Cleaner Biodiesel Fuel Puts Fat in the Fire : Environment: The less-polluting liquid is already powering cars in various tests around the world, but its higher cost is likely to limit the market.

Some day, you may be able to drive up to the pump and fill your car’s tank with a fuel made of vegetable oil and animal fats.

Whether that day ever comes is now being studied by a handful of corporate and university innovators who are testing this low-pollution fuel known as “biodiesel.”

Biodiesel includes no petroleum products, but can power conventional diesel engines.

It emits about half the soot particles and carbon monoxide of conventional diesel fuel and breaks down into carbon and water if spilled, says Chuck Peterson, an agricultural engineer at the University of Idaho.

The university uses soybean oil to produce 2,000 gallons a year of biodiesel fuel for experimental uses, including powering several vehicles for test purposes.

Biodiesel is also being used in demonstration projects around the country to power public transit buses, pickup trucks, airport maintenance vehicles and some boats.

But there’s uncertainty over how widespread its commercial uses will be in the long run or whether it can ever be as affordable as conventional diesel fuel.

High production costs and a limited supply of raw materials such as soybean oil put its retail price at about $2.50 per gallon, compared with $1 or less for conventional diesel.

John Ferrell of the U.S. Department of Energy’s biofuels program, says the the department supports biodiesel development and plans to work with other agencies and companies on emissions testing of the fuel and other similar fuels.

However, Ferrell is cautious about its potential.

“I don’t think it’s going to totally replace petroleum-based diesel,” he says.

One corporate believer is Interchem Industries Inc., an Overland Park, Kan., company that specializes in marketing fuels from renewable resources.

Interchem is the only company marketing biodiesel nationally, said Doug Pickering, its vice president of operations. It has been working with biodiesel fuel for two years, producing small 500-gallon lots for demonstration projects.

In August, Interchem took a much bigger jump into the business when it signed a contract with Cincinnati-based Procter & Gamble Co. to have P&G; produce up to 15 million gallons of biodiesel fuel per year.

For Procter & Gamble, it is just another market for “methyl esters” it has produced for 50 years by mixing methanol with coconut oil, palm oil or soybean oil. P&G; uses the esters in detergents, but they also serve as a biodiesel fuel.

Interchem hopes to sell biodiesel in a number of markets where pollution is a problem.

It is now providing a biodiesel fuel blend to power public buses in St. Louis, Kansas City and Topeka, Kan.

Other potential markets include industrial plants where diesel-powered forklifts or other devices are operated indoors, polluted cities striving to meet more stringent clean-air regulations and where conventional diesel fuel used in outboard motors could contaminate lakes or streams.

Pickering said he envisions biodiesel winning a niche in the renewable-resource fuels market.

“It’s not going to be a dominant entry. It’s going to be a niche,” he said.

Pickering said he hopes that sales of biodiesel fuel in the next few years could reach 150 million to 200 million gallons annually, compared with 47 billion gallons of conventional diesel fuel. The increased sales and profits could help reduce biodiesel’s cost, he said.

Biodiesel has gotten a foothold in Europe, where some countries are requiring its use in cities or in environmentally pristine regions whose purity the authorities want to protect.

Austria mandates use of biodiesel fuels in the Alps, said William Ayres, Interchem’s executive vice president. Germany is converting its taxis to use of biodiesel.

The problem with synthetic fuels is that all of them cost more than the petroleum derivatives, said Joseph Lastelic, spokesman for the American Petroleum Institute, trade representative of major petroleum companies.