Biomass Thermal Utilization Act of 2013 Revived as Amendment in Senate

On May 15, Senators King (I-ME), Collins (R-ME), Shaheen (D-NH) and Begich (D-AK) offered a biomass amendment (SA 3132) to H.R. 3474, the Hire More Heroes Act of 2014.  While H.R. 3474, a bill aimed at simplifying the hiring process for veterans, passed the House of Representatives without amendment on March 11, on a vote of 406-1, it currently has 165 amendments in the Senate and is being used as a vehicle for tax-extender legislation.  It is unlikely the bill will get picked up again before the mid-term elections, with a motion for cloture failing 53 - 40 on the evening of Thursday, May 15. Although renewable electricity sourced from solar, geothermal, and wind has benefitted from the investment tax credits, it does not currently apply to biomass thermal energy, despite thermal energy being 40 percent of U.S. energy use.  The amendment provides the same tax benefits to biomass thermal energy as in the original 2013 bill: a residential or commercial tax credit for up to 30 percent of the cost of qualified biomass fuel property expenditures.

Thermal biomass systems are on-site, residential or commercial stoves, furnaces or boilers that utilize biomass fuels to provide thermal energy.  Feedstocks include wood pellets and chips as well as agricultural residues.  Wood pellets are manufactured by compressing wood waste, providing an easily transportable, energy-dense fuel.  The image of old fashioned, soot-producing wood-stoves does not jive with the reality presented by clean burning pellet stoves, which will continue to become even cleaner-burning, thanks to evolving regulations.  In January, the EPA proposed new source performance standards (NSPS) for new wood and pellet stoves to protect human health and lower emissions, set at 4.5 grams particulate matter (PM) per hour of operation. Within 5 years, the PM standards will drop to 1.3 grams PM per hour.   Additionally, the use of agricultural and forestry residues for heat and electricity significantly reduces additional emissions of the potent greenhouse gas methane, by diverting these materials from landfills.  Heating represents the largest source of carbon emissions in the residential sector – especially for residents of the Northern half of the United States.  According to the Alliance for Green Heat, heating produces 345 million metric tons of carbon emissions per year, and the use of pellet stoves could reduce residential emissions by 20 percent.  

Home heating bills are also a significant strain on pocketbooks and represent the single largest utility bill to most individuals.  In colder, rural regions unlikely to have access to natural gas lines that service cities and suburbs the problem is particularly acute.  Last winter’s polar vortex conditions saw propane shortages in the Midwest and prices spike to nearly $5 per gallon, in comparison to less than $2.50 a gallon in 2012.  In 2007, an analysis by the U.S. Department of Energy found that with retail prices of $3.45 a gallon for home heating oil, oil cost consumers $30 per gigajoule of energy, whereas pellets cost consumers less than $15 per gigajoule of energy.  Most Northeastern and upper-Midwest rural regions are overwhelmingly dependent on heating oil or propane.  For instance, in Maine, a whopping 68.7 percent of homes and businesses use home heating oil and only 5 percent use natural gas. Every dollar spent on home heating oil ultimately flows out of the local economy – whereas pellet production and use support local economies.  Consumers have been responding to price fluctuations in heating oil and propane, with the Energy Information Agency  (EIA) reporting that states in the Northeast and mid-Atlantic saw a 50 percent increase in the use of wood or pellet stoves as the main heating source between 2005 and 2012.  Today, 2.5 million households, or 2.1 percent, use wood or pellets as their main heating source, with 20 percent of these households relying solely on wood or pellet heat having a net income of less than $20,000 per year.  

The original bipartisan Biomass Thermal Utilization bill, co-sponsored by Senators King and Collins, was widely supported by regions that rely on home heating oil or propane, as well as the American Forest Foundation, the Mt. Adams Resource Stewards, the National Association of Forest Service Retirees, the National Network of Forest Practitioners, the Northern Forest Center, Sustainable Northwest, among others.  The single largest hurdle to further integration of biomass thermal systems is the high upfront investment needed for these systems. A tax break could help biomass thermal systems overcome the hurdle that once faced solar power – now the most popular form of alternative energy in the United States.

For more information see:

Biomass Thermal Utilization (BTU) Act of 2013, Senator Al Franken 

Proposed Requirements for Wood Stoves and Pellet Stoves, U.S. Environmental Protection Agency 

Propane Prices Rise - Worries Grow for Millions of Americans, the New York Times 

Increase in wood as main source of household heating most notable in the Northeast, U.S. Energy Information Administration 

Biomass Derivatives Competitive with Heating Oil Costs, U.S. Department of Energy, Energy Efficiency and Renewable Energy  

Author: Jessie Stolark