Missouri has a mandate to sell gasoline mixed with 10% ethanol. A state senator wants to extend the bio-fuels mandate to include bio-diesel.

Sen. Bill Stouffer (R-Napton) is pushing SB29 that would require a 5% bio-diesel blend be sold in Missouri as long as its price is at or lower than regular diesel. It would allow for "splash blending" and require petroleum distribution terminals to have both regular and bio-diesel on hand at all times.

Stouffer has told the Senate Agriculture Committee that his bill contains provisions to guarantee the quality of bio-diesel. Quality became an issue in Minnesota when it approved a stepped, bio-diesel mandate. Stouffer says the industry learned from the experience in Minnesota and he has incorporated lessons into the bill.

Lobbyist Harry Gallagher with the American Petroleum opposes the bill. He says it has the same main problem the ethanol mandate has: interference with the marketplace.

Bruce Heine with Magellan Pipeline objects to two provisions in the bill. He says the provision that lifts the mandate when the price of bio-diesel drops below the price of regular diesel creates an environment in which the mandate starts and stops regularly. He says a second provision would force his company to invest $2 million per petroleum distribution terminal to maintain the inventory the bill requires. Heine says it would be much cheaper for his company to transport bio-diesel between its five terminals through pipelines.

Magellan, according to Heine, is considering construction of a $4 billion dollar pipeline from the Midwest to New York to carry bio-fuels to the East Coast. Heine says the company doesn’t oppose bio-diesel; it opposes a bill that is flawed.

The committee has approved the bill and recommends the full Senate pass it.

Download/listen Brent Martin reports (:60 MP3)