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May 30, 2011

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March 24, 2010

Alternative Fuels Industry Still Waiting for Tax Extenders Reconciliation

After the House and Senate passed bills including an extension of the alternative fuel mixture and biodiesel tax credit program, alternative fuel producers assumed that Congress would act quickly to put the legislation into a form that could be signed by the President. 

It has been more than two weeks now, however, and still Congress has not reconciled the two bills. 

House Ways and Means Committee Chairman Sander Levin (D-Mich.) is quoted by BNA Daily Tax Reports (March 23) to say that if lawmakers must hold a formal conference committee to settle differences on legislation extending expired and expiring tax cuts, it could be a long time before a compromise is reached.

Levin’s comments came the day after he told the House Rules Committee that it is “uncertain” when the House will consider the $31 billion extenders package (H.R. 4213), telling that panel the Senate-passed legislation has “many other provisions in it we need to consider within the committee and I’m thinking we’re going to have a conference committee and if we do I think the likely result is it will take considerable time to complete it.”

According to Levin, the House and the Senate used different offsets to pay for AFM and biodiesel tax cuts that expired December 31, 2009.

Until the bills are reconciled and signed by the President, the AFM and biodiesel tax credit remain in abeyance and the alternative fuel industry remains in limbo.

February 14, 2010

Senate Jobs Bill Resuscitates Alternative Fuel Credit

 Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Chuck Grassley, R-Iowa, last week released a draft of their Hiring Incentives to Restore Employment (HIRE) Act.

The bill contains a number of provisions intended to spark new hiring, including a social security tax holiday for workers hired during 2010.

Of interest to the renewable energy industry is the bill’s provision to extend the alternative fuel mixture credit for another year.  The AFM credit, which expired December 31, 2009, was omitted from other tax extender bills submitted earlier, but under the HIRE Act would be extended through 2010. 

The HIRE Act would also revise the definition of “liquid fuel derived from biomass” under 6426(d)(2)(G) to exclude black liquor.  This Senate Finance draft version of this jobs bill differs from House legislation.  The House Ways and Means extenders bill allowed the 6426(d)(2)(G) “liquid fuel derived from biomass” provision to expire as of 12/31/09.  Both versions would also extend the cellulosic biofuel credit under Section 40 of the Internal Revenue Code and would likewise exclude black liquor from its definition.

The lapse of the alternative fuel mixture credit has created substantial problems for the biofuels industry and many plants were shuttered at the end of the year.  New financings have come to a halt as project developers are waiting to see whether the tax credit program will be extended.  Extending the excise tax credit program should re-start many of those plans.

February 3, 2010

Administration Announces New Program to Promote Biofuels and Renewable Energy (RFS2; Carbon Sequestration; Biomass Crop Assistance Program)

President Obama today announced a series of steps as part of a comprehensive strategy to enhance American energy independence and build a foundation for a new clean energy economy. The administration believes that the strategy will create new industries and millions of jobs. (Reuters;  Reaction from Renewable Fuels Association).  At a meeting with a bipartisan group of governors,  the President set forth three efforts that he believes will work in concert to boost biofuels production and America’s dependence on foreign oil:

• The Environmental Protection Agency (EPA) has finalized a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress.

• The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. 

• The President’s Biofuels Interagency Working Group released its first report – Growing America’s Fuel. The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets. 

In addition, President Obama announced a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies. The U.S. will continue to rely on the availability and affordability of domestic coal for decades to meet its energy needs, and these advances are necessary to reduce pollution in the meantime.

The Presidential Memorandum calls for five to ten commercial demonstration projects to be up and running by 2016.

President Obama said, “Now, I happen to believe that we should pass a comprehensive energy and climate bill. It will make clean energy the profitable kind of energy, and the decision by other nations to do this is already giving their businesses a leg up on developing clean energy jobs and technologies. But even if you disagree on the threat posed by climate change, investing in clean energy jobs and businesses is still the right thing to do for our economy. Reducing our dependence on foreign oil is still the right thing to do for our security. We can’t afford to spin our wheels while the rest of the world speeds ahead.” 

