Quick Links
Environmental and Energy Study Institute

Printable Version of Issue 38

EESI Agriculture and Energy Program Homepage

Issue 37 - April 2007

Issue 36 - February 2007

Issue 35 - December 2006

Subscribe to EESI publications

Please distribute BCO (Bioenergy, Climate Protection, Oil Reduction) Newsletter to your colleagues, or send us their email addresses and we will add them to our distribution list. 

Article and commentary submissions are encouraged. Please send entries via email to eesi@eesi.org.

IRS Interpretation of “Renewable Diesel” Benefits ConocoPhillips and Tyson, Frustrates Biodiesel Advocates

On April 2, the Internal Revenue Service (IRS) issued a ruling broadening the definition of renewable diesel in the Energy Policy Act of 2005 (Sec. 1346, P.L. 109-58) authored by Rep. Roy Blunt (R-MO). The amendment creates a $1 per gallon tax credit similar to the biodiesel tax credit, and defines renewable diesel as diesel fuel derived from biomass using thermal depolymerization which meets EPA and American Society of Testing and Materials requirements.
 
For over a year ConocoPhillips and Tyson Foods, Inc. have been collaborating on protein chemistry, refining processes and marketing to introduce a renewable diesel in the United States. On April 16, they announced their strategic alliance to start making capital improvements to make this diesel.

Before the ruling, as ConocoPhillips and Tyson lobbied the White House for a looser interpretation which would include their diesel product derived from animal fat, Representative Blunt sent a letter to the Treasury Department arguing that a broad reading of that language "is not what we [Congress] intended." In the letter Blunt said the credit was intended to help the development of diesel fuel produced with new technologies using animal carcasses and other food waste. The IRS ruling, Notice 2007-37, interpreted thermal depolymerization "generically," allowing for ConocoPhillips and Tyson to claim the credit for diesel from animal fat and other refiners to claim the credit for producing diesel using vegetable oils.

Tyson said production from the joint venture would begin in late 2007 and would reach about 175 million gallons a year from beef, pork and poultry fat by 2009. ConocoPhillips Chief Executive Officer Jim Mulva said that ConocoPhillips and Tyson wouldn't proceed with the venture if they didn't qualify for the tax credit, saying “It's not profitable without the $1 tax credit.”  The feedstock is about $2 a gallon or about $84 a barrel. But with the $1-per-gallon tax credit the feedstock cost is down to $1 a gallon or $42 a barrel. 

“Denying the tax credit will only serve to limit the expansion and availability of alternative fuels and also damage the ability of livestock farmers and ranchers to participate in the renewable energy business,” Gary Mickelson, a Tyson spokesman, said in an email. He also cited support for the ruling from the National Cattlemen's Beef Association, National Pork Producers Council, National Chicken Council and Texas Cattle Feeders Association.

News of the IRS notice and the ConocoPhillips-Tyson venture has angered hundreds of smaller producers of biodiesel, which say they can't compete if big refineries are able to claim the credit.

“Allowing oil companies to claim a $1 tax credit for dumping vegetable oils and animal fats into existing oil refineries will do nothing to expand our nation's renewable production capacity and will hinder the growth of America's biodiesel industry,” said Joe Jobe, chief executive of the National Biodiesel Board.

Steve Censky, chief executive of the American Soybean Association, said the IRS decision “does nothing to increase our biofuels refining capacity, and it does nothing to add jobs,'' two of the tax credit's goals. Censky also said the rule may affect expansion of U.S. biodiesel capacity.

Before the change in the definition of renewable diesel the projected cost of the tax credit was $46 million through 2008, but now the cost could be a large unexpected drain on the US Treasury.

Congressional Democrats have responded to the situation: “There appears to be abuse that demands legislative correction,'' said Rep. Lloyd Doggett (D-TX), who is drafting a measure to overturn the IRS rule with Rep. John Larson (D-CT). Senator Maria Cantwell (D-WA) said during a Finance Committee hearing that ConocoPhillips and Tyson tried to “go around” Congress and that the tax credit needs to be “re-examined.”

Sources: http://www.conocophillips.com/newsroom/news_releases/2007+News+Releases/041607.htm
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axUrtn.WhHsw
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXpN2qEJteNU&refer=home
http://www.chron.com/disp/story.mpl/headline/biz/4735399.html
http://www.irs.gov/irb/2007-17_IRB/ar13.html

DOE Announces Proposed Rules for EPAct 2005 Loan Guarantee Program While Under Scrutiny for Their Implementation

Controversy Over DOE Process
The Government Accountability Office (GAO) has found that the DOE violated the law by creating guidelines, announcing its intention to issue up to $2 billion in loan guarantees and accepting pre-applications for the Loan Guarantee Program (LGP) in August before Congress had appropriated funds for the program. The GAO found that the department spent over $500,000 appropriated in fiscal year 2006 and 2007 in the process of beginning to implement the LGP. GAO General Counsel Gary Kepplinger said the DOE took steps to implement the program during a period when it “was affirmatively prohibited” from doing so by both its own laws and the Appropriations Act.

There has been a great deal of interest in getting the LGP program up and running. While the administration has requested loan authority of $9 billion for FY 2008, some lawmakers are pushing for more. At a House subcommittee hearing on April 24, Dennis R. Spurgeon, Acting Under Secretary of the DOE, said that issuing final regulations for the LGP by August 15, 2007, as required by the FY 2007 Continuing Resolution, will be a difficult task.

On April 26, Rep. Bart Gordon (D-TN) sent a letter to the DOE asking: how the program will be managed; if loan guarantees will total 80 percent of projects' capital costs; how DOE will monitor loan and lender performance; how and whether the program will address expensive nuclear projects; and how much risk DOE will accept and what will constitute a default, amongst other questions. Rep. Gordon also said he wants the program rules to "set out clearly defined objectives and outcomes for the program, including a strategy to successfully manage the financial risk to the government." He noted there is "incredible interest" in the program and says he intends to monitor it carefully.

Notice of Proposed Rule Making
On May 10, the U.S. Department of Energy (DOE) issued a Notice of Proposed Rulemaking for its Loan Guarantee program (LGP) as authorized by Title XVII of Energy Policy Act of 2005 (EPAct 2005), which will help spur investment in projects that employ new, clean energy technologies. Under the EPAct 2005, the LGP would provide guarantees for a variety of energy-related projects, including renewable energy systems, coal gasification, carbon sequestration, advanced nuclear energy facilities and biomass projects, such as waste-to-cellulosic ethanol. The DOE did not fund the LGP in it’s fiscal 2007 budget request, but Congress included $7 million in program-startup funds and $4 billion in loan guarantee authorization in February’s FY 2007 Continuing Resolution. The Administration's FY08 budget requested $9 billion in loan guarantee authority for DOE.

The LGP aims to encourage early commercial use of new or significantly improved technologies in energy projects. DOE seeks a broad portfolio of large and small projects using a wide variety of technologies. Within DOE's FY08 budget request of $9 billion in loan guarantee authority, DOE has proposed to guarantee $4 billion in loans for central power generation facilities, such as nuclear facilities or carbon sequestration optimized coal power plants; $4 billion in loans for projects that promote biofuels and clean transportation fuels; and $1 billion in loans for projects using new technologies for electric transmission facilities or renewable power generation systems. The notice says the loan guarantees will depend on the merits and benefits of particular project proposals and their compliance with statutory and regulatory requirements.

