The shuttering of biodiesel plants in the US

boilermaker2 · **Posted:** Mon Jun 21, 2010 9:52 am

Here is a little information for everyone to think about while you watch the "go green" news every evening..,

Since the $1/gallon subsidy was dropped, small commercial biodiesel manufacturing firms (the heralded small businessman every politician talks about) are going out of business here. My local plant has been shuttered since January. If you want to hear it from the industry themselves, they have stated their case (there will be a pop-up) at http://www.biodiesel.org Unless this is changes only the Uber producers will remain (Local blender claims that the lubricity of BD is gained at only a 2% blend so that is what they do to keep their costs down and still provide the lubricity lost when the Sulfur was taken taken). Anyway, that is what is happening HERE. The Food for Fuel debate has always landed with a resounding thud here because food always wins (go look at the cost of cooking oil at your grocery store and convert it to $/gallon and you'll see what I mean). If that wasn't bad enough, they're even jacking around with the subsidies they do have (http://www.wndu.com/hometop/headlines/91652889.html Maybe I'm too close to the argument... :banghead:

While I'm not a big fan for tax subsidies, I do see this as more immediate, green and practical than windmills and solar panels (the wind doesn't blow enough nor do we have enough sun here). I'm not saying we need we need these new sources of energy but I am saying that we do need to support what we've already invested instead of running towards the next chic boutique energy source before the job is done. The way we had it set up, it was also a lot cheaper in blood and treasury than a new aircraft carrier and all the liabilities that go with protecting a fuel source in a region of the world where nobody likes us...

I just wished we finish what we started instead of the scatterbrained, scattershot methods were seem to be deploying.

:ALONE:

Boilermaker2

cerich · **Posted:** Mon Jun 21, 2010 10:58 am

good, it will end the splash and dash which used our tax money to the benefit of foreign companies and endangered the US by increased and unnecessary oil tanker traffic.

racertracer · **Posted:** Tue Jun 22, 2010 5:20 am

cerich wrote:

good, it will end the splash and dash which used our tax money to the benefit of foreign companies and endangered the US by increased and unnecessary oil tanker traffic.

Can you expand on that, what was the tax money actually used for?

racertracer · **Posted:** Tue Jun 22, 2010 5:24 am

Nevermind, I found the answer.

http://www.foxnews.com/story/0,2933,366601,00.html

http://biodieselmagazine.com/article.js ... le_id=1863

boilermaker2 · **Posted:** Tue Jun 22, 2010 9:02 am

While I do agree that the splash and dash should be prohibited, I do believe that shutting down an industry in its infancy is literally throwing the baby out with the bathwater. Thanks for the splash and dash comment. I know how it works legally, locally and was unaware of the abuse. I also know some of the small businessmen that invested their retirement to employ about 20 other people to only have the carpet jerked out from underneath them as they were setting things up.

You see, the biodiesel is only a part of the "issue" of biodiesel production. The sale of the BD pays the bills (hopefully). It is the developmen, purification and marketing of the byproducts that actually allow one of these plants to become profitable. The margins are that close. When the subsidy was turned off overnight, literally, many of these plants were instantly idled.

Boilermaker2

CATCRD · **Posted:** Tue Jun 22, 2010 10:14 am

It just goes to show that the government should get out of the subsidy business. First the ethanol crash, then the BD crash, farmers being paid NOT to plant their fields...when does it end?

As a businessman, you shouldn't rely on government handouts as part of your business model. The next politician to be elected can just yank it away or let it expire. BD supply and price will now find its natural level in the marketplace.

dieseldoesit · **Posted:** Tue Jun 22, 2010 11:09 am

CATCRD wrote:

It just goes to show that the government should get out of the subsidy business. First the ethanol crash, then the BD crash, farmers being paid NOT to plant their fields...when does it end?

I completely agree. Government should tax the poor choices (loosers) and let the market decide the winners. Government can't choose winners, neither can we, but the markets surely can.

I like the idea of taxing carbon fuels at the source, and then let the markets do what they do best, find the cheapest solution...

TJ2 · **Posted:** Wed Jun 23, 2010 4:40 am

When I consider what the markets do best . . . deception and outright theft come foremost to mind.

boilermaker2 · **Posted:** Wed Jun 23, 2010 11:05 am

While I totally agree in a free and open market, I've not sniffed so much diesel smoke that I believe it is always taking place.

In addition, this is a policy decision. This is not a market decision. The market would have never put a man on the moon (this is not debatable).

A free and open market does not care if America has energy independance. Heck, it does not even care if we are independant at all. Free markets are a method and process. It would not care what percentage of our GDP goes to our military. Free market is always a collective path of least and cheapest resistance...which is not always a choice/path we (USA) would like to take.

dieseldoesit · **Posted:** Wed Jun 23, 2010 12:21 pm

I guess the point I was trying to make was we need to utilize the market to find the best solution. If energy independence is an issue, then we should tax all the energy we import. If clean energy is an issue, then we should tax all the energy that is not clean. This is the opposite of the subsidizing what we think are the correct winners or best options at the time. This is impossible to do, we can't pic winners, as technology keeps changing and changes the game all the time.

With a tax though, it will be stable, allowing for people to plan the future based on it. Look at the subsidies for wind and all the yo-yoing that goes on in the market because of it. The point of the subisidy was to make it more competitive with other electricity sources. Why not let the price of wind be brought out by the market and just tax the coal and nat gas plants to make wind or solar or any other new technology compete easier?

I guess another way to put it is to not prop up the good ones, but put down the bad ones, and let the market decide which good ones it wants to use.

Is that any clearer? I am I not making any sense?

CATCRD · **Posted:** Wed Jun 23, 2010 1:11 pm

TJ2 wrote:

When I consider what the markets do best . . . deception and outright theft come foremost to mind.

Spoken like a true socialist. But remember corporations can't steal your money, you hand it over willingly every day. The only party that legally takes your money without your consent is the government, which it does frequently and with great relish. They dole it out to their favorite companies in an effort to pick winners that the market would otherwise reject.

dieseldoesit · **Posted:** Wed Jun 23, 2010 1:44 pm

CATCRD wrote:

They dole it out to their favorite companies in an effort to pick winners that the market would otherwise reject.

you assume that it would be rejected correctly.. Markets have a hard time dealing with external costs and benefits... Some of which are VERY important, yet do not play a role in the decision making that occurs in the market.

FineDining · **Joined:** Mon Mar 29, 2010 8:17 pm **Posts:** 21

The point about externalities not being factored into the market price is absolutely correct. I wonder how much it will end up costing the US economy before, if ever, the BP well gets killed. In terms of subsidies, it seems like the companies with the most lobbyists get the most subsidies. Who is corrupt? The corporations or the government?

The shuttering of biodiesel plants in the US

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