EcoNuz

Total environmental impact is best calculated by doing a full Life Cycle Inventory (LCI [pdf]) on each biodiesel production method, as resource consumption and energy usage can vary drastically. The most in depth LCI of BD versus PD was completed in 1998 in a joint project with the US DOA and the US DOE.  The study concluded that total LCI usage for soy based BD compared to PD was 95% less.  The comparison was made for BD and PD consumption in the US transportation industry, specifically urban buses.

Resource and energy consumption differ for planting, growing and harvesting different crops.  Transportation costs can vary based on where crops are located in relation to the production facilities.  Production of oils, in this case crushing the soybeans, varies by crop. Conversion to a standard BD chemistry, like ASTM D-6571, can also vary because plant chemistry can vary.  Post production, the impact of BD from different sources would be the same because transportation to the location of end use, and the use itself would be very similar.

Because of strict standards, the chemical and physical properties of the end BD products upon final delivery are nearly identical.  ASTM D-6751 requires that “the product[s] shall undergo chemical analysis for flash point, methanol, water and sediment, kinematic viscosity, sulfated ash, oxidation stability, sulfur, copper strip corrosion, cetane number, cloud point, acid number, carbon residue, total and free glycerin, phosphorus, reduce pressure distillation temperature, atmospheric equivalent temperature, combined calcium and magnesium, and combined sodium and magnesium,” and must meet standards at time and place of delivery.

Over the entire life cycle, soy based BD reduces total CO2 emissions by 78.45%, compared to petroleum diesel.2  The use of B100 over PD reduces the total emissions of particulate matter (TPM) 32.4%, carbon monoxide (CO) 34.5% and sulfur oxides (SOx) 8%.  Unfortunately, one of the trade offs is that nitrous oxide emissions are increased by 13.35%.2 Total hydrocarbon (THC) emissions are also increased by 35.9% in the total life cycle of soy based BD because hexane is released in production.

Published LCI studies with algae based BD have not been as thorough because study has been focused on production, rather than combustion.  Since production methods are not standardized, it is not yet possible to do a full life cycle inventory that represents all algae based BD.  However, since algae based BD is essentially CO2 neutral, it saves 22.2 pounds of CO2 per gallon of diesel fuel it displaces.

One of the market barriers to using higher BD blends has been the lack of factory ready vehicles that can run on B100 without voiding the engine warranty.  The lack of factory ready vehicles has been attributed to the lack of standard chemical properties because of differing production methods.  Recent standards for BD have been approved, ASTM D-6751, which is expected to result in the ability of more engines to use higher blends of BD out of the factory.  ”Some engine companies have already specified that the biodiesel must meet ASTM D-6751 as a condition, while others are still in the process of adopting D-6751 within their company or have their own set of guidelines for biodiesel use that were developed prior to the approval of D-6751. It is anticipated that the entire industry will incorporate the ASTM biodiesel standard into their owner’s manuals over time.” (National Biodiesel Board)

Ignoring the warranty related issues, which can cause consumers to avoid BD, most engines manufactured after 1993 been constructed with gaskets and seals that are BD resistant.  Most current PD storage tanks in cars and distribution facilities can store B100 without materials compatibility problems.  Fuel pump hoses and seals have commonly been the components degraded from higher BD blends, but the manufacturer switch to components suitable for Ultra-Low Sulfur Diesel (ULSD) has caused a concurrent switch to components that are suitable for use with BD.  One necessary addition to the infrastructure for B100 distribution in cold climates is heated storage tanks. However, they are not necessary with low percentage blends.

Production costs are a major component in the market viability of a fuel because if they are too high, and subsidies are not enough to reduce the market price, then the fuel will not sell.  The two major components of the total price are the cost of the raw materials and the cost of processing.  The raw materials, or the oils used, can account for up to 75% of the total cost.3  The cost of raw materials includes the price of the source material (soy, algae, etc), plus the cost to process the source material into the oil.  Because market prices and the processes to convert them into oil can vary for each production method, total cost also varies by source material.

There are multiple methods for producing BD from plant oils, but the primary method used in industry is transesterification because it has consistently been the cheapest because it is the least energy intensive.3  Transesterification is the process of reacting alcohol with oil to form esters and glycerol.

The esters produced in the reactions are the components used as BD.  Because the process and reactions involved are very similar for different plant oils, the processing cost is essentially the same.  To keep the processing costs down, the remaining components can be recovered and reused.

