06/04/08
Farm Bill passes despite glitch
The House and Senate recently passed the $307 billion Farm Bill, over the objection of President Bush, only to have it vetoed.
The bill contains $10.3 billion in food stamps under the nutrition section, signaling a large victory for House Ways and Means Committee Chairman Charles Rangel (D-NY). Also, the ceiling for “direct payment” subsidies, a major issue of concern for the Administration, was reduced to $750,000, from nearly $1 million.
The Administration had favored it being lowered to around $200,000, arguing that farmers were doing very well and that these payments were superfluous. There is also $1 billion dedicated to biofuels, specifically, cellulosic ethanol, roughly a third of which would go to loan guarantees for refineries.
The policymakers who supported this legislation, exceeded the mandated figures required to overturn a veto, however a constitutional technicality arouse that threatened the bill. Apparently, when the paper copy of the bill was delivered to the White House, where it was expected to be vetoed, one of the titled sections of the paper copy of the bill was missing, about 34 pages.
Title III of the Farm Bill, the one left out, has yet to become law. This title focused on trade and included foreign food aid and a popular school lunch program known as McGovern-Dole. Because of the snafu, those programs expired. Congress will have to go back and pass this portion of the bill again for it to be appropriated.
Despite this, both chambers passed the bill by veto proof margins and will likely pass the missing title at a later date.
Here's an article from Friday about this interesting dilemma http://www.washingtonpost.com/wp-dyn/content/article/2008/05/22/AR2008052200321.html?hpid=moreheadlines.
And here http://www.nytimes.com/2008/05/15/washington/15cnd-farm.html
And here http://www.upi.com/International_Security/Energy/Analysis/2008/05/22/analysis_farm_bill_hikes_biofuels_funding/8535/
Senate eyes suspending renewable fuel mandate for ethanol
Sen. Kay Bailey Hutchison (R-TX) recently sent a letter to the Environmental Protection Agency (EPA) requesting that the EPA cap the corn based ethanol renewable fuel standard at its current peak, 9 billion barrels for this year in the face of record high food price inflation. Ethanol, which is currently on pace to meet 15 billion barrels by 2015, has sparked a heated debate that has lawmakers eager to assuage food price concerns among constituents.
Included in this list of 24 Senators is likely Republican Presidential Candidate John McCain. There are powerful interests on both sides of the argument. Midwestern Representatives feel that the mandate is important for their farming constituents and they argue that ethanol is taking the brunt of the blame for a number of extenuating circumstances that are contributing to the rise in food prices. They also say that the corn typically used to manufacture biofuels is inedible anyway (a point that was previously debated/discussed during the last EnComm telecom and succinctly explained by Chris Deal).
In December 2007, the President signed into law the Energy Independence and Security Act (EISA) of 2007, which raised the renewable fuel mandate to 36 billion barrels by 2036.
To read more please click here
http://in.reuters.com/article/environmentNews/idINN1933861020080519
or here
http://www.boston.com/news/nation/washington/articles/2008/05/06/gop_senators_seek_hold_on_ethanol_mandate/
Rep. Dingell and Rep. Boucher release fourth white paper on effects of Climate Change
In an ongoing discussion taking place between the Energy and Commerce Committee, its lawmakers who serve on the committee, and the American public a fourth report on the domestic cost of a cap-and-trade program was released. The reports, which provide ample facts and figures but is careful not to endorse a policy, is available for review at this link http://energycommerce.house.gov/Climate_Change/Climate%20Change%20White%20Paper-Cost%20Containment.052708.pdf.
Congress beginning to experience buyer’s remorse on Ethanol
Numerous articles recently are stating that some members of Congress are concerned that they have backed the wrong horse regarding the corn-based ethanol fuel source. As you know, the EISA Bill of 2007 raised the renewable fuel standard to 36 billion barrels by 2022. Although the numbers differ, currently, there are about 7.5 billion barrels of ethanol in production.
At a recent meeting that the author attended, Rep. G.K. Butterfield (D-NC) mentioned his concern about the environmental and economic cost of ethanol. Sen. Jeff Bingaman (D-NM) also expressed some concerns regarding the fuel. Midwestern lawmakers have been defending the fuel, however, including Rep. Stephanie Herseth-Sandlin (D-SD) and Sen. Byron Dorgan (D-ND) and Sen. Amy Klobuchar (D-MN).
While it remains highly unlikely that Congress would repeal the tax credits for ethanol, scaling down the subsidies for the industry, in light of the news that corn prices are at record highs and production has reduced 8 percent this year, could be a viable option for lawmakers. Bolstering tax credits available for cellulosic fuel, is another option.
