Biodiesel’s Green Diesel Nightmare

I have been saying this for months, and others are starting to realize the same thing:

Renewable Diesel: Biodiesel’ s Nightmare

I first heard of this process last October at an NREL presentation (they called it “Green diesel” and could not identify COP as the oil company they were dealing with,) but details remain sketchy. The fact that it refers to the process as a “proprietary thermal depolymerization production technology” and the fact that it is using existing refinery infrastructure should cause alarm to biodiesel firms, and investors.

Why should this cause alarm? Because COP claims its “renewable diesel” is chemically equivalent to conventional diesel. If this is true, it’s quite possible that it has a lower cloud point than biodiesel, and so could be used at a broader range of temperatures. In addition, since COP is using conventional refining equipment, they may also be achieving higher energy yields.

According to NREL’s Overview of Petroleum and Biodiesel Lifecycles, Biodiesel conversion requires 80 kJ of energy for every 1000 kJ of energy in the biodiesel, while petro-diesel requires only 64 kJ to produce an equivalent amount of fuel.

With the exception of small biodiesel producers using local and distributed biodiesel feedstocks such as waste vegetable oil from restaurants, I expect that petroleum refineries will end up having an economic advantage making renewable diesel in comparison to conventional biodiesel producers. This means that commodity oils, and fats available in large enough quantities to interest refineries will be bid up in price to a point where less efficient biodiesel producers will be unable to operate profitably.

I have said it before, and I reiterate: Biodiesel’s days are numbered.

Disclosure: I do own ConocoPhillips stock. As does Warren Buffet. ๐Ÿ™‚ And Jim Cramer. Must not forget about Mad Jim Cramer.

39 thoughts on “Biodiesel’s Green Diesel Nightmare”

  1. The quoted text is more nuanced than “biodiesel’s days are numbered.”

    For waste products at least it is a question of 80 Kj for conversion to a fairly high value product, or … ?

    Renderers have their traditional markets, but I don’t know their energy requirements or the value of their products.

    You can even compost much of this stuff … perhaps at low cost, but also producing a low value product.

  2. Does TDP green diesel have the same lubricity advantages of biodiesel? In other words, does transesterified biodiesel have a future as an additive?

  3. Of course, as you pointed out before, we now have the pinheads in Congress trying to distort the free market to force biodiesel back into the race.

    We just can’t allow Big Oil to be a part of the solution, can we? Not when there are easy votes to be bought in the crooked Midwest.

  4. For waste products at least it is a question of 80 Kj for conversion to a fairly high value product, or … ?

    Not really, because both processes work on the same substances: Biological oils. It’s just hydrotreating is the cheaper option, and results in a higher value product.

    I think there will always be some biodiesel produced, because hobbyists can do it in their garages. But commercially, the only way it survives is to continue lavishing subsidies on it.

  5. Renderers have their traditional markets, but I don’t know their energy requirements or the value of their products.
    Renederers have markets because USDA still allows farmers to feed animal offal to farm animals, in spite of mad cow disease and a host of other concerns. This is exactly where TDP got burnt.

  6. Does TDP green diesel have the same lubricity advantages of biodiesel? In other words, does transesterified biodiesel have a future as an additive?
    It’s a fair question, but it is also worth remembering that the world got along fine without biodiesel, and may do so again.

  7. “It’s just hydrotreating is the cheaper option, and results in a higher value product.”

    That’s the missing data, then ๐Ÿ˜‰

  8. In other words, does transesterified biodiesel have a future as an additive?

    I think it just depends on whether it can compete with the costs of other lubricity additives. Most lubricity additives are effective at very low concentrations. If biodiesel is as well (I know it is at higher concentrations), there could be a market, but I think it would be a small market because small concentrations are required.

  9. Do you know if the renewable diesel thus produced satisfies the EU’s biofuel mandate? If so, that’s very good news for what’s left of the SE Asian rainforest.

  10. Do you know if the renewable diesel thus produced satisfies the EU’s biofuel mandate? If so, that’s very good news for what’s left of the SE Asian rainforest.

    As I was working on my recent renewable diesel chapter, it was sickening to read the accounts of how biofuel mandates in the U.S. and Western Europe have exacerbated the destruction of those rain forests. Not sure if green diesel helps. It is just more efficient at turning palm oil into diesel.

  11. It is just more efficient at turning palm oil into diesel.

    Oh. That stinks. I was under the impression that this process was suitable for a wider range of biomass feedstocks.

