Next Steps on Oil-for-Renewable Package
Senate Democrats are eyeing a filibuster-proof budget bill as a vehicle for energy tax provisions that have narrowly failed to win the 60 votes needed to cut off debate, several lawmakers said yesterday.Energy taxes are a “candidate to be considered in [budget] reconciliation,” Budget Chairman Kent Conrad (D-N.D.) told reporters. “I think we have to look at things that reduce our dependence on energy.”
The oil-for-renewables package, which faces the threat of a Bush veto, received resounding support from a broad coalition of industry, investors, and environmental organizations in a press conference today on the first day of the Washington International Renewable Energy Conference. President Bush is scheduled to offer the keynote address to the convention tomorrow.
Pelosi, Bush Battle on Oil-For-Renewables Tax Package
Promotion of the renewable energy industry is the goal of the Washington International Renewable Energy Conference, which your Administration hosts next week. The conference offers a remarkable world platform to support a fiscally responsible commitment to these industries and technologies and the jobs they will produce. We urge you to reconsider your previous opposition to fiscally sound incentives for American renewable energy, and lend your support to this historic legislation in time for this occasion.
At today’s press conference, President Bush parried a question about his threatened veto of bill (after admitting ignorance about the likely $4 gallon gas this spring).
He claimed the cost-neutral bill would “cost the consumers more money and we need more oil and gas being explored for, we need more drilling, we need less dependence on foreign oil.” With respect to renewable energy, he discussed cellulosic ethanol and other biofuels, nuclear energy, and carbon sequestration, but not solar, wind, or energy efficiency.
QUESTION: Mr. President, back to the oil price tax breaks that you were talking about a minute ago.Back when oil was $55 a barrel you said those tax breaks were not needed, people had plenty of incentive to drill for oil. Now the price of oil is $100 a barrel and you’re planning to threaten a plan that would shift those tax breaks to renewables. Why, sir?
BUSH: I talk about some — some — of the breaks. This generally is a tax increase. And it doesn’t make any sense to do it right now. We need to be exploring for more oil and gas.
And taking money out of the coffers of the oil companies will make it harder for them to reinvest.
I know — they say, “Well, look at all the profits.” Well, we’re raising the price of gasoline in a time when the price of gasoline is high.
Secondly, we’ve invested a lot of money in renewables. This administration has done more for renewables than any president.
Now, we’ve got a problem with renewables, and that is the price of corn is beginning to affect food — cost of food and, you know, it’s hurting hog farmers and a lot of folks.
And the best way to deal with renewables is to focus on research and development that will enable us to — to use other raw material to produce ethanol.
I’m a strong believer in ethanol. This administration’s got a great record on it.
But it is — I believe research and development’s what’s going to make renewable fuels more effective.
Again, I repeat: If you look at what’s happened in corn out there, you’re beginning to see the food — the food issue and the energy issue collide. And so to me the best dollar spent is to continue to deal with cellulosic ethanol in order to deal with this bottleneck right now.
And secondly, the — yes, I said that a while ago — on certain aspects.
But the way I analyze this bill is it’s going to cost the consumers more money and we need more oil and gas being explored for, we need more drilling, we need less dependence on foreign oil.
And as I say, we’re in a period of transition here in America, from a time where we were — where we are oil and gas dependent to hopefully a time where we got electric automobiles, and we’re spending money to do that; a time when we’re using more biofuels and we take huge investments in that; a time where we’ve got nuclear power plants and we’re able to deal with the disposal in a way that brings confidence to the American people so we’re not dependent on natural gas to fire up our — you know, a lot of our utilities; and a time when we can sequester coal.
That’s where we’re headed for but we’ve got to do something in the interim. Otherwise we’re going to be dealing, as the man said, with $4 gasoline.
And so, that’s why I’m against that bill.
