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Turning Soybeans Into Diesel Fuel Is Costing Us Billions ( 264

This year, trucks and other heavy-duty motors in America will burn some 3 billion gallons of diesel fuel that was made from soybean oil. They're doing it, though, not because it's cheaper or better, but because they're required to, by law. From a report: The law is the Renewable Fuel Standard, or RFS. For some, especially Midwestern farmers, it's the key to creating clean energy from American soil and sun. For others -- like many economists -- it's a wasteful misuse of resources. And the most wasteful part of the RFS, according to some, is biodiesel. It's different from ethanol, a fuel that's made from corn and mixed into gasoline, also as required by the RFS. In fact, gasoline companies probably would use ethanol even if there were no law requiring it, because ethanol is a useful fuel additive -- at least up to a point. That's not true of biodiesel. "This is an easy one, economically. Biodiesel is very expensive, relative to petroleum diesel," says Scott Irwin, an economist at the University of Illinois, who follows biofuel markets closely. He calculates that the extra cost for biodiesel comes to about $1.80 per gallon right now, meaning that the biofuel law is costing Americans about $5.4 billion a year.
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Turning Soybeans Into Diesel Fuel Is Costing Us Billions

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  • by i286NiNJA ( 2558547 ) on Wednesday January 17, 2018 @01:37PM (#55946957) Journal

    The plan with all these energy schemes is that once you allow businesses to come into existence around them, they may figure out how to do it efficiently enough to become profitable. Sometimes it works like in the case of solar or wind, sometimes not so much like with ethanol.

    • In what universe is it a reasonable expectation that the amount of energy required to produce a fuel will be less then them amount of energy it produced when burns? Answer none.

      The question is , is scientifically _possible_ to create an efficient enough process that the energy in the plant material itself ( which is basically solar energy if you think about it) is more then the amount of energy needed to process the plant into food.

      otherwise what you have is at best something like a battery. A way to store

      • by ltcdata ( 626981 )
        In Argentina, we produce biofuel as a byproduct, so our cost is close to zero. Trump put a blockade (50% tax) to our fuel because he "thinks" it's subsidized and "Argentina is dumping!" It's not. It's VERY cheap for us to make it, and USA will never be able to produce it so cheap
        • by saider ( 177166 )

          Byproduct of what process? I am curious.

          • by Shotgun ( 30919 )

            Byproduct of producing soy meal for pigs and chickens in China. Soy basically produces meal and oil, and China has a high demand for the meal.

        • ... and USA will never be able to produce it so cheap

          What barriers to entry are there or what competitive advantage does Argentina have that would preclude the US from doing exactly what Argentina is doing?

        • In America we also produce ethanol as a byproduct of producing high protein feed for cattle. (what's left of corn after you boil out the sugar)

          Other countries can play that game of bullshit too.

      • by ceoyoyo ( 59147 )

        In what universe is it a reasonable expectation that the amount of energy required to produce a fuel will be less then them amount of energy it produced when burns? Answer none.

        This one. It's called thermodynamics. You always put more energy into making a fuel than you get out of using it. Fuel is a battery.

        In this case you're comparing biodiesel with fossil diesel. Making fossil diesel is very inefficient, but that happened a long time ago so you're not bothering to count the energy expenditure.

        • And if you forget the fact that the actual source of the free energy being used is Mr. Sun -- for EITHER diesel OR biodiesel (with the only real question being when the sunshine that contributed the energy occurred) -- one could read your words and become quite alarmed!

          That's the REALLY funny thing about the whole debate. Outside of nuclear energy, 100% of everything else IS solar energy. Hydro? Really solar. Natural Gas? Solar. Oil-based fuel? Solar. Ethanol? Solar. Bio-whatever? Solar.

          Wait, I t

    • once you allow businesses to come into existence around them, they may figure out how to do it efficiently enough to become profitable

      You've confused "allow" with "legally require". The difference is that legally requiring it means all they have incentive to figure out how to do efficiently is making the right level of campaign contributions.

      • They can still make more profit by cutting costs. Economic incentives don't sleep, even in captive markets.

    • And economically, if you look at the long run, petroleum will come to an end. Sure, it screws up the short term profits which is why this issue has become a political one instead of merely economic. But think back, we nearly caused many whale species to become extinct because of reliance on whale oil before we switched to petroleum. Do we really need to get those oil wells as dry as a bone before we switch to something else?

      Granted, there are a lot of other things not great about biodiesel at the moment.

