Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

Wind power developers in the United States built new installations at a fast rate during the first quarter of 2008, according to an industry group. But the American Wind Energy Association, which issued the report, also warned that the boom could go bust if Congress doesn't move to renew tax credits.

The association documented installations of 1,400 megawatts of new capacity, or about $3 billion worth, in its quarterly market report (see press statement here; text of report here). In its statement, the group said the industry was working at a "breakneck pace." The new installations were enough to serve 400,000 homes, according to the group. However, executive director, Randall Swisher, issued some caveats:

"But if Congress does not act quickly, this momentum could be derailed at the worst possible time for the economy, placing 76,000 jobs and over $11.5 billion in investment at risk. While 2008 is shaping up to be another great year, we could see a very different story in 2009 as uncertainty looms over investment in wind power projects and manufacturing due to continuing delay in extending the production tax credit (PTC).”

The tax credit for the production of energy from renewable sources is the primary federal incentive program for wind power, the association said in its public statement. The credit expires at the end of the year, along with other federal incentives for alternative energy.  

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• Businesses in the United Kingdom will not back the case for high levels of environmental taxation, such as those placed on emissions auctions, if the money goes towards meeting other public spending commitments, argues Independent business columnist Jeremy Warner.
• British great tits have proved themselves to be far more adaptable to climate change than their counterparts in the Netherlands. Or so reports London's ever-vigilant The Times. 
• Think there's nothing funny about climate change? There are those who disagree, reports the Guardian.
• Environmental groups are urging Congress to keep in place a ban on purchases of fuel from Canadian tar sands deposits, writes the Globe and Mail (see environmental organizations' press statement here).
• Another day, another verbal beating administered by Congress upon the Environmental Protection Agency for its alleged failure to make decisions based on science rather than politics, as recounted by McClatchy Newspapers. 
• Giant Danish wind power company Vestas says Europe should focus on land-based rather than offshore facilities, reports the Wall Street Journal's Environmental Capital. 
• President Bush and Congress remain at odds over the latest version of a farm bill, according to the Des Moines Register.
  

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• Who finds it easy -- or good business -- being green? The San Francisco Chronicle, citing a report from a New Hampshire nonprofit group, gives an accounting of climate-friendly companies.
• It's mercury, not climate issues, driving the opposition, but the Sierra Club is threatening to sue to block a number of coal-fired power plants, according to Reuters.
• The pending lapse of renewable energy tax credits causes the Christian Science Monitor to look at the implications, focusing on Arizona. 
• Nuclear power is on the minds of all three major presidential candidates, reports Reuters in a story carried on Planet Ark. 
• Democrats in the U.S. Senate unveil a new energy bill that taxes "Big Oil," according to a report on Reuters (see Democratic analysis of bill here). 
• The worldwide carbon market, now valued at $64 billion, "could become a victim of its own success and paralyze further progress," writes the Wall Street Journal's Environmental Capital, citing a new World Bank report (see World Bank press release here; text of report here).
• Iowa Gov. Chet Culver signs a bill promoting renewable energy in that state, reports The Messenger of Fort Dodge, Iowa (see Culver press release here).

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• European and Japanese investors have bought slightly over half of London-based Climate Change Capital, which invests in projects to cut carbon emissions in the developing world among other enterprises, Reuters reports.
• Efforts to address the transportation industry's carbon footprint, particularly that from air travel, are examined in a recent article in the New York Times.
• Top climate modelers have gathered in the United Kingdom to plan a revolution in climate prediction but computer power may have to increase before many improvements are seen, according to a story from the BBC.
• Republican presidential candidate Sen. John McCain and nearly two-dozen other senators have asked the Bush administration to waive ethanol production requirements, stories in the Guardian and other media say.
• Venture capitalists put $2.2 billion into clean tech companies last year and prospects for the future look good, according to an upbeat new report from PricewaterhouseCoopers, documented by C/Net's news.com. 
    

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Gov. Ted Strickland of coal-heavy Ohio has signed a bill pushing his state's electric distribution utilities to make sure that 25 percent of the power they sell comes from "alternative" resources by 2025.