“Advancing biomass and biofuel production holds the potential to create green jobs, which is one of the many ways the Obama Administration is working to rebuild and revitalize rural America,” said Agriculture Secretary Tom Vilsack. “Facilities that produce renewable fuel from biomass have to be designed, built and operated. Additionally, BCAP will stimulate biomass production and that will benefit producers and provide the materials necessary to generate clean energy and reduce carbon pollution.”

“President Obama and this Administration are strongly committed to the development of carbon capture and storage technology as a key part of the clean energy economy. We can and should lead the world in this technology and the jobs it can create,” said Energy Secretary Steven Chu. “The actions President Obama has taken today will create jobs, slash greenhouse gas emissions and increase our energy security while helping to put America at the leading edge of the new energy economy,” said EPA Administrator Lisa P. Jackson. “The renewable fuel standards will help bring new economic opportunity to millions of Americans, particularly in rural America. EPA is proud to be a part of the President’s effort to combat climate change and put Americans back to work – both through the new renewable fuel standards and through our co-chairmanship with the Department of Energy of the Interagency Task Force on Carbon Capture and Storage.”

February 2, 2010

U.S. Endowment for Forestry Seeks Proposals for Energy Demonstration Projects

Filed under: Biofuels,biomass,Renewable energy jobs — Tags: , — Jonathan B. Wilson @ 7:42 am

The U.S. Endowment for Forestry and Communities is seeking pre-proposals for grants of up to $250,000 to develop demonstration projects for the conversion of woody biomass to energy.

The Endowment will award grants of up to $250,000 (but not more than $750,000 in total) for proposals that can convert laboratory technology for converting woody biomass to energy in a way that is sustainable, economically viable and produces employment opportunities. 

The Endowment is a non-profit corporation created in 2006 as part of a bilateral agreement between the U.S. and Canada.  The Endowment’s approach in this RFP is to find solutions that have not yet been developed to commercial scale, for harvesting trees in forets that are not suitable for traditional lumbering. 

Proposals are due on February 12, 2010 and must be submitted through the Endowment’s online grant system.

September 14, 2009

Renewable Energy Around the Web: September 14, 2009

Our weekly compilation of renewable energy news and information from around the Web.

Biomass in North Carolina

North Carolina is exploring the potential of biomass energy through the recently created Biofuels Center of North Carolina.  The Center  is investigating the potential for in-state biofuels production from energy crops and forest biomass within the state. Industry leaders, elected officials and others toured the center’s four-acre plot of more than a dozen energy crops and fast-growth trees during the North Carolina Grows Biofuels event at the end of August.

The North Carolina General Assembly established the nonprofit center in 2007 to address strategies outlined in the North Carolina Strategic Plan for Biofuels Leadership, created by policymakers to develop a homegrown industry. The state allocated $5 million to the center to fund research and development in agriculture economics, conversion technologies and workforce development.  Norman Smit, director of communications and education for the center, noted that several companies have received grants.  He said, “The biofuel center’s goal is to replace 10 percent of all fuel used in the state with homegrown and produced biofuels by 2017.  He noted that North Carolina buys 5.6 billion gallons of liquid fuels each year.  

Energy crops have been planted at 20 sites around the state in partnership with the North Carolina Department of Agriculture and North Carolina State University. They include miscanthus, switchgrass, sweet sorghum, grain sorghum, tropical sugar beets and many others, along with fast-growth trees like sweetgum and cottonwood, Smit said. The center will use the data collected to determine which crops grow best in certain types of soil around the state, he said. The center will also determine the markets for the crops, ensuring they are economically sensible for farmers. “We want to be able to talk to farmers and say, ‘This is what you need to look out for,” Smit said. “We want to look for crops that will provide farmers with income.” While the Midwest can sustain one crop per season, North Carolina can support two, he added.

48C Application Deadline

Preliminary applications for Section 48C qualified advanced energy projects are due on September 16, 2009, just two days hence. 

