Cheaper Veggie Diesel May Change the Way We Drive

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"That created demand for about 16 million gallons [61 million liters] a year," Higgins said. A larger boost was provided by a U.S. federal tax credit that encourages blending biodiesel and regular diesel fuels.

"That has made biodiesel more cost competitive and significantly increased demand," she said.

The most common biodiesel fuel product, B20, is 20 percent biodiesel and 80 percent conventional diesel. Most commercially available biodiesel is sold in such blends.

Generally, biodiesel costs more at the pump than regular diesel fuel. The cost difference is about the same as it is between premium and regular gasoline.

Biodiesel production costs are tied to weather patterns that affect crops used in its production, such as soybeans or rapeseed (canola). Diesel costs are tied mainly to the cost of its source, petroleum.

Currently the U.S. is home to some 45 biodiesel plants. The average plant produces just 6.5 million gallons (24.6 million liters) a year, but larger facilities may soon be coming online.

Tip of a Green Iceberg?

Monty Goodell is president and CEO of Houston, Texas-based Cogeneration Technologies, parent company of the Biofuel Industries company. He is developing a 50-million-gallon (189-million-liter) facility. The operation would double the entire U.S. biodiesel output, based on 2004 numbers.

"We are at the tip of the iceberg for biodiesel," he said.

"There were 500,000 gallons [1.9 million liters] of biodiesel produced five years ago [in the United States]," Goodell said. "Last year there were 25 million gallons [95 million liters] of B100 biodiesel produced—a 5,000 percent increase in just five years." B100 is 100 percent biodiesel—no diesel added.

If B20 ever becomes a diesel fuel standard, Goodell says, biodiesel demand could be staggering.

"[There were] 55 billion gallons [208 billion liters] of petroleum diesel consumed in the U.S. last year," he said. "[A biodiesel requirement of] 20 percent would equal a requirement of 11 billion gallons [42 billion liters] of B100 biodiesel needed" for mixing with diesel fuel.

The word does appear to be getting out.

"We are seeing quite a bit of demand," said John Rymes, of Rymes Heating Oils in Concord, New Hampshire. Rymes has several biodiesel pumps and also provides biodiesel for construction-vehicle operators and home heating-oil consumers.

"I'm not going to tell you that we've generated a lot of income from it, but we're committed as a company to try to bring a cleaner-burning fuel to the region," he said.

The U.S. Environmental Protection Agency has determined that the greener fuel emits only a third of the unburned hydrocarbons and half of the carbon monoxide and particulates that standard diesel fuel emits. Furthermore, biodiesel's sulfur oxide and sulfate emissions, which cause acid rain, are negligible.

The fuel is also biodegradable, so safety concerns and pollution issues are minimal.

Rymes explains that New Hampshire fuel taxes currently take a big bite out of his potential profits on the fuel. But, to stimulate interest, he keeps biodiesel priced as competitively as he can.

"It's a great product," he said, "and there are a lot of people interested in using it."

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