The US Energy Bill of 2005

The US energy bill of 2005 has received a mixed bag of reviews depending on your interests.  The folowing are the portions of the energy bill that appear to be most relevant to the topics I discuss:

A two-year extension of a tax credit to companies that produce power from renewable sources — an allocation worth $2.7 billion. The bulk of those funds will promote the construction of new wind farms, a boon to utilities and wind turbine manufacturers, while the remainder will assist biomass, geothermal and hydroelectric companies.

Biofuels : A 7.5 billion gallon Renewable Fuels Standard (RFS) which would add billions of gallons of ethanol, biodiesel and other renewables to the nations fuel supply by 2012.  In addition to the RFS, the bill updates the small ethanol producer definition to 60 million gallons, extends the biodiesel tax credit through 2008, and establishes a 30% tax credit up to $30,000 for the cost of installing clean fuel refueling equipment, such as an E85 fuel pump.

Solar : Increases the permanent 10 percent business energy credit for solar to 30% for two years.   Eligible technologies include photovoltaics, solar water heaters, concentrating solar power, and solar hybrid lighting. The credit reverts back to the permanent 10 percent level after two years. The bill establishes a 30 percent residential energy credit for solar for two years.   For residential systems, the tax credit is capped at $2,000.

Geothermal, Wind: The bill continues to include geothermal energy in the Section 45 Production Tax Credit (PTC) for the full 1.9 cent/kwhr credit amount, but expands the credit period from five to the full ten years. As a result, geothermal and wind will now receive equal tax treatment -- the full ten-year, 1.9 cent production tax amount. Other technologies, such as open loop biomass, receive the full ten-year credit but for half the credit amount, or 0.95 cents/kwhr. The biggest clean energy perk in the bill was a two-year extension of a tax credit critical to companies that produce power from renewable sources -- an allocation worth $2.7 billion. The bulk of those funds will promote the construction of new wind farms, a boon to utilities and wind turbine manufacturers, while the remainder will assist biomass, geothermal and hydroelectric companies.

Direct users of geothermal energy may use a simpler procedure for leasing, or establishing a fee schedule instead of royalties payments. State and local governments are allowed to use geothermal resources for public purposes at a nominal charge.

Hybrid, fuel efficient vehicles: Close to $875 million in tax credits could be given to those who buy hybrid gas-electric vehicles before 2010.  The bill favors companies that are just getting into the hybrid business. Each manufacturer can apply the tax credit to just 60,000 vehicles.  Toyota sells roughly 150,000 hybrids per year and Honda 50,000 which means that a only a portion of their vehicles will be eligible for credits. The bill fails to include any provision for new fuel efficiency standards.

A new category of tax credits known as clean renewable energy bonds, or CREBs, that have an estimated value of $400 million. These tax-exempt bonds can be issued by local governments or electricity cooperatives to help pay for wind, solar, biomass and other specified projects.  An additional $194 million will go toward the two-year extension of excise- and income-tax credits for manufacturers of biodiesel, a soybean derivative that is blended with regular diesel.

In addition to the items above I was able to find the following by looking through the conference committee version of the bill:

• To develop not less than 4 different conversion technologies for producing cellulosic biomass ethanol and to develop not less than 5 technologies for coproducing value-added bioproducts (such as fertilizers, herbicides, and pesticides) resulting from the production of biodiesel fuel. $110,000,000.
• Established within the Environmental Protection Agency a program to be known as the `Sugar Cane Ethanol Program', $36,000,000.
• Biodiesel was redefined to include oil produced from animal wastes, including poultry fats and poultry wastes, and other waste materials; or municipal solid waste and sludges and oils derived from wastewater and the treatment of westwater.
• The Secretary may provide grants to persons in eligible communities to offset the costs of developing or researching proposals to improve the use of biomass or add value to biomass utilization. $25,000,000.
• Research and development directed toward the improvement of batteries and other rechargeable energy storage systems, power electronics, hybrid systems integration, and other technologies for use in hybrid vehicles. $50,000,000 per year for four years.
• Research and development directed toward the improvement of diesel combustion and after treatment technologies for use in diesel fueled motor vehicles. $75,000,000 per year for 5 years.
• The Secretary shall establish an applied research program to improve technologies for the commercialization of--(1) a combination hybrid/flexible fuel vehicle; or (2) a plug-in hybrid/flexible fuel vehicle.  The Secretary shall provide grants that give preference to proposals that--(1) achieve the greatest reduction in miles per gallon of petroleum fuel consumption; (2) achieve not less than 250 miles per gallon of petroleum fuel consumption; and (3) have the greatest potential of commercialization to the general public within 5 years.  $3,000,000, $7,000,000, $10,000,000 and $20,000,000 over the next four years.
• The term "renewable energy'' means electric energy generated from solar, wind, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project.
• Renewable energy research total , $632,000,000 for fy 2007, $743,000,000 for fy 2008 and 852,000,000 for fy 2009 including:  1) Bioenergy research $213,000,000 for fy 2007, $251,000,000 for fy 2008, and $274,000,000 for fy 2009. and 2)  solar power $140,000,000 a 2007, $200,000,000 for fy 2008 and $250,000,000 for 2009.
• Biomass A) any organic material grown for the purpose of being converted to energy; (B) any organic byproduct of agriculture (including wastes from food production and processing) that can be converted into energy; or (C) any waste material that can be converted to energy, that is segregated from other waste materials, and is derived from- (i) any of the following forest-related resources: mill residues, precommercial thinnings, slash, brush, or otherwise nonmerchantable material; or (ii) wood waste materials, including waste pallets, crates, dunnage, manufacturing and construction wood wastes (other than pressure-treated, chemically-treated, or painted wood wastes), and landscape or right-of-way tree trimmings, but not including municipal solid waste, gas derived from the biodegradation of municipal solid waste, or paper that is commonly recycled.
• The term "lignocellulosic feedstock'' means any portion of a plant or coproduct from conversion, including crops, trees, forest residues, and agricultural residues not specifically grown for food, including from barley grain, grapeseed, rice bran, rice hulls, rice straw, soybean matter, and sugarcane bagasse.
• Deliver the first 1,000,000,000 gallons in annual cellulosic biofuels production by 2015. $250,000,000.  No more than $100,000,000 shall be provided for any single biorefinery demonstration.

I did not include in my perusal of the energy bill any of the following programs: building efficiency, appliance efficiency, coal, electrical energy systems, geothermal, hydroelectric, hydrogen and fuel cells, oil, natural gas.

Technocrati tags: energy policy, renewable energy, solar, wind, ethanol, biomass , batteries

Comments

[Chiara]

Hello,
Do you know if the Energy Bill gives any incentives to GTL technology?
Thanks a lot!
Chiara

[Jim from The Energy Blog]

Chiara- I don't recal anything, but I made a quick search through the fossil fuels section and didn't find anything. Their is some work on coal gasification, but that is not applicable. Nothing on Fischer-Tropsch processes, but I know DOE doen't use that name to describe liquefication-I think the word liquefication is in their description. If there is anything it might be in an earmark (pork barrel) section and that is too difficult too search.

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