This headline turned my head (hat tip to my friend Jim) California diesel/biodiesel hits price inversion, others to soon follow.
"in Hawaii where Biodiesel is consistently about $.40 a gallon cheaper than diesel (due to the fact that biodiesel is made on the island and #2 Diesel is imported). Now it has happened in California. The average price of #2 Diesel in Bakersfield is $3.17 and about $2.80 for 100% biodiesel. The price of #2 Diesel is up over $1.00 in a year, the price of Biodiesel only up about $.50."

Now this seems on the surface to be a good thing and says the market EROEI for biodiesel is positive. But I am not so sure yet. I think this may be a transitory price inversion. I hope it stays and is a real effect. But I can't get out of my head all the hidden price supports built into biodiesel: farming subsidies, tax credits, tons of cheap oil used in fertilizer and transportation costs.... from where I sit, it looks like the supply chain for biodiesel is very long and for the real price to appear at the pump will take a long time. I pray that this price inversion is still there in ten years. For more information on EROEI and the hidden-ever increasing costs of oil extraction check out this excellent rant from the excellent The Oil Drum blog. Oil Prices Also Affect Oil Costs I highly recommend everyone read it because he cuts to the heart of why higher prices won't just create more oil supply, exploration or extraction.