Currently over 1,200 E85 based fueling stations in the U.S., over 900 of which are located in the state of Minnesota alone.
Click here to view their locations http://e85vehicles.com/e85-stations.htm. Notice that they are all concentrated in the Midwest.
Click here for an article about Congress and ethanol http://thehill.com/leading-the-news/doubts-grow-over-ethanol-2008-04-30.html.
Click here for a Washington Post article on Ethanol’s expansion and how it relates to food prices http://www.washingtonpost.com/wp-dyn/content/article/2008/04/29/AR2008042903092.html?referrer=emailarticle&sid=ST2008042903585.
President Bush calls for emissions halt by 2025
Although President Bush gave a speech recently indicating his desire to halt emissions output by 2025, many climate based policy analysts are skeptical. The opposition believes that the President’s speech comes at the insistence of industry, whom are deeply concerned that a proposal for climate change from the next Administration would be much more stringent than from the current one. Some lawmakers also feel that a halt by 2025 would simply be too little, too late and favor a more aggressive reduction. There is currently no law against emitting carbon.
ASME hosts briefing on CTL technology
ASME in collaboration with the UEF and founders societies convened a Congressional briefing on April 24, 2008, entitled “Coals-to-Liquids: Bridge to the future of fuel.” The briefing highlighted the briefing highlighted the technology’s evolution since its inception as well as the potential and challenges associated with it.
Moderating the briefing was longtime ASME member and coal expert, Dr. Dick Bajura. Dr. Bajura currently serves as the Director of the National Research Center for Coal and Energy at West Virginia University (WVU). The first presentation was from Dr. C. Lowell Miller, Director of the Office of Sequestration, Hydrogen and Clean Coal Fuels in the Office of Fossil Energy for the Department of Energy gave a presentation that identified the critical potential of CTL technology. Dr. Miller discussed the advances with the technology along with the growing economic viability due to the price of oil and, consequently, the price of gasoline.
Dr. Qingyun Sun spoke last and focused his discussion on explaining the current operating plan by China to bring several CTL and DCL (direct coal liquefaction) plants online this year and in the near future in the inner Mongolia region of China. Dr. Sun stressed that this investment in CTL technology, to the Chinese, was one for energy security and he pointed out that the nation imports over half of its oil but has abundant reserves of coal, similar to the current energy reality of the U.S.
A key issue, according to both Dr. Miller and Dr. Sun, is the successful implementation of long term sequestration of emissions generated from coals-to-liquids. Both speakers stated that with sequestration technology emissions from CTL would be equal to that of traditional gasoline. Although this presents a major obstacle in a carbon constrained climate, a chemical mix of CTL that contains biomass and other feedstocks has shown greater capacity for sequestering substantially higher amounts of carbon. Both speakers concluded that they believe CTL is an attractive option that could be implemented with the existing transportation infrastructure for a domestic alternative to traditional gasoline.
Co-sponsors of the briefing included: the American Society of Mechanical Engineers (ASME), the American Institute of Chemical Engineers (AIChE), the American Society of Civil Engineers (ASCE), the American Institute of Mining Engineers (AIME), and the Institute of Electrical and Electronics Engineers (IEEE-USA).
To learn more about the Shenhua project please click here http://www.shenhuagroup.com.cn/english/
To read Dr. C. Lowell Miller’s testimony to Congress on CTL please click here http://fossil.energy.gov/news/testimony/2006/060424-C._Lowell_Miller_Testimony.html
Congress holds hearings on FutureGen, indicates hope to revisit program
While the Administration announced their decision to “restructure” the FutureGen program in late January, members of the House and Senate are still seeking answers. Recently both chambers have held hearings on the program, which the Administration requested $146 million for the coming fiscal year, to ascertain what level decided to abandon the construction of a 275 megawatt coal fire plant that sequesters carbon emissions and produces hydrogen.
Recently the Senate Commerce, Science and Transportation Committee held a hearing on coal technologies with, as expected, considerable emphasis on the FutureGen program. Michael Mudd, head of the FutureGen Alliance submitted testimony and testified that the Alliance vehemently opposed the FutureGen “restructuring” because it delayed the commercial development of carbon capture and storage technologies. He implored the Committee to restore funding for this program and reminded them that a carbon limited society could be not to far off in the future.
The House also held a hearing but instead of focusing on coal technologies in general they focused on the defunct project FutureGen, which was “restructured” in January 2008.
