Biodiesel backers see big expansion of niche renewable product in Florida

TAMPA — Forget the image of a hippie making biodiesel from used cooking oil in his garage to fuel a VW van with Grateful Dead stickers on the bumper. The renewable energy fuel, advocates say, is becoming big business.

But the biodiesel industry remains something of an enigma to most Americans despite its production of an estimated 2 billion gallons of fuel in 2015, a figure that is expected to jump by 300 million gallons by the end of the year. Biodiesel is typically blended with regular diesel in the same way as another renewable fuel, ethanol.

The 2016 Biodiesel Conference and Expo comes to the Tampa Convention Center Jan. 25 through Jan. 28 with 2,000 industry representatives and others expected.

To be sure, Florida is a relatively small player in the diesel industry, which is generally much stronger in bigger agricultural states. Tampa Bay has few, if any, commercial biodiesel refiners. But officials at the National Biodiesel Board say they expect great growth in Florida.

The largest share of biodiesel is produced using soybean oil. Other raw materials include livestock fats from cattle, hogs, poultry and turkeys in addition to oils from peanuts, sunflowers and cotton seeds.

Joe Jobe, the board's chief executive officer, recently visited Tampa to promote the conference and sat down for an interview. (The interview has been edited for clarity and conciseness.)

How is biodiesel produced?

The way you make biodiesel is, you take any of these fats and oils and you react them to get the glycerin out of it. Glycerin is sold as by-product for cosmetics and other things. And the remaining material is very chemically similar to diesel fuel and can be used in pure form or in a blend with diesel fuel. It has similar horsepower and fuel economy and performance. It's really almost indistinguishable, especially in a blend up to 20 percent. …

So you take the soybean, you crush it, you take the leftover oil and make biodiesel out of it. You take the 80 percent protein and feed it to the chicken, and then the chicken grows meat and fat and then you take the fat and make biodiesel out of it. Then you fry the chicken in some of the leftover soybean oil, and then you reuse that soybean oil and you make it into biodiesel. So its kind of a virtuous circle.

What kind of carbon footprint does biodiesel have?

There is a 57 to 86 percent reduction in carbon, according to the Environmental Protection Agency and the California Resources Board (compared with regular diesel). … With diesel fuel you've got crude oil that is a carbon-dense liquid that has been sequestered in the ground. You've got plants and animals that absorb the carbon from the atmosphere and sunlight, and then they died, and they became sequestered in the ground. So with diesel fuel you're taking that sequestered carbon that is safely in the ground and you are releasing it in the atmosphere and you are building up carbon in the atmosphere, which is exacerbating the greenhouse effect.

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In the closed carbon cycles, the plants absorb the carbon from the atmosphere, they store it in the form of a liquid, the liquid is made into biodiesel, the biodiesel is burned in the vehicle and the CO2 from combustion is released back into the atmosphere. We're not taking sequestered carbon and releasing it into the atmosphere.

How does the cost of biodiesel compare with diesel fuel?

Diesel fuel is very, very volatile. That price is very, very unstable. A year-and-a-half ago we had north of $100-a-barrel crude oil. And now we've got $36 a barrel. It is one of the most volatile global commodities that we have. So biodiesel kind of follows that a little bit because that's the market we play in. … Biodiesel is typically about the same or maybe a little bit cheaper than diesel to the consumer. …

When you produce a gallon of biodiesel, you also generate a (renewable fuel federal tax credit), which can be traded and sold. So when diesel cost goes down, the credit goes up and it serves as a shock absorber for the price for the consumer.

What is that credit now?

It's about 72 cents a credit. It comes out to 1 gallon is a credit and a half. So it comes out right now to more than $1 per gallon.

How are ethanol and biodiesel different?

It is a completely different product. Ethanol is moonshine, literally. They're the exact same chemical. Ethyl alcohol is what moonshiners make. … So that's what ethanol is, it's ethyl alcohol. … And it has some energy content. Ethanol is made from corn. It's made from a starch product. Corn has protein, a little bit of oil. … And so that is alcohol that gets blended into gas, whereas biodiesel is a fat or oil that gets reacted into a fuel and gets blended into diesel fuel.

Ethanol is a conventional biofuel. Biodiesel is considered an advanced biofuel, which is defined by how much carbon reduction you have. The threshold is that you have to decrease carbon by more than 50 percent. Ethanol is 22 percent carbon reduction.

What state has the highest biodiesel production?

It used to be Missouri first. Then Iowa. And then Texas took it over. The Iowans were saying we want to be the Texas of biodiesel production. Then Texas became the Texas of biodiesel production.

What is the biggest challenge? What keeps you up at night?

We have always worked hard to be partners with the petroleum industry. … But refiners increasingly see biodiesel and biofuels as eroding their market share. … Certain segments of the petroleum industry have really made it a top priority to eliminate renewable energy policy and carbon policy. … It's a threat when you have the largest, wealthiest most powerful industry in human history making it a top priority to eliminate policy that is aimed at helping incentivise renewable energy.