A bill that would mandate a 5 percent biodiesel blend into diesel used in the state of Iowa passed through a key committee in the Iowa Senate on March 26 and is now up for a full Senate vote this week.

Sen. John P. “Jack” Kibbie, (D-Dist. 4), the sponsor of the bill, told DTN that the legislative proposal passed the state Ways and Means Committee overwhelmingly, and now goes for scheduling for a vote on the state Senate floor on Thursday (4/3) at the earliest, where he expects to win enough support.

The bill has 31 co-sponsors in the state Senate, more than the 26 votes needed to pass it. But the bill could slow in the state House of Representatives which hasn’t taken up the measure yet.

The collapse in crude oil spreads has all but eliminated the cost advantage for refining heavy and sour crude oils, lessening the advantage for deep conversion refiners, according to a report released by Fitch Ratings earlier this month.

If sustained, the report states, the collapse could dent the near-term earnings power of these refiners, leading to further reductions in capital expenditure plans or additional pressure on balance sheets.

Price discounts for different grades of crude oil have seen a dramatic shift since the second part of 2008. Whereas grades of crude used to differ by almost $20 bbl in some cases, discounts for heavy and sour crude have all but disappeared in the first quarter, driven by weak product demand and a storage glut in Cushing, Okla., the delivery point for the New York Mercantile Exchange crude futures contract.