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Gregoire Pushes State Biofuel Industry

Posted on: Wednesday, 14 December 2005, 18:00 CST

By Warren Cornwall, The Seattle Times

Dec. 14--Hoping to turn Washington's farm fields into veritable oil wells, Gov. Christine Gregoire yesterday announced a legislative proposal aimed at boosting state biodiesel production.

The measures would require that all diesel sold in Washington have a 2 percent mix of biodiesel, usually made from vegetable oil mixed with methanol. It would also create a $17.5 million fund to distribute low-interest loans to build factories in the state that make canola or mustard-seed oil.

"This agenda will start to reduce our dependence on foreign oil and create new markets for crops grown in Washington," Gregoire said in her announcement Tuesday.

Gregoire's package is one of several such proposals for spurring a state biofuels industry that are expected to be introduced in the Legislature this winter.

Interest in such an industry has exploded this year amid high gas prices, concerns about global warming and dependence on petroleum, and economic woes of state farmers.

Politicians have embraced it, partly because it bridges the politics of Eastern and Western Washington, uniting farmers and environmentalists.

But exactly how to create the industry is still somewhat in dispute.

Not everyone agrees, for example, on whether to require biodiesel be mixed with regular diesel.

Roughly 1 billion gallons of diesel are sold each year in the state, so Gregoire's proposal to require all diesel to be 2 percent biodiesel translates to about 20 million gallons of biodiesel a year.

Only 2 million gallons of biodiesel are now made in Washington each year, Matt Steuerwalt, Gregoire's chief adviser on energy issues, said.

And the requirement could be pushed above 2 percent once in-state production reaches certain levels, to keep the industry growing.

But state Rep. Janéa Holmquist, R-Moses Lake, and House Democrats are each working on separate legislation that would delay imposing the biodiesel requirement until enough state-grown crops and biodiesel refineries are available to meet a greater share of the demand.

Otherwise, the requirement could benefit Midwest farmers who produce soybean oil, said Rep. Hans Dunshee, D-Snohomish.

"What I'm after is 'Grown in Washington,' " Dunshee said. " 'Grown in Iowa' doesn't do us any good, really."

At the same time, Sen. Mark Schoesler, R-Ritzville, whose Eastern Washington district includes wheat fields, said he worries a mandate could push up diesel prices.

John Plaza, president and founder of Seattle Biodiesel, which makes biodiesel from oil delivered from out of state, praised Gregoire's work on the issue. He said he would add a requirement that all the biodiesel come from Washington refiners to give the infant industry a boost.

But requiring that it come from state-grown crops could stall the industry's growth, he said.

The petroleum industry will likely resist the requirement. The industry is opposed to mandates, said Frank Holmes of the Western States Petroleum Association, which represents major oil companies in the West. He also said there are questions about quality control for biodiesel.

"We just think that these alternative fuels should be market driven and let the fuel compete," Holmes said.

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Source: The Seattle Times

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