The proposed regulations provide the following:

• The Title XVII loan guarantee program will be implemented through a series of solicitations. The solicitations may target specific technology areas or be general;
• Projects must employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the loan guarantee agreement is executed;
• DOE may guarantee up to 90 percent of the amount of any loan as long as DOE does not issue guarantees for more than 80% of the total cost of a project;
• In the event of a loan default, DOE will have a superior lien on all project assets pledged as collateral for the guaranteed loan;
• The Secretary must determine that there is a "reasonable prospect" of repayment of the guaranteed debt;
• DOE must charge and collect fees sufficient to cover applicable administrative expenses;
• Borrower-paid Credit Subsidy Costs and administrative fees paid to DOE may not be included within total project costs for the purposes of determining the amount of guarantees that DOE can issue for a project;
• Receipt of other governmental assistance does not disqualify a project from receiving a Title XVII loan guarantee; however, when evaluating a project's application for a Title XVII loan guarantee, DOE will consider the extent to which a project will receive other governmental assistance (e.g., grants, tax credits, other loan guarantees);
• The guaranteed portion of a partially guaranteed loan or debt obligation may not be separated from or "stripped" from the non-guaranteed portion of the loan if the loan is participated, syndicated or otherwise resold in the secondary debt market; and
• The borrower must have a significant equity stake in a project.

The Notice of Proposed Rulemaking will be open to public comment for 45 days from the Federal Register. Public comment on this proposed rule will be accepted until July 2, 2007. A public meeting on the proposed rule will be held on Friday, June 15, 2007, from 9 a.m. to 4:30 p.m. in Washington, DC. Interested persons who wish to speak at the public meeting must telephone the DOE Loan Guarantee Program Office at (202) 586-8336 during the period Friday, June 1, through Tuesday, June 12, 2007, between the hours of 9 a.m. and 4:30 p.m.

In August 2006, DOE issued guidelines and a solicitation for pre-applications for up to $2 billion in loan guarantees. By the December 31, 2006 deadline for this solicitation, DOE received 143 pre-applications requesting more than $27 billion in loan guarantee protection (for project costs estimated at more than $51 billion). Of the applications, 16 percent were advanced fossil energy technology projects comprising 69 percent of the total costs, while 49 percent of the applications were for biomass projects totaling 11 percent of the total costs.

Sources: http://www.energy.gov/news/5045.htm
                http://public.cq.com/docs/cqt/news110-000002490558.html
http://energycommerce.house.gov/cmte_mtgs/110-eaq-hrg.042407.Spurgeon-testimony.pdf (pdf format)
E&ENews PM, DOE: Department efforts on loan program violated law – GAO (Subscription only)
Greenwire, DOE: House panel chairman wants 'clearly defined' loan program (Subscription only)
Full Notice on Proposed Rulemaking from the DOE website: http://www.lgprogram.energy.gov/LGP-NOPR.pdf (pdf format)
Full Notice on Proposed Rulemaking from the Federal Register:
http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-9297.htm (HTML text)
http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-9297.pdf (pdf format)

Senate Energy Package Headed to the Floor

On May 2, the Senate Energy and Natural Resources Committee reported out S.1115 a bipartisan bill on efficiency, renewable fuels and research on carbon sequestration on a 20-3 vote. The bill which is headed to the Senate floor is drawn from the text of bills: S. 731, S.962, S. 987, and S. 1115 and has been renumbered S.1419. Significant biofuels provisions in the bill include grants and loans for advanced biofuels, infrastructure incentives, vehicle and renewable fuel studies and an increase in the Renewable Fuel Standard (RFS) to 36 billion gallons/yr by 2022 up from 7.5 billion gallons/yr by 2012, passed in the Energy Policy Act of 2005. Senator Bingaman (D-NM) Chairman of the committee said, “This legislation is a big step forward in three areas key to America’s energy future.  It will help dramatically reduce our dependence on fossil fuels by requiring the more efficient use of energy and by putting a much greater emphasis on the use of renewable, homegrown fuels.”

Several amendments on efficiency standards, research and demonstration are included in the bill. One amendment which did not make it into the bill was a separate standard of 21 billion gallons/yr by 2022 for coal-to-liquid transportation fuels. This amendment was offered by Senators Thomas (R-WY) and Bunning (R-KY) and was voted down by a straight party-line vote of 12-11 and is expected to be offered when the bill comes to the Senate floor.   

Source: Senate Energy and Natural Resources

Farm Bill Moving Forward

On May 22, House Agriculture Subcommittees began marking up several titles in the upcoming farm bill including conservation, energy and credit. Chairman Peterson (D-MN) plans full committee markup of the whole bill before the July 4th break. The Senate has held several hearings and has seen many marker bills on the farm bill, but has not started markup. Many groups have predicted that the Senate will start markup of its version of the farm bill in June.

New Legislation

S.875 - Security and Fuel Efficiency Energy Act of 2007

March 14, Senators Dorgan (D-ND) and Craig (R-ID) introduced the Security and Fuel Efficiency Energy Act of 2007 (SAFE Act) to improve the energy security of the U.S. through a 50 percent reduction in oil intensity of the US economy by 2030. The bill would seek the expansion of secure oil supplies by raising the fuel efficiency of the vehicular transportation fleet, increasing the availability of renewable fuel by increasing the Renewable Fuel Standard to 30 billion gallons by 2020 with a 15 billion gallon carve-out for cellulosic biomass ethanol by 2020, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply. Senator Crapo (R-ID) is an additional cosponsor.

H.R.1590 - Safe Climate Act of 2007

March 20, Rep. Waxman (D-CA) introduced the Safe Climate Act of 2007. It has 137 cosponsors. The bill would reduce GHG emissions and protect the climate by amending the Clean Air Act to include a greenhouse gas emissions title, including a market-based cap on emissions, and also amending the Public Utility Regulatory Policies Act of 1978 to include both national renewable energy and national energy efficiency standards. The bill has been referred to the House Committee on Energy and Commerce, and the House Committee on Foreign Affairs.

H.R.1596 - Clean and Green Renewable Energy Tax Credit Act of 2007

March 20, Representatives Ferguson (R-NJ), Kuhl (R-NY), Reichert (R-WA), Burton (R-IN), and Brown-Waite(R-FL) introduced the Clean and Green Renewable Energy Tax Credit Act of 2007 to amend the Internal Revenue Code of 1986 to provide and extend tax incentives including the Production Tax Credit and conservation credits. The bill has been referred to the House Committee on Ways and Means. Additional cosponsors include Representatives Smith (R-NJ), Calvert (R-CA) and Fortenberry (R-NE).

S. 919 - Healthy Farms, Foods, and Fuels Act of 2007

March 20, Senators Menendez (D-NJ), Boxer (D-CA), Kerry (D-MA), Cardin (D-MD), and Lautenberg (D-NJ) introduced the Healthy Farms, Foods, and Fuels Act of 2007 to reauthorize and expand Department of Agriculture conservation and energy programs, and establish several other conservation programs and an integrated pest management initiative. The bill would modify the operation and administration of these programs including increasing funding and expanding eligibility for the Environment Quality Incentives Program with a goal of giving incentives to smaller farmers and ranchers to produce a wider variety of crops while being environmentally and energy friendly. The bill has been referred to the Senate Committee on Agriculture, Nutrition, and Forestry. Senator Akaka (D-HI) is an additional cosponsor.

