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Iowa company challenges study claiming B5 is best

By DOUG SCHMITZ
Iowa Correspondent

AUDUBON, Iowa — Biodiesel proponents find themselves on opposite sides of an increasingly heated debate over pending legislation being considered before the Iowa House Agriculture Committee, that would mandate the use of 5 percent biodiesel, or B5, in the state’s diesel supply.

If approved, Iowa, which leads the nation in renewable fuel production, would join Minnesota in becoming the second state to require the use of B5 in vehicles. The debate over the proposed law stemmed from findings in a report released by the Iowa Soybean Assoc. (ISA), called the Two Million Mile Haul study, which the ISA said supported the use of B5 in Iowa.

But on March 1, ISA President Delbert Christensen hand-delivered a letter to the committee and other state legislators, addressing information presented by opponents of the proposed requirement. In the letter, he took special issue with the use of testimony by Steve Lursen of Decker Trucking Co., who Christensen said cited the study to support the trucking company’s opposition to B5.

“Iowa soybean farmers, through their checkoff, have invested millions of dollars in research, and the fuel is of high quality, as witnessed by engine manufacturers’ warranties,” Christensen wrote. “While we can debate the merits of a biodiesel requirement, Iowa farmers cannot allow political opponents to damage the reputation of this fuel, which is used year-round by thousands of farmers and thousands of truckers with great results.”

Although a fleet of Decker’s trucks was used in the two-year, over-the-road study that compared biodiesel to petroleum diesel, the Fort Dodge, Iowa-based company is now challenging the ISA’s results. It issued a position letter to dispel what company officials said is confusion about the study results and their stance on the proposed B5 legislation.

In response to the company’s questioning of the results, Decker is claiming the ISA hid important data to support the state’s proposed biodiesel mandate, which was approved by the Iowa Senate in spring 2009.

“The Iowa Biodiesel Board, ISA and REG (Renewable Energy Group) are promoting the Two Million Mile Haul as a success,” said Lursen, a special projects manager who headed the study for Decker. “But, if the report is read, the true results are buried in a mountain of data.”

As a result of Decker’s protest, Lursen said it was no coincidence that the company hadn’t been invited to participate in study promotions.

“The sponsors are fully aware of our stance” he said. “Even more disheartening is confusion that’s being spread to suggest Decker Truck Line, Inc. supports the mandated use of biodiesel. This could not be further from the truth.”

But Christensen said he wanted to clarify to Iowa lawmakers that the ISA has never portrayed Decker Trucking as supporting the Iowa House proposal, which Decker had been claiming the ISA did, regarding the study results.

Decker officials said the proposed mandate is a significant concern because trucking company profitability is measured in cents per mile – especially since fuel is their second-largest operating expense, and the Two Million Mile Haul, they added, showed that biodiesel isn’t a cost-effective solution at this time.

According to Decker representatives, at the beginning of the study, biodiesel was cheaper than petroleum diesel and those savings helped off-set some of the issues associated with the biofuel. But by the end of the test, biodiesel was significantly more expensive, while delivering decreased performance, officials said.

That trend continues, with a gallon of biodiesel currently costing $3.83 and petroleum diesel priced at $2.62/gallon.

Besides the ISA and Decker, other study participants were Caterpillar Engine Co., Iowa Central Community College, the National Biodiesel Board (NBB), REG and USDA Rural Development.
In 2006, Iowa lawmakers created the Iowa Renewable Fuels Standard (IRFS) to support federal mandates, encourage consumer demand and create the necessary infrastructure to market more renewable fuel in the state. Delia Meier, senior vice president for Iowa 80 Truck Stop and an Iowans for Consumer Fuel Choice (ICFC) representative, said the existing standard has proven effective and created a competitive market position for renewable fuels in Iowa.

“State mandates will corrupt the free market system and place unnecessary burden on Iowa consumers and Iowa retailers,” she said.

Jessica Robinson, director of communications for the NBB, said the group supported the pending mandate because “Iowa has aggressive fuel quality measures, and believe the requirement to use sustainable biodiesel would be successful if implemented.”
But Dawn Carlson, president and CEO for the Petroleum Marketers and Convenience Stores of Iowa and an ICFC spokesperson, said while the group supported the use of renewable fuels, it opposes product mandates that would drive up fuel costs.

“Fuel choices at the pump allow for competition and keeps the price of fuel more affordable,” she said. “Mandating renewable fuel will create upside-down economics, eliminate the checks and balances of fair competition and increase fuel costs for Iowans.”

3/17/2010