Oil addiction: Battle to break our addiction

Paul Henson runs his 4WD diesel Nissan Terrano almost exclusively on canola oil which he recycles from a restaurant. Picture / Paul Estcourt

Paul Henson has the serene, satisfied look of one who has battled addiction and won. He's just clocked up 12,000km in his 4WD diesel Nissan Terrano, during which time he barely touched the black stuff that some say is driving this planet to extinction. Henson's Terrano runs almost exclusively on canola oil. "It's waste oil collected from a local restaurant and it has gone brilliantly."

Why did he do it - spend about $1000 on a conversion kit allowing him to run on both canola oil and diesel? And why does he bother collecting and filtering waste oil each week? "Two things - one was economics. I get the oil very cheaply from the restaurant. And the other is because it's better for the environment." He says his costs work out at under 50c a litre, and that burning canola oil reduces toxic emissions from the exhaust by up to 90 per cent compared to diesel.

If President Bush's recent contention - that the United States is a country addicted to oil - is extended to New Zealand, Henson represents the more extreme end of the battle to break the dependency. He's one of a growing group of thrifty, green enthusiasts around the world weaning themselves off the need for oil without having to confront their need to drive. Websites such as greasel.com, greasecar.com, journeytoforever.org, and the local envirocar.co.nz cater to their obsessions providing information, conversion kits and DIY advice on running vehicles on various forms of alternative "biofuels" - mostly vegetable oils.

The more mundane end of the biofuel spectrum, and the type of fuel that's likely to be coming to a petrol station near you in 2008 or possibly sooner, is blends - either of chemically processed fats or oils (biodiesel) added to diesel, or bioethanol (made from sugars and starches) added to petrol. Blends are in use all over the world. France for example puts B5 - a 5 per cent biodiesel blend in all its diesel vehicles. And the United States has had bioethanol in petrol for a couple of decades with E10 - a 10 per cent bioethanol blend widely available.

In New Zealand biofuels are few and far between and despite the Government setting a renewable energy target for the transport sector in 2002, almost no progress has been made. There are, however, a few biofuel glimmers. At the Gough Gough and Hamer vehicle facility in Wiri, the University of Auckland is investigating the performance of two Stagecoach buses running on 20 per cent and 40 per cent blends of biodiesel. The biodiesel used is supplied by BP Oil New Zealand which gets the product from Auckland's Bio Diesel Oils which has been developing its refining process over five years.

"Biodiesel and diesel will blend in any ratio," says research engineer Nigel Boielle. "You just mix the two together and you've got a hybrid fuel basically. That's one of the big advantages - you can offset your diesel consumption."

This work being undertaken by the Energy and Fuels Research Unit of the Mechanical Engineering Department is sponsored by the Auckland Regional Council, BP Oil New Zealand and the Energy, Efficiency and Conservation Authority (EECA).

"You can make biodiesel from nearly anything you can squeeze oil out of," Boielle says.

Overseas, most biodiesel comes from vegetable crops such as soybeans or rapeseed, but here the biodiesel is derived from tallow - the fat by-product from the meat industry currently used to make soap and other products. Studies indicate that New Zealand's annual production of 150,000 tonnes of tallow is enough to substitute about 5 per cent of the country's diesel.

It's also a resource which is gathering interest from offshore. Argent Energy, which runs the world's largest tallow-to-biodiesel plant in Scotland, announced last year it was investigating building a biodiesel refinery in New Zealand.

Energy and Fuels Research Unit technical manager Stephen Elder says the bus research results to date indicate significant reductions in particulate emissions for both biodiesel blends and only minor differences in performance compared to diesel. The data collected will be used in a spreadsheet-based model developed to predict the emissions and fuel consumption performance of bus fleets.

Stagecoach also conducted a trial last year on 10 in-service buses which ran on biodiesel blends of 5 and 20 per cent. Engineering Director Allan Cannell says the company hasn't made a decision on whether to continue the trial. It is awaiting advice from BP regarding prevention of excessive smoke produced by some of the buses that were running on 20 per cent blends. BP says it has resolved the issue, due to fuel filters in four of the five buses concerned.

