U.S. Biodiesel Lives to See Another Day: Tax Credit Back!

If the government had decided to mandate and subsidize the telephone company in the early 1900’s we would still be turning a crank on the phone to reach the operator down at the phone company. Welfare whether corporate or socially based (government workers) has never and will never work. If you throw them a rope they will pull you in.

I think this article does a goo job at describing the tax credit program used in order to push the importance of using biodiesel fuel by the general public. I think it’s important for society and companies to understand the importance and relevance of using biodiesel fuel. People looking for more information should definitely check out http://www.greencollareconomy.com.

what about all the other tax breaks that petroleum companies get and the other funding such as taxpayer funded jets that patrol for big tankers

Thanks for the explanation! Once I see and understand the numbers behind this and ethanol, the more I believe we need to level the playing field and put a carbon tax in place.

Your analysis leaves out a huge point.  Even though the price at the pump of diesel may be around $2…this is not the true price.  You have to factor in the subsidies to the oil industry and cost of securing access to oil in the Middle East (via War), and other hidden costs.  The International Center for Technology Assessment estimates these extra costs to be around $12/gal.  If we can help reduce our dependency on the destructive oil industry for $1.01/gal, I’d say that’s getting off cheap.

Don’t forget that 1st gen biodiesel needs to be augmented with urea to make the diesel trucks run correctly.  That’s another cost that isn’t mentioned.  Also, 1st gen biodiesel has performance problems acknowledged by the industry.

Good article, Joshua. Just one small correction: it is the cellulosic ethanol production tax credit that is $1.01 per gallon; the biodiesel blenders’ credit is an even $1 per gallon.

As for Tre’s comment, he sites estimates from an outdated study from 1998 that through in many subsidies that could equally be attributed to biofuels. Some of the “subsidies” included in the ICTA study included under-recovery of the costs of highways (since vehicles operating on biofuels also use the highways, this “subsidy” should be pro-rated to them as well), the external costs of noise pollution from cars and trucks (same reasoning), and the external costs of air pollution. At the time, the belief was that biofuels produced no pollution, but we now know that not to be the case, especially on a life-cycle basis.

Spelling correction: “As for Tre’s comment, he cites estimates from an outdated study from 1998 that threw in many subsidies that could equally be attributed to biofuels.”

Also factor in crude oil shipping from Opec and pipeline cost from Canada whereas algal diesel can be produced locally and used locally while cleaning up sewer effluent. Additionally Algae diesel burns cleaner
and is produced with American labor who pay taxes and the money circuates here in friendly hands rather
than overseas between someone who states they are going to cut our throat. In the future practically every city will have a God given miracle algae plant on their sewer effluent. producing diesel and many other products.
locally requiring no trucking.  Our energy security demands that we produce ALL our fuel here.

Wow all this talk of “subsidies” for the oil industry, wars for oil and cap & tax trade cons, makes me think i was reading a typical LWNJ blog. Here is another conspiracy theory for you to chew on, maybe that war in Iraq was just a good ploy to destabilize oil prices that would lead to the collapse of the economy thus forcing baby boomers to delay retirement and prevent a social security disaster. (not that I believe this but it is just as plausible as the theory that our Government is just the forceful are of the oil industry.

As for cap & tax, if you feel so strongly about it, just calculate what you should be paying for fuel based on those misguided assumptions and mail a check to the oil company or to the federal Government. If you really feel you should pay that much for fuel then put your money where you mouth is, if you can not do that then you really are just spouting off with anti-corporate, anti-government rants that do not express what you really want to say. Just admit you dislike capitalism and competition (most likely due to the inability to compete in any meaningful way) and you wish the world could just be one big grey cold dark place where no innovation or imagination is allowed to flourish.

Let us not forget that the US bio-fuel industry was taking those subsidies and then selling the fuel on the European market where they could make more profit. It was so bad near the end that the European market had to restrict trade. You can read about it here:
http://www.pennenergy.com/index/articles/display/8097718103/articles/oil-gas-journal/general-interest/government/articles/eu-slaps_antidumping.html

Sorry the first paragraph last sentence should have been forceful ARM of the oil industry.

as for Karls comments - the reason that companies had to sell to eorope was because it was the only place that would buy large quantities - the oil companies and their lobbyists do a very good job of keeping their prices just beyond the profitable area for biodiesel producers. The reason that europe put a restiction on is that the feedstock that they use was even more expensive thus making the fuel even higher but they wanted to protect their companies even thought the fuel cost more. We should only be so lucky to have support like that!!

When,oh when will The American public get it. Biodiesel and ethanol are monsters from hell. They merely convert fossil fuels into some trendy fuel that you believe is green. It will never be competitive with fossil fuels because it relies on fossil fuels and as for energy independence you are deluding yourselves. Most of your biodiesel finds it way to Europe, so indirectly and stupidly you are subsidising the Europeans. If the US wishes to reduce its energy dependency on foreign oil then use less- few people need to drive SUV’s. If biodiesel or ethanol were cheaper then the US would simply use more and wreck even more of the environment. Any reasonably intelligent person can sit down with a pen , paper and caluclator and do the maths.It is not difficult and biofuels are simply not sustainable is any form. As for algae, do the thermodynamcis and check out the nhype. This whole industry is infested with crackpot ideas and dodgy people looking to make money. Show me one, just one cellulosic ehtnaol or algae facility that is working past lab scale, that is promisingly possible and is prepared to disclose its true yield data and cost. Just one. The only one that is close is Seambiotic of Israel and that is still to show scale up potential. Then do the maths on algae carbon sequestration and tell me how much land would be required to sequester the carbon dioxide from a 1000 MW gas fired power plant at 50% efficiency. Do those maths and you will know what I am talking about. Then tell me how the carbon dioxide will be stored at night. You might also, like to read up on the PAR project and the ASP.
Do you want me to list the drawbacks on biodiesel. Look at jet fuel contamination and biological growths to start with.
By the way I do not work for big oil. I just did my homework.