Pump up the Volume

How additional factors are driving decreased biodiesel production, consumption
By Bryan Sims | December 20, 2010
According to the "Biodiesel Overview" report released by the U.S. DOE's Energy Information Administration, production in August sat at 23 million gallons, down from 28 million gallons in July. Similarly, consumption fell to 18 million gallons in August, down from 27 million gallons in July.

Certainly, macroeconomic factors such as the lapsed tax credit, price disparity between biodiesel and diesel and unfavorable blend economics are impacting decreased production and consumption levels. But, there may be an additional factor, according to Lisa Mortenson, CEO and founder of California-based biodiesel producer Community Fuels.

"Customers that used to pull product on a steady basis and maintain their own high volumes are now looking at pushing down their on-hand volumes," she says, noting that the company's 10 MMgy multifeedstock facility in Stockton, Calif., has successfully produced and sold biodiesel. "It's not that they're not still buying product, but we're seeing our customers take a 'just-in-time' approach, in other words, pulling product from our plant literally as they need it."

Additionally, EIA reported that biodiesel production peaked at 34 million gallons in March while consumption stood at a high of 29 million gallons in February.
 
 
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