Weekly Resource for February 17, 2012
USDA Leadership Needed in U.S. Energy Policy
Renewable energy advocates, and particularly those like the 25x’25 Alliance who believe the U.S. agriculture and forestry sectors can make major contributions to the nation’s energy needs, were pleased that Senate Agriculture Committee Chair Debbie Stabenow (D-MI)
launched her 2012 Farm Bill hearings this week with energy as a principle hearing topic. As noted in her opening statement, the committee’s focus on federal efforts to stimulate rural development, bio-based manufacturing and energy development require policies that create jobs in rural America and new market opportunities for farmers. The 25x’25 Alliance has long echoed Stabenow’s sentiment expressed this week that “the Farm Bill is a Jobs Bill.” But the new farm legislation must do even more. It must clearly establish energy production as a primary USDA mission area and provide the authority and direction sufficient to ensure that the Secretary of Agriculture is at the federal policy table when energy discussions are undertaken and decisions made. Read more…

Tax Parity for All Renewables
Editor’s note: The following is a guest blog from Bob Cleaves, President and CEO of the Biomass Power Association.
As Congress continues to grapple with the expiration of the payroll tax deductions and unemployment insurance benefits (both expiring by month’s end), there’s been a concerted effort by all renewable energy stakeholders to use this legislative vehicle to extend expiring (and expired) tax provisions. The 1603 Treasury Grant expired on December 31, 2011. Arguably the most successful renewable energy tax provision ever passed by Congress, 1603 has resulted in billions of new capital in renewable energy. The wind Production Tax Credit (PTC) expires in less than 11 months. The wind industry rightly points out that, with each passing day, projects are being cancelled. What is less well known is that for biomass, geothermal, waste-to-energy and hydropower – the so-called “baseload” renewables – Congress’ failure to extend the PTC program for these programs past their expiration date at the end of 2013 has the same result. Without it, there will be fewer new projects pursued, given the long development lead time of permitting and financing these projects.
Read more…

News of Note

White House Fiscal 2013 Budget Plan Scrimps on Farm Energy Funding, Boosts EERE
President Obama this week released a $3.8 trillion fiscal 2013 budget proposal, which the White House says includes a continued emphasis on renewable energy and infrastructure spending. The president called for an "all of the above" energy strategy during his State of the Union speech in January to grow the economy, create jobs and promote green technology development.

His proposal calls for an end to $4 billion in fossil fuel subsidies and a shift in funding from decreasing military actions in Iraq and Afghanistan to infrastructure projects. Clean energy and environment are said by administration officials to be important components and priorities of the fiscal 2013 budget request, which stresses developing new clean energy, advancing research and development funding for alternative energy, as well as promoting advanced manufacturing and jobs.

DOE funding would increase over 2012 enacted levels by 3.2 percent, to $27.2 billion. That includes $2.3 billion for the Office of Energy Efficiency and Renewable Energy (EERE), an increase of more than 28 percent from last year’s appropriated levels.

The DOE spending plan includes a $21 million (7 percent) increase over fiscal 2012 appropriations in the Solar Energy program; a $27.1 million (72 percent) increase in the Geothermal program and a $1.7 million increase in the Wind Energy program. The Hydropower program would sustain a 66 percent decrease under the White House plan.

The administration requested only $4.6 million in new budget authority for the Rural Energy for America Program (REAP) and seeks no new funds for any of the other major bioenergy programs in the 2008 Farm Bill. Authorization of all farm bill energy programs, including the Biomass Crop Assistance Program, the Biorefinery Assistance Program, or the Biomass Research and Development Initiative, expires this year.

The funding level for the farm energy programs "is a far cry from the more than $400 million per year (on average) in mandatory and discretionary spending" authorized by Congress for the energy title programs over the past years, says the Environmental and Energy Study Institute. The EESI acknowledges that actual spending over the past five years was much less than that authorized because Congress appropriated relatively little of the discretionary funding authorized in subsequent years. But the group said the White House proposal "contrasts sharply with the level of commitment to biofuels and bioenergy expressed by administration officials and the USDA over the past few years."

Elsewhere, the administration spending plan would allot through the USDA Commodity Credit Corporation about $200 million of previously authorized funds in fiscal 2013 to advance collaborative aviation biofuel projects that are already underway with the Navy and the DOE.

And the Energy Department's Biomass Program, which focuses on research and development of biomass and biofuel conversion technologies, fared much better, with $270 million in new budget authority, an increase of $70 million (35 percent) over the current fiscal year. The administration also is proposing to continue funding the DOE Office of Science Bioenergy Research Centers at $75 million, the same level as previous years.

BIO Asks Jackson to Reject Oil Industry Petition Seeking Waiver of Cellulosic Mandate
The Biotechnology Industry Organization, on behalf of the BIO's advanced and cellulosic biofuel member companies, has written EPA Administrator Lisa Jackson urging her to deny a petition filed by oil industry groups asking the EPA to waive the 2011 cellulosic biofuel Renewable Volume Obligation (RVO) under the federal Renewable Fuel Standard.

