Friday, May 04, 2012

What is the Price for Biodiesel?

Whenever petroleum prices go into a noticeable or serious increase, our biodiesel buyers network, SBN, gets far more inquiries from price motivated people hoping to save money by buying biodiesel. Here are some common questions and answers regarding price:

What is the price for biodiesel?"About the same or more than petro diesel" is the short answer, so buying commercially produced biodiesel through the conventional market supply and demand influences will not likely save a diesel driver any money over petro diesel.

Why would I buy biodiesel if it won't save me money (benefits)?
There are many benefits to using biodiesel over petro diesel and, other than running a diesel engine, the two fuels have little in common so comparing them could be irrelevant. Which benefits of using locally produced, B100 made from locally recycled cooking oil do you care about?:

  • Biodiesel is an easy, inexpensive first step toward making energy solutions real now before petroleum reaches peak to avoid panic.
  • Biodiesel supports local businesses and economy.
  • Biodiesel is made from crops that are renewable for an ongoing but seasonally limited supply.
  • Biodiesel emissions are non toxic.
  • Biodiesel has a higher lubricity which helps the engine run smoother and longer.
  • Using biodiesel sets a healthy example for our children and will leave them a healthy legacy.
  • It is not necessary to invade countries or kill anyone to gain access to biodiesel.
  • Biodiesel decentralizes power, naturally and peacefully.
  • Biodiesel is primarily carbon neutral.
  • Biodiesel smells good.
  • Running on biodiesel is just plain fun!

Why is the price for biodiesel about the same or more than petro diesel?
As shoppers compare prices between the two fuels on the open market, some predictable principles of supply and demand prevail as long as buyers keep wanting the lowest price and sellers keep wanting the greatest profit. Unless there is some kind of intervening policy or behavior introduced, the price for biodiesel sold in these conventional market conditions cannot go below petro diesel prices without the biodiesel supply diminishing as buyers buy it up when the price is lower. A diminished biodiesel supply makes the value and price go up for any remaining feedstock oil (what biodiesel is made from) in turn causing the biodiesel price to go up until it is equal to or greater than petro diesel prices causing the buying frenzy to taper off. Whenever the petro prices have risen above the biodiesel prices, the entire biodiesel supply gets purchased quickly by price shoppers leading to shortage related market and pricing phenomenon taking hold throughout the supply and manufacturing process. This phenomenon is even leading to bidding wars for the waste restaurant cooking oil in many areas.

How can I save money with biodiesel?
Making biodiesel ourselves is one way of being in control of our costs, either individually or collectively, by getting out of the conventional market supply and demand influences. This still leaves the feedstock and methanol costs to deal with unless we grow and make those ourselves too. It is also possible to organize individuals and groups to purchase biodiesel collaboratively, as we do through Sac Biofuels Network, which makes buying and delivery more efficient to help bring the cost down.

SBN assists people to both make biodiesel and buy it collaboratively and more efficiently. Contact Steve Bash at if either of these options interests you.

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