Biodiesel Plays Key Role in Addressing Environmental and Energy Security Woes

As Memorial Day marks the unofficial start of the summer driving season, many would-be travelers are choosing to stick closer to home versus experiencing the pain of skyrocketing fuel prices at the pump. But as bad as fuel prices may seem now, they could be worse if it weren't for domestically produced, renewable biofuels such as biodiesel.

New data from the International Energy Agency show that global biofuels production has cut consumption of crude oil by 1 million barrels a day, offering savings of $120 million dollars a day. In addition, Merrill Lynch commodity strategist Francisco Blanch says that oil and gasoline prices would be about 15 percent higher now if biofuel producers were not increasing their output. The biodiesel industry is playing a key role in helping to address many of our nation's economic, environmental and energy security woes.

According to the U.S. Energy Information Administration, the major factors contributing to the rising cost of regular petroleum diesel fuel include: rising cost and restricted supply of crude oil; tight refining capacity due to growing domestic and international diesel fuel demand; increasing transportation costs; higher costs associated with the required U.S. transition to Ultra Low Sulfur Diesel fuel; and higher federal excise taxes on diesel fuel compared to gasoline.

Biodiesel is uniquely positioned to offset all of these costs in the following ways:

  • As a drop-in replacement for diesel fuel, biodiesel blends can extend our diesel fuel supply. If we replaced 5 percent of our on-road petroleum diesel fuel with biodiesel, this would replace about 1.85 billion gallons of diesel fuel a year, or the entire amount of diesel fuel currently refined from crude oil imported from Iraq.
  • Biodiesel provides additional U.S. refining capacity. The U.S. biodiesel industry is currently equipped with more than 2 billion gallons of installed production capacity from 171 plants across 40 states. This wide geographic spread of biodiesel production facilities helps to bolster our national energy security, as well as soften the blow of negative events impacting the existing oil refining industry, such as the Gulf of Mexico hurricanes that caused diesel prices to soar in 2005.
  • Biodiesel is produced throughout the U.S. and can be used locally, helping to lower transportation costs. With nearly 3,400 biodiesel retailers and distributors located in all 50 states and in close proximity to biodiesel producers, consumers can benefit from lower transportation costs to move the fuel from the producer to the retail pump.
  • Biodiesel Improves the performance of Ultra Low Sulfur Diesel fuel (ULSD) without the need for costly lubricity additives. The removal of sulfur from ULSD fuel to meet federal mandates results in much lower lubricity values for the ULSD fuel, potentially causing excess wear and tear on engines. However, the use of biodiesel even in blends as low as B2 (2% biodiesel blended with 98% petroleum diesel) completely restores that lost lubricity and improves engine life and performance.
  • The Federal Excise Tax Credit for Biodiesel helps make biodiesel blends more cost competitive. This tax credit provides a $1 per gallon incentive to biodiesel blenders, helping to bring the cost of biodiesel to consumers more closely in line with the cost of diesel fuel.

In 2007, U.S. biodiesel production hit the 500 million gallon mark, displacing 20 million barrels of petroleum imports, while also creating 21,803 new jobs nationwide and adding $4.1 billion dollars to the U.S. Gross Domestic Product (GDP). In addition, biodiesel reduces lifecycle greenhouse gas emissions by up to 78%, while producing 3.5 units of energy for every 1 unit of energy it takes to make the fuel.

Joe Jobe, CEO of the National Biodiesel Board comments that, "While oil companies are making record profits and not making long-term investments to help stabilize prices, the biofuels sectors are making substantial investments in new renewable energy refinery capacity, and research into new non-edible feedstock supply for the future. Biofuels offer the only immediate renewable alternative to petroleum. It's more important than ever for the U.S. to continue to work toward energy independence by encouraging the use of domestically produced, renewable fuels such as biodiesel."

So despite the fact that fuel prices in general are on a continued rise in the near term, biodiesel is an instrumental part of mitigating that pain at the pump over the long term. As you fuel up your diesel vehicles for your travels this summer, consider filling up with biodiesel - and feel good knowing you are doing your part to enhance our nation's energy security, strengthen the U.S. economy and clean up our environment. For a listing of biodiesel retailers near you, visit

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