pushing to give the president a bill to sign no later than Christmas
pushing to give the president a bill to sign no later than Christmas
In big U.S. energy bill, who will pay?
By Mark Clayton Staff writer of The Christian Science Monitor
(AXcess News) - If the last energy bill was about squeezing remaining drops of oil from US soil, the newest is still a nascent, muddy legislative donnybrook over one question: Who will pay to shift the US energy mix to green and lean?
Energy-conservation measures in House and Senate bills approved earlier this year could by 2030 save the US twice as much oil as it now imports from the Persian Gulf, slash greenhouse-gas emissions by 40 percent, and reduce electricity use by at least 10 percent.
If key elements of the two bills now being reconciled behind closed doors make it into the final version, the result would be the biggest shift in US energy use since the 1970s - and underpin larger greenhouse-gas cuts in future legislation, observers say.
"We haven't seen any plan this significant in terms of oil savings since the 1970s," says Bill Prindle, deputy director of the American Council for an Energy Efficient Economy in Washington. While electric-efficiency gains would be more modest, they would save consumers billions of dollars on utility bills and eliminate the need for dozens of new power plants.
Senate majority leader Harry Reid and House Speaker Nancy Pelosi are pushing to give the president a bill to sign no later than Christmas - before the 2008 election cycle hits. To do that, they must reconcile two starkly different energy bills - and avoid a White House veto.
Two key but controversial measures hang in the balance: tougher Corporate Average Fuel Economy (CAFE) standards for cars and trucks as well as a national Renewable Portfolio Standard (RPS) for utilities to require more green power. Three other important pieces enjoy broad legislative support: the "Renewable Fuels Standard" requiring more ethanol use in gasoline, tougher electrical efficiency standards for appliances and lighting, and a production tax credit for renewable energy.
But industry groups - oil, coal, auto, and electric utilities - worry that they will have to foot most of the cost of any new energy legislation, which could run up to $32 billion. Most new green measures would be paid for by repealing tax incentives of $16 billion (House bill) to $32 billion (Senate version) that now flow to the oil and gas industry.
"Neither of those bills answers the question of how we produce more energy or how we get more energy into this country," says Mark Kibbe, senior policy analyst for the American Petroleum Institute, a Washington trade association representing large oil companies. "While there might be some good in these bills, the negatives outweigh it."
Even those not hit by tax break repeals worry over anticipated higher costs of compliance. The House bill, for instance, includes a new national RPS, requiring all electric utilities by 2020 to generate at least 15 percent of their power from renewable energy sources, such as biomass, wind, or geothermal.
Although 25 states already have such requirements - many of them far tougher than the proposed national RPS - utilities in the Southeast and elsewhere oppose a federal standard that doesn't take geography into account.
"We oppose any federal legislation that does not recognize regional differences because it would be an unfair burden," says Mike Tyndall, a spokesman for the Southern Company, an Atlanta-based utility serving the Southeast. "We have extremely limited cost-effective solar and wind resources compared with other parts of the country."
Range Fuels Breaks Ground for Cellulosic Ethanol Plant in Georgia By Chris Morrison, VentureBeat
Posted: Today at 7:33 a.m. Updated: Today at 1:33 p.m.
VentureBeat reported in March on a $76 million federal government grant for which venture-backed Range Fuels won preliminary approval. That grant was part of a $385 million package set aside for six companies.
The Fed has now confirmed that Range qualifies for the grant. The company is using the funding for construction of a plant in Soperton, Ga. Of the full amount, $50 million will go toward the first phase of construction, and the remainder to the second phase.
If Range sticks to its plans, it could have the first commercial-scale cellulosic ethanol facility in the United States. Heretofore, only demonstration plants have been set up, some by larger companies that have avoided investing a great deal of money in cellulosic ethanol.
The hesitation by these companies is because making cellulosic ethanol is a more complicated process than making ethanol from plants like corn or sugarcane. The process requires breaking down the chemical structure of plants like trees and grasses.
Although there are several proven techniques for doing so, the associated costs and challenges in scaling such an operation aren�t well known, and there is uncertainty over which materials are best to use. Range plans on using locally available wood, while other companies have plans to work with faster-growing plants like switchgrass.
Innovation Fuels has made a somewhat safer bet with its plans to build a biodiesel facility in Newark, N.J. The news of its $15.5 million funding, the company�s first, was broken Monday by VentureWire.
An unnamed bank and hedge fund contributed the funding for the plant, which VentureWire�s source said will have the capacity for about 40 million gallons annually. A separate plant the company is building in its hometown of Hampton, N.Y., will reportedly have a 50 million-gallon capacity.
Innovation doesn�t have a publicly available timeline for completing the facilities. The executive team has concentrated experience in trading and investment, which makes us wonder if the entire company isn�t a momentum play on the popularity of biodiesel, with the intention of ultimately selling the plants to larger companies.
The company started life a year ago as a division of CEO John Fox�s company Homeland Energy Resources Development, which is essentially a consultancy for the cleantech projects of other companies.
Codexis is one of several companies exploring the use of biological processes to produce fuel.
The technology behind the process, which in Codexis� case involves directly manipulating the DNA of microorganisms to produce different enzymes, can also be used for pharmaceuticals and other applications. In April, for instance, the company signed a large deal with Merck, a drug manufacturer.
The extension of Codexis� research partnership with Shell also involves an investment by that company into Codexis, for an undisclosed amount. However, considering that the company�s last official funding was for $40 million and Shell is taking a seat on the board, we�d guess it was likely a substantial round.
Meanwhile, oil futures hit $97 per barrel Tuesday, while demand is expected to continue rising into next year. As rises in oil prices are usually accompanied by heightened interest in biofuel, we can expect plenty more news like this in the next few months.