Biodiesel: Washington’s brave new world
Fledging industry has ties to Northwest Washington
by David Edwards


When German engineer Rudolph Diesel invented the engine that today bears his name, he powered the device with an energy source that came from underground. If you guessed petroleum, you’d be wrong. The original diesel engine ran on peanut oil.
But in the years following that breakthrough, the burgeoning auto industry somehow eschewed plant-powered vehicles and opted instead for the fossil fuels that have accompanied fill-ups ever since.
Now, more than 110 years removed from the invention of the diesel engine, it seems the automotive pioneer may have been a bit too far ahead of his time. That’s an anachronism members of a steadily growing coalition of energy-minded Washingtonians would like to rectify – with a slight variation in vegetal matter. Thanks to a spate of directives and spending bills passed during the Legislature’s 2006 session, the Evergreen State is poised to become a beacon for biodiesel, one of a handful of promising new alternative fuels for motor vehicles.
In addition to biodiesel, the lineup of alternative fuels includes ethanol, compressed natural gas, propane and low-sulfur diesel. The two most widely used, however, are ethanol and biodiesel, with the former being especially popular in the Midwest. Ethanol can be made from a variety of plant sources, but corn is its most common base. The corn-growing states in the Midwest produce an abundance of ethanol stock and possess a large percentage of the ethanol infrastructure in the United States.

The ethanol challenge
Motorists in the Northwest may be familiar with ethanol, given its widespread use as a gasoline additive. Montana is one of several states that have passed laws requiring gas stations to blend their fuel with at least 10 percent ethanol. Recently, though, gasoline and ethanol have switched roles. Advocates of alternative fuels, whose ranks include automaker General Motors, are promoting a blend of 85 percent ethanol and 15 percent gasoline known as E85.
But in Washington, Oregon and Idaho, E85 has a serious problem: if you want it, the only public station that offers it is in Boise. In addition, two of Washington’s three private E85 dispensaries are on military installations. By contrast, Washington alone has more than 20 locations where biodiesel is available; three of them are in Whatcom County, and one is in San Juan County.
Even if distribution of E85 weren’t an issue, though, production would be. The ethanol sold in the Northwest is likely to be derived from potatoes, yet despite the presence an alternative crop as a viable source, the Northwest has only two major production facilities. So although influence peddlers from President Bush to GM are singing ethanol’s praises, Washington state is missing too many links in the supply chain for E85. It may be an alternative fuel, but it’s an alternative that the driving public in much of the Northwest simply doesn’t have.

Biodiesel buzz
That explains the Other Washington’s buzz about biodiesel. The fuel can be derived from plants, although it doesn’t have to be, and any one of a number of oil-yielding crops – soybeans, mustard, canola – can serve as energy stock. Virgin oil is not a necessity, either, as waste grease can also be converted into biodiesel. In some places, that bit of chemical serendipity has spawned agreements between restaurant owners and small-scale producers of biodiesel.
“We want cellulosic ethanol to succeed, but see biodiesel as bit better fit,” said Tim Stearns, a policy analyst at the state Commission for Trade and Economic Development and also an expert in biofuels. “Canola and mustard seem to be better suited to Washington state and are feedstocks for biodiesel. Mustard can be used in rotation with potatoes as a biofumigant and therefore is a desirable way to address bug issues.
“There is a tremendous amount of grassroots interest in biodiesel because it is something individuals can do in their garage or can be done by smaller entrepreneurs even though I expect the scale of biodiesel plants to get much larger over time.”
Like fuels containing ethanol, biodiesel is sold at the pump in varying concentrations. The industry’s abbreviation system also corresponds to the one used for ethanol: E85 is 85 percent ethanol and 15 percent gasoline; B20 is 20 percent biodiesel and 80 percent diesel. E85 is the highest concentration of ethanol available as a commercial fuel in the United States. Biodiesel, on the other hand, is available in both blended and unblended varieties, and the fuel’s biggest fans actively pursue B99 and B100.
It’s easy to think of biodiesel in the contemptuous and dismissive vein of Greens gone wild. From that perspective, the fuel can appear to be a pie-in-the-sky enviro-concoction, an elixir to cure America’s oil addiction. And some consumers are so set in their ways that they would never dream of generating horsepower via plant power. That possibility would be too unconventional to even consider.
But biodiesel can no longer be viewed as a dreamer’s agenda pushed by people still living in the ’60s. Not now, after the bandwagon gained steam in the recently completed legislative session.

