Government delays blamed for suspension


Capital Press

Governmental delays have forced an Odessa, Wash., biodiesel plant to drastically reduce its production schedule, the general manager said.

Inland Empire Oilseeds LLC general manager Steve Starr told the Capital Press the plant resumed refining biodiesel and crushing oilseeds July 19. Production was shut down July 9, and 21 employees were laid off.

"At least temporarily, we are back in production and we expect to run intermittently as we sort out the situation," Starr said.

The company now has four employees, and will use several more temporarily as needed.

Part of the reason for the suspension of production was the lack of a published procedure from the Environmental Protection Agency detailing how renewable identification numbers, or RINs, for canola would be handled. Uncertainty over the RINs, which are credits for biodiesel and valuable to biodiesel buyers, dried up the market for canola biodiesel and orders have stopped, Starr said.

The EPA is now accepting public comment on proposed RINs, and the company was able to sell about 40,000 gallons of biodiesel, Starr said.

Another factor in the suspension was the lack of a congressional extension of a $1-per-gallon biodiesel blender's tax credit, which lapsed in January.

Starr said Congress has not renewed the credit despite bipartisan support and virtually no opposition. Congress will consider energy legislation in August, he said.

In light of these situations, the company's primary owners, AgVentures NW LLC-managed farmer cooperatives Odessa Union Warehouse Cooperative and Reardan Grain Growers, and their lender decided they were not in a position to lend additional funding to the company.

Starr said the company will need to attract outside investment to cover equipment and working capital to reach capacity.

"We had a sequence of really difficult events happen back-to-back, both of which are government-related," he said. "It's very frustrating to go from a situation where we were selling everything we could make as fast as we could make it to almost overnight having our orders dry up."

Washington State University crop and soil scientist Bill Pan, coordinator of the university's statewide biofuels project, said the company has the potential to provide a local market for oilseed crops, but it isn't the only market available to growers.

"It's a regional and global market," Pan said. "We're gathering information as to where growers can inquire about selling their canola. There's quite a few outlets that are available."

The prospects are positive for canola pricing, due to weather conditions causing problems in the Canadian canola market, he said.

Starr said the cooperatives in Odessa and Reardan are still receiving canola seed, and farmers are still delivering canola.

If the legislation reinstates the credit incentive, Pan foresees the facilities will return to full strength.

"The timing of legislation seems to be everything right now," he said.

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