The Drought is No Reason to Reverse Course on American Fuel

By Don Scott | September 10, 2012

For the first time in history, our nation is making meaningful progress in the drive for sustainable energy independence. This is thanks to strong federal policy that has made developing American-made fuels a priority. The federal renewable fuel standard (RFS2) led the U.S. into a record year of biodiesel production and use, more than 1 billion gallons in 2011. This is genuine progress in the quest for energy security, and it brings with it jobs, economic development and additional fuel refining capacity that this nation sorely needs. These benefits are tangible and real, as are the environmental benefits of biodiesel.

To be sure, the drought’s grip on the U.S. is also real. Extreme weather conditions and record-breaking heat waves present new challenges to the nation’s farmers and ranchers. Foreseeing fluctuations in crop yields, the biodiesel industry has worked with policymakers through the years to set responsible, attainable goals for biodiesel growth. That includes being ready for unforeseen circumstances, like the current drought. We should not let one year of drought threaten to undo meaningful momentum in the rise of American fuels. To the contrary, we need consistent policy, like RFS2, which reduces volatility. Pulling the plug on domestic energy production leaves us vulnerable to price shocks induced by foreign cartels.

As farmers and ranchers struggle with drought conditions across the country, biodiesel producers have continued to stimulate rural economies with domestic energy production. Biodiesel’s feedstock diversity allows for flexibility in times of market instability such as the current drought. This flexibility allows biodiesel production to continue using an optimal blend of feedstocks based on market conditions.

On top of a diverse feedstock base, biodiesel demand is also flexible. The RFS2 is built to be flexible. The program is designed to allow up to 20 percent carryover production from one year to the next to avoid supply and demand pressures that could develop. This built-in flexibility means that producers can work within short-term market conditions to meet obligations.

Biodiesel Production Benefits Food Markets

All of the feedstocks for biodiesel production come to the market as a byproduct or coproduct of existing food production industries. The utilization of oils and fats in biodiesel production helps add value to underutilized byproducts. This either reduces the consumer cost or increases the producer profit of products like soy protein meal, fried foods and packaged meats.

Biodiesel produced from soybean oil benefits many food markets stressed by drought. Since soybean oil-based biodiesel uses only a portion of the soybean, biodiesel production leaves valuable soy protein meal on the market and reduces the price pressure that the meal portion has to carry. For livestock producers, this means a lower relative price for soybean meal as livestock feed.

On the livestock side, an increased demand for animal fats as biodiesel feedstocks improves the value per head for livestock and reduces price pressures on consumer meat and dairy products. This is why a number of livestock production groups are on record supporting biodiesel.

From a sustainability perspective, getting more out of one single product is a much better utilization of resources. Using the byproducts and coproducts of existing industries to produce biodiesel means a more sustainable fuel.

Protect Resources, Prevent Future Disasters

While much of the drought coverage is focused on the here and now, it is important to look ahead and do all that we can to prevent similar situations in the future. While there is a difference between weather and climate change, it is impossible to deny the frightening number of record weather events in recent history. While these record-setting weather events forebode increasing stresses on our food production systems and society, in general, we must recognize that our industrialized society is pumping millions of tons of carbon dioxide and other greenhouse gases into the atmosphere as a result of reliance on fossil fuels. The same addiction that causes us to pump billions of dollars overseas to buy oil is also choking our atmosphere with carbon from permanent underground stores. 

One of the most significant environmental benefits of biodiesel is a reduction in greenhouse gas emissions. Biodiesel is the best option for powering our trucks, buses, tractors and diesel cars while minimizing the carbon dioxide and other greenhouse gases that are building up in our atmosphere.

Biodiesel also makes wise use of valuable water resources. Biodiesel production reduces wastewater production by 79 percent and reduces hazardous waste production by 96 percent compared to petroleum diesel production. Biodiesel is nontoxic and biodegradable. Preventing contamination is the best way to protect our natural resources.

Drought conditions have been difficult this year but the industry must work hard to keep misinformation from derailing the great progress the biodiesel industry has made.

Don Scott, Director of Sustainability, National Biodiesel Board

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