New UST law may kill California’s biodiesel business

In a 3-1 vote, California’s State Water Resources Control Board approved legislation that will require motor fuels containing more than 20 percent biodiesel to be stored in above ground tanks. It seems strange that regular petroleum diesel can be stored in underground tanks while “green” fuel must be stored above ground for fear of leakage and possible environmental contamination. But California has a law mandating that underground storage tanks be independently certified as leak proof before they can be used to store  new types of fuel, such as high-grade biodiesels. That testing and certification process can take as long as three years.

The rule came about after California experienced a series of massive environmental disasters stretching back 30 years — disasters that  involved underground storage tanks releasing tons of hazardous liquids into the land and water. Now, to play it safe, the state wants no doubt that even the newest, double-walled tanks can handle new types of fuel without sprouting leaks.

The decision has caused an outcry among gas stations that sell biodiesel, consumers who buy it, companies that make it, and environmentalists who advocate it – all of whom claim the move represents a step backward for California’s green movement.

One biodiesel dealer in San Jose told the Mercury News that the legislation requiring above-ground tanks kills his biodiesel business. “I’m not going to do that. I have no place to put them. And you are talking about $50,000 or more to buy the tank and put the monitoring system on it,” Bob Brown told the Mercury News. He added that he would continue to sell B5 to B20 biodiesel blends, as they can be stored in the USTs, but that he would discontinue selling B99, B50, and other high-grade bio blends.

Bill Rukeyser, a spokesman for the state water board, defended the state’s decision. Rukeyser told the Mercury News that California had to err on the side of caution. “We learned a real lesson. We’ve not forgotten that lesson. We don’t want to repeat that,” Rukeyser said.

Biodiesel consists of plant oils and recycled animal fats. The fuel’s “B” number indicates its percentage of environmentally friendly oils. The higher the number, the purer the fuel is and the cleaner it is to burn.

Although biodiesel has been available in California for 10 years, federal tax incentives led to a surge in the fuel’s popularity between 2005 and 2008, when demand for it grew ten times.