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JEFFERSON CITY – With a new soy bio-diesel plant in Carroll County coming online this year and more planned throughout the state, supporters are looking for more ways to break into the market.
Sen. Bill Stouffer again is trying to get the same help for soy bio-diesel as he did for ethanol in 2006. A hearing was held on Wednesday for Senate Bill 29 in front of the Senate Agriculture, Food Production and Outdoor Resources Committee. Stouffer sponsored the bill that would require a five percent blend of soy bio-diesel into fuel sold at pumping stations in the state. The state enacted a 10 percent ethanol blend in January of last year.
Committeeman Sen. Rob Mayer said he anticipated supporting the bill but had questions about quality.
It’s the third go around for the bill in the Missouri Senate and Stouffer addressed some of the concerns to Mayer and other members on Wednesday that similar standards have already been implemented in other states such as Minnesota and Pennsylvania with some problems. He said those state’s mistakes were taken into account when the bill was crafted this year.
“We took what they learned and put it into this bill so we can guarantee quality to our customers,” Stouffer said. “There would be nothing worse than having a bunch of trucks sitting on the side of the road with plugged filters.”
Stouffer argued, much in the same way as ethanol, that the bill creates a level playing field for soy bio-diesel in a market controlled by the oil companies.
“I understand why there is resistance from the people who supply petroleum,” Stouffer said, “Nobody wants to sell the competitions product. The only way we can expose the bio diesel to the market is to require a standard.”
Farmer and John Deere representative Don Borgman testified that his company already makes machinery to run off soy bio-diesel and tests show the machinery performance has not declined.
Oil company lobbyist Harry Gallagher said, much like the ethanol bill, this piece of legislation would only distort the market. He also argued against a provision in the bill that allows for splash blending at terminal sites.
Spokesman for Magellan Midstreams Bruce Heine said his company has already invested millions in pipeline infrastructure in the state and is currently working on a $4 billion pipeline project that would pump 250,000 barrels of soy bio-diesel from the Midwest to New York. Heine said his firm is not opposed to soy bio-diesel, just provisions in the bill that require his company to invest more than $10 million in storage units so retailers have an option of purchasing splash blend. Just like the ethanol standard, retailers are not required to purchase a five percent blend if the cost of soy bio-diesel is higher than petroleum diesel.
“We’re not opposed to bio-fuels,” Heine said. “We’re opposed to a bill that contains conditions we believe are flawed.”
Heine said having to invest in the storage units will make the company’s pipelines less effective and what he calls the most efficient way of transporting the fuel.
“Pipelines are going to be the most efficient way of transporting these blends and having this infrastructure investment at terminals isn’t going to reduce the price of bio-diesel or diesel to consumers,” he said.
Ron Leone, executive director of Missouri Petroleum Marketers and Convenience Store Association said his organization is neutral on the bill but urged the committee to leave the splash blend option in the bill because it allows retailers an option when their trucks pull up to the terminals.
Stouffer said yesterday that Heine has some legitimate concerns, however so does the petroleum marketers. He said the bill would still be looked at but in the end the consumer has to come first.
“He has a very legitimate point,” he said. “When you look at consumers having splash blend as a possibility, it’s a valid method to keep prices low for the consumer.”
The committee took no action on the bill.