Only in Washington, DC would you find the genesis of a headline like that. But this story in The Hill.com says a brouhaha is breaking out in the nation’s capitol over the $1-a-gallon renewable diesel tax credit.
Lobbyists for ConocoPhillips, Tyson, and the Soap and Detergent Association have jumped into the fight over whether oil companies should be able to use the credit. The IRS ruled last month that they should be able to. That prompted Rep. Lloyd Doggett (D-Texas) to introduce a bill to repeal the ruling and narrow the tax break’s scope to what Congress had originally intended.
Tyson got involved because it’s going to provide animal fats to Conoco to produce as much as 175 million gallons of biodiesel… grabbing its share from the credit.
Soap makers are concerned that the cost of animal fat – that they use in making soap – will go up:
In this economic food chain, the soap industry could soon be extinct, according to Dennis Griesing, vice president of government affairs for the Soap and Detergent Association.
“If they start buying up animal fats, it can suck it all up, and we’re dead,” Griesing said.
“We’ve been here forever, and we’re dead.”
Several other livestock producer groups including the National Pork Producers and the National Chicken Council want the more liberal ruling by the IRS.
Interesting how some of the same livestock producers – farmers who have hogs and soybeans – could find themselves on both sides of the issue… making themselves as their own strange political bedfellow.
When the Colorado Governor’s E85 Coalition was formed at the end of 2005 there were only ten E85 fueling stations available in the state.
“We’re at 20 now and by the end of the year we expect to have over 50,” says Gerry Harrow, president of the coalition. “So, we’ve had some great success in a very short time.”
Harrow says with the election of Bill Ritter as governor of the state last year, the coalition’s mission has been expanded beyond E85 and is now known as the Biofuels Coalition.
“He asked us to expand our focus into also putting out biodiesel infrastructure,” said Harrow. “So, we added that just recently, within the last month, to our mission.”
The Biofuels Coalition in Colorado includes representatives from the automobile industry, government, retailers, biofuels producers, petroleum marketers and agriculture. Harrow thinks Colorado’s model can be used in other states.
“Each state has its own unique needs and situation, but some of the things we have done here could help other states,” he said. “One of the things we are doing is working with NREL (the National Renewable Energy Lab) to publish a document that discusses the successes we have had and how we came to those successes and some of the things maybe a coalition would need to do to get started.”
Listen to an interview with Gerry about the coalition and their successes: colorado-e85-harrow.mp3
Photo Credit: Zach Ornitz/Aspen Daily News
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As livestock producers continue to voice concerns about rising feed costs, proposed “transition assistance” for farmers to grow dedicated energy crops was introduced this week in legislation sponsored by Senators Tom Harkin (D-IA) Amy Klobuchar (D-MN) and Kent Conrad (D-SD).
“Farmers are going to be a key part of our nation’s ability to achieve energy independence,” said Klobuchar. “These crops could revolutionize how we look at energy just like ethanol and biodiesel have. Now its time for Congress to act and reward our farmers at home, protect the environment, and pave the way for tomorrow’s energy.”
Harkin, chairman of the Senate Ag Committee, said in a press release that the Farm-to-Fuel Investment Act “charts a course for initiating the extensive production of biomass feedstocks while continuing to protect wildlife and promote sound soil and water conservation practices.”
The bill would provide three years of transition assistance to farmers who produce dedicated energy crops in an area 50 miles around a biorefinery that will produce fuels like cellulosic ethanol. Incentives are needed for the first few years because it takes about three years for crops like switchgrass to reach their first mature harvest. The three-year period also takes into account the time needed to develop a biorefinery to purchase the crop. After a market has developed and the crops have matured, the transition assistance would phase out.
Senator Conrad said he is supporting this legislation “because I believe that North Dakota can help this nation grow its way out of our dependency on foreign energy – whether it’s from cellulosic ethanol or biodiesel. It’s time we turned from the Mid East for our energy and turned instead to the Mid West.”
