tax on the amount of energy required to maintain carbon neutrality, the same would happen.
    The increased price of raw materials for biodiesel is the main cause for concern for me. Until they can prove that they have a feedstock which doesn’t detract from the amount produced for food, then it can’t really be considered renewable. That said, where would we be if we didn’t rock into a third world country and buy up their oil for next to nothing, denying them the same commodity that we build ourselves up on?

    • I’m not sure where you get all the “facts” that fuel that opinion. The petroleum industry, in the US at least, started by finding a product/process that had some use and developed both the markets and infrastructure. The biofuels industry wants to create a market by government intervention.

      The first refining of crude oil (Pennsylvania ~1850) was to make a lamp fuel that was a substitute for whale oil. The forerunner of gasoline was a waste product. Development of the Otto-cycle engines used this material and spurred refining of gasoline. http://www.oil150.com/files/refining-crude-oil-history,-process-and-products.pdf
      Refined petroleum seems like moderately expensive stuff in the 1880’s (~$1/bbl versus a per capita income of around $300, depending on where you lived.)

      http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A

      http://www.stanford.edu/group/spatialhistory/cgi-bin/railroaded/gallery/interactive-visualizations/capita-income-united-states-1880-1910

      (My mother and several of her sisters went off to the big city around 1940 and made $5/week out of which they paid room and board, sent money back home and wasted the rest.)
      As for paying for the removal of all the evil carbon (I assume you mean carbon dioxide) from burning petroleum, I’m a bit hard pressed to see that there is any problem other than a political movement wanting to use it.
      The only “advantage” I see with biofuels is that biodiesel results in reduced CO and VOC BEFORE catalyic convertors. It does so at higher NOx (~1.05 X diesel) at a cost of 1.2 X per gallon of diesel (B100, which is not subsidized).

  6. Wow, huge idiot factor here…. or are they called shills? @Dale, you are most definitely either on the petroleum criminal’s payroll and a fool if you are not. The biggest handouts always go to the petroleum industry, the rest is chump change chump. @James in NY, you are truly about as dumb as they come, just gotta laugh to keep from crying, what is incredible is that you are able to form complete sentences. @Mitch, do a little more homework and check your sources, biodiesel does not cut into food markets, the oil feedstock is a BYPRODUCT of food production, you are referring to misinformation about biodiesel which is only true for ETHANOL. @John, Biodiesel is not made from corn and does not drive up food prices, lets talk now about how much death and destruction your oil company wreaks upon all of us, so how does that foot taste? you can take it out now. tadchem, The petroleum industry survives ENTIRELY on government handouts and this has been going on for almost a century, you clearly cannot see past your nose or you are only ten years old. The petroleum Industry is the largest welfare recipient in the country WHILE turning the biggest profits any company has ever made, WHILE hiding their cash in off shore accounts. The people in fossil fuels are criminally insane.

    • I let this comment in because it’s nice to hear from all sides, but you really need to go do a little reading. Biodiesel doesn’t cut into the food market because it is a byproduct? Major sources of biodiesel are soy beans, rapeseed, corn oil, peanut oil, palm oil and so on. Do you really think the biodiesel industry runs around collecting restaurant grease traps to make millions of gallons? If I’m planting acres of crops for fuel use, that acreage ain’t going to food production? http://en.wikipedia.org/wiki/List_of_vegetable_oils#Oils_used_for_biofuel

      “The petroleum industry survives ENTIRELY on government handouts and has been for almost a century,” it is the “largest welfare recipient…WHILE turning the biggest profits.” Prove those statements.

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