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Wednesday, April 26, 2006

Bio Diesel

Also Posted at TakingBackND.com

The Minot Daily "News"

VELVA ­ There was genuine surprise when an Archer Daniels Midland Co. officials announced Monday there had been a change of plans and the projected production of the biodiesel plant at Velva has now increased to 85 million gallons. "When plans for the plant were announced the capacity had been pegged at 50 million gallons a year, said Greg Webb, ADM vice president for public affairs." "I'm pleased to announce today at this ground-breaking that the figure is now 85 million gallons and the crushing capacity will also be increased."

ADM had been tight-lipped about the production increase. Gov. John Hoeven, one of several guest speakers at the event said, "Did you guys (the media) know about this in advance? "They really kept it a secret," he said with a grin, obviously pleased about the development.

The new facility will convert canola oil from the oil-crushing plant into biodiesel fuel and use about 1 million acres of canola annually, adding further value to the crop. The oil-crushing facility has already helped to triple production of canola in the region by providing a local market for canola oil.


This is a good development for North Dakota. Having a market for our crops is a great thing.

However what's missing in the story is perspective. This plant is to make 85 million gallons of biodiesel. Contrast that with development of ANWR that Kent Conrad and Byron Dorgan are pulling every parlimentary trick to block. The majority want it, but Conrad and Dorgan have to listen to the special enviro-interests.

If Bill Clinton hadn't vetoed ANWR in 1995 we'd have a million more barrels of oil flowing down the Alaskan pipeline today.

A barrel of oil is 42 gallons. So ANWR production would equal this Velva plant in two days with assorted petroleum products. Of course the Velva production figures overstates the true production. It will take oil to grow the canola, crush it and convert it to bio-diesel. I don't know the efficiencies you get with conversion of canola, but I'll bet that it you'll get around 50%.

One days production of ANWR will probably equal the net gain of a years production of 1 million acres worth of this Canola factory. Another way to look at it is that it would take 365 million acres of farmland (that's worth maybe 365 billion dollars) to make up for what were missing from ANWR. According to Roger Johnson the state has about 39 million acres in farms and ranches.

US Daily consumption of petroleum is about 20 million barrels a day. To equal that production (assuming the Velva plant produces 50 million gallons of new energy er year) we'd need 6,132 of these plants in Velva. It would take 6,132 billion acres of farmland. That's about 157 North Dakota's producing nothing but canola to solve our dependence on petroleum.

Don't get me wrong. If the Velva plant is cost effective I'm all for it, and I think it's great. I want biodiesel and production of ANWR.

Of course it was a media event so:

Rep. Earl Pomeroy, D-N.D., was the only member of the state's congressional delegation able to attend the event. At one point in his comments, he grabbed a 2-litre bottle filled with 2 percent biodiesel fuel. "They say that biodiesel is red in color, but what I see is green - like money," he said while hoisting the bottle up for everyone to see.


Of course at every party you get some folks to show up trying to make the party about them. I guess it's to be expected. But I really wish that the Congressman could make sense when he does it.

(Note I think I got all of the maths close. However when you're talking millions of this and billions of that it is possible to get something wrong. So if I did sorry and I'll correct it.)

Comments

Avatar for Justin B

Point is that we need way more than these sort of stories and well made point.  This is a drop in the bucket, and while it is a feel good story, it has NO EFFECT ON THE UNDERLYING PROBLEM.  We need more domestic production of energy in general.

It is not just about ANWR, but about the continuing leadership of the Democratic Environmental wing that blocks all domestic production in the name of saving the environment.  Wake up people and ask who is to blame for $3.00 gas.  Is it the Oil companies?  Or perhaps it is the radical left that has put us in a situation where we have no refining capability, far less domestic production than needed, and where they themselves advocated for higher prices to get people to use mass transit and drive less.  Oh, and lets not forget boutique fuel blends and ethanol subsidies.

Justin B on April 26, 2006 at 03:16 pm
Avatar for The Whistler

Frankly it’s a great thing for the state of North Dakota.  The main thing is it’s not going appreciably help our energy problem.

The Whistler on April 26, 2006 at 03:24 pm
Avatar for Zsa Zsa

Whistler… Great perspective! When I paint, perspective is the key to making it seem real. An example of lacking perspective is the ban on developing the tens of trillions of cubic feet of natural gas in the Eastern Gulf of Mexico within 100 miles of Florida..the Greenies justify this by invoking the specter of Valdez and conjuring up images of flamingos mired in oil slicks. One problem. Natural gas wouldn’t be transported in leaky tankers and doesn’t and Can Not create oil slicks. And now Cuba has invited the Communist Chinese to develop oil and gas fields less than 50 miles of the Florida Keys. Another skewed perspective!!

