By Sam Gray
Director of Operations
Smoky Mountain Biofuels
We at Smoky Mountain Biofuels are pleased to see the initial acceptance of Senate Bills 1272 and 1277. Certainly (SB 1272), an ASTM standard for biodiesel protects our state's consumers from inferior product, and establishes a benchmark for all North Carolina biodiesel providers wishing to tap the proposed "Biodiesel Incentive Fund." In addition, the logic of Senate Bill 1277 covers North Carolina diesel fleets through manufacturer's warranties that their vehicles shall safely run biodiesel blends such as B20. These bills are an excellent start to a greater acceptance of statewide biodiesel usage.
Momentum must start somewhere, and we are grateful for our state's progressive thinking to create the necessary standards to successfully embrace biodiesel. However, I cannot stress enough that these standards must be followed with meaningful incentives to aid an industry truly in crisis based on recent IRS rulings, and under attack from South Carolina biodiesel produced using a slew of state incentives.
In an earlier statement, I mentioned the recent IRS ruling that provides our federal Volumetric Excise Tax Credit ($1.00/gallon using virgin oils) to "Big Oil" mainstays such as ConocoPhillips. The shameful ruling allows large refineries to blend virgin oils and animal proteins directly into their crude refining stream. The result is a product termed "renewable diesel," which does not have to pass ASTM standards before reaching the end user. Furthermore, refineries do not have to bear the additional infrastructure cost of traditional biodiesel refining equipment to integrate biodiesel into their product mix. This stifles both traditional financing and venture capital avenues for securing a future for existing biodiesel plants. We are praying for the reversal of this ruling, or biodiesel defined by ASTM and endorsed by your Senate Bill 1272 will be replaced in the short term by "renewable diesel," as the American consumer does not understand the difference at this time. The richest companies in the world, operating in some of the most instable places on our planet, will be even further subsidized by the American taxpayer. All this, and nothing to bolster jobs and keep dollars at home.
Concerning our neighbors to the south, South Carolina has passed excellent legislation favoring the development of biodiesel refineries. They boast the largest refinery in the south at this time (Carolina Polymer), and their incentives allow both retailers and producers to benefit from increased biodiesel production. Most of our state's "Biodiesel Producers" are purchasing their biodiesel from South Carolina, since it can be purchased cheaper there than made here. Our proposed "North Carolina Biodiesel Fund" would truly equal the playing field and encourage more statewide production of biodiesel. By creating the incentive fund, North Carolina is poised to meet the anticipated mandates for state vehicles to run B20 or greater, all at a cost (untaxed) equal to or less than the wholesale rack prices from Spartanburg, SC. Consumers and government fleets benefit from the well priced biodiesel that negates South Carolina's lesser excise taxes. Truckers are encouraged to fuel up with B20 in North Carolina when travelling through our state, not waiting to get to South Carolina, Tennessee, or Georgia to take advantage of their cheaper fuel, thanks to their excise tax rate. There is no reason for truckers to fuel when passing through North Carolina, and this guarantees us less dollars spent at retail while increasing the harmful emissions and particulates associated with petroleum diesel. This scenario will never change unless you target diesel, the fuel that moves the trucking transportation sector. The only environmental way to do so is to endorse biodiesel, which would then lead to favoring "state produced" biodiesel to reap the windfalls of jobs and INCREASED STATE EXCISE TAX COLLECTIONS. That's right, a biodiesel incentive fund would actually INCREASE North Carolina Department of Revenue collections by encouraging the largest consumers (18 wheelers) to fuel in state, rather than waiting to arrive in any one of our neighboring states.
The above logic must override legislator fear of decreased road tax collections, and serves our residents over the long term both in air quality and ample money for our impressive road system. This logic also supports House Rep. Pricey Harrison's legislation to negate the state tax on North Carolina biodiesel production, since the overwhelming portion of B20 is still petroleum diesel. The diesel portion still owes taxes at the prevailing state tax rate, with the benefits unique to biodiesel. The "Biodiesel Incentive Fund" in conjunction with Rep. Harrison's "reduction of the state excise tax" will undoubtedly make North Carolina the east coast's leader in biodiesel production. Both pieces of legislation will ensure the North Carolina biodiesel industry's success at a time when our long term viability is threatened by both "Big Oil" and reluctance by state legislators to fully embrace our state's "Strategic Plan" for biofuels leadership.
