By William McCall, Associated Press Writer
Monday, August 10, 2009

PORTLAND — Pulling up to the pump in a diesel car or rig? In Oregon from now on, a small portion of the fill-up will be soybean squeezings or recycled cooking grease.

Biodiesel production has reached a level in Oregon that triggered a mandate from the Legislature that requires a 2 percent blend with standard diesel fuel across the state.

The so-called “B2” blend requirement makes Oregon the third state — after Minnesota and neighboring Washington — to boost reliance on domestically produced biofuel, according to the National Biodiesel Board.

Massachusetts and Pennsylvania also have mandated a B2 standard, but that won’t go into effect until next year.

The Oregon mandate is part of the green energy policy that Gov. Ted Kulongoski and state lawmakers have promoted with hopes of expanding the biodiesel industry in Oregon while reducing carbon emissions.

But homegrown manufacturers still face competition from other biodiesel suppliers, especially Midwest soybean farmers sometimes favored by petroleum distributors who want consistent quality and cost savings from high-volume production.

“Our companies say they have four major concerns and the first three are quality, quality and quality — the other is price,” said Brian Doherty, an attorney and spokesman for the Western States Petroleum Association, an oil company trade group.

Oregon manufacturers of biodiesel, such as SeQuential Biofuels, say they meet the same quality standards as Midwest soybean growers but have less environmental impact because their fuel does not have to be hauled halfway across the country by rail.

“We have a lower carbon footprint,” said SeQuential co-founder and general manager Tyson Keever. “And the quality standards are the same for everybody.”

The Oregon company recycles cooking oil to create biodiesel. It started out with a capacity of about 1 million gallons a year but is ramping up to produce more than 5 million gallons.

“In the past three or four years, because of these mandates and state policy and incentives, we’ve encouraged over $300 to $400 million in development in the state of Oregon alone in biodiesel and ethanol production,” Keever said.

Supporters say biodiesel has several advantages as an alternative fuel because it is renewable, can be made locally from multiple sources, causes significantly less pollution and is roughly equivalent to the power output of standard diesel fuel.

“Pure biodiesel, or B100, contains only 8 percent less energy per gallon than the diesel motor fuel currently offered for sale in Oregon,” said Stephanie Page, the Oregon Department of Agriculture’s renewable energy specialist.

Page said about a half billion gallons of diesel are sold in Oregon each year, powering a wide variety of vehicles, from cars to heavy trucks and farm equipment.

Clark Cooney, assistant administrator with the department’s Measurement Standards Division, noted that many businesses and the city of Portland have been using a higher blend of biodiesel in their own vehicles on a voluntary basis, typically a 20 percent blend. Some Portland buses run on even higher blends.

Cooney said Portland has mandated a 5 percent blend for diesel sales since August 2007 “and I’m not aware of any problems being reported to us.”

Congress has approved blending 500 million gallons of biodiesel into the diesel supply nationally but implementation is awaiting U.S. Environmental Protection Agency analysis of the impact.

The 2007 Energy Independence and Security Act mandates that 36 billion gallons of biofuels a year must be blended into traditional fuels by 2022.

On Thursday, Sens. Maria Cantwell, D-Wash., and Chuck Grassley, R-Iowa, introduced legislation to simplify and extend the tax incentive for domestic biodiesel production and decrease reliance on foreign oil imports.

Cantwell said that oil prices that reached about $140 a barrel in 2008 had “devastating effects” on the economy while threatening both national security and the environment.

The shift to renewable energy has already attracted the interest of major oil companies, including Exxon Mobil Corp., which announced in July it is investing $600 million in developing biofuel from algae, or pond scum.

In Oregon, the 2 percent biodiesel blend went into effect this week in nine counties with the rest to follow by October.

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