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Biodiesel Hits Home

What do Jim Ashton of Vassalboro, Maine, William Grace of Seattle and Maine's Governor John Baldacci have in common? All of them have heated their homes with biodiesel, a blended fuel that includes new or recycled vegetable oil.

Ashton has been heating his nine-room colonial-style home with biodiesel for a number of years. Grace experimented with 100 percent biodiesel in his existing home heating system before switching to a blend of biodiesel and regular diesel fuel. The Blaine House, Baldacci's residence in Augusta, Maine, started using biodiesel in 2003 as part of a wider program to heat buildings in the state capital complex with alternative fuel.

Many people are surprised to learn that it's possible to heat a building, or run a diesel car or truck, with vegetable oil. The technology actually dates back a century, when engineer Rudolph Diesel developed an engine that fired on peanut oil. Today, world events are creating a niche market for biodiesel fuel. This emerging market is of special interest to homeowners, particularly those who warm their homes with heating oil.

High petroleum prices and conflict in the Middle East are creating a renewed awareness of the true costs of imported energy. Politics and the war in Iraq aside, some homeowners and policy makers just want to do something to reduce the nation's dependence on overseas petroleum.

Biodiesel is appealing because it's a domestic fuel made from soybean and other vegetable oils that are grown and processed in America. Biodiesel fuel also burns cleaner and creates less air pollution than 100 percent petroleum-based heating oil. That makes it a practical alternative for homeowners who are concerned about the environment and the nation's energy security.

But biodiesel fuel has some downsides, too, obstacles that are holding back its potential. The biggest drawback is cost. Biodiesel is more expensive than straight heating oil. Price differences vary, but homeowners can expect to pay 20 to 30 cents more per gallon for the most common blend of biodiesel.

To overcome the price hurdle, experts say, there needs to be more government commitment to biodiesel policies that create tax incentives or offer other financial inducements. That would give the industry a boost to ramp up production and become price competitive with petroleum.

That appears to be happening, at least in some small ways. More than a dozen states are taking steps to encourage biodiesel use. On the national level, Rep. Jim Nussle (R-Iowa) introduced a bill in June that included incentives to help spur the use of domestically produced biodiesel. Although it focused more on the use of biodiesel as an automotive fuel than as a home heating fuel, it's certainly a step in the right direction.

But homeowners in a growing number of markets don't have to wait for governmental action on this issue. As the home heating season approaches, they can make their own policy decisions by burning a home-grown fuel that reduces America's dependence on imported petroleum and is easier on the environment.

From Highway to Home

Biodiesel's revival has mostly been taking place on the highway. Tractor trailers, delivery trucks, school buses and motor coaches they're all powered by diesel engines. In recent years, hundreds of institutions ranging from trucking and utility companies to school districts to the U.S. Postal Service have been phasing in biodiesel fuel as a way to cut pollution, especially in metropolitan areas with poor air quality. The trend also has caught on with some owners of diesel pickup trucks and cars, notably those made by Volkswagen and Mercedes-Benz.

While it's possible to run a diesel engine on 100 percent vegetable oil, the practice isnt recommended. Biodiesel is a solvent. At full strength, it can degrade rubber and dissolve residual petroleum sludge, clogging fuel lines. Also, pure biodiesel will gel in cold weather, making it impractical to use during the winter in many regions.

For these reasons, biodiesel is typically blended with conventional petroleum diesel. The most common ratio is 20 percent biodiesel to 80 percent petroleum. This concentration, known as B20, provides dramatic clean-air benefits without affecting engine performance or maintenance.

(The term biodiesel has caused some confusion, since there is no petroleum diesel in 100 percent biodiesel, notes Grace, who is a biodiesel advocate. Biofuel would be a much better name. Biodiesel refers to vegetable oil or animal fat that has been through a chemical process involving a reaction with sodium hydroxide and methanol. This process produces methyl esters another name for biodiesel and glycerin, which can be used to make soap. Compared to straight vegetable oil, biodiesel has a more stable viscosity over a wider range of temperatures, and it burns easier.

The practice of blending biodiesel and regular diesel fuel has carried over to the evolving interest in home heating. More than 7 million homes use No. 2 heating oil, according to the federal government, with the majority of them in the Northeast and Mid-Atlantic states. Those homes burned more than 6 billion gallons in 2000. If most of the homeowners used a blend of 20 percent biodiesel instead, it would reduce the amount of petroleum fuel needed by more than a billion gallons a year.

Obviously, no one wants to heat their home with a fuel that will shorten the life of the furnace or void manufacturer warranties. Over the past few years, testing of different concentrations by trade groups and independent experts has shown that B20 can be substituted safely in any furnace or boiler that burns No. 2 heating oil.

