Biodiesel Price Mandate Debated

If biodiesel is more expensive than conventional diesel, the proposed 5 percent blend would not be required and conventional diesel could be sold without penalty.

Greg Sharpe, president of the Missouri Soybean Association, told the House Transportation Committee that mandating a blend of soy-based biodiesel “is a lifesaver for our industry” by providing another market for one of Missouri’s top two crops.

“The main thing is it’s a very conditional mandate,” Sharpe said of the “price trigger” built into the legislation.

But its conditional nature comes with unintended consequences, said Bruce Heine, spokesman for Magellan Midstream Partners, based in Tulsa, Okla. Magellan’s pipelines provide 50 percent of the state’s diesel fuel. He said the company is in a difficult position because it supports the growing use of ethanol and biodiesel and is looking into ways to transport both fuels through its pipes.

If the bill passes in its current form, Magellan would have to invest $1.5 million to blend the biodiesel on site for each of its five terminals to meet the mandate, he said.

“With the price trigger, some days it’s on and others it’s off, it’s essentially forcing us to make a bad investment,” Heine said.

It may make more sense for the company to close its mostly rural terminals, like the one in Palmyra, than to make the investment to meet the mandate.

He suggested that Missouri add incentives for terminal providers into the bill to help offset the costs of its investments.

The mandate would require 60 million to 62 million gallons of biodiesel a year to fulfill the mandate. Missouri’s four major biodiesel plants produce about 130 million gallons per year, more than enough to meet the mandate, said the bill’s sponsor, Sen. Bill Stouffer, R-Napton.

The bill also would regulate the quality of biodiesel. Several representatives expressed concern about biodiesel gumming up in engines, but the mandates’s proponent pointed out that the quality standards in the bill prevent those problems.

Stouffer also said that burning biodiesel removes 47 percent of the particulate emission, or ash, and 80 percent of the carbon monoxide and dioxide emissions.

View the Columbia Missourian story by clicking here.

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