Some unexpected news: The Olympianis reporting that biodiesel is now cheaper than regular diesel.
Until now, biodiesel consumers have had to pay a premium at the pump; making highway fuel from vegetable oil was more costly than pumping it out of the ground. But thanks to rapidly rising crude prices, that’s no longer true.
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Of couse, biodiesel still gets a $1 per gallon federal tax credit. Without that credit, biodiesel would be no bargain, even with petroleum-based diesel topping $3 per gallon.
But as biodiesel proponents point out, the subsidy may be just a way of levelling the playing field. Petroleum benefits from hidden subsidies, ranging from favorable tax treatment for domestic production; environmental costs of pollution and that are borne by society at large rather than oil consumers; and military and security costs.
It’s hard to pin down the precise value of the hidden petroleum subsidies, so it’s not completely clear how the $1 subsidy for biodiesel compares. (See here for a somewhat out-of-date look at the subject.)
Subsidies aside, this still seems like a significant landmark. Of course, I expect that if diesel prices rise, the price of biodiesel will follow suit. Once truck fleets start thinking of biodiesel as a bargain, they’ll start blending more in with the regular diesel; and as biodiesel demand rises, so will the price.
I am going to veer a touch away from topic on this one. I am currently doing a road trip in which I was trying hard to use biodiesel somewhat unsuccessfully. What has caught me by surprise though is the demand that is seemingly starting to rise for the substance. We have been in some small Idaho communities lately and they all do not seem to care that the cost might be a touch higher. They want to be petroleum independent (it is not complete independence but a step in the right direction) and they also want to understand it all better. I will pick on Clark even for a sec because he mentions vegetable oil seeminly implying that it is the same as biodiesel. There are quite a few independent souls running on straight vegetable oil and not doing the biodiesel thing. Biodiesel in the commercial product that has been converted to a standardized scale equal with regular diesel. That statement alone can be picked apart but I am trying to utilize my simplistic mind the best I can 🙂 To summarize, I am hopeful this topic might not be able to be judged on an equal pay at the pump cost basis and that mainstream access is just as important.