  • by Narcocide ( 102829 ) on Wednesday January 17, 2018 @01:37PM (#55946959) Homepage

    Way too many of you don't actually need to be driving every day but still are. I realize that's immaterial to food/resources shipping, but it's still the bulk of the weight of emissions and fuel waste. What we're looking at here isn't the real problem. The real problem is wasteful employers demanding their wage slaves jump through these unnecessary extra hoops just out of some blind devotion to an obsolete tradition, or else some sick psychotic enjoyment of the sense of control it provides them to be able to order them to do in some cases even hours of unpaid work before and after each shift.

  • by Rei ( 128717 ) on Wednesday January 17, 2018 @01:39PM (#55946967) Homepage

    But it's important to know that in 2020 a new low sulfur standard on bunker fuel is going to come into play. That's going to put shipping in direct competition with diesel for refinery output, and will likely create a significant crunch in that regard. The right time to have killed off biodiesel's subsidies is either "several years ago" or "after the market adjusts to the new low sulfur standards", not during the crunch / adaptation timeperiods.

    I mean, you can make the diesel crunch worse if you want if you're willing to drive up commodities prices further in order to accelerate the transition to electric shipping. There's a logic there. But as far as timing goes, diesel is going to be in a tight spot as it is without taking a lot of alternative fuel off the market.

    • Fair enough, but with the sulfur requirements having a definitive date, the ****free market**** ****should**** be able to adjust for this without the strict government requirements.
      • by Amouth ( 879122 ) on Wednesday January 17, 2018 @02:05PM (#55947253)

        so are you building the extra refinery? or am i? or you know if you don't i won't and we can both just charge x2 the price...

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Multinational companies killed the free market ages ago

      • How the fuck should the free market drive sulfur emissions down?

        Are you brain dead?

        • illiterate noob. " A ****free market**** ****should**** enable our energy companies to plan for a foreseeable spike in demand for a particular oil product and adjust production plans accordingly.
      • by Rei ( 128717 ) on Wednesday January 17, 2018 @02:41PM (#55947619) Homepage

        That would be great if the industry could react that fast, but it takes a lot longer than just a few years to convert a large portion of the world's total petroleum consumption from high sulfur sources to low sulfur sources. They're working on it, but there will be a supply-demand imbalance, and it will have financial consequences.

        BTW, the IMO regulations come into effect at the start of 2020, not the end. Not much time left. The rule change was only announced this fall

        It can also be dealt with, mind you, by installing scrubbers on ships - then they can still burn high sulfur fuel. But about 80% of shipping is expected to switch to lower sulfur crude, as the capital costs for ships to add scrubbers are quite high. There's another problem, in that the most affordable way to scrub sulfur from ship exhaust ends up dumping it into the sea... but then they're exposing themselves to a liability that years from now that might be banned and they'd have to undergo yet another retrofit.

      • by ceoyoyo ( 59147 )

        It will. The free market always adjusts appropriately. Problem is, we often don't like the correct adjustment so we try and fiddle it a bit.

        • What do you mean by the "correct adjustment"? People are selfish wasteful bastards and the free market reflects that. Government exists because people realize that they need something to keep themselves in check.

          • by ceoyoyo ( 59147 )

            The correct adjustment is setting the price appropriately for the supply and demand. Yes, it's kind of circular, but so is most of finance.

            That's what I mean: people are selfish, wasteful bastards, and if left alone the market will correctly reflect that. We've tried that a few times and didn't much like it, so we have governments to intercede.

  • by Rick Schumann ( 4662797 ) on Wednesday January 17, 2018 @01:43PM (#55947021) Journal
    We need to get away from these 'mature' technologies in transportation sooner or later, so why not sooner? Fast-track it.
    • Because that is heavy handed and idiotic.

      Don't think about legislating ICEs away until some common sense things are true: EVs are half the price they are now, have robust charging standards and charge stations are more numerous than unicorns.
      • by harrkev ( 623093 )

        Well, I have seen charging stations. They are not as common as they need to be to truly support a switch to electric, but we are slowly getting there.

        However, the cost for an EV will probably never come down to a parity with ICE cars (at least not without an artificial tax on gas vehicles). Lithium is still expensive, and demand for it is keeping the prices high.

        Really, the only hope is for some type of battery that does not involve lithium to take off (and no fair switching lithium for unobtanium -- all

  • cost (Score:5, Interesting)

    by Tom ( 822 ) on Wednesday January 17, 2018 @01:44PM (#55947035) Homepage Journal

    That might all be true, but has it occurred to any of those people that cost may not be the only factor that was considered when the law was created?

    Omg, the sky is falling, run for the hills - somebody is thinking about something else than profit, profit, profit!

