With energy prices soaring, traditional petroleum companies are embracing new technology, such as biodiesel and ethanol, while newer companies are creating demand for wind energy to power homes and offices.
At Acorn Petroleum Inc., Ken and Harlan Oaks started selling an ethanol blend, known as E-85, which is 85 percent ethanol, more than eight years ago. A little more than 18 months ago, the company, which has stores across Colorado’s Front Range, started selling a biodiesel blend of 20 percent vegetable oil and 80 percent diesel. The Colorado Springs store is at 529 S. Sawatch.
“It’s a small part of our business,” Harlan Oaks said. “But it’s growing slowly. When the energy bill passed incentives to create more ethanol last year, companies started building factories across Colorado that wouldn’t otherwise be built. And that’s what we need if the field is going to grow – more companies producing the soy and canola oil that we blend with the diesel.”
While biodiesel is not a huge business in Colorado, another alternative energy source is growing rapidly. During the past five years, corporations choosing wind energy renewable energy credits increased by 1,000 percent, said Quayle Hodek, president of Renewable Choice Energy in Boulder.
“And on the supply side, 2005 was another record year,” he said. “The entire industry increased wind turbine capacity by 30 percent last year alone.”
Renewable Choice Energy gathers renewable energy credits for its clients, which include Whole Foods, the city of Denver and Colorado College. It works like this: Clients pay the company the difference between the costs of traditional electricity versus wind energy. The wind farms then replace that amount in the electric grid, creating less need for fossil fuels, Hodek said.
“Since we’re all on an electric grid, it’s impossible to get electricity created by wind to houses and businesses around the country,” he said. “So, with the energy credits, the wind farm replaces the electricity used by the business. A kilowatt of wind energy means one less kilowatt needed from fossil fuels.”
Large companies are beginning to embrace alternative sources of fuel, both men said. The City of Colorado Springs, several El Paso County school districts and Peterson Air Force Base use biodiesel or ethanol to operate their bus and vehicle fleets.
“There are incentives that make it worthwhile for larger companies to start using biodiesel – certain tax breaks they get,” Oaks said. “Most of our larger companies are looking into using biodiesel at least part of the time; some are starting to use it 100 percent.”
Nearly the entire fleet of cars and trucks at Peterson, Schriever and Cheyenne Mountain air bases run on ethanol or biodiesel, said Master Sgt. Arthur Belmore, fuel superintendent at Peterson.
“I can think of only one vehicle out of our entire fleet that doesn’t run on an alternative source,” he said. “We made the switch in 2003, after a directive by President Clinton in 1997 or ’98 that said the government should switch to greener sources of energy. Now we have 81 vehicles that use ethanol and 110 that use biodiesel.”
Wind energy and biodiesel are more expensive than traditional counterparts. Biodiesel and E-85 are selling about 10 cents more a gallon than traditional sources, Oaks said. A year ago, that differential was 20 cents. As gas prices rise, alternative fuels are becoming more popular.
Belmore said the difference in the biodiesel price was minimal, because biodiesel cleanses the engine, requiring fewer filter changes.
“The engines run cleaner,” he said. “You get a smell like French fries cooking, but the fuel really does lengthen the life of the engine.”
When customers pay for wind energy, they pay the difference between traditional energy costs and the cost to produce the wind energy.
According to Renewable Choice Energy’s Web site, wind power for residential homes starts at $5 a month and can go as high as $15 a month for large homes. The company works with businesses to decide how much the wind power will cost.
The payment is in addition to regular utility bills, and provides a means to get electricity produced by wind energy onto the electric grid, Hobek said. As consumer awareness grows, the reliance on fossil fuels will lessen, he said.
Despite the higher production costs, Oaks and his brother started selling alternative fuels to help the county’s economy. Because biodiesel and ethanol are produced using domestic farm products, the use of the fuels lowers the trade deficit and strengthens the underpinnings of the U.S. economy.
“Use of alternative fuels is better for the air,” he said. “The fuels provide cleaner vehicle exhaust. We also wanted to reduce our dependence on foreign oil. Close to 60 percent of the oil we use comes from overseas, and that makes the supply of the products a little less secure. There are definite national defense and international relations implications with relying so much on foreign oil.”
Any vehicle that uses regular diesel fuel can use biodiesel, he said. The vegetable oil/diesel mix does not require any changes to the engine. Only about 2 million cars are equipped to use the E-85 mix. Those cars are known as “flex fuel” automobiles.
Both proponents of alternative fuel sources say their products are slowly gaining market share. Biodiesel sales are a small part of Oaks’ business, while most of the energy to power homes and offices still comes from coal. Only about 2 percent comes from solar and wind energy. But Hobek believes that will change.
“Wind energy is the future,” he said. “It’s of great economic benefit to rural communities who are watching family farms die. They can harvest the wind that blows through their farm every day.”
And the Front Range is prime territory for wind farms – it’s part of the “Saudi Arabia of wind,” Hobek said, that reaches from North Dakota to Texas.
“There are wind farms everywhere in the country, except for the Southeast,” he said. “Places like Georgia, Alabama, Arkansas just don’t have enough wind on a regular basis to make it worthwhile there. But there is enough wind energy to power the entire nation.”
Whole Foods Market is one business that is replacing 100 percent of the electricity used in its stores nationwide. The transaction represents the largest wind energy credit purchased in the United States.
“Whole Foods Market is a leader in the natural and organic foods movement, and that involves caring about our communities and respecting our environment. This purchase of wind energy credits is a natural extension of that leadership and is integral to our core values,” said Michael Besancon, Whole Foods Market Southern Pacific regional president and Green Mission task force leader. “Offsetting 100 percent of our electricity use with renewable, clean energy strengthens our commitment to be a leader in environmental stewardship by helping to clean the air and reducing our dependence on fossil fuels.”
As of Dec. 9, Whole Foods Market is purchasing more than 458,000 megawatt-hours of renewable energy credits from wind farms. This purchase will offset more than 700 million pounds of carbon dioxide pollution this year. To have the same environmental impact, more than 60,000 cars would have to be taken off the road.