Biodiesel, Yea or Nay?

I had been under the impression for some time that the US government's subsidies for biodiesel production were misguided, as producing biodiesel supposedly cost more fossil fuels than it replaced. As to why the US government would continue to subsidize biodiesel… well, soybean growers are generally found in swing states, right?

But that logic does not explain why environmental activists would pursue biodiesel with such fervor. Admittedly, many environmentalists ignore economic costs in favor of environmental impact, but one might expect them to be able to account for the direct fuel costs of producing biodiesel in the first place.

Today I stumbled on this 1998 report by the Depts. of Agriculture and Energy on the "life-cycle" costs of biodiesel, which explains much of the difference (section 9.2.2):

A survey of commercial technology for biodiesel reveals that there is high degree of variation on reported steam and electricity requirements for the transesterification process. High and low estimates for both steam and electricity used in the model are indicated in Table 138….

Steam requirements vary 3.5-fold from the lowest to the highest value. Electricity varies 4.4-fold. This high degree of variability warrants testing the range of these assumptions in our model to assess the uncertainty of our overall results related to this assumption. Furthermore, energy inputs for soybean oil conversion are a substantial part of the life cycle, making this variability even more important.

In other words, biodiesel detractors use the high values for energy consumption, while biodiesel advocates use the low values. Energy and resource consumption is even lower if the projections assume that biodiesel production occurs in particular ideal regions of the country, such as Chicago (section 9.2.1).

The report concludes that on average:

Biodiesel yields 3.2 units of fuel product energy for every
unit of fossil energy consumed in its life cycle. The production of B20 [20% biodiesel, 80% diesel] yields 0.98 units of fuel product energy for every unit of fossil energy consumed. By contrast, petroleum diesel’s life cycle yields only 0.83 units of fuel product energy per unit of fossil energy consumed.

Apparently, biodiesel is indeed more energy-efficient than petroleum-based fuel. This is especially true since in a comptetitive marketplace, producers will be driven to employ more efficient processing methods, as opposed to the less efficient ones. Now, the only catch is to build up the necessary infrastructure. Few gas stations sell biodiesel (ironically, Willie Nelson's B20 mix "BioWillie" is mostly sold in Texas), and unless consumers can easily switch over, they will have little incentive to do so.

The United States can grow truly awe-inspiring amounts of food, so much that we have to pay farmers to grow less. If biodiesel is truly a viable alternative to petroleum, I see no reason why we should not implement it as quickly as we can. (Especially with the Iranians acting up…)