Using biodiesel blends requires little or no engine modification and maintenance costs are comparable to those of conventional diesel vehicles. Neat biodiesel costs range from $1.95 to $3 per gallon, depending on the feedstock and supplier. In general, B20 will cost $.20 to $.40 per gallon more than conventional diesel. For more information, download the Alternative Fuel Price Report from the AFDC.
(The red hi-lighting is mine)
You've heard me say before - beware the crock of (crud) at the end of the rainbow. I have often thought that if government or big industry got any sort of hold on the pricing of Biodiesel, it would inflate it out of all proportion to what it should reasonably be so as to keep fossil fuels viable for the time being. THIS looks like a foot in the door for exactly that kind of 'Precedent Setting' scheme.
If the precedent of high prices for biodiesel is set, and the "Californesque" mind set that its "Good for the Planet" sells the product regardless, figure the odds that home production will be restricted and hyper regulated before long as well - making home production of fuels come under a varient of the ATF, and relegating home producers to the status of "Bootleggers"!
Perhaps I'm reading too much between the lines here, but my gut instinct is to throw down the "BS FLAG" on this play. Can it really cost as much as $3.oo per gallon for pure BD? Is that reasonable? Assuming the big companies have the same cost cutting ability in mass quantity production as in most any other industry, how much of that $1.95 to $3.oo figure is meat and how much of it is pure FAT???
In theory it should be more cost effective to produce in bulk than in the private sector since there are a number of ways for a big company to arrange to actually be PAID for services such as commercial waste disposal in collecting used oil. Most major fast food chains now have large holding tanks that are served by "nameless" waste handling companies. I was given a name and number by a manager at one of these in Atoka to see if I could get used veg oil from them - and not only was the number no good, but the waste management company itself cannot be found any trace of (not by telephone operator, or by internet search either...)
Additionally - I note that there is a tax incentive specifically for "FLEET VEHICLES". While on the face of it, this sounds like a great way to reduce MAJOR sources of pollutants - it is an even bigger incentive for major industry to round up the lions share of BD raw materials and set their own pricing (both internally and externally)
I looked into making biodiesel about 1 year ago before everybody and their mother was talking about it.
It turns out that the companies in CA that collect the used oil make money on both ends. They get paid to collect it and then they turn around and sell it. Other companies pay for clear filtered oil that gets used to make soaps, cosmetics, filler for dog food and various other things. They sell it for around $0.75 a gallon around here (if I remember correctly).
Also it turns out that the cities around here are "concerned" about the dumping of used vegatable oil so they make restaurants file paperwork that accounts for the amount of oil they consume and how much they pay to have hauled away by a collection service.
The only way I can get used oil is to get it outside of the city limits.
I have also been told that the price for used oil is increasing as more people are trying to get it. Also the price of soybean oil is shooting up as well. All this is because of the demands being created by the biodiesel phenomenon right now. Just think how many beans you have to squeze to get a gallon of oil. A lot I bet!
You are reading to far into it and have not done enough homework, I had a complete page for you unbelievers out there written and scrubbed it into the delete pile, I would challenge every single one of you that believe the USA government has something to do with the pricing structure of BD, you jumped on the first ship that had information that you thought was coming from a reliable source.
When has your government given you reliable information without lying to you? I believe in the people of the USA, but the government of politics is a different issue, they are not going to be setting the pricing structure of BD and cannot set it, there is alot more BD facilities around the world and USA grounds that all of the oil Co. in the world already. BD producers know already that there oil is only going to be a subsidary to Dino, not a take over, it may come down the road that Dino and BD are going to be 20 cents different, but it is going to be labeled as fuel specifically, both products do the same thing, but I don't think so.
Pricing for Dino is going to skyrocket and BD is going to stay stable, the real part that will change in the pricing structure of BD is the availability of the crude new or spent used vegetable oil prices to the manufacturing facilities. All other products should stay relevant. That is all in the future though, and I don't have ESP, I can only speculate. As far as the tax incentives, you didn't state that the first slated tax incentives stop at the end of 2006, no more free money to the fleets, it stops. The tax incentive was 1 cent per % of BD used up to 20 % of BD, not 100% BD in the tank, So this means you still have to buy at the least 80% Dino oil reguardless. Sounds to me that the Gov. is hearing the people finally, and the Gov. along with the oil Co. have got to give alittle to the people (since they are mostly seen in the bed together), and this is there cry, saying, we can't give into the BD fully, so we will give them just enough to get the quite them down a notch.
I believe that most american people are fed up with the low ball pricing of overseas and the USA Companies that do there major businesses there and bring them back into the states to complete the low balling, but BD here in the USA is made in the USA, support it, don't put it down.
I am not arrguing with you here, just challenging your mind.
Another thought that I have for all of you that think 2-3 dollars a gallon for BD is way to much, but yet think 4 dollars a gallon for Dino oil is going to be fine, take your own steps out of your comfort zone and build your own Biodiesel manufacturing facility and get your own piece of the pie. This is America, land of opportunity. Get a piece of it, first step, stop taking about the what everyone else is doing,
second step, start thinking of the possibilities for yourself.
third step, do it!
Fourth step, ........................let's go fishing!
I don't want to jump out here to far, but a friend and myself are putting together as we speak a pilot plant for BD that will do easily 5 million gallons of BD a year and it is not funded at all from the government, this is out of our pockets, and we don't have deep pockets, but we do have access to alot of used components, parts, pieces, tanks, tubing, pumps, engineering and we have a business plan like no other.
Pricing is still all unforseen as to where it can go, it could go down drastically, the fuel is really to new on the market and the product does not have the whole country support or stability, (you just don't pop into any fuel station and get BD or for that any alternative fuel, (hydrogen), ect.) still sporadic across the country.
Normal pricing will have to start from the oil renderer, they already get paid to pick it up from the restaraunt, then they sell it to the BD oil producer (by supply and demand) because the oil renderer already has an outlet for it without the BD producer, the BD producer does there thing to the oil and sell it out the the blender, wholesaler or final customer.
Government is helping fund the oil consumption through incentives right now, I am not sure what the final figures are, I have heard but I am not at this time concerned with that, and also waste fryer oil to BD, there is incentives for that also. These incentives have just been upt to 2010 from 2006. These incentives are for the producer and user both. I don't know where this is going to end or land, but I think the ride is going to be fun! Just alot of hard work ahead.
Again, I do agree with you, Government is saying what it is going to be or is, they just happen to be wrong,... again. They are the largest employer in the world, but by all means they are not the best. Broken Wire
These incentives have just been upt to 2010 from 2006.
Thanks for the update - I imagine you'll be keeping close track of these things.
Fascinating to watch all of this going on, its almost like the early railroad industry but how many people can build their own train in the backyard as a small home transesterification facility can be...