04-17-07
I’ve seen a fair amount of comment on the deal between Tyson Foods and ConocoPhillips to produce clean diesel fuel from waste chicken parts. See William Saletan’s latest column in Salon.com for a concise summary of the issues. I agree that what they’re doing will produce renewable diesel, but two things about the deal give pause:
1. The deal is designed to nab a $1-a-gallon federal tax credit that was originally intended for small producers (until oil companies lobbied to get themselves included). The tax credit may not be unlimited, so a big industrial operation like Tyson/Conoco could suck away available credits, denying smaller operators who try to claim it later. And Conoco hasn’t promised (that I can find) to keep producing biofuel after the federal credit expires at the end of next year.
2. Conoco will use its existing refineries to make the fuel and will almost certainly reduce production of regular diesel by an equal amount, instead of just adding the biodiesel to the market. That won’t do a thing to increase overall supply and ease prices.
As for another green-sounding deal, an announcement by Weyerhauser (the paper and timber company) and Chevron that they will study making cellulosic ethanol from timber waste the companies make it sound fabulous. But… until either company makes public how much it will invest, offers a timeline or lays the first brick on an ethanol plant, why waste electrons talking about it?