Full speed ahead
Forget the term “business plan” – what the state has is an industry plan. Using the combined power of government and private enterprise, Washington has resolved to start from scratch a statewide biodiesel industry. Politicians from the governor’s mansion on down, as well as a large cross-section of their constituents, are touting biodiesel as a way for Washingtonians to send transportation-fuel profits to local farmers, rather than Middle-Eastern sheiks or South-American socialists.
“This is one of those issues that hawks, hippies, sodbusters and tree-huggers can all agree on, and that doesn’t happen very often in politics,” said Rep. Jeff Morris, a Democrat from San Juan County who is also the House’s top energy official.
Morris, Rep. Hans Dunshee, D-Snohomish, and Rep. Janea Holmquist, R-Moses Lake, spearheaded the legislative charge. In a little more than two months, Washington’s leaders pledged the state to biodiesel, with state government setting the example and doling out millions to bankroll that commitment.
Two biofuels bills passed both houses of the legislature and as of press time await Gov. Chris Gregoire’s signature. Gregoire is on record as being a big fan of biodiesel production in Washington. One bill requires state agencies to start using biodiesel in construction equipment, vessels and vehicles that are powered by diesel engines. The requirement includes biodiesel-percentage mandates, with 2 percent as the baseline. As the state’s feedstock and crushing capacity go up, so will the percentage.
A companion bill, sponsored by Holmquist, offers incentives to potential producers. Her legislation establishes a state Energy Freedom Program, an account that will start with $25 million and offer grants and loans to venture capitalists looking to build infrastructure for biodiesel and ethanol in Washington.
In addition, a Dunshee-sponsored bill has earmarked money that will be used to help build seed-crushing facilities in four Eastern Washington locations. And though the state’s well-established wheat crop may one day spur an ethanol industry, the focus this past legislative session was squarely on crops that lead to biodiesel, namely mustard, canola and their ilk.
“The distribution system is growing,” Stearns said. “For it to be economic over time, we need widespread distribution. I can’t emphasize enough that we want to work with the existing oil infrastructure because it is quite universal and widespread. I believe it is necessary to keep costs down. I don’t believe biofuels will be competitive if they need to build a completely separate infrastructure.”
The state hopes the new laws and public policy will set an example that citizens will be inspired to follow. If Washington had intended to be the bellwether of biodiesel, though, it’s too late for that. The federal government already claims that distinction. All four branches of the U.S. Armed Forces now use biodiesel extensively, as do numerous civilian agencies and departments at the federal level. Nevertheless, there’s no prize for being first in this race. Getting it right is the real goal, and many lawmakers believe the collection of 2006 biodiesel bills accomplishes that aim.

Fueling the furor
Even though Washington state is only just beginning to lay the foundation for large-scale production and consumption of biodiesel, much of the currently available supply of the fuel is generated locally. And one of the state’s most established producers can be found in Mount Vernon, in the persons of Atul Deshmane and his colleagues at Whole Energy.
Deshmane founded the company in 2003, and it now has nine employees. Whole Energy uses the entire spectrum of sources to produce its biodiesel, from feedstocks to yellow grease, which it obtains from rendering plants. In the company’s early days, employees collected yellow grease themselves.
As testimony to Morris’ observation of the unifying power of biodiesel, Whole Energy’s clientele spans the political spectrum.
Other key players besides Whole Energy include Seattle Biodiesel and Chemical Consortium Holdings, Inc., a holding company that is developing a plant in southwest Washington to produce biodiesel and ethanol.
One of the major selling points biodiesel supporters emphasize is that its production benefits farmers. So far, rural areas in northwest Washington, such as Skagit County, have been left out as plans progress for crops and crushers east of the Cascades. There’s a reason for the exclusion, though: It’s largely self-inflicted.
“To my knowledge there are some oil crops that could be grown on the west side of the state, but, there appears to be very little interest,” said Robert Reuter, an engineer with the Department of Ecology.
While much of the discussion has focused on mass production of biodiesel, the fuel has the added advantage of adaptability. In other words, it can be homemade. Bruce Barbour, a Department of Ecology employee and a passionate biodiesel advocate, maintains a Web site, www.biodieselworks.com, that offers, among other things, systems that allow people to make their own biodiesel.
A word of warning is in order, though: Experts discourage that practice. The quality of different batches of biodiesel can vary greatly depending on a number of factors, and the poor automotive performance that results from a bad batch has soured many a novice biodiesel user. A nationwide industry standard for biodiesel exists, but as with any experimental process, there is a learning curve and kinks to work out. Despite the industry’s best efforts and intentions, the lack of consistent quality across the range of biodiesel producers remains a concern.

