Back to March 2008 home page

Triangle

TAX SUCKS LIFE OUT OF BIOFUELS 

For nearly three years, Stan Bingham has been driving around in a Volkswagen he modified to run on used vegetable oil, which the Republican state senator from Denton gets free from the General Assembly cafeteria. His bug gets more than 40 miles a gallon on it, but he has to filter the oil and start trips on diesel until the engine heats it up enough to use as fuel. A few miles before stopping, he has to remember to switch back to diesel to flush the fuel lines. Otherwise, the oil cools, gels and clogs them. “It’s really quite a chore to do this,” the lawmaker admits.

But weaning folks from fossil fuels onto biofuels — those made from renewable biological sources — could make North Carolina more self-sufficient and create jobs. So lawmakers pushed through the Strategic Plan for Biofuels Leadership in 2006. It mandates that, by 2017, 10% of liquid fuels sold in the state — about 560 million gallons, using current consumption levels — come from biofuels grown or produced here. Even Bingham is skeptical. “I don’t know that we’ll ever meet those goals — we’ll just have to change them.”

The legislature appropriated $5 million to start the nonprofit Biofuels Center of North Carolina, which opened earlier this year in Oxford. It’s supposed to support research, improve production, train workers and shape public policy and perception. It has a long row to hoe. Automakers don’t build vehicles that run on pure vegetable oil, though diesel vehicles will run on biodiesel blends. Biofuels often cost more than gasoline, and they’re not widely available.

As if that weren’t enough, the state taxes them the same as gasoline, unless users recycle or make their own. If they, say, buy a jug of vegetable oil at the grocery store, they’re supposed to pay 30.15 cents a gallon, one of the highest rates in the nation. After all, those taxes pay for the roads used by all drivers, so why shouldn’t biofuels users pay their fair share?

Calculating and enforcing such a tax is difficult, and state revenue officials, used to an orderly system where fuel is measured and taxed before it hits the pumps, aren’t apt to expend a lot of energy tracking down the small number of scofflaws buying and using pure biofuels in their vehicles. But those caught face a $1,000 fine and a bill for back taxes.

The center wants the state to eliminate or reduce the tax on biofuels, but that’s not likely to happen in the upcoming legislative session, Bingham says, because the highway budget is too tight. “It’s going to be a hard sell to take away from the motor-fuels tax.”

Executive Moves

Raleigh-based Red Hat, which sells and services the Linux computer-operating system, hired James Whitehurst, 40, as CEO. The former chief operating officer at Atlant-based Delta Air Lines took over for Matthew Szulik, 51, who will remain as chairman...Cary-based Bandwidth.com, which sells phone and data services, hhired Matthew Petzold, 42 as chief financial officer...Chris Viehbacher, 57, was hired as chief executive of the North Carolina Technology Association. he had been presidnt of Hermann Associates, a Kansas City consulting company. He replaces Joan Myers, who left in AUugst for a job at Cary-based software maker SAS Institute...Guy Campbell, 61, will retire in June as CEO of Morrisville-based Harris Stratex, which sells wireless-network equipment. No successor has been named.

RALEIGH - The State Bureau of Investigation and the state Department of Insurance are investigating the finances of The Castleton Group, which provided payroll, health-insurance and other human-resources services for more than 100 small and mid-size businesses. Castleton closed and filed for bankruptcy in late December. The company, which had about 30 employees, says its liabilities exceed its assets by $6.1 million.

RALEIGH - Optimal Technologies, which makes software that it says can prevent blackouts and lower utility costs, moved its headquarters and 20 employees here from Calgary, Alberta. The company plans to create 125 jobs within a year and add 200 more by the end of 2010. If it does, it will receive $650,000 in state and local incentives. The average salary for the new jobs is more than $71,000 a year.

RALEIGH - Columbus, Ohio-based Nationwide Insurance plans to close a call center here by the end of the year, laying off about 60. It will cut about 40 other local jobs as well, part of about 1,000 it is shedding nationally. It will still have about 700 employees here.

RALEIGH - RBC Centura Banks, based here, will change its name in April, dropping Centura. The trade name will become RBC Bank. Toronto-based Royal Bank of Canada kept the Centura name when it acquired Rocky Mount-based Centura Banks in 2001 and made RBC Centura its U.S. banking subsidiary. The holding company for the bank will be RBC Bancorporation (USA). The new name will identify it more closely with its parent.

OXFORD - Granville County commissioners have withdrawn support for a $450 million animal-disease research center that the federal Department of Homeland Security is considering building in Butner. Commissioners say they are frustrated because Homeland Security will not answer questions about the center. The department, which is considering four other locations, is scheduled to pick a site this fall.

DURHAM - Motricity, which makes software for downloading games, ring tones and other content to mobile phones, sold its electronic-books division and eReader.com Web site to Chatham, N.J.-based online book retailer Fictionwise. Terms were not disclosed.

CARY - Armonk, N.Y.-based IBM plans to buy Arsenal Digital Solutions, which stores, manages and protects data for other companies. The purchase price was not disclosed. IBM says it plans to add to the 100 employees at Arsenal, which will become part of its Global Technologies Services division. The sale was scheduled to close in the first quarter.

CARY - Qimonda plans to close its design center in Burlington, Vt., and consolidate operations at its North American headquarters here. The German company makes microchips for cell phones and other electronics. The shift will result in a net increase of about 40 jobs here, bringing employment to about 340.

CHAPEL HILL - Pozen expects to hear by mid-April whether its migraine treatment will be approved by the federal Food and Drug Administration. In August, the agency requested further study of whether Treximet, formerly known as Trexima, could cause genetic damage. Pozen submitted the latest study to the FDA in March. Treximet would be its first product.

DURHAM - Carlsbad, Calif.-based Invitrogen plans to buy CellzDirect, which supplies liver cells and other cell-based products for drug research, for $57 million. Invitrogen sells more than 25,000 products used to research diseases and drugs. About half its 90 employees work here, with the rest in Austin, Texas. CellzDirect does not expect any layoffs.

RESEARCH TRIANGLE PARK - Clinipace, which makes software used by drug companies to collect and manage data generated by clinical trials, raised $2.6 million in a funding round led by Durham-based Hatteras Venture Partners. It plans to use the money to add 10 to 15 employees this year to the dozen it already has.

CHAPEL HILL - London-based WPP Group, a global public-relations and marketing company, purchased Yankelovich Holdings, which conducts market research. Terms were not disclosed. Yankelovich employs about 45 at its headquarters here and nearly 25 others in offices in New York, Atlanta and Dallas. No layoffs are expected.