Zsa Zsa on April 26, 2006 at 04:21 pm
Avatar for Tom_with_a_Dream

Zsa Zsa got it, the recently posted (elsewhere) radar blip about Castro planning to (with Canada and China, and others ?) drill 45 miles off the coast of Florida while we Americans fret about (not) drilling 150 miles offshore. 

But Whistler, I came here to say, please go easy on the bioDiesel producers.  I live along the I95 corridor and cannot get biodiesel (easily) for my 27+ mpg Jeep LIberty CRD.   At the risk of sounding like a cowboy I (mostly) admire, I say, "Bring it on!"

At least my diesel is cheaper than regular unleaded in the summer. 

Tom_with_a_Dream on April 26, 2006 at 05:18 pm
Avatar for The Whistler

Tom, I thought I was clear that bio fuels are a good thing.  MOST of the advantage will go to the producers.  It’s too small of a drop to affect the market.

Still it’s a good thing and my farmer friends will do better so I’m not down on it at all.  If ADM can make money at it I think it’s GREAT! 

The Whistler on April 26, 2006 at 05:32 pm
Avatar for Zsa Zsa

Whistler...any new source of energy that economically can be produced domestically is OK in my book and i didn’t mean to imply otherwise in my earlier post. I am more in tune with the domestic oil and gas industry than biodiesel - can ADM make it work without being subsidized?

Zsa Zsa on April 26, 2006 at 05:51 pm
Avatar for The Whistler

You would think at a certain price of oil that bio fuels would be viable.  On the other hand, canola and corn can go up in price too.

The Whistler on April 26, 2006 at 06:15 pm
Avatar for robert108

We will have to get a whole lot wealthier before we can afford this liquid gold.  Maybe we can clear the Amazon rainforest to get the necessary land to raise all that corn.  Yeah!  Talk about stupid enviros.

robert108 on April 26, 2006 at 07:05 pm
Avatar for Rob B.

Whitsler, the problem with the bio desiel is that the transport facilities run the cost up. So the magic number is $8.50. Once gas hits $8.50 biodesiel will be a break even commodity, or at least according to the DOE.

By the way, I work in oil and gas and i still root for alternative fuels. It’s a lot easier to find the corn then to find the oil. smile

 

Rob B. on April 26, 2006 at 08:55 pm
Avatar for Zsa Zsa

I am with Rob B. on that. I have been in and around the oil business all my life and alternative fuel is eventually going to be the way of the future...It is one of the only ways to free ourselves from being dependent on foreign oil. This is a great post!

Zsa Zsa on April 27, 2006 at 02:56 am
Avatar for Carrick

Interestingly, the total biodiesel produced in this country in 2005 was only 75 million barrels last year, so this represents a huge increase.

It costs about $1.50/gallon just for the raw materials, but I would  be very surprised to learn that the breakeven point were up around $8.50.  Not if the net profit margin is around 10% that is.

I’ve been looking for peer-reviewed studies of the economic viability of eiither ethanol or biodiesel.  Haven’t found one yet, so I would appreciate any links that anybody knows.  

Carrick on April 27, 2006 at 09:12 am
Avatar for Tom_with_a_Dream

Whistler, I wasn’t implying that you were down on BD.  My post could be read that way, but it was my fault in hasty posting, nothing more.  Would have come off right if it were said in person, I guess.

Plus, the dealer finally replaced my factory-bad EGR valve and my mileage is now right above 29 mpg!  Stoked, to say the least. 

Tom_with_a_Dream on April 27, 2006 at 04:55 pm
Avatar for EU-guy

Hey Guys,

as I am from Germany I have to pay at least up to 6 $/Gal. You should really change to modern, very efficient Diesel-motors. I drive a BMW with a 2 litre engine (0,53 gal) which has 150 PS, a great acceleration and runs at least 150 mph. And it needs just 10 litres (2,67 gal) for 100 miles. We don’t drive the cars with the huge engines anymore. Diesel is so efficient. And you can blend it in any relations with biodiesel. B100 is not the way in europe. we blend it.

EU-guy on May 9, 2006 at 11:13 am
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