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The Price of Biodiesel

Leif Forer Piedmont Biofuels Coop 2008 Annual Meeting April 12, 2008 West End Wine Bar Chapel Hill, NC

Cheap fuel?

Whats in a gallon?
Feedstocks
 Fat or Oil: waste poultry fat or used fryer oil  Alcohol: methanol  Catalyst: potassium methylate  Yield: 85% - 90%  Federal Tax Credit:
 $1.00/gallon for virgin fats and oils  $0.50/gallon for recycled fats and oils

Whats in a gallon?
Refining
Wages Insurance Utilities: electricity and water Consumables: ion exchange resin, filters, absorbant, additives, etc.  Laboratory  EPA Compliance    

Whats in a gallon?
Distribution
 Short truck deliveries to the B100 Community Trail  Maintaining equipment  Administering transactions

Taxes
 Federal Excise Tax: $0.244/ gallon  State Excise Tax: $0.299/gallon  Exemption? H.B. 2003 (Harrison)  State Inspection Fee: $0.0025/ gallon  Sales Tax: exempt

Where does Trail fuel come from?


Piedmont Biofuels Coop: self
 Moncure - Tami Tank

Piedmont Biofuels Industrial: self


    Pittsboro- Industrial Raleigh - Larrys Beans Carrboro - Public Works Burlington - T.S. Designs (Coming soon!)

Carolina Biodiesel: PBI, others


 Durham - Bull City  Durham - Godars Garage  Reba & Roses - Hillsborough

Where does Trail fuel come from?


Blueridge Biofuels: self, PBI, others
 Asheville - Gas Up  Black Mountain - Black Mountain Natural Foods

Cape Fear Biofuels: PBI, others


 Wilmington - Co-op pump

PBC price breakdown


Cost per Gallon of Biodiesel
Piedmont Biofuels Coop Retail Price: $4.50/gallon

Distribution 0% Profit 4%

Taxes 12%

Feedstocks 22%

Refining 62%

PBI price breakdown


Cost per Gallon of Biodiesel
Piedmont Biofuels Industrial Retail Price: $4.50/gallon Distribution 3% Profit 1% Refining 14%

Taxes 12%

Feedstocks 70%

Buying and selling global commodities


 Waste fats and oils (yellow grease, poultry fat, beef tallow, and pork lard) are bought and sold worldwide through brokers and vendors not a central exchange.

Buying and selling global commodities


 Virgin oils are traded worldwide through central exchanges, brokers and rarely directly through vendors.
 Chicago Board of Trade: soy, corn, wheat, oats, rice, ethanol, metals  Winnipeg Commodity Exchange: canola  Intercontinental Exchange: crude oil, heating oil, gas, agricultural commodities, currencies  Bursa Malaysia Derivatives & Dalian Commodity Exchange: palm  Chicago Mercantile Exchange: livestock, dairy, currencies  New York Mercantile Exchange: crude oil, heating oil, gas, metals

11 year world oil prices

10 year U.S. fats and oils prices

1 year U.S. diesel prices

Source: Energy Information Administration

Price (U.S. dollars/gallon)


O ct
0.5 1 2 3 4 1.5 2.5 3.5 0

(2003 - 2006)

B100

Biodiesel vs. diesel prices

Source: Dave Kutcher, Saskatchewan Research Council


#2 Diesel B2
1 D 6/0 ec 3 Ja 4/0 3 n M 29/ ar 04 1 Ap 1/0 r 4 Ju 22/ ne 04 Ju 3/ ly 04 Au 15/ g 04 26 O /04 ct N 7/0 ov 4 1 Ja 8/0 n 4 2 M 0/0 ar 5 Ap 3/0 r 5 M 14/ ay 05 2 Ju 6/0 ly 5 Au 7/ g 05 Se 19/ pt 05 2 N 9/0 ov 5 10 Ja /05 n Fe 5/0 6 b 16 M ar /06 M 30/ ay 06 11 /0 6

Todays fuel prices


Price Per Gallon Comparison
as of April 9, 2008

$5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Diesel $2.58

$4.23

$4.50

$3.15

Retail Feedstock

Biodiesel

Questions?

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