Missouri Sees Sharp Increase in Biofuels Investors

John Davis

Another indicator of the viability of ethanol and biodiesel might be the increasing numbers of investors in the alternative fuels. In Missouri, for example, the Secretary of State’s office reports the number of the number of biofuels investments filed with the state increased from just five in 2005 to 15 last year. In this Associated Press story, government requirements are seen as the driving reason for the increase.

Federal clean air requirements have people seeking cleaner-burning additives for fuel such as ethanol and biodiesel. At the same time, ethanol’s main competitor – MTBE – has been phased out because it contaminates water supplies faster than other fuels as it dissolves in water rather than separating like oil.

Plus, states and the federal government have set benchmarks for using more alternative fuels. A federal 2005 energy law, championed by former Sen. Jim Talent, R-Mo., required the United States to use 7.5 billion gallons of renewable fuels such as ethanol and biodiesel by 2012. A Missouri law will require a 10 percent ethanol blend in most gasoline, effective next January, as long as its price doesn’t exceed traditional fuel.

On top of all that, there is a mix of state and federal subsidies for ethanol and biodiesel refineries and state tax credits for farmers who supply the agricultural products that are turned into fuel. This year’s state budget has almost $14 million of biofuels incentives – more than double the amount from two years ago.

While Missouri does have its own burgeoning ethanol and biodiesel industries, most of the companies that sought permission with the Secretary of State’s office to solicit Missouri investors were from out of state.

Biodiesel, Ethanol, Government