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Biodiesel Revisited

news2_Green StationThe Green Station keeps hopes for biodiesel alive in Santa Cruz
Whatever happened to biodiesel? Once—not so long ago—it was hailed as an immediate and sustainable way to alleviate dependence on oil and reduce CO2 emissions. But lately biodiesel seems to be living in the shadow of other green technologies, like spotlight-stealing electric cars. However, the absence of fanfare hasn’t deterred Santa Cruz’s Kings of Biodiesel, Green Station owners Bill Le Bon and Ray Newkirk, from continuing the fight. While forced to lease U-Hauls out of the Green Station lot to make ends meet (and sell some of those sly electric cars, which they also agree are great eco-choices), they remain committed to keeping the biodiesel pumps alive and accessible for Santa Cruz.

Despite their prime location on the corner of Ocean Street and Soquel Avenue since 2008, the Green Station has struggled to find a large client base of biodiesel customers. To make matters worse, the tax credit for biofuel producers that helped propel the industry and keep prices low was put on hold, resulting in large numbers of biofuel producers and distributors going out of business.

The business was also forced to briefly raise its biodiesel to $4.75 a gallon, but worked with producers to quickly bring costs down to less than $4. Le Bon says, for biodiesel, the tax credit provided a level playing field when trying to compete with behemoth petroleum companies.

“We’re not getting any subsidies right now yet we’re still surviving, barely,” says Le Bon, “whereas the oil companies are getting huge subsidies and they’re raking in billions and billions in profits.”

Le Bon isn’t alone in his assessment of the real cost of oil versus what we pay at the pump: more economists and academics are saying we need to begin considering the hidden costs of petroleum use.

A report by the National Defense Council Foundation found that if if you cut through the subsidies and account for hidden costs, like environmental impacts and economic tolls, we are actually paying more than $5.28 for a gallon of gasoline. They also report that America’s dependence on oil totals $297.2 to $304.9 billion in economic penalties annually.

Apart from tax dollars spent, petroleum is also afforded some of the highest tax breaks around. Last July, the New York Times reported that BP was able to write off 70 percent of what it was paying in rent for the Deepwater Horizon rig, or $225,000 a day from the start of the lease. Now, BP is claiming a $9.9 billion tax credit for its response to the oil spill it caused in the Gulf of Mexico.

Newkirk says it’s exactly these kind of subsidies, both direct and indirect, that make producing and delivering alternative fuels so difficult. He adds that misconceptions about biodiesel create an added obstacle for would-be users thinking of making the switch.

He says much of the public has been misguided by anti-biofuel campaigns creating notions that bio-diesel requires special motors to be run or will deprive the world of much-needed food sources.

“All the biodiesel we use is made from recycled vegetable oil from restaurants, so it’s a waste product already,” he counters.

Another factor is the low number of biodiesel vehicles in the United States. With gas remaining relatively cheap and accessible everywhere, the convenience and cost savings (diesel engines cost around $1,000 more to produce than petroleum engines) has left diesel strictly in the minority.

Le Bon argues that despite public reluctance to make the switch, the robustness of diesel engines and the increased fuel efficiency (about 30 percent better than petroleum engines) results in long-term savings.

Currently, the tax credit that has helped maintain efforts like Green Station over the last five years is attached to the Domestic, Manufacturing and Energy Jobs Act of 2010, and if passed would retroactively extend the credit until the end of the December. Two other bills, H.R. 4070 and S. 1589, could also create a multi-year extension of biodiesel tax incentives.

Regardless of buzz behind advancements in electric cars and green technology, the Green Station plans to remain in business for people looking to make a concrete change now instead of promising to reform in the future.

“The purpose of our business is provide people with solutions that are affordable, practical and that work today,” he says. “Not a year from now or five years from now—today.”

Comments (1)Add Comment
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written by jason morvay, October 12, 2011
it's sad our tax dollars go towards big oil only which only increases our dependency on OPEC. the only way we can overcome special interests and lobbying which is cutting off the flow of Federal funds so we can become independent is to contact your state and Fed representatives. the squeeky wheel gets the grease as they say.

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