Web exclusive posted Feb. 6, 2008, at 10:15 a.m. CST
Most people never bear witness to all that's involved in making policy. Good policy is not made on the floors or committee rooms in Congress and Legislatures, nor is good policy made over lunch with lobbyists. By the time issues come up for discussion by lawmakers, most have had input from numerous groups over the course of several months. Good policy is made when stakeholders get together to work out an issue. Though not quite like making sausage, the process isn't glamorous either. It takes time, patience and brainstorming, and it's only effective when all relevant players are involved.
The Minnesota Biodiesel Task Force knows full well the time and effort involved to bring good policy before the Legislature. The group, which advises the Minnesota Department of Agriculture, was charged with working through the issues and strategies to incrementally move the state biodiesel mandate from the current B2 requirement to B20 by 2015, a goal Gov. Tim Pawlenty set in August 2007. With the deadline of Feb. 12, which is when the 2008 State Legislature convened, the task force needed consensus amongst its members representing feedstock suppliers, distributors, producers, blenders, consumers and government officials.
The task force last met in January. "The goal of this meeting is to bring stakeholders together-we'll never get consensus," said Kristen Weeks-Duncanson of the Minnesota Soybean Growers Association and chair of the task force at the January meeting. Getting the task force to agree on a recommendation meant meetings, presentations, proposals, comments, revisions, comments and more revisions. The task force met in September, October, November, and finally in January before it presented its recommendation to the Next Generation Energy Board in late January. At the November meeting, a template for the B20 legislation was outlined based on discussion thus far. Members were asked to submit comments on the proposal, from which another template was drawn and discussed in January.
The meeting, which was held on Jan. 7, didn't have the conflict one might have expected from a group with such a variety of vested interests. This may have been a product of "Minnesota-nice," but was more likely the result of members working toward the best solution. By the time the group met in January, most of the discussion on the merits of the proposal had already taken place. With a proposal going forward, the stakeholders were there to ensure they could live with the contents of the recommendation. By this time, the devil was in the details.
The task force has been through this before. It was formed in March 2003 to help the state carry out its B2 requirement by September 2005. The issues the task force dealt with at that time differed significantly from today's issues. At that time, the primary issue was facilitating production capacity. Fifty percent of the market, which was about 8 MMgy of production capacity, needed to be operating in Minnesota before the mandate could be enacted. As the fuel was blended, the task force also addressed product quality issues. Since then, the task force has helped promote and educate possible biodiesel developers, marketers, consumers and manufacturers.
This time, stakeholders discussed issues including product quality, original engine manufacturers' (OEMs') acceptance levels, blender concerns, product supply, higher blend users experiences, the Department of Commerce Weights and Measures Division on enforcement issues, labeling, product/usage education and ASTM specifications for biodiesel.
The Details
The crux of the task force recommendation develops specific recommendations for moving to B5 by a specific date, and then outlines the process for implementing future ramp ups. The governor's proposal called for Minnesota to move to B5 by 2008, B10 by 2011, B15 by 2013 and B20 by 2015.
The task force used the governor's proposal as a launching pad for discussion. Weeks-Duncanson led the discussion in a Socratic manner, asking questions to spark debate and keeping the discussion on track. The major question was, can the state move to B5 by 2008? According to the recommendation, there is general agreement among the task force members that the state should move to B5 because adequate fuel and feedstock supply exist, adequate specifications exist, as do testing protocol, fuel quality programs and OEMs' warranties for B5.
Regardless of these readiness factors, some at the January meeting took issue with the initial implementation date of July 1, 2008. Ron Obermoeller of the Minnesota Soybean Processors said the implementation date to move to B5 shouldn't be before the spring of 2009 because many issues remain unresolved, and because it's important to understand recent federal legislation. "The Farm Bill and Energy Bills are bigger than the Bible," he said. "Have patience and get it done right. Biodiesel doesn't need any more black eyes."
Obermoeller also wanted to extend implementation because of a lack of blending terminals. Specifically, consumer issues in southwest Minnesota are likely to crop up due to the fact that the terminal in Sioux Falls, S.D., doesn't have blending equipment.
