By Lori Ehde
Biodiesel legislation was passed into law Friday, and supporters are comparing it to ethanol, in terms of its projected effect on soybean markets.
Jim Willers, Beaver Creek, is state director of the Minnesota Soybean Growers Association and has been working to see the bill passed into law.
"You could call this Minnesota's second oil well - after ethanol," Willers told the Star Herald Monday.
Minnesota is the first in the nation to mandate the use of biodiesel.
The law requires a portion of diesel fuel sold in Minnesota to contain soybean-based biodiesel by 2005.
The law requires a 2-percent biodiesel blend when state biodiesel production exceeds 8 million gallons.
This will happen 18 months after the state or federal government provides a biodiesel tax credit, or at least by 2005, with or without the credit.
Biodiesel is a clean-burning alternative fuel made from renewable fats or oils, such as soybean oil. It can be burned in any diesel vehicle, and more than 50 major fleets across the nation have used it commercially.
The fuel performs similarly to a petroleum diesel but is non-toxic and biodegradable, and its use reduces harmful air emissions. Biodiesel produces up to 50 percent less dangerous particulate matter than petroleum diesel.
Willers said there are a great many of Rock County soybean producers who stand to benefit from the new mandate.
"What's been holding down the price of soybeans is the glut of soybeans on the world market," Willers said. "This will give us a larger market."
He said there are 2.9 billion gallons of vegetable oil in storage worldwide, and that supply is growing.
"Minnesota will use 16 million gallons of biodiesel annually, but we need other states to use biodiesel also," Willers said.
At the federal level, he said Sen. Mark Dayton has introduced legislation that would provide tax incentives for biodiesel use.
"Biodiesel is a homegrown renewable fuel," Dayton said. "Even as world oil prices are tightening, America's farmers are producing record crops of soybeans... Building demand for biodiesel will help increase these commodity prices while enhancing our nation's energy security."
He's proposed a 1-cent tax credit per 1 percent of biodiesel used in diesel fuel, up to 20 cents.
Since opponents have criticized biodiesel as a costly alternative, Willers said, "The tax incentive would take care of that cost difference," Willers said.
Three biodiesel processing plants are scheduled to come online soon in Albert Lea, Mankato and Brewster.
A small soybean processing plant is in the research and development stage for Luverne, but its products would include foods, not biodiesel.
Gov. Jesse Ventura decided Friday to allow the bill to become law without his signature, registering a protest against the measure, but without killing it with a veto.
"I have serious reservations about any mandate from the government," he said in a letter to the Legislature. "If this bill did not present such a clear opportunity for our farmers and our state, I would veto the bill on these grounds alone."