S.962 - Department of Energy Carbon Capture and Storage Research, Development, and Demonstration Act of 2007

March 22, Senators Bingaman (D-NM), Domenici (R-NM), Tester (D-MT), Bunning (R-KY), Salazar (D-CO), Obama (D-IL), and Webb (D-VA) introduced the Department of Energy Carbon Capture and Storage Research, Development, and Demonstration Act of 2007 to amend the EPAct of 2005 to reauthorize and improve the carbon capture and storage research, development, and demonstration program of the Department of Energy. The bill has been referred to the Senate Committee on Energy and Natural Resources. Additional cosponsors include Senators Durbin (D-IL), Dorgan (D-ND), Brownback (R-KS), Thomas (R-WY), Craig (R-ID), Corker (R-TN), Landrieu (D-LA). The companion House bill H.R. 1933 was introduced by Representative Udall (D-CO) on April 18.

S.987 - Biofuels for Energy Security and Transportation Act of 2007

March 26, Senators Bingaman (D-NM) and Domenici (R-NM) introduced the Biofuels for Energy Security and Transportation Act of 2007 (Best Act of 2007) to enhance the energy security of the U.S. by promoting biofuels. The bill would increase the renewable fuels standard to 8.5 billion gallons for 2008, and 36 billion gallons for 2022, with more promotion of advanced biofuels, such as cellulosic ethanol. The bill also includes grants for biofuel infrastructure development, amendments to the DOE loan guarantee program, and increases biofuel funding for research and development by 50 percent. The bill has been referred to the Senate Committee on Energy and Natural Resources. Additional cosponsors include Senators Cantwell (D-WA), Salazar (D-CO), Craig (R-ID), Martinez (R-FL), Akaka (D-HI), and Dorgan (D-ND).

S.1007 - United States-Brazil Energy Cooperation Pact of 2007

March 28, Senator Lugar (R-IN) introduced the United States-Brazil Energy Cooperation Pact of 2007 to direct the Secretary of State to work with the Government of Brazil and other foreign governments to develop partnerships that will strengthen diplomatic relations and energy security by accelerating the development of biofuels production, research, and infrastructure to alleviate poverty, create jobs, and increase income, while improving energy security and protecting the environment. The bill has been referred to the Senate Committee on Foreign Relations.

S.1016 - Solar Opportunity and Local Access Rights Act

March 28, Senator Menendez (D-NJ) introduced the Solar Opportunity and Local Access Rights Act to amend the Public Utility Regulatory Policies Act of 1978 to promote energy independence and self-sufficiency by providing for the use of net metering by certain small electric energy generation systems. The bill has been referred to the Senate Committee on Energy and Natural Resources.

S.1018 - Global Climate Change Security Oversight Act

March 28, Senators Durbin (D-IL), Hagel (R-NE), and Feinstein (D-CA) introduced the Global Climate Change Security Oversight Act to address security risks posed by global climate change. The bill would require the creation of a National Intelligence Estimate on global climate change. The bill has been referred to the Senate Select Committee on Intelligence. Additional cosponsors include Senators Casey (D-PA), Lugar (R-IN), Whitehouse (D-RI), Cantwell (D-WA), Kerry (D-MA) and Biden (D-DE). The House companion bill H.R.1961 was introduced by Representatives Markey (D-MA), Bartlett (R-MD), Larson (D-CT), Eshoo (D-CA), Solis (D-CA), Hall (D-NY), McDermott (D-WA), and Olver (D-MA) on April 19.

S.1020 - Creating Renewable Energy through Science and Technology Act

March 28, Senators Hutchison (R-TX), Stevens (R-AK), Murkowski (R-AK), Allard (R-CO), and Cornyn (R-TX) introduced the Creating Renewable Energy through Science and Technology Act (CREST Act) to move toward energy independence through a coordinated development of renewable energy sources, including wave, solar, wind, geothermal, and biofuels production. The bill would amend the National Science Foundation Act of 1950 to create a council on renewable energy. The bill has been referred to the Senate Committee on Energy and Natural Resources. Senator Bond (R-MO) is an additional cosponsor.

H.R. 1728 - Global Warming Education Act

March 28, Representatives Honda (D-CA), Farr (D-CA), McCollum (D-MN), Ellison (D-MN), Doggett (D-TX), Grijalva (D-AZ), Carnahan (D-MO), Waxman (D-CA), Cohen (D-TN), and Cleaver (D-MO) introduced the Global Warming Education Act to authorize the National Science Foundation to establish a Global Warming Education Program. The bill has been referred to the House Committee on Science and Technology. Additional cosponsors include Representatives Matsui (D-CA), Israel (D-NY), Fattah (D-PA), Solis (D-CA), and Hinchey (D-NY).

H.R.1766 - CHESSEA Act of 2007

March 29, Rep. Van Hollen (D-MD) introduced the Chesapeake's Healthy and Environmentally Sound Stewardship of Energy and Agriculture Act of 2007, with 20 cosponsors. The bill would amend conservation and biofuels programs of the Department of Agriculture to promote the compatible goals of economically viable agricultural production and reducing nutrient loads in the Chesapeake Bay and its tributaries. The bill would accomplish this by assisting agricultural producers to make beneficial, cost-effective changes to cropping systems, grazing management, and nutrient management associated with livestock and poultry production, crop production, bioenergy production, and other agricultural practices on agricultural land within the Chesapeake Bay watershed. The bill has been referred to the House Committee on Agriculture.

H.R.1772 - Rural Wind Energy Development Act

March 29, Rep. Blumenauer (D-OR) introduced the Rural Wind Energy Development Act, with 11 cosponsors. The bill would amend the Internal Revenue Code of 1986 to provide a tax credit for the installation of wind energy property and an accelerated depreciation allowance for such wind energy property to include rural homeowners, farmers, ranchers, and small businesses. The bill has been referred to the House Committee on Ways and Means.

S.1073 - Clean Fuels and Vehicles Act of 2007

March 29, Senators Feinstein (D-CA), Collins (R-ME), and Snowe (R-ME) introduced the Clean Fuels and Vehicles Act of 2007 to promote the use of fuels with low lifecycle greenhouse gas emissions. The bill would amend the Clean Air Act to establish a greenhouse gas performance standard for motor vehicle fuels and to require a significant decrease in GHG emissions from motor vehicles. The bill has been referred to the Senate Committee on Environment and Public Works.

S.1094 - Creating Research Extension and Teaching Excellence for the 21st Century Act of 2007

April 12, Senators Stabenow (D-MI) and Casey (D-PA) introduced the Creating Research Extension and Teaching Excellence for the 21st Century Act of 2007 (CREATE-21 Act of 2007) to reauthorize and provide additional funding for essential agricultural research, extension, education, and related programs. The bill would establish the National Institutes for Food and Agriculture as an independent agency reporting to and coordinating with the Secretary of Agriculture. The bill has been referred to the Senate Committee on Agriculture, Nutrition, and Forestry.

S.1106 - Ethanol Tariff Extension and Caribbean Basin Initiative Investigation Act

April 12, Senator Thune (R-SD) introduced the Ethanol Tariff Extension and Caribbean Basin Initiative Investigation Act to extend the additional duty on ethanol and investigate certain ethanol imports. The bill has been referred to the Senate Committee on Finance.