    How similar (or different) is this process to the one being used by Changing World Technologies on turkey waste?

    Supposedly, CWT’s process can accept all kinds of things, up to and including old tires. But I’ve not heard of an actual demonstration of effective fuel production from anything more challenging that animal guts, and I’m real skeptical that you can effectively produce fuel from anything as chemically stable as tire rubber. (If you know otherwise, please do enlighten me.)

  12. Biomass gasification can take any feedstock and turn it into diesel. But they are not quite ready for commercialization. Capital costs are still high.

    CWT’s process heavily borrowed from hydrotreating technology. In fact, their patent reads like a hydrotreating patent, and they have acknowledged that this was the basis. I know they claim they can turn tires into diesel, but I think it’s telling that they focused on turkey guts.

  13. optimist said:

    “We just can’t allow Big Oil to be a part of the solution, can we? Not when there are easy votes to be bought in the crooked Midwest.”

    Are they trying to? Are they trying be part of the “solution”? The solution is not “more oil”. Yes we will need oil for a long time, but that is the status quo. The solution that is needed, is long term sustainable energy for the world. If the oil companies are working on long term sustainability, they have done a horrible job communicating it. Aside from a few rumblings from BP about butanol, I can’t think of any big oil efforts get into the biofuel business. I not saying they aren’t any, I just don’t know about them, and I read a lot about energy. I’m sure the people “in the know” will say they are working on it, but I’ve heard at least once that big oil was not in the biofuel business. Oh, they want to do CTL, GTL, well those are fossil fuels as well. Oil companies have a lot of work to do to get the public on their side.

  14. The graph shows 2006 biodiesel consumption at 225 million gallons, but then later, the article says this:

    โ€œAll of this may happen remarkably quickly as well. ConocoPhillips and Tyson say that their deal could ramp up to 175 million gallons by 2009, or about 10% of the United States’ 2006 biodiesel production.โ€

    175 million gallons would be about 78% of 2006 production. Which number is correct?

  15. “Biodiesel’s Green Diesel Nightmare”

    Your headline might as well say: “Big Oil Crushes the Little Guy”

    Oh, Wow, Sign me up for that!

    How about “Big Oil Seeks to Partner with Farmers and Biodiesel Produces to Enhance America’s Energy Security”

    How about turning that headline into a reality.

  16. Hi Robert,
    Great blog. Seriously, do you ever sleep? ๐Ÿ™‚

    I find your arguments for renewable diesel pretty compelling.

    But I have a question about the relative cost of renewable/green diesel. In this post you seem to be saying it is cheaper to make than biodiesel via transesterification. But I seem to recall in previous posts on renewable diesel, you pointed out that the simple fact that the refiner needs to build a hydrotreater ($$$), or invest in additional hydrogen capacity ($$), makes renewable diesel a more expensive process than conventional biodiesel. Any thoughts?

  17. Great blog. Seriously, do you ever sleep? ๐Ÿ™‚

    Funny you should ask. Right now, my eyes are bloodshoot and irritated because I have spent too much time doing this lately when I should be sleeping. I promised the wife and kids I would take it easy tonight.

    the refiner needs to build a hydrotreater ($$$), or invest in additional hydrogen capacity ($$), makes renewable diesel a more expensive process than conventional biodiesel. Any thoughts?

    True, the refiner has to invest in hydrotreaters and hydrogen capacity. Neither are cheap items. But, biodiesel has to buy methanol, which is made from someone having a methanol reactor $$$ and associated equipment. It it is probably true that the capital costs for renewable diesel production are higher, but the operating costs are going to be lower. The products will also have a higher value. Bottom line: I think the overall economics will strongly favor renewable diesel, and if all renewable diesel subsidies are ever pulled, biodiesel won’t survive.

  18. Are they trying to? Are they trying be part of the “solution”? The solution is not “more oil”.

    This article, and several I have written lately, are about Big Oil’s attempt to get involved in biofuels (and government interference designed to prevent that).

  19. I’m confused by the blanket statement:

    I have said it before, and I reiterate: Biodiesel’s days are numbered.

    And then the following alphabet-soup of contrasting methods for (broadly) biodiesel.

    I’d think biodiesel is properly defined as diesel from living (as opposed to fossil) materials. I’d think that is biodiesel is further divided between waste and grown-to-purpose soruces.

