USDA & EPA Called to Update Climate Change Analysis

ChamblissLucasQuestions by the Secretary of Agriculture himself about the USDA’s and EPA’s climate change analysis has prompted the two ranking members of the U.S. Senate and House Ag Committees to ask questions as well.

U.S. Senator Saxby Chambliss (R-Ga.) and U.S. Representative Frank Lucas (R-Okla.) have sent a letter to Secretary Tom Vilsack, asking him about his apparent lack of confidence in the modeling used by both USDA and EPA. They’d also like to see Vilsack on Capitol Hill and ask him about the impact cap and trade legislation would have on the agriculture and biofuels sector:

The Department’s testimony delivered earlier this month to the House Agriculture Committee is clear and unequivocal; agriculture will undergo significant structural impacts that will change how food, feed, fiber and fuel are produced in the United States. The disappearance of 59 million acres of cropland, higher food prices and lower exports will undoubtedly shape how farmers and ranchers make a living in the years ahead. While we can disagree on policy, we cannot ignore the facts when they are inconvenient to our preferred narrative.

In light of your critique of USDA’s analysis, we respectfully request your office consult with the EPA and report to the House and Senate Agriculture Committees on the problems with the economic model in order to reflect realistic scenarios while examining the impact of cap and trade on the agriculture and forestry sectors. Moving forward with flawed studies will only result in bad policy and legislation.

You can read USDA’s analysis on cap and trade here.

Grassley Blasts Dems for Biodiesel Incentive Lapse

grassley3Republican Senator Charles Grassley of Iowa says Democrats seem to just paying lip service to the concept of green energy and green jobs.

He took to the floor of the Senate this week to blast the Democratic leadership for what appears to be allowing the $1-a-gallon biodiesel tax incentive to expire at the end of this month. Here are some of the remarks as posted on

President Obama and Vice President Biden have been talking for months about the need to create “green jobs.” In fact, President Obama has held three public events in recent days to highlight his concern about the economy and the need to create jobs. Yesterday, the Administration apparently announced billions more in tax credits for renewable energy and energy conservation efforts.

It seems like nearly everyone in the Administration is touting the benefits of green jobs and a clean energy economy. It’s astonishing, then, that this Congress will head home for the Holidays while thousands of “green energy” workers receive pink slips and furloughs…

Without an extension of the tax credit, all U.S. biodiesel production will grind to a halt. Plants will be shuddered, and workers will be let go. No one should be surprised by the upcoming expiration of this tax credit. It was extended most recently in October of 2008. So, we’ve known for 14 months that it would need to be extended by the end of 2009. The Senate has been in session nearly continuously for months…

There’s no excuse for inaction on this extension.

The Democratic leadership is content to leave here without doing the necessary work on extenders, believing that they can extend the tax provisions retroactively sometime early next year. But, retroactivity doesn’t help the U.S. biodiesel market from grinding to a halt on January 1, 2010, because without the incentive, biodiesel will cost much more than petroleum diesel.

Although a one-year extension of the biodiesel tax incentive has breezed through the U.S. House, it’s been all health care all the time in the Senate. Grassley says while lawmakers “dither,” thousands of biodiesel workers could lose their jobs. He adds that any halt to the biodiesel industry could be a death knell for the green fuel.

NBB: No Long-Term Biodiesel Tax Extension this Year

USCapitolThe National Biodiesel Board seems to be conceding defeat for a long-term extension of the the biodiesel blender tax credit … but the group seems to be holding out hope for a one-year extension of the incentive set to expire after Dec. 31, 2009.

The U.S. House has already passed the tax extender package in H.R. 4213, which included a one-year extension of the biodiesel blender tax credit. Biodiesel Magazine reports now they have to get the Senate to agree:

“In terms of the five-year tax extension that would also alter the credit from a production excise credit to a producer credit, it is clear that due to the legislative calendar and the priorities currently facing Congress—healthcare being front and center—that legislation (S.1589 and HR 4070) will not be voted on this year,” [Michael C. Frohlich, Director of Communications for the National Biodiesel Board’s Washington, D.C., office] said. “Therefore, the NBB has decided to endorse the one-year extension as to ensure that the tax credit does not expire, and will continue to work towards a multiyear producer credit in the future.”

So far, the measure has been referred to the U.S. Senate where it was received and read twice, then referred to the Committee on Finance.

