The ever fluctuating price of fuel

Drive by almost any gas station and you'll see one common link - they advertise the price of their fuel in big numbers right out front.

With no other product are people as price sensitive. Back before I knew I had a choice, I would fill my car with the cheapest gas I could find, or would choose a station that was a penny less than its neighbor. I doubt I ever saved more than a dollar on any one transaction, but that was important to me.

Nowadays, because the fuel I buy is cleaner burning, the price is much less important. To me, just being able to use cleaner burning makes paying more worth it. I drive a diesel Jetta TDI and use biodiesel (B20 BLEND for the winter, B99 BIODIESEL in the summer). (In case you are wondering, I pay the retail price for my fuel - the SeQuential employee discount is only valid at the Eugene biofuel station and I live in Portland).

Recently the price of biodiesel has been increasing and has prompted many email questions. For those of you who are wondering, here is a breakdown of the price increases from the SQ Newsletter January 2008:

Biodiesel Price Increases

As many of you are aware the price for biodiesel at the pump has been increasing. We have been working diligently to keep costs down, however certain areas are out of our control. As a small local company that was built by our loyal customers, one of our goals is to be as transparent and open as possible. In an effort to keep everyone informed of the industry trends we would like to address some of the causes of this price increase.

1 – METHANOL: The cost of methanol has gone up over 300% since September 2007. Methanol is a key ingredient in biodiesel production and this increase affects not just the SeQuential-Pacific Biodiesel plant in Salem but also biodiesel producers throughout the country. Two of the world’s largest methanol plants experienced unplanned outages due to mechanical and technical production problems which caused this spike in prices. Global supply forecasts are expecting for prices to begin falling by early spring

2 – SOYBEANS - The most common feedstock for biodiesel in the United States is soybean oil and soybean oil prices have increased over $0.90 since September. The SeQuential-Pacific Biodiesel plant in Salem has a capacity of one million gallons per year and primarily uses used cooking oil or Oregon-grown canola. The demand for biodiesel well exceeds capacity and we are importing soy based biodiesel, which is affecting the price at the pump. The SeQuential-Pacific facility is currently under expansion to five million gallons per year.

We appreciate your commitment to locally sourced, cleaner-burning biofuels. We are doing everything we can to keep prices down and to continue offering you a choice in your fueling needs.

It is important to note that SeQuential only owns one station, the solar-powered biofuel station in Eugene; SeQuential can not set prices at any other locations or with distributors. (See all locations and distributors).

If you find the price of biodiesel is too high for you, you can mitigate this is by using biodiesel / petroleum diesel blends. Just fill up partly with petroleum diesel and then top off with biodiesel - the fuels will mix in your tank and it can save you some money. Also, driving less cuts down on fuel costs - try to combine errands into one trip, carpool and when able, take public transportation or ride your bike!

Bang for the buck or personal connection?

The other day I took a call from a small bookstore, asking for one of us to give a presentation on biofuels. After looking at schedules and the hours people will be putting in at the Good Earth Home and Garden show this weekend, I turned the bookstore down; I haven't been able to stop thinking about this since.

Recently, I have been pushing to get more 'bang for the buck' out of events - with limited time and resources, it makes more sense to talk to 500 people at a trade show instead of 15 at a bookstore. That said, turning the bookstore down felt wrong. After all, these people wanted to learn about biofuels!

Traditionally, SeQuential has done a ton of educational events, from tabling at the Muddy Boot Festival, to having a full tradeshow setups, to giving small talks at various Rotary chapters. I personally have put in hours and hours at events (as have many of us at SQ) and really appreciate the value of face-to-face contact; it gets more across that a pamphlet ever will.

When it is all boiled down, the hard truth is that there are only so many hours in the day; there are more opportunities to present than we have time to. To make the largest impact as possible on greenhouse gases, energy security and local economies, you have to educate as many people as you can on the simple fact that they have the choice to use a cleaner burning fuel.

This is no criticism against smaller events - I would wholeheartedly prefer to be at them, but it just reflects the situation the world is in and the potential for communities to make change on a global scale. By talking to 500 people at a home show, I feel SQ can help make a bigger impact, faster. Even though the connection isn't as deep, the education component is strong enough to drive change.

Count your victories, not your problems.

One of the downsides of the information age is that we have access to a ton of troubling news from every corner of the globe - everything from cloned food (label it please) to melting glacial ice (less personal but equally ominous), to war, political scandals, etc. In light of all this, it can be hard to stay positive.

