Iowa Biodiesel Makers Take to DC

nafb15-nbb-grantIowa Biodiesel Board (IBB) members joined their National Biodiesel Board colleagues in lobbying lawmakers to renew and restructure the federal $1-per-gallon credit for biodiesel and renewable diesel. IBB pointed to Iowa Sen. Chuck Grassley’s proposal that would correct a loophole in the existing program and save U.S. taxpayers $90 million.

“Nowhere is the success of the tax credit more evident than in Iowa. Our state’s 13 plants produced more than a quarter of a billion gallons of biodiesel last year, supporting jobs and economic development while replacing foreign oil and diversifying our fuel supply. The federal tax incentive has played a key role in enabling those plants to stay operating and profitable, benefiting all levels of our economy,” said Grant Kimberley, executive director of the Iowa Biodiesel Board.

But Kimberley isn’t just looking at the benefits for Iowa. During an interview with the recent National Association of Farm Broadcasting meeting in Kansas City, Missouri, he said that Iowa biodiesel can be a real help to California’s Low Carbon Fuel Standard (LCFS).

“California … wants to have all of their transportation fuels fit under the [LCFS], where it reduces greenhouse gas emissions and is better for the environment,” said Kimberley. “Renewable fuels, including biodiesel, can play a key role in that.”

He said biodiesel producers have had to educate California officials just how good biodiesel can be. Initially, California scored biodiesel just above conventional diesel. But education efforts improved that score.

“Now they’ve moved that score higher, so now it’s up to 50-80 percent better than petroleum-based diesel, which means biodiesel can play a really strong role in the [LCFS]. It could be up to 600 million gallons of biodiesel per year that could be utilized in California,” said Kimberley.

He also pointed out that since California doesn’t produce much of the green fuel, it opens up many possibilities for Midwest producers.

Listen to all of Cindy’s conversation with Kimberley here: Grant Kimberley, executive director of the Iowa Biodiesel Board

Biodiesel Leaders Push for Tax Credit Renewal

Biodiesel leaders from across the nation descended on Washington, D.C., to push lawmakers to renew the federal $1-a-gallon biodiesel tax credit. The National Biodiesel Board points out producers have been without the credit for all of 2015, and that’s the fourth time in six years Congress has allowed it to lapse.

nafb15-nbb-gregDuring the recent National Association of Farm Broadcasting meeting in Kansas City, Missouri, NBB board member Greg Anderson, a soybean producer from Nebraska, said they’d like to get the tax credit done for two years – retroactive for 2015 and for the upcoming 2016 calendar year. He said it’s important to get this passed.

“It levels the playing field,” said Anderson. “We know that oil is subsidized, and biodiesel is a young industry [in comparison]. It would give incentives and confidence to the plants out there that have the production capacity, want to make new hires, provide great jobs and energy independence. We’re lacking when [the tax credit] is not in place.”

Anderson feels confident it will get done, because he knows the NBB’s Washington office has been working legislators hard. He hopes those lawmakers will realize just how valuable the fuel is and how it fits with the Renewable Fuel Standard (RFS).

“Biodiesel is the tip of the spear toward the RFS’ success. We’re the only advanced biofuel commercially available,” showing success from coast-to-coast, heating homes and fueling vehicles cleanly, he noted.

Anderson added the NBB is also working with the Environmental Protection Agency that could see more aggressive RFS growth for biodiesel than what the EPA is currently proposing.

Listen to interview here: NBB board member Greg Anderson

Biofuels Groups Blast House Hearing on RFS

uscapitolBiofuels backers say a U.S. House Science Committee had very little to do with science in regards to the Renewable Fuel Standard (RFS). The Congressional committee met on the 10th anniversary of the RFS, and Tom Buis, co-chair of Growth Energy, said the committee has a history of misrepresenting biofuels, relying on misinformation and outright lies to cast a negative light on an American success story.

“Today’s hearing was nothing more than a coordinated attack against biofuels. Minus a few open-minded individuals who examined this issue based on facts, not pre-determined bias, this hearing did nothing to reflect the overwhelming contributions of the RFS…

“With regards to the environmental benefits of ethanol, the facts are clear. According to Argonne National Laboratory, – an objective national laboratory – ethanol reduces greenhouse gas (GHG) emissions by an average of 34 percent compared to gasoline, even when the highly controversial and disputed theory on Indirect Land Use Change (ILUC) is factored into the modeling. Furthermore, Argonne has found that without ILUC included, ethanol reduces GHG emissions by 57 percent compared to gasoline.

“It is unfortunate that the Science Committee missed an opportunity to provide an unbiased examination of the RFS. Instead, the Committee – which has no jurisdiction over this policy – continued to present a misguided agenda to smear biofuels, hosting several witnesses that fabricated information on the impact biofuels have on food prices, the environment and the American economy. This treatment of homegrown American fuels is insulting to the hardworking Americans across our country who are helping fuel our energy independence.”

