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Economic Feasibility Of Biodiesel Production In North Dakota

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Author Info

  • Vanwechel, Tamara
  • Gustafson, Cole R.
  • Leistritz, F. Larry

Abstract

The U. S. biodiesel industry is rapidly expanding due to energy production concerns, environmental concerns, and recent legislation. The most common type of biodiesel in the United States is derived from soybean oil. Soybeans are a major crop in North Dakota and could easily supply a 5 million gallon per year biodiesel facility. Potential market segments of a biodiesel facility in North Dakota include agriculture, construction, and state fleet sectors based on current diesel use. However, with existing technology and no subsidy, biodiesel operation and investment costs for a North Dakota facility are not competitive with petroleum diesel. Using soybean oil prices of 17 cents to 25 cents per pound, the per gallon cost of producing diesel in southeastern North Dakota ranges between $2.02 and $2.64, while the wholesale price for regular diesel is $0.91. The cost of producing biodiesel is highly dependent on the price and availability of soybean oil. While biodiesel production technology is feasible and fairly simple, producing biodiesel in North Dakota is not economically feasible at least in the foreseeable future.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 21928.

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Date of creation: 2003
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Handle: RePEc:ags:aaea03:21928

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Related research

Keywords: biodiesel; soybeans; economic feasibility; Resource /Energy Economics and Policy;

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  1. Coon, Randal C. & Leistritz, F. Larry, 2001. "Economic Impact Of Production And Processing Of Irrigated Potatoes In Central North Dakota," Agribusiness & Applied Economics Report 23481, North Dakota State University, Department of Agribusiness and Applied Economics.
  2. Leistritz, F. Larry, 1995. "Potential Local Socioeconomic Impacts of the Proposed ProGold Processing Plant," Agricultural Economics Reports 23190, North Dakota State University, Department of Agribusiness and Applied Economics.
  3. Bangsund, Dean A. & Leistritz, F. Larry, 1998. "Economic Contribution Of The Sugarbeet Industry To North Dakota And Minnesota," Agricultural Economics Reports 23450, North Dakota State University, Department of Agribusiness and Applied Economics.
  4. Bangsund, Dean A. & Leistritz, F. Larry, 1999. "Economic Contribution Of The Soybean Industry To North Dakota," Agricultural Economics Reports 23467, North Dakota State University, Department of Agribusiness and Applied Economics.
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Cited by:
  1. Nick D. Paulson & Roger G. Ginder, 2007. "Growth and Direction of the Biodiesel Industry in the United States, The," Center for Agricultural and Rural Development (CARD) Publications 07-wp448, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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