Spain, Canada, New Mexico - what gives?

Amidst all of the positive news in the U.S. biodiesel industry these days, the governments of Canada, Spain and even the state of New Mexico seem to be withdrawing their support for the most environmentally conscious, green-job-creating, security-enhancing, technically scrutinized and tested fuel on the planet. After a decade of promoting green alternatives to mitigate horrific damage done to the environment from more than a century of unabashed exploitation and wild consumption of dirty oil, and attempts to help break the immoral mega-monopoly stranglehold Big Oil has on planet Earth, it is back to business as usual where the oil companies write public policy and the world’s 7 billion people get the shaft while the few elite amass their fortunes from the people’s sufferings.

New Mexico

Senate Bill 374 introduced by Phil A. Griego seeks to nullify the state’s 5 percent biodiesel mandate that hasn’t even had the chance to take effect yet. In July 2010 all state agencies, political subdivisions and public schools operating on-road motor vehicles were required to use at least B5. In September 2010, REG, the largest U.S. biodiesel producer, announced it would purchase an unfinished biodiesel production facility in Clovis, N.M. After July 1, 2012, the B5 mandate was to extend to consumers. The mandate in either form, for government entities or the public at large, never happened. Now, if SB 374 passes, it never will. The mandate was originally passed several years earlier when Gov. Richardson, a major biodiesel proponent, was in office. It has been suggested that the attempt to repeal the mandate now is political pushback from that, rather than opposition to biodiesel itself. Whether you punch me in the eye because you don’t like me, or if you do it because you don’t like who I voted for, either way it’s going to hurt—and bruise.

Donna Belcher with Rio Valley Biofuels, the state’s first commercial biodiesel plant, a small producer in Anthony, said, “We are aware of the issues with SB 374.” She tells Biodiesel Magazine that while the mandate never really was enforced, it has pushed a lot of the government entities to put requests out for B5. “A lot of people are already running B5 whether they know it or not,” because that much is allowed in the D975 diesel fuel spec without labeling.  She says the mandate already has a waiver provision in it, so legislation to repeal it is unnecessary. “I don’t want them to remove it even though it’s not really being enforced,” Belcher says, “because it actually makes a lot of the government entities put a requirement in their bids for B5, which they wouldn’t do otherwise.” She says she believes the bill to strike the biodiesel mandate is being pushed by the New Mexico petroleum organizations. If the bill were passed, Belcher says it would have a negative impact on the 1 MMgy Anthony-based production facility’s business. “The government entities that are currently complying with the B5 mandate would stop,” she says. She adds that, according to taxation and revenue, biodiesel is treated the same as diesel fuel except there is no provision to sell it above the rack. “So any place that a rack operator would want to buy biodiesel in New Mexico to blend, they are double-taxed on it because they don’t treat biodiesel producers as rack operators, or as refiners.” She’s been fighting with taxation and revenue since they started operating Rio Valley Biofuels, and after years of doing so, she says the legislature is working to change that with SB 160. “If that bill passes, that will really help—it’s actually more of an issue to me than the mandate being in effect or not,” Belcher says. She says it has already passed through the first committee unanimously.

I hope a grassroots effort in New Mexico can muster enough support to defeat the bill to rescind the mandate, as well as pass fair taxation legislation, so the current and future biodiesel producers in the state can have local demand for their product at a tax rate on parity with diesel fuel.

Anthony Hulen, REG’s executive director of corporate affairs in Washington, D.C., had this to say to me. “Obviously we will work with our partners in the biodiesel industry to show New Mexico, as we’ve shown in other states, that biodiesel is a working part of an all-of-the-above energy diversity and security strategy.”

Canada

The federal government is pulling support on the emergence of a growing biodiesel industry in Canada by phasing out its $1.5 billion ecoENERGY Biofuels Program subsidies by 2017. “The program closed to new applicants in March 2010 and we will not be reopening the program,” said Natural Resources Canada Minister Joe Oliver in an email statement to Biodiesel Magazine. Companies already participating in the program will continue to receive support “as long as they follow their contribution agreements,” Oliver said. “This program has helped create a strong ethanol industry in Canada that is supporting farmers across Canada. Unfortunately, the biodiesel program has not seen the level of success of the ethanol aspect of the program. Refiners of diesel have indicated that many of the biodiesel products currently produced in Canada do not meet their fuel preferences and are not easily blended with diesel. Currently, most of the biodiesel produced in Canada and supported under the ecoENERGY Biofuels Program is exported to the United States, where it can receive further benefits through American blending incentives. In this time of fiscal restraint, our government has committed to ensuring that we are balancing our priorities with challenging global fiscal realities.” What’s next, rescinding the federal and provincial biodiesel mandates? Let’s hope not.

Spain

After Spain’s long fight to protect its domestic biodiesel producers from cheap, imported Argentine biodiesel, the Spanish government did a “180” by announcing last week that it was drawing down biodiesel targets from 7 percent to 4.1 percent. “It is considered appropriate to revise the mandatory consumption targets for biofuels in 2013 and thereafter, setting targets that minimize the fuel prices and ensure some stability in the sector,” the Spanish Ministry of Industry, Energy and Tourism stated. I can say this: one way to provide instability to the biodiesel fuel sector in Spain is to pull out all stops to protect your domestic industry and then turn around and cut the nation’s biodiesel mandate by nearly a half. This, like many of the activities reported here today, doesn’t make any sense. But I suppose when Big Oil writes energy policy, it doesn’t have to make sense—it only has to make obscene profits for the authors.