Senator leader Harry Reid included several "green" provisions in the controversial tax bill, which passed the Senate today.
It includes a one year extension of the Convertible Renewable Tax Incentive – a crucial program allowing investors in renewable energy projects to take their tax break in cash, rather than tax credits. According to a study by the U.S. Partnership for Renewable Energy Finance, the extension would create or preserve 100,000 jobs.
Now the bill goes to the House. Rep. Lloyd Doggett (D-TX) is circulating a letter to Democratic leadership asking for last minute changes to the House bill to include the renewable energy extension. 30 lawmakers have signed Doggett’s letter but expressed frustration that the bill doesn’t extend the clean energy manufacturing credit, they want the ethanol credits reduced, and they’re against including tax credits for coal-to-liquids technology. Read the details.
According to the NRDC blog, the offending provisions are tax credits for corn ethanol and liquid coal.
Liquid Coal
The bill extends a 50 cent per gallon tax credit for liquid coal transportation fuels – fuels produced by liquefying coal. This provision must be stripped from the bill. Congress should not be doing anything to help a liquid coal industry get off the ground.
The production and use of liquid coal fuels releases more than twice the carbon pollution as conventional fuels. Even if some of the carbon pollution from the production process is captured and disposed, the fuel could still result in more pollution than conventional fuels. There are also the severe environmental impacts from coal mining, which include habitat loss, groundwater contamination and mountaintop removal.
The bill extends the tax credit provided by Sections 6426 and 6427 of the federal tax code. While fuels qualifying for the credit have to come from production facilities that capture and dispose of 75% of their carbon pollution, that’s not enough to bring emissions down to parity with conventional fuels.
Moreover, this incentive is intended to commercialize a fundamentally flawed technology. Once commercialized, there is little evidence that the next generation of plants will perform any carbon and capture at all. See NRDC’s liquid coal fact sheet provides more information about the problems of liquid coal.
Corn Ethanol
The bill includes a one-year extension of the Section 40 corn ethanol tax credit. The corn ethanol lobby went into this year demanding a 5 year extension of this credit (officially called the volumetric ethanol excise tax credit or VEETC).
The Senate and President Obama have seen fit to say no and only offer a one-year extension. This will save tax payers $25 billion. But this is still a huge waste of tax payer dollars. Ending the tax credit now would save an additional $6 billion. Reducing the tax credit by 20% would save $1.25 billion. Saying no to 5 years is a start, but Congress should go further and end this wasteful, environmentally harmful handout. Sending 70 cents of every renewable energy dollar to oil companies to use ethanol defies common sense.
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I became aware of the recent negative comments by Al Gore with regard to Ethanol and the expressed intentions of the recently confirmed Congressman Fred Upton as chairman of the House Energy and Commerce Committee. Upton favors clamping down on support for renewable energy deployment while opening up federal lands and conservation areas to oil exploration. These two developments make it extremely important to make sure that everyone understands that ethanol made from corn is only the first temporary method to produce ethanol. The second method to produce ethanol is to make it from cellulosic material which includes material that we consider trash; e.g., 40% of what is contained in our land fills located throughout our country. And, cellulosic ethanol is also temporary but provides an acceptable means of transitioning away from the use of imported oil while the third method of producing renewable fuel is fully deployed. This third method is the permanent method that frees us from our current dependence on imported oil for ground transportation forever. This method is the Hydrogen Fuel Cell which produces electricity that runs the motors that propel our cars, trucks, busses and trains. Note that another renewable fuel for our jet aircraft has already been developed. As a matter of fact, Cellulosic Ethanol and Hydrogen Fuel Cells are already developed and are ready to be deployed. Current estimates are that it will take 30 to 40 years for the United States to make a complete transition to Hydrogen Cells due to logistics. Cellulosic Ethanol and the already developed Biodiesel that we have will provide the necessary transportation fuels while an estimated 170,000 Hydrogen refueling stations augment or replace the currently existing 170,000 ethanol or fossil fuel refueling stations. We and others already have electric cars and buses running successfully on Hydrogen Cells.
Many people ask me why the U.S. has not made the transition to renewable fuels SO THAT WE COULD STOP TRANSFERRING ONE BILLION DOLLARS PER DAY TO OTHER COUNTRIES FOR IMPORTED OIL AND AT THE SAME TIME CREATE MILLIONS OF GOOD PAYING JOBS THAT CAN ONLY BE DONE BY U.S. CITIZENS IN OUR OWN COUNTRY?
To be nice, I tell them our House, Senate and executive branches in Washington D.C. do not have the “political will”. Occasionally, but for the past few months much more often, I get searching questions with a mixture of anger. I can only respond with what I know to be true and that is “big oil is in control of the people we elected to serve us.” It is the U.S. version of the Golden Rule. That is, He Who Has the Gold Makes the Rule. Ostensibly, what is good for our Country is not important and if actions hurt our people, let them eat cake!