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Minnesota Soybean Business

Twenty years tough: MSGA, MSR&PC leaders look back on the birth of biodiesel in Minnesota

March-April 2022

Minnesota farmer leaders and biodiesel advocates went their own way two decades ago in the uphill push to pass landmark legislation that forever changed the biodiesel industry.

“There was no blueprint, no roadmap,” said Ed Hegland, former Minnesota Soybean Growers Association (MSGA) vice president and treasurer. “We just made it up as we went along.”

On March 15, 2022, both MSGA and the Minnesota Soybean Research & Promotion Council (MSR&PC) celebrate the 20th anniversary of the B2 (2% biodiesel) minimum blending requirement becoming law. For the farmer-leaders from Minnesota Soybean who led the way, time flies when you’re (mostly) having fun and fueling a multi-billion-dollar industry that continues growing demand in a changing world.

“We went from a time when we started the B2 stuff in 1998, soybean oil was trading for 10 cents a pound,” said Mike Youngerberg, MSR&PC’s senior director of product development and commercialization. “Now we’re trading at 63 cents and going higher. It’s incredible.”

The biodiesel industry has exploded in the 20 years since the biodiesel mandate became the law of the land, thanks to the foresight of Minnesota’s soybean leaders in the late 1990s and early 2000s. Brushing aside constant market and political threats, biodiesel now adds an estimated dollar to a bushel of soybeans, and production totals nationwide are nearing 3 billion gallons. In Minnesota alone, biodiesel adds nearly 5,400 jobs and contributes nearly $1.7 billion towards the state’s GDP, totaling $676 million in farm-level impact statewide.

“Minnesota has been a huge boost to the entire industry,” Hegland said. “All these years later, we’re held up at the national level as leaders.”

The movement started as a grassroots collaboration between farmer leaders from both MSR&PC and MSGA. The Council helped fund research showing the benefits of biodiesel, while MSGA tackled the policy side of engaging with legislators and industry leaders.

“If it wasn’t for the Minnesota checkoff, we wouldn’t have a biofuels industry,” MSR&PC Director Gene Stoel said. “Minnesota soybean farmers were the ones who proved biodiesel works. We crush soybeans for meal, then use the residual product for oil. We can take the oil and make a fuel out of it. That, to me, was pretty forward-looking on the part of a lot of good farmers.”

Thinking big

In the mid-1990s, Minnesota Soybean partnered with the National Biodiesel Board (since renamed the Clean Fuels Alliance America) to promote Soy Shield, a biodiesel additive. The product treated about 50 gallons and was distributed via Minnesota Soybean’s county promotional program. The additive was well-received, but then-MSGA Director and biofuels supporter Vernon Pooch had grander ambitions.

“Vernon said, ‘This is good, but why not go bigger?’” Youngerberg said.

At a town hall in Alexandria, Pooch approached his district legislator, then-Rep. (and now Sen.) Torrey Westrom, urging him to support a biodiesel bill to boost Minnesota’s agriculture economy.

“We just wanted to go for two percent,” Pooch said. “Torrey liked what he heard and introduced it.”

The stage was set. Westrom carried the bill in the 1999 session that put momentum behind biodiesel. Westrom’s bill passed the Ag Committee but never made it to the regular session. Over the next two years, MSGA faced stiff – almost overwhelming – opposition from lobbying groups representing Minnesota’s trucking, oil, railroad, waste management and airline industries. Even the Chamber of Commerce came out against biodiesel. In addition, some state legislators refused to support any legislative mandates.

How the heck did MSGA get the job done?

“Well, we were lucky to have a great lobbyist,” Pooch said.

Jerry Schoenfeld oversaw MSGA’s lobbying efforts at the time. He found himself in unchartered territory.

“In the beginning, we were pushing a product that almost didn’t exist, because it wasn’t really available,” he said. “In the end, of course, it became available.”

MSGA and MSR&PC directors returned to the Capitol with renewed vigor in the early 2000s. Minnesota Soybean was ready to fight for biodiesel through grassroots advocacy. Farmers packed committee rooms. Hegland remembers traveling 13 times to St. Paul during the 2001 session; farmers swarmed the Capitol grounds wearing red, pro-biodiesel T-shirts. MSGA brought a diesel-powered truck to the steps of the Capitol, blaring messaging that read: “Oil from the Midwest, not the Mideast.”

“It was an all-out effort,” Youngerberg said. “People got the message.”

Team work

Slowly but surely, Minnesota Soybean garnered bipartisan support in St. Paul. Industry supporters, including the National Biodiesel Board, Minnesota Farm Bureau, Minnesota Farmers Union and the American Lung Association, stood behind MSGA.

“It was an exciting time,” said Worth, MSGA’s current vice president. “It was really a good team effort. It proves right there that when you have a solid team working for a good cause, positive things do happen.”

The growers were resolute in their determination. Finally, in March 2002, the toil paid off for Minnesota soybean farmers. The B2 mandate passed with bipartisan approval. The bill was sent to then-Gov. Jesse Ventura’s desk. The governor refused to sign the bill, but through a series of measures, B2 became law in Minnesota. Ventura’s detached role in biodiesel becoming law remains a curious footnote.

