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Plenty of soy oil for fuel

The biodiesel industry is slowly coming back to life
after a year without a $1-a-gallon tax credit, and there’s plenty of soybean
oil available when it does.

That’s part of the message that the United Soybean Board
and the National Biodiesel Board shared at the Ag Connect Expo in Atlanta,
Georgia, Saturday.

By the end of 2010, the biodiesel industry was operating
at only 20% to 25% capacity when the tax credit was restored in the lame duck
session of Congress in December, according to Gary Haer, chairman of the
National Biodiesel Board.

“2010 was an extremely challenging year for the biodiesel
industry,” said Haer, who is vice president of sales and marketing for the
Renewable Energy Group in Ames, Iowa.

The industry produced about 350 million gallons of
biodiesel in 2010, but has registered some 1.4 billion gallons of production
capacity with the EPA.

The tax credit is back in effect, but the results haven’t
been instantaneous. The industry is just now starting to revive.

“We just haven’t seen that increase in demand just yet,”
he said. “It’s going to take time for the industry to gear up and rehire.”

The renewable fuel standard (RFS) for the 2007 Energy Act
mandates that the petroleum industry use 800 million gallons of biodiesel this
year and 1 billion gallons next year. And New York City in 2012 will mandate
the use of 20 million gallons of biodiesel with fuel oil used for heating.

But the industry is still struggling with the uncertainty
of having only a one-year extension of the biodiesel tax credit. Haer said that
it supports a bill introduced by Senators Chuck Grassley (R-IA) and Maria
Cantwell (D-WA) that would extend the tax credit for five more years.

Meanwhile, stocks of soybean oil in the U.S. are at
record levels, said Marc Curtis, a Leland, Mississippi farmer who is chairman
of the United Soybean Board.

The Board has approved a campaign to promote the use of
biodiesel, he said. Curtis said that farmers began promoting the use of soybean
oil for fuel in Missouri 20 years ago, an effort that evolved into the creation
of the National Biodiesel Board, based in Jefferson City, Missouri.

“We needed a market for or soybean oil twenty years ago
and we need it today,” he said.





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