Truckers may not give a second glance to the soybean fields carpeting the landscape as they pass through Iowa, but more are beginning to realize that the biodiesel fuel made from that crop can benefit both the environment and the economy. Or, maybe it just makes their trucks run better.

Bosselman’s Truck Plaza off Interstate 80 near Altoona, which began selling the B5, or 5 percent, biodiesel blend about two months ago, has seen a steady increase in interest, said General Manager Chris Aubert.

“It started out pretty slow,” she said. “But as soon as they find out that we have it, they’re coming back to get more. It’s a pretty big deal.” The truck stop, which now has six pumps for B5, is one of more than a dozen stations across Iowa that now carry the alternative fuel. The blends used by trucking companies generally range from 2 percent to 20 percent.

MidAmerican Energy Co., which in Des Moines uses a 20 percent biodiesel mixture for its trucks and other diesel-powered equipment, is probably one of the largest single users of biodiesel in the state, said spokesman Allan Urlis. The company, which began using biodiesel in 1999, purchases about 25,000 gallons of B100 biodiesel each year to blend with its diesel to obtain the desired mixtures. Overall, MidAmerican purchases about 2 million gallons of fuel annually.

“It certainly fits in with the corporate philosophy of respect for the environment that MidAmerican has,” Urlis said.

Billed as the fastest-growing alternative fuel in the country, biodiesel got a boost in August when President George W. Bush signed the Energy Bill, which extends through 2008 a tax credit aimed at reducing the retail price of biodiesel. It also created a Renewable Fuels Standard requiring the use of 7.5 billion gallons of alternative fuels, including biodiesel.

Last year about 30 million gallons of biodiesel fuel were produced nationally, and that production capacity is expected to increase to 100 million gallons by the end of this year as additional plants now being built begin production.

In Iowa, three cooperative-owned plants currently produce soy biodiesel: Soy Solutions in Milford; West Central Soy in Ralston; and Ag Processing Inc. in Sergeant Bluff, which is now undergoing an expansion. Two new plants are also under construction: Western Iowa Energy’s Wall Lake facility, and a plant being built by Cargill Inc. in Iowa Falls, which at a 37.5-million-gallon annual capacity is expected to be the world’s largest.

Additionally, there are at least 16 potential biodiesel plants in various stages of development throughout the state, among them sites in Lamoni, Nevada, Newton and Storm Lake.

A number of factors have come together recently to make biodiesel a more competitive product, said Grant Kimberley, market development manager for the Iowa Soybean Association.

“The passage of the energy bill and the biodiesel tax credit has made it more cost-competitive,” he said. “The other factor is high fuel prices. They were high before the hurricane and worse now. That has made biodiesel very competitive.”

The tax credit, which became effective Jan. 1, applies to biodiesel blended for both off-road and on-road vehicles, and is available to fuel distributors that blend biodiesel, with the assumption that they’ll pass the savings on to their wholesale customers.

West Central Cooperative, which operates a 12-million-gallon plant in Ralston, has operated a 30,000-gallon biodiesel bulk blending facility on Des Moines’ Southeast Side for a little over a year. It’s one of a handful of facilities across Iowa that top off tanker trucks’ diesel loads with 100-percent biodiesel. Those distributors, such as Keck Oil Co. in Des Moines, then qualify for the blending tax incentive.

“I would say the majority (of distributors) are passing the savings through,” said Don Irmen, West Central’s sales manager for the Eastern United States. “If not, they’re not going to sell anything.” Typically, biodiesel has been priced 1 cent per gallon higher than diesel for each percentage of biodiesel blended in, but the credit has allowed some dealers to price it even with or below diesel prices.

“Right now, diesel fuel is more expensive, so when it’s blended (with biodiesel), it should be cheaper than diesel,” he said. “But for it to be cheaper, they have to send the credit on through.” The cooperative’s Web site, www.soypower.net, has a blend calculation form that estimates the savings from using any percentage blend of biodiesel.

In the short term, the demand for biodiesel is going to outpace supply, but the additional plants coming on line across the country should bring that into better balance, Irmen said.

Higher cost was the primary reason the Des Moines Metropolitan Transit Authority ruled out biodiesel when it considered alternative fuel options a year ago, said

Brian Litchfield, the MTA’s director of program development.

The MTA is in the process of converting its fleet of 125 buses and 15 paratransit vehicles to run on O2 Diesel, a blend of diesel and ethanol with an additive that allows the two to mix and be used without engine modifications.

The MTA will be the largest municipal bus fleet in the country to date to adopt O2 Diesel, which has been used for the past year by the Lincoln, Neb., transit system. The bus system will purchase the corn-based ethanol and additive from O2Diesel Corp., a publicly traded Delaware company.

“When we were looking at the O2 Diesel, we were seeing biodiesel prices that were still (5 cents per gallon) higher than diesel last year,” Litchfield said. “At that point in time, we felt it wasn’t cost-effective to do (soy biodiesel). As we look at our fuel price projections for the upcoming year, we’ll be looking to see whether there is a better deal for diesel fuel.”

The MTA puts out a new bid for fuel approximately every 10 days, and each fuel supplier must be capable of properly blending the ethanol and supplement mixture into the diesel fuel it supplies. Presently, subsidies provided through O2Diesel’s corporate sponsors keep the cost of the mixture the same as diesel, Litchfield said.

“Hopefully, the thought is the two will become very similar in price or even less (without the subsidies),” he said. “That’s the ultimate goal.”

Over the next 12 months, the MTA will evaluate whether O2 Diesel improves its buses’ fuel mileage. which Litchfield said he expects to see based on Lincoln’s experience.

For MidAmerican Energy, Urlis said the price of biodiesel remains a few cents higher than diesel.

With the passage of the Energy Bill, the price difference between diesel and biodiesel should “pretty much be eliminated,” Kimberley said. The Iowa Soybean Association’s top legislative goal in the next session of the Iowa General Assembly will be to encourage passage of a state tax credit to further bring down the price in Iowa, he added.

“We’re seeing similar initiatives in other states, and it makes sense in the Midwest to promote an industry that’s good for the local and state economies,” he said. Illinois, for instance, exempts biodiesel blends of 11 percent or more from state sales tax. On Thursday, Minnesota begins a mandate that will require all diesel fuel sold in that state to be at least a 2 percent biodiesel blend. And last week Ohio’s governor signed an executive order mandating its transportation department to use at least 1 million gallons of biodiesel fuel per year.