The 4% alcohol can be reused in additional reactions, the 1% fertilizer used in growing the source material, and the 9% glycerin can be sold for a number of purposes including pharmaceuticals, food additives, and cosmetics.  With all recovery taken into account, some calculations place the total production cost of soy based BD to be as low as $2 per gallon.  In 2006, when PD was $2 per gallon, the price of a barrel of oil was approximately $60.  ASP conclusions put the optimistic production cost of algae based BD to be competitive at $59 per barrel of oil, meaning the final selling price would also need to be $2 per gallon to be cost competitive.

Life Cycle Inventory of Soy Based Biodiesel

In 1998, the US Department of Energy and the US Department of Agriculture did a joint study on the Life Cycle Inventory (LCI) of Biodiesel and Petroleum Diesel for Use in an Urban Bus. The study took into account all known measurable factors to determine the overall environmental impact of each product.  The study LCI of soy based BD included the impact of agriculture, transportation to production facilities, processing, distribution, and tailpipe emissions.  The LCI of petroleum diesel included mining, transportation to refineries, refining, distribution, and tailpipe emissions.  The LCI study concluded that the total impact of B100 is 95% less than that of petroleum based diesel.

US Department of Energy Aquatic Species Program

The most relevant previous studies were done in the US DOE Aquatic Species Program (ASP).  The program was started in 1978 and concluded in 1996.  During its years of operation, the ASP studied production BD methods from algae species with high lipid content, utilizing waste CO2 from coal fired power plants.  During the studies, advances were made in manipulating the metabolism of various algae species to increase the lipid content, as well as production methods to increase output.

By investigating the physiology and biochemistry of upwards of 3000 algae species, the ASP was able to determine the necessary conditions to maximize the lipid content of algae, thus maximizing the production of BD.  At the conclusion, the ASP had narrowed the list to 300 species that had the greatest potential for high yield BD production.  While the conclusion was that algae based BD production was technically feasible, the ASP concluded that the production costs were too high to be viable at 1996 oil prices.

The basic economic concept of substitute goods concludes that when one good raises in price, the demand for its substitute goods goes up.  Since BD is a substitute good for petroleum based diesel, demand for BD goes up as the price of PD increases.  Since 64% of the retail price of PD is crude oil, increases in the price of a barrel of oil directly lead to increased prices at the pump.  Because the price of PD increases with oil, the demand for BD also increase.   Alternatively, if the price of BD increases then the demand for PD also goes up.  To remain cost competitive in the market, BD must remain at or below the price of PD.

Existing infrastructure is important to the market viability of biodiesel because biofuels are not purchased for vehicles that cannot run on them.  Existing diesel engines can run on biodiesel blends of up to 20% (B20) without any modification.  The ability of existing engines to use B20 will allow biodiesel to be added directly to petrodiesel for distribution, which drastically reduces the necessary up front capital investment.  End consumers of biodiesel do not need to purchase new engine components, and distributors do not need to replace infrastructure components like storage tanks or fuel pumps. While current infrastructure can use B20 without problems, the chemistry of B100 does differ from PD.  Biodiesel in high concentrations is a solvent, so some rubber components do need to be replaced or phased in with increased blend percentages.

A major factor in determining the market viability of a biofuel is the production cost. The more expensive the production, the higher the price of the end product. In 1995 the US Department of Energy Aquatic Species Program (ASP) concluded that algae based biodiesel could potentially be cost competitive at three times the current price of oil, or $20/barrel.1 The optimistic cost of production for a barrel of oil equivalent, which would require improvements over 1995 production methods, was $59.1 Since 1995, production methods have improved, there are additional technologies available to generate revenue from byproducts, and additional government subsidies are available. Because production costs have decreased, additional subsidies have been introduced, and the price of oil is higher, biodiesel can now be sold at a price that is more cost competitive with petrodiesel.

The scope of this series and its recommendations is limited to the US transportation industry for a few reasons. Historical price and consumption data for petroleum products is readily available from the Energy Information Administration, so the size of the market is well known. Many aspects of the industry are regulated and enforced, such as emissions standards, and sales infrastructure. Because of the regulation, recommendations incorporated into legislation have greater potential for implementation, like the required B2 blend in Minnesota, as well as the Ultra Low Sulfur Diesel (ULSD) national requirements mandated and enforced by the EPA.

Switching from petrodiesel to biodiesel in the US can also have a large impact because the market is one of the largest in the world7, and the transportation industry consumption accounts for 18% of total refined petroleum products and 82% of petroleum distillate in the United States. (EIA)