WASHINGTON – For the past few years, the U.S. Department of the Interior has tested the effectiveness of electrical transformers that use vegetable oil instead of mineral oil to boost power production while lowering the threat of fires and toxic spills.

Now, the agency plans a "very large project" using the green technology that Minnetonka-based Cargill Inc. helped perfect.

"Our transformers sit on decks overlooking the flow of beautiful Western waterways," said Bill Heckler, an engineer with the department's Bureau of Reclamation, which operates hydroelectric dams. "We fear ruptures or fires that will drop large quantities of oil into rivers."

Easing that fear helped Cargill win a Presidential Green Chemistry Challenge Award on Wednesday in the nation's capital.

The Environmental Protection Agency cited Cargill for its role in commercializing carbon-neutral vegetable oil transformer insulation fluids known as "natural esters." Transformers need the oil as an insulating and cooling agent. Polychlorinated biphenyls — PCBs — once filled that role, but they turned out to be toxic. Petroleum-based mineral oil replaced PCBs, but posed an environmental risk.

Cargill makes its dielectric transformer fluid out of soybeans. Other companies make it from sunflower seeds and other vegetables. But whatever the base material, vegetable oil fluids do not catch fire or overheat the way mineral oil does, and they biodegrade naturally within weeks if spilled, something that petroleum-based mineral oil does not do.

Cargill chemist Charles Tanger helped develop transformer fluid that received a Presidential Green Chemistry Challenge Award on Wednesday.

Right now, vegetable oil-filled transformers make up only about 10 percent of the U.S. market, said David Roesser, who manages Cargill's transformer fluids operations worldwide.

But Roesser says Cargill, which controls the bulk of the vegetable oil fluid market, expects "natural esters will be a much larger percentage than that in the future."

In 2012, about 350,000 electrical transformers nationwide contained vegetable oil fluid, Roesser said. A year later the number has swelled to more than half a million. They range from the small canister transformers on power poles to house-sized transformers at power plants.

Last year, Cargill bought the vegetable oil fluid brand FR3 from Cooper Power Systems of Milwaukee. Today, Cargill makes the fluid at plants in Chicago and Wichita, Kan., as well as at a plant in Brazil.

Roesser says Cargill will expand existing company facilities in Europe, Asia. India and Mexico to produce the oil in the next 24 to 36 months.

In California, the utility Pacific Gas & Electric has decided to only use vegetable-oil-filled transformers going forward. The decision is important for Cargill because the key to commercialization of natural esters will be convincing major utilities to use the product, which currently costs 1½ times more than mineral oil.

"Probably 75 percent of the transformers in the U.S. are bought by utilities," Roesser explained.

Cargill pitches the virtues of higher operating temperatures and lesser environmental and safety risks to argue for design and functional changes. With vegetable oil insulation, lightning strikes to transformers may no longer lead to fires, the company says. Spills will be less toxic.

Also, smaller, cheaper carbon-neutral transformers will be able to produce the same amounts of energy because they can run at higher temperatures than mineral oil transformers. In places like Florida, utilities can keep transformer sizes the same, but run them at full capacity to prevent summertime brownouts when everyone wants to run air conditioners.

"You start to look at total cost for an end user," Roesser said. "You have areas where a soybean oil transformer is less expensive than a mineral oil transformer."

This potential for affordable widespread usage is what caught the EPA's attention and led to the Presidential Green Chemistry Challenge Award.

Cargill, said EPA chemical safety administrator James Jones, found a way to reduce reliance on fossil fuels and improve the carbon footprint, "all the while improving the bottom line."

Once the Bureau of Reclamation determined that its vegetable oil transformer worked as reliably as its mineral oil transformers, Heckler said, improved safety and environmental protection made the technology a natural choice for a bigger project.

Studies show that vegetable oils catch fire at roughly 680 degrees Fahrenheit, while mineral oil catches fire at roughly 335 degrees.

"A higher flame point makes it a safer product to use around buildings and people," Heckler said.

"If standard mineral oil spills," he added, "it can be damaging downstream. Natural ester oils revert to the food chain in two or three weeks."

One of the big electrical transformers at this power plant on the American River near Folsom, Calif., is using Cargill-made soybean oil instead of mineral oil.

Jim Spencer • 1-202-383-6123