Tuesday, March 11, 2008

Le Sigh

Marko had a post up the other day in which he asked "Whats wrong with turbo diesels?". He correctly pointed out that the newer diesels get better mileage and last longer. He wondered why they are not more popular.

I left a comment that I thought the lack of popularity was due to the "style over substance" lives many Americans live. I opined that because diesels are not offered in "flashy", the public has no desire for them. I stand by that thought.

As an aside, I stated in my comment that as good as a diesel is, the fact that I make my own fuel (biodiesel) for less than a dollar per gallon makes it even better.

And then along came a blogger by the name of Standard Mischief. He (I assume) proceeded to tell me that I was not in fact making fuel for less than a dollar per gallon. He stated that I had not figured in all my costs. Just so there is no misunderstanding, I will quote part of his reply here:

Biodiesel at a buck a gallon isn’t figuring all your costs. Otherwise the big boys would get in on the act and beat your costs on the economy of scale. You can buy the stuff at the pump, but it’s somewhat more expensive than oil of dead dino. Even burning WVO takes time and effort to collect and pre-filter.

I gave him the benefit of the doubt, and assumed he meant well. I then explained that in fact I was making it at my stated costs. I even broke down all my costs per batch for him, trying to explain. I did this not in an effort to prove anything, only to try to help someone understand. I know there is a ton of bad information out there about biodiesel.

After all that, he posts this:
Hmm, well somehow, Mr Fixit, you seem to be arguing that your endeavor is too worth doing, while I am merely stating that buck a gallon biodiesel does not reflect your true costs.

So even after explaining, and showing the facts, he still doesn't believe. I think there is a word for that, delusional comes to mind.

Folks I don't mind questions. I don't mind doubts. I don't mind being told that someone doesn't understand. But don't get on your high horse and tell me I'm wrong. Especially after I show you the facts. If you don't like it, that's fine too, don't do it.

This is not about biodiesel. It's not about biodiesel being better or worse. It is about being told I can't (am not able to) do what I damn well am doing. I don't care if you can or not, that has no effect on whether or not I can.

deep breath

Let's assume I wanted to start today from scratch, and begin making biodiesel. How much would it cost per gallon?

Well, I'd have to build my processor. I build the one I use now for under $1K, but lets just say one thousand dollars. That includes processor, washer and dryer along with pump, filter and fill hose to fill vehicles. It took my son and I about 6 hours to make, so call it 12 man-hours.

We need oil. Used vegetable oil. I pick mine up from a Chinese buffet. They let me have it for free.

We need a way to transport oil. I use 2 55-gallon drums I bought at a salvage yard for $6 each.

We need to pump the oil from the restaurant tank into my drums. I use an oil pump from a V-8 Ford. I welded on the fittings so I could attach 3/4" tubing for suction and discharge. Pump and fittings, plus hose cost $75 dollars. Time to make; 1 hour

I have storage tanks at my home to keep the oil in until I am ready to process. They were free, and took about 3 hours to pick up and take home.

So, we are up to $1087 in materials and 15 hours of labor. How much to charge myself for my labor. Hmmm, let's say $10 per hour. So now we have $150 in labor cost, which brings our total cost of pr-production to $1237.

Now, we need the "ingredients" to make fuel. I use Potassium Hydroxide as a catalyst, which I buy at $1 per pound in 50 pound bags.

We also need Methanol, which I have been buying for $3.00 per gallon in 55 gallon drums.

I make 100 gallons of diesel per batch. I use 20 gallons of methanol, and an average of 7.5 pounds of catalyst per batch.
Material cost would them be $67.50 per batch of 100 gallons, or $0.67 per gallon.

I wash with water to clean the fuel, using about 30 gallons of water total. I just called the city and the cost breaks down to just over $0.02 per gallon, call it $0.03 just to be fair. So the wash water costs a whopping $0.90.

The electricity is a bit harder to figure. I have 2 4500-watt heating elements that run for about 2 hours per batch. The pump that runs the whole thing runs for a total of maybe 4 hours per batch. It is a 110V and draws less than 8 amps. Let's call that pump 880 watts. So 9000 watts for 2 hours is 18000 watts, plus 880 watts for 4 hours is 3520 watts for a total of 21520 watts. At a cost of about $0.12 per kilowatt that brings us to an electricity cost of $2.58 per batch.

Ok, we now have a per batch cost of:
Water- $0.90
Electricity- $2.58

For a total of $70.48 per batch. Assuming I get 90% of the oil into biodiesel (I do better) that leaves us with a cost per gallon of $0.79 per gallon. (I rounded up)

Now, when I started making fuel, the cost of diesel at the pump was about $2.25 per gallon. But were talking about starting now, so lets say fuel costs an average of $3.50 per gallon. I paid $3.80 yesterday for diesel, so I know that's a safe cost. And lets further assume that the cost will not rise for a year. We all know it will, and it may come down a bit later, but lets just say.

That's a savings of $2.71 per gallon, or $243.90 per batch (90 gallons net). Let us assume I make on average 2 batches per month. The monthly savings will be $487.80. At that rate it will take just over two and a half months to pay for the equipment.

After that, the only cost per gallon will be the material costs, along with the time or "labor" costs of going and getting the oil and materials. Since I get everything but the oil on my way home from work, It only takes an extra half hour per month to get the materials. (methanol and KOH)

The oil takes about an hour per trip per week. 4 hours a month of "labor" to get the oil will add $40 dollars to the monthly costs. At 2 batches per month, and 20 per batch that brings the cost of my diesel to $1.00533333333333/gallon.

Somehow, I still don't think he'll understand.

Mr Fixit

*And by the way, you can do the same thing too. Go to Biodieselcommunity.org to learn how. Then over to Biodiesel Infopop for forums and discussion. Tell 'em Mr Fixit sent you.


Matt M said...

The big guys cannot meet your costs because they cannot get free oil from the restaurant down the street. The problem with that is that, as soon as they figure out how to do it, they will buy that oil for more than you are willing to pay. Then your costs will go up.

Or, when your readers figure out how cheap it is to make biofuel, the line at the restaurant for free oil will start early.

It is in your best interests to tell us about the fire ants in the tank, the skunks that are attracted by your exhaust, and how tough it is to scrape wonton out of the filter.

farmist said...

I've been thinking about trying it, but am having trouble locating a source for methanol. Would you tell me where you buy yours?