Domestic Fuel

A fancy title does not good biofuels policy make.

Mixed emotions are emanating from the introduction of the “Foreign Fuels Reduction Act,” introduced by U.S. Senators Joe Manchin (D-W.Va) and Bob Corker (R-Tenn). The legislation would allow only domestically-sourced fuels to be used to meet the requirements of the Renewable Fuel Standard (RFS).

“It is time for America to create an all-of-the-above energy policy that will help lead us to energy independence,” Manchin said. “It’s simply common sense to use all of our resources, and that includes non-food based biofuels. I am proud to cosponsor this bill with my good friend Senator Bob Corker to make sure that we continue to develop domestic non-food based biofuels while stopping the current system’s incentives to import food-based ethanol products from foreign countries.”

According to Corker, the RFS is having some unintended consequences. “This bill is a common sense step toward potentially mitigating gasoline price increases the RFS may contribute to in the near future,” he said. “Because its mandated biofuels volumes are too high, the RFS is also unintentionally incentivizing ethanol imports.  Our bill helps to correct that problem by more properly aligning mandated levels with what we produce domestically.”

The potential challenge with the bill? It would require a reduction in the volume of cellulosic biofuel required under the RFS. It would also result in a pro rata reduction to the total volume of renewable fuel and advanced biofuels,a fight many anti-biofuel camps have been engaged in for years. While this would “ensure” only domestically produced biofuels are used, it would lower the total amount required until production levels ramp up significantly.
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By a 15-5 vote, the Senate Agriculture Committee sent the Agriculture Reform, Food and Jobs Act of 2013 and its commitment to renewable energy to the full Senate, which could take it up next week. The National Biodiesel Board (NBB) welcomed the move, especially the part that funds the Biodiesel Fuel Education Program to the tune of $1 million a year through 2018, with another $1 million a year in discretionary funding for that same time.

During an interview with Chuck at the National Association of Farm Broadcasters (NAFB) Washington Watch, Anne Steckel vice president of federal affairs for the NBB said she is also hopeful Congress preserves the Renewable Fuels Standard (RFS).

“The RFS is really the backbone of the biodiesel industry,” she said. “It’s been incredibly successful for our industry, and it’s been very beneficial for consumers in general. We’re supporting over 50,000 jobs. We’re diversifying off foreign oil, and we’re helping better the environment.”

Steckel went to say that biodiesel enjoys a broad base of bipartisan support in Washington, and she is optimistic that support will continue and help that green fuel sector grow.

“The biodiesel industry is going to continue in its steady growth pattern, [producing] 1.3 billion gallons this year,” and the support of the RFS and biodiesel federal tax credit will help the industry and consumers as well.

Listen to Chuck’s interview with Anne here: Anne Steckel, NBB

2013 NAFB Washington Watch Photo Album

Colorado State University’s Center for the New Energy Economy (CNEE) has launched an Advanced Energy Legislation (AEL) Tracker, a database tracking energy-related state legislation pending in all 50 states. Types of energy include solar, wind, biofuels, natural gas and more. The AEL was created in partnership with Advanced Energy Economy (AEE) and the system will also enable CNEE to conduct analysis of trends in state energy legislation.

To date, there are more than 2,100 bills being considered in U.S. states and the energy tracker monitors the progress of each bill as they move forward. Of these bills, nearly 25 percent call for new financing tools, including tax incentives, for the installation of energy facilities. In addition, roughly 21 percent of the bills are promoting development of clean energy sources, and about 8 percent encourage the adoption of energy-efficient appliances, building codes and practices.

If we look at where the country is going on advanced energy policy, overwhelmingly that transition is being led by states,” said Bill Ritter, Jr., director of CNEE and former governor of Colorado.”To get the pulse of where the country is going we need to understand what the states are doing.”

Ritter continued, “AEL Tracker brings together information on energy-related legislation in all 50 states, in a form that is easily accessible not only to lawmakers at all levels of government, but to academics, analysts, environmentalists, funders, business leaders and the general public. It will allow our Center to conduct critical academic analysis of issues to energy legislation nationwide.”
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Legislation to reauthorize the Farm Bill energy title was introduced in the Senate Monday.

Senators Tom Harkin (D-IA) and Al Franken (D-MN) introduced the Rural Energy Investment Act to “help farmers, ranchers, and rural communities by encouraging the growth of agricultural energy technologies, including advanced biofuels, biogas, biomass, and renewable energies.”