Bruce Heine of Magellan Midstream Partners LP said his company has no current plans to invest an estimated $1.4 million in biodiesel infrastructure at that terminal, regardless of the mandate. Because of this, some questioned the rationale to extend the deadline if there were no infrastructure plans. "Are we willing to extend the deadline because a handful of people can't make it work?" asked Bill Beukema of SoyMor, a biodiesel production facility in Albert Lea, Minn. "There are no problems in a lot of places."
Beyond the terminal, the group concluded that smaller infrastructure would likely need to be installed or updated across the state. This was the selling factor. It's likely that the bill wouldn't be passed until the end of May, which wouldn't give much time for infrastructure modifications. Because a winter start wouldn't be preferable either, the task force agreed to push back the start date to May 1, 2009. "It gives us the opportunity to digest the federal legislation and time for infrastructure installation," Weeks-Duncanson said.
The plan to move beyond B5 was not as clear cut. "The taskforce is overwhelmingly supportive that the state can go to B5 without incident," Beukema said. "We don't have the same unanimous opinion from B5 to B10 without blend standards." While some in the group wanted to set definitions for the standards, it was decided to wait on ASTM and the U.S. DOE to set the standards.
Blend standards should be just one of the triggers or benchmarks met before the state transitions to a higher blend, said Jeremy Bezdek of Flint Hills Resources LP. Rather than assume, he advocated using a checklist or trigger program to make sure everything is ready to move up in blends. "There was no checklist to go to B2 and we had problems," he said. "The dates are irrelevant. A lot will change between now and then. I'm not comfortable with setting any dates. The goal should be to move along when everyone is comfortable to move along."
Others found that unrealistic. "If there's no goal, we'll never get there," said Douglas Peterson of the Minnesota Farmers Union. Kevin Paap of the Minnesota Farm Bureau said there were two choices of implementation: do it in the right manner, or do it in the timely manner (and preferably both right and early).
To solve the issue, the task force concluded that setting dates was necessary to give stakeholders direction and guidance about issues like building capacity and working with OEMs on warranties. Rather than reinvent the wheel, the task force adopted language from similar legislation. Like the state's renewable electricity standard, the B20 legislation should set percentage goals with restrictions and parameters, and let an administrative authority and the industries work on meeting the goal without additional legislative action required.
The task force kept the governor's proposal to guide activity between increases (10 percent by 2011, 15 percent by 2013 and ultimately 20 percent by 2015), but made increases subject to certification by a panel of commissioners that specified trigger conditions are met.
The suggested commissioners-agriculture, pollution control and commerce-would have the authority to delay an increase in blending if the following trigger conditions are not met:
- An ASTM specification, or federal standard, for that blend level that adequately address Minnesota's climate challenges
- Adequate sources of feedstock and production capacity
- Adequate supply and availability of in-spec biodiesel fuel
- An adequate testing and enforcement protocol to ensure B100 fuel quality at the blended fuel level by the Weights and Measures Division
Finally, the task force suggested a clause to prevent clumping of implementation dates. No more than one year-round increase would be allowed, and the implementation must begin in the warmer months. The task force recommended significant notification of increases as well. The blend increase must take place at least nine months after the panel's decision, during which time notice would be sent to the governor's office and published in the state register.
Many other issues were discussed by the task force, including fuel quality, biodiesel blending infrastructure grants, weights and measures, wholesale/retail compliance, sampling outside the state, and the role of the task force. Each issue was discussed until the group was satisfied. Weeks-Duncanson had said consensus could not be reached, but the agreements reached were certainly a fine example of stakeholder inclusion.
Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at amcelroy@bbibiofuels.com or (701) 738-4962.
Minnesota Biodiesel Task Force members:
Tim Gerlach, American Lung Association of Minnesota
Thomas Byrne, Byrne & Company Ltd.
Don Olson, CHS Inc.
Jeremy Bezdek, Flint Hills Resources LP
Charles Neece, Farmers Union Marketing & Processing Association
Kevin Paap, Minnesota Farm Bureau
Douglas Peterson, Minnesota Farmers Union
Robert Krogman, Minnesota Petroleum Marketers Association
Kristin Weeks-Duncanson, Minnesota Soybean Growers Association
Lance Peterson, Minnesota Soybean Growers Association
Ron Obermoeller, Minnesota Soybean Processors
Jeremy Estenson, Minnesota Trucking Association
Bill Beukema, SoyMor
Kelly Strebig, University of Minnesota Center for Diesel Research