Friday, August 31, 2007

Biodiesel Performance, Costs, and Use

Nitrogen oxide emissions from biodiesel blends could possibly be reduced by blending with kerosene or Fischer-Tropsch diesel.16 Kerosene blended with 40 percent biodiesel has estimated emissions of nitrogen oxide no higher than those of petroleum diesel, as does Fischer-Tropsch diesel blended with as much as 54 percent biodiesel.17 These results imply that Fischer-Tropsch diesel or kerosene could be used to reduce nitrogen oxide emissions from blends containing 20 percent biodiesel, although the researchers did not investigate those possibilities.

...2.47 EIA’s price projections for soybean oil are based on data from the U.S. Department of Agriculture (USDA), Office of Energy Policy and New Uses.27 The USDA estimated the effect on agricultural markets of a renewable fuels requirement for gasoline and diesel fuel by constructing two agricultural market forecasts: a renewable fuels standard case with, and a reference case without, biodiesel production from soybean oil.

...The biodiesel production process uses, for each gallon, 0.083 kilowatthours of electricity30 and 38,300 British thermal units (Btu) of natural gas.31,32 EIA estimates energy costs (in 2002 cents) of 18 cents per gallon in 2004 and 16 cents per gallon in 2005 and 2006.33 A new biodiesel plant is estimated to cost $1.04 per annual gallon of capacity.

...Petroleum refiners, on the other hand, use more than 90 percent of their capacity, and additional capital investments are needed to keep up with increasing demand and tightening product specifications, such as the transition in 2006 from a highway diesel sulfur limit of 500 parts per million to 15 parts per million.... Because soybean biodiesel producers have overcapacity and a product that more than meets the upcoming highway diesel sulfur limit, they need make no additional capital investments to produce output up to 80 million gallons in 2006 and beyond.36 The cost comparison in Table 3 is therefore between the cost of biodiesel, excluding capital, and the cost of petroleum diesel, including capital.

...Biodiesel from yellow grease is closer to being cost-competitive with petroleum diesel than is biodiesel from soybean oil, but the available supply of yellow grease will probably limit its use for biodiesel production to 100 million gallons per year (6,523 barrels per day) or less.

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