    Stuff made from plants is renewable. Sooner or later we will have to switch to renewable, because - surprise - oil is only renewable on a scale of millions of years. So you can over a period of some decades slowly transition to renewables - with probably increased overall costs, definitely higher costs initially because everything is more expensive when you start it - or you can keep burning oil until it is actually over and then watch civilization crumble in the price shock.

    The last numbers I could find in a quick search was biodiesel wholesale prices above $4 per gallon. That means with taxes, distribution and profits for the petrol station, it'll be somewhere in the $5-$6 range per gallon by my naive estimate.

    Imagine the price of gas suddenly went up into that price range. I bet you know a lot of people who would have to make some hard life choices.

    • >Stuff made from plants is renewable.

      It's carbon neutral too.

      The crime isn't burning hydrocarbons. It's digging them out of the ground and burning them.
      $1.80 extra per gallon is the cost to us when they don't use biodiesel.

      • by dgatwood ( 11270 )

        >Stuff made from plants is renewable.

        It's carbon neutral too.

        Only if it takes no non-plant-based energy to harvest it and refine it.

        • >Stuff made from plants is renewable.

          It's carbon neutral too.

          Only if it takes no non-plant-based energy to harvest it and refine it.

          Which would be diesel fuel. You've got to make some to prime the loop.

    • Re: (Score:2, Informative)

      the problem is this 'renewable' is not even a net zero return. which is to say you could not run the trucks and equipment used to produce bio-diesel on bio-diesel and expect to not add other fuel into the system. At best it needs to be views as an energy storage mechanism not a fuel. Maybe ... one day ... we will find a process to convert the plant to fuel that doesn't take more energy ( produced from oil) then you get back when you burn it , but that isn't today. Also, these has been being researched

    • >has it occurred to any of those people that cost may not be the only factor that was considered when the law was created?

      Fossil fuels are only more profitable because we don't include all the costs... production was handled a long time ago, over a very long period of time. Pollution? We do a lot more to mitigate than we used to, but in the grand scheme of things we really don't spend much on turning the use of such fuel in to a net-zero impact on the environment.

      You burn a plant, and you grow a new on

    • Limited production (Score:5, Insightful)

      by DrYak ( 748999 ) on Wednesday January 17, 2018 @02:16PM (#55947363) Homepage

      Stuff made from plants is renewable.

      On the other hand stuff made from plants is, well... made from plants.
      And there are only so many that you can grow at the same time.

      If you produce bio-fuels by finding a new use for waste (e.g.: fermenting *plants waste* into ethanol, as done is some countries), then that's not a problem. In fact it's an advantage, now you can get even more value from the plants that you grow.

      If you produce bio-fuels by growing specific plants for that (e.g: I might remember that in the US you tend to do that ?), then your fuel production if going to compete with your food production.
      Will you plant crops that you will use to sell food ? Will you plant crops that you will use to produce fuel ?

      Bio fuel production in the latter case can have a bad impact on food production, even more so if the bio-fuels are exported for a premium to much richer countries, whereas the already starving population can barely buy enough to feed themselves : the local population won't be able to afford food a higher price to increase the incentive to produce more food, while the other richer countries will be able to pay slightly more money to make sure they'll receive the fuel they crave.

      • by idji ( 984038 ) on Wednesday January 17, 2018 @03:07PM (#55947905)
        The erosion, low biodiversity , glysophate, Nitrogen and Phosphorus use and runoff is appalling. These are the non-renewable costs of these biofuels.
        How much energy went into producing the nitrate fertilizer for this soy? Phosphorus is not a renewable resource.
    • That's a false dichotomy. By making biodiesel renewable, you are just delaying the transition to all electric transportation.
    • Re:cost (Score:5, Informative)

      by Solandri ( 704621 ) on Wednesday January 17, 2018 @02:56PM (#55947785)
      Nearly all the farm subsidies stem from the Great Depression. The Dust Bowl led to food shortages. Today we pay farmers not to plant crops just to prevent their farmland from being sold and converted into condominiums. The idea is that if a similar ecological disaster strikes, we'll have plenty of reserve farmland which can rapidly be put back into production and sown with seeds.

      Likewise, we pay farmers to overproduce. There's no way to know ahead of time what percentage of the crops will fail, so we set a target of growing enough crops that even if there's a worst-case crop failure (e.g. devastating cold snap in late Spring), there will still be enough crops to feed the entire country. Of course when no crop failure happens, we suddenly have more food than we need. Left to normal supply/demand economics, this would cause the price of these crops to crater, and farmers would go out of business. So instead the government sets a guaranteed price before the season. It buys all the crops thus ensuring the farmers stay in business. Then it sells that food to wholesalers and distributors at a loss. This is how corn, wheat, soybeans, etc. are subsidized.

