Biodiesel, solar power, ethanol companies growing to fill local demand
Back in 1994, when Atul Deshmane began work at Ford Motor Co., his mentors told him there was no future in alternative-energy vehicle design.
“At the time at Ford, it was one of the least attractive places to go to build your career,” he said. “My mentors told me, ‘Atul, don’t go into environmental vehicles. Go into trucks. You seem to be competent, and that’s an area where you can grow your career.”
But Deshmane was completely uninterested in trucks and stuck with his passion. Eventually he helped kick off the Ford Escape hybrid in 2002.
Nowadays, it’s hard to remember a time when global warming and climate change from carbon dioxide emissions didn’t blaze the covers of newspapers and magazines, and when governmental leaders didn’t routinely, or even just occasionally, acknowledge the importance of relying less on foreign oil and more on alternative energy sources.
Deshmane, who owns Whole Energy Fuels, got into alternative transportation and renewable fuels before they were popular and has recently witnessed the industry’s euphoric sense of urgency to produce limitless bio and alternative fuels.
He doesn’t think this fervor is necessarily such a good thing, as some of the new players aren’t as aware of the hurdles the industry faces in terms of sustainability.
Here in Whatcom County, several entrepreneurs have cashed in on the growing trend toward alternative energy, but most say obstacles will need to be resolved before the industry can really take off.
An industry growing faster than it’s maturing
Deshmane and business partner Orion Polinsky started their biodiesel distribution company in March 2004. At first, it was just the two of them slinging biodiesel at the Bellingham Farmers Market in the pre-Depot Market Square era.
Whole Energy now sells its fuel at 24 stations in Western Washington and Chelan County, employs a staff of 12, and has an estimated 10,000 regular customers.
Deshmane has begun maximizing his Anacortes plant and distribution center by producing and wholesaling glycerin and methanol — both biodiesel byproducts. The company will soon begin work on a production plant in Northern California to accompany its Southern California plant, where it produces fuel for that state’s market.
While most of Whole Energy’s biodiesel arrives by rail from six producers around the country, the company also operates a small production facility in Ferndale and encourages more local production. The few nearby plants that currently produce biofuels are too small to accommodate Whole Energy’s needs.
This spring, Whole Energy will begin selling ethanol at two of its fueling stations, as well.
Despite this growth, Deshmane said the biofuels and alternative/renewable energy industry has grown faster than his company has. More specifically, the industry has grown faster than it has matured, he said.
“The bubble mentality is definitely there, and big industry and big agriculture and petroleum companies are jumping in,” he said.
The problem with all this investment is rooted in the way biofuels, including biodiesel and ethenol, are produced.
Biodiesel is essentially vegetable oil, and most of Whole Energy’s fuel comes from feed stalks such as soybeans and canola.
Feed stalk must be grown and harvested as crops in order to turn into fuel. The problem with biofuel consumption is that many people getting into the industry assume biofuels could fully replace petroleum consumption, but using that much cropland for United States’ fuel consumption is not feasible or sustainable, Deshmane said.
“If we did that, we would have an ecological disaster,” he said. “I certainly don’t embrace replacing all petroleum with biofuels. Instead, I think biofuels are a useful platform to allow a new fuel industry to grow.”
Biofuels could substitute some of the petroleum Americans use, have a better environmental impact, and encourage the use of other alternative energy sources.
“And they create a greater mindfulness by the consumer of what they’re consuming. Because if we’re consuming our land for the purpose of driving our vehicles, then one would think we’d be more mindful of how we drive and when we drive,” he said. “But I would say that view is in the minority, rather than the majority, in the biofuels industry.”
Currently, the industry is in denial about the limits to its growth, he said.
In Deshmane’s ideal world, biofuels would use organic and locally grown feed stalk that also produces a meal co-product. They would be used in tandem with other alternative energy sources such as solar, wind, hydrogen and methane, and consumers would rely more on public transportation
“You have to look for the whole loop, for more synergies, because if you don’t you’re just creating more problems,” he said.
