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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

As the U.S. tries to break its reliance on oil, crop-based fuels are taking off. Dozens of new ethanol plants are popping up in the Midwest. And the country's largest biodiesel refinery is being built on the coast of Washington State.

NPR's Martin Kaste takes a closer look at the company that's making fuel from soybean oil, and its hundred million dollar biodiesel wager.

MARTIN KASTE: Driving around Seattle, it doesn't take long to spot the biodiesel bumper stickers. There's a lot of biodiesel pride on display, and nowhere more so than here.

(Soundbite of machine running)

KASTE: In this modest warehouse, where soybean oil is turned into fuel. The company spokesman, John Williams, pats the side of a stainless steel tank, which was salvaged from an old brewery.

Mr. JOHN WILLIAMS (Spokesman, Imperium Renewables): What used to hold beer now holds the fuel of the future.

KASTE: But this 7,000-gallon beer tanks are yesterday's news.

Mr. WILLIAMS: They are being replaced by 2 million-gallon tanks that are six storeys high and 90 feet across.

KASTE: The company is building a 100 million-gallon-a-year refinery out on the Pacific Coast, and it's getting ready to build three more - one on the East Coast, one in Hawaii, and one in Argentina. And this little company, once known simply as Seattle Biodiesel, now calls itself, Imperium Renewables.

Imperiums' downtown offices have that good 'ol dot-com feel, a lot of exposed timber and mod furniture, and bright young things waiting for job interviews. The CEO, Martin Tobias, wears a floral print dress shirt, untucked. He made his millions in tech, but he says the next big business opportunities are in energy.

Mr. MARTIN TOBIAS (CEO, Imperium Renewables): Where are we going to get our next gallon of gas? How are we going to provide renewable, clean alternatives to drive of our cars and trucks around?

KASTE: Tobias is one of several local tech millionaires who are now putting their money into alternative energy. There's a similar trend in Silicon Valley. He says biodiesel is now ready to go mainstream. But consumers aren't likely to switch unless prices are competitive with regular diesel. And right now, the price of the pump comes close only because of a generous federal tax subsidy - up to a dollar a gallon.

Tobias says that's only fair, given how entrenched the oil industry is.

Mr. TOBIAS: I'm a pretty conservative guy, generally. I've voted Republican my whole entire life. And I'm very skeptical of the government's role in any kind of market. But, in this case, there's no other way to do it but with government support and mandates.

KASTE: He's also counting on the government to promote biofuels by putting restrictions on greenhouse gases, something he expects to see within the next five years. Financial analysts say that's actually a good bet, given the growing unease over a global warming.

Tim Dittmer, a professor at Central Washington University, has studied the economics of biodiesel. He says the industry is likely to make money, but only if it keeps its eco-friendly image.

Professor TIM DITTMER (Economics, Central Washington University): In some ways, the greatest danger is that the environmentalist community, who was solidly behind the product previously, will turn on this product. And if that occurs, of course, the push for backing for it is going to go away.

KASTE: And there are some nagging doubts about the fuel's green credentials. Imperiums' refineries will depend at least in part on vegetable oil from sensitive ecosystems, soybeans grown in the Amazon basin, and palm oil from Asia. Palm plantations in Malaysia and Indonesia have been pushing the endangered Orangutan closer to extinction.

Dittmer says the biofuel's industry has to hope that it doesn't see bumper stickers with a new message.

Mr. DITTMER: Biodiesel - my car runs on Orangutans.

KASTE: Imperium understands this danger. The company now promises to buy what it calls sustainable palm oil, though that may not matter as long as overall demand for the oil keeps increasing. Some more radical environmentalists have even condemned biofuels outright, calling them a distraction from what they see as the real priority: smaller cars and more conservation.

Mr. TOBIAS: I think that's stupid, that's shortsighted.

KASTE: Martin Tobias says telling Americans to just do the right thing will never save the environment.

Mr. TOBIAS: We've been preaching conservation to the American consumer for 20, 50 years? However long? And cars keep getting bigger. Americans want big cars.

KASTE: Mainstream environmentalists seem to agree, although they're sometimes a little tentative about biofuel. Julie Gorte is the chief social investment strategist for Calvert, an eco-minded investment firm.

Ms. JULIE GORTE (Chief Social Investment Strategist, Calvert): Even if, you know, the biofuel isn't coming from the best seed stock in the world, if it makes a contribution towards getting us to a more sustainable lower emissions economy, if even as a bridge, it's probably worth a try.

KASTE: Investors certainly see biodiesel as worth the try. So far, this little Seattle startup has raised well over $100 million, not bad for a company that's started out brewing its fuel in beer tanks.

Martin Kaste, NPR News, Seattle.

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