House Debating Oil-For-Renewables Package Today
From the beginning of her tenure, Speaker Nancy Pelosi (D-Calif.) has attempted to pass legislation cutting billions in tax breaks and royalty payments to oil and gas companies to invest in renewable energy and energy efficiency. The legislation has died twice by a single vote in the Senate – in December as part of the energy bill (H.R. 6), and three weeks ago as part of the economic stimulus legislation (H.R. 5140).
House leadership announced plans to immediately reintroduce the legislation as a standalone bill, named the Renewable Energy and Energy Conservation Tax Act of 2008 (H.R. 5351).
Debate on the bill is now taking place, with a final vote scheduled for some time after 3 PM EST.
Update: HR 5351 passed by a roll call vote of 236-182. 17 Republicans joined the Democratic majority; 8 Democrats (Barrow, Boren, Cuellar, Gene Green, Lampson, Melancon, Ortiz, Rodriguez) voted against passage.
Extends: (1) the tax credit for production of electricity from renewable resources through 2011; (2) the energy tax credit for solar energy and fuel cell property through 2016; (3) the special rule for treatment of gain from electronic transmission transactions by certain electric utilities through 2009; (4) the tax credit for residential energy efficient property expenditures through 2014; (5) the tax credit for alternative fuel vehicle refueling property expenditures through 2010; (6) the tax credit for biodiesel and renewable diesel used as fuel through 2010; (7) the tax credit for nonbusiness energy property expenditures through 2009; and (8) the tax deduction for energy efficient commercial buildings through 2013.Allows new tax credits for: (1) investment in new clean renewable energy bonds and qualified energy conservation bonds; and (2) the production of plug-in hybrid motor vehicles, cellulosic alcohol fuel, and electricity from marine and hydrokinetic renewable energy sources.
Revises the definition of “passenger automobile” for purposes of the limitation on depreciation deductions.
Allows a tax exclusion for bicycle commuting reimbursements.
Revises certain tax incentives for investment in the New York Liberty Zone.
Revises tax credit amounts for certain energy efficient household appliances produced after 2007.
Allows a five-year recovery period for the depreciation of qualified energy management devices.
Places limits on the tax deduction for income attributable to the domestic production of oil, natural gas, and any related products.
Revises tax rules relating to foreign oil and gas extraction income and foreign produced fuel used or sold outside the United States.
Energy Efficiency and Renewable Energy: Reviewing FY 2009 Budget Request and Key Tax Incentives
The Environmental and Energy Study Institute (EESI) and the House Energy Efficiency and Renewable Energy Caucus invite you to a briefing addressing the impacts of the President’s FY 2009 budget on energy efficiency and renewable energy (EE/RE) programs, including impacts upon states and low-income consumers. In addition, the urgent need to extend Federal tax incentives for EE/RE will be discussed. Energy efficiency and renewable energy technologies are critical elements of a national energy policy that will meet the nation’s goals of reducing energy imports, moderating energy prices, and improving the economy, national security, the environment and public health.
Panel- Deborah Estes, Majority Counsel, Senate Energy and Natural Resources Committee
- Scott Sklar, President, The Stella Group; Chair, Sustainable Energy Coalition Steering Committee
- Bill Prindle, Deputy Director, American Council for an Energy Efficient Economy
- Jeff Genzer, General Counsel, National Association of State Energy Officials; Duncan Weinberg, Genzer & Pembroke
The President’s FY 2009 budget request for the Department of Energy’s (DOE) EE/RE programs is $1.26 billion—essentially flat with the Administration’s FY 2008 budget request and 27 percent below FY 2008 appropriations. Given the volume of voices and concerns about energy security, the huge bills residential and business consumers face, loss of economic competitiveness, environmental degradation, and rising greenhouse gas emissions, the funding priorities reflected in the President’s FY 09 budget appear in conflict with his goals of expanding renewable energy development and making the economy more energy efficient. With dramatically rising energy prices for homes, businesses and drivers, states are concerned by the proposed zeroing out of the Weatherization Assistance Program Grants.