Illinois lawmakers Tim Johnson and John Shimkus, both Democrats, joined the House Committee on Science and Technology, to take turns interrogating Undersecretary of Energy Clarence H. “Bud” Albright. Although Albright conceded that the decision on FutureGen had been “difficult” he was adamant that the final decision had come within the Department of Energy by Secretary Samuel Bodman, with his advice and counsel. In lieu of building the plant, the Administration chose to fund sequestration technology for three smaller plants, a move strongly criticized by environmentally inclined lawmakers.
To view the hearing in its entirety click here http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=a6be2602-97d5-4232-9aaa-4ba84d8c66fa
To view his testimony click here http://commerce.senate.gov/public/_files/MikeMuddFutureGenTestimony040908.pdf
To read an article about the House Committee on Science and Technology hearing on FutureGen please click here http://www.news-gazette.com/news/local/2008/04/16/delegation_pleads_case_in_house
Congress questions oil executives over record profits and funding for renewables
At a hearing this week in the House Select Committee on Energy Independence and Global Warming, members on both sides of the aisle took turns verbalizing their concern about the record high price of oil and urged representatives of oil companies to reinvest their record profits into renewables.
Members of the committee were inquisitive about renewable technology investments by the companies, citing a combined $123 billion in profits that the companies made last year. J. Stephen Simon, Executive Vice President of Exxon Mobil, claimed his company would be spending $100 million this year on climate change research at Stanford University this year; but cited market forces that commanded their investments to more traditional energy technologies and not renewables. John Hofmeister, President of Shell oil, revealed investments in solar, wind technologies; Bob Malone of BP bragged of their biofuels research and investments (R&D); while Peter Robertson of Chevron highlighted their push toward geothermal energy.
Still, some members of the Committee appeared unimpressed. Rep. Jay Inslee (D-WA) called Exxon Mobil’s renewable investments, which appeared lower than the other companies present on the panel, as “pathetic.” Rep. Emmanuel Cleaver (D-MO) likened the company executives’ approval ratings to lower than those of Congress, a comment that drew few laughs in the intense committee room.
Despite the outrage expressed by some members, other members applauded the efforts undertaken by the companies to invest in renewable sources and spoke of their concerns that the U.S. was making it too difficult for companies to explore areas for other sources of oil. While all the panelists agreed that expanded exploration in coastal waters could help alleviate gas prices; they also acknowledged that increased consumption from rapidly developing nations and price speculation were contributing factors could also keep prices higher.
Chairman Markey indicated at the conclusion of the hearing that he would be calling on the companies to testify again to Congress should the price of oil continue to rise.
To read more about the hearing held by the Select Committee please click here http://globalwarming.house.gov/mediacenter/pressreleases?id=0197
02/29/08
House passes energy tax package, Senate plans to act before Easter
This week, the House of Representatives once again brought a renewable energy tax package, H.R. 5351 to the floor for a vote. By a final vote tally of 236-182 the bill was passed.
Similar bills were taken up and passed by the House last year but stalled in the Senate. Twice the Senate has failed to invoke cloture, the last time by just one vote. Even if the Senate were able to pass this bill, the Administration has made it clear that they would veto it on the grounds that it raises taxes and hurts consumers.
The bill seeks to provide three year extensions to tax credits for solar, wind, geothermal producers, with a total cost around $18 billion over the next decade as well as new tax breaks for renewables. The tax breaks to encourage renewable are accomplished, in part, by revoking tax breaks for oil and gas companies that were implemented in the 2001 to encourage companies to identify more areas for extracting energy. Essentially, lawmakers were concerned that American energy companies were not investing into infrastructure in the U.S. and wanted to provide incentives for oil and gas companies to continue to do exploration in the U.S. instead of in nations in South America and the Middle East. The law waived royalty fees for oil and gas companies who conducted energy exploration.
Now with companies such as Shell and Exxon Mobil earning record profits some House leaders feel that revoking the tax break for them is a reasonable concession to better promote alternative energy sources. House members in opposition argue that this tax break is vital to keeping the price of energy lower for consumers and that if it is revoked the energy companies will have no incentive to perform domestic exploration and will move their operations to other nations.
Tax package seen as ‘extension’ of Energy bill passed last year
Without a renewable energy tax package, many lawmakers feel that the energy bill signed into law late last year is incomplete. Several Ways and Means Committee staff referred to this vote as “symbolic” while oil prices crept up to $103 per barrel.