S.1115 - Energy Efficiency Promotion Act of 2007

April 16, Senators Bingaman (D-NM), Domenici (R-NM), Dorgan (D-ND), Lugar (R-IN), Akaka (D-HI), Murkowski (R-AK), and Craig (R-ID) introduced the Energy Efficiency Promotion Act of 2007 to promote the efficient use of oil, natural gas, and electricity. The bill would reduce oil consumption and strengthen energy efficiency standards for consumer products and industrial equipment. The bill has been referred to the Senate Committee on Energy and Natural Resources. Additional cosponsors include Senators Snowe (R-ME), Kerry (D-MA), Salazar (D-CO), Klobuchar (D-MN), Menendez (D-NJ), Sanders (I-VT).

S.1154 – A Bill to Promote Biogas Production

April 18, Senator Nelson (D-NE) introduced S.1154, cosponsored by Senator Craig (R-ID). The bill would promote biogas production. The bill has been referred to the Senate Committee on Finance.

H.R.1915 – American Automobile Industry Promotion Act

April 18, Rep. Castle (R-DE) introduced the American Automobile Industry Promotion Act, which seeks to promote the future of the American automobile industry through advanced energy initiatives for vehicles, including battery, electric drive and biodiesel technologies among others. The bill has been referred to the House Committee on Science and Technology, the House Committee on Ways and Means, and the House Committee on Energy and Commerce.

S.1158 – Alternative Fuel Standard Act

April 19, Senator Inhofe (R-OK) introduced S.1158. The bill would amend the Clean Air Act to increase the use of renewable and alternative fuel. The bill would replace the current renewable fuels standard with an alternative fuel standard by requiring 10 billion gallons of alternative fuels, including alcohols, biofuels, natural gas and natural gas-derived liquid fuels, and coal-derived liquid fuels, to be used in 2010 and increasing to 35 billion gallons by 2018. The bill has been referred to the Senate Committee on Environment and Public Works.

S.1168 – Alexander-Lieberman Clean Air Climate Change Act of 2007

April 19, Senator Alexander (R-TN) introduced the Alexander-Lieberman Clean Air Climate Change Act of 2007 to amend the Clean Air Act to establish a regulatory program for sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide emissions from the electric generating sector. The bill would place carbon caps only on power plants that produce electricity. The bill has been referred to the Senate Committee on Environment and Public Works. Senator Lieberman (I-CT) is a cosponsor of the bill.

H.R.1945 – Energy For Our Future Act

April 19, Representatives Shays (R-CT) and Hinchey (D-NY) introduced the Energy For Our Future Act to improve the energy efficiency of the United States. The bill includes the following provisions: oil savings, heavy duty vehicle fuel economy requirements, reductions in heat and electric bills, tax incentives and renewable energy research and development. The bill has been referred to the House Committee on Energy and Commerce, the House Committee on Ways and Means, the House Committee on Natural Resources, the House Committee on Transportation and Infrastructure, and the House Committee on Science and Technology. Additional cosponsors include Representatives Delahunt (D-MA), and Maloney (D-NY).

H.R.1965 - Credits to Clean Renewable Energy Bond Holders

April 19, Representatives Pomeroy (D-ND) and Lewis (R-KY) introduced H.R. 1965, which amends the Internal Revenue Code of 1986 to modify the credit to holders of Clean Renewable Energy Bonds (CREBs). The bill has been referred to the House Committee on Ways and Means.

S.1106 - Ethanol Tariff Extension and Caribbean Basin Initiative Investigation Act

April 12, Sen. Thune (R-SD) introduced the Ethanol Tariff Extension and Caribbean Basin Initiative Investigation Act to extend the additional duty on ethanol, to require an investigation into certain ethanol imports.

S.1116 - More Water, More Energy, and Less Waste Act of 2007

April 16, Senators Salazar (D-CO), Bingaman (D-NM), Domenici (R-NM) and Thomas (R-WY) introduced More Water, More Energy, and Less Waste Act of 2007 to facilitate the use of water for irrigation and other purposes of water produced in connection with development of energy resources. The companion bill H.R.902 was introduced on February 7, 2007 by Representatives Udall (D-CO), Edwards (D-TX) and Pearce (R-NM).

S.1118 - Fuel Efficiency Energy Act of 2007

April 16, Senators Dorgan (D-ND) and Craig (R-ID) introduced Fuel Efficiency Energy Act of 2007 to improve the energy security of the United States by raising average fuel economy standards, through a 50 percent reduction in the oil intensity of the economy by 2030.  The bill would increase fuel efficiency of the transportation fleet; increase availability of alternative fuel sources and infrastructure; expanded production and enhanced exploration of domestic and other secure oil and natural gas resources; and improve the management of alliances to better secure global energy supplies. The bill reforms and strengthens fuel efficiency standards by establishing an annual four percent increase in the fuel economy of the entire new vehicle fleet, including automobiles, medium trucks, and heavy trucks from 2012–2030.

S.1131 - Suburban and Community Forestry and Open Space Program Act of 2007

April 17, Senator Collins (R-ME) introduced Suburban and Community Forestry and Open Space Program Act of 2007 to amend the Cooperative Forestry Assistance Act of 1978 to establish a program to provide assistance to States and nonprofit organizations to preserve suburban forest land and open space and contain suburban sprawl through forest management and value-added forest products industries.

S. 1154 - Biogas Production Incentives Act of 2007

April 18, Senators Nelson (D-NE) and Craig (R-ID) introduced Biogas Production Incentives Act of 2007 to promote biogas production through tax incentives and guaranteed loans for small businesses. On April 25, Representatives Kind (D-WI) and Nunes (R-CA) introduced S.1154's companion bill H.R.2038.

S.1187 - Carbon Neutral Capitol Complex

April 23, Sen. Kerry (D-MA) introduced a bill to require the Architect of the Capitol to develop a plan to reduce carbon dioxide emissions from the Capitol complex, with the goal of achieving carbon neutrality by Dec. 31, 2020. This goal will be achieved through a combination of energy-efficiency gains, stepping up conservation measures, and using both onsite and offsite renewable sources of energy.

H.R.2001 - Industrial Cogeneration Act of 2007

April 23, Rep. Inslee (D-WA) introduced Industrial Cogeneration Act of 2007 with 11 cosponsors. The bill amends the Internal Revenue Code of 1986 to apply an energy tax credit to combined heat and power system property.

S.1201 - Clean Power Act of 2007

April 24, Senators Sanders (I-VT), Lieberman (I-CT), Leahy (D-VT), and Feingold (D-WI) introduced the Clean Power Act of 2007 to amend the Clean Air Act to reduce emissions for electric powerplants, and for other purposes.

S.1203 - Department of Energy Electricity Programs Enhancement Act of 2007

April 24, Senators Bingaman (D-NM) and Domenici (R-NM) introduced the Department of Energy Electricity Programs Enhancement Act of 2007  to enhance the management of electricity programs at DOE.

H.R.2037 - A bill to require states to use renewable fuels

April 25, Rep. Kaptur (D-OH) introduced H.R.2037 to amend the Energy Policy and Conservation Act of 1992 to require States to meet certain goals for the use of renewable fuels.

H.R.2039 - Alternative Fuel Infrastructure Act of 2007

April 25, Rep. Levin (D-MI) introduced Alternative Fuel Infrastructure Act of 2007 to amend the Internal Revenue Code of 1986 to modify the alternative fuel vehicle refueling property credit by increasing the percentage covered from 30 percent to 50 percent and increase the cost limit from $30,000 to $50,000.

S.1227 - Clean Coal Act of 2007

April 26, Sen. Kerry (D-MA) introduced Clean Coal Act of 2007 to amend the Clean Air Act to establish carbon dioxide new source performance standards for new coal-fired electric generated units.

