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Biodiesel, an alternative transportation fuel made from animal or vegetable materials that has been used in motor vehicles since the beginning of the automobile industry, can be substituted for petroleum-based diesel (petrodiesel) fuel. Vehicles using biodiesel emit fewer pollutants than petrodiesel, although they also generally get fewer miles per gallon.

Retail biodiesel is described by the percent of biodiesel blended with petrodiesel. For example, “B20” is a 20 percent blend.

Texas is the nation’s leading producer of biodiesel and, as such, it is well positioned to benefit from any expansion in its use. Because of the high price of soybean oil, the raw material most often used to produce biodiesel, and resulting high production costs, most Texas biodiesel is currently exported to Europe, where it is price competitive.


Per Million Btu Data comparable to other fuel sources not available.
Per Gallon (motor vehicle fuel) $3.37 (B20, January 2008)159
Per Gallon of Gasoline Equivalent $3.08 (B20, January 2008); B20 is $3.43 in diesel gallon equivalents.160
Direct Subsidy Share of Total Consumer Spending Federal: 9.9 percent; State and Local: 3.1 percent.161
Notes Very sharp increases in the price of feedstocks (primarily soybean oil, which doubled from October 2006 to January 2008) have resulted in higher costs for biodiesel producers. Petrodiesel prices have risen, but not enough to make biodiesel price competitive.162 Each gallon of biodiesel requires approximately 7.35 pounds of soybean oil, each of which requires slightly more than one pound of soybeans to produce.163 Given the current high price of soybeans, it is not currently possible to produce and sell biodiesel on a competitive price basis in Texas, even with subsidies.164 As noted, most Texas biodiesel is exported.

Economic Impact and Viability

Wages and Jobs Economic data on the biodiesel industry in Texas are not available. Texas has 22 commercial biodiesel plants and 12 more under construction. Jobs associated with biodiesel are related to its production and distribution and the construction or expansion of biodiesel plants.165
Regulatory Climate Biodiesel plants must obtain air and wastewater permits from TCEQ, a process that requires an average of about one year.166
Texas Competitive Advantage Texas has a concentrated and advanced fuels industry. It has some biodiesel feedstocks but no significant soybean oil production.
Notes In 2007, Texas produced 3 million bushels of soybeans, or a little more than one-tenth of one percent of the U.S. total of 2.59 billion bushels.167

Availability and Current Infrastructure

Estimated Resources in Texas Vegetable oils and animal fat for biodiesel are available from Texas sources, though Texas biodiesel refiners currently import soybean oil because the state has no soybean crushing plants.
Current Fuel Production In 2007, Texas made 72.9 million gallons of biodiesel, or approximately 9 trillion Btu.168
Consumption in Texas Texas drivers consumed less biodiesel in 2007 than in 2006. The high cost of the fuel and rising costs of feedstock affected sales across the state. Actual consumption numbers are not available.169
Number of Fueling Stations in Texas Texas has 51 retail fueling stations offering biodiesel blends.170
Vehicle Availability All diesel-engine vehicles are capable of running with B20. As of 2006, 528,705 diesel vehicles were registered in Texas, and most farm and industrial vehicles run on diesel as well.171
Notes Texas’ current biodiesel production capacity is more than 100 million gallons annually, with another 87 million gallons of capacity under construction.172

Environment, Health and Safety

Greenhouse Gas Emissions Although biodiesel releases carbon dioxide when burned, these emissions are considered part of the earth’s natural carbon cycle and represent no net increase in CO2.
Air Pollution (Non-Greenhouse Gas) Biodiesel combustion emits nitrogen oxides. Experts have disputed whether NOX emissions from biodiesel are greater or less than those from fossil fuels, but recent studies by the National Renewable Energy Laboratory concluded that B20 has no net impact on NOX emissions.173
Solid Waste No significant issues.
Land Use Agricultural land is needed to grow biodiesel crops. Land is also required for refinery sites.
Water Withdrawal Beyond the water consumed by biodiesel production, no additional water withdrawals are required.
Water Consumption Depending upon climate conditions, soy-based biodiesel requires between 14,000 and 75,000 gallons of water per million Btu of energy produced, primarily for crop irrigation.174 Water use at biodiesel plants is negligible.
Water Quality Uncontrolled feedstock crop runoff can contain pollution from pesticides and fertilizers. Appropriate conservation practices can significantly reduce these effects.
Notes According to two 2008 studies in the journal Science, some biofuels may contribute more to greenhouse gas emissions than conventional fuels if the full consequences of the conversion of existing rainforests and other lands to cropland is taken into account. These studies suggest that a shift to biofuels derived from agricultural waste, sugar cane or other feedstocks may be necessary to prevent the increase in carbon that occurs during the conversion of natural ecosystems to cropland.175

Fuel Characteristics

Energy Content B20 has an energy content of 126,800 Btu per gallon.176
Renewability Biodiesel is a renewable resource.

Other Issues

Dependence on Foreign Suppliers No significant issues.
Price and Supply Risks The price of biodiesel depends primarily on the price of the feedstock used to make it. Soybean oil prices have been rising since 2005. It takes 7.35 pounds of soybean oil to produce a single gallon of biodiesel. As a result of soybean oil price increases, the cost of feedstocks alone has reached over $4 per gallon.177
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