To participate, farmers would have to agree to adopt conservation practices for soil quality, water quality and wildlife habitat. This legislation also allows for an additional incentive to farmers who produce native perennial energy crops, such as prairie grass mixtures, because of the tremendous conservation benefits those crops provide. Perennial grasses protect soil and water quality, sequester carbon, create wildlife habitat and save farmers money on fuel and fertilizer.
Congressman Lloyd Doggett (D-Texas) is expected to introduce soon, possibly on Thursday, a bill that will keep Big Oil from cashing in on the tax credit intended to help biodiesel producers.
This story posted on TheHill.com says the representative wants to reverse an IRS ruling that allows oil companies to claim a $1-a-gallon renewable diesel tax credit by adding animal fat to the traditional refining process.
The National Biodiesel Board, whose members produce biodiesel from soybean and canola oils, opposed the IRS ruling, fearing oil companies would siphon off their own federal support for renewable-fuels production.
Doggett’s news release said the credit was designed to encourage production of “clean-burning, biodegradable diesel fuel
that is fully independent of petroleum products.”
U.S. Senator John Thune (R-South Dakota) will hold a wind energy roundtable this coming Monday, May 14th at 1:00 PM (CDT) at the Sheraton Hotel in Sioux Falls.
From his press release:
“South Dakota could and should be a national leader in producing electricity harnessed through our abundant wind supply, but until now, our state has lacked the necessary infrastructure to fully develop this industry. I am looking forward to hearing the discussion about the future of wind energy production and related transmission issues,” said Thune.
As you might remember from my May 3rd post, Thune recently called for a federal tax credit to promote the growth of wind power across the nation.
More details of the conference:
WHEN: 1:00 PM CT, Monday, May 14, 2007
EVENT: Wind Energy Roundtable
WHERE: Fontenelle Room, Sheraton Hotel, Sioux Falls, South Dakota
PANELISTS: Brad Barton, Director of Commercialization, U.S. Department of Energy;
Brian Parsons, Wind Applications Project Manager, National Renewable Energy Laboratory;
Laura McCarten, Co-Executive Director CapX Transmission Initiative, Xcel Energy;
Beth Soholt, Director, Wind on the Wires;
Lloyd Linke, Watertown Operations Manager,
Western Area Power Administration (Western)
Drivers along a stretch of Interstate 15 in Utah might be used to seeing biodiesel-powered vehicles, but the same stretch of road is becoming home to the raw materials used to make biodiesel.
According to a story in the Salt Lake Tribune, the Utah Department of Transportation has partnered with Utah State University to plant safflower, camelina, canola and perennial flax in a safety strip along the interstate. The seeds are then crushed to make biodiesel:
The unusual idea came from Dallas Hanks, a 44-year-old biologist who is working on his doctoral degree at USU. With an initial $50,000 boost from UDOT, Hanks aims to prove the 2,500 miles of state-owned highway right-of-way could yield an annual average of 500,000 gallons of 100 percent biodiesel.
By addressing efficiency, energy development and climate-change concerns, the project “has it all,” said Laura Nelson, (Utah Governor Jon) Huntsman’s energy policy adviser. “A lot of agencies are pursuing the conservation initiative,” she said. “This is probably the most innovative [approach].”
Officials expect the biodiesel will power the UDOT trucks and heavy equipment.
Lawmakers in the Illinois State House have passed what’s considered a pretty ambitious renewable energy standard calling for the state to buy up to 25% of its renewable energy sources by 2025. According to a press release posted on the Environmental Law and Policy Center web site, wind power is seen as the main source for clean power:
“Developing wind power, a ‘no-CO2’ energy source, can help to solve our global warming problems,” said Howard A. Learner, Executive Director of the Environmental Law & Policy Center. “Renewable energy is a win-win-win—it’s good for farmers, good for rural economic development and good for the environment.
Experts say Illinois has enough wind power capacity to be a leader in the U.S. Plus, since the state is a hub for power transmission lines, so there is a cheap, efficient to get the power onto the grid.
About 5,500 megawatts of wind power are under development in Illinois. That would be enough to power 1.7 million homes.
