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Agri panel endorses biodiesel incentives, rejects biodiesel sales mandate Wednesday, Feb 28, 2007 By Rob Moritz Arkansas News Bureau LITTLE ROCK - A Senate committee Tuesday advanced legislation to provide $20 million in incentives for production and distribution of biodiesel fuel in Arkansas but rejected a companion bill to mandate that stations sell biodiesel. With a voice vote, the Senate Agriculture, Forestry and Economic Development Committee endorsed House Bill 1379 by House Speaker Benny Petrus, D-Stuttgart, known as the Arkansas Alternative Fuels Development Act. Sen. Robert Thompson, D-Paragould, who is carrying the House bill in the Senate, told the committee that developing a biodiesel production industry in the state would help the economies of rural Arkansas, and would help the environment because biodiesel fuel burns 80 percent cleaner than regular gasoline. He also said the fuel would be made using Arkansas crops. Under the bill, state Department of Agriculture would make $16 million available for distributing grants to companies that make biodiesel fuel from soybeans or wood products, as well as to farmers who grow the soybeans. The bill also would make $2 million available to the University of Arkansas agriculture department for research, and $2 million to the state's weatherization assistance fund, a program directed by the state Department of Health and Human Services that helps those in poverty insulate and weatherize their homes. Biodiesel distributors would be eligible for up to $50,000 to install the necessary heating equipment at stations under the bill. Biodiesel turns to jelly in the cold weather. The bill goes to the Senate. Thompson's Senate Bill 237 would require all service stations in the state that sell diesel fuel to sell only biodiesel fuel when production in Arkansas reaches a certain level. The bill has the backing of Arkansas Farm Bureau Federation, the state's largest farm organization. Also, Keith Thompson, CEO of Green Way Bio Energy, which is building a biodiesel plant on the Arkansas River in Little Rock, said it was "critical to turn every diesel pump in Arkansas into a biodiesel pump." But the measure faced stiff opposition. Rich Ezell, senior strategy manager for fuel with Bentonville-based Wal-Mart Stores Inc., expressed concern that mandating biodiesel-only sales would drive costs up and lower quality. "We want it cost-neutral and quality-neutral," Ezell said. "We are opposed to mandates, but we support the incentives," said David Dobbins, director of supply and distribution for Knoxville, Tenn.-based Pilot Travel Centers. Lee Stephenson, owner of Stephenson Oil Co. in Clinton, said there were concerns about biodiesel jelling at low temperatures, and that it would be expensive for stations to purchase and install the necessary heating equipment to keep the tanks warm. Richard Meeks, senior vice president for refining with Lion Oil Co. in El Dorado, said a mandate could increase the cost of biodiesel fuel because the current availability of soybean oil is already insufficient to meet current consumption. Meeks also said there are several fuel quality problems associated with biodiesel fuel. The quality of the fuel needs to improve before any mandates are approved, he said. Ann Hines, executive vice president of the Arkansas Oil marketers Association, also spoke against the bill. The bill failed for lack of a second to a motion to approve it. |