Show Me the Money

Anna  Austin and Lisa Gibson chronicle the challenges of renewable energy promoters in finding cash funding for their projects in the latest issue of Biomass Magazine

They write that, “although a lack of liquidity in the equity and debt markets is currently keeping a lid on project development activity, there are some encouraging signs on the horizon for biomass projects, according to Rob Kurtz, BBI International Engineering and Consulting Group project manager. “Positive signs include the recent USDA issuance of feasibility study grant guidelines for both combined heat and power at biofuels plants and anaerobic digestion systems, and a slight thawing in venture capital/risk investment as evidenced by the Tendril and Gevo investments recently announced, and several other announcements by companies developing combined-heat-and-power systems,” Kurtz says. The Tendril Networks and Gevo investments totaling $70 million were among the top five reported venture-capital deals nationwide for clean energy and environmental technology companies in the second quarter, according to Ernst & Young LLP. Gevo, an Englewood, Colo.-based alternative fuels producer received $40 million and Tendril, a Boulder, Colo.-based smart grid software company received $30 million.

“Biomass project developers need to think big when they are putting together their financial package, says Timothy Baye, bioeconomy and bioenergy business development specialist at the University of Wisconsin-Extension. “Think return on capital, working capital needs, for this type of commodity-related business, you’ll need equal to or up to three times the amount of the capital budget, because you’ve got to secure a feedstock—and that takes money.””

Up in the Air, Junior Birdmen!

Biofuels Digest is reporting that Sustainable Oils been awarded a contract by the Defense Energy Support Center for 40,000 gallons of camelina-based jet fuel.

The fuel will be delivered to the Naval Air Systems Command fuels team in 2009 and will support the Navy’s certification testing program of alternative fuels. The contract includes an option to supply up to an additional 150,000 gallons of camelina-based jet fuel.

Camelina was selected by the DESC because it does not compete with food crops, has been proven to reduce carbon emissions by more than 80 percent, and has already been successfully tested in a commercial airline test flight. In addition, camelina has naturally high oil content, is drought tolerant and requires less fertilizer and herbicides.

It is an excellent rotation crop with wheat, and it can also grow on marginal land. Camelina has also been proven to significantly reduce carbon emissions in aviation fuel. A life cycle analysis (LCA) of jet fuel created from camelina conducted at Michigan Tech University in conjunction with UOP LLC, a Honeywell Company, and Sustainable Oils found that the renewable fuel reduces carbon emissions by 80 percent compared to petroleum jet fuel.

Camelina is the most readily available renewable fuel feedstock that meets the Navy’s criteria, with the ability to scale up acreage to meet demand.  The camelina for the contract was primarily grown in 2009 and harvested recently by farmers in Montana. The company also has several field trials in Washington state.

More Green Jobs

A new study is reporting that shifting to renewable energy will create more jobs than continued dependence on fossil fuels. 

The study, by environmental group Greenpeace and the European Renewable Energy Council (EREC), urged governments to agree a strong new United Nations pact to combat climate change in December in Copenhagen, partly to safeguard employment.

“A switch from coal to renewable electricity generation will not just avoid 10 billion tons of carbon dioxide emissions, but will create 2.7 million more jobs by 2030 than if we continue business as usual,” the report said.

Governments were often wrong to fear that a shift to green energy was a threat to jobs, said Sven Teske, lead author of the report at Greenpeace. He said that the wind turbine industry was already the second largest steel consumer in Germany after cars.

“Renewable power industries can create a lot of jobs,” he told Reuters of the outlook for solar, wind, tidal, biomass — such as wood and crop waste — and other renewable energies in power generation. “This research proves that renewable energy is key to tackling both the climate and economic crises,” said Christine Lins, Secretary General of EREC, which represents clean energy industries.

Assuming strong policies to shift to renewables, the study projected that the number of jobs in power generation would rise by more than 2 million to 11.3 million in 2030, helped by a surge in renewables jobs to 6.9 million from 1.9 million.

While the prospect of more jobs in renewable energy is heartening, the study seems to drive home what would be an obvious (and not terribly meaningful) point.  Shifting energy production from one technoloyg to ANY OTHER TECHNOLOGY would necessarily create more jobs.  The effort and stress of making any kind of change in production would necessarily “create jobs” as facilities were designed, funded, built and staffed.  We won’t criticize green jobs on these pages, but this kind of study runs the risk of prompting a backlash as it touts an economic necessity (that a shift from one technology to another technology creates new employment potential) as if it were a merit of renewble energy per se.  That kind of reasoning will not help the renewable energy industry in the long run.

