MACON, Ga. − The message at a biodiesel conference held at the Georgia Farm Bureau on Tuesday was simple: Georgia is ripe for creating a successful new fuel industry.

About 70 people attended the conference about oil- and fat-based diesel fuel, which many participants predicted would have long-range economic and environmental impacts in the state. Georgia is a leader in poultry and vegetable oil production.

"All the elements of success are here: farm supporters, distributors and producers," said Martin Bierne, director of Southeastern Region World Energy.

Biodiesel can be used either by itself or, more often, mixed with conventional fuel. No engine modifications are necessary.

The fuel reduces most types of diesel air pollution, helps a vehicle's injection pump run more smoothly and can be substituted for sulfur in diesel fuel -- a big advantage for the new industry because diesel producers are being required to drastically reduce sulfur levels by 2006. Biodiesel requires half as much energy to produce as ethanol, the corn-based additive that is used much more widely.

But some types of biodiesel produce more nitrogen oxide, a major contributor to smog, and the fuel often costs about 20 cents more than conventional diesel.

To combat the latter problem, a new law offers incentives for biodiesel blenders. The two-year tax credit is about a dollar a gallon for most biodiesel, varying according to the fuel mix, explained Troy Bredenkamp with the American Farm Bureau Federation.

Although there is no guarantee the tax savings will be passed on to consumers, Bredenkamp said it likely will equalize the price of biodiesel.

Some states offer further tax incentives, but not Georgia. At the conference, state Agriculture Commissioner Tommy Irvin urged the new state legislature to change that.

Georgia has a biodiesel plant in Rome that turns chicken fat into fuel, and a Tifton company expects to break ground on an even larger plant in Brunswick in about a month. That plant will use soybean oil to create biodiesel.

All biodiesel reduces emissions of sulfur and tiny particles that are dangerous to breathe, but soybeans and some other vegetable oils increase an engine's production of nitrogen oxide, said Dan Geller with the University of Georgia. Biodiesel made from animal fats do not.

Bibb and part of Monroe County are in a federal non-attainment zone for high smog levels caused primarily by nitrogen oxide emissions.

About 90 percent of biodiesel is made from soybean oil, but peanut oil, canola, chicken and pork fat, and other vegetable sources also are used, said Tom Verry, director of outreach and development for the National Biodiesel Board.

Bredenkamp said that for every 100 million gallon increase in biodiesel demand, the price of soybeans could rise 10 cents a bushel.

But conference organizer Mark Detweiler, president of the Georgia/Florida Soybean Association, said biodiesel isn't just about soybeans. The need to reduce American dependence on foreign oil, add jobs and reduce air pollution are other major motivators for promoting the industry.

However, Jimmy Moncrief of Roberta questioned whether the country might not just be switching from one foreign fuel source to another unless it adds trade protections for American-produced biodiesel. Georgia farmers often compete with those from South America in agricultural production.

"If we're doing this from a self-sufficiency standpoint and reliance on foreign fuel, we're just going to move from Iraq to Brazil," warned Moncrief, who farms in Macon, Peach and Crawford counties.

Locally, Davis Oil company in Perry sells biodiesel to Robins Air Force Base, the city of Macon and a few other local fleets. Dennis Burnett, alternative fuels manager for Davis Oil, said the company may add public biodiesel pumps at its gas stations in the Interstate 75 corridor for use by governments.

Macon allows residents to use its biodiesel pumps, billing users on a monthly or quarterly basis.

Linda Smyth was the first resident to sign up. She said she fills up her diesel Mercedes there because she's an environmentalist, she's patriotic and she wants to promote agricultural products -- plus, biodiesel there is now about 25 cents cheaper than conventional diesel.

Many conference participants focused particularly on concerns about American dependence on Middle Eastern oil.

Greg Hopkins, president of U.S. Biodiesel, said his Rome company uses all the high-quality chicken fat produced in the state to make the fuel.

"I've never had as much job satisfaction as with this, because it is the right thing to do," he said. "Every time I fill up, I know I'm not paying somebody who would like to kill me."

Source: Knight Ridder/Tribune Business News