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)

Kerry-Lieberman bill would create 200,000 jobs a year and cut greenhouse gases 22% by 2020, 42% by 2030

(Photo of Diablo nuclear power plant in California from Flickr and photographer Mike Baird)

The Kerry-Lieberman climate bill would spur a surge of 200,000 new jobs a year from 2011 to 2025 and would cut greenhouse gases 22% by 2020 and 42% by 2030, according to a new study by the non-partisan Peterson Institute of International Economics .

The jobs would be largely for construction of new power plants and increased use of biofuel. They would help with the recovery from recession, but would slow to business-as-usual after 2025, the study says.

This first analysis of the American Power Act was released Thursday. It forecasts what the U.S. energy picture will by 2030 if the bill is passed.

The changes will be significant, though not as much as some might hope.

• Fossil fuels will drop to 70% of the energy supply from 84% today.
• Renewable energy will rise to 14% from 8%, with wind growing the most, followed by biomass and then solar.
• Nuclear power will double to 16% from 8%.
• Nuclear and renewables will power about half the electricity.
• Carbon capture and sequestration will be a factor for both coal and natural gas.
• Oil use will drop 33-40% as transportation turns increasingly to ethanol, biodiesel and electricity. U.S. spending on foreign oil will fall to $93B from $144B per year.
• Homes will see about a 3% increase in electricity rates between 2011-2020, while gasoline will rise about 5%. Home heating oil will rise as well. But price increases will be mitigated by increased efficiency and the return to consumers of revenues from purchased allowances.

Two side benefits will be reduction of other pollutants, such as mercury and nitrogen oxides, plus a sizeable reduction in water use.

Download the study.

(Sources: Greenwire, Peterson Institute of International Economics)

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)