For a while there, Monterey County was rolling away from petroleum. The local transit agency planned to run buses on mustard seed oil, while a plant in Gonzales cranked out 100 percent biodiesel. All that has come to a halt due to gummed-up state and federal biofuel regulations.

In 2008, Monterey-Salinas Transit kicked off an ambitious program to run its buses on biofuel made from mustard seed, grown without fertilizer or irrigation in King City. A summer harvest of 30 experimental acres produced about 75 gallons of raw oil – less than hoped for, due to an upwind turnip invasion, but a show of potential nonetheless. MST Assistant General Manager Hunter Harvath still keeps a bottle of the raw oil in his office.

“OUR EMPLOYEES ARE GONE; COMMUNITIES ARE LOSING REVENUE.”

From September through December 2008, MST ran its buses on biofuel from other sources. But as biodiesel prices rose, petro-diesel prices fell. Then the state cut all of MST’s biodiesel funding, Harvath says, and the MST board decided to revert to the industry standard, “clean diesel”: ultra-low-sulfur petroleum fuel, combined with special exhaust filters to curb tailpipe particulate emissions.

Meanwhile, the state choked on its biodiesel storage regulations. A February 2008 memo from the state Water Resources Control Board limited biodiesel blends stored underground to 5 percent, pending independent safety testing. Outcry from biofuel supporters pressured the agency to ease off; a June 2009 emergency variance allows underground storage of blends of up to 20 percent through June 2012.

For now, higher-percentage biofuel blends are limited to aboveground tanks. Local facilities with underground fuel storage – including MST and retail gas stations GG Petroleum in Salinas and Alliance Mart in Monterey, which once sold blends up to 99 percent – had to retool their biodiesel ambitions.

Complicating matters: Congress has stalled on a federal tax credit that helped make biofuel competitive with dinosaur juice. The U.S. Senate failed to meet its Dec. 31 deadline for renewing a “blender’s credit” of $1 per gallon of pure biodiesel produced, effectively shutting down the vast majority of biodiesel plants nationwide.

That includes Energy Alternative Solutions in Gonzales, which in 2009 produced about a half-million gallons of pure biodiesel, according to EAS President and CEO Rich Gillis.

“This is a big deal,” he says. “The U.S. Senate, by its failure to act at a time when we need jobs, is hurting our economy even further. Our employees are gone; communities are losing revenue.”

With the blender’s tax credit in limbo, Harvath says, MST can’t afford to switch back to biofuel without raising fares and cutting service. But a Monterey Bay Unified Air Pollution Control District grant has allowed the agency to begin installing several small aboveground tanks at its bus yard in Salinas, which should hold enough biodiesel to supply the summer trolley service in Monterey and Carmel, and the Salinas trolley service the rest of the year, Harvath says. Construction is scheduled to start next month.

In order to accommodate more biodiesel moving forward, the agency plans to build aboveground storage tanks at its new facility on the former Fort Ord.

It’s not the fast-paced energy independence MST hoped for, but at least it’s movement.