S.1238 - Energy Security and Corporate Accountability Act of 2007

April 26, Senators Caset (D-PA and Webb (D-VA) introduced Energy Security and Corporate Accountability Act of 2007 to repeal certain provisions of the Energy Policy Act of 2005, close tax loopholes, impose a windfall profits tax on major integrated oil companies, provide a reserve fund for biofuels research and infrastructure, and provide payments for low-income households.

S. 1242 - Establishes Crop Insurance and Loan Guarantees for Biofuels Crops

April 26, Sen. Tester (D-MT) introduced S.1242 a bill to amend the Federal Crop Insurance Act and Farm Security and Rural Investment Act of 2002 to establish a biofuels pilot program to offer crop insurance to producers of experimental biofuels crops and a program to provide loans and loan guarantees to producers of experimental biofuels crops.

H.R.2069 - Save Our Climate Act of 2007

April 26, Representatives Stark (D-CA) and McDermott (D-WA) introduced Save Our Climate Act of 2007 to amend the Internal Revenue Code of 1986 to reduce carbon dioxide emissions by imposing a tax on primary fossil fuels based on their carbon content.

DOE Announces up to $200 Million in Funding for Biorefineries

On May 1, Department of Energy (DOE) Secretary Samuel W. Bodman announced that the DOE will provide up to $200 million, from FY07-11, to support the development of small-scale, (at ten percent of commercial scale), cellulosic biorefineries in the United States. The Funding Opportunity Announcement (FOA) seeks projects to develop integrated biorefinery demonstration facilities, employing lignocellulosic feedstocks for the production of a combination of liquid transportation fuel(s), biobased chemicals, biobased products and substitutes for petroleum-based feedstocks. This solicitation is in support of Sec. 932 of the Energy Policy Act of 2005 (P.L.109-58).

Up to $15 million is expected to be available in FY07, with the remaining $185 million expected to be available in FY08-11, subject to Congressional appropriation.  DOE anticipates making 5-10 awards under this announcement, with projects requiring a minimum of 50 percent costshare. The FOA will support demonstration projects that use novel approaches as well as a variety of cellulosic feedstocks to test key refining processes and provide operational data needed to lower the technical hurdles of financing full-size commercial plants. Projects are expected to be operational within three to four years with commercial-scale demonstrations expected to follow thereafter.

Applications for this FOA are due August 14, 2007.

For more information on the FOA, "Demonstration of Integrated Biorefinery Operations for Producing Biofuels and Chemical/Materials Products" - DE-PS36-07GO97003 visit:

DOE Solicitation
DOE Announcement

EPA Announces Final Rule for Renewable Fuel Standard Program

On April 10, 2007, the Environmental Protection Agency (EPA) announced the finalized regulations for the Renewable Fuel Standard (RFS) Program for 2007 and beyond. The following items have been established by this rule:

• Annual renewable fuel standards
• Responsibilities of refiners and other fuel producers
• Trading system and other compliance mechanisms
• Recordkeeping and reporting requirements.

Furthermore, the EPA has published a Regulatory Impact Analysis (RIA) which contains analyses of the economic and environmental impacts of the expanded use of renewable fuels under this program.
For more details see: EPA Renewable Fuel Program Website

U.S. Automakers Meet with President to Promote Increased Biofuel Availability

On March 26, President Bush met with executives from General Motors Corp., Ford Motor Co. and the Chrysler unit of DaimlerChrysler who were promoting incentives for ethanol and biodiesel fueling stations as they plan to increase output of flex-fuel vehicles. The President has called for a 20 percent decrease in American oil consumption by 2017, with three-fourths of the reduction from replacing oil with alternative fuels, and the remainder through improved vehicle fuel economy.

This was the second meeting in Washington D.C. between the executives and President Bush in the last four months, and the focus remained on increased access to biofuels as opposed to stricter fuel economy standards. “If the goal is to reduce oil imports and improve the environment, the opportunity is first of all in ethanol, biodiesel,” Rick Wagoner, chief executive of GM, told reporters after the meeting.

By 2012 half of all of the vehicles made by all three car manufacturers could be capable of running on biodiesel or E85, according to a statement from the automaker executives. “We are willing to lead the way,” the statement said. “But we need government and fuel providers to increase infrastructure before we can make a meaningful impact.” According to the executives, there are currently more than 6 million flex-fuel vehicles in the U.S., but of the country’s 170,000 gas stations only 2,000 offer E85 or biodiesel.  Access to an E85 supplier within five miles of most American motorists would require a minimum of 20,000 pumps, according to Phil Lampert, executive director of the National Ethanol Vehicle Coalition.

Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=a98ONw8UlS5I&refer=home

Testimony to Senate Field Hearing Calls for Higher Ethanol Blends and Incentives

Senator John Thune (R-SD) hosted a field hearing for the Senate Agriculture Committee’s Energy Subcommittee at South Dakota State University. Much of the prepared testimony at the hearing focused on the possibility of the industry's transition from corn-based to cellulosic ethanol, but higher percentage ethanol fuel blends came up as well.

Don Endres, chairman and chief executive officer of Brookings-based VeraSun Energy Corp., made the case to increase fuel blends from E10 to move ethanol closer to a true ‘renewable fuel’ as opposed to just an additive. Endres said that the Environmental Protection Agency could help demand keep up with the growing supply of domestic ethanol by approving E20 or even E30 blends. "Then, I think, the free market takes hold here," Endres said. Senator Thune recently asked the EPA to approve the use of a 20-percent ethanol blend.

Jeff Fox, vice president of legal and governmental affairs for ethanol-maker Poet, expressed a desire to see the government show its support for ethanol by extending existing tax credits and incentives. Senator Thune said incentives have promoted corn-based ethanol's growth and that he doesn't think the ethanol industry needs to apologize for trying to bring the U.S. more energy independence.

Senator Thune also described payment of $60 or $70 barrels of oil to Iran, Saudi Arabia or Venezuela, by the US as a ‘terrorism tax’ and that, "The oil industry has benefited enormously from those kind of incentives, and has over time".

Source: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/05/AR2007040500151.html

Environmental Protection Agency Relaxes Ethanol Production Air Pollution Standards

On March 12, the Environmental Protection Agency issued a rule allowing ethanol plants to operate under the same environmental rules and with the same air pollution equipment as ethanol plants producing alcohol for human consumption. The agency increased the amount of nitrogen oxide, sulfur dioxide and other pollutants ethanol plants are allowed to emit before being considered a "major air emitter" and required to meet more stringent regulations.

In the past most ethanol plants have been treated like chemical manufacturers for purposes of air pollution regulation. EPA spokeswoman Jennifer Wood said the rule was designed to make sure that all forms of ethanol production, including the distillation of alcohol for human consumption, "are treated equally under the Clean Air Act." The new rule would not apply in urban areas already dealing with air quality problems.

Chief executive officer of the National Corn Growers Association Rick Tolman expressed his support for the change and said the rule is beneficial to the members of his organization and reflects a trend toward larger ethanol plants. Tolman said, "Even with the change, ethanol is significantly net positive for emissions and greenhouse gases."

Others have opposed the rule change. William Becker, executive director of the National Association of Clean Air Agencies, said "it was a double whammy. They have inappropriately increased the major source threshold and made that change worse by ignoring plant emissions that are still a problem for public health."