“These energy programs are essential for expanding clean energy supplies, which also spur rural economic development and job creation,” said Harkin. “The tradition of providing strong support for an energy title in a farm bill must continue today, so for that reason I am hopeful that this measure will serve as a marker as the 2013 bill moves through the U.S. Senate.”

“Advancing our agricultural energy technologies is good for our farmers and economy, and it improves our overall energy independence and security,” added Franken. “This legislation will create jobs and play a critical role in cutting costs for our farmers and producers and will help them with the adoption of energy efficiency and renewable energy technologies.”

The Agriculture Energy Coalition supports the legislation and thanked the senators for introducing it. Last week, the coalition joined more than 100 national, state and regional organizations in a letter to the leaders of the House and Senate Agriculture Committees, urging them to adopt a new Farm Bill with robust mandatory funding for renewable energy and energy efficiency programs.

Yesterday Rep. Jim Sensenbrenner introduced legislation that would stall the roll-out of E15. Many in the renewable fuels industry responded to the proposed legislation including Fuels America who noted that the legislation ignores the long track record of successful, rigorous testing that E15 has undergone. “What the bill is clearly geared toward, however, is promoting the interest of oil compaines looking to retain control over America’s fuel option.”

“E15 is the most tested renewable fuel in history and to suggest otherwise ignores a wealth of facts. In multiple tests, E15 has been put through the paces in more than 6 million miles of testing. The results of these tests were so satisfactory that E15 is used in NASCAR vehicles – high-performance racecars that can top 200 miles an hour – have opted to use E15, continued the Fuels America statement.

“The reality is that E15 provides options to Americans and the choice to power their cars with clean and renewable fuel. Unfortunately, Rep. Sensenbrenner’s legislation would limit that choice by favoring the oil industry over hardworking American families and businesses.”

The American Coalition for Ethanol (ACE) who recently had a team of more than 70 ethanol supporters meeting with Congressman in DC, noted that the legislation would require another 18 months of E15 testing at taxpayers expense. Senior Vice President Ron Lamberty called the bill “A transparent attempt to protect Big Oil’s profitable monopoly by taking away a driver’s right to choose which fuel to use in his or her own car.”

“Congressman Sensenbrenner is basing his opposition of E15 primarily on two studies that clearly selected vehicles and components based on their history of performing poorly regardless of the type of fuel that was in them,” said Lamberty. “All Mr. Sensenbrenner is proving is that he either doesn’t know what the studies actually say or he does know, and is misrepresenting the findings. Neither should be acceptable to those who serve with him on the House Science and Technology Committee. In the event the bill passes out of committee, we would hope Congress would recognize this bill for what it actually is and not pass it.”

Lamberty continued, “Jim Sensenbrenner has a well-known history of refusing to accept science that doesn’t agree with his personal opinions. And after repeatedly saying two years of E15 testing by EPA and DoE testing was a “rush to judgment,” does anyone think he’ll accept a smaller, shorter test from the National Academy of Sciences when it says E15 is safe? No, this isn’t about science, it’s about delaying to protect BP and Exxon-Mobil.”

“Congressman Sensenbrenner loves to talk about “individual choice and free-market competition” when he talks about health care, and “defending the freedom and individual responsibilities” of motorcycle riders to not wear helmets, but he doesn’t trust people to make their own choice at the gas pump? Ridiculous,” added Lamberty.

Following the House Committee on Science, Space and Technology’s mark up and ultimate approval of H. 875, legislation designed to untimely repeal approval of E15 that was introduced by Rep. Jim Sensenbrenner.

“The House Science Committee is ignoring hard data and facts that show E15 is reliable and the most tested fuel to date,” said Tom Buis, CEO of Growth Energy. “It is ironic that many members of the Committee chose to ignore the science, kick the can down the road and keep our nation addicted to foreign oil. Clearly this legislation does nothing to increase our energy security or independence; rather it only provides additional roadblocks and legislative hurdles for homegrown American energy from entering the commercial marketplace.

Buis continued, “H. 875 is a legislative tactic to delay, and ultimately repeal approval of E15. This is truly unfortunate as E15 is the most tested fuel to date and all the ethanol industry is asking for is the chance to compete in a free marketplace, where market share is not blocked and consumers and retailers have the opportunity to make the voluntary choice of the fuel they wish to use. However oil companies, refiners and special interests know that once higher blends of biofuels become available, consumers will line up to get a cleaner, higher performing, better fuel that is made in America instead of paying more to continue our reliance on foreign oil.”

Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), added, “This legislation is a tribute to stubbornness. Congressman Sensenbrenner refuses to acknowledge that E15 is a thoroughly tested and approved fuel option that gives consumers a cost-saving, environment-enhancing, domestic renewable choice at the pump. E15 has been test driven the equivalent of 4,700 round trips from Washington, D.C. to Milwaukee. If he doesn’t want to use it, fine, but American drivers have a right to choose. Stop throwing bad paid-for ‘science’ and scary warnings around in the name of oil monopoly protectionism.”

Georgia State Rep. Rusty Kidd (Independent – Milledgeville) has introduced the Rural Georgia Economic Recovery and Solar Resource Act of 2014, that if passed, would create greater access to solar and an economic opportunity for rural Georgia. According to Georgia Solar Utilities, the bill would bust the current monopoly on solar in Georgia and allow competitive bidding for construction of new solar projects by private companies, ensuring costs to drop and deliver real price-savings to customers.

What the bill does: 1) Provides a 100% voluntary solar program that would allow ratepayers to opt-in on their monthly bill. 2) Lowers power bills for customers who take advantage of the failing costs of Georgia-grown solar energy. 3) Opens the marketplace for competition in the solar industry, under the supervision of the Georgia Public Service Commission. 4) leverages private-sector investment to finance solar projects, not taxpayer subsidies. 5) Compensates utilities for grid access and other electricity transmission costs.

Georgia Solar Utilities is asking that solar supporters send a thank you note to the sponsors of the bill to help garner support. They are:

Chief Sponsor: Rep. Rusty Kidd: 404.656.0202
Co-Sponsors:

• Rep. Buzz Brockway: 404.656.0188
• Rep. Gloria Frazier: 404.656.0265
• Rep. Carol Fullerton: 404.656.0116
• Rep. Tom Kirby: 404.656.0177
• Rep. Terry Rogers: 404.656.0178

As last week came to a close, U.S. Congressman Jim Sensenbrenner (R-WI) introduced a bill to place what the Renewable Fuels Association (RFA) calls artificial caps on the Environmental Protection Agency’s (EPA) annual cellulosic biofuel projected production numbers. The proposed limits for any given year would be no more than five percent or one million gallons, whichever is greater, of total volume of cellulosic biofuels commercially available for the most recent calendar year.

In response, Bob Dinneen, RFA President and CEO said this is worse than irony. “Now that truly meaningful investment is being made in cellulosic ethanol companies that can be witnessed by the steel in the ground and actual production and introduction of millions of gallons of advanced ethanol into the marketplace, the Congressman wants this nation to turn its back on progress — turn back the clock to days of petroleum domination,” said Dinneen.

“Americans want fuel choice, they want cost savings, and they want American energy independence.  America is noted worldwide for its ingenuity and creativity.  Ethanol, especially the next generation that is now coming to fruition before our eyes, is the epitome of the American spirit.

Rather than encouraging that uniquely American entrepreneurial spirit, Congressman Sensenbrenner would limit the growth in advanced biofuels to no more than five percent per year.  Clearly, far faster growth will occur if the RFS is left to work as designed.  But in any case, I wonder if Congressman Sensenbrenner would agree to a five percent cap on the growth of non-conventional petroleum from fracking in the same spirit he is trying to cap advances in biofuels to five percent.  Why limit the speed of progress toward energy independence from any domestic resource?” concluded Dinneen.

Although the Taxpayer Relief Act is an all but done deal, stakeholders across numerous industries continue to pick at the legislation. This is particularly true for the renewable energy industry. Legislation can be hard to digest and so the law firm Milbank, Tweed, Hadley & McCloy created a “crib” sheet, or alert, giving a brief overview of how the Act will impact current and future projects in the renewables space including wind, biomass, geothermal, landfill gas, hydropower, cellulosic and advanced biofuels, biodiesel and even marine and hydro projects.

According to Millbank, the most important feature was the extension of the production tax credit for qualifying wind projects. A project must begin prior to January 1, 2014. The alert notes, “any such qualifying facility (or the electricity generated and sold from it)” that can get off the ground in the next year will be eligible for the tax credit – “regardless of when the facility is placed in service.” That suggests a big financial infusion into the wind industry during 2013 to jump-start projects that may have been put on hold pending the outcome of the tax bill.

