As private-sector and government pull together, biodiesel gains ground in Minnesota

By Dan Lemke

Grand Meadow, Minn. — Brian Hanson runs every diesel truck and tractor on his 2,700-acre farm on biodiesel. In fact, he buys his own soy methyl esters to blend with conventional diesel.

“I blend at a one-percent rate now, but I’ll go to two percent this fall,” Hanson says. “I guess it’s my own protest against high oil prices.”

Recently elected national director for the American Soybean Association, Hanson is among the producers helping themselves by utilizing and promoting biodiesel made from their own crops.

Biodiesel to the masses

Farmers buying biodiesel for their own use ultimately secure only a small market for the fuel. That’s why numerous efforts are promoting biodiesel to the masses.

Over the past year, biodiesel testing in snowplows and other Hennepin County highway department vehicles showed favorable results. In July, generators powering the Taste of Minnesota celebration in St. Paul ran on biodiesel. And the Minnesota Department of Commerce is conducting a demonstration of biodiesel-powered school buses. These efforts and others like them are serving to raise public awareness, acceptance and possibly demand.

“Soybean producers are looking for domestic opportunities to move product,” says Scott Singlestad, domestic market chair for the Minnesota Soybean Research and Promotion Council. “For Minnesota, biodiesel is big because it provides a domestic use that we don’t have to ship far, and we don’t have to worry about world trade agreements.”

“Right now there is about a two billion gallon soybean oil surplus in this country,” says Max Norris, AURI senior scientist. “Anything that moves oil off the market is a good thing for the industry.”

Biodiesel is on the market in the form of fuel additives or as pre-blended fuels. It can be burned in various ratios, from low blends to 20-percent soy blend to pure or “neat” biodiesel.

Legal pushes a plus

Besides biodiesel proponents’ efforts, actions taken in St. Paul and Washington D.C. will greatly impact the industry. Legislation introduced in the last session of the Minnesota Legislature would require all diesel fuel sold in Minnesota to be at least a five- percent biodiesel blend. The measure will be reintroduced in January. Don Louwagie, the state soybean association president, says a five- percent inclusion would result in 25 million gallons of soy oil consumed for fuel in Minnesota each year.

In Washington, the EPA is considering tightening sulfur standards in diesel fuel to reduce pollution. That’s good news for soybean farmers. Sulfur provides lubrication for diesel engines; reducing it results in a “drier” fuel. But soy oil, even in low blends, restores the necessary lubrication while lowering particulate emissions, so EPA standards for lower sulfur would open the door for biodiesel.

Two dollar gas

High prices at the pump in early summer helped draw attention to alternative fuel development. Fluctuating oil prices directly impacted consumers, with prices near and sometimes exceeding $2 a gallon, reminding Americans of our keen dependence on fossil fuels.

Biodiesel production is expensive, however. Some of AURI’s research includes ways to reduce biodiesel’s cost. One example is potentially using waste fats and oils for fuel. Refining waste oils and combining them with virgin soybean oil could help lower the cost of biodiesel, making it more attractive.

Nevertheless, Brian Hanson is excited about the future of soy-based fuels. Capturing even a small portion of a large market would be great for Minnesota agriculture, he says.

“There is great potential for biodiesel. ... I think the bulk of it will be used in lower blends of one, two, maybe up to five percent. I think that’s where we will capture the market.”

To stay informed on significant developments in the biodiesel industry, visit www.auri.org to read the Biodiesel Bulletin, a monthly newsletter distributed by the National Biodiesel Board.