Well, here's a pretty kettle of fish. In the last few days, most of us have heard news reports (here's one from the NY Times) about the deal between Tyson Foods (their press release) and ConocoPhilips (their press release) to produce a form of renewable diesel biofuel from animal fat, and use it to supplement existing diesel supplies. Thousands of tons of fat rendered by Tyson from pigs, chicken, and cattle would undergo a thermal depolymerization process and be combined with hydrocarbon feedstock. The resulting fuel, according to the partners' PR, would be "a high-quality diesel fuel that meets all federal standards for ultra-low sulfer diesel."
The U.S. Treasury department likes the idea, and in April approved a request from the two companies to be able to qualify their product as a renewable fuel under the Energy Policy Act of 2005. This will net the partnership a dollar-per-gallon tax break.
Vehemently opposed to the deal is the National Biodiesel Board, which represents the nation's soy biodiesel producers (their press release). First, the NBB says the fat-based product doesn't meet the ASTM-D 6751 standard, that its environmental impact isn't known yet, and that if it turns out to be unreliable it could set back the entire biofuels industry. But what really seems to make the NBB see red is the dollar-per-gallon tax credit, which they say will put an extra burden on taxpayers who are already paying high prices for fuel. "Fuels should be fully evaluated for their impacts on all aspects of production and use. Each should be encouraged based on their own merits through the regulatory process -- like biodiesel has had to do -- not by exploiting an ambiguity in the tax code."
Well, there will be an extra burden, but it will be spread thin when all is in place -- a fraction of a fraction -- and while ConocoPhilips might not need the break, Tyson Foods, who are getting into a whole new sidebusiness, might deserve it. More to the point, soy farmers have been reaping rewards from government subsidies for years. This has given agribusiness the latitude and support needed for the serious exploration of soy-based fuels, and in fact the National Biodiesel Board has been at the forefront of responsible biodiesel development, helping to establish standards that will assure high-quality fuel, and encouraging member producers to adhere to those standards. All this makes their loud protest against the fat-fuel tax break sound a bit like sour grapes.
At NEW, we use certified soy biodiesel for a car, a boat, and a furnace, and can vouch for it up and down. But fair's fair. If there are tons of animal fat that can be made into fuel that will offset fuel from OPEC, well, why not? If Tyson and ConocoPhilips can't meet ASTM standards, and machinery fails or doesn't perform right because of substandard fuel, then that will be a bad and undeserved strike against biofuels in the eyes of those who may never have experienced the good stuff. But let's give Tyson and ConocoPhilips a chance to do right before we accuse them of doing wrong. We need all the renewable fuel we can get. And fer cryin' out loud -- it's not as if America's soy farmers can't sell their crops. America's soy farmers are pretty well guaranteed a solid market and a premium price for every bean they produce for the knowable future.
As for the tax break sapping taxpayers and the U.S. Treasury, consider that CononcoPhilips/Tyson are talking about quickly ramping up production of fat-fuel to 175 million gallons per year. In the grand scheme of things, a subsidy of a buck a gallon is no big whoop, especially if it makes the difference between go and no-go. If those 175 million gallons were the exclusive oil supply in this country, they'd last us about eight days. Meanwhile, the war in Iraq costs about about $195 million every day. (Source: costofwar.com. Some estimates are as high as $300 million per day.) A string of eight days over there costs the American taxpayer $1,560,000,000.
We need every drop of biofuel we can make, whether it comes from soybeans, animal fat, algae, or voodoo. This is no time for bickering. We're strong supporters of the National Biodiesel Board, and think this gamesmanship is beneath them. They need to accept (if not welcome) the fat-fuel effort and help Tyson Foods/Conoco Philips adhere to the excellent standards that they themselves have worked so hard to establish.
There's a good discussion of all this over at James Fraser's Energy Blog.
~ Doug Logan, New Energy Watch
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