NY Senator Supports Biodiesel Not Ethanol

U.S. Senator Chuck Schumer (NY-D) visited New York’s only commercial biodiesel producer last month to assure them of his support for the federal tax incentive for biodiesel.

“The dollar tax incentive assures us that we are competitive with regular diesel fuel right now. The federal government subsidizes the petroleum industry as well, so if we lose our incentive, we lose our competitive advantage over the regular fuel,” said Schumer during a stop at Northern Biodiesel on February 19.

However, while Sen. Schumer supports biodiesel, he opposes corn ethanol. Informa Economics reports that Schumer sent a letter to a constituent outlining his concerns, saying that “corn ethanol provides no environmental, economic, or security benefit over petroleum, and it raises serious ethical concerns about our obligations towards our neighbors.” At the same time, Schumer does support the development of cellulosic ethanol, saying production does “have the potential to protect the environment and reduce America’s dependence on foreign oil, without putting strains on American agriculture or other countries’ food supplies.”

Schumer’s letter prompted officials with Western New York Energy (WNYE) to write him a letter and set the record on corn ethanol straight.

“Rather than pointing out the inconsistency in your ethanol and biodiesel positions, we wanted to take this opportunity to provide you with more current information about America’s ethanol industry in the hopes that you will revisit your position,” wrote plant owners John and Michael Sawyer. They are planning to contact the senator’s office to set up a tour of their 55 million gallon per year plant located in Medina, NY which was the first ethanol plant built in the northeast United States and is a member of the Renewable Fuels Association.

Pennsylvania Slated for Biofuel Conference

A one-day conference is scheduled to provide information to Pennsylvania biodiesel producers on what should be expected when the state’s B2 mandate goes into effect.

Biodiesel Magazine reports the Pennsylvania Department of Agriculture and the National Biodiesel Board are holding the April 20 event, called the Pennsylvania Biofuel Development Conference:

The mandate is based on trigger points, so when instate production—not installed capacity but actual production volumes—reaches 100 MMgy, the Pennsylvania biodiesel standard will move from B2 to B5. Keystone Biofuels’ Ben Wootten, also president of the Pennsylvania Biodiesel Producers Group, said installed biodiesel production capacity in Pennsylvania is currently 114 MMgy.

The B2 mandate is for on-road diesel fuel only, but Wootten, who just accepted the position of regulatory chair for the National Biodiesel Board, said Bioheat legislation was just recently proposed, Senate Bill 1282, which would seek a B5 mandate for all heating oil sold in Pennsylvania beginning May 2011.

The event will feature sessions focusing on statewide biodiesel distribution systems, best practices to ensure fuel quality, testing methods and more. To register and for more information, contact Michael Radar at (717) 787-9089.

Biodiesel Credit Clears Senate, On to House

As expected, the federal $1-a-gallon biodiesel tax incentive has cleared the U.S. Senate on the back of the current jobs bill.

The 62-36 vote now moves the measure into a reconciliation phase with the House’s version of the bill.

I caught up with Michael Frohlich, the director of federal communications for the National Biodiesel Board’s office in Washington, D.C. earlier this evening. He says final passage of this important measure can’t come soon enough.

“It’s an immediate need for the industry at this point,” says Frohlich, pointing out that biodiesel has been without the credit since the beginning of the year. Fortunately, if the bill does pass and is signed into law, it will be retroactive back to January 1, 2010.

But Frohlich is worried that biodiesel will be back in the same boat next December 31st as it was last December 31st, because this version of the tax credit expires at the end of this year.

“Although it’s slightly a bit of a hollow victory in the sense that we’ll have to go back to the drawing table once this gets enacted to make sure that it continues to get enacted again next year, it is traditional that [Congress does] pass these extenders, and we haven’t seen any objection from any senator or House member.”

He says last year, the Senate got so caught up in the health care debate, lawmakers worked on Christmas Eve … and that never happens … and the incentive got left by the wayside. Frohlich doesn’t expect that the biodiesel credit will get left behind again, but it has reinforced that the NBB’s number one legislative priority is to get a multi-year tax credit into effect.

And hopefully, there won’t be a health care debate that stops all business.

You can hear all of my conversation with Michael below.

Biodiesel Clears Senate Hurdle on the Back of Jobs Bill

It looks like the $1-a-gallon federal biodiesel tax incentive could be close to renewal, as the jobs bill to which it was attached has cleared a key vote in the U.S. Senate.