Source:  STLtoday.com

Final EPA rule: http://www.epa.gov/nsr/documents/20070412final.pdf (pdf format)

California Energy Commission Awards $3 Million to Biofuels Projects

The California Energy Commission (CEC) has selected three biofuel projects to receive a combined $3 million in funding.  The CEC received 19 proposals in response to a Public Interest Energy Research Program solicitation issued in October 2006. The CEC Technical Advisory Committee (TAC) reviewed, evaluated, and scored the proposals, and funding was allocated based on the TAC’s scores and suggestions.

• The Metcalf & Eddy and San Francisco Public Utility Commission proposal scored the highest and received $995,791 for a brown grease recovery and biofuel production demonstration project.
• Renewable Energy Institute International received $996,093 for a proposed demonstration of an integrated biofuels and energy production system.
• Bluefire Ethanol received $995,938 for a lignocellulosic biorefinery project.  Bluefire Ethanol was also recently awarded up to $40 million from the DOE for a proposed plant in Southern California that will produce about 19 million gallons of ethanol a year from sorted green waste and wood waste from landfills.

Source: http://www.greencarcongress.com/2007/03/california_ener.html
For the full CEC release: http://www.energy.ca.gov/contracts/BIOFUELS-PIER_NOPA.PDF (pdf format)

Diversified Energy and Evergreen Pulp Partner for California Biomass to Hydrogen Proposal

Diversified Energy Corp., based in Gilbert, Arizona, and Evergreen Pulp, Inc., based in Samoa, California, jointly submitted a proposal to pursue a project to generate both hydrogen and biogas from biomass, a replacement for natural gas. The companies submitted the proposal in response to a solicitation issued by the Public Interest Energy Research Natural Gas (PIER-NG) Program, a part of the California Energy Commission. The state solicitation focuses on biomass-to-gas or hybrid projects addressing industrial and commercial process heating or combined heat and power needs. The state is expected to make an award this spring, with the project occurring over a period of 36 months.

In the proposed project for the state, Diversified Energy will act as the primary contactor and will place a demonstration-scale gasification reactor at an Evergreen Pulp kraft pulp mill in Eureka, California. The reactor will gasify low-value excess wood fines (a a woody byproduct produced by cleaving and shearing with sharp knives) to create syngas from which hydrogen gas could be parsed. This syngas will be pumped into the burners of the mill’s process heating facility, offsetting the natural gas currently being used by the mill, potentially making the mill completely independent from fossil fuels.

"We are excited to move towards the implementation of this green technology that could eliminate our dependency on natural gas and produce biomass hydrogen for fuel cells at the same time. Through such projects, we endeavor to do our part in supporting California as a leader in the field of renewable fuel development," said David Tsang, CEO of Evergreen Pulp.

Sources: http://www.renewableenergyaccess.com/rea/news/story?id=47958
http://www.diversified-energy.com/auxfiles/pressReleases/30Mar07_Evergreen_Mil.pdf (pdf format)

Pennsylvania Offers $31.4 Million for Clean Energy and Alternative Fuel Grants

On April 11, Pennsylvania Governor Edward Rendell announced $31.4 million in grants through three programs for projects working on clean energy and alternative fuel, the programs include Alternative Fuels Incentive Grants, Pennsylvania Energy Development Authority and Energy Harvest. The grant money and programs are part of Governor Rendell's Energy Independence Strategy to reduce Pennsylvania's reliance on imports and fossil fuels.

The Alternative Fuels Incentive Grants (AFIG) program will offer up to $16.4 million to finance the production and use of clean-burning fuels in Pennsylvania with an emphasis on investments in ethanol and biodiesel. AFIG funding over the last two years will result in the use of 1.5 million gallons of B20 and the production of 33 million gallons of biodiesel through 2008.

The Pennsylvania Energy Development Authority will offer $10 million in grants available for assisting with capital costs for a wide variety of advanced and clean energy projects. These projects include: solar energy; wind; geothermal; biologically-derived methane gas, including landfill gas; biomass; and demand management measures, including energy recovery, energy efficiency and load management.
 
The Energy Harvest program will offer up to $5 million in grants for projects that promote awareness and build markets for cleaner or renewable energy technologies.

Source:   http://www.earthtimes.org/articles/show/50677.html
http://www.state.pa.us/papower/cwp/view.asp?A=11&Q=461471

New Mexico Governor Signs Four Clean and Renewable Energy Related Bills

New Mexico Governor Bill Richardson recently signed into law four bills related to renewable and clean energy. "These vital pieces of legislation will work hand in glove with the other major clean energy bills I enacted earlier this session -- the Renewable Energy Transmission Authority and the quadrupling of the Renewable Portfolio Standard -- to continue to make New Mexico the nation's Clean Energy State," said Governor Richardson.

Enacted Legislation:

• SB 489 will require that 5 percent of every gallon of diesel fuel sold in New Mexico comes from an agricultural source by the year 2012.
• SB 463 contains several tax incentives, including: a Renewable Energy Production Tax Credit, Biodiesel Fuel Production Tax Incentives and Agricultural Water Conservation Tax Credits.
• The Advanced Energy Tax Credit bill, SB 994, is the first tax credit in the nation to cover carbon capture technology and include specific “capture” goals at coal-fired power plants.
• HB 318 allows New Mexico to pass more stringent mercury pollution standards than the federal government’s.

Source:   http://www.renewableenergyaccess.com/rea/news/story?id=48151

Indiana State Legislature Passes Bill for Biobased Products Advisory Commission

The Indiana State legislature sent HB 1281 to the Indiana Governor’s office in early April. The bill establishes the Indiana Biobased Products Advisory Commission and requires governmental bodies and state educational institutions to purchase biobased products when available, economically feasible and appropriate in light of federal requirements and special scientific requirements. The bill defines biobased products as products produced from plant or animal sources that would otherwise be produced from petroleum based sources. The bill will go into effect July of 2007.

Source:   http://www.munciefreepress.com/node/1310
Full text of the bill: http://www.in.gov/legislative/bills/2007/HE/HE1281.1.html

 Iowa Senate Approves $100 Million Initiative Aimed at Reducing Oil Dependence

The Iowa Senate approved the creation of a $100 million Iowa Power Fund in an effort to increase developments in the state’s renewable energy industry and to reduce the state’s dependence on imported oil. The bill, Senate File 599, contains a framework for spending the research, development and commercialization fund consisting of a proposed state Office of Energy Independence and a new, 18-member Iowa Power Fund Board.

The $100 million fund would be created in $25 million installments over four years with at least 10 percent earmarked for energy efficiency and conservation initiatives and $2.5 million reserved annually for worker training for the renewable energy industry. The Office of Energy Independence would accept applications and assess proposals. A seven-member "due diligence" committee appointed by the governor would review the feasibility of the projects and the Iowa Power Fund Board would decide whether to provide financial incentives.

State Senator Jeff Angelo, a Republican from the Creston district, was among the critics of the proposed economic development program, saying "it is very unclear what the resulting goals of the plan will be." Whereas state Senator Bill Dotzler, a Democrat from the Waterloo district, supported the bill saying, "the Iowa Power Fund is a big step that will encourage the production of alternative, Iowa-grown energy." The bill passed on a 36-13 vote and now goes to the House for more debate.

Source:   http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2007704200390

Florida Company Plans Ethanol Dehydration Plant in the Caribbean

Tampa Energy, a Florida-based company, and its partners are seeking to invest $50 million in an ethanol dehydration plant to be based in the Dominican Republic and to then supply anhydrous ethanol to the US market. The CEO of Tampa Energy, Arthur McDonnell, expects the plant to start operations during the 2008-09 harvest. Initially the plant is expected to process roughly 50 million gallons annually, with plans to possibly double capacity after two years.

