The people who started what's now the largest biodiesel refinery in the state are planning what could be the largest such plant in the nation, in the heart of Western Washington's depressed timber country.
Imperium Renewables, the parent company of Seattle Biodiesel, announced Tuesday that it hopes to complete a refinery in Grays Harbor County by the end of next year that could produce as much as 100 million gallons a year of diesel fuel made from plants, a vast increase in the state's production.
But it would probably be of little immediate benefit to Washington farmers, because the new refinery would be fed largely by palm oil from Malaysia and soybean oil from elsewhere in the U.S.
Imperium Renewables' announcement coincided with its signing of a lease with the Port of Grays Harbor to build the $40 million refinery on port-owned land on the border of Hoquiam and Aberdeen.
The project has attracted money from Microsoft co-founder Paul Allen, whose investment company, Vulcan Capital, is backing it, said Imperium President John Plaza. Two California venture-capital firms are the other major investors, he said.
For Grays Harbor, which has suffered economic loss from a slowdown in the timber industry, the project could mean 250 to 350 construction jobs plus 50 long-term jobs, according to Imperium.
The Legislature this year passed a law requiring that by 2008, all diesel sold in Washington each year must be 2 percent biodiesel, hoping to create a market for Washington's crops and eco-friendly fuel.
Biodiesel, made from processed vegetable oil, produces less air pollution than petroleum-based diesel. Proponents say it also makes less carbon dioxide, a gas linked to global warming.
With the recent jump in fuel prices, biodiesel is now also slightly cheaper than regular diesel at Seattle-area gas stations.
Currently, Seattle Biodiesel's refinery in Seattle is the largest in the state, at 5 million gallons a year. The capacity of the Aberdeen plant would be far larger than what's now used in Washington. But Plaza said he expected that it would supply markets all over the West Coast.
The company isn't immediately planning to buy Washington-grown canola oil because of the price, Plaza said.
"We have to be competitive with diesel," he said.
But he added that the company will consider buying from local farmers, who might be encouraged to grow the seeds when they see a firmly established market for them.
"They just have to be competitive with foreign [vegetable] oil," Plaza said.
The refinery could help create a more stable state biodiesel industry, said Matt Steuerwalt, a senior energy policy adviser to Gov. Christine Gregoire. Now there is little infrastructure to make the fuel.
But the project also could hurt smaller biodiesel plants proposed in Eastern Washington because it would hold down prices and meet demand for biodiesel, said Chad Kruger of Washington State University's Climate Friendly Farming project.
But Bruce Nave, an Arizona businessman looking to build a biodiesel plant in Whitman County, predicted the Grays Harbor project's use of foreign palm oil could make it less attractive to consumers.
"We're trying domestically to get off imported fuels, whether or not it's a renewable fuel or petroleum," he said.
The plan to use Malaysian palm oil also raises questions for some about the environmental benefits, because rain forests in Malaysia are being cleared for palm-tree plantations, said Brant Olson, of the environmental group Rainforest Action Network.
Plaza said Imperium Renewables will try to make sure its palm oil comes from sustainable palm plantations.The Seattle Times
