An agency that enforces air-quality laws in the region is accepting proposals for reducing greenhouse gas pollution with money from a local oil refinery.

The Northwest Clean Air Agency will get as many as 22 proposals by the end of the month to tackle the problem of global warming. According to initial letters submitted by potential candidates, proposals could range from building electric cars to generating electricity from cow manure.

"The letters of intent we received reflect a broad array of ideas," said Laura Curley, spokeswoman for the Clean Air Agency. "We won't know what greenhouse gas emission reductions may be possible until the actual proposals are thoroughly evaluated."

BP Cherry Point gave the agency $3.4 million for the projects. The refinery paid the money voluntarily to offset the additional carbon dioxide that will be released from a new reactor that will remove sulfur from gasoline and diesel fuel.

The Clean Air Agency could fund one big project, or multiple projects costing as little as $250,000.

"We have not had this kind of money before" to fund pollution-control projects, Curley said.

Sulfur reduction satisfies new federal regulations but creates another problem: more carbon dioxide emissions, which contribute to global warming. The new reactor will add about 500,000 tons of carbon dioxide to the atmosphere per year, according to the Clean Air Agency.

The agency's goal is to fund programs that will reduce greenhouse gas emissions in Whatcom, Skagit or Island counties.

Bellingham's Department of Public Works proposed what it called "an exceptional project" to build a hydroelectric power plant on a vacant lot near the waterfront. Electricity would be generated using water from an existing pipe between Lake Whatcom and Bellingham Bay, the city's letter said.

Several letters described ways to reduce vehicle emissions, which are the leading cause of greenhouse gases in the state.

The state Department of Transportation would install a traffic signal just south of the inspection area at the Peace Arch border crossing. Motorists would be instructed to turn off their engines when the signal turns red, the department's letter said. A similar signal is already working on the Canadian side of the border.

A Ferndale-based company called RoadboarD Motors, Inc., would use the money to build prototype single-passenger electric cars for eventual mass production.

The dairy industry is another major source of greenhouse gases. Farm Power Northwest proposes to build a digester in the Samish watershed that would burn methane from cow manure to generate electricity. The business already has two such plants in the region, according to its website.

The Washington State University Extension Energy Program would find ways to make the dairy industry more energy efficient, from the farms to the processing plant in Lynden, to developing methane-based fuel for dairy trucks using cow manure.

"Methane digesters on dairies get a lot of attention but are only part of the story," WSU's letter of intent said.

The full proposals will be available at nwcleanair.org after the July 31 submission deadline. The letters of intent are currently posted.

The ultra-low-sulfur unit at BP Cherry Point should be operating by early 2013, said Michael Abendhoff, the refinery's director of government and public affairs.

Meanwhile, the Clean Air Agency is reviewing the Feb. 17 fire at BP because it resulted in elevated air pollution emissions. Investigation of the fire is ongoing and could result in the agency fining BP, Curley said.

No one was injured in the fire, which was caused by the failure of a corroded pipe in the crude processing unit. BP officials shut down the refinery for more than three months after the fire.

Reach RALPH SCHWARTZ at ralph.schwartz@bellinghamherald.com or call 715-2261.