    Where does the alphabet soup leave us? Are some but not all waste biodiesels still winners? Are any grown-to-purpose biodiesels still winners?

    Or, are diodiesel’s days truly numbered?

  20. Your headline might as well say: “Big Oil Crushes the Little Guy”

    You mean like ADM, one of the largest (the largest?) producer of biodiesel in the U.S.? The farmer won’t get crushed. He is still going to sell his soybean oil. He will just sell it to companies that will hydrotreat it to a higher value end product than biodiesel.

  21. I’d think biodiesel is properly defined

    I have gotten into this as well, because a while back I called this biodiesel. Several people protested, and I looked into it. The name biodiesel is strictly used for the transesterification process.

    Are any grown-to-purpose biodiesels still winners?

    If you have Process A and Process B, each of which can process soybean oil (for instance), and Process A has cheaper overall costs and produces a higher value product, you tell me. Because that is the situation we are talking about here.

    The government is running interference by trying to funnel subsidies only to strictly defined biodiesel. In that way, they can distort the market for the time they do it.

  22. Aside from a few rumblings from BP about butanol, I can’t think of any big oil efforts get into the biofuel business. I not saying they aren’t any, I just don’t know about them, and I read a lot about energy.
    Well, you here’s some more reading:
    1. Tyson Foods and ConocoPhillips working on green diesel.
    2. Tyson Foods and Synthroleum working on a similar technology.
    3. Neste Oil Corporation and Austrian oil and gas group, OMV, working on the NExBTL process.
    4. Shell is investing in CHOREN’s biomass gasification technology – a technology that can convert cellulose into hydrocarbons. As in forget ethanol.

    And then we are not even talking about research grants, research centers and the like.

    I’m sure the people “in the know” will say they are working on it, but I’ve heard at least once that big oil was not in the biofuel business.
    I think Robert can speak to that. Perhaps they are changing their tunes as they find that much of the world’s remaining crude is locked under the feet of hostile national oil companies…

    Oil companies have a lot of work to do to get the public on their side.
    That’s true enough. But let’s not feed the conspiracy theries that often seem to crowd out common sense.

  23. Shell is also a major backer of Iogen, the Canadian cellulosic ethanol producer. And besides biofuels, several oil companies are major players in other renewable technologies, like solar power.

  24. I tend to agree about that oil companies are not the villians they are often portrayed to be, and this blog has convince me of that. But I also know that perception is 90% of reality. The public needs to see that the oil companies are completely committed to sustainable energy.

  25. Robert,

    Could you address the discrepancy in the article as to whether 175 million gallons equates to 10% of the 2006 market?

  26. I don’t think that definition of “biodiesel” will work for the general public.

    (We chemists had to deal with a public definition of “organic” and got over it.)

  27. Could you address the discrepancy in the article as to whether 175 million gallons equates to 10% of the 2006 market?

    Clearly a mistake on the author’s part. 2006 biodiesel production, from what I can tell, is about 250 million gallons.

  28. So is the 10% correct, or is the 175 million gallons correct?

    175 million gallons is the announced volumes, but not scheduled to be reached for several years. I still think it depends on whether congress kills subsidies for “green diesel”, as is their intent with the recently-passed bill by the House. If so, it will slow down green diesel, but it won’t kill it.

  29. “Biodiesel’s days are numbered.”

    Isn’t green diesel just a modified form of biodiesel? Boundaries Robert, more boundaries…

    ;-]

    From the quoted blog:

    “This means that commodity oils, and fats available in large enough quantities to interest refineries will be bid up in price to a point where less efficient biodiesel producers will be unable to operate profitably.”

    Yes, and even David Ricardo was responsible enough to note “all things being equal” in the 19th century. 21st century thinkers should be better at this. Absolute and comparative advantages allow for a rich free market trade economy to develop.

    Biodiesel isn’t exactly best measured on pure Btu-Displacement now is it?

    And not much of a biodiesel industry to collapes, now is there? B2 sounds about right for the average compression ignition engine (oxygenation, centane and lubrication) using liquid fuels. B100 for the farm communities. Ofcourse CNG-Diesel pilot-injection engines would be even better over time. For those now-exotic engines B100 would actually be the best (cetane rating). Leverage is a great liberator of both minds, monies and modalities.

  30. Isn’t green diesel just a modified form of biodiesel?

    No, it isn’t. And that causes a great deal of confusion. Biodiesel is strictly defined as the product from the FAME process. It is chemically distinct from green diesel, which is a bio-based diesel of course, just not biodiesel.

