The solution to the diesel fuel crisis threatening area farmers
may soon flower in the fields of San Benito County.
A startup company led by former Morgan Hill Mayor John Varela
aims to replace the petroleum-based diesel farmers use with
environmentally-friendly blends of biodiesel, a renewable energy
source derived from plant and animal waste.
Hollister – The solution to the diesel fuel crisis threatening area farmers may soon flower in the fields of San Benito County.
A startup company led by former Morgan Hill Mayor John Varela aims to replace the petroleum-based diesel farmers use with environmentally-friendly blends of biodiesel, a renewable energy source derived from plant and animal waste.
The initial response from the San Benito County farming community has been positive. San Benito County Farm Bureau President Paul Hain believes price will be a major factor in the success of the product, but said local farmers and ranchers could benefit from biodiesel.
“I think more research needs to be done, but if you can grow your own fuel that’s great,” he said. “The Farm Bureau is very supportive of that.”
Local rancher John Hodges uses some diesel fuel on his ranch, but said most of his equipment runs on gasoline. Hodges said he would want to know a lot more about biodiesel before making a switch.
“You’ve got a lot of money invested in those tractors and you don’t want to put a new fuel in there that might mess them up,” he said. “I’d have to see it, smell it and read about it before using it.”
If things go as planned, San Benito and Santa Clara County farmers will save money on gas and profit by growing the produce used to make biodiesel. Varela is also predicting that 100 jobs will sprout up in a production plant, which he hopes to get up and running in the next six months before expanding throughout the region.
“We have an opportunity to not only produce but to market biodiesel,” Varela said. “In light of what’s happening with petroleum going through the roof, this is an opportune time.”
With wholesale diesel prices hitting $3-a-gallon and local farmers buckling under the weight of fuel bills that are two and three times as high as they were a year ago, Varela believes the time is right to sell biodiesel to a large marketplace.
Traditionally, biodiesel has been more expensive than standard diesel. But crude oil is selling for more than $60 a barrel and there is now price parity between the two fuels. Varela said improved economies of scale will push biodiesel prices down dramatically in the near future.
“When oil was selling between $20 and $40 a barrel, biodiesel was not a viable alternative,” Varela said. “We’re anticipating a pricing structure in line with what consumers were paying two or three years ago.”
Varela said his company, Biofuels Distribution, will open a production facility with a minimum capacity of 500,000 gallons a year. He expects to open other facilities in California to exploit industries such as agriculture and transport that are thirsty for cheaper diesel.
“The whole world seems to run on diesel,” Varela said. “As much as we could produce, we could never meet the demand.”
Biodiesel fuel burns at a higher temperature than regular diesel which can create some complications in older equipment, but Varela said such problems could easily be fixed by frequently changing the motor’s fuel filter.
And biodiesel wins praise from the Bay Area Air Quality Management District.
“Anything that moves us away from petroleum is good for the environment,” district spokeswoman Luna Salaver said. “Now that people are finding ways to produce, we can have more stations selling it, which will make it cheaper.”
Brett Rowland contributed to this report.
