HELENA (AP) – Two companies forming a joint venture to produce up to 100 million gallons of biodiesel by 2010, primarily with Montana crops, will be looking to sign up as many as 50 farmers by next year.
The companies announced their project Tuesday morning with Gov. Brian Schweitzer, and Sens. Max Baucus and Jon Tester.
Farming groups said it’s exciting to have a new opportunity, but many farmers will take a wait and see approach with a crop that is just getting its start in the state.
The companies behind Sustainable Oils said the project plans to use a new strain of camelina, from Seattle-based partner Targeted Growth, that will produce more oil and grows well in dry climates in rotation with other crops like wheat.
The other partner in the deal, Green Earth Fuel of Houston, said it has a new processing plant in Texas capable of making 90 million gallons of biodiesel a year. It plans to look at building a plant in or around Montana in the next couple of years.
The project was hailed as a step toward making camelina a viable source of fuel that will decrease global warming emissions, reduce dependence on foreign oil and help farmers with another profit source.
The companies said they will offer contracts to farmers they say will be competitive with other crops, and will start with 30 to 50 farmers next year — expanding to several hundred farmers in the following years. They expect most of the camelina will be grown in Montana, while some will be grown in eastern Washington, Wyoming and the Dakotas.
“These fellows are going to create a market, and that makes this product competitive with other crops,” said Tester, a grain farmer.
The companies said they will have to convince farmers it makes sense to plant the crop, in part by offering good money for the camelina. They did not specify what they will be offering.
Sustainable Oils is still being formed and hiring staff. A location for its headquarters has not been chosen — although Montana is a possibility, backers said.
Farmers will especially be interested in the project if Baucus and Tester can get Congress to offer crop insurance for camelina, said Lola Raska, executive vice president of the Montana Grain Growers. But rising prices for traditional crops like wheat could make it a tough sell.
“We are always supportive of new opportunities,” she said. “I hope they can make a go of it.”
Sandy Courtnage, Montana Farmers Union spokeswoman, said very few farmers in the state are now growing camelina.
“I imagine they will want to learn more about it,” she said of farmers. “It’s always exciting when there are new opportunities to help Montana agriculture.”
“I think you have to sell farmers on the crop,” he said.
Ron Ueland, with Western Plant Breeders, said his company is going to help Sustainable Oils distribute its seed and sign up farmers. He said other farmers will be drawn to the product as they see the success of others.
Baucus said provisions in the farm bill before Congress, such as the crop insurance, will help the project, which he says will help Montana and the country. Baucus said he is confident a farm bill will pass this year.
“It’s my sense this has real potential,” Baucus said.
The companies said they will need to have a total of 1 million acres grow the camelina to meet their 100 million gallon goal.
Tom Todaro, Targeted Growth chief executive, said they are prepared to get hundreds of thousands of acres planted in a short period of time.
Green Earth Fuels chief executive Greg Bafalis said his company looked at many biodiesel sources before settling on camelina grown in Montana and surrounding states.
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