I will end this plea from one of your own biodiesel producers with facts gained from the latest issue of "Field and Stream" magazine (May 2007). The facts relate to the extraordinary challenges posed by global warming, and reveal a 90% degree of certainty that human-generated greenhouse gases account for most of the global temperature rise seen over the last fifty years. Our state has a proud heritage of outdoorsmanship, and we cherish our waters, forests, and farmland for the bounty they deliver yearly. The most recent "Intergovernmental Panel on Climate Change" (IPCC) report from February 2007 shows that a 3.6 degree increase in global temperatures over the next century would cause massive species extinctions and melting of ice sheets. In addition, stream habitat in the Rocky Mountains would suffer an approximately 50% reduction of trout with an air temperature increase of 4.8 degrees. Global warming would furthermore lessen duck populations throughout the Midwest by up to 69%. The hunting season of the Arctic's Inuit people has already been reduced by 50% thanks to global warming.
Finally, over 70% of sportsmen (National Wildlife Federation poll) feel global warming is a threat to fish and wildlife. Please keep in mind that the effects of global warming are most noticeable at the poles, and will work their way toward the middle as we approach this "critical mass" of greenhouse gases. We are well underway, and it is beyond a legislators "civic duty" to DO SOMETHING NOW to encourage alternatives to the status quo. Understand that we are only a temporary bandage to the aforementioned problems, and we greatly need your assistance to ensure our viability. We can deliver immediate gains rather than banking on the next "holy grail" of transportation (i.e. hydrogen), and we can deliver these gains with your assistance. Please value your streams, your air quality, and your future. Support Sen. Snow's and Rep. Harrison's quality pieces of legislation now without delay, and give us a chance so that we can provide the fuel transition North Carolina has envisioned and so badly needs.
Director of Operations
Smoky Mountain Biofuels
We at Smoky Mountain Biofuels are pleased to see the initial acceptance of Senate Bills 1272 and 1277. Certainly (SB 1272), an ASTM standard for biodiesel protects our state's consumers from inferior product, and establishes a benchmark for all North Carolina biodiesel providers wishing to tap the proposed "Biodiesel Incentive Fund." In addition, the logic of Senate Bill 1277 covers North Carolina diesel fleets through manufacturer's warranties that their vehicles shall safely run biodiesel blends such as B20. These bills are an excellent start to a greater acceptance of statewide biodiesel usage.
Momentum must start somewhere, and we are grateful for our state's progressive thinking to create the necessary standards to successfully embrace biodiesel. However, I cannot stress enough that these standards must be followed with meaningful incentives to aid an industry truly in crisis based on recent IRS rulings, and under attack from South Carolina biodiesel produced using a slew of state incentives.
In an earlier statement, I mentioned the recent IRS ruling that provides our federal Volumetric Excise Tax Credit ($1.00/gallon using virgin oils) to "Big Oil" mainstays such as ConocoPhillips. The shameful ruling allows large refineries to blend virgin oils and animal proteins directly into their crude refining stream. The result is a product termed "renewable diesel," which does not have to pass ASTM standards before reaching the end user. Furthermore, refineries do not have to bear the additional infrastructure cost of traditional biodiesel refining equipment to integrate biodiesel into their product mix. This stifles both traditional financing and venture capital avenues for securing a future for existing biodiesel plants. We are praying for the reversal of this ruling, or biodiesel defined by ASTM and endorsed by your Senate Bill 1272 will be replaced in the short term by "renewable diesel," as the American consumer does not understand the difference at this time. The richest companies in the world, operating in some of the most instable places on our planet, will be even further subsidized by the American taxpayer. All this, and nothing to bolster jobs and keep dollars at home.
