SAN FRANCISCO – Whatever the energy preference of a consumer may be, he'd be happy to know that the availability and variety of motor fuels throughout the U.S. is growing.
And availability is key, considering that sometimes only a specific fuel will do.
"Comparing ethanol to biodiesel or renewable diesel sources, in many ways, is like comparing apples to oranges," given that each has different uses, said Rick Kment, an analyst at Omaha, Nebraska-based DTN.
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"One of the problems that the United States faces when looking toward a diesel-based economy is that the current diesel engines do not meet environmental standards for motor vehicles in some states," he said.
Even so, "the diesel market continues to be a large market in the U.S., with most of the shipping traffic, truck, train and ship based on diesel-power products," he said.
In 2005, 37 percent of the nation's convenience stores that sold fuel sold diesel, according to John Eichberger, vice president of government relations for the National Association of Convenience Stores. That equated to about 41,442 stores.
That's handy, considering the trucking industry consumes 36 billion gallons of diesel fuel annually, according to American Trucking Associations' spokeswoman Tiffany Wlazlowski.
Ethanol blended with gasoline up to E10, or 10 percent ethanol, is also widely available, said Eichberger. "Ethanol is used in all reformulated gasoline, which is about 1/3 of the nation's volume," he said.
And E85 is gaining market share, he said. Still, there are many challenges with selling the product, including cost of equipment installation, the low number of flexible fuel vehicles, low demand, 25 percent fewer miles per gallon with E85 vs. gasoline etc., he said.
Biodiesel popularity
On the other hand, Eichberger said that retailers are showing interest in biodiesel, and more are starting to offer the product, although it is still a "very small component of our existing infrastructure."
The National Biodiesel Board offers a list of retail biodiesel fueling locations. Read the list here.
"Soy, canola and many other oils [used to produce biodiesel] are far less energy intensive to produce than corn for ethanol," said James Williams, an economist at WTRG Economics.
Also in biodiesel's favor: there's a large number of "viable feedstocks ... that can be grown all over the world and are not necessarily in competition with the food supply," said Darin Newsom, an analyst at DTN.
"More world economies are based on diesel than gasoline — meaning more demand for a U.S.-made product" and "diesel vehicles generally get better mpg — meaning each gallon of biodiesel goes farther," he said.
"I have had a hard time understanding why more emphasis has not been placed on biodiesel with the ongoing frenzy surrounding ethanol," he said.
ATA touts the use of biodiesel fuel as well. "The American Trucking Associations supports the voluntary use of high-quality biodiesel in low percentage blends," Wlazlowski said. High-quality biodiesel in up to 5 percent blends performs comparably to today's diesel fuel, she said.
At the same time, "trucking's biodiesel use is only limited by the biodiesel industry's ability to grow," said Wlazlowski.
The National Biodiesel Board estimated in late January that the annual U.S. production capacity for biodiesel stood at 864 million gallons per year. That comes from about 105 companies that have invested in the development of biodiesel manufacturing plants and are actively marketing biodiesel, it said.
And 77 companies have reported that their plants are under construction, with another eight plants expanding their existing operations, NBB said.
Combined capacity, if realized, would result in another 1.7 billion gallons per year of biodiesel production, it said. Read the fact sheet.
But remember that as biodiesel plants are built, U.S. demand for diesel is climbing, said Charles Perry, chairman of Perry Management. So by the time we can produce, say, 600,000 barrels of biodiesel per day, "our diesel demand may have climbed to 5+ million barrels per day," he said.
Copyright (c) 2007 MarketWatch, Inc.
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