State House Passes Bill To Encourage Production Of Biodiesel

www.komotv.com March 12, 2003 By KOMO Staff & News Services

OLYMPIA - With some gas prices topping $2 a gallon and no relief in sight, some state lawmakers want to give drivers more options at the pump.

The state House passed a package of bills on Tuesday that would give tax breaks to encourage the production and use of biodiesel, an environmentally friendly fuel that can be used in any diesel engine.

Now just a few places in Washington state sell biodiesel fuel, and it retails between $2.75 and $3.25 a gallon, compared to an average price of $2.03 per gallon for regular diesel. But lawmakers and biodiesel fans believe prices will drop if Washington can attract biodiesel manufacturers to the state.

"As the price of petroleum goes up, the price of this product will go down as we get into production," said Rep. Brian Sullivan, D-Mukilteo, who sponsored the biodiesel bills. He said in Minnesota, where some biodiesel production plants are located, the fuel costs $1.80 a gallon.

Biodiesel can be made from soybeans, oilseed crops such as mustard seed, recycled vegetable oil or even used restaurant grease. Using biodiesel instead of petroleum in cars reduces carbon monoxide by about 40 percent over regular diesel, according to the U.S. Department of Energy, and cuts air toxins by 60 percent to 90 percent.

Duane Heier runs his tractor on biodiesel at the Steamboat Island Nursery near Olympia. He likes the environmental benefits and the "much less noxious" smell of biodiesel fumes. When he starts up the tractor, he said, "it smells sort of like the back of McDonald's."

Heier can afford biodiesel because he only uses about 10 gallons a month. "Less expensive would be great," he said.

Heier buys his biodiesel from Neil Falkenburg, who sells it at the West Bay Marina in Olympia. Falkenburg has used the fuel in his 1998 Dodge Ram pickup, and said while 100 percent biodiesel seems to give him a little less power, the engine runs quieter and the exhaust smells "by far more pleasant." He usually uses a mix of biodiesel and petroleum diesel.

Falkenburg said his biodiesel business has grown steadily since he started a year ago; he has about 20 regular customers.

"Once they get started on it, they're hooked," he said. Some customers bought new diesel Volkswagens just so they could use the special fuel, he said. In a car that gets 40 or 50 miles to the gallon, biodiesel starts to make economic sense as well as appealing to environmentalists.

Beside the environmental benefit, Sullivan pushed the biodiesel bills as ways to stimulate the rural economy. Washington farmers can grow the ingredients for biodiesel, and attracting biodiesel manufacturers to the state could create much-needed jobs in depressed rural areas.

House Bills 1240, 1241, 1242 and 1243 would create tax breaks for biodiesel makers and sellers in Washington, encourage state agencies to use biodiesel fuel, and start a pilot project for using biodiesel in school buses. A handful of Republican lawmakers opposed the bills, saying state government shouldn't meddle with free market competition.

"If a product is good it will rise to the top," said Rep. Lois McMahan, R-Olalla.

Bill supporters said biodiesel can and will succeed on the free market - but the Legislature can make sure it happens in Washington by giving biodiesel manufacturers tax incentives to set up shop here. Sullivan mentioned Airway Heights, outside of Spokane, as one possible biodiesel plant site.

"Do we want to lay the groundwork to have this be the center of biodiesel production on the West Coast?" asked Rep. Jeff Morris, D-Anacortes, who supported the bill.

Petroleum diesel cost an average of $2.03 a gallon in Washington on Tuesday, according to AAA, while a gallon of regular unleaded gas cost $1.85 - up from an average of $1.18 a year ago and $1.52 a month ago.

A few hours before the House passed Sullivan's biodiesel bills, lawmakers were grilling oil industry representatives at a hearing on high gasoline prices.

"It seems to my constituents out there that you are taking advantage of increased war talk to increase your prices," said Rep. Laura Ruderman, D-Kirkland. "It doesn't seem reasonable."

Anita Mangels, a spokeswoman for the Western States Petroleum Association, said rising prices were driven by high crude oil prices, in turn driven by jitters about war in Iraq and political instability that virtually shut down oil production in Venezuela.

"Unfortunately, the petroleum industry is incredibly sensitive to global conditions," Mangels said. "It's the market. It's always the market. It's economics 101."

For More Information:

Look Up Bills' Text -- www.leg.wa.gov Dr. Dan's Alternative Fuel Werks, Seattle-based biodiesel retailer: www.fuelwerks.com