In signing the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) on December 19, 2007, President Bush said EISA makes “a major step toward reducing our dependence on oil, confronting global climate change, expanding the production of renewable fuels and giving future generations of our country a nation that is stronger, cleaner and more secure.” However, not included in EISA were a Renewable Energy Portfolio Standard (RPS) and an extension of renewable energy and energy efficiency tax incentives. A new economic study by Navigant Consulting finds that over 116,000 US jobs and nearly $19 billion in U.S. investment could be lost in just one year if renewable energy tax credits are not renewed by Congress. See EESI’s FY 2009 DOE Budget Analysis regarding requested funding for energy efficiency and renewable energy.
This briefing is free and open to the public. No RSVP required. For more information, contact Fred Beck at [email protected] or 202-662-1892.
House Plans to Resubmit Renewable Tax Package Stall
Following the second one-vote defeat of the renewable tax package in the Senate last week, House leadership let slip they planned to re-introduce the oil-for-renewables legislation some time this week, for passage before the President’s Day recess.
Today Katherine Ling reports in E&E News that timeline is now in doubt:The death of Rep. Tom Lantos (D-Calif.) and last-minute negotiations may delay House plans to take up a renewable energy tax incentive package later this week. Lantos died yesterday morning due to esophagus cancer complications. . .The bill was expected to be introduced this morning, according to Matthew Beck, a spokesman for House Ways and Means Committee Chairman Charlie Rangel (D-N.Y.). Beck said the committee was writing the bill but had not completed it yet as they were waiting for decisions from the leadership.
Sierra Club Takes McCain to Task for "Lie" about Clean-Energy Non-Vote
Following the one-vote failure on Wednesday of S. Amdt 3983 to H.R. 5140, the Senate stimulus package that contained $5.6 billion in “green” incentives, various environmental organizations, including the Sierra Club, called Sen. John McCain (R-Ariz.) for missing the vote.
On Thursday, the Sierra Club asked its members to call McCain’s office to ask “why he failed to show up for a vote that could have determined the future of green energy in America.”
Today, Executive Director Carl Pope blistered the office response to member calls in a blog post entitled John McCain Should Be Ashamed.
Immediately, people begin calling and emailing me, saying, “The Senator’s office says he voted for clean energy, and that your alert is wrong.” We check. He didn’t. We call his office. Stunningly, his staff has been coached to mislead callers. “That’s not true at all,” they say, “he voted for the bill yesterday.” Well, he voted, yesterday, but for a different bill. However we phrase the question, we get a lie. “No, if he had voted for the bill, it would not have passed. That was purely procedural.” But McCain’s staff knows that if cloture had been invoked, passage of the bill would then only require 51 votes, and the bill with clean energy would have passed. [Ed.- emphasis added.]
Senate Stimulus Package Filibustered by One Vote 1
- expanded tax-rebate eligibility for low-income seniors, disabled veterans and married couples
- a 13-week extension of unemployment benefits
- additional LI-HEAP funding
- $5.6 billion in renewable energy and energy efficiency incentives
- tax breaks for coal companies
This is the second time a renewal of the renewable production tax credits has failed by one vote in the Senate.
All Democrats, including Sen. Mary Landrieu (D-La.), who voted against the production-tax-credit package in the 2007 Energy Bill, voted for the Senate version (except for Sen. Reid, who cast a procedural vote against the package when it was evident cloture would fail).
Republican senators Collins, Snowe, Smith, Coleman, Grassley, Dole, and Domenici voted in favor of the package. All but Snowe (Maine) and Grassley (Iowa) are up for reelection this year, although Domenici has announced his intention to retire.
Sen. John McCain was the one senator not in attendance.
Friends of the Earth and David Roberts at Grist have singled out John McCain for the failure.
Senate Finance Committee Includes Green Jobs, Renewables In Stimulus Package
- the renewable electricity production credit
- solar, fuel cell, and microturbine credits
- energy-efficient building deductions and credits;
- the high-efficiency appliances manufacturing credit
- stripper well depreciation credit
- energy-efficient home retrofitting credit
Full details are available here.
