Biofuel boost: Efforts under way to promote alternative fuels in New England
New England policymakers are floating ideas such as tax incentives to help boost alternative energy business in the region, and even committing to the use of biofuels-based state vehicles to lead by green example.
Until these ideas and policies can clear a complex web of federal, state and local hurdles, however, too many alternative energy companies still won't benefit. At least not yet. While there is still work to be done, there's plenty of movement particularly in Massachusetts and Connecticut to help support fledgling alternative energy companies and keep them here in New England.
Earlier this month, Connecticut Gov. M. Jodi Rell asked state officials to make recommendations by July 2007 about how to increase the state government's use of alternative energy vehicles and plan for an increased demand for alternative fuel pumping stations.
Last week, Ian Bowles, Massachusetts secretary of energy and environmental affairs, said the administration is devising a similar plan to encourage the executive branch to purchase alternative fuel vehicles. Administration officials declined to offer further details.
Both opportunities, however, may elude some alternative fuel companies, such as Easthampton-based Greasecar Inc.
For Greasecar, which specializes in technology to adapt diesel fuel cars to accept vegetable oil as fuel, the higher demand could mean a boost in business. But vegetable oil is not a certified biofuel by the U.S. Department of Energy, U.S. Environmental Protection Agency or Bay State energy regulatory agencies.
Greasecar has begun lobbying federal and state officials to win approval for vegetable oil, said Jeremie Spitzer, Greasecar general manager. Without the certification, Greasecar would have difficulty competing for municipal contracts to convert government vehicle fleets because government contracts must adhere to federal and state guidelines regulating biofuels.
"We want to grow and add jobs in Massachusetts, but we would need a level playing field," said Spitzer.
Greasecar, which was founded in 2000 and employs 11 people, has 3,500 customers in all 50 states, said Spitzer. Its technology is designed for use on diesel cars. Drivers must collect vegetable oil from, for instance, local restaurants and then process the oil at home using a Greasecar filtration system.
The technology is a two-part system, which includes a heating and filtration kit to fit a 55-gallon drum. Once the oil is cleaned it is pumped into the car. A separate device, which includes a digital display, is installed on the car to filter the oil further and monitor fuel levels and temperature.
The average cost of the devices -- plus installation -- is $2,500. But the per-gallon cost of vegetable oil cost is $1.95 per gallon, making it an attractive alternative to diesel fuel and regular gasoline, which are hovering nationwide at costs of $2.90 per gallon and $3.10 per gallon, respectively, according to data from the American Automobile Association.
On the tax incentive front, meanwhile, one Massachusetts lawmaker, freshman state Sen. Benjamin Downing, D-Pittsfield, has proposed a tax incentive for renewable energy technology companies that create 10 or more jobs in the Bay State. The proposal is an amendment to an existing program eligible to biotechnology, medical devices and marine sciences technology companies.
The measure would benefit companies such as Pittsfield-based Berkshire Biodiesel LLC, which was founded in 2006. Earlier this month, the company revealed plans to build a $50 million biofuel manufacturing plant. The plant is expected to generate as many as 30 jobs once construction is completed in 2008, said Lee Harrison, executive vice president of Berkshire Biodiesel.
"Let's face it, the oil industry has had all kinds of incentives for probably 100 years. To get this industry off the ground, we are going to require incentives and we shouldn't be ashamed of that," said Harrison.
While it's too soon to tell if the tax breaks for the fledgling industry would significantly drain state coffers, lawmakers should be cautious about opening the incentive gates too widely, said Michael Widmer, president of Massachusetts Taxpayers Foundation.
"These kinds of credits only make sense if they are instrumental in producing job growth," said Widmer.