Biodiesel may help the planet, but the price won’t help you

Anyone thinking that the rising price of gasoline might make this a good time to convert to a “green” fuel such as biodiesel might want to think again.

The price of biodiesel has been rising along with the price of petroleum fuel.

The Snohomish Cenex station was selling B-75 — a mix of 75 percent biodiesel and 25 percent petroleum diesel — for $3.54 per gallon on Dec. 1, station manager Ed Eldridge said.

On Thursday, it was selling for $4.24 per gallon.

Regular, non-diesel petroleum fuel averaged $3.55 — compared with $3.09 just a month ago — in the Seattle metro area as of Friday, according to AAA’s Web site.

That current price is 69 cents cheaper than the cost of the biodiesel mix.

Biodiesel prices are rising everywhere. According to industry experts, a complex mix of factors is driving prices up, including continuing drought in Australia and the weakness of the American dollar.

“I think it’s an issue of commodities overall,” said Nikola Davidson, director of the Northwest Biofuels Association, based in Seattle.

The Cenex station is passing on its costs from the distributor, just as the distributor passes on higher prices from the manufacturer, Eldridge said.

“Feed stock prices are way up,” he said. Most of the biodiesel sold in Snohomish County is made from soybeans grown in the Midwest and trucked to the Northwest.

Prices do vary. Standard Biodiesel north of Arlington sells biodiesel made from recycled cooking oil for $3.60.

Instead of buying biodiesel hauled from elsewhere, the company collects the oil from 2,000 restaurants between Olympia and Bellingham, said John Wick, the company’s vice president.

Business has grown steadily since the company opened about a year and a half ago, Wick said.

“It’s been very, very good for us,” he said.

Meanwhile, the price increase at many outlets has driven some customers away.

American Distributing Co. in north Marysville added biodiesel to the fuels it sells more than a year ago, owner Steve Miller said. Recently, after several months of rising prices, the company discontinued biodiesel, Miller said. He had to pay close to $4 per gallon for pure biodiesel, and by the time he added on taxes and other costs, he was selling it for more than $4.50.

“When the price went up, the customers went away,” Miller said. “A lot of people think green as long as the price is cheap.”

Ivan Johnson of Snohomish thinks green when gassing up his dump truck — in terms of money as well as the environment.

He recently filled up his nearly 60-gallon tank on B-20, a mix of 80 percent petroleum diesel and 20 percent biodiesel, at the Snohomish Cenex station.

“I’d rather be going 100 percent bio,” Johnson said. He’d prefer that his fuel dollars stay in the U.S. instead of going to the Middle East.

If the price of regular diesel and biodiesel blends are within a few pennies, he goes with the biodiesel, he said. If one is significantly less than the other, that’s what he buys.

When Johnson was at the Cenex station Thursday, the B-20 blend and petroleum diesel were exactly the same price — $4.04 per gallon.

Soybean prices have nearly tripled in recent months, according to Kevin Kuper, marketing director for Whole Energy, a Bellingham distributor from whom many Snohomish County biodiesel dealers buy their fuel.

Similarly, the price of canola, an oily grain from which biodiesel also is made, has nearly doubled, Kuper said.

The weak American dollar is resulting in more crops being exported, creating a shortage at home, according to Kuper.

Also, China and India are importing and consuming more vegetable oils, said Davidson of the Northwest Biofuels Association. And more farmers are switching from soy to corn, partly because of the rising demand for ethanol, another biofuel. No retail ethanol outlets are located in Snohomish County, and there are only a handful in the Northwest.

The rising canola price could help draw more farmers into growing canola for biodiesel, said Dale Reiner of Monroe. He’s one of five local farmers who participated in a canola-growing program with financial aid from a seed company and Snohomish County.

The farmers together grew canola on 250 acres last summer. Because of bad weather, transportation costs and other problems, each farmer struggled to break even.

Seven farmers plan to participate this year, Reiner said.

“It’s very competitive,” he said. “We need those higher prices.”

Davidson said she expects the prices to level off and come back down as the markets shift. In the future, more biofuels are expected to be grown from non-food sources, such as switchgrass for ethanol. Production issues also need to be smoothed out.

“It’s a young industry,” Davidson said.

Reporter Bill Sheets: 425-339-3439 or sheets@heraldnet.com.

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