15 MB - Great Lakes Maritime Research Institute

of a long­term low­temperature storage test to verify that separation of the blendand preferential gelling of the biodiesel component does not occur is recommended.5. Our study also indicates that although ship­board use of fuel cells using biodiesel isenergy efficient and environment friendly, is very capital intensive and highlyunlikely to be economical.Biodiesel: An Alternative Fuel for Great Lakes Marine Vessels; Economic Analysis;Supply and Demand; Economic Impact ModelVolatile production and pricing associated with dynamic changes make modeling thebiodiesel industry challenging. For instance, for business planning, a break­even analysisusually calculates a break­even point based on fixed costs, variable costs per unit of sales,and revenue per unit of sales. Business planning at the level of individual enterprise issuggested as further research, and assumptions of per­unit revenue and per­unit cost aswell as assumption of other fixed costs would be estimated through a detailed salesforecast as well as profit and loss data from the industry. Given the aforementionedvolatility of this market, as seen in the supply and demand trends in the foregoing datatables, average sales and costs may not be representative. Analysts predict, however, thatcosts will come down and prices will rise, making the break­even point a moving target.The variation in feedstock producers, type of feedstock, the possibility of increaseddemand from Great Lakes maritime fleets, “fixed” costs such as legislated incentives andregulations which can be amended or removed, and the technological advances inchemical processing and operations and end­use engineering can introduce new variablesat any stage of the business model.For the industry sector, it can be assumed that eventually the low cost producers will ableto force the independent producers out of the industry and capture market share. Changesin the industry sector will have impacts for the regional economy.An estimate of economic impacts to the Great Lakes region from the introduction of morebiodiesel production is provided. The use of biodiesel fuel by Great Lakes commercialfleets is expected to increase in the future. By the end of the decade, the demand forbiodiesel could be over 30 million gallons. Although over 23 million gallons of dieselsales were disclosed by two Great Lakes suppliers for this report, other Great Lakesproducers would not reveal sales volume. Therefore total Great Lakes sales or productioncould not be reported. However, it is possible to assume that a new 30 million gallonsbiodiesel facility could be supported as the Great Lakes fleets convert to biodiesel usage.Data show that there was total domestic demand for 2.1 billion gallons of distillate fueloil for vessel bunkering in 2004. Great Lakes states maritime commerce consumes about170 million gallons of diesel fuel. Based on soybean production in 2005 it would onlytake about 9% of the states’ soybean production to satisfy demand for converted biodieselmaritime use. How quickly vessels will convert to biodiesel is unknowable, but some ofthis demand could be supplied by increased biodiesel production. To meet this increaseddemand a new Great Lakes Biodiesel Plant, of typical production capacity of 30 millionvi