Future of Biodiesel Industry in the U.S.

Sept. 17, 2009 - PRLog -- As a biodiesel consultant, I get asked quite often whether I believe that now is a good time to be in, or getting into, the biodiesel business in the United States.  While I certainly believe the government must to do more to assist this industry (which is very much a vital concern to national security), I also believe that the outlook for this industry is very positive.  Here is my rationale.  First, energy demands are growing.  Second, U.S. national security dictates that we wean ourselves from Middle East oil.  But fossil fuels currently make up 80% of the world’s energy and they will continue to provide the majority of the world’s energy twenty years from now.  Why is this?  Because even though the other pure alternatives such as nuclear, wind, etc  are being heavily researched and are growing at a much faster pace, they starting from such a small percent that they will be lucky to garner even one fourth of the market over the next 20-30 years.  The bottom line is that we are going to be using oil, and lots of it, over the foreseeable future.  So, we must have oil, but we don’t want to maintain dependence on certain nations that may have somewhat antagonistic attitudes toward the U.S. and democracy in general.  What to do?  Seems we have only two choices:  Either find more of our own oil here or figure out how to stretch what we do have.  The first option would be great, and without getting into the politics of drilling for oil, the simple fact is that that supply is finite and it is running out.  Thus, my conclusion:  Alternative fuels that can be blended into oil will be in MAJOR demand over the next two to three decades.  

Are the oil companies in agreement with me?  Well, the biodiesel market has taken a downturn, and many of the smaller groups who initially got into the business have been shaken out.  However, it appears that the major oil companies are continuing their build up, especially now being able to purchase at relatively low prices.  We are seeing fairly regular press releases from oil companies announcing their new ventures into the industry.  And, what about our neighbor to the north?  Canada is coming along fast – actually at a better pace than the U.S. presently.   In just a few weeks, Manitoba will become the first province in Canada to implement its biodiesel mandate.  Then in Jan. 2010, British Columbia kicks off its B5 mandate. In fact, Canada is contemplating having enough biodiesel to sell the U.S. when we cannot produce enough of our own.
So, can this alternative fuels idea be done successfully here in the U.S. - is it sustainable?  Brazil sets us a pretty good example. 50% of Brazil’s transport is ethanol-based right now.  They have been a pioneer in biofuels for more than 30 years already. They produce about 20 billion liters of biofuels every year.  And, their cost of biofuels from sugar cane compares to oil at $45 a barrel? What they can do with mostly ethanol, we can do with biodiesel.  I rest my case.

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Wayne Lee is the owner of Lee Enterprises, a biodiesel consulting firm specializing in project management, feasibility studies, business plans, and assistance with planning, market analysis, site evaluation, feedstock selection and procurement, process technology, evaluation, offtake distribution, financing, capital budgeting, and contract negotiations (for feedstock, off-take, transportation, construction, site purchase/lease, and plant management). He also owns National Business Brokerage, Inc., (www.natbusbro.com) a full service business brokerage firm specializing in the buying and selling of biodiesel plants. Lee Enterprises, 1503 East Kiehl Ave., Sherwood, AR 72120. (501) 833-8511. (www.lee-enterprises.com).