“Premium Diesel,” reads the green sign in front of the Brooks Street Cenex station. Crowded between dozens of other signs on the busy thoroughfare, the words don’t command much attention. But in a week or two, Cenex hopes to pique passing interest with a change to “Premium B20 Diesel.”
“Yeah, the B20 may confuse a few customers,” says Cenex Regional Manager Kyle Stensrud. “But hopefully they won’t be turned away by it. We’ll have stickers by the pump and a pamphlet inside to explain to customers what they’re getting.”
B20 diesel is a mixture of 80 percent petroleum diesel fuel and 20 percent biodiesel—fuel made from vegetable oil. Cenex and Missoula-based biodiesel refiner Sustainable Systems are hoping B20 will prove a next step toward cleaner air, a richer local economy and profits.
Many Missoulians associate Sustainable Systems with the French-fry grease-powered University of Montana biobus, but Sustainable Systems founder Paul Miller and Vice President David Max have set their sights on expanding their profile beyond the UM pilot project. The two have begun marketing their biodegradable, non-toxic fuel to the agricultural industry, the city and the everyday diesel-engine retail customer.
“First we tell [potential customers] that it’s a little more expensive than a petroleum-based product, but that it’s a better engine lubricant,” says Miller. “The second thing we tell them is that this is an agricultural-based, domestically produced product, so your dollar that’s spent on this product stays in the United States and is recycled. The third thing is the positive environmental impact.”
The biodiesel will cost about 25 cents more a gallon at the Cenex station. While Cenex and Sustainable Systems know that the added cost might be a hard sell to Montanans in diesel 4X4s, Sustainable Systems has already made inroads with larger consumers.
The city has earmarked $2,500 to cover the cost difference between petroleum diesel and biodiesel, and plans to buy all it can to fuel portions of its fleet, including street sweepers and snow plows.
“One thing that has to happen when you start a new technology like this is that somebody has to agree to use it,” says Council member Ed Childers. “So we’ve decided to buy around 1,000 gallons and be a user, and try to get it started. We’ve got enough trouble here in the Missoula valley with the air quality, this can only help that. It’s so much cleaner.”
Miller says the University’s support has been important, and “With the city on board, it just builds more creditability for the product.”
Help from the government is something Miller and Max have been working toward since the company started two years ago. During the 2003 legislative session, the two worked with Montana lawmakers trying to pass a B2 mandate that would have required all Montana diesel engines to run on 2 percent biodiesel fuel. After failing to find help at the state level, the two are hoping the federal government can give the technology a boost.
Federal lawmakers have proposed a consumer tax credit of one cent a gallon for every 1 percent of biodiesel added to fuel. If the provision is included in the energy bill, it could help biodiesel compete with petroleum fuels. Without the subsidy, Sustainable Systems faces a tougher marketing campaign.
“When people ask me, ‘Why is biodiesel so expensive?’ I ask them, ‘Why is petroleum so cheap?’” he says. “Then I explain that when people are buying cheap petroleum, they are buying a product that’s not good for the environment, it’s not sustainable and the true cost is higher than people think, because you’re paying for petroleum with your taxes to support the military and with your taxes to support the petroleum industry subsidies.”
While price is an obstacle for individual drivers, Max says marketing to the agricultural community is easier. Sustainable Systems partnered with Cenex because of the company’s agricultural roots. Founded as a cooperative to serve rural Midwestern communities, Cenex is already one of the nation’s largest suppliers of ethanol-enhanced gasoline (usually made with corn). Now the company is increasing its distribution of biodiesel.
“This isn’t a hard sell to farmers, because this is essentially agriculturally driven,” says Cenex’s Stensrud. “In the Midwest we have farmers growing soy beans for the fuel.”
The Cenex on Brooks will be the first B20 pump in Montana; if the business takes off, Cenex will expand beyond Missoula. Biodiesel has been regularly available in the Midwest for several years. Last week, a retail Biodiesel pump opened outside Denver, and the U.S. Navy has announced plans to recycle its used cooking oil into biodiesel to run its diesel vehicles.
Sustainable Systems is confident that even if the retail market growth is slow, it will be steady. The company is so confident, it has begun to diversify.
“As soon as we got into the business we realized there are so many things you can make from vegetable oil besides fuel,” says Miller. “There’s motor oil, hydraulic fluid, soft greases. We can really go so far from here.”