Faith in mustard seed fuels Blue Sun’s
vision of biodiesel cartel
Innovation can mean creating something completely
new, or, in the case of Blue
Sun Biodiesel, it can be taking a great idea—like
extracting fuel oil from a renewable plant source—and
tailoring it to the specific needs of a region or group—like
struggling farmers in dry western states.
The Ft. Collins, Colo.-based agriculture energy
company opened for business in 2001 to capitalize on the growing
market for biodiesel. “We started
with the idea of producing and distributing a high-quality,
dependable product that both diesel engine manufacturers and
consumers would fully endorse, and worked backward from there
as we learned more about the business,” recalled owner
and CEO Jeff Probst.
Search for cost-effective
feedstock uncovers high-performing alternative
An early lesson was that importing soybeans, a commonly used
biodiesel feedstock, from the Midwest to Colorado added to the
cost of manufacturing the renewable fuel. Blue Sun enlisted
researchers from Colorado State University, Kansas State University
and the University of Nebraska to investigate industrial oilseed
crops that could grow in dry land crop areas. “We could
build a business on importing soy, but to compete in the long
term, we knew we had to exploit western resources,” Probst
noted. “So we started looking at alternative feedstocks,
not only from a cost perspective but also in terms of fuel performance.”
Blue Sun turned its attention to a mustard family
plant similar to a biodiesel feedstock used in Europe, which
offered many performance advantages over soybeans. Pound for
pound, the oil content of mustard seed is 40 percent, compared
to the 18 percent content of soybeans. Mustard seed has a higher
cetane rating, the measurement of fuel’s ignition quality,
and it retains flow properties in freezing temperatures better
than soy-derived oil.
Best of all, both for Blue Sun and for Colorado
farmers, mustard seed is better suited than soybeans and other
oil-bearing crops to the growing conditions of the High Plains
region. The drought-tolerant and heat -resistant crop requires
little irrigation, a factor that improves the fuel’s energy
balance. Soybeans produce 3.2 units of energy for every unit
of energy used to process the oil into fuel. Probst estimates
that growing the low-moisture feedstock close to the manufacturer
helps to boost mustard seed’s energy balance to more than
four units of energy per unit spent in processing.
Growers’ co-ops give
farmers stake in biodiesel’s future
Mustard seed’s early spring planting season and July harvest
fits into the fallow cycle of eastern Colorado’s winter
wheat producers, adding incremental value to the farmers’
crops without adding to irrigation loads. “It offers an
opportunity to support the rural economy, keep revenues in the
state and give farmers more control over their own destiny,”
said Probst.
Blue Sun formed two growers’ co-ops—
Colorado-based Blue
Sun Producers, to serve Colorado, eastern Kansas and Wyoming
farmers, and Progressive Producers, exclusively for the state
of Nebraska—to offer farmers a stake in their vision.
Members must invest a minimum of $5,000 and plant up to 200
acres with seed Blue Sun provides. The company will contract
with the farmers before planting season, and pay them an annual
dividend on the investment. Participating farmers will also
benefit from the expected equity appreciation in the company.
The money will be used to fund the construction
of a 2.8-million-gallon biodiesel production facility in northeastern
Colorado. More than 50 farmers have already joined the cooperatives,
according to Probst.
The U.S. departments of Agriculture and Energy have shown interest
and support for the project, too. DOE awarded Blue Sun a $100,000
Phase I SBIR grant to breed new oilseed varieties that may improve
on the fuel properties of mustard seed. The research may lead
to a Phase II grant of $750,000.
The company received two separate USDA Rural
Development matching grants for $450,000 each to help with setting
up the growers’ co-ops. The money will add 2.5 cents per
pound incentive to the 9-cent-per-pound payment mustard growers
would receive for their crop.
Greater availability, lower price needed
to build consumer acceptance
Colorado Rural Development Director Gigi Dennis presented the
grant to Blue Sun at the Feb. 6 opening of the state’s
first all-biofuel retail station. Heartland Town and Country
store in Ft. Morgan joins Bartkus Oil Company in Boulder, Colo.,
the Catherine Store in Carbondale, Colo., and Shoco Oil in Commerce
City, Colo., in pumping B20, a 20-percent biodiesel/80-percent
petroleum diesel mix, for the general public.
Glen
Babcock, co-owner of the Heartland Town and Country store,
heard about the product from a fellow Farmland
Co-op member who had worked with Blue Sun. “The more
I learned about it, the more I thought we should give local
farmers and ranchers the option of renewable fuel,” he
explained.
Turning an entire station over to biofuels
did not require extensive retrofitting. Heartland had recently
installed a new pump to handle ethanol, and any diesel pump
was compatible with pumping biodiesel. “My feeling is,
we’ve been held hostage to fossil fuels long enough,”
Babcock declared. “Biofuels are good for farmers and for
the local economy. Heartland is supporting the product from
tillage to tank.”
Whether consumers will support biofuels
as enthusiastically is still an unanswered question. The smog
that frequently plagues Colorado’s Front Range has made
cleaner-burning biodiesel attractive to many fleet customers.
The University of Colorado uses Blue Sun in most vehicles, and
Denver’s Regional Transportation District has begun a
pilot program for the product. The cities of Boulder, Breckenridge
and Colorado Springs, a Western customer, recently contracted
with Blue Sun’s distributor and retail network to supply
B20 for their municipal diesel vehicles.
Still, with only five retail outlets in
Colorado and a sixth to open in Ft. Collins. Colo., it takes
a committed driver to seek out the pumps. Also, the B20 fuel
blend customers prefer costs about 20 cents more per gallon
than petroleum diesel. Congress is considering a revised energy
bill with a 20-cent-per-gallon tax reduction on biodiesel and
a new transportation bill with a similar incentive. If one of
those bills carrying the incentive proposal passes, it could
offer some price relief.
And, of course, Blue Sun continues to believe
that the humble mustard seed can reduce air pollution and dependence
on foreign oil, save the family farm and build a multi-million
dollar industry. All it takes is a good idea and a little faith.