Biodiesel refinery idea holds promise for Valley

OLYMPIA – A prominent state lawmaker is calling for construction of a biodiesel fuel refinery in Eastern Washington, fed by local crops and paid for partly with millions of dollars in state money.

“There’s benefit for everybody if we get this thing going,” said Rep. Hans Dunshee, D-Snohomish, who chairs the House construction-budget committee. So far, he said, groups in Lincoln County, Columbia County and Spokane Valley are interested. The Spokane-area proposal comes from several local farm cooperatives and the county conservation district.

“The Spokane Conservation District one really seems the most viable,” Dunshee said. “But I want to scrub the numbers on all of them.”

“I think this is very real,” said Sen. Mark Schoesler, R-Ritzville, the top-ranking Republican on the Senate agriculture committee. “People want it to happen.”

Biodiesel, made from vegetable oil or animal fats, is a substitute for conventional petroleum-based diesel. Modern diesel engines can burn it with no modifications, according to the conservation district’s Jim Armstrong. Locally, the City Service Valcon station in Greenacres sells about 10,000 gallons of a biodiesel blend per month, mostly for Central Valley School District buses.

Although still about 20 cents a gallon more expensive than conventional diesel, it’s growing in popularity because of its cleaner exhaust gases and “green” origins. Several Puget Sound bus fleets, a taxi company and some state ferries use the fuel. In Tacoma, it runs garbage trucks.

Earlier this year, Seattle Biodiesel opened a 5-million-gallon-a-year plant, the region’s first. But with no large-scale seed-crushing facility in the state, the company relies heavily on soybean oil shipped from the Midwest.

Dunshee and other lawmakers say it’s time to change that. Mustard, canola and rapeseed grow well in Eastern Washington. All are heavy in oil.

“We have farmers growing crops that are turning into fuel today, as we speak, but unfortunately it’s less than 1 percent of what we need,” Gov. Christine Gregoire said earlier this month, publicly calling on the state Department of Agriculture to spur in-state production of biodiesel and other crop-based fuels. With fuel prices near record highs, lawmakers in both parties have called for more incentives for making and using crop-based fuels.

“This is the first time in history that a bushel of grain is worth less than a gallon of fuel on the Palouse,” said Schoesler. Republicans are upping the ante by pushing for caps on energy and fuel taxes, as well as property tax breaks for oil-crop farmers.

To pay for the seed-crushing plant, Dunshee said, the state could tap up to $5 million from money that nervous lawmakers set aside this spring, when the federal government was eyeing military bases for closure. The money – for roads, utility lines or other base-related work – was intended to try to dissuade the feds from closing any major local bases. As things turned out, none was slated for closure.

Armstrong said it’s not enough to build a plant and hope that farmers will show up with truckloads of seeds. It has to be profitable for them. And for that to happen, somebody has to buy the waste: the crushed seed meal left over after the oil is pressed out.

“If they don’t establish those markets, then the whole thing is down the drain,” Armstrong said. “It all hinges on the meal.”

That’s what happens with Midwestern soybeans. The dry, powdery meal is sold as livestock food and as a high-nitrogen fertilizer to farmers.

Locally, rapeseed or canola meal can be used as livestock food or as a fertilizer. But a particularly promising crop, Armstrong said, is mustard seed meal, which can be used as a pesticide and soil fumigant.

The key to widespread use of the meal, however, is federal approval as a pesticide. To speed that process up, Dunshee said, the state may spend up to $2 million for research for the labeling effort.

“We could give that to WSU and say ‘Get on it,’ ” he said.

Armstrong said it’s likely to take years to ramp up oil seed production. Supplying a 5-million-gallon plant requires about 100,000 acres of crops, he said. And Eastern Washington farmers grew only about 4,000 acres of oil seeds last year.

Farmers have good reason to be skeptical, Schoesler said. In recent years, they’ve watched much-touted local ventures with sugar beets, ethanol and straw board stall.

“Quite honestly, there isn’t any speculative money left out there in farm country,” he said. “They’re a little bit guarded in their optimism.”

One key reason that both Dunshee and Schoesler give the Spokane Valley proposal the best odds, however, is that it’s backed by co-ops.

“They’ve got 1,000 farmers in those co-ops,” said Dunshee. “That gets the buy-in you need to convince people to grow this stuff.”

And who would buy the biodiesel, which is still likely to be more expensive than regular diesel, at least in the short term? Dunshee notes that the state and big transit agencies already buy millions of gallons, most of it brought in by the trains from the Midwest.

“We, the state, could buy all they could produce,” he said.