Under the Caribbean Basin Initiative (CBI) trade agreement, ethanol exported from Caribbean and Central American countries enjoy a tariff-free quota of up to 7 percent of the US ethanol market. Once the quota has been exceeded, ethanol imports into the U.S. under CBI are subject to the 54 cent per gallon tariff.

Interest in ethanol dehydration in Caribbean and Central American countries has grown in light of the region’s proximity to both low-cost Brazilian hydrous ethanol and the US market for anhydrous ethanol as a fuel additive.  Jamaica Broilers is constructing a plant in the region with a 60 million gallon annual capacity as is EthylChem, with a 100 million gallon annual capacity. Both are scheduled to come online this year. McDonnell also said Tampa Energy and its partners are looking to build a 130,000 metric ton plant in the Caribbean to produce the gasoline additive ETBE (ethyl tertiary butyl ether) using ethanol as a feedstock.

Source:   http://www.cattlenetwork.com/content.asp?contentid=114481

Five Megawatt All Biodiesel Power Plant Begins Operating in Texas

Biofuels Power Corp., based in The Woodlands, Texas, just north of Houston, has begun operation of a biodiesel only power plant in Oak Ridge North Texas. The company invested $3.5 million in the plant which consists of three 2,000 horsepower diesel engines, together consuming between 70 and 100 gallons of biodiesel an hour, producing 5 megawatts of power, enough to power 3,500 homes. The project is a partnership between Biofuels Power Corp. and Safe Renewables Corporation, with Safe Renewables supplying biodiesel derived from chicken fat from nearby Conroe, Texas.

Biofuels Power will only operate the plant during times of peak demand when power prices are the highest. The company will also benefit from the $1 per gallon biodiesel federal tax credit.  The National Biodiesel Board credits the Oak Ridge North plant as being the only power plant in the country which runs entirely on biodiesel. Biofuels Power is planning on another biodiesel plant to supply the east Texas and Louisiana area.

Source:   http://www.myfoxdfw.com/myfox/pages/News/Detail?contentId=2700986&version=1&locale=EN-US&layoutCode=TSTY&pageId=3.2.1

 Two New Proposals for Hawaiian High Capacity Biodiesel Plants

Imperium Renewables Inc., based in Seattle, Washington, has proposed a $90 million plant near Kapolei, Hawaii. The proposed plant would produce 100 million gallons of biodiesel a year from locally grown crops and imported oil palm from South East Asia. The plant would be the same size as Imperium’s biodiesel project under construction off Gray’s Harbor in Washington, which is the nation's largest biodiesel plant. Imperium also announced a $214 million influx of investment, and is looking into opening facilities in the Northeast US as well as internationally.

Maui Electric Co. (MECO) and BlueEarth Maui Biodiesel LLC have proposed a $61 million refinery on the island of Maui with a capacity of producing 120 million gallons a year of biodiesel and which be used to fuel MECO’s largest diesel power plant. While the proposal is awaiting approval by the state Public Utilities Commission since it involves a regulated utility, BlueEarth hopes to complete the plant and begin operations by early 2009, starting with production at 40 million gallons annually, most likely using imported oils, primarily palm oil, as a feedstock.

Some observers argue that not all biodiesel should be considered equally green. According to testimony given to the state legislature by several groups, including Environmental Defense and Life of the Land, the increased demand for palm oil, a high-yield biodiesel feedstock, is leading to slashing and burning practices to make way for oil palm plantations, and the forest fires from these tactics are contributing to global warming. Kelly King, marketing and communications director of Pacific Biodiesel which operates two biodiesel facilities with a total capacity of 1.5 million gallons of biodiesel a year in Hawaii, calculates that by planting oil palm trees on all of the state’s agricultural land not currently used in other agricultural production would not provide enough feedstock to meet capacity for one of the two proposed plants (BlueEarth or Imperium). Pacific Biodiesel’s strategy is to produce biodiesel at a capacity appropriate to Hawaiian feedstock.

Source:   http://starbulletin.com/2007/03/26/news/story03.html

Indy 500’s Race Series Switches to Running on Pure Ethanol

The IndyCar Series opened its season on March 24 with the entire fleet of race cars running on 100 percent ethanol officially supplied by Renova Energy in Torrington, Wyoming. For the 17 races of the 2007 schedule, including the Indianapolis 500, and for subsequent seasons onward, ethanol will be the official fuel. In 2005 the series announced it would be switching from running on methanol, which is derived from non-renewable natural gas, to running on ethanol. Last season cars began the transition from methanol to ethanol, running on a blend of 10 percent ethanol and 90 percent methanol.

“The IndyCar Series jump to ethanol has been great,” said Tony Kanaan, the IRL 2004 champion. “We are definitely on the right path with ethanol. There is more power with the new engine. It runs clean and it is better for the environment. So it is a win-win situation.” The Renewable Fuels Association, the Ethanol Promotion and Information Council and the IRL brought a full-sized Team Ethanol Indycar to Capitol Hill to promote the IndyCar Series’ switch to 100 percent ethanol.

Sources: http://www.ethanolrfa.org/media/press/rfa/view.php?id=983
http://www.insideindianabusiness.com/newsitem.asp?ID=22352&ts=true

North Carolina Residents Concerned about Odor from Proposed Ethanol Plant

Residents of Fayetteville, North Carolina are raising concerns about the location of and smell coming from a proposed 100 million gallon corn ethanol plant. The start-up E85 Inc. is seeking to build the $200 million plant in Fayetteville near a Goodyear Tire plant and a residential community. Local county commissioners were considering offering E85 Inc. $875,000 in incentives while residents attempted to petition the commissioners to not authorize the plant. E85 Inc., already in possession of a permit from the state's Division of Air Quality, decided not to seek incentives from the county commissioners, avoiding a confrontation with the petitioning residents, and now needs to purchase the land for the proposed plant and receive building permits before beginning construction.

“Hopefully, you folks understand quality of life also includes clean air and water, and a healthy, safe community that doesn’t smell bad,” said Denny Shaffer, a Fayetteville resident. Whereas Phyllis Owens, of the county’s Business Council, didn’t think smell would be an issue for the plant’s neighbors: "In some cases there is a smell, but it's older technology. And in most cases, when we're talking about state-of-the-art technology, the smell is confined to the plant site."

Sources: http://www.wral.com/news/local/story/1249764/
http://www.wral.com/news/local/story/1256721/
http://www.fayobserver.com/article?id=257629

Novozymes Proposes Strategy to Achieve Economically Viable Cellulosic Ethanol

Novozymes announced a five-part strategy to achieve economically viable cellulosic ethanol at the 4th World Congress on Industrial Biotechnology and Bioprocessing in Orlando, Florida.  Novozymes focuses on enzyme technologies and microorganisms in the biofuels production process and was recognized by President Bush earlier this year for their research in alternative fuel technology.

The strategy consists of:

1. Continued funding of research and development, specifically in the areas of biomass conversion and the development of a commercial process technology.
2. Establishment of geographically distributed configuration testing and development centers to address multiple types of biomass feedstock as well as to integrate processes.
3. Scientific advancement to increase cost efficiency by improving underlying agricultural practices, notably the collection and harvesting of biomass and pre-treatment methods.
4. Scientific advancements in biotechnology, including enzyme technology, metabolic engineering and novel separation methods.
5. Continued bi-partisan support of a national infrastructure to support practical implementation including funding, incentives and tax credits.