The vote came Tuesday as eight Republicans sided with 58 Democrats to end debate on the $150 billion measure.

The cloture vote clears the way for final passage in the Senate. H.R. 4213, the American Workers, State and Business Relief Act includes retroactive extension of the biodiesel tax credit, and it will have to be reconciled with the US House’s version.

The American Soybean Association is urging lawmakers to work together to get a final bill done:

“Expiration of the biodiesel tax incentive has essentially caused the production and use of biodiesel in the U.S. to cease and has placed thousands of jobs currently supported by the domestic biodiesel industry in immediate jeopardy,” said ASA President Rob Joslin, a soybean producer from Sidney, Ohio. “Companies have already started laying-off employees, and this situation is certain to worsen the longer the tax incentive is allowed to lapse.”

An interesting note: I found out about this passage earlier on Tuesday when our friend Jessica Robinson from the National Biodiesel Board (@Biodiesel_Media) tweeted, or more accurately, re-tweeted @agripulse‘s tweet to my Twitter account (@jdavisreporter) when the vote happened. Didn’t take long for at story to travel around the social media! No wonder Chuck and Cindy (@AgriBlogger and @FarmPodcaster) have been such big advocates!

Biofuels and Conservation Achievable with Biomass

Getting energy from the land and practicing good conservation are not mutually exclusive. A federal ag deartment researcher says we can have both through using biomass.

USDA researcher Doug Karlen, who works at the Agricultural Research Service’s National Soil Tilth Lab in Ames, Iowa, told attendees of the recent USDA Outlook Forum that conservation and energy from biomass can be compatible if three things are considered.

“If we utilize multiple feedstock options, multiple conversion platforms and recognize that’s there’s no single solution.”

Karlen also told the group that you have to consider how land conditions vary. In addition, biomass cannot always be seen as just a waste waiting to be made useful. He points out that the trade-off for using biomass from fields for bioenergy is that there is no residue left over to renew the soil with nutrients, as well as losing the habitat for wildlife those crop leftovers provided. Karlen says that’s why it is so important to have a diversity of biomass products within a certain area.

Advanced Biofuel Makers Call for Tax Credits

The advanced biofuels industry is putting a bug in Congress’ ear, calling for lawmakers to allow for an investment tax credit that will help advanced biofuels makers get money to get their projects up to commercial scale and become eligible for another operating credit.

Biomass Magazine explains that the industry would be eligible for a federal production tax credit of 30 percent, but the incentive is unused because there are no operating commercial-scale facilities:

Nearly 40 industry-relevant groups such as the Renewable Fuels Association, BlueFire Ethanol, Coskata, Enerkem, Verenium, Range Fuels and Iogen signed a letter to U.S. Sen. Max Baucus, (D-Mont.), Charles Grassley (R-Iowa), Rep. Dave Camp (R-Mich.)and Rep. Charles Rangel (D-N.Y.), which points out that there will be no commercial cellulosic biorefineries commissioned before 2011, at the earliest. The principle cause for commercialization delay is lack of funding, the letter states, due to the severe plummet of the U.S. economy.

According to U.S. Department of Energy numbers, it costs $250 million to get a 50 million-gallon-a-year advanced cellulosic biofuel operation up and running, and right now, that’s some tough scratch to come up with in this economy.

RFA Urges Full Funding of Ethanol Fuel Research

The Renewable Fuels Association (RFA) is urging Congress to ensure full funding of fuels research programs to provide the necessary scientific basis for increasing ethanol blending.

Renewable Fuels Association LogoIn a letter this week to leaders of both the House and Senate Appropriations Subcommittees on Energy and Water Development, RFA President Bob Dinneen outlined concerns with the budget submitted by President Obama with respect to higher level ethanol testing. Specifically, Dinneen called on Congress to support full funding of the Biomass and Biorefinery Systems program’s Utilization of Platform Outputs R&D subprogram as well as funding for the Vehicle Technologies program’s Fuels Technology subprogram, which were cut or eliminated in the president’s budget.

“President Obama recently reaffirmed his commitment to both current ethanol technologies and next generation opportunities in his biofuels plan released in February,” said Dinneen. “Congress should take this opportunity to ensure these critical fuel research programs are fully funded and to allow America’s ethanol industry to reach its full potential to displace petroleum use in motor vehicles.”

