6/3/07 (Daily World Writer ) OLYMPIA — Coastal Caucus legislators are scrambling to remove a last-minute amendment that would prevent biodiesel companies like Imperium Renewables from using the most popular kinds of palm oil.

Imperium Renewables’ new Hoquiam plant — rapidly taking shape at the Port Dock — is set to produce 100 million gallons of biodiesel annually.

Company officials have said they would like to use canola oil, from Washington-grown crops, but in order to make their quota they’ll have to use palm oil from Malaysia and Indonesia simply because there isn’t enough local canola being raised. But environmentalists have long argued that rainforests in that part of the world are being razed to make way for the palm fruit and seeds, which become palm oil.

“It’s very difficult to say we’re opposed to drilling in ANWR — the Arctic National Wildlife Refuge — but we’re OK with cutting down rainforests,” said state Rep. Doug Ericksen, a Ferndale Republican who is the minority party’s deputy leader.

Ericksen said his amendment won’t create an outright ban on the use of palm oil. The Legislature can’t dictate what companies can and cannot use in this case. But the measure does say that Imperium Renewables will lose much-coveted tax credits the state is giving the biodiesel industry if it insists on using a palm oil that’s linked to the destruction of rainforests.

In fact, the Whatcom County Republican said, Imperium could use palm oil if it figures out a way to make sure it comes from a more sustainable source. And Imperium has been working with a global group called the Roundtable on Sustainable Palm Oil to do just that anyway.

House Majority Leader Lynn Kessler, D-Hoquiam, and Rep. Kevin Van De Wege, D-Sequim, met with Rep. Ericksen on Friday to try and convince him to drop his amendment, noting the bill he attached it to was a technical measure meant to clean up some legalese in a biodiesel tax credit bill passed last year.

“This is a fledgling industry that will let us slowly wean ourselves off foreign oil,” Kessler said. “But to start saying which products you can and cannot use is definitely not a good idea.”

John Plaza, the president of Imperium Renewables, said on Monday that he thinks the Legislature should focus on the farmers and leave the biodiesel industry to manage where it gets the palm oil being used to create biodiesel, itself.

“All of the language in our palm oil contracts state that our palm must come from sustainable sources,” Plaza said. “Yes, losing the rainforest, it’s a problem but the way to solve the problem is to create and force change like we’re doing.”

If Imperium already uses a sustainable source of palm oil, what’s the problem with supporting Ericksen’s legislation to make sure any other companies that locate in the state follow suit?

“It is inappropriate for Washington to put in state legislation that affects what happens in another country,” Plaza replied. “I don’t think that’s the right answer. If there’s specific legislation, that’s detrimental to the company.

“I would rather see the Legislature incentivize Washington farmers, to get them to produce canola oil that we could purchase. That’s where their attention should be focused.”

Rep. Ericksen said the purpose of last year’s biodiesel energy freedom accounts bill was to help both the biodiesel industry and farmers, and right now only the biodiesel industry is benefiting.

Kessler said she’s working with the Governor’s Office to figure out what kind of incentive can be given to prompt farmers to grow canola and may have something when the House introduces its operations budget in a couple of weeks.

Officials with Imperium Renewables say they’re trying to do their part, but convincing farmers to switch to canola is proving to be difficult because, for the most part, it’s an untested crop in this state. That said, in January, Imperium was able to contract with Natural Selection Farms of Sunnyside in Eastern Washington to buy feedstock that will produce 1 million gallons of canola oil.

“After meeting with Imperium Renewables, I know they share our goals,” Ericksen said. “They don’t want to be cutting down the rainforest for their product either. … At the end of the day, I believe this legislation is going to be useful for them, but we’re still faced with the issue of supporting local farmers and energy independence.”

Even so, Plaza thinks the state should still stay out of their business.

“The state does not have the right to be in other government’s policies,” he said. “We need the most competitive edge possible against petroleum and getting the state to help us achieve that is the right thing for the state to do, not to prevent businesses from being free market capable.”

Ericksen isn’t deterred and plans to take his argument to the floor of the House when the bill is expected to come up for a vote later this week.

The measure is House Bill 1055.