Per Falholt, Novozymes chief scientific officer, said that the path to economical viability for cellulosic ethanol could last 4 to 5 years: “To make daily use of cellulosic ethanol not only a possibility but an economic and practical reality, all parties need to contribute to a common vision.”

Source: http://carolinanewswire.com/news/News.cgi?database=1news.db&command=viewone&id=3451&op=t

Largest Capacity Wood Pellet Plant in United States Opens in Maine

Corinth Wood Pellets of Corinth, Maine began operations of its facility, producing an estimated 140,000 tons of wood pellets annually, making it the largest capacity for a single wood pellet manufacturing plant in the country. The grand opening ceremony was held March 23rd. The plant is located on 103 acres of land in a Pine Tree Zone, created through an initiative by Maine Governor John Baldacci, which will offer tax breaks to the company.  The plant is estimated to employ 40 people at the factory and an additional 120 loggers, truck drivers and others.

Ken Eldridge, owner of Corinth Wood Pellets, has invested $4.5 million so far and spent 16 months planning and constructing the project which will produce wood pellets for sale domestically and overseas. Eldridge anticipates that 20 percent to 30 percent of the pellets will be sold in the United States and the remainder will be shipped to European markets.  The second phase of the project would increase capacity to 300,000 tons annually and is expected to be completed by the end of the year.

Sources: http://bangordailynews.com/news/t/news.aspx?articleid=147864&zoneid=500 http://www.maine.gov/tools/whatsnew/index.php?topic=Portal+News&id=35546&v=Article-2006

Dartmouth Professor Wins $100,000 Award for Consolidated Bioprocessing Work

Dartmouth Thayer School of Engineering professor and co-founder of Mascoma Corporation Lee Lynd received the inaugural Lemelson-MIT Award for Sustainability on April 2. Lynd received the $100,000 award in recognition of his work on a single-step process for converting cellulosic material into ethanol and other biofuels in a process known as consolidated bioprocessing (CBP).

"CBP is an innovation which is still unfolding," Lynd explained. Lynd and his research group have generated a growing interest in CBP. The DOE research roadmap for biofuels and biomass states that CBP is "widely considered to be the ultimate low-cost configuration for cellulose hydrolysis and fermentation." The Mascoma Corporation is dedicated to researching CBP and has received investments from several venture capital firms and recently a $4.9 million federal grant.

Sources: http://www.thedartmouth.com/article.php?aid=2007040301050
http://web.mit.edu/invent/n-pressreleases/n-press-07LMA.html

Additive Makers and Refiners Seek Solutions to Possible Texas Biodiesel Ban

The Texas Commission on Environmental Quality (TCEQ) is considering banning B20 because of worries that it will raise nitrogen oxide (NOx) emissions and other volatile organic compounds (VOC) that contribute to smog.  Texas has some of the worst smog problems in the United States. In order to combat smog, the Texas Low Emission Diesel (TxLED) program was created to regulate NOx and VOC emissions from diesel in 110 counties in Texas. TxLED regulates B20 because it meets the program's definition of diesel fuel, while pure biodiesel is not under the program’s definition of diesel fuel and thus does not fall in TxLED’s jurisdiction.

TCEQ has delayed a decision over a year to give the Environmental Protection Agency and the National Renewable Energy Laboratory time to complete a study to determine if B20 raises NOx emission levels. A 2002 EPA study found that B20 increased NOx levels, but a 2006 NREL study found that "B20 has no net impact on NOx." Results of the new and more comprehensive study are due in December of this year.

Preparing for a possible regulatory change, California-based ORYXE Energy has been the first to receive approval from TCEQ for its biodiesel additive that will lower NOx and VOC emissions. While most refiners believe the EPA study due in December will show that there is no net NOx increase from burning biodiesel, most are still preparing to do business under the TxLED regulations. World Energy Alternatives is in the process of altering its refining process to produce fuels that would meet Texas standards. John Kellogg, Director of Communications at World Energy, commented “it will not be a big change in our technical process.”

Source: http://www.renewableenergyaccess.com/rea/news/story?id=47964

Michigan State Professor Argues for Biofuels Increasing World Food Supply

The research of Dr. Bruce Dale, a Michigan State University chemical engineering and materials science professor, has found that ethanol made from cellulosic materials will render the debate over whether biofuels will lead to a decrease in food supplies moot. Dr. Dale presented the findings of his research, conducted in part through life cycle analysis tools, at the American Chemical Society annual meeting in Chicago at the end of March.

Dr. Dale believes that energy crops, grasses and woody materials grown for their energy content and used as feedstocks for cellulosic ethanol can be grown on marginal agricultural lands. "This will reduce pressure on our land resources," said Dr. Dale. "We'll be able to get more raw material out of one acre of land."

"We grow animal feed, not human food in the United States," Dr. Dale said. "We could feed the country's population with 25 million acres of cropland, and we currently have 500 million acres. Most of our agricultural land is being used to grow animal feed. It's a lot simpler to integrate animal feed production into cellulosic ethanol production than it is to integrate human food production. With cellulosic ethanol, the 'food vs. fuel' debate goes away." Dr. Dale also said, "The evidence indicates that large-scale biofuel production will increase, not decrease, world food supplies by making animal feed production much more efficient."

Sources: http://news.mongabay.com/2007/0327-ethanol.html
http://newsroom.msu.edu/site/indexer/3039/content.htm

Chevron and Weyerhaeuser Look to Jointly Assess Cellulosic Biofuels Feasibility

Chevron Corporation and Weyerhaeuser Company announced a letter of intent outlining a joint effort to assess the feasibility of commercializing the production of biofuels from cellulose-based sources on April 12. Both Chevron and Weyerhaeuser currently have separate research partnerships under way investigating the development of cellulosic biofuels.

The companies will focus on researching and developing technology that can transform wood fiber and other nonfood sources of cellulose into economical biofuels. Feedstock options span a range of materials from Weyerhaeuser's existing forest and mill system and cellulosic crops planted on Weyerhaeuser's managed forest plantations.

"Crops created for and dedicated to fuel feedstocks offer the opportunity to augment value creation from our managed forest lands," said Steven R. Rogel, chairman, president and chief executive officer for Weyerhaeuser. "Working [with Chevron] we can create new, sustainable sources of biofuel."

Writers: Jetta L. Wong and Jamil Farbes
Editor: Carol Werner

Please distribute BCO to your colleagues or send us their e-mail addresses and we will add them to our distribution list.  Article and commentary submissions are encouraged and should be sent via email.

Environmental and Energy Study Institute
122 C St., NW, Suite 630
Washington, DC 20001
Phone: (202) 662-1885; Fax (202) 628-1825
jwong@eesi.org

Please visit us at http://www.eesi.org/
We welcome your suggestions, comments and questions.

The Environmental and Energy Study Institute (EESI) is a non-profit organization that works at the nexus of policy and innovation to promote environmentally sustainable societies.  EESI was founded in 1984 by a bipartisan group of Congressional Members dedicated to finding environmental and energy solutions.  EESI provides credible, timely information and innovative policy ideas through coalition building, media outreach, publications, briefings, workshops and task forces on the issues of energy efficiency and renewable energy, transportation, smart growth, agriculture and global climate change.  Carol Werner leads the EESI team as executive director.