    Biodiesel isn’t exactly best measured on pure Btu-Displacement now is it?

    Nobody I know of is attempting to measure it that way. The disadvantages biodiesel will have over green diesel are mostly economic, but there is also the energy density issue. Since both are made from the same starting material, there is going to be a competition there, which will be somewhat impacted by government interference (because biodiesel producers are howling).

    B100 for the farm communities.

    This gets right back to the differences in the products. You could use 100% green diesel in farm communities. B100 is going to gel in cold weather and cause serious problems. That’s why its usage in cold weather is limited. In summary, the product has limitations, results in a co-product that is not in great demand, is a more expensive fuel to produce, and is made from the same feedstock as green diesel. That’s why I say that biodiesel’s days are numbered. But by all means, feel free to invest in an up and coming biodiesel plant. ๐Ÿ™‚ Just don’t say you weren’t warned.

  31. Yeah, gelling during January cold-spells will really put a damper on economic activity of New England farms.

    Are you F’ing serious Robert???

    Since when are farm equipment used during cold weather? And even if they were (retard level stupid) guess what: we have solutions!

    And yes biodiesel and green diesel are the same. It was a joke. Well, actually it turned out to be a trick question. A carboxylic group means nada to most people but it actually is useful for oxygenation and cetane levels along with lubrication. Dare you to find a way to select for almost-pure 18 carbon alkanes. Using butanol as the ester actually enhances the effects. That crimp in the molecule changes everything.

    But you’re acting like these things aren’t important to paying customers. You have a blog. Guess that’s why.

  32. A carboxylic group means nada to most people…
    Right! Until they find their diesel tank gelled up during cold weather.

    but it actually is useful for oxygenation and cetane levels along with lubrication.
    Hence Robert’s suggestion to use B2. Of Course, even with B2 you can get expensive problems during cold weather. Important issues to paying customers, won’t you say?

    Dare you to find a way to select for almost-pure 18 carbon alkanes.
    And the point would be…?

    Using butanol as the ester actually enhances the effects.
    Ditto!

    But you’re acting like these things aren’t important to paying customers.
    Who’s acting like there’s no difference between biodiesel and green diesel?

  33. Optimist, your relies are way off target.

    1) Gelling is irrelevant for most people.

    2) Oxygenate and cetane is more useful than the lubrication.

    3) Fractionation of a specific chemical quality such as cetane or molecular mass and shape is not trivial. Economics of blending allows biodiesel a permanent niche. Ditto that Optimist.

    4) There is no difference between biodiesel and green diesel per the source feedstock (biocarbon and sunlight).

    Enough petty technical monkey-typing.

  34. “What ya bet, that Ethanol will also succum to making Gasoline from plant matter.

    Via an LS9 style process.
    http://gristmill.grist.org/story/2007/7/30/2124/78022

    -GreyFlcn
    (Too lazy to log in)”

    Quote from link:

    Relative to ethanol, LS9’s products don’t require a huge new distribution infrastructure. Ethanol, if and when it scales up, will be distributed by lots and lots of trucks and trains, which will be burning lots of gas and emitting lots of CO2. LS9’s products can be distributed via existing oil infrastructure. That saves gas.”

    As usual the liberal blogosphere serves up more compostables. I’d like to see someone say gasoline isn’t transported by trucks or trains after it has been transported for thousands of miles by international seagoing vessels and the “efficient” pipelines.

    Alcohol microrefineries can be a few thousand feet from the “gas” pump. Last time I checked my local gas station was served by tanker trucks that drove well over a mile.

    Perhaps we should call this the “Late Mile Problem” of fuel delivery akin to the networking problem of the internet?

  35. With the exception of small biodiesel producers using local and distributed biodiesel feedstocks such as waste vegetable oil from restaurants, I expect that petroleum refineries will end up having an economic advantage making renewable diesel in comparison to conventional biodiesel producers.

    THANK YOU for laying out that exception.

    I’m a home brewer of fuel… just enough to run my two vehicles and share a little with my sources of WVO. I’m growing tired of being lumped in with both the “save the planet” weirdos AND the “turning food into fuel is evil” weirdos. Both are a little off but I’m tired of being a political football being bounced around by association.

    Small-scale recycling of waste oil is a really smart thing to do. How else can an individual actually contribute to the energy independence of this nation and still drive a car?

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