Audi Tells Obama, “Forget Plug-Ins, Think Biodiesel”

The top executive at Audi’s U.S. offices says American political leaders need to think less about plug-in electric vehicles and more about vehicles that run on biodiesel, as well as standardizing the rules for biodiesel.

The Detroit News reports that Audi of America President Johan de Nysschen made the remarks at Washington, D.C.’s National Press Club, where he told the audience that despite the current administration’s love of extended-range electric cars, such as the Chevy Volt, that technology is not financially viable:

“I understand why political leaders have fallen in love with hybrids and electrics. But this may be the one time you’ll hear someone in Washington say it shouldn’t be a monogamous relationship,” de Nysschen said.

President Barack Obama, however, is one of those enthusiastic backers of electric vehicles. The administration awarded $2.4 billion in cash grants in August to spur electric vehicle and battery improvements. He wants 1 million plug-in electric vehicles on the road by 2015…

De Nysschen favors using diesel technology and allowing the marketplace to pick the winners and losers. He urged the government not to be “prejudging winning and losing technologies” and urged more work to standardize biodiesel rules.

He noted that if one-third of U.S. vehicles used diesel power, “America would save 1.5 million barrels of oil a day” — the same amount the United States imports from Saudi Arabia daily.

Of course, Audi’s pushing of biodiesel is not just coincidental. The article points out that half of the company’s European sales are diesels, and Audi has a couple of diesels on the U.S. market, including the A3 TDI, which just picked up the “Green Car of the Year” award during recent Los Angeles Auto Show.

Biodiesel Gets British Columbia to Cut Carbon Tax

bc_flagA controversial tax imposed on some Canadians will be reduced at the beginning of the new year, thanks to biodiesel.

Today’s reports
that British Columbia’s carbon tax will drop by 5 percent and planned increases will also be lessened because of renewable fuels:

On Jan. 1, 2010 the carbon tax rate on diesel drops from 4.04 cents per litre to 3.84 cents per litre and on gasoline from 3.51 cents per litre to 3.33 cents per litre.

On July 1, 2010 the carbon tax rate will increase to 5.11 cents per litre (adjusted from 5.38 cents per litre) for diesel and 4.45 cents per litre (from 4.68 cents per litre) for gasoline.

The government determined the annual rate increase when the carbon tax first became effective and it will continue until July 2012. Yearly increases for diesel, adjusted for the renewable fuels, will be: July 1, 2011 –¬ 6.39 cents per litre, instead of 6.73 cents per litre; and July 1, 2012 –¬ 7.67 cents per litre, instead of 8.07 cents per litre.

The tax was expected to cost the trucking industry $20 million. Maybe if we can get a bit more of cleaner burning biodiesel into the mix, they’ll save even more.

DOE Issues Final Rule on Loan Guarantee Program

It was a busy day in Washington yesterday as U.S. Secretary Steven Chu announced the issue of a final rule for the Loan Guarantee Program. The revised rule was designed to increase participation from private investors and banks as well as to support more innovative energy technologies. This announcement came on the same day that Chu released another $100 million for a second round of ARPA-E funding.

*Photo Credit The Cayman Institute

*Photo Credit The Cayman Institute

“This much needed change will provide greater flexibility to the Loan Guarantee Program and help us to support more projects at a better value to taxpayers,” said Secretary Chu. “This is part of our commitment to ensuring businesses are able to access the support they need to create jobs and contribute to a clean energy economy.”

The new rules came as a result of more than 2,100 comments from interested parties during the 30-day comment period. Under the updated rule, the Loan Guarantee Program will be able to consider financing project in conjunction with other lenders as well as provide loan guarantees to projects with multiple stakeholders.

Copies of the proposed rule will be available from the Department’s Loan Guarantee Program at

DOE Announces Additonal $100M in ARPA-E Funding

New_DOE_Logo_DFU.S. Energy Secretary Steven Chu announced today an additional $100 million round of funding opportunities for transformational energy research projects that will be made available through the Advanced Research Projects Agency-Energy (ARPA-E). This announcement was made along side Commerce Secretary Gary Locke in advance of the Copenhagen Climate Conference.

In a statement, Chu said, “I am pleased to announce ARPA-E’s second funding opportunity because it demonstrates our commitment to lead the next Industrial Revolution in clean energy technologies, creating thousands of new jobs while helping cut carbon pollution,” said Secretary Chu. “This solicitation focuses on three cutting-edge technology areas which could have a transformational impact.”