"Challenging" is how John Stephenson describes the economics of biofuels. The New Zealand Institute of Economic Research economist says cost benefit analyses don't immediately stack up. He says the main argument in favour of introducing biofuels involves quantifying "all the bad things that happen when you burn carbon" - such as the increase in carbon dioxide and pollutants in the air. "You can argue that the people burning the fuels aren't bearing the cost of the pollutants because the people who don't drive vehicles are also bearing the cost of that. To some extent the introduction of biofuels reduces that cost to society."

Stephenson points out that today's high price of oil of over $US60 ($88) a barrel has made a marked difference to analyses done in 2004. "By my estImate the at-the-pump price of biodiesel today could be fractionally less than regular pump diesel."

The economics get challenging, however, for any firm that decides to build the multimillion-dollar infrastructure to distribute or produce biofuels only to find that oil prices fall. That leads Stephenson and others to favour mandatory sales targets for biofuels to ensure a market for those making the investment.

Elizabeth Yeamen, senior adviser, renewable energy for EECA, agrees that in the absence of any initiatives by fuel companies to meet voluntary sales targets for biofuels, mandatory sales obligations are required. EECA, the Ministry of Transport and other Government departments are working out just how that might occur.

"It will require all the oil companies to start selling at least some small amount of biofuels in New Zealand. It's up to them whether it's biodiesel or bioethanol, what blends they put in, or where to sell it. But they will have to start doing something if that policy goes through."

The anticipated start is 2008 - the same year Kyoto commitments to reduce global climate change kick in. The use of biofuels plays a big part in Kyoto because while carbon dioxide still comes out of biofuel vehicles' exhaust, the fuel is derived from plants, such as soybeans, which in their growing have taken carbon dioxide out of the atmosphere. In other words, combusting biofuels are effectively just recycling the carbon dioxide that's already there.

Despite its widespread use around the world, there seems little interest in the use of bioethanol blends in petrol in New Zealand.

Gull Petroleum expressed an intention last year to supply 5 to 10 per cent bioethanol blends at its North Island petrol pumps, but the project appears to have stalled.

As with biodiesel, New Zealand has a ready supply of bioethanol made from whey - a by-product of the dairy industry. Anchor Ethanol, a Fonterra business, converts lactose to bioethanol for a range of products including alcoholic beverages, indus

trial solvents and aerosols. A report prepared for EECA estimates 30 million litres a year of bioethanol could be produced from surplus whey and from that, along with vegetable, fruit straw and paper waste, a total of about 275 million litres a year could be produced.

So with all that potential, why the apathy? The problem stems from the 50 per cent of New Zealand cars on the road that are second-hand Japanese imports and that Japan has regulated ethanol use there to just a 3 per cent blend. In turn that has prompted motor industry concerns that higher blends of bioethanol may damage some vehicle components.

"There are concerns about components," says Yeaman. "That's why ethanol in most countries is limited to 10 per cent. If you use it at much higher concentrations you can get into problems."

In Brazil, however, which has been using bioethanol since 1932, the bioethanol blend level is 22-24 per cent. But as Yeaman points out, all vehicles there have some under-bonnet modification. Brazil's gas stations also sell 85 per cent bioethanol which is used by a large fleet of "flexfuel" vehicles that can run on ordinary petrol or anything up to E85 thanks to fuel sensors that detect the ethanol content and adjust the engine accordingly. About 5 million flexfuel vehicles are also in use in the United States and the first flexfuel vehicles made for righthand drive countries came into production this year.

Quite why New Zealand is dragging its feet on biofuels remains unclear. Many of the ingredients, such as fuel standards for both biodiesel and bioethanol, are already in place. There are also significant sources available to produce the fuel.

And there are plenty of compelling environmental, and possibly economic, reasons why biofuels are a good idea.

So what's holding back the Government from pressing the "Go" button? "It will take time to implement and get ready for it - 2008 will be quite a demanding target," says Yeaman. "And there's nothing stopping the oil companies moving ahead of that timeframe."

Research engineer Boielle points out "the resistance, up until now, has been the incredibly cheap cost of diesel - you might be able to displace it with biodiesel, but it's likely to be dearer." Couple that with the fact that biofuels show no sign of soon becoming conveniently available for New Zealand drivers and you can see why, for a country in love with driving, there's little incentive to break our oil addiction.