      That takes care of the economics (keeping the farmers from going bankrupt). But there's still a discrepancy between supply and demand. Because we overproduced, the government is left with a bunch of food which it can't sell. Rather than let it rot in silos, the government has to come up with other uses for it. A lot of it becomes food for foreign aid (which kills the economy for local farmers overseas, but that's another story). Some of the corn gets turned into high fructose corn syrup, to reduce our dependence on imported sugar cane (which only likes to grow in tropical climates).

      And in the 1970s during the Arab Oil Embargo, some clever person said why don't we turn some of that extra food into fuel? You see, this is excess corn and soybeans we're talking about. The cost to grow the crop has already been paid - it's a sunk cost []. Anything useful you can do with it is better than letting it rot in silos, as long as the added cost (i.e. excluding the cost of growing the crop) is less than the benefit of the use. For the biofuel program to make economic sense, only the cost of converting it into ethanol or biodiesel has to be less than the market price for gasoline or diesel. The feedstock (corn or soybeans) is essentially free.

      That's how it began. Then the agriculture industry got a hold of the idea and lobbied for laws which mandated growing crops for the express purpose of converting them into biofuels. So now we're no longer talking about excess corn and soybeans. We're talking about corn and soybeans which were grown with the sole intent of turning them into ethanol and biodiesel. When you do that, suddenly the cost of growing the crop is no longer a sunk cost, and the economic cost of the program is the conversion cost plus the cost to grow the crop. And it becomes a money-wasting program. These programs need to be scaled back to what they originally were - a use for excess crops grown because of our food subsidies.

      Like ethanol, biodiesel has its uses. Ethanol is hygroscopic (likes to absorb water). So adding a little ethanol to gasoline (but nowhere near the 10% we use) helps prevent water from building up in storage tanks. Likewise, the refining process which produces ultra low-sulfur diesel removes much of the natural lubricity in the fuel. Adding a small amount of biodiesel to the tank is a good way to get it back, helping reduce engine wear, reducing maintenance costs and improving engine lifespan. But the programs need to be scaled back to only use excess crops, with enough R&D on the process so they can be ramped up quickly if/when we hit peak oil.
      • Thanks, good history lesson.

      • by Z00L00K ( 682162 )

        There's also a lot of byproduct waste when you process the crops that can be used for producing fuel, even if it's not high grade it do contain at least fuel value.

        The point is that what we today consider waste that's biodegradable can actually be used as a source for fuel. The remains that are left after fuel production would still be rich in minerals that might be possible to use as fertilizer unless it has been contaminated in some way - usually by metals.

  • It's just as bad, if not worse than the tar sands. If we are going to insist on using biofuels, do it with algae ponds out in the middle of the ocean somewhere.

    • It's just as bad, if not worse than the tar sands. If we are going to insist on using biofuels, do it with algae ponds out in the middle of the ocean somewhere.

      You better be prepared when the algae mass becomes sentient.

    • You do understand that genetically engineered algae ponds don't work? Might never work?

      It's hard to take anything you write seriously.

  • There is starvation occurring all over our world and we have no better idea than to convert food that could be saving lives into fuel to burn?  At a higher cost than petroleum fuel? Starving individuals and families can't eat the less expensive petroleum product.  Who makes these decisions about who eats and who does not - who lives and who dies?  Particularly when there is a better alternative?

    One has to ask if this is just ignorance or willful disregard.
  • OK, biodiesel and ethanol for liquid fuels were interesting ideas but aren't panning out as planned. Ethanol pushes up corn prices, biodiesel is expensive, no one has a commercial viable process for creating alcohol from cellulose (the great hope around 2000).

    At the same time, we have coal plants which are being shuttered in favor of natural gas and/or solar. No, wait, keep reading! I'm not going to advocate burning coal!

    Thing is, we have lots of biological fuels, they're just solid instead of liquid. We ha

    • Taking random stuff and burning it is harder to keep clean than a known. That's why it is easier to burn natural gas in a clean way than coal.
    • by saider ( 177166 )

      Feeding the world is a distribution problem, not a supply problem. We grow plenty of food for the world, but local conflicts do more to disrupt the distribution of this food than anything else.

    • All of this biomass isn't terribly energy dense, and a good chunk of the mass is water which you don't really want. So you spend a lot of time, effort and energy collecting it and transporting it to a central location where it can be processed.

      • Fair enough. We already handle this for lots of agricultural products (e.g. hay). You basically just cut it down and let it dry in the sun. I don't know about the density of coal (pretty high), sawgrass hay (dunno) and natural gas (relatively low).

