When Kent Madison looked over his field of butter-yellow canola flowers this summer, his prospects seemed golden. He could burnish his farming operation and Oregon’s nascent biodiesel industry.

Yet, the 1,000-acre harvest brought a harsh reality.

“We’re getting just a piddly bit of oil,” said the lanky third-generation head of Madison Farms. He expects better results next year, but as for this year’s fall harvest: “It’s a real fiasco.”

Turning canola oil into biodiesel might be Oregon’s and Washington’s best short-term option for cashing in on the national rush to biofuels.

But as Madison’s predicament highlights, the states’ farmers face significant limits in growing the crop, despite a big push from government, new tax breaks and the buzz about biofuels’ potential to strengthen rural economies.

At most, Oregon could produce enough canola for 10 million gallons of biodiesel a year, less than 2 percent of the state’s diesel consumption, an Oregon State University study concluded. Counting production costs and tax breaks, OSU economist William Jaeger found that to cut the same amount of fossil fuel, growing canola was 11 times more costly than raising gas taxes.

It would take 133,000 to 400,000 acres of canola to meet Washington’s requirement that diesel contain at least 2 percent biodiesel, according to a review by Washington State University analyst Kate Painter. In 2006, the state’s farmers harvested 7,500 acres of canola.

Biofuel backers concede that local crop production may be low to start. But slowly building capacity is a sensible part of the solution to global warming and U.S. dependence on fossil fuels, they say.

Skeptics, Jaeger included, worry that the political enthusiasm for growing biofuels is a feel-good distraction from steps that would really make a difference, such as carbon taxes and significantly higher vehicle mileage standards.

Biofuels has “this intuitive appeal because it’s like growing energy in our backyard and in our farm communities,” Jaeger said. “But there seems to be a fair amount of wishful thinking going on.”

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