Renewable Energy Experts Ask Congress for Support
ENERGY
Wsee-35 Web site
Lindsay Perna
Boston University Washington News Service
March 4, 2009
WASHINGTON – Banks and automobile companies are not the only ones looking for more green from their government.
Renewable energy experts nationwide appealed to Rep. Kathy Dahlkemper (D-Pa.), Rep. Glenn Thompson (R-Pa.) and other members of the House Small Business Committee for “must-have” support as bio-fuel plants suffer in a staggering economy.
At a hearing of the committee, the energy representatives asked for an extension of biodiesel tax incentives, a loosening of credit for struggling ethanol plants, and an overall commitment to the industry.
The current regulations on biodiesel include a temporary tax refund to consumers using biodiesel from vegetable oils, animal fats and food grease. After extending the energy policy act twice in the past five years, the incentive will expire Dec. 31, 2009.
“Current law sends the signal to the marketplace that the federal commitment to biodiesel is tenuous—the temporary nature of the incentive undermines overall confidence in the stability of the industry,” said Manning Feraci, the vice president of federal affairs of the National Biodiesel Board.
Feraci and the other four members of the panel testifying said that biofuel demand dwindles as oil prices dive. This creates an unappetizing market for investors un-willing to make a leap for this oil replacement.
Already, two-thirds of ethanol plants are not operating due to a stifling credit flow and minimal long-term investment, Feraci said.
Stating that renewable energy initiatives have a potential to create more than 78,000 jobs, Feraci elaborated on the benefits the nation would reap if they invested in the vitality of the industry.
Biofuel has displaced more than 20 million barrels of petroleum in 2008, according to Brooks Hurst, a board member of the Paseo-Cargill Biofuels Plant in Missouri.
After the hearing, Rep. Dahlkemper said, “We really want to move towards energy independence here—something that is already constructed, ready to produce—but we are not giving companies the incentives they need to make it viable financially.”
The congresswoman said she thinks credit will fall into place after the industry is revitalized.
“Private investment would jump at the chance to be part of this market but if the market’s not there—it’s a demand issue right now that I think is the crux of the whole thing,” she said.
She said it is a top priority as foreign dependence on oil creates national security and economic issues.
“We can talk about solar and wind and so many other things,” she said. “But this is already there; we just have to move it along a little bit.”
Though Thompson said he would like to see those tax incentives stay, he said the country needs to utilize petroleum and natural gas instead of ethanol from corn.
“It is my true belief that…we can’t move right into alternative energies, because they are not productive to do that,” said Thompson. “If our goal is to eliminate dependence on foreign oil…this is not a bridge that will get us there for many many decades.”
The 5th District congressman said that there are other more efficient forms of renewable fuels.
“It takes as much energy to create corn ethanol as what corn ethanol produces—so it’s a break even and we are taking from our food stock,” he said. “Biomass ethanol that uses landfill—there’s a win-win.”
For Michael Maniates, an environmental science professor at Allegheny College in Meadville, said in an email that extending tax incentives for biodiesel is only fair as the nuclear and oil industries have already seen billion-dollar tax incentives.
“If we’re going to see alternatives flourish, they need to be afforded the same support. Anything else stifles competition and innovation and is plain unfair,” Maniates said.
However, Maniates said that the ethanol industry already receives heavy subsidies and should not be rewarded with loans until production becomes more “energy positive.”
“They should be mothballed until oil prices rise or until the industry is able to shift production away from corn-fed fuels and towards more environmentally and energetically positive sources like woody biomass and switchgrass.”
“It may take more energy to raise the corn and process it into liquid fuels than the energy in the liquid fuel itself,” he said.
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