Biodiesel

Biodiesel is a clean burning natural fuel. It is derived from renewable resources such as vegetable oils, waste restaurant grease (yellow grease), and animal fats. Biodiesel contains no petroleum, but can be blended to any level with petroleum diesel to create biodiesel blends. Properly processed biodiesel can be effectively used as a substitute for petroleum based diesel fuel, because the viscosity of biodiesel is similar to that of petroleum diesel.

Burning biodiesel as a substitute to that of petroleum diesel fuel in a diesel engine will reduce greenhouse gas emissions by more than 20%. The most common biodiesel blend, B5, consists of 95% petroleum diesel and 5% biodiesel. B5 can be distributed through conventional channels, dispensed from standard diesel fuel pumps, and burned in standard diesel engines.

The rapid growth of the biodiesel market has been predominantly driven by the following factors.

• Ready Integration. Biodiesel, either B100 or petroleum blends, can be readily distributed and used in the traditional markets for diesel fuel with no modifications. Blended biodiesel is preferable to pure petroleum diesel because it has the ability to extend engine life thus decrease operating expenses.
  
  
• Lack of Production Capacity. While the number of operable U.S petroleum refineries decreased from 319 in 1980 to 149 in 2007 according to the Energy Information Administration (EIA), domestic demand for petroleum based diesel increased 17.7% over the same period. The United States consumes over 60 billion gallons per year of petroleum diesel based on 2006 volumes reported by the EIA.
  
  
• Environmental Benefits. Biodiesel is biodegradable, non-toxic, and contains only traces of sulphur and aromatics. Biodiesel reduces tailpipe exhaust emissions, greenhouse gas emissions and sulphur dioxide emissions (acid rain) and minimizes black smoke and smog-causing particulate matter.
  
  
• Geopolitical Concerns. Increases in domestic demand coupled with decreases in domestic oil production have increased U.S import requirements; according to the EIA, crude oil imports represented 65.7% of the U.S crude oil supply in 2007 and are estimated to rise almost 10% by 2025. Political unrest and attacks on oil infrastructure in the major oil producing nations, particularly in the Middle East, have periodically disrupted the flow of oil. At the same time, developing nations such as China and India have increased their demand for oil. Biodiesel can be produced from locally available feedstock and contribute to the reduction of dependence on imported oil.
  
  
• Government Support. Government incentives and mandates, encompassing both sides of the border, include tax incentives to lower the effective cost of biodiesel in order to make it more price competitive with petroleum diesel, mandates to increase the use of biodiesel, and investment incentives to encourage investments in production and distribution capacity, as well as technology to promote end use of biodiesel.