House OKs 26 cent/barrel tax increase for Oil Spill Trust Fund

Before adjourning for Memorial Day, the House of Representatives narrowly passed a tax-extender package that includes an oil tax increase of 26 cents a barrel.

The bill increases a tax on the oil industry to 34 cents a barrel from 8 cents a barrel. This money would go into the Oil Spill Liability Trust Fund.

The fund helps cover economic and natural resource costs above the $75 million liability cap for private companies. The bill also raises the per-incident cap for payments from the Trust Fund to $5B from the current $1B.

The bill extends for one year (retroactive to Jan. 1) energy tax credits for biodiesel, renewable diesel, energy efficiency and alternative vehicles fuel.

It also extends the “doc fix,” which each year prevents drastic cuts in Medicare payments to doctors and hospitals.

A second bill passed that authorizes the Defense Department to spend $470M on energy efficiency, renewable energy and environmental cleanup. This is the bill that includes an amendment repealing “don’t ask, don’t tell.”

This bill provides $5M for a pilot project to develop a microgrid. Another provision says DOD can stop contracts with BP if it is not considered a “responsible source.”

It allows government agencies to buy alternative fuels whose lifecycle greenhouse gas emissions exceed conventional fuel (i.e. tar sands) so long as less than half of that fuel comes from such sources.

Both measures will move to the Senate after the break. Their future there is uncertain.

(Source E&E News PM)

Wind, solar and geothermal tax credits extended, but fossil fuels get incentives too

(Photo of wind farm in Texas from Flickr and photographer fieldsbh)

Washington Report: In case you missed it, the $700 billion bailout bill included renewable energy tax credit extensions, which just a week earlier had seem DOA for this session of Congress because the Senate and House couldn’t agree. It was the Senate version (the least desirable one) that was attached to the bailout. So we got good news and bad news: the good being that renewable energy companies can continue to grow – the bad being that coal, oil shale and tar sands got a break too. The $17 billion package of extensions included:
• 1 year of production tax credits for wind (the industry is already lobbying for longer-term extension of credits)
• 2 years of production tax credits for geothermal, biomass and other alternative sources.
• 8 years of investment tax credits of 30% for solar energy for homes and commercial properties and removal of the $2,000 cap (so an installation costing $30,000 would be reduced to $20,000).
• Biodiesel credits for the U.S. that put an end to Europeans shipping their product here to get the credit and then back again.
• New credits for plug-in electric hybrid vehicles of $2,500 to $7,500. The new Chevy Volt would qualify at the top level.
• New credits for wave and tidal energy projects.
• New employer tax credits to reimburse up to $20/month to those who use bicycles as their main commuter transportation
• New credits for refineries that process oil shale and tar sands.
• New credits for coal-fired plants that capture and store carbon dioxide, including pumping it into depleted oil fields to extract the remaining oil.
• Inclusion of coal-to-liquid fuel as an alternative fuel.
(Sources: Greenwire, E&E Daily)

House, Senate both extend renewable energy tax credits, but are still at odds

Washington Report: At long last, both House and Senate have extended the renewable energy tax credits due to expire at years’ end. The House passed its bill Friday, the Senate its earlier in the week. But they passed different versions and now have to reconcile them, which seems to be a problem. At issue are:
*The addition of tax credits for oil shale and tar sands refineries and coal-to-liquid in the Senate bill.
*Failure to pay for all credits in the broader Senate bill, which goes beyond energy credits with other business and individual tax credits.
House Dems and environmentalists strongly object to the introduction of credits for fossil fuels. Rep. Jay Inslee (D-Wash.) called oil shale “enormously environmentally damaging.” So are tar sands and coal-to-liquid fuel. On the second point, Blue Dog (conservative) Democrats in the House don’t want to see anything passed that isn’t 100% paid for. The White House favors the Senate bill, despite some taxes on oil, and says it would veto a final bill that looks like the House version. So now the two chambers have to resolve the conflict. Inslee said he thinks that is possible, since a large majority favors the extensions. The Senate Bill passed 93-2. House Dems have passed renewable tax credit extensions without fossil fuels 8 times. (Sources: E&E Daily, E&E News PM)

Mayors pledge to increase energy efficiency, avoid tar sands to meet climate change challenge

(Photo of Indiana refinery processing tar sands oil from Flickr and The Rainforest Network)