Renewable Fuels Association (RFA) President and CEO Bob Dinneen said “Big Oil’s narrative opposing the RFS no longer has any currency.” Continue reading

Iowa Biodiesel Producers Push for Tax Incentive

IowaRFAlogoIowa biodiesel producers are pushing for a renewal of the federal $1-per-gallon biodiesel tax incentive. The Iowa Renewable Fuels Association (IRFA) sent a letter to all members of the Iowa Congressional delegation urging them to pass a multi-year biodiesel tax incentive.

“While facing more than a century of uninterrupted subsidies for petroleum, the biodiesel tax incentive has been allowed to expire four times in six years,” stated IRFA Executive Director Monte Shaw. “Now more than ever, the biodiesel community needs certainty and a level playing field in order to continue to build upon the vast energy security, economic and air quality benefits producing and using biodiesel currently provides to this country.”

The letters stated, “We urge you to do all you can to push for swift passage of a tax extenders package that includes an amendment to shift the biodiesel tax incentive to a producer’s credit, as was unanimously passed out of the Senate Finance Committee in the Tax Relief Extension Act of 2015 (S.1946) on July 21, 2015.

“The biodiesel tax incentive is a proven job creator that is critically important to the U.S. biodiesel industry, and specifically to Iowa biodiesel producers. However, the $1.00 per gallon incentive lapsed on January 1, 2015, marking the fourth time in six years that the incentive has expired—even as favorable tax incentives for petroleum have continued uninterrupted for more than a century. This has created significant disruption and uncertainty in the industry. It is imperative that Congress end this piecemeal tax policy for biodiesel by passing a long-term tax incentive that paves the way for growth.”

The entire biodiesel industry is not quite in harmony on the renewal of the tax incentive. Last week, the Advanced Biofuels Producers Association stated its opposition to an amendment by Sens. Charles Grassley and Maria Cantwell, which would extend the $1-per-gallon federal credit, but would convert the credit from one for blenders (those who make biodiesel mixtures) to one for those who produce biodiesel and renewable diesel.

Iowa is a major producer of biodiesel, with 12 biodiesel facilities able to produce nearly 315 million gallons annually.

ABFA Opposes Biodiesel Tax Credit Restructure

ABFAlargeA move that extends the federal biodiesel and renewable diesel tax credit for two years, but changes its structure, is finding opposition from at least one biofuels group. The Advanced Biofuels Producers Association opposes an amendment by Sens. Charles Grassley and Maria Cantwell, which would extend the $1-per-gallon federal credit, but would convert the credit from one for blenders (those who make biodiesel mixtures) to one for those who produce biodiesel and renewable diesel.

Converting the tax credit to a producer’s tax credit and limiting its availability fails to capture the global market essence of fuels. It increases profits for a limited number of producers; while reducing the overall availability of fuels. Any limits in the supply chain are likely to increase costs for consumers. This amendment also places an unnecessary burden on fuel retailers who have incurred significant costs to purchase and maintain the equipment to dispense blended fuels, another cost likely to be passed on to consumers.

There is also significant concern that the provision will limit the supply of biofuel heating oil into the Northeast this winter. This change, in combination with the poorly designed excise tax system, could lead to consumers paying as much as an additional 24 cents per gallon for their biofuel heating oil this winter. Converting to a production credit will also likely result in a trade violation, a concern acknowledged by Senator Grassley.

With the potential for rising costs to consumers both at the pumps and at home, Michael McAdams, President of the Advanced Biofuels Association, released the following statement in response:

The current blenders’ credit for biofuels creates a competitive market for biodiesel and renewable diesel, which benefits the American consumer. Continuing and extending the original policy allows truckers and consumers to share in the value, it encourages consumer acceptance, and it benefits blenders and those who provide the feedstocks that make these cleaner, better fuels. This amendment destroys these positives, by syphoning the benefits to a small group of producers and punishing everyone else along the supply chain, including consumers. ABFA and its partners believe the current blenders’ credit should be extended in its longstanding form as originally intended.

You can read the group’s letter here.

Geothermal Industry

The Geothermal Energy Association (GEA) is calling on the Environmental Protection Agency (EPA) to include geothermal energy in the Clean Energy Incentive Program (CEIP). In a letter, GEA makes the following suggestions that would allow geothermal power plants to fully be included in CEIP:

  1. Include metered MWh generated from geothermal resources or allow states to include geothermal resources if their state contains these resources.
  2. Since the timeframe for geothermal includes exploration and more permitting in many states than an equivalent wind or solar project, include projects where significant construction has begun; this could include a binding written contract to the manufacture, construct, or produce electricity on a piece of the geothermal property, and includes expansion of existing facilities (incremental generation) or a new facility.
  3. Projects online in 2020 and 2021 under this program would receive credit for their MWh generated like wind or a solar project.