The National Biodiesel Board today called on Congress to put pro-biodiesel provisions in the new Farm Bill, including a Biodiesel Incentive Program and Biodiesel Fuel Education Program. According to an NBB release, making the case for the board and the American Soybean Association in front of the Senate Agriculture Committee was Neil Rich, president and CEO of Riksch BioFuels of Crawfordsville, Iowa:
“The construction of our biodiesel facility is the direct result of the successful programs from the 2002 Farm Bill,” said Rich of the plant that created 14 high-quality jobs in Southeastern Iowa to allow it to produce 10 million gallons of cleaner burning biodiesel annually. “Biodiesel should be a significant part of the 2007 Farm Bill.”
The program would be similar to the Commodity Credit Corporation Bioenergy Program… already working well in expanding biodiesel the industry the last few years. The federal Ag Department would use commodities to reimburse biodiesel producers.
NBB officials say the energy portion of the 2002 Farm Bill has encouraged greatly expanded biodiesel production. USDA analysis says that every 50 million gallons of biodiesel raises soybean prices one percent. In the long-term, experts say the increased demand for biodiesel will increase average soybean prices nearly 10 percent by 2015. They also point out that extra money in farmers’ pockets will mean that much less in farm program payments.
Senator John Thune (R-South Dakota) is asking Congress to extend the Renewable Energy Production Tax Credit, which will expire next year, through 2012. The incentive is a two-cent-per-kWh tax credit for renewable electricity production. This story on the Black Hills Today web site, says the credit makes wind energy more competitive:
“As our nation’s energy demands continue to grow at record speed, our dangerous dependence on foreign sources of energy puts America in a more vulnerable position than ever,” Thune said. “To avoid a looming energy crisis, we need to explore every possible source of renewable, home-harnessed energy, such as wind power—an under-utilized resource that has the potential to provide cost-effective energy to millions of Americans.”
Thune is so interested in wind power because of the potentail it holds for his state. The article goes on to say that researchers estimate South Dakota is capable of producing 566 GW of electrical power from wind… more than half of the entire country’s demand. Right now, though, the state produces only 44 megawatts… far behind its neighbors Minnesota and Iowa, which produce 895 MW and 936 MW, respectively.
Members of the National Biodiesel Board have testified before Congress about how biodiesel has benefitted America. According to an NBB press release, the board’s Chief Executive Officer Joe Jobe testified before the U.S. House of Representatives Committee on Small Business in a hearing entitled “The Impact of Renewable Energy Production in Rural America.”
“If you take one thing away from my testimony today, I hope it is that biodiesel delivers,” Jobe said. “The biodiesel tax credit is a shining star in the universe of public policy.”
To prove his point, Jobe presented a survey that shows how supportive the American public is of the tax credits lawmakers have granted the industry:
Results of our recent survey of American consumers show that almost half (46%) are aware of biodiesel, while just 16% are aware of renewable diesel. This may partially explain why a very large majority (77%) believe the tax credit for biodiesel is a good decision but, after a series of questions, just 17% believe big oil companies should receive similar taxpayer support for a product called renewable diesel, even if it helps lead to energy independence.
Jobe also told representatives that the biodiesel industry produced just 25 million gallons a year in 2004. Today, after the biodiesel incentive has boosted the industry, there are 105 plants capable of producing 864 million gallons of biodiesel. In addition, biodiesel has added at least 40,000 new jobs and will add $24 billion to the U.S. economy. Farmers are also enjoying the benefits of the credit. Soybean prices have gone up $.42 a bushel since the incentive took effect.
Jobe urged lawmakers to extend the biodiesel incentive past its 2008 expiration date while cutting off big oil from abusing the credit.
The Senate Energy and Natural Resources Committee has approved energy legislation that calls for 36 billion gallons of renewable fuels use by 2022. The bill also provides the necessary incentives to spur the development of commercial-scale cellulosic ethanol production.
The bill received bi-partisan support in the committee, with eight Republicans and 12 Democrats voting in favor of passage. Three Republicans opposed the measure.
In addition to increasing renewable fuels production, the legislation includes loan guarantees and other incentives for ethanol research and plant construction, support for production of “plug-in” gas-electric hybrids and requirements for more efficient appliances and light bulbs.