Under Senate Bill 221, that would include juice coming from such renewable sources as wind and solar, to other forms of generation, including "clean" coal, fuel cells and advanced nuclear, according to a statement by Strickland (see statement here; bill text here) and a report in the Toledo Blade (see story here).

To meet the mandate that at least 25 percent of the power come from "alternative energy resources," Ohio's legislation requires that "at least half shall be generated from renewable energy resources, including one-half per cent from solar energy resources," in accordance with a number of annual benchmarks. 

The Blade reported that the measure allows utilities to avoid full compliance with the standards if they can demonstrate that their attempts to comply would raise consumers' bills by 3 percent or more, a provision that disappointed some environmental groups.

In his statement, Strickland (pictured) lauded the measure:

"This bill, Senate Bill 221, will ensure predictability of affordable energy prices and maintain state controls necessary to protect Ohio jobs and businesses.

We will safeguard Ohio families by empowering consumers and modernizing Ohio’s energy infrastructure.

And we will attract the jobs of the future through an advanced energy portfolio standard—and today’s action by Ohio means that a majority of states now agree that these technologies represent the future of energy in the United States." 
 

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• The Asian Development Bank's head announces a new fund to combat damage caused by climate change, writes The Economic Times of India. 
• Scientists suggest species living in the tropics may be in more serious danger than those living near the Arctic, reports the CBC.
• The world can reach a significant new climate change agreement by the end of next year, if current talks keep up their momentum, the head of the United Nations climate panel says, according to Reuters.
• A connection between rising shark attacks and global warming? Perhaps, the Guardian newspaper writes.
• A new book that offers "a profound academic, spiritual, theological, exegetical, politically grounded and energizing rendering of the global climate and sustainability crisis" is positively reviewed by The Christian Century. 
• Sempra Energy Chairman Donald E. Felsinger says there is enough scientific evidence in place that "we need to take action" to mitigate the effects of climate change, according to an interview with the New York Times appearing over the weekend
• The Bush administration literally chose to "add more fuel to the global warming fire" by moving ahead to open the Chukchi Sea to drilling, argues the Audubon Magazine.
• Ethanol mandates "are just an appetizer for a much larger big business feast should a liberal Congress be paired with a liberal White House," argues a posting on the Heritage Foundation's blog, The Foundry.   
  
  

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This saving the planet stuff just isn't complicated enough, it seems.

Underscoring the importance of the finer points involved in establishing a market-based approach to controlling greenhouse gas emissions, a new report (accessible here) sponsored by a fascinating collection of interests shows how huge sums are at stake depending on how such a program is structured.

The most intriguing part of the document examines one of the most controversial parts of a cap-and-trade scenario: the distribution of emissions credits or "allowances" that will determine how many tons of heat-trapping gases that, say, a power plant can emit over a year. It looks at the differences in formulas contemplated by two bills now before Congress, the Lieberman-Warner Climate Security Act and the Bingaman-Specter Low Carbon Economy Act. The document also adds another twist, such as examining what would happen if credits were allocated based on each company's electricity output, versus its share of emissions.

The report generally seems to side with Lieberman-Warner. That bill would require selling more of the credits initially and it would also allocate some credits for sale to benefit the public.

The document also finds that some utilities, such as those with relatively cleaner technologies, would fare vastly better under a system in which credits were distributed on the basis of power output. However, both bills so far propose to allocate the allowances to electric providers based on their historic carbon dioxide emissions. 

The bills are named for their sponsors, Sens. Joe Lieberman, I-Conn., John Warner, R-Va., Jeff Bingaman, D-New Mexico, and Arlen Specter, R-Pa.

 

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• The Arctic and the Antarctic experience similar greenhouse gas levels and solar radiation but are responding in dramatically different ways, according to the National Oceanic and Atmospheric Administration, which reported on a new study soon to be published in EOS, a publication of the American Geophysical Union.
• Consumers who reduce the amount of meat and dairy in their diets will do more to reduce their carbon footprint than buying all local all the time, writes Science Times, reporting on a new study of the issue.
• The United Nation's new top adviser on food is urging a freeze on investments in biofuels, reports the BBC.
• Great Britain is experiencing a boom in installations of  "green roofs" and rainwater harvesting technologies in response to a changing climate, reports The Times of London. 
• A company called OptiSolar wants to build the largest solar farm in the world about 100 miles north of Los Angeles, says a report on C-Net's news.com.
• Shell's decision to drop out of a large offshore wind project has caused an uproar in the United Kingdom, according to the Guardian.
• Kleiner Perkins Caufield & Byers has raised $1.2 billion in two distinct funds, one of them entirely "to help speed mass-market adoption of solutions to the world's climate crisis," the San Jose Mercury News reports.  
• Hawaii's Legislature has voted to require all new homes to have solar water heaters installed starting in 2010, says the Associated Press in a story appearing in the Houston Chronicle.  
  
