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"We hope to show there are local solutions for energy problems of national concern," Distefano said.

The move comes on the heels of increased talk that Alaska should explore alternatives to fossil fuels because of the rising cost of oil, its possible detrimental effects on climate, and air-quality concerns about diesel exhaust.

Distefano points to the success of a 2004 pilot project in which Hawaii-based Pacific Biodiesel used waste fish oil from Alaska processing plants to create 5,000 gallons of biodiesel.

The Alaska fish processing industry disposes of an estimated 13 million gallons per year of fish oil that could be converted to biodiesel, according to the Alaska Energy Authority. The authority is looking for bids on a portable system that would render fish oil from fish waste from various processors.

Larry Zolezzi at Pacific Biodiesel said the pilot project went very well and urged Alaska to build a plant.

"It was really easy and it was a great idea, so somebody in Alaska should be doing it," Zolezzi said.

At least one company in Juneau is familiar with the benefits of biodiesel. The Baranof Hotel invested about $10,000 in a new fuel system about a year and a half ago to power its boilers with a blend of biodiesel and regular diesel.

The hotel has saved about three times that much in diesel costs by using about 10,000 gallons of waste vegetable oil it has gathered from the kitchens of businesses around town, as well as its own.

The Baranof's exhaust stack now emits the distinct aroma of French fries, said Assistant Chief Engineer Quin McLean.

McLean said the hotel not only saves money on fuel, but companies that supply the hotel with waste vegetable oil save by not having to pay to dispose of it.

"They love it because there's nothing they can do with it in town with the incinerator gone," McLean said.

Distefano hopes to gather and disseminate information on these types of projects and ideas through a biodiesel cooperative.

"We want to start a group of people to educate ourselves, the community at large and our elected representatives about alternative energy," he said.