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Wednesday, Aug. 31, 2016

Biodiesel producers may get a set market

Monday, January 28, 2008

LILBOURN -- Thanks to a push from the Governor and the General Assembly, biodiesel producers in Missouri may soon have a guaranteed market for their product.

"It will certainly be helpful -- anything that is going to make more demand for the biodiesel product will help the producers," said Stan Polivick, general manager of the Great River Soy Processing Cooperative in Lilbourn.

In a recent State of the State address, Gov. Matt Blunt offered support to the creation of a 5 percent diesel standard, which means that all diesel fuel sold in the state will contain a 5 percent blend of biodiesel, when it is the same price or less than conventional diesel fuel.

"The bottom line is that Gov. Blunt wants to increase access to renewable fuels in our state," said Jessica Robinson, a spokeswoman for the governor.

Something that's hurting the industry right now is the low demand, said Polivick -- partially due to a lack of awareness, as well a scarcity of locations that sell biodiesel.

Dale Ludwig, executive director and CEO of the Missouri Soybean Association, said that oil company contracts at gas stations often prevent stations from carrying biodiesels. That's something that the bill will address.

"We want to make sure that those stations would have biodiesel available and would be required to sell it if the price was the same or less than diesel fuel," he said.

In line with Blunt's proposal is Senate Bill 759, sponsored by Sen. Bill Stouffer, which also addresses fuel quality. That encompasses stricter testing requirements, as well as a better cold-weather performance, said Ludwig.

"People expect to get quality fuel every time," said Ludwig. "We're trying to make sure that the fuel quality is stellar and that we have no problems."

One problem with biodiesel right now is that it thickens in colder temperatures. Regular diesel has the same effect, but at lower temperatures, said Polivick. There are, however, some standard fuel additives used to prevent that in diesel that can create similar results in biodiesel.

The Lilbourn plant has only made about 93,000 gallons of biodiesel. It isn't in production right now -- and probably won't be until March or April, said Polivick.

That's partially due to low demand for the fuel -- which makes it hard to operate and make a profit, he said.

The proposal, however, would help alleviate some of that burden.

According to an MSA news release, biodiesel production in Missouri is expected to reach at least 125 million gallons this year, which would easily surpass the 60 million gallon market created by the mandate.

"It certainly would be helpful as far as demand is concerned," said Ludwig. An increase in supply would also put downward pressure on prices. "We think it's good for people in Missouri, but not good for people in the Middle East."

Jerry Bagby, owner of the Global Fuels LLC in Dexter, another biodiesel production plant in the area, said that biodiesel is less expensive and better for the environment, as well as vehicles.

"It does not release the carbons into the atmosphere that straight diesel does," he said.

In Blunt's address, he said that research has shown biodiesel cuts carbon dioxide and cancer-causing matter by 75 percent.

The biodiesel also helps lubricate engines. "Some of the tests have shown that engine life is extended by 35 percent if they use biodiesel," said Bagby. For an over the road truck that puts on 250,000 miles a year "that would be a tremendous savings," he said.

He said right now, the trucking industry has no real incentive, other than vehicle maintenance, to use biodiesel, because it adds fuel surcharges. "That just adds on to the customers' cost," he said.

One of the best things about the mandate, Bagby and Polivick agreed, is that it will give more awareness and credibility to the fuel.

"It would help everyone think about biodiesel more seriously," said Bagby.

"People are just a little nervous about it -- they don't know what it is yet," said Polivick. "If we could get the fuel more readily available to the consumers that do want it and increase awareness, it would help."

And those advancements could be shortly around the corner. Ludwig said those involved are confident that, if the bill goes to a vote, it will be passed.

"We're off to a fast start -- it was the first bill heard in the Senate," he said. "We're excited about where we're at."