US geothermal energy photo DOE“Without this amendment to the CEIP program, GEA is concerned the way the current rule is written would shift investment away from geothermal projects in the west,” states the letter, noting geothermal’s importance in the low-income communities such as the Imperial and Coachella Valleys.

The letter states, “geothermal power meets the criteria and the spirit of the CEIP by providing emission free power in low-income communities. In fact, studies have shown, geothermal binary plants are less polluting than either wind or solar technologies on a lifecycle basis. In addition, these plants are located in some areas with the highest unemployment rates in the west. Adding geothermal to this provision could help expand these facilities, providing jobs and economic opportunities in these impoverished communities. Overall, geothermal power will be essential to western states’ long term clean energy portfolio and economies, while being consistent with the CEIP’s directive to advance clean technology in impoverished communities.”

Recently several senators (Reid, Feinstein, Boxer, Wyden, Merkley, Hirono, and Schatz), submitted a letter to EPA Administrator McCarthy also calling for geothermal energy to be included in the program. The letter stated, “We have noted that the Clean Energy Incentive Program includes solar and wind energy, but does not include a number of other important clean energy technologies that the federal government has historically defined as renewable energy resources, like geothermal energy, marine and hydrokinetic energy, biomass, small irrigation power, and qualified hydropower, as defined under Section 45(c) of the Internal Revenue Code. The Environmental Protection Agency should ensure that other clean energy sources of electricity are eligible for matching emission rate credits under the Clean Energy Incentive Program.”

Senate Democrats Propose New Energy Package

A group of Senate Democrats have proposed a new energy bill to promote clean energy. If passed, the legislation would end some subsidies for fossil fuels and close some oil and gas tax loopholes; incentivize clean energy such as solar and wind through grant programs and tax incentives; and encourage carbon capture and sequestration along with continued development of nuclear energy and biofuels.

AWEA logoIn response to the proposed bill, Tom Kiernan, CEO of American Wind Energy Association (AWEA) commented, “We commend Senators Reid, Wyden, Schumer, and Cantwell for putting forward a policy framework to provide domestic energy producers with greater stability so businesses can invest and bring costs down even further. The tax code has a century-long history of incentivizing American-made energy, and we must continue to ensure that we have abundant, clean, and affordable energy to power our economy. Wind energy has proven that it can deliver in these areas and it must continue to be a critical part of the U.S. energy mix. We appreciate the leadership of Sens. Reid, Wyden, Schumer, and Cantwell in trying to find common ground to ensure that the U.S. is well-suited to face the energy challenges of the 21st century by promoting a diverse energy portfolio.”

According to Senate Finance Committee staff, this legislation would save Americans at least $20 billion over the next 15 years and create/support at least 3.5 million jobs.

SEIA logo“By providing long-term, steady federal tax and energy policy, this legislation provides the stability that businesses in the solar industry need to grow – adding tens of thousands of new, well-paying solar jobs across the country, which today includes more than 174,000 Americans,” said Solar Energy Industry Association (SEIA) President and CEO Rhone Resch. “We also applaud the inclusion of programs that remove barriers for low-income Americans, making it easier for everyone to access clean, affordable, reliable solar energy.”

If approved and signed into law, this legislation would temporarily extend the federal solar investment tax credit (ITC), and then ease the transition afterward through the creation of long-term, technology-neutral clean energy tax incentives.

Resch added, “The United States deserves to be a world leader in cutting-edge technologies, and providing a long-term extension of the ITC will encourage massive investment in the U.S. solar industry. When you provide certainty to solar consumers and businesses with an energy tax code that promotes innovation and encourages the development of new and efficient technologies – America wins. We see this bill as a major step forward, and the solar industry looks forward to working with Congress so all solar technologies are included.”

Officials Highlight Need for Stable Energy Policy

The U.S. Department of Energy (DOE) has released new data showing the cost of wind energy has declined by nearly two-thirds over the last six years according to the report 2014 Wind Technologies Market Report. DOE Energy Secretary Ernest Moniz noted, however, that to keep the momentum going there must be stable energy policy.

64522_WindTechMrktRprt_cover“With declining costs and continued technological development, these reports demonstrate that wind power is a reliable source of clean, renewable energy for American homes and businesses,” Secretary Moniz said in a statement. “Through continued investments and the help of stable policies, we’re confident that wind power will keep playing a major role in creating jobs and shaping America’s clean energy future.”

