Weekly Clean Energy Roundup:June 14, 2006

News & Events

South Carolina is even more optimistic about the vehicles, as the latest budget includes a $300 sales tax rebate for the purchase of plug-in hybrid vehicles. Since the vehicles won’t be commercially available for some time, a more realistic rebate goes to the mechanically inclined, who can earn a $500 sales tax rebate for the purchase of equipment to convert a standard hybrid to a plug-in hybrid. The budget also includes a $300 sales tax rebate for buyers of fuel cell vehicles and an equal, but more pragmatic, sales tax rebate for buyers of flexible-fuel vehicles, which are readily available today. To encourage alternative fuels, the budget also includes incentives of 5 cents per gallon for the sale of E85 (a blend of 85 percent ethanol and 15 percent gasoline) and B20 (a diesel blend containing 20 percent biodiesel). Finally, individuals and businesses producing biodiesel for their own use can earn tax credits of 20 cents per gallon if they produce it from soybeans and tax credits of 30 cents per gallon if they produce it from feedstocks other than soybeans. To see the budget item, scroll down to section 72.113 in the South Carolina general appropriations bill.

South Carolina also passed a bill last week that includes tax credits for new ethanol or biodiesel production facilities. Facilities placed in service between 2007 and 2009 will earn a tax credit o
f 20 cents per gallon for the first 5 years of fuel production. In 2014, the tax credit drops to 7.5 cents per gallon. In addition, the legislation includes a tax credit of 25 percent of the cost of equipment for production, distribution, or dispensing of ethanol or biodiesel. Also included in the legislation are tax credits for solar heating and cooling systems and landfill gas systems. See sections 36, 37, and 38 of the bill, S. 1245.

Chevron Enters Biofuels Business, Invests in Biodiesel Company

Chevron Corporation announced in late May that it has launched a biofuels business unit to advance the technology and pursue commercial opportunities relating to ethanol and biodiesel production. The biofuels business unit will operate within Chevron Technology Ventures (CTV), a corporate subsidiary dedicated to identifying, developing, and commercializing emerging energy technologies. The subsidiary is currently involved in hydrogen-related technologies, advanced energy storage technologies, renewable energy, and nanotechnology.

Chevron announced the new business unit at the groundbreaking for a biodiesel plant in Galveston, Texas, that could eventually produce 100 million gallons of biodiesel per year?a significant number when compared to last year’s biodiesel production in the United States, which totaled only 75 million gallons. Chevron is an investor in Galveston Bay Biodiesel, which is building the plant. The biodiesel facility will have an initial production capacity of 20 million gallons of biodiesel per year when it is completed later this year. See the Chevron press release.

While soybean oil and other vegetable and seed oils are the current sources of biodiesel in the United States, other countries are producing the fuel from plants more suited to their climates. The Philippines is the world’s second largest grower of coconuts, so President Gloria Macapagal-Arroyo has mandated the use of 1 percent “coco-biodiesel” in all diesel-fueled vehicles used by the government. Chemrez Inc. just opened a plant in the Philippines to produce nearly 16 million gallons of coco-biodiesel per year, and International Fuel Technology, Inc. (IFT) is currently working with CIIF Oil Mills Group, the country’s largest coconut producer, to expand the use of the fuel. Meanwhile, in hot, semi-arid countries, farmers are growing Jatropha curcus, a drought-resistant perennial that produces seeds with an oil content of 37 percent. D1 Oils, a U.K.-based biodiesel company, currently holds agreements to purchase Jatropha seeds and oils grown on more than 100,000 acres of land in India, Southeast Asia, and southern Africa. See the press releases from Chemrez, IFT, and D1 Oils, and for more information on Jatropha, see the Centre of Excellence for Jatropha Biodiesel Promotion Web site.

Virginia Tech Takes Top Honors in Challenge X Competition

A team of students from the Virginia Polytechnic Institute and State University has won the second annual competition in Challenge X, a three-year competition to improve the fuel efficiency and reduce the environmental impact of a 2005 Chevrolet Equinox. The Virginia Tech team developed and built a hybrid version of the Equinox that uses two electric motors and runs on E85, a fuel blend containing 85 percent ethanol and 15 percent gasoline. The Virginia Tech vehicle also exhibited the best braking and handling, the lowest tailpipe emissions, and the lowest petroleum usage. DOE and the General Motors Corporation are the lead sponsors for Challenge X, in which 17 teams of North American engineering students are participating. See the Challenge X press release (PDF 31 KB) and the full competition results on the Challenge X Web site.

Like Virginia Tech, most of the teams in this year’s competition used a combination of hybrid technology and alternative fuels, filling their tanks with E85, B20 (a diesel blend containing 20 percent biodiesel), or hydrogen. Deviating from the pack was the University of Waterloo, which employed a hydrogen fuel cell. While Virginia Tech and most other teams drew on a nickel-metal-hydride battery pack (the same type used in today’s hybrids) for their power supplies, the University of Akron also added ultracapacitors, and West Virginia University’s power supply came from ultracapacitors alone. Two teams employed lithium-ion battery packs, while the University of Michigan-Ann Arbor forsook electrical storage, and instead employed a hydraulic system to store the vehicle’s mechanical energy. See the list of technologies used by each team (PDF 22 KB) on the Challenge X Web site.

USDA Loan Program to Encourage Energy Efficient Homes

The U.S. Department of Agriculture (USDA) announced last week that it will loosen its requirements for low- and moderate-income families buying energy efficient homes in rural areas through the Rural Development Section 502 homeownership loan program. Under the special program, called Home Energy Advantage, the qualifying ratios for home loans may be exceeded by up to two percentage points if an energy-efficient home is purchased. The program recognizes that owners of energy efficient homes spend less money on utility bills, so they can afford larger mortgage payments. The cost of installing energy-saving features or buying energy-efficient appliances may be included in the loan amount. See the USDA press release.

The USDA program is similar to Energy Efficient Mortgages (EEMs), which are offered through the Federal Housing Administration (FHA), a part of the U.S. Department on Housing and Urban Development (HUD); the Department of Veteran’s Affairs; Fannie Mae; and Freddie Mac. See the HUD Web site for a description of EEMs and a list of specific requirements for an FHA EEM.

Energy Connections

BLM Releases Map of Proposed Energy Corridors on Federal Land

The Bureau of Land Management (BLM) released last week a preliminary map that shows potential energy corridors on Federal lands in 11 Western states. DOE, BLM, the U.S. Forest Service, and the Department of Defense are preparing to designate energy corridors for future electric transmission lines and pipelines for oil, natural gas, and hydrogen. The map released last week was developed using comments received during a public scoping period in the fall of 2005. Once the map is finalized, the four federal agencies will prepare a draft Programmatic Environmental Impact Statement (PEIS) to identify the impacts of the energy corridors.

The Energy Policy Act of 2005 required the designation of new energy corridors to help minimize the time it takes to site and approve projects, as well as reducing environmental effects and conflicts with other uses of federal lands. Individual projects proposed for these corridors will still be required to meet the National Environmental Policy Act and will be analyzed individually for their environmental impacts. The public is invited to comment on the proposed map; comments are due by July 10th. See the BLM press release and see the preliminary map on the West-Wide Energy Corridor PEIS Web site.

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