Massachusetts political leaders yesterday proposed a combination of first-in-the-nation mandates and incentives to promote the development and use of biofuels, with the hope of reducing the state's carbon emissions and dependence on foreign oil.
The mandates would require all heating oil and diesel fuel to contain at least 2 percent of "renewable biobased alternatives" by the year 2010 and 5 percent by the year 2013.
Biofuel heating oil currently costs the same or more than regular heating oil, but state officials said they were hopeful the price advantage would tip in favor of biofuel heating oil by 2010.
The bill filed yesterday also would exempt from the state's 23-cent gasoline tax any gasoline that contains ethanol produced from plant products other than corn. The exemption would give gasoline dealers a financial incentive to buy fuel blended with the new type of ethanol and give a handful of Massachusetts high-tech companies an incentive to produce it.
Bruce A. Jamerson, chief executive of Cambridge-based Mascoma Corp., said his company and a handful of others are scrambling to show that cellulosic ethanol - environmentally friendly ethanol produced from such vegetation as wood chips, algae, and grass - can be produced commercially.
"No other state has gone out and embraced cellulosic ethanol the way Massachusetts is doing," Jamerson said after yesterday's news conference at the State House.
Governor Deval L. Patrick, who filed the biofuels legislation along with House Speaker Salvatore DiMasi of Boston and Senate President Therese Murray of Plymouth, said the gas-tax exemption and the heating oil mandate would be the first of their kind in the nation. Patrick said the state could benefit economically and environmentally from greater use of biofuels.
"Where others see a reason to panic, we see opportunity," Patrick said. "We need this in our gas pumps, our tanks, and in our economy."
The governor predicted the gas-tax exemption would spur cellulosic ethanol production, creating 3,000 new jobs in Massachusetts and pumping $320 million into the economy.
US Representative William Delahunt of Quincy, who was described by DiMasi as the driving force behind the biofuels initiative, said the goal is to reduce dependence on foreign oil and keep more of the state's energy expenditures inside the state.
"We have 500,000 acres of farmland in Massachusetts," Delahunt said. "Why not grow energy crops there?"
Murray said potential Massachusetts energy crops could include wood chips, algae, agricultural waste, cranberry bog biomass, and some grasses. The state officials said the bill would also create a biofuels task force to explore other ways to promote the use and development of biofuels.
Several Massachusetts heating oil dealers are already selling heating oil blended with biofuel. The companies typically import soy oil from the Midwest and blend it with heating oil here.
Len Bicknell, president of Alvin Hollis Inc., a Weymouth heating oil dealer, recently began offering a 90-10 blend of heating oil and soy oil to his customers. More than 100 customers are buying it, he said, paying about 10 cents a gallon more than his company charges for regular heating oil, or $3.20 a gallon.
Bicknell said the bioheat fuel oil reduces sulfur oxide and nitrogen oxide emissions. By using less oil, the product also reduces carbon dioxide emissions. Elizabeth Warren, who runs Mass BioFuel, the biofuel division at Fisher-Churchill Oil Co. in Dedham, said 390 customers currently purchase either an 80-20 blend of heating oil and biofuel or a 90-10 blend of low-sulfur heating oil and biofuel. Warren said the 80-20 blend currently costs the same as regular heating oil from the company, or $3.20 a gallon. She said the 90-10 blend costs $3.30 a gallon.
"There's so many people that want this product," Warren said. "It's the environmental craze that's going on now."
Three Massachusetts biofuel refineries are currently in the planning stages, in Pittsfield, Greenfield, and Quincy. Once those come on line, state officials said, the cost of biofuel should come down and make the product more price competitive.
"I'm confident we'll ultimately be saving people money," said Ian Bowles, state secretary of energy and environmental affairs.
Bruce Mohl can be reached at email@example.com.