Milbank points out in the alert that the legislation does not modify the eligibility requirements for certain types of projects, including those generating power through small irrigation, solar energy, refined coal, or Indian coal, rather keeps the same requirements in place. In addition, the alert takes a close look at tax allowances, including the special first-year allowance, otherwise known as “50% bonus depreciation” to qualifying property placed in service before next January 1.

Across the board for renewable energy, the tax extenders only stay in place for one year. This means that the renewable energy industry will need to take advantage of the tax packages this year while also looking at how to continue growth as uncertainty about industry tax incentives remain on the “cliff” beyond this year.

The U.S. Senate repeal of a second provision in the military’s budget that would have blocked the developing the use biofuel alternatives is being welcomed by biofuel makers. Yesterday, The Senate voted 62-37 to pass an amendment by Senator Mark Udall (D-CO) repealing section 313 of the FY2013 National Defense Authorization Act (NDAA), which prohibited DOD from procuring alternative fuels if they cost more than their conventional counterparts. Today, they passed Senator Kay Hagan’s (D-NC) amendment to repeal section 2823 of the NDAA that prohibited defense officials from entering into a contract to plan, design, refurbish or build a biofuels plant or any facility used to refine biofuels unless it is specifically authorized by law. This amendment passed by a vote of 54-41.

Growth Energy CEO Tom Buis applauded the move:

“Today’s successful passage of Senator Hagan’s amendment is yet another example of the strong bipartisan support in the U.S. Senate for American made renewable energy. This is the second successful vote in two days supporting renewable fuels and the message lawmakers are sending is clear – biofuels play a critical role in developing a diversified energy portfolio to meet our growing energy needs and increase our energy independence.

Mike Breen, Executive Director of the Truman Project and spokesman for its clean energy campaign, Operation Free, was also pleased to see Hagan’s (D-NC) amendment pass.

“Today’s vote was a victory for our military’s energy security, helping ensure that we develop technology to diversify the fuels that power our military’s vehicles, ships, and aircraft…

The DoD has a long history of encouraging private-public partnerships that result in new opportunities for civilian industries. Advanced biofuels can be the next success story.”

Bob Dinneen, the President and CEO of the Renewable Fuels Association (RFA), added his congratulations to the Senate for repealing both measures in the defense spending bill:

“We now have two examples in two days of the strength and momentum behind renewable fuels. Americans believe in biofuels and see a future that is strong, bright and energy independent.”

A similar provision is also making its way through the House’s version of the defense spending bill.

The extension of the wind energy tax credit could come this year, but it might be part of a bigger deal of tax reform. Sen. Chuck Grassley (R-IA), who holds positions on the Senate’s Budget, Finance and Ag Committees, says it will be a fight.

“I think now the argument ought to be, ‘Why would you sort wind out of all the other energy tax credits that are in the bill that came out of the Senate Finance Committee?’ Hopefully, they won’t find a reason to separate it and make an exception for wind,” he said during a news conference, pointing out there are 60 extenders in the tax bill.

Grassley said it could be part of a deal to get a whole package through. “There could be a decision made between [House Speaker John] Boehner and the President that we ought to put this all off until next year. If that happens, then everything that sunsets January first will be extended into next year, I’d say, for at least six months. Then, use that for… more tax reform of the tax code, generally.”

The senator added that a five-year extension is probably not doable, but this deal, backed by a bipartisan coalition of governors, is just for one year.

Listen to Sen. Grassley’s comments about the wind energy tax credit: Sen. Chuck Grassley

A report from an environmental group warns that the loss of the U.S. military’s biofuels program means a loss of potential jobs and economic activity in the civilian sector. Environmental Entrepreneurs (E2) says the Department of Defense’s plans to expand its use of biofuel in planes, ships and other vehicles would generate at least about $10 billion in economic activity and create more than 14,000 jobs by 2020. But Congressional plans could curb all that:

[U]nder the National Defense Authorization Act (NDAA) that Congress is expected to take up in the next several weeks, the military – the nation’s biggest user of oil and gasoline – would be prohibited from expanding its use of biofuel.