Last Friday, 33 senators sent a letter to the Committee leadership urging support for renewable energy, energy efficiency, and green jobs incentives.
According to the Sierra Club, by today the number of Senators was up to forty:Senators who have expressed support for the inclusion of the renewable energy incentives include: Cantwell, Snowe, Wyden, Smith, Klobuchar, Kerry, Sununu, Sanders, Dole, Boxer, Johnson, Allard, Salazar, Mikulski, Stabenow, Murray, Dorgan, Brown, Bayh, Clinton, Collins, Specter, Menendez, Thune, Feingold, Dodd, Levin, Obama, Brownback, Coleman, Murkowski, Feinstein, Schumer, Stevens, Lautenberg, Leahy, Akaka, Kohl, Roberts, Grassley, Bingaman, and Domenici.
The Economic Stimulus Act of 2008 1
Modification Energy Package part of package passed by committee.
| Provision | Approx Cost (billions) |
| PTC (Sec. 45) | 3.0 |
| Solar (residential & business, including fuel cells, microturbines) | 0.13 |
| CREBs ($400m allocation) | 0.2 |
| Commercial buildings | 0.15 |
| Efficient homes (new) | 0.06 |
| (exp. 12/07) Efficient homes (existing) | 1.5 |
| (exp. 12/07) Efficient appliances | 0.32 |
| Percentage Depletion (marginal wells and stripper wells) | 0.25 |
| TOTAL | 5.57 |
1. Production Tax Credit (Section 45). Extends placed-in-service deadline for qualifying electric generating facilities (wind, biomass, geothermal, etc.) for one year. Estimated cost is $3b/10.
2. Solar, fuel cell, microturbine credits (Sections 48 and 25D). Extends Section 48 (30% investment credit for solar and fuel cell property, 10% credit for microturbines) and Section 25D residential solar credit for one year. Cost is approx. $130m/10.
3. Clean Renewable Energy Bonds (CREBs). Provides $400m in new CREBs issuance, at estimated cost of $206m/10.
4. Appliances Manufacturer Credit. Extends manufacturer credit for high-efficiency appliances for two years through 2009, at cost of approximately $323m/10.
5. Energy-Efficient Existing Homes. Extends 10% investment tax credit for energy-efficient home retrofits (windows, heating and cooling equipment, etc.) through 2009, at estimated cost of $1.5b/10.
6. Energy-efficient Commercial Buildings: Extends deduction for energy-efficient commercial buildings for one year, at estimated cost of $153m/10.
7. Energy-efficient New Homes. Extends credit for energy-efficient new homes for one year, at estimated cost of $61m/10.
8. Percentage depletion for marginal wells. Extends suspension on the taxable income limit for purposes of depreciating a marginal oil or gas well through 2009, at estimated cost of $247m/10.
Senators Push For Renewable Tax Credits in Stimulus
Thirty-three senators, including several Republicans, sent a letter Friday urging leadership to include the renewable tax incentives set to expire this year in the economic stimulus package. Inclusion of the production tax credits in the 2007 energy bill failed by one vote.
We strongly support current bipartisan efforts to mitigate an economic downturn by providing direct financial relief to American families. At the same time, we believe that we must be cognizant that energy prices have been a leading cause of our current economic environment. Accordingly, we strongly believe that we must provide a timely long-term extension of clean energy and energy efficiency tax incentives that expire at the end of this year. Given record energy prices and growing demand, postponing action on these critical energy incentives will only exacerbate the problems afflicting our economy. In fact, these renewable energy and energy efficiency investments have a verifiable record of stimulating capital outlays and promoting job growth. We must ensure that this impressive record is maintained in 2008 and extend these tax credits expeditiously.
Nine of the signatories are members of the Finance Committee.
Full text of the letter is available here.