Research getting underway on biofuels production  
Capitol Spotlight for weeklies for week of June 17, 2007
By Jim Campbell
OPA Capitol News Bureau
Potential production of engine fuels from black strap molasses and sugar cane in plants licensed for the Okemah and Antlers areas illustrates research that may be undertaken through creation of an Oklahoma Bionergy Center.
State Agriculture Secretary Terry Peach said Senate Bill 609, recently signed by Gov. Brad Henry, who proposed it last winter, would bring together researchers from state colleges and universities to look at a variety of fuel sources.
Using facilities of the Samuel Roberts Nobel Foundation, the research will involve production of vehicle fuels from switchgrass and various native grasses as well as corn, milo and other emerging sources.
"There's not necessarily a better way to go," Peach said. "It's a combination of three or four different ways to produce biofuels."
Corn ethanol already is a major priority in such states as Iowa, but critics have said its production may use more energy than it produces and crimps supplies for livestock and human consumption. Sugar cane is the primary source in Brazil, which has managed to eliminate oil imports.
Peach said research at Oklahoma State University (OSU) has developed potential for sugar cane with a higher sugar count. Black strap molasses, similar to the familiar tonic routinely poked into kids a generation or two ago, is now mostly produced from sugar beets and can be trucked in by the barrels for use in the project. 
He said biofuels will not be a great short-term success, but rather an ongoing project that will lead to greater opportunities for Oklahoma agriculture.
Sen. Joe Sweeden, D-Pawhuska, SB 609 author, said it will ensure that Oklahoma stays at the forefront of the energy industry for years to come.
"Oklahoma's unique combination of natural resources and a prominent energy industry makes us a perfect fit to lead the way in developing new energy sources," Sweeden said.
Research at the Bionergy Center with a $4 million startup appropriation will focus on development of feedstocks, collection and transportation, conversion technologies and distribution. It will involve top researchers from OSU, the University of Oklahoma and from throughout the nation.
"A healthy biofuels industry can diversify the state's economy, bring high-paying jobs and provide our state's agricultural producers with a new market," Sweeden said.
Henry, Energy Secretary David Fleischaker, Environmental Secretary Miles Tolbert and Peach proposed the project early in the 2007 legislative session.
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Another biofuels bill signed by Henry provides a tax exemption for biofuels producers.
House Bill 1916 by Sen. Ron Justice, R-Chickasha, was amended to provide opportunities for industry that utilizes the agricultural products.
"Honestly, right at this point there isn't a lot of this production but if you look around at the interest across the nation and look at Oklahoma and the opportunities we have here, I think it's something we need to be out front on and really involved in," said Justice, co-chair of the Senate Agriculture Committee.
Steve Thompson, legislative liaison for the Agriculture Department, said the bill requested by the Oklahoma Farm Bureau exempts producers of biofuels from use in their own vehicles and farm equipment.
"It's an opportunity to encourage producers to do that," Thompson said. "It's not really lost revenue to the state."
How many farmers will actually do it, he said, "is kind of unknown."
"We don't know if there will be 10 in five years or 100, or none," he said.
House author was Rep. Phil Richardson, R-Minco.
Rep. Frank Lucas, R-OK, has introduced legislation in Congress to help state farmers grow crops for use in ethanol production. It also includes incentives for installation of wind turbines for power.
Lucas, of Cheyenne, said the goal is to boost the role of rural areas in energy production.
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Oklahoma's revenue collections were down slightly in May from a year earlier but still on track for a maximum despot in the state's Rainy Day Fund.
State Treasurer Scott Meacham said preliminary reports show General Revenue Fund collections totaled $435.2 million, a figure $4.8 million or 1.1 percent below the prior year and $6.6 million, or 15 percent above the estimate. 
"The ongoing growth in sales tax collections is a key indicator that our economy is doing well," Meacham said. "Income tax collections are also strong when tax cuts enacted at the start of the year are factored in."
The personal income tax rate dropped from 6.25 percent to 5.65 percent on Jan. 1, 2007.
Sales tax collections were up 4.4 percent from the previous year, personal income tax down 0.2 percent and gross production taxes 5.8 percent below the prior year.
Year-to-date collections are $206 million over the estimate-to-date, Meacham said, ensuring a maximum deposit in the Rainy Day Fund. The maximum balance of the fund is limited to 10 percent of the prior year's certified GR Fund collections.
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