American Council on Renewable Energy (ACORE) Ups Biofuels Presence at Policy Forum

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April 24, 2015

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by Joanne Ivancic* (Advanced Biofuels USA) Over the past year, the American Council on Renewable Energy (ACORE) increased its work with the biofuels sector of renewable energy, upped its presence and activity at biofuels-related conferences and events, and got into the weeds, leading some Renewable Fuel Standard policy implementation and improvement activities.

Beginning with remarks by Senator Chuck Grassley (R-IA) and continuing throughout the April 23 ACORE Policy Forum, speakers and attendees highlighted the benefits and challenges of biofuels lowering greenhouse gas emissions in transportation.

One tweet from Rachel Gantz of OPIS Biofuels summarized a core point made by Senator Grassley:

.@ChuckGrassley at @ACORE: "We don’t need to put a Navy fleet in harm’s way to protect the shipping lanes for biofuels out of the Midwest."

Later in the day the Air Force's Miranda A.A. Ballentine, Assistant Secretary of the Air Force for Installations, Environment & Energy explained that transitioning to renewable fuels is not easy, describing more effort needed to certify all countries' military aircraft to use biofuels, as US military aircraft are. And she urged renewable jetfuel producers to bid for fuel contracts under existing regulations, not to wait for special solicitations.

She pointed out other barriers to continuing the expansion of renewable energy for the military. Shrinking military funds, she said, mean that renewable energy development and installations of all kinds must bring in third party financing.

An afternoon panel, "Stop, Start--The Path to Policy Certainty and Lowering Clean Transportation Costs," featured a firey and impassioned invective by former US Senator Byron Dorgan (D-South Dakota) assailing the failure of the Obama administration to effectively exploit the country's sustainable renewable fuels resources.

Dorgan was joined by Rob Walther, Director of Federal Affairs for POET; Todd Ellis, Vice President, Sales and Business Development, Imperium Renewables and Rob Myrben of Airlines for America who provided context and background details about policy successes and policy breakdowns. For example, Ellis described the initial growth of Imperium's biodiesel business; and the subsequent stagnation due to policy uncertainty. Others talked about how the Obama Administration's years-long delay in enforcing the provisions of the Renewable Fuel Standard stifled investment.

Heard in the Halls

For many years, ACORE concentrated policy and educational work on renewable heat and power. The value of ACORE's renewed interest in including more speakers on biofuel-related topics and a biofuels perspective on renewable energy developments in general became evident in presentations as well as during conversations at breaks and at lunch with biofuels folks expressing appreciation for hearing about heat/power; and heat/power folks interested in engaging in discussions of biofuels.

Certainly, these groups not only benefit from better understanding of the overlap of their industries (lignin from corn stover powering POET's cellulosic ethanol biorefinery and the corn ethanol plant next door, for example); and also mutual interests in feedstock development, aggregation and availability. An advantage of mixing these groups could be that anticipated competition for feedstock might be better managed with openness to mutually beneficial practices and collaborative opportunities.

An integrated renewable energy sector

In general, it's good to expand consciousness about others in the renewable energy field, to understand the achievements and the frustrations; the successes and continuing challenges.

Iowa, as described by Senator Grassley, exemplifies how all these renewable energy elements combine not only to benefit an individual state, but also to benefit the country and world at large:

And, Iowa is third in the nation in wind energy capacity. More than twenty-seven percent of Iowa’s electricity comes from wind – making it the number one in the nation in percentage from wind.

The state of Iowa is proving that our farmers and ranchers can simultaneously produce the food, feed, fuel and fiber that our country needs. During the past 30 years, we’ve witnessed tremendous growth in the renewable energy industry. Because of the success of America’s biofuel producers, renewable fuels now account for ten percent of our nation’s transportation fuel supply.

Homegrown biofuels are extending our fuel supply and lowering prices at the pump for consumers.

Biofuels are reducing our dependence on finite fossil fuels. They keep more money at home rather than sending it to Persian Gulf countries that may wish to do us harm.

