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The Miracle Bean - fueling higher prices
By Rob Schmitz
Minnesota Public Radio
February 12, 2002

Farmers from southern Minnesota think they have an answer to our country's dependence on foreign oil - biodiesel. Biodiesel is a diesel fuel made from the oil of crushed soybeans. After 10 years of research and development on the fuel, scientists have found the fuel to be a superior alternative to oil-based diesel fuel. Last year, some Minnesota lawmakers wanted to require that all diesel fuel be made with 2 percent biodiesel. They introduced a bill that died in the Senate. They'll reintroduce the bill to the Legislature this year.

Roger Peterson
Roger Peterson is a farmer in the Albert Lea area. He's a member of the Soy-Moor soybean farmer cooperative, which hopes to break ground this spring for the state's first biodeisel plant.
(MPR Photo/Rob Schmitz)

Albert Lea farmer Roger Peterson is processing corn and soybeans. Peterson has a dumping bin, dryer, and holding bins for his corn and soybeans. What he wants now, though, is a soybean crusher.

Peterson is the director of Soy-Moor, a Minnesota soybean farmer cooperative of 500 area farmers. This spring, Soy-Moor plans to break ground for construction of Minnesota's first biodiesel plant. Peterson hopes his work promoting biodiesel will lead to a requirement that Minnesotans use the new fuel.

"We're willing to take our resources and talents to develop this stuff. But we need our mandates to get us in the marketplace, and then everyone will benefit," says Peterson.

Biodiesel is a diesel fuel made from the oil of a variety of vegetables, including soybeans. All diesel engines made in the last 20 years are able to run on it, without any modifications.

When burned, biodiesel's emissions don't contain sulfur or any greenhouse gases. Biodiesel also increases what is called "lubricity" in an engine, increasing an engine's overall performance. But Peterson says the biggest benefit of biodiesel has little to do with engine performance or the environment.

"We're importing 60 percent of our fuel. If, at some point, something happened - given the nature of the world, terrorists and stuff - we'd be in tough shape if we lost 20 percent of our oil one day," says Peterson.

Not many people have vehicles that rely on diesel fuel. And that's why - Peterson says - most Americans either don't know or don't care about biodiesel.

But it's this benefit - reducing our dependence on foreign oil - that Peterson and pro-biodiesel lawmakers point to when explaining why the average American should care about this new fuel.

"This thing isn't about farms. Certainly it'll help with farming, but it's about other things," says State Rep. Dan Dorman, R-Albert Lea.

Soybeans grown in Minnesota
•Minnesota is the third largest soybean producer in the United States (after Iowa and Illinois), contributing over 10 percent of the United States total soybean production.
•Soybean is the top agricultural crop in Minnesota, generating $1.5 billion in cash receipts or 18 percent of Minnesota's total farm income.
•In 1998, Minnesota produced a record high of 286 million bushels of soybeans from 6.8 million acres.
•Soybean acreage accounted for 24 percent of Minnesota's total farmland in 1998, a 42 percent increase from 4.8 million acres a decade ago.
•From 1988 to 1998, the annual rate of increase of Minnesota's soybean production averaged 9 percent, the highest growth rate in the nation.
(Information courtesy of Minnesota Department of Agriculture)

(Map courtesy of University of Minnesota Extension)

"It's about cleaner air, it's about less dependency on foreign oil," says Dorman. "It's an overused statement, but this should be a number one issue with the soccer moms in the suburbs. And we want the soccer moms going out there in their minivans saying, 'I love biodiesel.'"

While the image of soccer moms campaigning for biodiesel may be far-fetched, Dorman believes suburbanites should care about the new fuel, because it will provide cleaner air for more densely-populated areas and put taxpayers' money to better use.

He theorizes if the government spends more on alternative fuels, farmers will get more for their crops, and the government will will pay less in farm subsidies. Dorman calls it a reinvestment in America - one that'll make us less dependent on foreign oil.

For proof, Dorman points to Europe, where biodiesel has been on the scene for 10 years. In countries like France, Italy, and Germany, biodiesel plants are a popular capitalist venture.

In Germany, for example, taxes on crude oil-based products have caused their price to skyrocket. Meanwhile, there are tax incentives for biodiesel production, which has made it a cheaper fuel.

According to the European Biodiesel Board, about one-half of all gas stations in Germany have a pump with B100, the code name for 100 percent pure vegetable diesel oil.

"There is an attractive climate of investors who say, 'Hey, with biodiesel, I can make a fortune,'" according to Werner Korbitz, director of the Austrian Biofuels Institute.

Korbitz says biodiesel has become so popular in Europe that for the first time, researchers are developing a hybrid plant whose only use is to make biodiesel.

Most European biodiesel is made from rapeseed. But now, Korbitz says, European biodiesel plants are starting to look elsewhere for raw materials. In Austria, an American icon is selling off oil from its french fry vats.

"McDonald's has very high quality philosophy in the kitchen. They change frying oil regularly, so recycling oil still has a high quality. And it is an excellent feedstock for biodiesel," says Korbitz. "It is a cheap source, and it's a useful step. You add value to something which you would otherwise throw away or burn."

Europe is so ahead of the United States in biodiesel use, Europeans have designed many of the U.S. biodiesel plants. Soy-Moor's Roger Peterson will soon leave his Albert Lea farm for a trip to Italy to buy parts for his biodiesel plant.

Up to now, European countries have depended on tax incentives for biodiesel use. But a European Union mandate could be on its way. Europe's headway in biodiesel has been the envy of many Minnesota farmers and legislators.

Soybean harvest
Soybean farmers in the Midwest are hoping their crop becomes the basis of a new alternative fuel, biodiesel, which will in turn boost their prices.
(Photo courtesy of University of Minnesota Extension)

Last year, the Minnesota Legislature failed to pass a biodiesel mandate that would have required a 2 percent biodiesel blend for all diesel fuel in the state.

The bill's supporters say they are optimistic the bill will pass this year, but they admit they'll have to face two big obstacles - Northwest Airlines and the Minnesota Trucking Association.

Although Northwest refused to comment for this story, according to legislators, Northwest officials worry a biodiesel mandate will raise the price of jet fuel.

Higher prices also worry the Minnesota Trucking Association. John Hausladen is the group's spokesman.

"We think developing a domestic fuel makes sense. We just don't think that forcing it down the troats of its users while they absorb the cost is the way to do it," says Hausladen. "The mandate is the least creative solution to this. It forces people who aren't ready to use it, at a time when the economy is reeling."

Hausladen says a mandate would make truckers pay more for the diesel they need, and he says the money won't go to farmers. He says it'll simply boost the income of a small group of farmers who can afford to build a biodiesel plant.

If a statewide mandate for the use of biodiesel doesn't pass this year, changes in federal policy will soon require it. In 2007, The Environmental Protection Agency will lower the national sulfur emission standards from 500 parts per million to 15 parts per million.

The new standards will make biodiesel - and the soybeans that make it - a desirable commodity.

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