In Warwick, R.I., for instance, the school department participated in a federal pilot program to test the mixture in school boilers, with good results. The USDA has used the fuel in its Agricultural Research Service in Beltsville, Md., since 2000.

Perhaps one of the most important tests was a joint effort coordinated last year by the Massachusetts Oilheat Council, which represents regional oil dealers. Combustion tests using B20 found 20 percent drops in both nitrogen-oxide and carbon-dioxide emissions, and less smoke and odor. The trade group is preparing to do more tests of different blends to optimize performance and costs. More information about biodiesel testing and bioheat in general can be found at the website of the National Biodiesel Board: http://www.biodiesel.org.

Paying the Price

All this testing wouldn't mean much to homeowners if they couldn't get biodiesel delivered to their homes. Fortunately, more and more private fuel dealers are realizing that there's a market for the product. There's no master list of these dealers, however. The only way to find out if biodiesel is available in your area is to call around or watch for advertising. In addition, you can encourage your current fuel dealer to start delivering biodiesel.

Frontier Energy in South China, Maine, was the first in the state to offer biofuel and petroleum fuel in blends. Most customers who use biodiesel opt for B20, according to Joel Glatz, the company's vice president. Frontier promotes its product at natural-lifestyle events, through word of mouth and by responding to news stories in the local press. It also has a website:

http://www.frontierenergy.org.

The price difference between No. 2 heating oil and biodiesel is about 30 cents a gallon, Glatz says, which can be price-prohibitive for some customers. But Glatz makes an analogy to organic foods, which only a few years ago were hard to find outside of natural foods stores and typically cost more than conventional products. Today, they are available in most mainstream supermarkets as vendors respond to consumer demand.

Glatz supplied 40,000 gallons of biodiesel in 2002 to the state of Maine for heating capital buildings, including the governor's residence. Sales like that help expand demand for the product.

But the home market will depend on thousands of individual decisions from people like Ashton and Grace. Ashton was a home-heating-oil customer at Frontier Energy, so it was easy for him to make the switch to B20. He burns 500 to 600 gallons a year and also uses a wood stove to heat his 150-year-old house. Ashton says he was motivated to try biodiesel because of the growing unrest in the Middle East and America's dependence on petroleum from that part of the world. He's willing to spend some extra money, he says, to do something about it. (Grace's experience with biodiesel is told in the sidebar below.)

Although heating oil is dominant in the Northeast, it also warms homes on the West Coast. Steve Corah is a sales representative at Albina Fuel in Portland, Ore. His company has offered B20 for more than two years, and roughly one in five customers now orders biodiesel.

Albina Fuel markets biodiesel as a green fuel. It promotes the environmental benefits, the ability to cut foreign oil dependence by 20 percent and the benefits to American farmers, who grow the soybeans that often are used as the feedstock for biodiesel. Customer reaction has been encouraging, he says, and demand is growing slowly.

However, price remains an obstacle, Corah says. B20 sells for roughly 20 percent more than No. 2 heating oil. That's not a deal breaker for homeowners who are willing to pay a small premium because they believe in the benefits of biodiesel, he says, but it dampens the market for municipalities or businesses with tight budgets.

Another obstacle, Corah says, is the lack of local production facilities. Most are now located in the Midwest farm states. The biodiesel Albina Fuel sells is shipped by rail car from Iowa. The transportation costs associated with shipping biodiesel contribute to the higher price.

The best way to boost demand, he says, is to bring down the price. This year's dramatic run-up in oil prices and the impact on all petroleum fuels also has increased the cost of producing and transporting biodiesel. So it's a tough time to predict how any energy markets will evolve, at least in the short term.

The Future of Biodiesel

Paul Nazzaro, a consultant in Lynnfield, Mass. (http://www.fuelsolution.com), works with the National Biodiesel Board and is an expert in alternative fuels. It's clear, he says, that biodiesel will need some sort of national tax incentives or subsidies for the heating-oil industry and consumers to embrace it. Until then, it will remain a niche market. And if demand does take off, Nazzaro says, the country will need more production facilities to supply the product.

So like many promising ideas, biodiesel's potential hinges on chicken-and-egg, supply-and-demand forces that are difficult to bring into line. These forces are especially tough to align in a national election year, when major legislation tends to grind to a halt.

Meanwhile, private companies continue to move ahead. An 18-million-gallon-a-year biodiesel production plant in Lakeland, Fla., that had been closed under previous owners, reopened in May. ItÃ.‚¬'s now the largest multifeedstock biodiesel facility in the United States.

This and other developments could put more biodiesel into the market. The question now is whether homeowners will be willing to pay a bit more to get their home heating fuel from the soybean fields of Middle America, rather than the oil fields of the Middle East.