Biofuel backlash feared amid high prices

SEATTLE, June 8 (UPI) -- The rising cost of producing biodiesel has created a consumer backlash against the cleaner burning fuel, analysts say.

The price of biodiesel has almost doubled to about $6 per gallon, and some experts blame biofuels for at least part of the rise in global food prices, The Seattle Times reported Sunday.

Biodiesel retailers in Washington say soaring costs and slowing demand are eating into their bottom line.

"Business is down at least by half," said Dan Freeman of Dr. Dan's Alternative Fuelwerks in Ballard, Wash.

In Washington, sales of biodiesel, which is made from the oils in soybeans and other crops, fell by almost two-thirds from July to March, to about 520,000 gallons, state figures show.

The newspaper said the rush to produce biodiesel assumed skyrocketing petroleum prices would soon make biofuels reasonably cheap by comparison. But the cost of making biodiesel has outpaced the rise in fossil fuel prices.

A gallon of nearly pure biodiesel retails for close to $6. Conventional diesel, meanwhile, currently sells for about $4.80 per gallon.

As a result, many U.S. biodiesel plants "are running at partial capacity or not running at all," said Pavel Molchanov, an analyst with investment bank Raymond James.