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https://www.bloomberg.com/news/articles/2021-09-02/chevron-b...

Chevron and Bunge have announced a deal to process soybeans for oil to convert into biodiesel.

Good deal but there seems to be a cost problem. Soybean oil weighs 7.6 lb/gal. The futures price is $0.59/lb. That is $4.48/gal vs current fuel oil futures price of $2.15/gal. Soybean oil is priced at 2.08 times the price of fuel oil.

Vegetable oils are usually converted to methyl esters by reaction with methanol for biodiesel. Glycerin is a by-product probably worth about $0.50/lb.

The saponification value of soybean oil is 190 mg KOH/g. That gives a molecular weight of 886. The methyl ester is 890, indicating the following ratio: 1 lb of soybean oil reacts with 0.11 lb methanol yielding 1.004 lb of methyl ester and 0.10 lb glycerine.

A bushel of soybeans weighs 60 lb and is valued at $12.84/bu. On processing you expect to get 10.7 lb/bu of soybean oil (valued at $6.31/bu) and 49.3 lb/bu (valued at $340/st ton=$8.38/bu) for a total of $14.69/bu with a profit of $1.85/bu.

If the value of the soybean oil is reduced by the $1.85/bu to $4.46, the value of soybean oil falls to $0.42/lb or $3.17/gal. That is still 47% more costly than fuel oil at 2.15/gal.

This looks mostly like a public relations announcement. Unless there are solid savings to be obtained. Perhaps it can work if soybean meal is in short supply forcing up prices making soybean oil something to get rid of. That seems doubtful.

Tall oil fatty acid from Kraft paper mills is usually the lowest cost vegetable oil available. Its price is unpublished but is usually about 50% that of soybean oil. Implying $0.30/lb. But crude tall oil is very smelly and probably unsuitable until processed.

Soybean oil is usually alkali refined. Washing with caustic soda removes traces of fatty acids usually present. That produces soysoap stock as a waste stream. Acidification produces soybean fatty acid (and a salt waste stream). That could be a very low cost biofuel source if a home can be found for the by-product salt. A salt stream suitable for fertilizer use might be possible by washing with KOH and then acidification with nitric or phosphoric acid.

We shall see how this comes out.

The oil industry has been under pressure to adapt to climate change. This looks like one of those proposals but is it practical?
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