Unlike the last round which focused on supporting projects such as biofuels, carbon capture, renewable power vehicles and more, this round will focus on three key areas: new approaches for biofuels, carbon capture and batteries for electric vehicles.

In a new category coined electrofuels, “ARPA-E is seeking new ways to make liquid transportation fuels – without using petroleum or biomass – by using microorganisms to harness chemical or electrical energy to convert carbon dioxide into liquid fuels.” More specifically, they are looking at funding projects that will research, “organisms capable of extracting energy from hydrogen, from reduced earth-abundant metal ions, from robust, inexpensive, readily available organic redo active species, or directly from electric current.

It is theorized that such an approach could be 10 times more efficient than current photosynthetic-biomass approaches to liquid fuel production. Click here to learn more about submiting a proposal.

EPA Determines CO2, Other GHGs Endanger Society

coal_fired_power_plantSome of the biggest news to come out of Copenhagen yesterday was the ruling from the Environmental Protection Agency that greenhouse gas emissions are now considered “an endangerment” to society. This ruling now gives the EPA the authority, under the Clean Air Act, to regulate greenhouse gases. This decision could lead to stricter vehicle, manufacturing and power plant emissions – including ethanol and biodiesel plants.

The timing was no coincidence as President Obama is looking to improve America’s bargaining hand during the two week Climate Change Conference where leaders from nearly 200 countries are attempting to create a global climate policy plan.

On December 7, 2009, the Administrator signed two distinct findings regarding greenhouse gases under section 202(a) of the Clean Air Act:

  • Endangerment Finding: The Administrator finds that the current and projected concentrations of the six key well-mixed greenhouse gases–carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)–in the atmosphere threaten the public health and welfare of current and future generations.

  • Cause or Contribute Finding: The Administrator finds that the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare.

In addition to tightening emission standards, there are two other ways that have been discussed at length to regulate CO2 emissions, the gas that is in the most abundance. First is through a carbon tax and second through a cap and trade system.

Grant to Help Iowa Plant Produce Biodiesel & Cosmetics

elevanceAn Illinois company has received a $2.5 million federal grant to put in a demonstration project in an Iowa biodiesel plant that could allow the facility to produce the green fuel and cosmetics.

Last month, I told you how Elevance Renewable Sciences of Bolingbrook, Ill., was looking to get some government assistance to put in the $8.1 million project in Renewable Energy Group’s Central Iowa Energy biodiesel plant in Newton (see my post from Nov. 23, 2009). Now, the Des Moines (IA) Register reports the U.S. Department of Energy has come through with part of the money Elevance was looking for:

Elevance uses a proprietary technology that could produce fuels, chemicals, pharmaceuticals and cosmetics from the same soybean oils and animal fats used at biodiesel plants. It has told state officials that the process could be bolted on to other biodiesel plants around the state.

Elevance also has requests pending for a $3.8 million grant from the Iowa Power Fund and another $800,000 from the Iowa Department of Economic Development.

Elevance is backed by the Texas Pacific Group investment fund of Fort Worth as well as Cargill and Materia Inc. of Pasadena, Calif., which owns the patents to the Olafin Metathesis process that won the 2005 Nobel Prize.

This grant is part of that $600 million the feds announced last week that went to 19 biorefinery projects in 15 states.

OH Biodiesel Plant Part of Advanced Biorefinery Projects

Kapturbiodieselplant2An Ohio biodiesel plant is among those 19 projects that Michelle told you about yesterday that will share in $564 million in federal Recovery Act monies.

This press release from Rep. Marcy Kaptur (D-OH), whose district includes a biorefinery pilot project on the Health Science Campus at the University of Toledo, says that biorefinery will get nearly $20 million:

Federal funding for the project will total $19.9 million and will be derived from the American Recovery and Reinvestment Act, popularly known as the economic stimulus plan. “Our goal is to put our people to work in an industry that can help America break its dependence on imported petroleum,” Kaptur said.

“Advanced biofuels are critical to building a cleaner, more sustainable transportation system in the U.S.” said Secretary Chu. “These projects will help establish a domestic industry that will create jobs here at home and open new markets across rural America.”

The Toledo pilot plant will refine biodiesel—which Secretary Chu noted will be an end project that requires no additional processing in order to be used in diesel engines—out of agricultural and forest product residue.

The project is expected to create at least 100 jobs in the building of the biorefinery with the potential for more after that.