Sunday, March 2, 2008

Biodiesel from...Scrapple?

Here's another example of how the ridiculous federal subsidies and mandates for corn based ethanol are starting to backfire. High soy prices have prompted a biodiesel plant in Cleveland to retrofit its facility to process discarded pig fat into fuel rather than its original soy feedstock. Not only is there capital expenditure involved, but using pig fat requires an additional processing step that will increase operating costs as well. Even with the biodiesel blending tax credit, processing soy is no longer economical. Soy price has ballooned from an increased worldwide demand of soy compounded with loss of supply from crop switching to heavily subsidized corn for ethanol.

For one, I find it amazing that the additional costs associated with switching to pig fat are economical. Also, I wonder if this is a reasonable use of waste from pork rendering facilities. I imagine there are some site specific factors that make the aforementioned relationship work, but it would be great to turn another waste stream into fuel (as opposed to a major food crop).

I really don't understand how our federal government can keep saying that all the tax breaks to domestic food-fuels are a good idea. It seems to me that a rise in food prices should be a big red flag. I guess that a good chunk of Americans may be more insulated from changes in food price than fuel price, but there are also millions in poverty that must be acutely affected. I did appreciate the fact that Bush's State of the Union generally lauded biofuels instead of corn ethanol specifically, but the goverment certainly hasn't made any major policy changes to reflect the recognition that corn and soy are not the answer. May this be the 954,102,041th time a member of this course wished it to be January 20, 2009.

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