Shared Values Across the Political Spectrum

Some find concern about the environment, promotion of renewable energy and fuels, and working toward a more sustainable future the realm of left-leaning Democrats and Environmentalists. This gathering proved the contrary.

Three sitting Republican US Senators (Senator Grassley, Senatory Cory Gardner (R-CO) and Senator Dean Heller (R-NV)) made the trek to ACORE's policy forum to share their intent to work for renewable energy policies.

Debbie Dooley, Co-Founder Green Tea Coalition, Tea Party Patriots Board of Directors, and Conservatives For Energy Freedom Founder explained that conservatives and others share a desire for transition to renewable energy; however, they may arrive at that same place taking different paths.

The concept of stewardship may motivate some. Free market choice, competition for monopolies and national security values are shared by people with many different political identities. "Being good stewards should not be a partisan issue," Dooley said, quoting President Ronald Reagan. Conservation used to be a core plank for the Republican Party, she pointed out. She urged "grabbing the mantle of energy freedom and choice" and speaking to a wider audience.

Unique Problems, Shared Benefits

At a closing panel, Felix Mormann, a professor at the Miami School of Law, summed up the status of the renewable heat/power sector. He looked at the focus of the day's conversations. For example, although discussion of tax policy may be familiar; they were no longer talking about how to get solar panels on roofs, but about the effect of expanding renewable energy on the existing public utility structure. Is integration possible? Do we need to create a fundamentally different system? Are we heading to a post-utility era?

From the start of the day, carbon tax was described as the way to create the simplest, purest market standard against which energy production and use can be measured and true market cost quantified. Representatives of all sectors of renewable energy could appreciate that.

*Joanne Ivancic serves as Executive Director of Advanced Biofuels USA. She also served as a lobbyist promoting advanced biofuels research and production on Capitol Hill and with executive agencies. She has observed the development of advanced biofuels’ research and financing for more than fifteen years. From 2010 to 2015 she was voted one of the Top 100 People in Bioenergy by Biofuels Digest readers and editors.

Additional Excerpts from Senator Chuck Grassley's remarks:

The wind industry today supports 80,000 American jobs. The tax incentive has spurred $105 billion in private investment in the U.S. since 2005. Opponents of the renewable energy provisions would like to have this debate in a vacuum. They disregard the many incentives and subsidies that exist for other sources of energy, and are permanent law.

For example, the 100 year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry. These are not general business tax provisions – they are specific to the oil and gas business. Here are a few examples:

Expensing for intangible drilling costs
Deduction for tertiary injectants
Percentage depletion for oil wells
Special amortization for geological costs

These four tax preferences for this single industry result in the loss of more than $4 billion annually in tax revenue. Nuclear energy is another great example. The first nuclear power plant came online in the United States in 1958 – 57 years ago. Nuclear receives special tax treatment for interest from decommissioning trust funds.

Congress created a production tax credit for this mature industry in 2005, which is available until 2020. The nuclear industry also benefits from Price-Anderson -- federal liability insurance that Congress provided as a temporary measure in 1958. This temporary measure has been renewed through 2025. Nuclear energy has also received $74 billion in federal research and development dollars since 1950. Are these crony capitalist handouts? Is it time to end market distortions for nuclear power?

I authored the wind incentive in 1992. I know it won’t go on forever. It was never meant to, and it shouldn’t. I’m happy to discuss a responsible, multi-year phase out of the wind tax credit. In 2012, the wind industry was the only industry to put forward a phase-out plan. But, any phase-out must be done in the context of comprehensive tax reform, where all energy tax provisions are on the table. And, it should be done responsibly over a few years, to provide certainty and ensure a viable industry.

Good tax policy requires certainty that can only come from long-term predictable tax laws. Businesses need certainty in the tax code so they can plan and invest accordingly. The only sound way to reach this goal is through comprehensive tax reform. Targeting certain provisions for elimination outside tax reform makes little sense. I will work for a responsible transition for the wind production tax credit and hope to achieve a sensible policy for those who depend on it. READ MORE