The Senate has tried three times in the past year to pass a similar bill, falling just one vote short the last time. It is unlikely that this bill will not be altered before it reaches the floor of the Senate. Senate leaders have some different renewable energy priorities than the House, which further hurts the chances of its passage. Should this bill stall again in the Senate or be vetoed by the President it is likely that this package will be brought up through either a Budget Reconciliation bill this year or early next year with the hope being that a more sympathetic administration will support its passage into law.
States with renewable energy companies are complaining that production is already slowing down as companies become concerned that the expiring tax breaks will be renewed. For more information on the Energy tax package please click here http://www.washingtonpost.com/wp-dyn/content/article/2008/02/27/AR2008022702635.html?hpid=topnews
Or here http://dotearth.blogs.nytimes.com/2008/02/28/moving-tax-breaks-from-oil-to-sun-and-wind/#more-179
2/12/08
Big budget issues loom for Administration and Congress
The unveiling of the President’s final budget proposal failed to draw much nostalgia but did manage to draw some acrimony as members of both parties were critical of the budget. The Administration proposed steep cuts or the elimination of 151 programs including in education, public housing and forest research, collectively saving $18 billion. Included in this are sizable reductions to Medicare, the federal health insurance program for the elderly and Medicaid, a federal health insurance program for the poor and the disabled.
Lawmakers were critical because the budget does not address the expiring tax cuts initially passed in 2001 and 2003 as well as the Alternative Minimum Tax (AMT), a tax created in the late 1960’s to keep the wealthy from using deductions and credits to avoid paying any income tax whatsoever. The AMT was never adjusted for inflation however, and has been affecting an increasing number of middle class taxpayers in the U.S. For the past two years, Congress has passed one year “patches” for the AMT relieving millions of taxpayers from the tax, with a promise to eliminate the program altogether that appears to be difficult to implement. Any elimination of the program would have to be offset by a tax increase to recreate the lost revenue, estimated to be over a trillion dollars in the next decade.
Coupled with a federal budget deficit that is estimated to be $410 billion by the Office of Management and Budget (OMB) and some lawmakers are floored. This would be the second highest budget deficit in dollar terms on record, after the $414 billion budget deficit from 2004. This is up considerably from the $163 billion budget deficit last year, which was lower as a result of unexpectedly high tax returns. That is an unlikely scenario this year given the economic slowdown, and a $161 million economic stimulus package that was just passed last night. Other lawmakers are concerned about the funding that is being requested to support the war efforts that are not included in the federal budget request. Rather, this funding is requested as part of a Spending supplemental, so it is not counted against the federal deficit.
Several provisions contained within the energy budget proposal have irritated Congressional Democrats such as the decision to double the Strategic Petroleum Reserve fund to 1.5 billion barrels of oil, reduce funding for the popular low income heating assistance program and to discontinue the FutureGen project. Congress has talked openly about passing a Continuing Resolution until after the Administration has departed and then negotiating with the new Administration on a budget that they feel will be more sensitive to their concerns and needs. A CR would appropriate funding at the previous year’s levels, flat funding many programs considered critical to the nation. The administration defends their budget request however, stating that although there are five year forecasts; budgets can vary tremendously from year to year. It remains to be seen whether a budget will be passed but, given the national election this year that appears to be a somewhat far fetched goal.
02/07/08
Energy Secretary Bodman testifies on the FY09 Budget request
Energy Secretary Samuel Bodman testified recently before the House Energy and Commerce Committee regarding the fiscal year 2009 (FY09) budget request that was unveiled on Monday, February 4th.
While exchanges were mostly cordial, some lawmakers took the opportunity to express their disapproval over the recent budget request. Rep. Shimkus (R-IL) and Schakowsky (D-IL) were deeply concerned about the DOE’s recent decision to “restructure” the FutureGen project. Initially, the project was supposed to develop the first near zero emissions coal fire plant with hydrogen technology capabilities as well in Mantoon, Ill. This project site was never endorsed by the DOE even after the FutureGen Alliance chose it, and, citing rising costs, the DOE decided to abandon the project recently. Rep. Jay Inslee (D-WA) took the time to press Sec. Bodman on working to establish a cap-and-trade (C&T) for the U.S. as well as his personal views on such a system. Sec. Bodman declined to reveal his views on the policy.
Other provisions that lawmakers testified they were concerned about were funding cuts for solar energy (7 percent decrease), hydrogen (33 percent decrease) programs in the Energy Efficiency and Renewable Energy (EERE) department. Several lawmakers expressed dismay that the Low Income Home Energy Assistance Program (LIHEAP) funding was cut 22 percent, as well as the Weatherization Assistance Program. The Weatherization program received $223 million in FY08 appropriated funds.