Other businesses also filling energy gap
Other local entrepreneurs are also benefiting from an increase in public awareness about alternative energy use.
Local developer Bill Grant is in the process of searching for land and a feed stalk source to start an ethanol plant in Whatcom County. In April, the BBJ reported Grant’s plant would cost about $125 million, employ 80 workers and produce up to 110 million gallons of ethanol fuel per year.
Dana Brandt, owner of Ecotech Energy Systems LLC, which designs and installs solar electric systems for homes, had to go to Europe to get his masters degree in renewable energy in 2003 because he couldn’t find a closer technical graduate program.
When he moved back to Bellingham he started his own business by default.
“I realized there were no solar contractors in Bellingham — there was nobody to hire me,” he chuckled. “I was forced to start the business myself.”
The business has installed about 20 solar-power systems around Whatcom County.
Jack Hardy started his solar energy design business, Western Washington Solar, after retiring from Western Washington University as an environmental science professor four years ago. His company works with local contractors and plumbers to install solar electric, hot water and space heating in homes.
The solar industry faces two major hurdles in Whatcom County, both Brandt and Hardy said.
The first is convincing home and business owners that solar power works in Whatcom County and can be cost effective.
Hardy said Western Washington gets almost 70 percent as much solar exposure as Los Angeles per year.
While the upfront costs associated with solar installations run high — ranging from $10,000 to $30,000 depending on the size of the structure — the federal, state and local incentives and tax credits manage to reimburse that cost in seven to nine years for a residential installation, he said. Businesses get even better incentives and can pay for the installation within five years, he said.
A lack of educational opportunities is another impediment to the development of a solar-electric market in Whatcom County.
“There is a lack of people qualified to do solar installations. It isn’t like plumbing or regular electrical work,” Hardy said. “In general, anybody who has real technological experience in solar is already busy where they are.”
The future of alternative/renewable energy in Whatcom County
Despite the hurdles, Whatcom County seems ripe for a growing alternative energy industry and market.
According to Derek Long from Sustainable Connections, the organization that spearheaded the Green Power Community Challenge last year, Bellingham is now the largest green power community in the U.S., with nearly 12 percent of its electricity coming from renewable sources. More than 140 businesses in Whatcom County are participating in Puget Sound Energy’s green power program, and the EPA recently recognized the city as a green power partner of the year.
Deshmane, Brandt and Hardy all said they think the alternative/renewable energy market has tremendous potential in Whatcom County despite the above-mentioned hurdles, because of the area residents’ commitment to reducing their environmental footprint.
“What is amazing about the Northwest is that it has probably the largest demand pull in the world. And demand pull will survive political ebbs and flows,” Deshmane said. “When people want something, there will always be that market in place.”
Fluctuates, but was just over $3 a gallon in late October.
Biodiesel can be blended at any level with petroleum diesel to create a biodiesel blend. It can only be used in diesel engines.
Biodiesel burns cleaner than petroleum diesel and is less harmful if spilled or swallowed. It is renewable and reduces emissions. The life-cycle energy efficiency of biodiesel is the best of any renewable road fuel because the chemical process of turning vegetable oil into biodiesel takes very little energy.
A 1998 biodiesel lifecycle study, jointly sponsored by the U.S. Department of Energy and the U.S. Department of Agriculture, concluded that biodiesel reduces net CO2 emissions by 78 percent compared to petroleum diesel.
For more information on Whole Energy, visit www.whole-energy.com.
By the numbers
7 percent of the nation’s energy supply that comes from renewable energy (this includes solar, biomass, geothermal, hydroelectric and wind)
15 percent annual rate of growth in U.S. energy consumption the biofuels industry experienced between 2004 and 2005
12 percent of Bellingham’s power that comes from renewable energy
78 percent reduction in net CO2 emissions from biodiesel as compared to petroleum diesel
Source: U.S. Dept. of Energy and U.S. Dept. of Agriculture