Bipartisan Bill Would Save Jobs and Help Ethanol Grow

Bipartisan legislation introduced Thursday will help preserve jobs in the renewable energy industry and accelerate the development of cellulosic ethanol, according to its sponsors. The Renewable Fuels Reinvestment Act sponsored by Reps. Earl Pomeroy (D-ND) and John Shimkus (R-IL) unveiled legislation would extend the current Volumetric Ethanol Excise Tax Credit (VEETC), the Small Ethanol Producers Tax Credit and tariff on imported ethanol for five years and extend the Cellulosic Ethanol Production Tax Credit for three years.

Congressman Pomeroy said, “At a time when our economy is struggling, we cannot afford to let these tax incentives expire and stymie the growth we have seen in our ethanol industry.”

“Extending the ethanol and cellulosic tax credits helps give much needed certainty to the industry and will continue to help our nation’s energy security,” said Congressman Shimkus.

Leaders of the Renewable Fuels Association (RFA), Growth Energy and the National Corn Growers Association (NCGA), joined the congressmen in a Thursday afternoon press conference at the Capitol to introduce the bill. Pictured from left to right are RFA President Bob Dinneen, Congressman John Shimkus (R-Ill.), Growth Energy CEO Tom Buis, Congressman Earl Pomeroy (D- N.D.), with NCGA president Darrin Ihnen at the podium.

“The extension of VEETC would contribute to energy independence, create and secure thousands of jobs in rural America and allow for a stronger agriculture sector,” said Ihnen, a grower from South Dakota. 

Growth Energy just released a study showing that if the tariff on foreign ethanol is allowed to expire at the end of the year, extreme job losses and the loss of billions of dollars in economic activity would follow. The 10 year projection, calculated by the University of Missouri’s Community Policy Analysis Center, found 39,506 jobs would be lost in the first year after the tariff lapses, 115,642 in the second year, and 161,384 in the third year. The decline in economic activity following the lapse of the tariff was calculated at $9.2 billion the first year, $26.4 billion the second year, and $36.7 billion the third year – and remaining in the double digits during the 10-year projection, hitting $21.2 billion in 2021.

“Without the tariff, American taxpayers will be allowing foreign-subsidized ethanol to subvert American companies and American workers,” said Growth Energy CEO Tom Buis. “It would replace our nation’s addiction to foreign oil with dependence on foreign ethanol – and not make our nation one bit more energy secure.”

Joining Reps. Pomeroy and Shimkus as co-sponsors of the bill are 27 other members of Congress. A companion bill in the Senate is expected soon.

RFA Pleased with Bill to Extend Ethanol Incentives

The Renewable Fuels Association today praised the Renewable Fuels Reinvestment Act (RFRA) introduced by Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL). The bill would extend the $0.45 Volumetric Ethanol Excise Tax Credit (VEETC), commonly called the blenders’ credit, and the secondary tariff on imported ethanol until December 31, 2015. It would also extend the Small Producers Tax Credit and the Cellulosic Ethanol Production Tax Credit to January 1, 2016.

Renewable Fuels Association Logo“Passage of the RFRA will provide investors with the long term stability needed to bring next generation technologies to commercialization. Likewise, it allows current ethanol producers to invest with confidence in new efficiencies to further improve upon ethanol’s economic and environmental benefits,” said Renewable Fuels Association President Bob Dinneen. “Representatives Pomeroy, Shimkus and their fellow cosponsors are showing tremendous leadership and foresight. I urge all members of Congress to take this opportunity to learn the real facts about American ethanol production and, ultimately, pass this bill as soon as possible.”

Last week, the RFA released a study detailing the damage that would be inflicted upon the domestic ethanol industry if the tax credits were allowed to expire, which would include the loss of 112,000 jobs and the reduction of domestic ethanol production by 38 percent.

Chuck Zimmerman interviewed Bob Dinneen, who participated in a press conference today introducing the bill. Listen to or download that interview here:

Warthog to be First Jet to Test Biomass Jet Fuel

It’s officially called the A-10 Thunderbolt II, but to the men and women who wear the blue of the U.S. Air Force, it is affectionately called the Warthog … and it’s real beauty will come in its upcoming test of biomass-based jet fuel.

Air Force News Service says a test pilot will attempt to fly an A-10 on a blend of biomass-derived and conventional JP-8 jet fuel, the first flight of an aircraft powered solely on a biomass-derived jet fuel blend:

The biomass-derived fuel used for this event is referred to as hydrotreated renewable jet, or HRJ, and is part of a class of fuels derived from either plant oil or animal fat feedstocks. The feedstock source of the biomass powering the A-10 demonstration is camelina oil, a flowering plant in the same family as mustard, cabbage and broccoli, but not used as a food-source.

Biomass-derived fuels offer the potential to reduce greenhouse gas emissions. While additional testing will be conducted to explore the full extent of their benefits, test data show that particulate emissions are reduced during combustion of biomass-derived fuels.

This event marks the next phase in the Air Force’s alternative aviation fuel program and represents a milestone in worldwide development of alternative aviation fuels, paving the way for future Air Force HRJ certification flight tests of the F-15 Eagle, F-22 Raptor and C-17 Globemaster III to begin this summer.

This flight is part of the Air Force’s goal to get half of its domestic aviation fuel from an alternative fuel blend by 2016.

Pennsylvania Biodiesel Heating Oil Mandate Considered

Pennsylvania residents might soon take the chill off their cold winter nights (and cool spring, summer and fall days and nights) with a dose of biodiesel.

This post from Heatingoil.com says a new bill introduced in the state legislature by Sen. Ted Erickson would require heating oil to be blended with biodiesel, as well as lowering the sulfur content in regular diesel:

The bill in Pennsylvania would amend a 2008 bill known as the Biofuel Development and In-State Production Incentive Act. The low-sulfur mandate would go into effect on May 1, 2011; heating oil in Pennsylvania is currently allowed to have a sulfur content of up to 2,000 parts per million. The requirement for heating oil to include 10 percent biodiesel would go into effect on May 1, 2013.

The post goes on to say the Pennsylvania Petroleum Marketers supports the bill, and the Keystone State could be joining other states in the Northeast that either already have or are proposing a biodiesel-in-heating-oil mandate.

Biodiesel Incentive to Wait At Least Until Mid-April

Although it has a broad base of support across the country (unlike a certain health care measure that 60+ percent of Americans don’t favor), renewal of the federal $1-a-gallon biodiesel tax incentive seems that it will have to wait at least a month at the earliest before Congress will get to it.

This article from Reuters says with Congressional recesses coming up, the measure is unlikely to see any action until at least the middle of next month:

While the House and Senate have passed bills to renew the credit for 2010, they must agree on a common text to send to the president. “Neither the House or Senate has signaled any particulars on how they will do that,” said Michael Frohlich of the National Biodiesel Board, a trade group.

The tax credit is one provision in a $149 billion bill focused on job creation and extension of tax incentives.

A resolution is unlikely before mid-April, said two biofuels officials. Congress soon will recess until April 13, they noted, and a final vote on the credit could be delayed until late April or later, depending on the pace of House-Senate negotiations.

So, instead of moving quickly on a bill that is projected to save 23,000 jobs that have been or are being lost by the biodiesel industry because of the loss of the credit, we have lawmakers in D.C. staying up late on a Sunday night to pass a bill (healthcare) that has only about one-third of the country’s support. Maybe they should have nick-named the measure the “Biodiesel Health Bill.”

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.