In reaction to the report, the American Wind Energy Association (AWEA) said this success has been driven by performance-based renewable energy tax incentives that drive U.S. manufacturing and American ingenuity. The report finds that since 2009, costs have fallen 65.5 percent. This makes the U.S. the global leader in total wind energy production.

“While this report is good news, extending the Production Tax Credit and Investment Tax Credit remains critical for keeping Americans at work, reducing the cost of wind energy and continuing to scale up this homegrown resource through the end of this decade,” said Tom Kiernan, CEO AWEA. “Wind energy is increasingly cost-competitive in several parts of the U.S., but we need stable, predictable policy to continue bringing this consumer benefit to every corner of the country. Policy stability will keep this American economic success story going.”

There must be, called Kiernan, an extension of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) and said the near-uncertainty in these credits puts investments at risk. The last time the credits were not expanded the U.S. wind energy industry lost nearly 30,000 jobs and caused wind installations to drop 92 percent the following year. Kiernan concludes by noting that Federal policy plays a critical role in the wind industry’s decisions to make long-term investments in U.S. manufacturing facilities, research and development, and worker training to create the modern American wind industry, and thus, the credits must stay in place.

Energy Policy Modernization Act Intro’d

U.S. Senators Lisa Murkowski (R-Alas) and Maria Cantwell (D-Wash) have introduced legislation entitled “The Energy Policy Modernization Act of 2015,” a bipartisan bill designed to increase the use of renewable energy in the U.S. Karl Gladwell, executive director of the Geothermal Energy Association (GEA) noted that the legislation would help America achieve its geothermal potential, “by addressing some of the most important barriers to geothermal development in the U.S.”

Photo Credit: Geothermal Technologies Office

Photo Credit: Geothermal Technologies Office

The legislation features five titles reflecting common ground on energy efficiency, infrastructure, supply, accountability, and land conservation. In the supply title, it includes several provisions supporting geothermal energy. It would:

  • set a 50,000-MW National Geothermal Goal;
  • direct federal agencies to identify priority areas for development;
    •allow federal oil and gas lease holders to obtain a non-competitive geothermal lease to facilitate coproduction of geothermal power — today 25 billion barrels of hot water are produced annually from oil and gas wells within the United States;
  • facilitate new discoveries by allowing the limited non-competitive leasing of adjacent lands where a new discovery has been made; and
  • provide geothermal exploration test projects a limited categorical exclusion provided the lands involved present no extraordinary circumstances.

“Our energy renaissance has taken us from a position of energy scarcity to one of energy abundance, but current law rarely reflects that fact. After months of working together, the bipartisan legislation we introduced today marks a critical step toward the modernization of our federal energy policies. By focusing on areas where agreement was possible, we have assembled a robust bill with priorities from many senators that will promote our economic growth, national security, and global competitiveness,” Chairman Murkowski said in a press statement.

The Senators cite that the end result will be more affordable energy, more abundant energy, and more functional energy systems that will strengthen and sustain our energy nation’s renaissance. The bipartisan Energy Policy Modernization Act will also achieve these goals in a fiscally-responsible manner.

Earlier this week the Senate Finance Committee voted 23-3 in support of legislation sponsored by Sens. Hatch, R-Utah, and Wyden, D-Ore., to extend the expired Production Tax Credit for geothermal power plants that start construction by December 31, 2016.  The Murkowski-Cantwell legislation builds upon legislative proposals introduced previously by Sens. Heller, R-Nev., Wyden, D-Ore., and Tester, D-Mont., along with several co-sponsors. The bill now awaits the Committee’s markup, expected next Tuesday.

Geothermal Industry Calls for Tax Extender Credits

The geothermal industry is happy with the news that the Senate Finance Committee voted for a package of tax extenders proposed by Chairman Orin Hatch (R-UT) and Ranking Democrat Ron Wyden (D-OR). The package includes provisions extending the Production Tax Credit (PTC) for new geothermal power facilities that “start construction” by the end of 2016. Developers retain the option of converting the PTC to a 30 percent investment tax GEA logocredit. The PTC expired at the end of 2014, although it was extended in December 2015 for a two-week period that was far too short to benefit geothermal projects according to Karl Gawell, executive director of the Geothermal Energy Association (GEA).

“This is important news for geothermal developers,” said Gawell. “It will help spur the market for new geothermal power plants which has been suffering due to slack demand and uneven tax treatment,” he said.

The Committee voted 23-3 in support of the package, with strong majorities of both Republican and Democratic Members supporting the bill. The tax extenders bill, entitled “An Original Bill to Extend Certain Expired Tax Provisions,” now moves to the Senate floor.

“The strong bi-partisan support in Committee is a good sign for the future of the Senate Tax Extenders Bill,” Gawell noted.