By Tom Webb, Pioneer Press, St. Paul, Minn.
Groups representing Minnesota trucking firms and car dealers have sued to block the state's 10 percent biodiesel mandate, arguing it hurts their business and violates federal law.
The lawsuit, filed Friday in U.S. District Court, escalates a long-running dispute over soybean-based biodiesel that pits fuel users and some vehicle makers against Minnesota farmers and green groups.
Last July, Minnesota began requiring that diesel fuel sold here contain 10 percent bio- diesel, the highest mandate in the nation and double the earlier 5 percent level. Some industries objected, noting some engine warranties don't cover biodiesel fuel blends above 5 percent.
"We were warning the administration all along that there were tens of thousands of vehicles on the road that were not built to handle the higher bio-diesel levels," said Scott Lambert, executive vice president of the Minnesota Automobile Dealers Association, based in West St. Paul.
But Lambert said farming interests carried the day at the State Capitol, so "we were left with little alternative than to go to federal court."
The lawsuit names four members of Gov. Mark Dayton's administration -- the commissioners of Agriculture, Commerce, the Minnesota Pollution Control Agency and the director of Commerce's weights and measures division.
On Tuesday, a spokesman for the Agriculture Department said "the department cannot comment on pending litigation.
But last summer, when the biodiesel mandate increased, assistant ag commissioner Charlie Poster lauded biodiesel's economic benefits to rural Minnesota, to soybean growers and to air quality, in a state devoid of fossil fuels.
"We thought this was a clear win for the state," Poster said last summer. "It drives down the cost of fuel and increases the value of soybeans, which can put money in farmers' pockets." Minnesota has three biodiesel plants, in Albert Lea, Brewster and Isanti, that can produce 63 million gallons of fuel a year.
John Hausladen, president of the Minnesota Trucking Association, based in Roseville, said his group has never liked the biodiesel mandate, but concern has spread as the blend level increased from an initial 2 percent, then to 5 percent, then to 10 percent -- and eventually is scheduled to hit 20 percent in 2018.
But if critics win their court fight, "the judge could roll back to 5 percent, or the judge could say none of the mandate stands, and it could wipe out the whole thing," Hausladen said. The trucking group hopes to "get rid of the mandate in its entirety."
The car dealers, on the other hand, have "no problem with a 5 percent blend," Lambert said. "That's an approved fuel." But going beyond warranty levels is a worry for the 40 or 50 dealers in Minnesota who sell diesel vehicles, Lambert said.
Joining the lawsuit are three national groups, the Alliance of Automobile Manufacturers, the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers. They argue that federal laws like the Clean Air Act prohibit Minnesota from setting different standards.
The original mandate was passed in 2008 by the Legislature and Gov. Tim Pawlenty. It required increasing levels of biodiesel in the state's diesel fuel, finally reaching 20 percent on May 1, 2015 -- which would have been next week. But that phase-in was slowed down in 2014, although not enough for critics.
Because biodiesel can gel in cold weather, the 10 percent mandate drops to 5 percent from October through March. And if biodiesel gets too costly compared with regular diesel, the governor has the authority to waive the mandate.