  
  
  
  

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Maryland's Gov. Martin O'Malley has signed a package of energy bills to among other things beef up renewable portfolio standards in that state, set goals for reducing energy consumption and funnel proceeds from the sale of greenhouse gas credits to clean energy projects.

The governor (pictured) also signed a measure, SB 1013, that ratifies a settlement of a dispute with Constellation Energy Group and ends ratepayer obligations for decommissioning nuclear power plants in the future. The settlement, according to the Baltimore Sun newspaper, also gives the state some assurances a nuclear power plant will be built (see article here). 

In a statement, O'Malley, a Democrat, held out high hopes for the a package of bills on energy and other environmental issues (see text here):

"With today’s bills, we are creating a sustainable energy policy, securing relief for thousands of Maryland ratepayers through a global settlement with Constellation Energy, protecting our environment and helping to restore the Chesapeake Bay for future generations.” 

Among the bills signed by O'Malley was a measure that, according to various reports, about doubles the state's renewable power mandate. The new law, HB 375, requires 20 percent of Maryland's electricity to come from renewable sources by 2022. That's a more modest goal than some other states, including California, which is prodding utilities to meet the 20 percent goal by 2010 and is considering imposing a 33 percent goal by 2020 (see background on California mandate here). 

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A new federal economic analysis of the Lieberman-Warner Climate Security Act shows that the measure wouldn't impede strong growth in the United States; whereas a new federal study of the bill forecasts a gloomy future of  higher energy prices and problems for industry.

It's the same document. Just depends on who's looking at it.

Produced by the Department of Energy's statistical arm, the Energy Information Administration, the new report seems to have done little to foster agreement between the warring sides in the battle over the greenhouse gas reduction bill. The Senate is poised to take up the bill, sponsored by Sens. Joe Lieberman, I-Conn., and John Warner, R-Va., in June.

Like a previous government analysis of the bill, which would cap emissions and establish a trading program, the new report shows some economic impacts but it also predicts by mid-century the legislation would produce better than 50 percent cuts in the production of heat-trapping gases (see text of report here). 

According to the new study, the drag on the gross domestic product between 2009 to 2030 would be between 0.2 percent and 0.6 percent. The bill's impacts would fall more heavily on industry than on other parts of the economy, the report predicted. While comparing the two analyses is difficult because of differences between them, the overall economic effects forecast by the new document appear to be generally smaller than those found by the U.S. Environmental Protection Agency in its  analysis put forward earlier this year (see Climate Law Update story here).  

Perhaps not surprisingly, supporters and opponents of congressional action to address climate change saw the energy department report dramatically differently. Oklahoma Sen. James Inhofe, a leading Republican global warming skeptic (pictured), said the analysis showed the bill "is wrong for America." Environmental groups and congressional supporters of the legislation saw it as confirming the bill as economically benign.

    

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• Methane coming from a landfill near San Francisco could soon fuel the garbage trucks serving the site, under a plan to be announced by Waste Management, the San Francisco Chronicle reports.  
• European leaders on climate change say they do not expect much from President Bush on the issue but they have hopes a new administration will be different, writes Reuters. 
• Rising demand for food and biofuels that prompted farmers to plant more crops has helped produce a shortage of fertilizer, according to the New York Times. 
• Australian government officials and representatives of that country's agriculture community have been discussing the industry's role in climate change policy, Sky News reports.
• Global warming could take a break in the next decade, thanks to a natural shift in ocean circulations, but long-term the planet's temperature will rise as previously expected, according to an AFP report on a study in the British journal Nature.
• Miami-Dade County government should invest in a wide range of actions to prepare for climate change, including high-tech mapping and financing fuel-efficient taxis, an advisory task force recommends, reports Miami Today.
  

