State Legislature to push for biofuels production

SPOKANE, Wash. — Everyone loves the idea of biofuels: Growing crops to make clean-burning vehicle fuels that will cut pollution and our nation's reliance on foreign oil. The trick is making it all pencil out.

The state Legislature this session will consider a bill that would provide incentives to increase the production and use of biofuels in Washington.

The incentives would go to farmers to grow crops like canola, and to various government entities to replace or retrofit big polluters like school buses.

"The issue is resonating well with legislators," said Clifford Traisman, a lobbyist for the Washington Environmental Council and other groups pushing the measure.

Biodiesel is a clean-burning alternative fuel made from oils derived from farm crops, and can be used in any conventional diesel engine. It is used in pure form or blended with regular diesel.

Biofuels would help fight global warming, and could provide an economic boost to farmers if the new crops can be sold for high prices, Traisman said.

He said the "clean air, clean fuels" bill has 36 sponsors in the House already. It proposes spending $20 million on a variety of incentives.

A key provision calls for spending $5 million to help local governments replace 700 aging diesel school buses with newer models. It also provides money to retrofit other old buses so they run more cleanly.

The bill would encourage the creation of production plants and the growing of crops, including canola, to make biofuels. It would allow the state to contract with fuel producers to purchase their product for the state motor fleet, and it would allow public utilities to produce and distribute biofuels created from Washington state products.

It would also require the state to reduce its fossil fuel use by 25 percent below 2006 levels by the year 2020.

Under the measure, the state would use $500,000 to help create ethanol fueling stations along the Interstate 5 and Interstate 90 corridors in Washington; appropriate $6.75 million to Washington State University's energy program to qualify for potential federal matching dollars for research, and recommend additional biofuel production incentives.

Major users of biodiesel in Washington could be state ferries, transit buses, school buses and many farm vehicles. An additional incentive for that use is a measure under consideration in the state Senate that would exempt biodiesel fuel used for non-highway farm use from sales and use taxes.

The bills are intended to complement previous state law calling for 2 percent of the motor fuel sold in Washington to be from renewable sources, said Tom Geiger, a spokesman for the environmental council.

But the issue is complex. Washington farmers worry they will not make any money if they undertake the expense of converting to production of canola. Processing plants have also been slow to break ground.

Wheat farmers are going to take some convincing before they convert many of their acres to canola, said Glen Squires, vice president of the Washington Wheat Commission.

Many of Washington's 2.2 million acres of wheat fields are not suitable for canola, Squires said. Farmers are also wary because they cannot get insurance for growing canola, and are worried they may be left holding a crop they cannot sell.

"Wheat they have a market for," Squires said.

But he expected individual farmers might try growing canola on a few hundred acres.

"The transition may be a little longer than 'next year we are all going to plant canola,"' Squires said.

State Sen. Jim Honeyford, R-Sunnyside, said current high prices for wheat also dampen enthusiasm for a new crop.

Still, the bill received plenty of support from various interest groups at a hearing Wednesday of the state House Agriculture and Natural Resources Committee in Olympia.

Fred Fleming, a fourth generation wheat farmer from Reardan, is involved in efforts to boost the production of biodiesel in the state. He said the biofuels industry offers huge potential for farmers to diversify.

"For a change in agriculture, the future is finally starting to look bright," Fleming said.

But he said adequate money for Washington State University research is key so that proper crop varieties can be found and exploited.

A Seattle company called Imperium Renewables, Inc. is building an enormous biodiesel plant at the Port of Grays Harbor between Aberdeen and Hoquiam. It would produce an estimated 100 million gallons per year. But its main source of raw materials will be imported from other states and countries.

The plant in Grays Harbor will be the largest biodiesel refinery in the U.S. and the company plans three more of that size around the world by the end of 2008. Another biodiesel plant is under consideration in Ellensburg by a company called Central Washington Biodiesel that wants to make 5 million gallons a year.

Seattle Biodiesel, a subsidiary of Imperium, already operates the Northwest's first commercial refinery, producing 5 million gallons a year of biodiesel.

Martin Tobias, the company's CEO, said the Grays Harbor plant should by completed by the second quarter this year.

The company hopes to eventually buy much of the raw material from Washington farmers, but hasn't yet found enough farmers willing to grow the needed crops.

"As much canola as could be grown by Washington farmers, I could buy," Tobias said. "Farmers need a nudge to take a risk on a new crop."

The clean energy measure is House Bill 1303. The tax incentive measure is Senate bill 5009.