“The military is the biggest driver of the biofuel industry right now. If Congress stops the military from doing what the military knows is best, Congress also could threaten the growth of the Made-in-America biofuel industry.”

The report goes on to point out that military developments particularly in the aviation field could help the commercial airline industry expand its use of biofuels.

A group of business leaders who purport to “promote sound environmental policy that builds economic prosperity” have a report making the case that biofuels used and developed by the military could help the economy. Environmental Entrepreneurs (E2) will release the report during a news conference tomorrow, Nov. 14 at 11 a.m. EST that says the Department of Defense’s Advanced Biofuels Initiatives could generate more than $10 billion in economic activity and more than 14,000 jobs:

Congress is about to take up the National Defense Authorization Act, which in current versions would prohibit the DoD from moving forward with its plans and desires to increase its use of biofuels. Citing national security concerns, the Navy and Air Force want to replace 50 percent of their fuel supplies with non-petroleum biofuels by 2020.

Just as military innovation and leadership transformed our nation’s economy in sectors ranging from aviation to communication to computers, the military’s biofuels expansion could provide a major boost to the economy and job creation, and help transform the nation’s energy, airline and agriculture industries.

E2 leaders, biofuels executives and military advocates will be on the phone call to discuss how military investments in biofuels can pay off for the private sector.

Media members are encouraged to contact Bob Keefe at bkeefe@e2.org or (202) 289-2373; or Patrick Mitchell at pmitchell@hastingsgroup.com or (703) 276-3266 to sign up for the news conference.

Last December, U.S. District Judge Lawrence O’Neill ruled California’s Low Carbon Fuels Standard (LCFS) unconstitutional. However, a stay was issued allowing implementation of the law until a federal appeals court hears arguments in the case. This is set to take place this week.

The Consumer Energy Alliance (CEA) is lobbying for the end of the LCFS. Executive Vice President Michael Whatley said, “We are optimistic that through these proceedings, it will become clear the LCFS is an unconstitutional and destructive program that will hurt California’s consumers and kill jobs. Even those supporting California’s LCFS have acknowledged its legal risk. CARB’s claims of LCFS benefits have been debunked by study after study. At the end of the day, the LCFS will double gas prices and cost our economy billions of dollars – all while failing to reduce greenhouse gas emissions.”

CEA cites several studies showing that LCFS is harmful to consumers. In June 2010 Charles River Associates released a study that says it would cost the loss of between 2.3 and 4.5 million jobs; increase the price of gasoline and diesel up to 170 percent over the next 10 years; and will decrease the Gross Domestic Product (GDP) 2-3 percent.

The organization also cites a study from the Boston Consulting Group that adds that a LCFS will result in the loss of 25-35 percent of California’s refining capacity and the closure of 5-7 of the state’s refineries. And yet another study they cite is from Barr Engineering that poses a significant carbon emission increase could occur under a LCFS program.

While I’m not here to pick sides, it is interesting to note that both sides use the argument that “study after study” has debunked the view of the other side. I’ll let you decide what to believe.

As the Production Tax Credit (PTC) remains stalled in Congress, worker layoffs in the wind energy industry are rising. The Iowa Wind Energy Association has been forewarning legislators that if the PTC is not extended, thousands of Americans could lose their jobs.  Proof: Siemen’s has laid off more than 400 workers in its Fort Madison wind turbine blade plant. Other companies that have let employees go include Clipper and Vestas among others.

Layoffs will accelerate as many wind farms currently under construction will be completed by December 31, 2012. Without the security of the Production Tax Credit, investors are not moving forward with the monies needed to build or expand wind farms. This in turn dries up demand for the entire wind turbine supply chain.

Iowa leads the nation in the number of people employed with component manufacturers and wind related companies. The industry totaled nearly 7,000 across the state until the layoffs began. Following the Siemen’s announcement, 10 percent of Iowa’s wind energy workforce has disappeared.

On the national level, the failure to extend the PTC could cost as many as 37,000 jobs according to estimates by Navigant Consulting. A delay could reduce the expansion of the wind energy industry between 75 percent to 90 percent compared to previous years.

The lowa Congressional Delegation is leading the effort to expand the PTC in both the Senate and House. Yet the Iowa Wind Energy Association notes that legislators need more help from Senators and Representatives from other states to grow a bipartisan coalition to move the extension forward. This can be done through grassroots efforts including contacting your local legislator to let them know how important the wind energy industry is to America.