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A compromise farm bill that reportedly includes some sharp reductions in subsidies for some forms of ethanol underwent heavy criticism Tuesday from President Bush. At a news conference, he called the overall multi-billion-dollar measure a “massive, bloated” bill that would do little to solve the problem of rising food prices (see White House transcript here).

That cast uncertainty on the legislation, which emerged with some fanfare late last week from behind-the-scenes negotiations between key lawmakers. Among the notable features in the bill, according to news reports (see Reuters story here), was a 6-cent-per-gallon cut in federal tax credits for ethanol. That would take the incentive down from 51 cents to 45 cents. However, Reuters reported the bill would also create a $1.01-a-gallon subsidy for ethanol distilled from cellulose, found in grasses, woody plants and crop residue.

Last week, the bill, which also contains incentives for public nutrition programs, took life with a boost from Senate Agriculture Committee Chairman Tom Harkin, D-Iowa. He said the compromise legislation, among other things, "invests heavily in renewable energy and will help bring the promise of cellulosic biofuels to reality by providing grants and loans to move from corn ethanol to other renewable feedstocks." Access the full text of Harkin's statement here.

 

  

  

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Chinese government officials may have produced a startling new goal for wind power in the giant country -- 100,000 megawatts by 2020. That represents a big step beyond more near-term figures the country floated just earlier this year (see Climate Law Update story here).

According to a story in the Shanghai Daily (see article here), an official with the Chinese Wind Energy Association (Chinese language site) said that the country's top economic planning agency, the National Development and Reform Commission recently discussed increasing wind power capacity to the 100,000-megawatt level. Previously, the country's leaders had announced a goal of installing 10,000 megawatts by 2010, so the new objective represents a 10-fold increase over the succeeding decade.

The country had set an objective of supplying 10 percent of its electricity from renewable sources by 2010, which would include wind, hydropower, bio-energy and solar.  According to the Shanghai Daily story it now wants to achieve 15 percent of its power consumption from renewable sources by 2020.  

Environmental Capital, the Wall Street Journal's online site that monitors such developments, sees new business opportunities in the Chinese move (see full posting here):

"Despite the recent tax reform meant to limit wind-turbine imports, China’s more ambitious goals could also open the doors for more joint ventures and local business for wind turbine makers like Vestas of Denmark, Suzlon of India, and Gamesa of Spain—all of whom have made China a key part of their global growth plans. And of course, General Electric hopes to make its energy business one of the group’s driving forces."

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• Descendants of John D. Rockefeller will call for a shakeup at the top of ExxonMobil, the successor to the Standard Oil giant Rockefeller founded, amid concerns the company has been slow to acknowledge climate change, The Times of London reported. 
• Wisconsin Gov. Jim Doyle wants an agreement between his state and the United Kingdom to work together on climate change issues, according to a story in The Capital Times. 
• Forest Day in Africa was marked by discussions of how to reduce the impact of climate change, says a story in The Post, an English-language paper in Cameroon.
• Gov. Arnold Schwarzenegger's decision to dump high-profile members of a California commission overseeing state parks may have been related to efforts to build a transmission line serving a Southern California solar project, the San Francisco Chronicle reported over the weekend.
• Entrepeneurs are turning to such ventures as financing solar technologies, according to C/Net's Green Tech Blog. 
• A Canadian panel sees climate-related threats to the polar bear, writes the Globe and Mail, but that doesn't go far enough to satisfy an American environmental group pushing for stronger action to protect the animal (see Center for Biological Diversity press statement here).
• Lawmakers in Washington are working toward a new deal on a farm bill that could cut ethanol tax subsidies, reports Radio Iowa. On the other hand, the measure would also boosts support for such renewables as cellulosic biofuels, according to the Delta Farm Press. However, by no means are all critics mollified, the Milwaukee Journal Sentinal wrote over the weekend.
• The presence of electromagnetic fields generated by hybrid vehicles has led some to question whether they are safe for drivers, the New York Times wrote this weekend.  

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On Earth Day, attention naturally turns to all things green – as in money.

