Johnson City Press, Johnson City, Tennessee

 Tuesday, August 21, 2007

Tennessee’s government has turned the corner in its commitment to clean energy during the past year, a biodiesel entrepreneur said during a “Strategies for Rural Development” conference at the Millennium Centre Monday.

“I think Tennessee is the leading state in the Southeast in terms of promoting the use, production and growth of biofuels crops,” Mark Mauss, owner of Athens-based Sunsoil, said.

A host of entrepreneurs, government officials and business development professionals will complete the sessions — which mark the Appalachian Regional Commission’s 8th Business Incubation conference — today.

Mauss and Brian Hensley of the state Department of Economic and Community Development led a session Monday focused on biofuels markets and development.

With global petroleum production liable to peak within a decade and the U.S. relying on oil imports from unstable countries, Tennessee Democratic Gov. Phil Bredesen realized a couple of years ago that “we have a liquid transportation fuel crisis,” Hensley said.

Since then, Bredesen has pushed an alternative fuels strategy that could significantly impact small business and rural employment in Tennessee, Hensley said.

Whether it is farmers growing soybeans, hybrid trees or switchgrass as feedstock for ethanol and biodiesel, or jobs returning to rural areas through production facilities, alternative fuels offer promise throughout the state, Hensley said.

He said ethanol and biodiesel could eventually provide a quarter or more of transportation fuel in the country, and that Tennessee is working hard to capture its share of those markets.

“If we can use Tennessee products for the biofuel we’ll have a distinct advantage,” Hensley said. He listed a number of public entities in Tennessee that have converted to biodiesel, which is made from plants, waste products and even used restaurant grease, and said a conversion to just 2 percent biodiesel use could keep $42 million inside the state.

“This transition might be a great opportunity for business incubation across the state,” Hensley said.

Even with all the potential upside to alternative energy, Sunsoil’s Mauss said tax credits and other incentives are crucial during the industry’s early years. Among the long-term results, though, could be a “rural renaissance” in terms of job creation.

“There’s been a tremendous flight of good-paying manufacturing jobs from our rural areas, and biofuels bring good-paying manufacturing jobs to rural America,” Mauss said. He said refineries or distribution centers for biodiesel could serve about a 60-mile radius, thus creating a significant number of mediumsized employers.

Mauss did caution that not all the people who have jumped into small-scale biodiesel production have the technical and business background that he and his partners have. Sunsoil plans to produce 20 million gallons of biodiesel, from low-quality stock such as yellow grease and restaurant waste, when it reaches full production.

“There’s a lot of dumb money flooding into biofuels,” said Mauss, who worked for Shell for several years. “Investors should make sure the fundamentals are in place, and if they’re not, get the company there or talk them out of the business.”

EDC’s Hensley agreed that to have an economic impact for small businesses, rural communities and consumers, public policy changes and government support will be crucial early on.

“We’ve got to make a sufficient investment and commitment for a market transformation so there’s enough change for consumers and providers that we don’t drop back into the old habits ... especially if the petroleum price drops,” Hensley said.

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