Oil Availability Seen Crucial to Biodiesel Momentum

While soy oil disposal in the past has been a challenge for Midwest growers, an executive with Illinois’ original biodiesel manufacturer warns projected U.S. biodiesel production “far outstrips” existing soy oil supplies.

Meeting recently with Illinois Soybean Association (ISA) directors, Stepan Co. biodiesel manager Jeff Nelson estimated this year’s possible 3-billion-pound soy oil carryover could produce 400 million-plus gallons of biodiesel. However, he noted some 700 million gallons of new domestic biodiesel production is expected to come online in the near future.

Nelson called Chicago Democrat U.S. Sen. Barack Obama’s proposed “alternate diesel standard,” which would require 2 billion gallons of biodiesel be mixed annually into the 40-billion-gallon national diesel pool by 2015, a “great accomplishment” by the National Biodiesel Board.

But he fears “politicians may lose interest” in biodiesel incentives if the industry cannot obtain oil supplies it needs to “be significant” in meeting overall domestic energy demand.

Martin Ross will have more on the biodiesel industry in Monday's edition of FarmWeek. We have a link to the National Biodiesel Board and to Stepan Co., an Illinois-based biodiesel manufacturer.