Pocketbook issues are at the center of a number of new reports that assess the impact of efforts to combat climate change and promote the development of renewable sources of energy. One report shows government subsidies taking a big jump in recent years with renewables such as solar and wind getting a proportionately large share of the money.

The Environmental Defense Fund has come out with a document that studies the studies out there on the economic cost of a cap-and-trade system to cut emissions of greenhouse gases. Perhaps coming as no shock, the organization concludes that “a clear consensus” among the models demonstrates such a market system “is consistent with long-term economic growth.” The overall cost of capping the gases would amount to less than 1 percent of household budgets over the coming two decades, according to the EDF, which supports market approaches to the problem (see press statement here; text of study here).

Release of the analysis comes as the U.S. Senate is readying to take up the Lieberman-Warner Climate Security Act, which would establish a cap-and-trade system in the country. It also comes against a background of other reports issued by the government and business organizations showing potentially significant  economic impacts from such a system (see Climate Law Update story here).

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The Federal Energy Regulatory Commission has partially approved Pacific Gas and Electric Company's request that allows the company to recover from customers at least some of the costs related to a 1,000-mile transmission project intended to deliver power from renewable sources.

In the words of a statement from the federal agency, it gave partial approval to the Northern California utility's "petition for a declaratory order for recovery of prudently incurred pre-commercial and abandonment costs" related to the effort (see text of statement here; see full text of decision here). The $3.2 billion project would deliver up to 3,000 megawatts of new renewable power to California from Canada's British Columbia and from states in the Pacific Northwest.

The project will also be designed to take advantage of the fact that demands in the region peak at different times of the year, according to a statement from one of the commissioners. 

The Energy Policy Act of 2005 gave the commission authority to encourage greater investment in the power grid, including granting incentives allowing the recovery through rates of the costs associated with the projects. Barbara Connors, a spokeswoman for the commission, declined to put a dollar figure on the items so far approved by the panel.

     

 

 

 

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• Widespread concerns are surfacing that Africa, despite being less culpable for climate change than other regions, could be among the worst affected, reports Voice of America.
• Industrial companies fear that European efforts to combat climate change could drive them from doing business there, Reuters discloses in a story in the International Herald Tribune.
• Musician Paul McCartney advocates vegetarianism as a way of battling global warming, notes gigwise.com.
• A leader of Canada's natives says governments must engage indigenous populations on the issue of climate change, according to CTV.ca.
• Rising food prices, partly as a result of biofuel production, could ease acceptance of genetically engineered crops, says a story in the New York Times.
• Both Al Gore and a new poll suggest the public reaction to warnings about climate change is underwhelming, reports a New York Times blog, thelede.

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A new report published by the California Public Utilities Commission suggests a robust beginning for a state program to provide incentives for residential and commercial solar projects.

The document, issued this week, reported that the California Solar Initiative, launched in January 2007, has received more than 10,000 applications. It has more than 9,800 on file, equaling more than 249 megawatts of new solar and $649 million in incentives (see full text of report here). The initiative, which covers existing residences and both existing and new commercial, industrial and agricultural properties, is one of several in California intended to boost solar installations.

Among the report's highlights:

• Applications for more than 40 megawatts were added in the first quarter of 2008;
• The program has 33.4 megawatts of installed projects, including more than 14 MW in the first quarter of 2008;
• Residential applications make up 89 percent of all the applications received but the total capacity of non-residential projects account for more than 80 percent of the electric capacity.

Officials estimated that based on applications received by the end of 2007, at least 100 MW of capacity should be installed under the initiative in 2008. Project applicants have 12 months to complete their installations.

The nearly $2.2 billion ratepayer-funded program offers financial incentives to customers in the territories of the state’s large private utilities, Pacific Gas and Electric; Southern California Edison and San Diego Gas and Electric. The report found that so far the most interest in both residential and non-residential project has been in PG&E’s territory, although that could change under the program’s provisions allowing incentives to decrease once certain levels of capacity are met in each area.

