Wednesday, September 14, 2005
Testing the Biodiesel Bandwagon
With American gasoline price surpasses $3 per gallon and continuing, many other alternative fuel sources are gaining public’s interest. One of them is biodiesel. Unlike the regular diesel (or Petrodiesel) which are extracted from fossil fuel, biodiesel is derived from vegetable oil and sometimes animal fat.
After reading several articles in various scientific magazines about biodiesel, and even SpikeTV’s show Trucks has featured about it, I have decided to find out for myself if it is worth the effort to jump onto the biodiesel bandwagon. Keep in mind that I understand all the environmental benefits biodiesel has compare to regular petroleum based diesel. My analysis is purely from an economical point of view.
To start a home based biodiesel refinery, first I need the ingredients of vegetable oil, lye, and methanol. Many biodiesel enthusiasts’ websites suggest contacting local restaurants for their used oil, but what if they don’t want to give the liquid gold to you? That is why I have a Costco card. The cheapest oil I found was Kirkland Signature soybean oil by Cargill at $14.37 for 35lb (approximately 4.5 gallon). Don’t forget the cost of lye and methanol.
The manufactured biodiesel brewing kit sells for somewhere between $2,000 and $3,000. On the Trucks show, Stacey David featured a kit that only cost $850. Of course the cost can be cut down to 1/2 if I can buy the basic components separately and assemble them myself. Biodiesel supporters claim after spending the initial investment of several hundred of dollars on the kit, the actual cost of biodiesel is about as low as $0.50 per gallon. One thing they forgot to mention is that they assumed used vegetable oil would be free, and the $0.50 only covers lye and methanol cost.
Here is a simple example:
Kit = $400 (I would buy all the components separately and assemble them myself)
Vegetable Oil = $3.46 per gallon (I had to buy vegetable oil from Costco$14.37 for 4.5 gallon with 8.2% sales tax)
Chemicals = $0.50 per gallon (lye and methanol)
In order to get my fuel cost down to the same price as petrodiesel ($2.847 as of Sept. 13, 2005) and recoup the initial investment, it would take
[$400+($3.46+$0.50)*x]/x = $2.847
Correction: Even if I got the vegetable oil for free, it would still take over 170 gallons. Assume I drive a vehicle that gets 20 miles per gallon, and I average about 12000 miles per year. 170 gallons of biodiesel would last me over three months before I actually experience the financial benefit.
In conclusion, biodiesel is a great idea as alternative fuel source. Unfortunately as of right now, there are too much initial investment involved and it takes too long for average consumer to receive the benefit. Companies with large trucking fleets with much greater fuel consumptions would benefit much more from biodiesel than anyone else.
Continue to Part II