Trucking, environmental issues converge over fuel
When the diesel engine was invented more than a century ago, its fuel was made of peanut oil, not petroleum. Now because of the high price of diesel, extensive environmental regulations and government incentives to use biodiesel, there’s renewed interest in making fuel out of soybeans, vegetable oils and even animal fats.
Across the country, farmers, private investors and huge agribusinesses are building biodiesel refineries and counting on it being “the next big thing.” Biodiesel is typically mixed with conventional diesel, resulting in a blend containing 2 percent to 5 percent biodiesel.
Last year, Congress enacted a $1-per-gallon subsidy for biodiesel use, which has been extended through 2008. Investors are eagerly plunking down large sums of money, betting that people will be clamoring for the fuel in the near future.
The American Trucking Associations has only recently embraced biodiesel, when it endorsed the use of the fuel in blends of up to 5 percent, known as B5. But getting truck stops to sell biodiesel and truckers to buy it may be another matter. Many truckers have been concerned that biodiesel would gel on cold days (which it won’t in blends of B5 or less), and truck stops say they will only sell what customers will buy.
In other news impacting the intersection where the trucking industry meets the environment, all diesel engines made starting Jan. 1, 2007, will be required to meet tougher clean-air standards mandated by the EPA. The program is expected to eliminate 2.6 million tons of smog-causing nitrogen oxide emissions and 100,000 tons of soot per year. Each new engine will be equipped with a 300-pound filter that reduces particulate matter emissions by more than 90 percent.
The good news is that maintenance and fuel costs will be minimally affected, according to engine makers. The large filter, designed to last the life of the vehicle, will require service once every four to five years, costing approximately $200. The bad news, not surprisingly, is the overall cost of the 2007 engines. One former truck manufacturing official estimated a year ago that the new engines would cost $4,500 to $6,000 more than the 2004 engines. Other reports, however, put the price tag as high as an additional $10,000.
Engine makers say the new diesels will be competitive in performance and reliability. They expect a smooth product introduction.
Meanwhile, the price of diesel fuel, which skyrocketed to an all-time high of $3.16 a gallon (national average) in October, stood at $2.48 a gallon at the end of November. While the price continued a six-week drop totaling nearly 70 cents a gallon, diesel fuel still cost 35 cents more per gallon than it did the same week in 2004. Where the price goes in 2006 is anyone’s guess.
Sources: Roemer Report, ATA, DOE