There is a limited amount of fossil fuel inside the Earth. Since the current world energy resources and consumption is mainly fossil fuels, we are very dependent on them for both transportation and electric power generation. The Hubbert peak theory predicts that oil depletion will result in oil production dropping off in the not too distant future. As time goes on our economy will have to transition to some alternative fuels. Fossil fuels have solved two problems which could be separately solved in the future: the problem of a source of primary energy and of energy storage. Along with straight vegetable oil and biodiesel, some energy technologies that could play an important part in the future include :
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Burning fossil fuels releases sulfur dioxide (SO2) and other harmful air pollution. Because vegetable oil has not been inside the earth for millions of years, it is not contaminated with things like sulfur and burns much cleaner, even than ultra-low sulphur diesel. Burning fossil fuels also contributes to the greenhouse gas problem.
Note that if fossil fuels are used in any aspect of production and distribution (making fertilizer, tractors, fuel trucks, etc.), then there would be some contribution to pollution. For it to be 100% non-polluting all aspects of vegetable oil production would have to be non-polluting as well.
Vegetable oil is essentially non-toxic relative to other fuels such as gasoline, petroleum-based diesel, ethanol, or methanol, and has a much higher flash point (approximately 275-290 °C). The higher flash point reduces the risk of accidental ignition. Some types of vegetable oil are edible.
Another potential issue for new fuels is the Catch-22 conundrum: if there needs to be expensive new infrastructure before people will make cars running on a new fuel, and there needs to be new cars before people will build the infrastructure, how can the transition ever be made? With vegetable oil this is not nearly the problem that it is with some other fuels. The transition from petroleum oil based transportation to vegetable oil based transportation could be gradual and relatively easy compared to hydrogen, ethanol, and most other alternatives. Vegetable oil is used for transportation in four different ways:
The transition can start with biodiesel, vegetable oil refining, and vegetable oil blends, since these technologies do not require the capital outlay of converting an engine to run on vegetable oils. Because it costs to convert vegetable oil into biodiesel it is expected that vegetable oil will always be cheaper than biodiesel. After there are production cars that can use straight vegetable oil and a standard type available at gas stations, consumers will probably choose straight vegetable oil to save money. So the transition to vegetable oil can happen gradually.
Availability of biodiesel around the World is increasing. It is estimated that by 2010 the market for biodiesel will be 7.5 billion litres (2 billion USgallons) in the U.S and 9.5 billion litres (2.5 billion USgallons) in Europe. Biodiesel currently has 3% of the diesel market in Germany and is the number 1 alternative fuel. The German government has a Biofuels Roadmap in which they expect to reach 10% biofuels by 2010 with the diesel 10% coming from fuel made from vegetable oil.
From 2005 to 2007 a number of types of vegetable oil have doubled in price. The rise in vegetable oil prices is largely attributed to biofuel demand.
Much of the fuel price at the pump is due to fuel tax. If you buy vegetable oil at the grocery store it does not have such high taxes. So at times people have bought vegetable oil at the store for their cars because it was cheaper. They did this in spite of the fact that packaging by the gallon adds to the cost and it was illegal to use in a car since no fuel tax had been paid on it.
Since vegetable oil (even as biodiesel) does not contribute to greenhouse gas, governments may tax it much less than gasoline as they have done with ethanol.
This would help them reach Kyoto protocol targets.
The World production of vegetable oil in 2004/5 was 387.7 million tonnes. Much of this is from Oil Palm, and palm oil production is growing at 5% per year. At about 7.5 lb/USgal (900 g/L) this is about 110 billion USgallons (430 billion L). Currently vegetable oil is mostly used in food and some industrial uses with a small percentage used as fuel.
In 2004 the US consumed 530 billion litres (140 billion USgal) of gasoline and 150 billion litres (40 billion USgal) of diesel. In biodiesel it says oil palm produces 5940 litres per hectare (635 USgal/acre) of palm oil each year. To make 180 billion US gallons of vegetable oil each year would require 1,150,000 square kilometres (443,000 sq mi) or a square of land 1070 kilometres (666 miles) on a side.