Several members were also concerned about the Proliferation Prevention program that House members say has funded Russian institutes that supported the Iranian nuclear effort. The IPP program was created in 1994 to provide employment for Russian weapon scientists to dissuade them from selling their expertise to terrorists or "countries of concern," like Iran.
To read a letter from Rep. Dingell and Rep. Bart Stupak, the Chair of the Subcommittee on Oversight and Investigations, please click here http://energycommerce.house.gov/Press_110/110-ltr.020608.Bodman.NonProliferation.pdf.
For Chairman Dingell’s opening statement please click here http://energycommerce.house.gov/Press_110/110st128.shtml
1/23/08
Presidential Candidates continue to talk about energy and global warming
As Sen. John McCain (R-AZ) tours the nation drumming up support for his second bid to become President he has chosen the issue of climate change as one of his signature concerns. Sen. McCain previously introduced legislation with Sen. Lieberman establishing a Cap and trade system. Although many believe that Sen. McCain won in New Hampshire, in part, on his views on the environment, the issue has not taken hold with many of his fellow Republican candidates.
Both former New York City Mayor Rudy Giuliani and former Massachusetts Governor Mitt Romney (R-MA) have stated that they oppose a hard cap on emissions. While Mayor Giuliani has said he prefers market incentives to encourage better technology, Gov. Romney has stated that he believes an international agreement would be more beneficial because it would not give nations that are continuing to pollute, an edge on the U.S.
Former Arkansas Governor Mike Huckabee (R-AK) has said that he supports a cap-and-trade but has not outlined a specific plan.
On the Democratic side, former Sen. John Edwards (D-NC) has said that he supports a mandatory reduction in greenhouse gas emissions (GHGs) by 80 percent by 2050, a platform that is shared across the board. Sen. Edwards has also said that he would like to auction off credits and use the proceeds to make investments in renewable energy. Sens. Clinton and Obama have also stated that they support a cap-and-trade. Sen. Obama has also stated that he supports coals-to-liquids (CTL) technology provided that technology to sequester the carbon could be implemented.
For more information on the candidates and their views on energy and environmental issues please click here
1/14/08
CTL stalls out in final Energy bill but remains high on Congressional wish lists
The tax provisions that were voted out of the Energy bill that was passed late last year would have provided $2 billion dollars in tax benefits to the coal industry including CTL producers provided that they were successfully able to sequester a percentage of the emissions from their plants. Although the tax package was removed from the final bill, it is likely to be proposed again later.
In the Farm Bill recently passed, Sens. Rockefeller (D-W.Va) and Jim Bunning (R-Ky) successfully pushed to attach a 50-cent-per-gallon tax credit extension for CTL to 2010. The provision called for developers to capture 50 percent of the carbon they produce. Developers hope that this provision will shore up capital to help mitigate some of the cost of constructing CTL plants, which, right now, is substantial.
To read an article related to this provision please click here http://thehill.com/leading-the-news/the-farm-bill-grows-a-crop-of--lobbyists-2007-11-06.html
With energy prices remaining high, politicians are still scrambling for ways to cultivate alternative forms of energy for American consumers and CTL remains high on the list for some who feel that it could provide a tremendous economic benefit to their constituents as well as wean the nation off “foreign oil.”
In September 2007, the House Science and Technology Committee held a hearing regarding CTL. Among the people to offer testimony was Dr. Robert Freerks from Rentech, a Colorado based CTL Company was there to espouse the virtues of their product and decry the policy limitations that currently surround the technology. The reaction was mixed.
Many CTL advocates decry the inconsistent treatment of synthetic fuels (synfuels) such as corn-based ethanol and cellulosic feedstocks (boosted greatly by the recently expanded renewable fuel standard) that conspicuously left CTL out.
The message for CTL resonates well in some circles. Members of Congress from coal rich areas (Montana, West Virginia, Kentucky, Ohio, etc) believe that CTL could provide high paying jobs to their districts and states. Montana Gov. Brian Schweitzer is well known for championing the potential of CTL. He even carries a small vile of CTL around with him. Currently, the state of Montana has the largest coal reserves of any state in the U.S. To read more about Gov. Schweitzer’s plans for CTL please click here http://www.northernplains.org/news/CTL-7-06/
Skeptics contend that the concept of displacing gasoline with CTL is far fetched and that the environmental benefits for CTL are highly dubious considering that emissions are generated by the process and the high amounts of water that are consumed to produce the fuel. Senator Barack Obama has come out in support of CTL technology provided that the emissions could be sequestered, a technology that is still in a developmental phase.
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