A bill given initial Senate approval Monday night would require most diesel fuel sold in Missouri to contain a 5 percent biodiesel blend. A law that took effect Jan. 1 already requires most Missouri gasoline to contain a 10 percent ethanol blend.
The alternative fuel mandates are backed by Missouri's corn and soybean producers, who stand to make more money by increasing the demand for their grains. They promote the requirements as a way to improve the environment and reduce dependency on foreign oil.
But some lawmakers denounced the biodiesel mandate Monday as a socialistic, big-government intrusion into the free market.
The bill, which is supported by Gov. Matt Blunt, needs a second Senate vote to go to the House. If it becomes law, Missouri would become the sixth state to enact some sort of biodiesel requirement, according to the Missouri Soybean Association.
As originally proposed by Sen. Bill Stouffer, the mandate would have begun April 1, 2010, as long as distributors were able to obtain biodiesel for no more than the cost of conventional diesel.
He accepted an amendment to push the start date to no sooner than June 1, 2010. But it could be delayed even longer.
Under an amendment by Senate Majority Leader Charlie Shields, the Missouri Department of Agriculture would have to first determine that the average price of biodiesel has been equal to or less than the average price of traditional diesel for a full year. Once that occurs, the biodiesel requirement would begin four months later.
Shields, R-St. Joseph, said it could cost fuel distributors millions of dollars for the tanks and equipment necessary to store biodiesel.
"Before we ask people to invest in that equipment, let's make sure the price makes sense," Shields said.
Recent high prices for soy oil have made it unprofitable for some biodiesel plants to operate. But Stouffer, R-Napton, said he doesn't expect that prevent the mandate from beginning two years from now.
Shields' amendment was intended as a compromise, yet it did little to mollify opponents who extended debate on the bill into the night.
Sen. Victor Callahan, D-Independence, derided the legislation as "a massive government intrusion into the marketplace." To avoid Missouri's existing ethanol mandate, Callahan said, some motorists in the Kansas City area are crossing the state line to fill up in Kansas.
Among others joining him in opposition was Sen. Luann Ridgeway, R-Smithville.
"We've got it backwards," Ridgeway said. "We're following the big-government Russia model of figuring out how can we make this industry work, how can we make this product work, and we've totally forgotten the consumer."
By the end of this year, Missouri's biodiesel plants should have the capacity to produce about 130 million gallons annually — a little more than twice what's needed to supply the biodiesel that would be in Missouri, Stouffer said.
Under his bill, biodiesel producers who fail to meet quality standards for their fuel could be fined up to $10,000 per violation by the Department of Agriculture.
"We're giving the consumer a very high-quality fuel," Stouffer said.
Stouffer is among several Missouri lawmakers who have received state tax credits for investing in ethanol or biodiesel plants. Elected officials are allowed to receive the tax credits as long as their ownership share is less than 10 percent.
Biodiesel bill is SB759.
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