"The gradual move from oil has begun. Over the next 15 to 20 years we may see biofuels providing a full 25 percent of the world's energy needs. While the move is good for reducing greenhouse emissions, soaring oil prices have encouraged most countries to 'go green' by switching to greater use of biofuels." - Alexander Müller, Assistant Director-General of Sustainable Development at the FAO.
Algaculture could potentially produce far more oil per unit area. Results from pilot algaculture projects using sterile CO2 from powerplant smokestacks look promising.
Genetic modifications to soybeans are already being used. Genetic modifications and breeding can increase vegetable oil yields. From 1979 to 2005 the soybean yield in bushels per acre more than doubled. A company has developed a variety of camelina sativa that yields 20% more oil than the standard variety.
According to a study by Cornell University and University of California-Berkeley, turning plants such as corn, soybeans and sunflowers into fuel uses much more energy than the resulting ethanol or biodiesel generates. There is concern that the current growing demand for vegetable oil is causing deforestation, with old forests being replaced with oil palms. When land is cleared it is often burned, which releases lots of CO2. Vegetable oil production would have to increase substantially to replace gasoline and diesel. With current technology such an increase in production would have a substantial environmental impact.
While not immediately toxic to wildlife, spills are still potentially dangerous due to the physical damage caused to ecosystems. These effects may include contamination of tissues impeding their vital functions (e.g. plant stomata, fish gills, bird feathers, and mammal hair), increased biological oxygen demand and chemical oxygen demand leading to deoxygenation of water, and infiltration into soil sediments and aquifer contamination.
In some poor countries the rising price of vegetable oil is causing problems. There are those that say using a food crop for fuel sets up competition between food in poor countries and fuel in rich countries. Some propose that fuel only be made from non-edible vegetable oils like jatropha oil. Others argue that the problem is more fundamental. Farmers can switch from producing food crops to producing biofuel crops to make more money, even if the new crops are not edible. The law of supply and demand predicts that if less farmers are producing food the price of food will rise. It may take some time, as farmers can take some time to change which things they are growing, but increasing demand for biofuels is likely to result in price increases for many kinds of food. Some have pointed out that there are poor farmers and poor countries making more money because of the higher price of vegetable oil.
The silver bullet for the vegetable oil economy is harvesting vegetable oil from algae. Some species of algae contain as much as 50% vegetable oil. Algae have very high growth rates compared to plants normally used to produce vegetable oil. Potentially algae could produce much more oil per area of land than current farming methods. So producing vegetable oil this way should result in less deforestation and less competition for food production land. One expert wrote: "As demonstrated here, microalgal biodiesel is technically feasible. It is the only renewable biodiesel that can potentially completely displace liquid fuels derived from petroleum. Economics of producing microalgal biodiesel need to improve substantially to make it competitive with petrodiesel, but the level of improvement necessary appears to be attainable. "
Where there is existing electricity generation using fossil fuels, there is a source of sterile CO2. This makes algaculture much easier. To grow algae you need lots of CO2, but if you get it from air you will also get all kinds of other organisms, some of which eat algae. Getting CO2 from a smokestack works out really well. Governments trying to address the external costs of coal power plants may have a carbon tax or carbon credit that provides additional motivation to use CO2 from smokestacks. Several commercial pilot plants are under construction.
If all CO2 emitting powerplants had algaculture farms attached to them that were making biofuel from algae, the total vegetable oil produced would be about equal to world transportation needs. One could run a powerplant off the vegetable oil produced by it, in which case the electricity production would be carbon neutral. However, because coal is so abundant and transportation fuel so valuable, the common case would probably be coal coming into the powerplant and carbon going out as vegetable oil to be used in transportation. After the carbon is used the second time for transportation, it would be released into the atmosphere as CO2. So the combination of powerplant and transportation would then release as much CO2 as either does alone now. The other benefit is that transportation fuel would last as long as coal, which is expected to be a long time.
There is substantial research and development work in this area but as of 2007 there is no commercial vegetable oil produced from algae and used as biofuel. If and when the commercialization challenges are overcome, vegetable oil production could expand very rapidly.