        Regardless of density, I'm trying to compare and contrast biofuels vs. bio-fixed-location-power-plants. You have to do all the same cutting down, processing, and moving about. Just with biofuels, you then throw away huge chunks of the plant and spend a bunch of ti

    • by Hadlock ( 143607 )

      I think it's important to have strategic plans in place on the off chance Saudi Arabia, Iraq etc decide to pull up roots and side with the Russians and our external (we produce ~98%+ of our own needs) oil supplies dry up. I don't think we need a whole lot of ethanol fuel, biodiesel plants around to do this, but 0.5-1% capacity ensures that we at least have a backup plan in case we lose access to some or all of our oil fields. Never rely on a single source for anything. We have strategic oil reserves but jus

    • by cb88 ( 1410145 )
      No, :/ if your burn the plant it just means you have to spend even more on fertilizer... one of the best things about soy it is replenishes the nitrogen in the soil which corn does the opposite of.

      A few harvests of corn without tilling the plant under or at least leaving it lying will mean you *must* fertilize... and that just ends up in our streams polluting our rivers and lakes and killing fish.

      $2 extra for a gallon of fuel and you thing you have it bad... in many other countries fuel is $7+ a gallon and
      • A few harvests of corn without tilling the plant under or at least leaving it lying will mean you *must* fertilize... and that just ends up in our streams polluting our rivers and lakes and killing fish.

        Yeah, the soil replenishment issue is the big one which jumps out at me. I know in the California central valley, rice farmers often burn rice straw to rid of it. I don't know what happens to the above-ground parts of soybean and corn plants (or wheat for that matter). I'd like to think it decomposes and feeds the soil but honestly have no idea.

        BTW, don't confuse nitrogen fertilizer with compost. Once you've grown the soybean plant, the soil is as charged with fixed nitrogen as it's going to be. I don't bel

  • by Shawn Quinn ( 3483619 ) on Wednesday January 17, 2018 @02:03PM (#55947233)
    Virgin 'anything' oil will be expensive for Biodiesel. I used to use biodiesel exclusively. I drove almost 2 years using > 20 gallons of regular diesel. I bought the biodiesel in bulk from a local producer who ws making it from waste oil. With the subsidy it was usually about the same price as diesel. I bought fuel in bulk (200 gallon sat a time) which would 'fix' my fuel cost for however long it took me to burn 200 gallons of fuel. At 40+ MPG, it took a while :). I stopped using biodiesel after a diesel fill rendered my car un-drivable due to the injection pump leaking so bad. I sent the pump out for re-seal and it ended up costing $1000ish to repair the injection pump due to corrosion inside. The Root cause was deemed to be water in the biofuel. Once fixed, I haven't touched the special sauce. In general I'm not sorry I tried it, but it did seem to cause or as least exacerbate an injection pump issue, it got about 5% worse fuel economy, and seemed to make slightly less power. On the plus side, it usually smelled like Chinese food vs diesel exhaust stink. I still have the car but has since sold my home Biodiesel fuel station.
    • Pretty much the same story for me, but I was using virgin soy biodiesel as that's what I could get locally. The fuel pump died, I spent 1000$ and that was pretty much it.

      I don't know the cause of the fuel pump problems - never took it apart to diagnose or anything.

  • Converting soybeans to fuel is a lot better than putting those soybeans into the food chain. Eating them turns men into Soy Boys. []

  • Burning food in your car or truck is stupid.

  • Quite seriously Ethanol barely breaks even energy wise... it is at best a corrosive additive that wears our cars out faster with a slight to neglegible reduction in emissions. Corn Ethanol is nothing but a useless subsidy for corn farmers (they should be farming something else as corn is detrimental to the land as well and requires large amounts of fertilizer to mitigate the removal of nutrients from the soil)

    Soy Biodiesel on the other hand while expensive produces more much more fuel per acre (and denser f
  • ..if it's made from waste oil, left over from cooking

  • A typical human adult not excercising burns roughly somewhere between 70-140 American calories an hour. Burning one calorie per second gives you roughly 4.2 kwatts or 5.6 horsepower. So it takes 3600 calories per hour per 5.6 horsepower or 640 calories per hour per horsepower. Trucks get about 5.6 miles per gallon of diesel which has 30,000 calories or about 5,300 calories per mile. That's enough to keep two healthy adult males alive a day per mile, or maybe a small family could squeak by. forget that
  • I thought this was going to be an article about Turing Soybeans.
  • The cost of fixing an issue will likely be less than continuing to pour more co2 into the air. While this does not reduct pollution it slows it.

I go on working for the same reason a hen goes on laying eggs. -- H.L. Mencken