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The Economics of Biofuels

By John Pierson

IN THIS ISSUE Gaining New Ground on Biodiesel Conversion Efficiency The Economics of Biofuels Georgia Tech Students Study Biodiesel Production Using Algae High School Student Produces Homemade Biodiesel Using Restaurant Fryer Oil Defining Strategies to Control Storm Water Runoff from Poultry Processing Facilities Researchers Develop Process to Recover Eggshell Waste for Alternative Uses A Look at the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standard and Its Impact on Poultry Processors and Growers Changing Environmental and Energy Climate Creates New Opportunities for Electric Boilers and Water Heaters Bringing the Research Lab to the Classroom

As the nation continues its debate over the role of biofuels in helping it achieve greater energy independence, more attention is being given to economic and environmental considerations. Recent spikes in biofuel production have brought increased demand on agricultural production which, in turn, has driven up food costs. Many are now questioning whether crop-based fuels can cost-effectively increase energy independence.

The alternative fuels challenge has sparked broad interest within not only the business and research communities, but also the next generation of engineers, scientists, and entrepreneurs intent on finding answers (see page 3).

Large poultry companies are also recognizing the opportunities for renewable fuels. Tyson Foods recently created a renewable fuels division and struck a deal with oil giant ConocoPhillips to produce and market diesel fuel for U.S. vehicles using beef, pork, and poultry fat.

There is definitely growth potential for biofuels. The U.S. Department of Energy’s Energy Information Administration estimates that the United States consumes about 140 billion gallons of gasoline and 60 billion gallons of diesel fuel per year. Ethanol production met about 3 percent of gasoline consumption in the United States, while biodiesel production met 0.15 percent of diesel fuel consumption in 2005. But how to sustainably achieve that growth remains in question.

Energy independence with reduced environmental impact is often cited as a key reason for embracing biofuels. Studies have indicated that biofuels provide a net positive balance between energy consumption and greenhouse gases. But the overall environmental balance of crop-produced biofuels versus fossil fuels remains unclear. Given that other more cost-efficient methods for abating greenhouse gases are being explored, some believe that biodiesel production subsidies should be targeted more toward pollution control and phased out altogether by 2030.

As the debate over crop-generated biofuels intensifies, biodiesel made from waste byproducts remains a strong market-driven opportunity for industries such as poultry. Current estimates indicate that biodiesel from crop oils range from $1.14 per gallon with soybeans as the feedstock to $2.62 per gallon when rapeseed is used as the feedstock, with the feedstocks accounting for about 70 percent of costs. However, research shows that lower value feedstocks including saponified vegetable oil soapstocks can reduce feedstock costs by 25 percent.

One of the challenges for biofuel production is shifting from its heavy dependence on crops to taking better advantage of waste byproducts.

One of the hurdles in effectively converting waste byproducts into biofuel, however, is conversion efficiency and the elimination of unwanted conversion byproducts. Here, there is a wide consensus that greater efficiencies are achievable through the use of enzymatic or catalytic processes.

Can biofuels provide energy independence with favorable environmental and economic benefits? Yes, if a cost-effective feedstock can be delivered that does not compete with food markets. While we wait for microalgae, genetically-modified crops, or biomass sources to be readied, food processing waste materials remain a ready source of opportunity.

 

John Pierson is a principal research engineer and head of the Food Safety, Environment, and Energy Technology group in Georgia Tech’s Food Processing Technology Division.