Unity: Advanced Biofuels Association, BIO, Algal Biomass Organization hold joint meeting, briefing in DC on 2011 agenda

March 11, 2011 |

In Washington, the top trade groups representing the advanced biofuels industry in the United States met today to continue industry-wide collaborative efforts begun last year aimed at improving communication among stakeholders while building a more cohesive industry to develop clean energy alternatives that strengthen our nation’s economy. 70 senior industry leaders attended the briefings.

The Advanced Biofuels Association (ABFA), the Biotechnology Industry Organization (BIO) and the Algal Biomass Organization (ABO) met for policy briefings with leaders and senior staff from Congress and the Obama administration.

The meetings included a closed door session with U.S. Rep. Charles Boustany (R-LA.), a member of the House Ways and Means Committee; Pat Bousliman, a senior staff member on the Senate Finance Committee; Robert Edwards, the deputy general counsel for Energy Policy at DOE; Paul Bryan, the program manager for the DOE Renewable Energy Program; and EPA Senior Policy Advisor Paul Argyropoulos.

Following the meeting, the Digest received a briefing from Bob Ames, VP & General manager of Tyson Foods and the incoming chairman of ABFA; Lee Edwards, CEO of Virent, and the chairman emeritus; Mike McAdams, the ABFA president, and Tjerk de Ruiter, the CEO of Genencor and a board member of BIO’s Industrial Biotechnology section.

Highlights from the briefing:

Tax title. The House Ways and Means committee is looking closely at an overhaul of the tax title, and has been engaged with macroeconomists for the past fee weeks towards that end. Their goals are to broaden the tax base, but lower the tax rates,  and use the removal of obsolete exemptions and credits to finance that work. A focus on finite incentives, that may rapidly sunset.

VEETC ethanol blender tax credit. Unsurprisingly, the ethanol blender tax credit “is in play,” but “an active discussion is underway”, and “the outcome is unclear”. There are options to keep the VEETC in place, eliminate it altogether, redeploy the funding towards infrastructure investments, or establish a sliding scale of supports related, possibly, to the price of oil.

On the VEETC, McAdams pointed out that it is a victim of its own success. It has been a key component in successfully establishing an ethanol industry in the US, and now those gallons are in the billions, and the tax credit exposure are getting expensive. Now is time to look beyond, to the next wave of investments, and perhaps redeploy those credits towards the development of new goals. Edwards commented, “With the VEETC, there’s a $6 billion obligation, and everyone is asking ‘what the most effective way to deploy that kind of support?’ It could be in the form of distribution infrastructure, or in supporting the creation of a new class of advanced biofuels assets.

The 2011 process. Congressman Boustany’s advice to the biofuels community: “Be careful, be patient, stay engaged, and be prepared for a longer process rather than a short one.”

The new House of Representatives? “They understand that we can do a better job in establishing an energy policy.” “Taxpayers are expecting efficiency.” “With the new members, just because they have the Republican label doesn’t mean they will just follow – they forced the leadership on the $100 billion tax cuts.”

The Senate? Since there was no change in control this year, “the Senate is more grounded,” and “more focused at the present time on the art of the possible.”

The industry’s aims? According to de Ruiter, “there’s a lot of good legislation in place and there are opportunities we hope to broaden that. But we must maintain what we have got.”  Edwards added, “now is the time to re-evaluate, no one can expect permanent subsidies. But there can be a series of opportunities for policies that don’t pick winners,  are technology neutral, but offer support in that start-up phase.”

The industry’s need? “Consisent, continuing messaging – that the industry has started eith corn based ethanol, but now has opportunities to replace the entire barrel of oil with bio-based fuels and chemicals.

Silver buckshot. Bob Ames added, “There’s no one silver bullet among all the technologies, and what everyone is looking for is the silver buckshot, while trying to avoid the overly prescriptive kinds of legislation.

Unification of message. On further unification of biofuels and renewables policy. “In the short term, ACORE is beginning to move in that direction, but we are a ways away from unification of policy in other aspects. Admas noted that, on investment tax credits, the biofuels industry worked in support of the credits for solar and wind, even though they are not open to biofuels at this time.

On expansion of loan guarantees, and an investment tax credit. “Inslee’s bill is in the works, and we are hopeful to build on that, for bioproducts as well as biofuels, and there are other bills as well. It is an iterative process,” commented McAdams. The speakers from the Hill confirmed to the group that it will be more challenging for a biofuels investment tax credit.

On loan guarantees, the concern is real that the DOE’s loan guarantee program will be de-funded, and that a number of companies who have received term sheets but not yet progressed to conditional offers, or closing, will be stranded.

Loan guarantees: Rug-pulling “unthinkable”

Jim Macias, CEO of Fulcrum Bioenergy put it into context:

“Our waste-to-biofuels facility outside of Reno, Nevada will produce 10 million gallons of domestic fuel annually, create some 500 new engineering and construction jobs and more than 60 long-term, family-wage jobs in Northern Nevada, an area hit hard by the recession. Altering or eliminating funding for the loan guarantee program not only impacts this facility, but other projects that Fulcrum is developing across the country that will have the capacity to produce over one billion gallons of domestic fuel annually.”

“We’ve spent over two years and several million dollars to get to final term sheet negotiations with DOE on a loan guarantee for our Sierra Project,” Macias added.  “That the rug could be pulled out from under us at the 11th hour is unthinkable. Eliminating or decreasing funding for the Loan Guarantee program will have an adverse impact on the economy.  Jobs will be lost, contracts and agreements will be broken, and energy costs will increase.”

Also at the AFBA meeting: new officers for 2011-12

Meanwhile, at the meeting, ABFA separately elected and installed new officers to its Board of Directors. They include Robert Ames of Tyson as chairman, Jack Huttner of Gevo as vice chairman, Jim McVaney of Rentech as treasurer, Kinkead Reiling of Amyris as secretary, and Lee Edwards of Virent as chairman emeritus.

Category: Policy, Top Stories

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