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Biodiesel, 'the next thing,' in Newell study

Tuesday, November 16, 2004

Flexible and widespread applications in ag

Discussion is progressing on a biodiesel plant near Newell.

Paul Monson, who currently farms south of Newell and is interested in the project both as an investor and as a way to bring new business to Newell, said the next step for the plant is a feasibility study expected to cost $35,000.

"They want to see if there's enough interest in it," Monson of the feasibility study.

"As an investment, it's coming down the road," Monson said. "With all the ethanol plants coming down the road, biodiesel is probably the next thing."

Monson said he and a group of other Newell area farmers toured a soybean pressing plant at Terrill and a soy diesel plant at Milford, both owned by Ruthven Farmers Coop.

Two advantages for Newell are location and a ready supply of soybeans, Monson said.

"We're on a good rail line which is important," Monson said. "We're also in a soybean area."

Monson also points to a good, local market for biodiesel.

"Most farmers around here are using a blend in their diesel," Monson said.

With ethanol plants sprouting up around the Iowa landscape like a new corn crop, there's diversity on the horizon for value-added agricultural development for Iowa with the advent of biodiesel.

Biodiesel, also known as soy diesel, presents significant advantages over ethanol, particularly higher E-85 ethanol blends, in that straight soy diesel can be burned in just about all diesel engines manufactured since the 1980s. The only hitch is the cost of production which could be leveled through shaving away highway taxes to make soy diesel more competitive with regular petroleum diesel.

A big question is how committed legislators are to promoting a renewable resource and preserving the environment on the one hand and going up against the big oil lobbies on the other.

Local proponents are aware of the disappearance of federal energy tax credits for wind and solar promoted by the Carter administration in the 1970s. Fortunately, tax credit programs have since reappeared, most notably those for wind energy at the federal level which were the recent impetus for MidAmerican Energy to push forward with its Intrepid wind farm in Sac and Buena Vista counties.

Dale Gruber is a marketing consultant for the new Ruthven Farmers Coop biodiesel plant at Milford which has been in operation since last August.

The beauty of soy diesel is that it can be burned in any engine with no modifications. The only problem other than cost is that soy diesel gels at a higher temperature. Blends, usually 98 percent petroleum, seem to work fine though for most farming applications.

Gruber said adding smaller percentages of soy diesel makes the resulting fuel take on the gelling characteristics of whatever petroleum diesel with which soy diesel is mixed. So, soy diesel mixed with number one diesel will have a very low gelling temperature while that mixed with number two diesel will have a higher gel point. A 60-40 two-one winter blend will have about the same gelling temperature whether or not soy diesel is added.

Gruber said a recently passed federal law allows the blender/wholesaler to offset a penny-per-gallon tax liability on soy diesel.

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