Concerning our neighbors to the south, South Carolina has passed excellent legislation favoring the development of biodiesel refineries. They boast the largest refinery in the south at this time (Carolina Polymer), and their incentives allow both retailers and producers to benefit from increased biodiesel production. Most of our state's "Biodiesel Producers" are purchasing their biodiesel from South Carolina, since it can be purchased cheaper there than made here. Our proposed "North Carolina Biodiesel Fund" would truly equal the playing field and encourage more statewide production of biodiesel. By creating the incentive fund, North Carolina is poised to meet the anticipated mandates for state vehicles to run B20 or greater, all at a cost (untaxed) equal to or less than the wholesale rack prices from Spartanburg, SC. Consumers and government fleets benefit from the well priced biodiesel that negates South Carolina's lesser excise taxes. Truckers are encouraged to fuel up with B20 in North Carolina when travelling through our state, not waiting to get to South Carolina, Tennessee, or Georgia to take advantage of their cheaper fuel, thanks to their excise tax rate. There is no reason for truckers to fuel when passing through North Carolina, and this guarantees us less dollars spent at retail while increasing the harmful emissions and particulates associated with petroleum diesel. This scenario will never change unless you target diesel, the fuel that moves the trucking transportation sector. The only environmental way to do so is to endorse biodiesel, which would then lead to favoring "state produced" biodiesel to reap the windfalls of jobs and INCREASED STATE EXCISE TAX COLLECTIONS. That's right, a biodiesel incentive fund would actually INCREASE North Carolina Department of Revenue collections by encouraging the largest consumers (18 wheelers) to fuel in state, rather than waiting to arrive in any one of our neighboring states.
The above logic must override legislator fear of decreased road tax collections, and serves our residents over the long term both in air quality and ample money for our impressive road system. This logic also supports House Rep. Pricey Harrison's legislation to negate the state tax on North Carolina biodiesel production, since the overwhelming portion of B20 is still petroleum diesel. The diesel portion still owes taxes at the prevailing state tax rate, with the benefits unique to biodiesel. The "Biodiesel Incentive Fund" in conjunction with Rep. Harrison's "reduction of the state excise tax" will undoubtedly make North Carolina the east coast's leader in biodiesel production. Both pieces of legislation will ensure the North Carolina biodiesel industry's success at a time when our long term viability is threatened by both "Big Oil" and reluctance by state legislators to fully embrace our state's "Strategic Plan" for biofuels leadership.
I will end this plea from one of your own biodiesel producers with facts gained from the latest issue of "Field and Stream" magazine (May 2007). The facts relate to the extraordinary challenges posed by global warming, and reveal a 90% degree of certainty that human-generated greenhouse gases account for most of the global temperature rise seen over the last fifty years. Our state has a proud heritage of outdoorsmanship, and we cherish our waters, forests, and farmland for the bounty they deliver yearly. The most recent "Intergovernmental Panel on Climate Change" (IPCC) report from February 2007 shows that a 3.6 degree increase in global temperatures over the next century would cause massive species extinctions and melting of ice sheets. In addition, stream habitat in the Rocky Mountains would suffer an approximately 50% reduction of trout with an air temperature increase of 4.8 degrees. Global warming would furthermore lessen duck populations throughout the Midwest by up to 69%. The hunting season of the Arctic's Inuit people has already been reduced by 50% thanks to global warming.
Finally, over 70% of sportsmen (National Wildlife Federation poll) feel global warming is a threat to fish and wildlife. Please keep in mind that the effects of global warming are most noticeable at the poles, and will work their way toward the middle as we approach this "critical mass" of greenhouse gases. We are well underway, and it is beyond a legislators "civic duty" to DO SOMETHING NOW to encourage alternatives to the status quo. Understand that we are only a temporary bandage to the aforementioned problems, and we greatly need your assistance to ensure our viability. We can deliver immediate gains rather than banking on the next "holy grail" of transportation (i.e. hydrogen), and we can deliver these gains with your assistance. Please value your streams, your air quality, and your future. Support Sen. Snow's and Rep. Harrison's quality pieces of legislation now without delay, and give us a chance so that we can provide the fuel transition North Carolina has envisioned and so badly needs.