An overall goal would be established of reducing gasoline use by as much as 45 percent below what it otherwise is expected to be in 2030.
The U.S. House of Representatives Committee on Small Business held a hearing Thursday on the impact of renewable energy production on rural America.
Among those who testified was Renewable Fuels Association president Bob Dinneen, who told the committee that ethanol production is providing a dramatic economic stimulus in rural America.
“The production of ethanol has sparked new capital investment and economic development in rural communities across America,” said Dinneen. “Farmer-owned ethanol plants account for half of the U.S. fuel ethanol plants and almost 40 percent of industry capacity. In fact, the National Farmers Union recently released the findings of a study they commissioned by the University of Missouri on the concentration of agricultural markets. The study showed an increased concentration in every industry except ethanol production. The study also found that ethanol production is the only agricultural sector in which concentration has steadily decreased.”
Dinneen added that, ccording to RFA’s analysis, a 100 million gallon ethanol facility will generate $406 million for the local economy and increase the size of the state economy by $223 million.
The U.S. Department of Energy (DOE) will provide up to $200 million, over five years to support the development of small-scale cellulosic biorefineries in the United States.
According to a DOE announcement, the funding will be for projects to develop biorefineries at ten percent of commercial scale that produce liquid transportation fuels such as ethanol, as well as bio-based chemicals and bioproducts used in industrial applications. This research aims to advance President Bush’s goal of making cellulosic ethanol cost-competitive with gasoline by 2012, and assist in reducing America’s gasoline consumption by 20 percent in ten years by expanding the availability of alternative and renewable transportation fuels.
During a White House press briefing on Monday with European leaders, President Bush commented on his goals for renewable fuels and the current research in producing ethanol from sources other than corn in response to a foreign journalist’s question about global environmental concerns:
I have said we’ll have a mandatory fuel standard, not a voluntary fuel standard, but a mandatory fuel standard that will reduce our uses of gasoline by 20 percent over a 10-year period of time. We believe that ethanol and biodiesel, the spread of ethanol and biodiesel are — the goal of spreading ethanol and biodiesel is achievable, that’s what we believe. And we’re spending a lot of money to achieve that goal.
Now, the spread of ethanol in the United States is not going to be achievable if we rely only upon corn. There is a limit to the amount of ethanol we can produce with corn as a feedstock. So our research dollars are going to what they call cellulosic ethanol, and that means the ability to make ethanol from switchgrasses or wood chips. And we’re spending a lot of money to that end.
And it is a mandatory approach. And the reason why I laid it out is because, one, I do believe we can be better stewards of the environment; and, two, I know it’s in our national interest to become less dependent on foreign sources of oil. The fundamental question is, will America be able to develop the technology necessary for us to achieve the goal. I think we can. It’s in our interest to share that technology, not only with our partners who are wealthy enough to spend money on research dollars, but also with the developing world.
Now you talk about helping alleviate poverty in the developing world — wouldn’t it be wonderful if the developing world could grow crops that would enable them to power their automobiles, so they wouldn’t have to be dependent on foreign oil, either. And that’s the message I took down to South America, with Lula, and to Central America. For example, sugar cane is the most — you’re learning about ethanol here, but sugar cane is the most efficient way to make ethanol. It turns out in Central America there is a lot of land and opportunity to continue to produce cane, which means that the Central American countries could be eventually net exporters of energy. So we’ve got a lot of common ground and a lot of area to work on.
Tennessee’s Department of Transportation (TDOT) announced today that it is expanding its use of biodiesel into vehicles used in Nashville.
According to a release on TDOT’s web site, the agency has been using biodiesel for two years in a 130-vehicle test fleet in East Tennessee as part of the Pilot Fleet Program:
“It’s imperative that government and businesses begin identifying ways to improve air quality,” said TDOT Commissioner Gerald Nicely. “Using biodiesel is an effective way TDOT can reduce harmful emissions and protect our environment.”
TDOT is using B20… 20% biodiesel and 80% regular diesel fuel. Eighty-one heavy-duty dump trucks, bull dozers and back hoes are using the biodiesel.