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• John Doerr, Silicon Valley venture capitalist, explains why cleantech is "the biggest economic opportunity of the century" and his four steps for solving global warming.
• China is ramping up polysilicon production, but will remain a small player for some time, according to THT Research.
• CNET reports on the debate over ethanol's carbon footprint.
• The New York Times reports on how technology is smoothing the way for home wind-power turbines.
• Reuters reports that the EU is on track to meet wind energy goals.
• Solar power boom continues in Europe.
• The Telegraph reports that scientists are underestimating the impact of climate change on sea levels.

 

 

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Greenhouse gas emissions in the United States dropped by a somewhat lower fraction than earlier reported, according to final estimates released this week by the U.S. Environmental Protection Agency.

However, the annual Inventory of Greenhouse Gas Emissions and Sinks still showed a 1.1 percent drop between 2005 and 2006, compared to a draft report’s estimate earlier this year of a 1.5 percent decline (latest report can be accessed here; EPA press statement here). It also indicated that previous years’ emissions were a bit lower than had been previously estimated.

Both versions of the report also concluded that a variety of factors, including increased use of natural gas and renewable power sources, warmer winter weather and rising fuel prices contributed to the decline (see previous Climate Law Update story here).

The agency recalculated some of the base figures used in the report, which produced estimates lower than those previously reported. Those changes also helped narrow some of the gaps between the years. For instance, the earlier draft report showed total emissions in 2005 were equivalent to 7.3 billion metric tons of carbon dioxide, dropping to just more than 7.2 billion in 2006, a difference of about 112 million tons. In the revised report, those figures were about 7.1 billion and 7 billion, respectively, a difference of approximately 75 million tons.

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A California lawyer who has closely followed California's energy regulation, and once was part of it, has concluded that state lawmakers handed Attorney General Jerry Brown a victory last year when they passed a new law in reaction to his controversial greenhouse gas litigation.

The statute  was passed as SB 97 (see full text here). The legislation codifies Brown's argument that that increased emissions of the gases and their effects constitute an environmental impact that must be considered by agencies issuing permits that are subject to review under the California Environmental Quality Act. That's according to Thelen Reid Brown Raysman & Steiner attorney Peter V. Allen (pictured) in an article originally published in  Ecology Law Currents, vol. 35 (2008). The publication is produced at the University of California-Berkeley's law school Boalt Hall (see full article here).

The law was approved last year after Brown sparked controversy in the Legislature by weighing in on county land use and transportation plans and other proposals that warranted scrutiny under the state environmental law. Brown ultimately sued San Bernardino County and reached a settlement requiring the county to take account of greenhouse gases and come up with a plan to reduce them (see text of lawsuit here; text of settlement here; press statement here).

Republicans in the Legislature had held up the state budget and attempted to pass a law limiting Brown's power to bring such lawsuits in the future, a clash that ultimately produced SB 97. Critics viewed Brown's work as a premature effort to enforce the state's law limiting greenhouse emissions, AB 32. Brown, who has maintained the state needs to move forward quickly with efforts to reduce heat-trapping gases, argued that San Bernardino had not adequately analyzed the effects of development on global warming.  

In addition to constituting "a win for the attorney general's position," the bill also will make many CEQA reviews more complex and will require more costly mitigation measures for many projects, Allen wrote. But he noted it should also provide some potential opportunities, especially for renewable energy providers. 

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Global warming is bad, and developing renewable energy to help solve the problem is good, right? While that might be a popular view, the reality is a bit more complicated, as experts in the field have begun noting with some frequency lately.

Talk of what UCLA School of Law Professor Ann Carlson (pictured) calls “localized environmental values clashes” over renewable projects was in the air at a recent conference at the University of California-Berkeley’s law school, Boalt Hall.

Speakers at the two-day event, “California and the Future of Environmental Law and Policy,” noted that, in particular, legal and policy fights over transmission lines pose a significant challenge for renewable development. Among them was Karen Douglas, who formerly spearheaded California climate change efforts for the  group Environmental Defense (now known as Environmental Defense Fund). She is now a member of the California Energy Commission which, among other duties, licenses large new thermal power plants in the state, as well as the transmission lines connecting them to the grid. Douglas crystallized the issue this way:

“It’s kind of a different challenge to do renewables because you’ve got to generate the power where the renewable resources are and then bring it where the people are. So that means often a lot of power lines. People don’t want that through their neighborhoods. It’s hard to site and hard to build and so on, so one issue is transmission.”

