Tapping fields of gold

Backed by governor and hailed by Bush, burgeoning biodiesel industry may be ready for a breakthrough

Lewiston Morning Tribune
February 12, 2006

By Joel Mills of the Tribune

Raw biodiesel flows from a small crusher owned by MaryJanesFarm near Moscow. Farm Vice President Nick Ogle calls the farm's effort to produce homegrown fuel an experiment. But recent developments have given the clean-burning alternative fuel a boost, putting it into position to become big business in the region.

MOSCOW -- The early-morning cold is giving Nick Ogle's new oilseed crusher fits.

While the winter sun turns icy fog into rising steam, the temperature inside Ogle's blue pole barn south of Paradise Ridge is still freezing.

Ogle, vice president of MaryJanesFarm -- and husband of founding organic farmer MaryJane Butters -- mixes the oil from the $50,000 crushing setup with regular diesel to make biodiesel.

The 20 percent mixture -- commonly referred to as B20 -- is cleaner burning than straight diesel and fuels various vehicles around the farm.

After some hiccups and about 10 minutes of preheating the crusher, oil begins to slowly flow into a catch barrel. Ogle and his employees will treat the deep-golden liquid with methanol and mix it themselves.

"It just makes sense to be able to grow your own fuel," Ogle says as the German-made crusher picks up speed.

But he is quick to admit the crusher is an experiment, and the farm is putting more resources into it than it is getting out.

"By the time you pay for the fertilizer and all the components that go into it -- electricity, the methanol, take the glycerols out, the things that don't burn -- it's fairly expensive."

But after years of research and speculation about the real value homegrown fuel could bring to the region's faltering ag economy, biodiesel may be poised to jump from laboratory and pole barn to the big time.

Biodiesel has been touted as an environmentally friendly alternative to regular diesel that could help reduce Amer-ica's dependence on foreign oil and help area farmers out of economic doldrums.

Private industry is more than interested. Arizona's Wi BioFuels wants to invest millions in a biodiesel plant across from Clarkston at the Port of Wilma.

And with last year's natural disasters and the resulting $3-per-gallon gasoline, government has jumped aboard the alternative fuels bandwagon.

President Bush made them a centerpiece of his recent State of the Union address, even though he proposed cutting research funding in the same week.

And several proposals to kick-start Washington's biodiesel production are winding through the Legislature.

The two most likely to pass are Gov. Chris Gregoire's mandate of 2 percent biodiesel in diesel by mid-2007 and $9 million in emergency loans to build four seed-crushing plants in eastern Washington.

Whitman County commissioners are getting behind biodiesel as well. They recently approved $5,000 toward the purchase of a demonstration-size crusher similar to MaryJanesFarm's. Five farmers will eventually tow the crusher around the county in a "show-and-tell" to promote the switch from wheat to oilseed for homegrown fuel, says Commissioner Les Wigen.

"It's got to get off the ground," he says from the Hyde-Out in Colfax, a dimly lit den for local aggies. "This is something that can change eastern Washington and rural America."

But many farmers are concerned that local crushers and refineries will have to rely on imported Canadian seed and Midwestern soybean oil for their stocks.

"If our farmers can produce the seed, that's the way to go," Wigen says.

After years of government subsidy, the Midwestern ethanol industry is highly developed and is in a positive economic balance.

Not many think Washington can compete with the biofuel industry in the corn belt. But some think canola, rape and mustard seed can be the cash crop local farmers have never had.

"The Northwest is different from the Midwest," says Endicott-area farmer Read Smith. "We export 80 to 90 percent of what we produce. That's come back to bite us."

Smith was an early proponent of environmentally friendly direct-seed, no-till agriculture. He and his son, Jeremy, own 8,000 acres between St. John and Endicott. Half of that is in wheat, and he'd like to turn a quarter of that into oilseed.

Endicott-area farmer Read Smith and one of his son Jeremy's many farm cats sit atop a 1945 International Harvester TD9 tractor that runs on biodiesel. Smith wants Washington lawmakers to get behind new initiatives that could make growing oilseeds more profitable for both farmers and the environment.

Exporting wheat, peas, lentils, barley and other traditional crops has left farmers at the mercy of the commodities markets, Smith says.

But he thinks if growers can be persuaded to rotate oilseed stocks into their planting regimen, a microeconomy that can set its own prices would emerge.

"We are creating the chicken and the egg," he says.

That would also require that farmers invest in the infrastructure, much like Midwestern farmers do, he adds.

But whoever owns the refineries needs to provide incentives to get local farmers to grow oilseed, he says.

"If they want (nonimported) feed stocks, they need to set their price at a level that guarantees local production."

Another key will be creating viable markets for byproducts like seed meal and glycerin. Farmers would benefit from those sales only if they own a piece of the factory.

University of Idaho scientists say the meal can be used as livestock feed and a natural herbicide, and that glycerin can be sold to the cosmetic and pharmaceutical industries.

Smith favors Gregoire's 2-percent mandate because it would create an instant demand.

"It gives a certainty that the market is for real, so that people will invest and that farmers like myself will take a cooperative, equity position in a facility," he says.

And with ever-expanding biofuel production worldwide, he says demand will keep growing.

"The demand for the finished product, energy, is huge," Smith says. "We've (Washington farmers) never had a product we can raise with unlimited demand. Finally, we have one."

Another thing Smith says the Northwest economy has never had is sustainability. The wheat market has long been global, and prices have stagnated.

Plus, many say the U.S. Department of Agriculture's Conservation Reserve Program is causing problems for small towns. The program, which pays farmers to turn cropland into rangeland, has upsides for farmers and the environment.

But the lost acreage has put a dent in all the support industries surrounding agriculture, they say.

Wigen says he's seen some area high school enrollments decrease since the program's inception.

Smith says if that community infrastructure and support can be revived, along with economic and environmental sustainability, those towns could prosper again.

"All three of those pieces need to be present long-term in order to survive," he says.

Jackson Davis wanted to jump on the biodiesel bandwagon a couple of years ago, but found it didn't make economic sense.

The latest push for alternative fuels has got the St. John-Lamont area farmer interested again, but he still thinks he's a year or two away from jumping in himself.

"When it comes to the concept of biodiesel, man, I like it," says Davis, who also works as an accountant in Moscow. "But the foundation wasn't there yet."

He says he won't put oilseed crops on a significant portion of his 2,000 acres until there's a demand and a decent price. Prevailing wisdom says that price has to be at least 15 cents per pound. Canola now trades at about half that.

"If it was closer (in price) to soft white wheat, I'd grow it in a second," Davis says.

But with the renewed activity in Olympia, Davis is optimistic biodiesel will get a boost.

Others share Davis' moderate skepticism. Jared Templin is an agronomist and certified crop adviser at the Colfax Grange Supply. He says the biodiesel market could progress significantly, but maybe not as fast as some hope.

"But if it catches on and there's enough biodiesel demand to keep the price up, I think a lot of (farmers) will turn to it," Templin says. "I think it's going to take something like (crushers and refineries) to get it going."

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Mills may be contacted at jmills@lmtribune.com