The RFA is calling for the full $24 million for the Vehicle Technologies program’s Fuels Technology subprogram and for an additional $5 million appropriation for the Biomass and Biorefinery Systems R&D subprograms.

Read the letter here.

Iowa Biodiesel Mandate Dies, But Could Be Reborn

A proposal to mandate a 5 percent biodiesel blend in every gallon of diesel sold in Iowa has died in one legislative committee … but could be reborn in another.

The Fort Dodge (IA) Messenger reports that the House environmental protection committee’s ranking member, Rep. Steve Olson, R-DeWitt, declared the bill dead:

Olson said the GOP caucus was opposed to the bill because it opposed mandates. However, even though the bill died in one committee, it could be revived in another or amended into another bill before the session ends, he said.

Rep. Gary Worthan, R-Storm Lake, who is the ranking member of the House ag committee and also sits on the transportation committee, heard both days’ testimony and said that although he is opposed to mandates in general, Iowa may have to mandate 5 percent blended biodiesel in order to save the industry.

”Right now biodiesel is where ethanol was 15 years ago,” Worthan said. ”There’s no market access for it.” He said he fears that what happened in 2009 with petroleum refiners purchasing failing ethanol plants for pennies on the dollar, may happen soon with biodiesel plants unless they can get a strong financial footing.

Worthan added that biodiesel blends are more uniform than in the past to meet federal standards, and that should make the green fuel more attractive than years ago when standards were a bit looser.

Obama Changes Tune from Biodiesel to Biofuels

Some others have started to notice something I told you about back in January. It seems that while he campaigned on the word “biodiesel,” President Barack Obama is now talking “biofuels” … a more ambiguous term that is leaving some biodiesel producers scratching their heads wondering whether the president backs them.

This piece from Biodiesel Magazine points out that Stimulus Act monies seem to be going to too many unproven technologies, such as fuel cells, cellulosic ethanol and electric motors, instead of proven, reliable biodiesel:

The Obama administration coming out with billions of dollars from the American Recovery and Reinvestment Act to increase “clean energy manufacturing” could seem almost like a taunt to biodiesel producers.Obama announced “awardees” of the $2.3 billion clean energy manufacturing tax credits as existing biodiesel producers languish over the lapse of their specific federal blender tax credit. “Projects are assessed based on the following criteria: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions,” the White House stated on Jan. 8.

While the word “biofuels” was good to hear spoken by the president, there’s a word that describes the 2009 biodiesel year—idle. Huge plants sat quiet for months as vegetable oils were high and diesel prices were not. Imperium Renewables Inc., which suffered an explosion at its Grays Harbor plant in Washington State, said it was in no big hurry to make repairs while the tax credit is nonexistent.

“I don’t think this Obama administration is any different than any other—Republican or Democrat—in that often the right hand doesn’t know what the left is doing,” said Joe Gershen of Los Angeles’ Tellurian Biodiesel. “So it does hurt, but I will say that I don’t think they’re doing it on purpose.”

I think the fact that the biodiesel tax incentive was allowed to expire and the White House not pushing for renewal speaks volumes … actions always speak louder than words.

Grassley: Jobs Bill Forgot 23,000 Biodiesel Jobs

The latest jobs bill seems to be forgetting the 23,000 workers in the biodiesel industry who are at risk since the provision renewing the federal $1-a-gallon tax incentive was removed. That’s the opinion of Sen. Charles Grassley, a Republican from Iowa who saw his version of the jobs bill with the biodiesel provisions get scrapped for a pared down version from Senate Majority Leader Harry Reid (D-Nevada).

Now, it looks like Reid’s bill will come to a vote on Wednesday after passing an important procedural vote earlier this week. But before the cloture vote, Grassley took to the Senate floor to express his dismay at Reid’s jobs bill without the biodiesel-jobs-saving provisions (this excerpt from IowaPolitics.com):

Either the Democratic leaders are playing partisan politics with tax extenders, or they don’t understand the worth of the provisions to the economy, including job retention and creation. The biodiesel industry alone says 23,000 jobs are at risk due to the biodiesel tax credit being allowed to expire. Those workers are not fat cats.

And in case anyone thinks biodiesel is something only Iowans worry about, these green jobs are in forty-four of the fifty states.

The biodiesel tax incentive was allowed to expire at the end of 2009 while the Senate wrestled over health care reform.