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The U.S. Senate Thursday moved forward with its version of an extension of tax credits for renewable energy. But it did so without identifying how to pay for the estimated $6 billion in incentives for wind, solar and other projects.

Introduced by Sens. Maria Cantwell, D-Washington, and John Ensign, R-Nevada (pictured), only a week ago (see Climate Law Update story), the Clean Energy Tax Stimulus Act (see text here) was grafted as an amendment onto a housing bill before the Senate. Lawmakers adopted the energy amendment on an 88-8 voted and passed the entire bill 84-12.

In many ways, the Senate bill is roughly similar to a measure the House passed earlier in the year extending incentives known as the investment tax credit and the production tax credit. The renewable industry has been pushing hard for Congress to adopt some kind of legislation extending credits which expire at the end of the year.

Both bills provide short-term extensions of credits for producing electricity from renewable sources and for a longer period, until 2016, for business investment tax credits for solar and fuel cell projects. Residential solar and energy efficiency projects would also benefit under the Senate bill.

But the major difference in the Senate legislation lies in the fact that bill avoided the House approach of funding the incentives through reducing tax breaks for the oil industry. Instead, the Senate bill contains no identified funding mechanism. That could give the bill a difficult road in the House.

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By any measure, it’s been a tough few weeks in the spotlight for biofuels such as corn-based ethanol and other alternative sources for transportation energy, including hydrogen.

A Time Magazine cover story not-so-subtly titled: “The Clean Energy Scam,” set the tone for the criticism. But it was met by a spirited rejoinder from the biofuels industry, which sees itself as helping to lead the way toward sustainability.  

The scrutiny focused on biofuels didn't stop with the magazine. 

Recently, reports have emerged that American biofuel subsidies have, in the characterization of the Wall Street Journal’s Environmental Capital, been “boomeranging” across the Atlantic (see story here). Meanwhile, the Los Angeles Times reported a California biofuels manufacturer was “short on cash and suffering from higher corn and plant construction costs” which threaten the company. The paper also noted a number of other plants that have been put on hold across the country, citing narrowing margins between the cost of production and the selling price of ethanol (see story at newspaper's Web site here).

Then, late last week, reports began emerging that corn had hit a record $6 a bushel, prompting the food industry to pin the blame rising prices squarely on government encouragement of ethanol production. The Grocery Manufacturers Association said the "ripple effects" are being "felt throughout the economy" (see statement here).  

On the hydrogen front, the San Jose Mercury News tweaked California Gov. Arnold Schwarzenegger, who four years ago proclaimed the creation of a “hydrogen highway” that would allow motorists to fill up fuel cell cars. So far, however, the newspaper reported (see story here), “not a single hydrogen fueling station has been built under the program.” The article cited a number of possible reasons, from economics to politics, for the failure. The paper also reported that Mary Nichols, the chairwoman of the California Air Resources Board, believes up to 100 stations will be built by 2015, five years later than expected.

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Legislation extending tax credits for renewable energy including wind, geothermal and solar for at least a year was introduced Thursday in the U.S. Senate by a bipartisan group of lawmakers. The move drew immediate praise from the solar industry.

Senate authors of the measure, who left out a controversial hit on the oil industry that was contained in a recent House bill, hoped to break a logjam that has blocked progress on keeping incentives for renewable energy in place. Backers stressed the need to act quickly, with billions of dollars in projects possibly on the line. The bill also includes financial encouragements for energy efficient buildings, homes and appliances.

Introduction of the Clean Energy Tax Stimulus Act of 2008 in the Senate (see bill summary and text), comes more than a month after the House passed its own multi-year extension measure. The Senate legislation is sponsored by Sen. Maria Cantwell, D-Washington (pictured), and Sen. John Ensign, R-Nevada. It has 21 other co-sponsors. Cantwell urged swift action (see full statement):

“Critical tax incentives are set to expire this year. If both houses of Congress don’t pass a bill, and the president doesn't ’t sign it into law within the next one to two months, we will start to see as much as $20 billion of anticipated investments in 2008 delayed or canceled. This could result in more than 100,000 U.S. jobs lo