Senate Energy Bill Biomass Provisions

This item acts as a companion piece to the Senate energy bill article that proceeded it (see link below). Alexandra Morel, Policy Analyst with the Environmental and Energy Study Institute, provided the following summary of biomass and biofuels provisions included in the Senate’s version of comprehensive energy policy. Again, as with the other Senate story covering the main policy items passed for each technology, these items will need to be included in a House and Senate consolidated energy bill, which is not necessarily guaranteed to pass.

Amdt 919: National Security and Bioenergy Investment Act – Introduced by Sens. Harkin, Obama, Lugar, and Coleman – Creates Assistant Secretary of Agriculture for Energy and Biobased Products. – Amends Biomass R&D Initiative of 2000 (P.L. 106-224)- subject to appropriations- increases yearly funding from $14 million to $200 million from FY06-FY2010 (total of $1 billion) – Creates Reverse Auction program for cellulosic biofuel- in order to produce first 1 billion gallons of cellulosic biofuel by 2012. To be administered by the Secretary of Energy. The amount of incentive received for eligible entity chosen by Sec. will be decided by the amount of performance incentive requested in the auction for each gallon produced and sold by the entity during the first 6 years of production. Not to be more than $100 million in any one yr and not more than $1 billion over the lifetime of the program. Subject to appropriations. Grant programs: – Regional Bioeconomy Development Association: to support growth and development of bioeconomy through coordination, education, outreach. – Small Business bioproduct marketing and certification grants – Pre-processing and harvesting demonstration grants Amdt. 851: Joint Flex-Fuel/Hybrid Vehicle Commercialization Initiative – Introduced by Sens. Obama Secretary will establish applied research program to improve technologies for the commercialization of combination hybrid/flexible fuel vehicle or a plug-in hybrid/flexible fuel vehicle. $3 mil. in FY05, $7 mil. in FY06, $10 mil in FY07, and $20 mil. in FY08 Amdt. 798: Alternative Fuels Reports – Introduced by Sens. Pryor To be submitted to Congress by Secretary one year after enactment of this bill, a report on the potential for biodiesel and hythane to become major, sustainable, alternative fuels. Amdt. 866: Waste-derived Ethanol and Biodiesel – Introduced by Sen. Cochran To expand definition of biodiesel and ethanol to include animal wastes (poultry fats and poultry wastes), and MSW, sludges, and oils derived from wastewater and treatment of wastewater as feedstocks. Title II: Renewable Energy – Sec. 222 Biomass Commercialization Grant Program (President’s Healthy Forests Initiative) $20 per green ton of biomass delivered from areas of highest risk. $25 million/yr authorized to Sec. of Interior and Sec. of Agriculture – Sec. 223 Improved Biomass Utilization Program- to provide grants to offset the costs of developing or researching proposals to improve the use of biomass or add value to biomass utilization. Max. grant $500,000. $25 mill/yr. authorized to Sec. of Interior and Sec. of Agriculture Title XV: Energy Policy Tax Incentives – As agreed to by Senate Finance – Alternative motor vehicle credit for hybrid vehicles (sunset 12/31/09) – Credit for installation of alternative fueling stations credit for property placed in service before 1/1/10 -Credit for retail sales of and imposition of tax on alternative fuels -Extend excise tax provisions and income tax credit for biodiesel (credit sunset 12/31/10) -Establish small agri-biodiesel producer credit and expand eligibility for ethanol producer credit -Provide a 15 percent credit for qualifying pollution control equipment at ethanol plants. Subtitle B: Reliable Fuels – Introduced by Sens. Domenici, Thune, Harkin, Frist, Dorgan, Grassley, Nelson (NE), Brownback, Johnson, Hagel, Conrad, DeWine, Talent, Stabenow, Lugar, Salazar, and Coleman. – 8 billion gallon RFS by 2012, 4 billion by 2006, subsequent years will be ruled by the Administrator. – Cellulosic ethanol will be 250 million gallons of RFS after 2013 – Cellulosic ethanol will be credited as 2.5 gallons for every one gallon of renewable fuel. – States that have received a waiver are exempted from seasonal requirements to minimize air quality ‘back-sliding’ – Creates loan guarantee program for demonstration projects of cellulosic biomass ethanol and MSW- no more than four, with a design capacity of 30 million gallons of cellulosic ethanol per year. One must be using cereal straw and one must use MSW. – Creates Renewable Fuel Production and Research Grants- targeted for RFG States with low rates of ethanol production. – Will be authorized $25 million a year for FY06-FY2010 – Cellulosic Biomass Ethanol Conversion Assistance- provides grants to merchant producers of cellulosic ethanol to assist producers in building production facilities. Authorized to be appropriated $250 million in FY05 and $400 million FY06

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