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Bill adds perks for biodiesel users

Proponents say
the fuel decreases dependence
on foreign oil.
Wednesday, October 15, 2003 | 12:00 a.m. CDT; updated 2:00 a.m. CDT, Saturday, July 12, 2008

Every day, tanker trucks fill up their tanks with gasoline or diesel at the Williams Pipe Line Co. south of Columbia. Next door, at the Piasa Bulk Terminal, trucks can top off with ethanol or biodiesel before getting back on U.S. 63.

On Tuesday, U.S. Rep. Kenny Hulshof held a news conference at the Piasa terminal to promote a bill he introduced in Congress to provide tax credits to users of biodiesel and continue tax credits already in place for ethanol.

The bill, called the Renewable Fuels and Transportation Infrastructure Enhancement Act of 2003, also switches funding for the alternative fuel incentives from the Highway Trust Fund to the general fund, which Hulshof said would free up $50 million per year for Missouri roads and bridges.

In addition to increasing the demand for soybeans, supporters said the legislation would create jobs, provide money for highway projects and help the environment.

“It’s a win-win-win-win,” said Dale Ludwig, president and CEO of the Missouri Soybean Association.

The cost of a gallon of fuel containing biodiesel and petroleum-based diesel generally is about 1 cent more per percentage point used in the mixture compared to straight petroleum-based diesel. For example, a diesel mixture with 2 percent biodiesel costs 2 cents more per gallon. The bill would eliminate this cost difference.

“If there is no cost difference, everyone will want to buy it,” Ludwig said of the soybean-based fuel.

Biodiesel is a natural lubricant and can extend the life of a vehicle, Ludwig said, even if used in small quantities such as a 2-percent blend. The fuel decreases carbon dioxide and sulfur emissions and can help to reduce America’s dependency on foreign oil, according to proponents.

Thirty years ago, one out of every three barrels of oil came from a foreign source. Today, two out of every three barrels comes from a foreign source, Hulshof said.

“Instead of looking to the Middle East, why don’t we look to the Midwest?” Hulshof said.

Hulshof said the bill faces “staunch” opponents, including petroleum producers and those who disapprove of changes to the tax code. But several powerful members of the House and Senate have indicated support for the bipartisan bill, Hulshof said, and he’s hopeful of the passage.

If the tax incentives succeed in increasing demand for soybeans, a biodiesel production plant may be built in northern Missouri within a year and a half, said John Kleiboeker, director of field services for the Missouri Soybean Association.

Once a plant is built, the capacity to make other products with soy bases such as paint and wood treatments is created. “But it’s the fuel that will justify a plant,” Ludwig said.


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