About a month ago I took a phone call on the main SeQuential line from a young woman who was feeling buried by all the negative news of the world - she felt there was nothing she could do to solve all the problems of the world, so why should she even bother trying? We talked about how there is no silver bullet that will fix everything and how by taking small steps and leading by example, large ripples can be created that eventually create real, tangible results.

One such of these ripples tuned into a wave yesterday as the Oregon Renewable Fuel Standard (RFS) started phasing in, just one part of the 2007 Biofuel Bill. This bill passed thanks to the efforts of a small coalition of non-profits, private business, industry organizations and dedicated individuals, not to mention government leadership. This bill is creating a huge positive impact on such daunting issues as local economic strength, energy security and climate change.

In 1992, Portland and other cities around the country were mandated by the EPA to use gasoline blended with ethanol to improve air quality during winter months. As of Tuesday, nine Oregon counties are now mandated by the Oregon RFS to use gasoline with 10% ethanol year round. Another nine counties are shifting over April 15; the rest of the state on September 16.

The impact of this is huge. Ethanol is cleaner-burning and the RFS was kicked into effect by Pacific Ethanol's in-state ethanol production, moving Oregon one step closer to energy independence.

In 2006, Oregon used 3,571,000 gallons per day of gasoline. Once the whole state is switched over, the ethanol RFS will, on an annual basis, approximately:

• Reduce carbon dioxide (CO2) emissions by 198,735,000 tons (CO2 is a greenhouse gas)
  
• Avoid the use of 95,149,000 gallons of petroleum fuel (scaled for the lower BTU content in ethanol

There is also a portion of the RFS for blending biodiesel in with petroleum diesel; this will go into effect when in-state production reaches the five million gallon per year mark. (The SeQuential-Pacific Biodiesel plant in Salem is currently under expansion from one to five million gallons per year.)

The Oregon RFS timeline for blending ethanol in with gasoline:

• January 15th: Multnomah, Clackamas, Washington, Clatsop, Columbia, Tillamook, Yamhill, Polk and Marion counties.
  
• April 15th: Linn, Lane, Benton, Lincoln, Douglas, Coos, Jackson, Josephine, and Curry counties.
  
• September 16th: all remaining counties.

SeQuential and Oregon Lottery TV ad

The Oregon Economic and Community Development Department along with the US EPA, Lane County and SeQuential, helped remediate the contaminated soil (known as a brownfield) left behind by the previous tenant at the now SeQuential station in Eugene.

In recognition of these efforts, the Oregon Lottery put together this ad:

Product Offerings: Values vs Customer Demand

Whenever I go back to Buffalo to visit family I take at least one trip to a Wegmans, a grocery store chain of 71 stores on the east coast. (Lets face it - you can't get real rye bread in Oregon.) Wegmans is kind of like Safeway, but with a strong and extensive pre-prepared food section and a focus on consumer health.

Wegmans is nothing close to a New Seasons or Whole Foods (although they were given an Ethics Award), so I was surprised when I read that they are no longer selling cigarettes or tobacco products. Wegmans does have a track record of enacting food safety policies (Belize farmed shrimp) but organic only gets a small mention.

This ban on tobacco is noteworthy because Wegmans is a large, established grocery chain and based on their consumer health values, bottom line be damned, they are eliminating an entire product category.

The potential impact of Wegmans' decision:

• Wegmans reinforces their values surrounding consumer health, creating more trust from their consumer base.
• Tobacco using consumers will have to change their purchasing habits to buy tobacco elsewhere, which might make Wegmans loose total sales volume.
• Although convenience stores sell more tobacco products than grocery stores, the loss of the category will still effect Wegmans' bottom line.
  

To me, improving our customer's lives is an amazing goal; it is the reason every one of SeQuential's fuel products are cleaner-burning, and there is such a focus on fuel for every vehicle, not just for hard-core biodiesel users. Our focus is inclusive - we will meet consumers at the level they want to engage, from 2007 Dodge Caravan E10 gasoline users to '78 Mercedes B99 BIODIESEL users.

All this raises some questions about our own product selection:

• Does our inclusive approach mean that we should continue to offer the "better choice" additive-free tobacco products, or should we eliminate tobacco altogether?
  
• Would our customer's lives change for the better if we stopped carrying tobacco or would we be forcing our customers to buy potentially additives-laden products elsewhere?
  
• If we know something is unhealthy, should we walk the high road and say, "we will not enable you to live an unhealthy lifestyle"? If so, where do we draw the line on what is "healthy"? (High fructose corn-syrup, GMO, trans-fat, processed foods, plastic packaging, etc.) Could we find adequate substitutes for the products our customers want, but still meet all our standards?