News Update 4: The U.S. Conference of Mayors has attacked global warming by endorsing an increase in energy efficiency, seeking guidelines to avoid high-emission unconventional fuels and phasing out plastic water bottles. At its meeting in Miami in late June, the conference:
• Unanimously supported a 30% increase in energy efficiency in new residential buildings and called for a dramatic improvement in the national model energy building code that guides state and local governments. Code officials will meet in September to finalize the 2009 International Energy Conservation Code (IECC), the first update since 2006.
• Challenged high-carbon fuels from tar sands, liquid coal and oil shale, asking for guidelines and purchasing standards to help mayors understand lifecycle greenhouse gas emissions from fuels. These unconventional and synthetic fuels can emit 2-5 times the greenhouse gases during extraction and production.
• Agreed to phase out bottled water in favor of the public water supply. It takes 1.5 million barrels of oil each year to manufacture the bottles, most of which end up in landfills. (Sources: Sierra Club Cool Cities, portofentry.com)

Tar sands oil disaster for planet

A top Canadian official has asked the U.S. to go slow in plans to cut greenhouse gas emissions. What’s THAT about?

It’s about the Alberta tar sands, and the desire to keep us buying their synthetic oil made by a filthy, messy process that:
• destroys thousands of miles of pristine forests and wetlands
• releases 3 times the carbon dioxide into the air as conventional oil
• digs up 2-4 tons of earth to produce each barrel of oil
• burns enough natural gas each day to heat a million homes
• takes 3 barrels of water from the shrinking Athabasca River for each barrel of oil
• generates 2 barrels of toxic waste for each barrel of oil, stored in holding lagoons so big they can be seen from space
• leaves the land spoiled instead of reclaiming it
• smells like rotten eggs.

Matthew Simmons, author of “Twilight in the Desert” calls the process “atrocious.” Al Gore says it’s “truly nuts.”

The tars sands are Canada’s fastest growing GHG emissions source and one reason it’s not meeting its Kyoto targets.

Show me the money
Why would anyone make such a mess to produce oil? Money, that’s why. Tar sands became economically viable in 2003. Investors are piling on ($52 billion with much more expected), and the Canadian government stands to make $51 billion in taxes by 2020, while Alberta province will get $44 billion. Not surprising they haven’t done an impact assessment.

And we’re the enabler because we’re buying almost all their exports, to the tune of $73 billion a year. Why? To reduce our reliance on Middle East oil. Canada is now our biggest supplier, at 16% of our total. They want to sell us much more, and together the countries plan to increase production 5-fold.

To make matters worse, refiners here at home are trying to expand to refine the stuff and build pipelines to bring it in. The Sierra Club and other environmental groups have fought permits in several states, including Ill., Ind. (remember the row with Chicago over the Whiting plant?), Michigan, Ohio and Wis.

The basics
Tars sands, re-branded “oil sands” by the industry, is also found in Venezuela. About 20% is near the surface and mined in open pits by giant equipment. The remainder is far underground and recovered by injecting steam into the earth to melt the tar (or bitumen) so it’s thin enough to pump up. Then impurities are removed in an energy-intensive process. The Canadian government wants to replace the natural gas that powers the operation with 20 nuclear reactors.

Alberta is sitting on the second largest reserves in the world, after Saudi Arabia. It is producing 1.25 million barrels a day from its tar sands, an amount expected to triple by 2016. China, another likely market, has invested in two companies there.

But tars sands are not the only source of “unconventional” or synthetic oil. Oil shale and coal-to-liquid are other means to make a dirtier form of oil that produces more GHG and could tear up OUR landscape.

Why even mess with this stuff, when there are cleaner forms of energy like wind, solar, geothermal and cellulosic ethanol. We should be investing in those, as well as cutting waste and driving electric cars. But we’d better get busy. Because tar sands are clearly on a tear.

Note: "Highway to Hell" is a compelling account of work at the large Ft. McMurray tar sands in northern Alberta in OnEarth magazine online.
For more on tar sands, see Climate Progress

(Sources: Washington Post, OnEarth, PlanetArk, Sierra Club, Natural Resources Defense Council, World Watch Institute, E&E Daily, E&E News PM, Tar Sands Watch/Cleveland Plain Dealer and Oil Sands Truth)

(Photo of the Alberta tar sands courtesy of Flickr and photographer Gord McKenna)