You may have heard that everything is bigger in Texas. As a leading biodiesel-producing state, with capacity having grown to more than 280 MMgy in 2007, the old adage rings true. Our biodiesel refineries, much like our petroleum refineries, range in sizes, inputs and locations, but all are cohesively focused on making sure our local industry continues to solidify itself as the biodiesel capital of North America.

The Biodiesel Coalition of Texas Inc. is a non-profit corporation created by biodiesel pioneers and industry leaders to ensure that biodiesel receives favorable treatment by state regulatory agencies and the Texas legislature. After completing our second annual Texas Biodiesel Conference and Expo in Austin in early September, the unified BCOT team continues to develop strategies and advocacy platforms that demonstrate the environmental and economic benefits of biofuels.

Among the pressing topics highlighted at the conference were the three major challenges the Texas biodiesel industry contended with in 2007, including an ongoing air quality debate, the recent expiration of an important state production incentive left unfunded by the Texas legislature, and a complete lack of demand for biodiesel in Texas.

The first issue is a nearly three-year-old threat by the Texas Commission of Environmental Quality's Texas Low Emission Diesel Program to outlaw popular biodiesel blends if the emissions profiles show evidence of an increase in smog-forming nitrogen oxides, or NOx. BCOT continues to work with TCEQ to emphasize that regulations should view low blends of biodiesel as part of the solution-not part of the problem-to Texas air quality challenges. We are hopeful that the TxLED issue will be amicably resolved by early this year.

Second, being an agriculture and energy power, Texas has the infrastructure and know-how to be America's leading biofuel state. Under a former state program, Texas gave 20 cents per gallon to biodiesel producers, but only after collecting 3.2 cents for every gallon they made. The Texas Department of Agriculture estimates producers received roughly $12 million in state money the past fiscal year. The recent loss of this production incentive is a huge blow to the growing local industry at a time when the amount of biodiesel made in Texas has jumped 110 percent in the past year. In light of President George W. Bush's push to increase the renewable fuels standard by a factor of five, the question is not whether or when additional production will be built, but where it will be built. To ensure that new production develops in Texas, the state needs to compete with the more than 30 other state incentive/mandate programs.

The third challenge facing biodiesel in Texas is the lack of a market for the fuel in its own state. With the cost to produce biodiesel at record levels due almost entirely to increasing feedstock costs, local producers are being forced to look overseas for product sales in order to stay in business. With a long-term goal of providing economically viable fuel domestically, the industry requires a state program that supports standards for existing biodiesel capacity in Texas while also being progressive enough to encourage continued capacity growth. It is imperative for the Texas biodiesel industry to secure a targeted state fuel standard that sets an ambitious, yet achievable, goal for the future production of biodiesel in Texas.

As a group, the Texas biodiesel industry faces its own unique challenges but also shares in working through the same issues that continue to plague all biodiesel interests throughout the United States. We, as an industry, are committed to working together with local, state and federal legislative bodies, agencies and both the private and public sectors to ensure that biodiesel becomes an established fuel for America.

Jennifer E. Ligums is co-founder and vice president for BioSelect Fuels, a developer and operator of biodiesel facilities, and spokesperson for the Biodiesel Coalition of Texas. Reach her at jligums@bioselectfuels.com or (281) 768-4912.