100 Servants

U.S. Energy Secretary Steven Chu, in an interview with National Public Radio, called for greater conservation and more sensitive in using energy in America.  Today, he said,  “every person in the United States uses energy as if they had 100 personal servants at their beck and call,” cleaning their carpets, or traveling to the supermarket.  While he won’t ask everyone to “cut” the number of their “servants” in half or by some other fraction, he believes American need to be more aware of how they use energy and to conserve more.

Your Name Here

Does your company have a story of interest to the renewable energy committee?  Drop us a line at “editor” at “renewableenergy” dot com and tell us what’s going on with your company or firm.  We would love to hear from you.

August 21, 2009

Is Renewable Energy Safer?

The U.S. Occupational Safety & Health Administration (“OSHA”) today released a report claiming that renewable energy is safer than ‘conventional’ power generation and that switching to renewable power generation could save up to 1,300 lives each year.

The OSHA report said that renewable energies should improve the health of the 700,000 U.S. workers in the energy sector, citing researchers from the Medical College of Wisconsin.  Their research is published in the August 19 issue of JAMA, the journal of the American Medical Association. Steven Sumner, M.D. and Peter Layde, M.D., professor of population health and co-director of the Injury Research Center at the college, examined occupational health risks to workers in renewable energy industries compared to those in fossil fuel industries.

They pointed out the risk of workplace injury and death among energy workers is a hidden cost (or “externality”) of energy production.  Externalities of energy production include problems ranging from damage to the general environment to adverse health effects caused by pollution, injuries, and fatalties. Sumner and Layde concluded that wind and solar energy appear to lessen injury risks because the energy extraction phase is minimized or eliminated in wind or solar energy production. Biomass, comprised of biofuels, organic waste, and wood derived fuels, currently accounts for more than half of U.S. energy renewable consumption and does not appear to offer a significant safety benefit to U.S. workers relative to fossil fuels, they found.

“The energy sector remains one of the most dangerous industries for U.S. workers. A transition to renewable energy generation utilizing sources such as wind and solar could potentially eliminate 1,300 worker deaths over the coming decade,” Sumner said.

August 11, 2009

Renewable Energy Industry: We’re Moving Too Slowly

Filed under: Renewable energy jobs — Jonathan B. Wilson @ 7:49 am

Renewable energy industry players at the Nevada Clean Energy Summit said the U.S. renewable energy industry is moving too slowly

Speakers at the conference called for the swift passage of more legislaton that would encourage renewable power, including expanded federal loan guarantee programs and funding for increased electrical transmission development.  The lack of capacity in the electrical grid for the transmission of power is often cited as a limitation on the value of new electric production facilities.

July 31, 2009

DoE Announces $8.5 Billion in Loan Guarantees Available

The Department of Energy has announced that it is now ready to accept applications for up to $8.5 billion in renewable energy loan guarantees. 

Energy Secretary Steve Chu said, “These investments will be used to create jobs, spur the development of innovative clean energy technologies, and help ensure a smart, strong and secure grid that will deliver renewable power more effectively and reliably.  This administration has set a goal of doubling renewable electricity generation over the next three years.  To achieve that goal, we need to accelerate renewable project development by ensuring access to capital for advanced technology projects.  We also need a grid that can move clean energy from the places it can be produced to the places where it can be used and that can integrate variable sources of power, like wind and solar.”

Application information from the Department of Energy is available here.

July 30, 2009

New Energy Jobs Slow to Bloom

The Miami Herald trumpeted in a headline yesterday, “Despite federal aid, new energy jobs slow to bloom.”  The article claims that the recession has hit the renewable energy space just like the rest of the economy, so renewable companies are slow to hire.

That’s true, of course, but it’s not the whole story.  Despite the unprecedented level of support given for renewables through the 2009 Recovery Act, including the Section 48 Investment Tax Credit and the extension of the biofuel excise tax credits, this kind of support is not enough for projects to get off the ground.  Any developer looking to break ground on a new project still needs cash to bring the project online.

The expanded role of the Department of Energy and the Department of Agriculture in issuing guarantees for qualified renewable energy projects was supposed to be the catalyst that would bring renewable projects into fruition faster, but these programs have been painfully slow in coming.  While DoE and DoA grants and guarantees are helpful, a project developer still needs to raise a substantial amount of cash equity to take advantage of them, only to then proceed through the guarantee application process.

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