The partnership is a five-year, multimillion-dollar collaboration between Chevron and researchers at Texas A&M AgriLife Extension Service focusing on creating a genetically engineered breed of low-input peanut lines that can produce higher yields of oil for use as a renewable biodiesel.
The fuel produced could be viable for everything from passenger cars and tractor-trailers to airplanes, trains and more, said Luis Ribera, a professor of agricultural economics at the extension service.
“The diesel nut will be converted into renewable diesel, which is chemically identical to fossil diesel, so it can be used in anything that uses diesel,” Ribera told FreightWaves.
Texas A&M AgriLife is one of the country’s premier research agencies in agriculture, natural resources and the life sciences. The agency is based in College Station.
As part of the partnership, Chevron (NYSE: CVX) is building the capacity to produce 100,000 barrels per day of renewable fuels by 2030, the company said.
“We expect all of our U.S. diesel sales [markets] to have renewable or biodiesel content by 2030,” Chevron said in an email to FreightWaves.
Chevron declined to say how much it is investing in the diesel nut project.
Ribera, who will lead research transportation, shelling and crushing infrastructure for the project, said Chevron has discussed targeting the California market for use of renewable diesel.
“Chevron is mainly looking at domestic [sales] and right now they are looking at the California market,” Ribera said.
The diesel nut project comes at a time when the U.S. is using more diesel fuel than ever. In 2021, the U.S. transportation sector used about 47 billion gallons of diesel fuel, an average of about 128 million gallons per day, according to the U.S. Energy Information Administration (EIA). This accounted for about 77% of total U.S. consumption of diesel.
Diesel engines are used in everything from trucks, trains, boats, and barges, to farm and construction equipment. The U.S. military also uses diesel fuel in tanks and trucks.
In recent months, supply chains were hammered when soaring diesel prices hit the trucking and rail freight transport industries. On June 20, diesel was as high as $5.81 a gallon nationwide.
Diesel prices have fallen in recent weeks to $5.27, and the EIA predicts retail diesel prices will average $4.73 per gallon for the rest of the year. The EIA also said in its July short-term energy outlook it expects the demand for renewable diesel fuel to continue to increase.
“Consumption of biofuels has risen in the U.S. in 2022, and we expect this growth to continue,” the EIA said. “Increasing demand for transportation fuels, higher 2022 renewable fuel standard program targets announced on June 3, and new renewable diesel production capacity coming online all contribute to this growth.”
Converting peanut oil into diesel fuel is actually a concept that dates back to the 1890s when German scientist Rudolf Diesel first used peanut oil to power an automobile engine. In 1900 at the Paris World’s Fair, Diesel tested an engine that purportedly ran on 100% peanut oil.
One issue with using peanut oil to produce diesel fuel is that current food-grade peanut varieties don’t have a high oil content — approximately 48%, according to Texas A&M AgriLife — and produce only about 123 gallons of biodiesel per acre.
Existing peanut lines also require significant amounts of water to raise. Soybeans need 15 to 25 inches of water per year, whereas peanuts need 20 to 39 inches. The primary plant oil used in the U.S. to make biodiesel is soy oil.
The diesel nut project is developing peanut lines that have 55% to 60% oil content and could produce as much as 350 gallons of biodiesel per acre. The “diesel nuts” are also being bred to perform under limited irrigation and dryland production, AgriLife said.
John Cason, a Texas A&M AgriLife researcher who will lead the diesel nut project, said the goal of the project is to create peanuts that yield more oil, while also introducing new peanut lines that farmers can use as cash crops in drier climates. Researchers are also designing a system of production, transportation and distribution for the diesel nuts once the crops are harvested.
“One thing that will help the diesel nut succeed is that when you don’t irrigate a peanut, you run the risk of aflatoxin, which can be devastating to food-grade peanuts,” Cason said, referring to a toxin created by fungus that can contaminate food crops. “But that won’t matter when the crop is being crushed for biofuel, so regardless of how much moisture, if the grower can grow something, they can market it.”
Using peanut oil as a fuel also has a lower carbon intensity. That encompasses the energy needed to produce it as well as water, pesticides and fertilizer, AgriLife said.
In Texas, farmers typically begin planting peanuts the first week of May and harvest occurs around October. During the first year of the diesel nut project, Texas A&M AgriLife will conduct testing at three key peanut production areas in Stephenville, Vernon and Yoakum, Texas.
The project aims to bring production back to areas that previously grew peanuts but ran out of water, Cason said. For now, Texas A&M researchers are focused on testing diesel nut harvests and yields in the Lone Star State, but the idea is to expand production elsewhere eventually.
“The end goal of the project is to develop a high-oil peanut that could be grown across the southern U.S.,” Cason said. “At this point, I anticipate the breeding lines we have being the best adapted to a Texas climate. That is where most of our work is focused and where almost all of our testing occurs, but with a little breeding for disease resistance, I think these could be adapted to other areas of the U.S.”
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