Biofuel Businesses Remain Small-but-Profitable

The other dayI searched for E85 ethanol fueling stations in my home state of Connecticut. Turns out there are just two such public stations in all of New England. Even biodiesel stations are still sparse. Why?

In a piece last week in GigaOM, Boonsri Dickinson talked about how the biofuel businesses remains very small nationwide. There’s just a single biofuel station in San Francisco, DogPatch Biofuels. Across the whole of the U.S., there are just over 1,500 biodiesel stations, and 2,500 stations that serve E85 ethanol. Compare that to the over 130,000 gas-only stations in the U.S., and there is obviously a huge discrepancy there. While biofuel businesses do manage to turn a profit despite small scale (the San Francisco station sells just about 600 gallons of biodiesel a day) they often have to turn to selling other stuff, like chicken seed, to make more money. A big reason biofuel stations don’t draw big business is that biofuels are missing two components; infrastructure, and trust.

There is no “name-brand” biofuel business in the U.S., no trusted source of high-quality fuels. Now I’m not saying the start-up entrepreneur working out of a warehouse making biodiesel doesn’t know what he is doing. But when it comes to fueling up an investment that can cost tens of thousands of dollars, people are hesitant to put just any ol’ fuel into their car.

Beyond that, biofuel companies don’t have the infrastructure of deep pockets of Big Oil, but they’ve got the advantage of being able to farm their fuel from local sources as opposed to shipping it halfway across the country (or the world). Even so though, the people interested in fueling up with ethanol or biodiesel are still few and far between, and many of these people have learned how to use their vehicles minimally, if at all. Biofuels have a high hill to climb, and they may forever remain a niche market.

At least to me though, it remains a better alternative to petroleum.

Source: GigaOM | Image: DogPatch Fuels

Chris DeMorro is a writer and gearhead who loves all things automotive, from hybrids to Hemis. You can follow his slow descent into madness at Sublime Burnout.

Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.