Who will buy?
You don’t need an economics degree to know that production without consumption makes for a short-lived product. Yet with so many environmentally friendly automobile options for consumers, who’s to say which one will emerge as the consumers’ choice. In this contest, drivers will vote with their fuel tanks and their wallets.
Money is a definite consideration, too. Vehicle buyers should consider it a given that they will pay more for fuel efficiency, no matter what type of engine they choose. Gas-electric hybrids, diesels and flex-fuel vehicles all cost more than their gasoline alter egos.
So, what does biodiesel have going for it? And what does it have working against it? In short, more of the former than the latter.
For starters, biodiesel is generally compatible with any diesel engine. In most vehicles, the engine has already been modified, leaving the driver free to choose between standard diesel and biodiesel. And because many fleets, whether public or private, use diesel trucks or buses, that makes biodiesel, particularly B20, a popular choice among fleet owners.
Finding a personal vehicle that can run on biodiesel is a bit more challenging. Europeans love diesel engines and therefore contribute to a thriving market for diesel. The American diesel experiment of a few decades ago did not go so well, however, and automakers have been reluctant to market such vehicles in the United States. That is changing, albeit slowly.
Mercedes and Volkswagen pretty much dominate the diesel world. Volkswagen’s line of TDi cars, including the Jetta and Golf, have achieved iconic status in biodiesel circles. Mercedes also enjoys a strong following. However, the hunt for dealerships that carry these vehicles can try customers’ resolve.
A more dependable customer base for Washington biodiesel might be the military, which already uses the fuel extensively. The market potential is magnified given that three of the largest military bases in the United States call Washington home. According to a study by Dr. J. Greig, CEO of Chemical Consortium Holdings, annual diesel use by the military in Washington exceeds 1.4 billion gallons. Meeting that demand would require an extra 280 million gallons of biodiesel per year.
Fuel efficiency is another feather in the cap for biodiesel. In a November 2005 article, the Tacoma News Tribune analyzed which biofuel would provide the best value on a drive from Tacoma to Portland. Even though biodiesel costs more per gallon than the other fuels, it won the head-to-head competition because of the greater fuel economy of diesel engines.
However, as Deshmane from Whole Energy noted, biodiesel is not a panacea; it does have a few drawbacks. In cold temperatures, it gels easily, making it all but impossible to pump into a fuel tank. Another major concern is the greater nitrous oxide emissions that result as a byproduct of biodiesel burned up by an engine. Nitrous oxide can adversely affect air quality in places prone to smog.
“Biodiesel is not always the best choice,” said Josh Clements of Whole Energy. “We believe that there is also a need to use natural gas, ethanol, and other synthetic diesel fuels.”

Driving off into the sunset?
Questions abound as Washington enters a brave new world: Will farmers buy in to the idea and start growing large amounts of crops that have traditionally been unprofitable? Will the biodiesel distribution network in Washington grow so producers can consistently get the fuel on the market? Will auto dealers commit to making diesel vehicles available for sale? And perhaps most importantly, will enough consumers join the movement to make biodiesel worth Washington’s while?
“It is exciting and uncertain to build a new industry,” said Stearns, the CTED analyst. “The time is right, but (the endeavor) is not risk-free by any means. The business models and technologies will inevitably evolve. Personally, I think we have a narrow window to develop this industry here. If we wait, we will have less influence over it.
We export over $25 million a day from the Washington economy, and as we grow it will only get worse. I would rather have those dollars bounce around in our economy longer, producing locally grown fuels that give farmers another opportunity and have a lighter footprint on our planet.”
In short, the great biodiesel experiment will in itself be a test, one that will reveal just how strong the Evergreen State’s commitment is to being ever green.