The National Petrochemical & Refiners Association, the American Petroleum Institute and the Western States Petroleum Association say the mandate will require the industry to pay $6.8 billion for not blending cellulosic ethanol that has not been produced.

However, the letter from BIO President and CEO Jim Greenwood says the oil industry has other options for meeting its obligation besides dropping the cellulosic ethanol mandate, that supplies to meet the 6.6 million gallon requirement are on their way, and that to grant the waiver would set a dangerous precedent.

Granting the joint petition "would significantly undermine [the] intended and necessary market certainty" of the RFS and "potentially strand investments in the industry," the BIO letter states.

"[S]ince EPA announced in November of 2010 the 2011 required cellulosic biofuel volume obligations . . . parties have had several calculable ways to meet those obligations," the BIO letter says. Also, granting the joint petition "would create a dangerous precedent that would threaten the policy and market stability (1) established by the announcement each November by the EPA of the following year’s cellulosic RVOs based on maximum achievable production volumes and, (2) depended upon by the cellulosic industry as it works towards broad commercialization to meet the goals of the RFS."

New Study Examines How States Evaluate Utility Energy Efficiency Programs

A study of state policies requiring utilities to offer energy efficiency programs shows a variety of approaches, but overall a high level of engagement.

Conducted by the American Council for an Energy-Efficient Economy (ACEEE), the comprehensive national survey was undertaken in response to efficiency programs becoming more widespread and energy savings requirements becoming stronger, increasing attention on how energy efficiency programs are being evaluated. One concern cited by the ACEEE is the apparent inconsistency in evaluation approaches across different states and the call from some for a "national standard" for energy efficiency program evaluation.

While the
National Survey of State Policies and Practices for the Evaluation of Ratepayer-Funded Energy Efficiency Programs found a great diversity in the policy framework, administrative structure, and technical details across states in their approach to evaluation; but overall, a high level of state regulator commitment to evaluation.

"These states take their responsibility for ratepayer protection very seriously," said Dr. Martin Kushler, ACEEE Senior Fellow and lead author of the report. "As someone who spent 10 years directing the evaluation unit of a major state utility regulatory commission, I can say that dollar-for-dollar, it's hard to think of any other aspect of utility operations that receives as much detailed scrutiny as energy efficiency."

Moreover, the variability in evaluation approaches across states does not seem to materially change the bottom line: energy efficiency programs are highly cost-effective, ACEEE leaders say. In a related earlier study,
Saving Energy Cost-Effectively: A National Review of the Cost of Energy Saved Through Utility-Sector Energy Efficiency Programs, council researchers examined the reported evaluation results across 14 different states with major ratepayer-funded energy efficiency programs, and found that the overall utility cost of conserved energy across states- despite differences in evaluation approaches- only ranged from 1.6 to 3.3 cents per kWh.

The latest report provides the overall survey results on a wide array of variables, ranging from policy framework and administrative structure to cost-effectiveness tests, approaches for dealing with "free-riders" and "spillover," deemed savings databases, and a variety of key input assumptions. ACEEE did find some areas where evaluation practices could be improved and/or made more consistent, and those are noted in the report. An appendix to the report also provides links to individual state policies and rules regarding energy efficiency program evaluation.

Duke Study Suggests Not All Methods Equal in Estimating Biomass as Energy GHGs
A recent study from scientists at Duke University's Nicholas Institute for Environmental Policy Solutions suggests that the methods used to estimate net greenhouse gas benefits stemming from biomass co-firing can strongly influence the observed results and that policy makers and stakeholders need to be aware of the variation in evaluating biomass as energy.

Citing recent media attention focused on the net GHG implications of using woody biomass to produce energy, and in particular, the controversy that has erupted over the biomass accounting techniques used to evaluate these GHG effects, the researchers ran a comparative analysis using a hypothetical scenario of a plant in Virginia co-firing biomass.

Factors such as shifts in forest area, shifts in forest type, and shifts in industrial capacity all influence net GHG benefits attributable to the use of biomass. Those approaches that did not account for these potential effects yielded much poorer GHG balances than those that did.

Furthermore, the researchers said, it is not just a matter of which components (market responses, management shifts, etc.) are included, but also the method used to tally the various components and the metric used to report the result.

The study cautions that failure to consider the full suite of factors can moderate net GHG effects of biomass utilization. The role for stakeholders and policy makers is therefore to determine how to balance a desire for accuracy and comprehensiveness with reporting and administrative simplicity.

To download and read the report, click
HERE.


Headlines of Note for the Week Ending February 17, 2012
News of interest to our 25x'25 Partners and advocates for a clean energy future:


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