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Problem with converting oil into gas and diesel is it takes BIG factories with lots of control equipment. It is a very dangerous thing to do. It operates optimal at very large scales, and the people in the oil transport business don't sell barrels at a time, they sell tankers at a time. Interpret these statements as "it is nearly impossible to enter into the oil refinery business". They have a monopoly. I have seen operate a trans-esterification unit (i.e. a bio-diesel maker), operating at 99.9% conversion efficiency (on the fatty acid) that could sit easily in the back of a 1/2 ton pickup. At this size, and with this operating efficiency you could make about a gallon a minute. The process was scalable to larger scale as well. Very small chance of fires / explosiones / etc... due to the nature of the chemicals being used and how they are processed... with methanol being the worst. In the mid west their are lots of co-ops producing bio-ethanol that are set up around the corn producing areas. It is cheaper to convert it into ethanol localy at small conversion centers then transport the ethanol to the blending stations where they mix it with the gas. This is not entirely the same with bio-diesel, as the soybeans (or rapeseed or cotton seed or sunflower seed or whatever) must first be extracted to remove the oil from the seed. This extraction is currently being done at... you guessed it... big business. However, they are producing edible grade vegetable oil. That quality (and the processing pains that go along with it) is not necessary for material that will ultimately be burned in diesel engines. Additionally they typically use the remaining seed protein for food or feed products, and if it's food products, the quality must be kept quite high. However, if your doing the oil extraction at a small co-op in nowhere Missouri, then all you have to do is make the remaining seed quality good enough for cattle feed. Once again, feed for cattle can be of a lower quality than feed for humans. Farmers need Diesel to run their tractors and trucks, etc... They farmer gives their seed to the co-op, the co-op gives them back a certain amount of processed seed and biodiesel. The co-op sells a little of the processed seed and diesel to pay for operating costs. Money is saved by not having to transport the raw materials and the final products... except from the farm to the co-op and back again. Very wordy answer. So, in a word or two, Yes I think it can be kept small business. But I've given all this time to the Pro's of this argument. Any good debator knows both sides of the argument. And here's the Con's. If there is a major drop in production of soybeans one year, the prices go through the roof. The farmers don't sell any of their soybeans to the co-op, but instead sell them all to the grain processors. The co-op has no seeds this year, and the co-op has to lay off all employees and sell off capital. Business closed. The alternative is that the co-op has contracts with the farmers for a certain amount of seeds each year. That's fine, so the farmers grudgingly ship their seed to the co-op (which will make them less money) and the co-op realizes (with the help of their economic analysts) that the best way to make money this year is to sell their seeds to the grain processors and buy the farmers seeds and diesel... lay off the employees and wait till next year. On year in Nebraska their was a huge corn crop (imagine that!). Farmers sold a lot of corn to the local bio-ethanol plant. Turns out the rest of the US had a lousy corn crop. The bio-ethanol plant sold all their corn for cash and made no bio-ethanol that year. It's all about $'s. Now lets not mention the fact that all though it is POSSIBLE to run an engine on pure ethanol or bio-diesel... it's a bad idea. It is better to blend it with the petrochemical material. With bio-diesel you have the geling that occurrs at low temperatures which can be "lessened" by a blend with petrochemical diesel. You also have the bacterial growth that occurs in 100% biodiesel that can be minimized by blending with petrochemical diesel. Incidentally, barges going up and down the Mississippi will probably run 100% biodiesel (or close to it) one day, because when they have a spill or leak a bunch of their petrochemical fuel, it becomes an EPA / Coast Guard / DOH nightmare. If instead they had the biodiesel... it naturally degrades in a short matter of time, and no problem. Just add a little fertilizer to the spill and it goes away. Nature knows how to fix itself. All this information and $2.50 will buy you a cup of coffee.
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