Greener pastures?

SEATTLE- Seattle business owner Joe Whinney turned off a quiet side street and backed his 2006 Volkswagen Jetta up a short driveway to an insulated plywood shed on a recent Wednesday afternoon. Inside that dilapidated structure stood an old-fashioned gas pump-an industrial relic more typical of lonely highway outposts than this urban neighborhood's mix of residential and light industrial space.

But Whinney didn't come to admire an antique. His interest centered on the long-overlooked technology gurgling within the pump's hoses. "Just fill it up," he said to a waiting attendant, who promptly squirted 13-plus gallons of modified vegetable oil into the Jetta's fuel tank.

A clipboard with a hand-written daily customer log lay nearby, listing the names of about a dozen drivers who, like Whinney, had bypassed the area's numerous petroleum-based diesel stations for the more expensive biodiesel at Dr. Dan's Alternative Fuel Werks. "Let's just say I'm a serious tree-hugger," said Whinney, the founder of an organic, fair-trade chocolate factory in town. "Biofuel, from all the research I've done, is just consistent with my personal values."

For years, the retail side of the biodiesel industry has relied on such ideologically committed customers. Handfuls of entrepreneurial environmentalists have polka-dotted the country with fueling stations similar to Dr. Dan's, scraping by largely on the business of upper-middle-class patrons willing and able to pay a premium for lower carbon dioxide emissions and higher mileage per gallon.

As a niche market product, biodiesel delivers what conservationists demand-a clean, home-grown fuel manufactured either as a byproduct of various food crops or from recycled vegetable oil that restaurants and potato-chip plants would otherwise throw away. Low-blend biodiesel, such as B2 and B5, is equally sustainable and popular with farmers throughout the South and Midwest.

But the industry is changing: National Biodiesel Board spokesperson Amber Thurlo Pearson told WORLD that global sales of U.S.-produced biodiesel have tripled in each of the past two years, moving from 25 million gallons in 2004 to 225 million gallons in 2006. Construction is underway on 65 new biodiesel plants in the United States alone, and much of Europe is enamored with the fuel as a means to satisfy the emissions reduction requirements of the Kyoto Protocol.

Such skyrocketing demand raises serious questions about biodiesel's long-term sustainability. Soybeans, the primary crop from which the product is manufactured, produce only 50 gallons of biodiesel per acre. Sunflowers yield close to 100 gallons per acre and canola (rapeseed) can deliver as much as 150 gallons an acre. But even at those higher rates, biodiesel would require a massive expansion of existing farmland to make any significant dent in the fossil fuel market. And even the expanding waistline of French fries and potato chips leaves recycled deep-frying oil making up only a tiny fraction of fuel demands.

The global market has responded to these pressures with new vegetable oil supplies that should inspire gnashing of teeth among self-proclaimed tree huggers-were they not knee deep in denial. Tropical countries such as Thailand, Malaysia, Singapore, and Indonesia are rushing to slash their remaining rain forests to make room for palm oil farms, the cheapest means for producing biodiesel's raw materials. Such deforestation threatens to increase worldwide carbon dioxide levels far more than the use of biodiesel could ever reduce them.

That tradeoff amounts to a sort of emissions outsourcing for European countries-a chance to fulfill Kyoto requirements and curry political favor without ultimately decreasing global contributions to climate change. The European Union has admitted the problem but decided against banning imported biodiesel due to potential hang-ups with world trade rules.

Such difficulties underscore a stark reality: Biodiesel, like ethanol and other faddish biofuels, is not a magic solution to the issues of foreign oil dependence and greenhouse gas emissions. Contrary to the oversimplified contentions of committed biodiesel ideologues, the choice between fossil fuels and biofuels is inescapably tragic: Both products raise problems.

Biodiesel's problems extend stateside, too, although at a slower rate-since the Kyoto pact is not driving the industry. U.S. producers and distributors may not yet need tropical palm oil to create sufficient amounts of the alternative fuel, but their need for more farmland is already straining a limited resource.

Renewable Energy Group (REG), an Iowa-based company and the industry leader for sales of non-blended biodiesel, produces its product exclusively from soybeans grown within the United States. With four new production plants currently under construction and four more in a pre-construction phase, that business model could face a squeeze. Company spokesperson Alicia Clancy told WORLD that genetic engineering might solve the issue by increasing how much oil soybeans yield. Researchers are also looking into extracting usable oil from pond algae.

But demand has outpaced such innovations. Seed farmers in Washington state, who supply half of the world's cabbage seeds, are terrified that an influx of rapeseed and its accompanying pollen will destroy their fields. Such concerns have not slowed local politicians, who recently passed a law requiring all fuel suppliers in the state to ensure that biodiesel comprises at least 2 percent of their diesel sales by the end of 2008. The law further stipulates that all state agencies must convert at least 20 percent of their diesel use to biodiesel by the summer of 2009.

Other local and state governments, especially along the West Coast, have passed similar measures, ensuring that biodiesel demand will continue its steep upward climb. Politicians in such environmentally sensitive areas are eager to procure green stamps of approval from constituents who consider "Big Oil" the world's greatest evil. Businesses in those areas stand to benefit from pro-biodiesel stances, too. Accordingly, retailers of the trendy renewable fuel are moving from side streets to Main Street.

Several miles south of Dr. Dan's in the stylish neighborhood of West Seattle, two giant "SoyPower" banners hang prominently from the breezeway roof of a crowded six-pump Safeway gas station. The nation's second-largest grocery chain and operator of more than 300 gas stations nationwide dipped its pinkie toe into the biodiesel market last month. The mega-conglomerate, and a host of other major fuel retailers, will closely monitor the West Seattle station to gauge biodiesel's mainstream appeal.

Sienia Chan, a cashier at Safeway's test station, says she's noticed a slight increase in customer traffic since the biodiesel pumps opened. But she adds that some potential customers have expressed their dissatisfaction with Safeway's choice to sell B20, a diesel blend with only 20 percent biodiesel: "Some people tell me they'd rather go to Ballard where Dr. Dan sells B99."

REG spokesperson Clancy, whose company is supplying Safeway's biodiesel, said the decision to sell B20 widens the potential consumer base. Diesel cars can easily switch back and forth between B20 and petroleum-based diesel without needing to replace fuel filters. And B20 can survive in winter temperatures below 40 degrees without coagulating like a jar of cooking grease in the refrigerator.

Such factors help attract customers like Chris Wu, a 27-year-old anesthesiologist who pulled his 2004 Volkswagen Passat into the Safeway station on a recent morning and began fueling with biodiesel. He'd read about the new station in the local newspaper and decided to give it a try. "I'm not a huge environmentalist, to be honest," he said. "But given the choice, I'd rather go with something more earth friendly." The jury is out on which choice qualifies.