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)

Wins and losses in this Congress in fight against global warming

Washington Report: Congress has left Washington for the election campaign, and a lame duck session in November is unlikely to bring much action on the global warming front. So we can probably go ahead and assess what this Congress has done for us in the fight to curb greenhouse gases. There was a flurry of activity, with multiple committee hearings and dozens of proposed bills, so the topic was high profile. But what was really accomplished? Not much.
• The biggest victory was passage for the first time in 2 decades of a corporate average fuel economy (CAFE) standard for cars and light trucks. They will have to average 35 mpg by the year 2020. That bill also had a renewable fuel standard, which encouraged a controversial increase in the use of corn ethanol, which does nothing to curb greenhouse gases and drove up food prices.
• Left on the drawing board, passed by the House but not the Senate, was a renewable electricity standard of 15% by 2020 to force power plants to use less fossil fuel and more renewables.
• Failed to summon the 60 votes needed to debate a compromise and watered-down global warming bill by Sens. Joe Lieberman (I-Conn.) and John Warner (Va.)
• Permitted the 26-year-old off-shore drilling ban to expire, as well as a ban on oil shale extraction in Western states. (Though Democrats are hoping to reinstate the offshore ban, at least partially.)
• Extended renewable tax credits for wind, solar and other renewable sources, adding incentives for plug-in cars and wave energy, but also for fossil fuels in the form of refining oil shale and tar sands, producing coal-to-liquid, and sequestering carbon. The tax credits were on their way to oblivion when the Senate leadership attached them to the $700 billion bailout bill at the 11th hour.
So, the fossil fuel interests basically won every round except auto fuel efficiency, if you see extension of renewable credits as maintaining the status quo. There’s been a lot of activity, but not much progress. We need to get those 60 votes in the Senate.

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)

Big Oil wins this round; offshore ban is gone

(Photo of offshore oil platform from Flickr and photographer absolutwade/Beau Wade)

Washington Report: Big Oil has won, at least for now. After spending millions on lobbying, and taking advantage of the rise in gas prices to win over two powerful advocates, President Bush and John McCain, it has two-thirds of the country believing we need to drill offshore – and drill now. Not to mention those omnipresent American Petroleum Institute ads of an annoying woman of indeterminate age in a black pantsuit who strides across the U.S. map as if she owns it, telling us Congress has put most of the oil reserves in the U.S. off bounds. Well, they aren’t anymore. For the first time in 26 years, Congress has let the moratorium on offshore drilling expire. Starting Oct. 1 oil rigs technically could spring up just 3 miles offshore, except within 150 miles of Florida’s Gulf Coast, which was placed off-limits by a 2006 law. Also gone is the ban on oil shale in the West. It’s a huge step backward for the environment and a win for fossil fuels. Not satisfied, some lawmakers continue to push their drilling agendas. Republicans want to give the states a portion of the royalties (which some gulf states had and lost) and speed up leasing and permitting. Democrats from Massachusetts want to make sure to protect the Georges Bank fishing grounds (“shellfish, not Shell Oil”) and national marine sanctuaries from drilling. A new president and Congress could reinstate the ban. (E&E News PM)

House approves energy bill with off-shore drilling, tax credit extensions for renewables, RES

(Photo of Capitol Building from Flickr and photographer seansie/Sean Hayford O'Leary)

Washington Report: The House on Tuesday voted 236-89 to pass a comprehensive energy package that allowed for more off-shore drilling but at the same time rolled back oil tax breaks to fund renewable energy and efficiency. HR 6899 would:
• Allow drilling more than 100 miles of both coasts and, if states said OK, drilling 50 miles off their shore; maintained the ban on drilling within 125 of the west coast of Florida; protected Georges Bank fishing grounds off New England from drilling.
• Create a renewable electricity standard (RES) mandating 15% of electric power come from renewable sources by 2020, though one-fourth of the mandate could be met with efficiency.
• Roll back $18 billion in oil tax breaks to fund renewable energy and conservation.
• Extend investment tax credits for solar energy 8 years, production tax credits for wind 1 year, and other renewables like geothermal and wave energy 3 years.
• Make $1 billion in tax credits available for coal plants that use carbon capture and storage (CCS) technology.
• Lift a moratorium on oil shale leasing in Colorado, Utah and Wyoming, though the states must pass laws to permit it.

The politics behind the bill
Environmental groups, while liking the renewable provisions, objected to the bill’s offshore drilling, oil shale and CCS provisions. Democrats said they backed down on offshore drilling because public opinion favors it and they wanted to give cover to moderate Dems in tough re-election fights. They also noted the offshore drilling ban expires at the end of September, which would permit drilling as close as 3 miles offshore if Congress doesn’t act. They added CCS and oil shale at the last minute to garner more support. GOP leaders, who wanted much broader offshore drilling, complained they had no input into the bill and said it would not add to domestic oil production because states would have no financial incentive to allow drilling off their shores. The White House threatened to veto the bill, based on the rollback of oil tax breaks and the RES. (Sources: Congressional Quarterly, E&E Daily,
thedailygreen.com)