“Being a wrestler, he understood marketing. But he didn’t like mandates,” Youngerberg said. “I do think he liked the concept of biodiesel and energy independence.”

Youngerberg still marvels at Schoenfeld’s lobbying shrewdness in the face of long odds. MSGA membership funds help fund lobbying efforts, and there are few legislative wins in MSGA’s 60-year history that loom larger than biodiesel. Schoenfeld, who retired in 2016, ranks it among his top career accomplishments.

“Jerry was skillful in orchestrating an effort that people didn’t believe we could pull off,” Youngerberg said. “It was a monumental achievement.”

In 2003, newly-elected Gov. Tim Pawlenty declared renewable fuels a top policy priority. Later that year, the GOP governor created a Biodiesel Task Force to streamline the B2 implementation process.

“Governor Pawlenty believed in renewable fuels,” Worth said. “He was a true champion of biodiesel.”

A win-win

Minnesota’s biodiesel processors were required to produce 8 million gallons of B100 in production sites

before the Minnesota Department of Agriculture (MDA) gave final clearances. Three biodiesel plants were built in Minnesota between 2002 and 2004, more than enough to meet the production requirement.

By August 2002, the requirement had been met, and Gov. Pawlenty approved implementation on Sept.

29, 2005. After a bumpy rollout in fall 2005, Minnesota moved to B5 in 2009 but was delayed in moving to B10 in 2010 because of inadequate blending infrastructure in southwest Minnesota. The issue was solved by 2013, and B10 was implemented the following year. In May 2018, Minnesota became the first state to move to B20 implementation during the summer months. During the winter months, Minnesota fuel stations continue selling a 5% biodiesel blend.

“What Minnesota did has helped inspire other states to do similar legislation,” said Tom Verry, Clean Fuels’ director of outreach and development. “We learned so much as an industry from Minnesota.”

Over the course of 17 years, biodiesel use in Minnesota has improved not just Minnesota’s economy, but its environment. Studies show biodiesel reduces greenhouse gas emissions by more than 50% and lowers particulate matter by 47%, reducing smog and cleaning Minnesota’s air. Each year, cleaner-burning, renewable biodiesel displaces roughly 130 million gallons of petroleum diesel in Minnesota.

“Through farmer innovation and proactive policies from our state leaders, Minnesota has been a national leader for two decades, and it’s exciting to share biodiesel’s positive environmental impact,”

MSGA Executive Director Joe Smentek said. “While we recognize there’s a push for electric vehicles, biodiesel is a viable environmental solution until technology catches up with our market needs.”

In Minnesota, using B20 in the summer and B5 in the winter equates to removing the emissions from approximately 245,000 vehicles from state roads each year. According to a recent Clean Fuels study, switching Mike Youngerberg and Ed Hegland were both featured in a book marking 30 years of the National Biodiesel Board, “The Birth of American Biodiesel.”

At the National Biodiesel Conference & Expo in January, Hegland, who served as NBB chair from 2007-2010, was honored with the Kenlon Johannes Pioneer Award. Hegland and Roger Peterson (1999) are the two Minnesotans who have chaired NBB to B100 (100% biodiesel) would create a 45% reduction in cancer risk when heavy-duty trucks use B100, and 203,000 fewer or lessened asthma attacks.

“As technology has improved, the biodiesel produced in Minnesota today is now far more efficient than how it was produced 20 years ago,” said Chris Hill, a Jackson farmer who serves on both MSGA and the Clean Fuels boards.

The next 20 years

What does the future hold for biodiesel? Well, it’s complicated. While the price of soybean oil has more than doubled in a few short years, electric vehicles and renewable hydrocarbon diesel present their share of challenges to the biodiesel industry.

“The landscape is changing tremendously,” said Youngerberg, one of the nation’s leading biodiesel experts and a 2018 recipient of the Biodiesel Impact Award. “It’s changed the dynamic of the soybean oil market from a drag to driving the market. … The things we fought to get two percent of the marketplace have benefitted us.”

Youngerberg says corporate America’s push toward sustainability and addressing climate change have altered the outlook for biodiesel.

“The Walmarts and big shippers all over the world are now saying to their suppliers, ‘I want to reduce my carbon footprint. How are you going to do it?’” he said. “There’s no electrification coming soon for the marine, railroad, large truck and even aviation market, and that’s why we’re seeing this huge interest in renewable hydrocarbon diesel and sustainable aviation fuel.”

Pooch, never one to mince words, is still bullish on biodiesel.

“We’re always going to have biodiesel. There are too many trucks,” he said. “Electric isn’t the answer, either.”

MSGA and MSR&PC continue protecting – and benefitting from – biodiesel. Each year, MSGA advocates with legislative and agency leaders to keep and grow the biodiesel mandate. Meanwhile, MSR&PC invests checkoff resources in educating producers and improving infrastructure.

“We can’t ever take biodiesel for granted,” MSGA President Mike Skaug said. “We’ve come too far to lose this market. As an organization, we’re enormously proud of what we accomplished together.”

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