WASHINGTON — Sen. Chuck Grassley today said that a comprehensive energy bill passed the Senate with an overwhelming majority of 85 – 12. The bill included an 8 billion gallon Renewable Fuels Standard; tax incentives for biodiesel, biomass, ethanol, and wind; and a Renewable Portfolio Standard that would require electric companies to generate more power from renewable sources.
"The development of alternative energy sources should alleviate domestic energy shortages and insulate the United States from the Middle East-dominated oil supply. Renewable energy conserves existing natural resources and protects the environment," Grassley said. "Iowans have launched efforts to diversify the state’s economy and found creative ways to extract a greater return from corn, soybeans, biomass and other natural resources found in our state."
The Renewable Fuels Standard mandates that 8 billion gallons of renewable fuels be used in the nation’s fuel supply annually by 2012. Grassley said that several plants have recently been built and the U.S. still has the need for more ethanol.
The Renewable Portfolio Standard requires electric utilities to generate 10 percent of their power through renewable energy sources such as wind, solar, ocean, geothermal, biomass, landfill gas and incremental hydropower by 2020. Grassley supported the amendment and has said he will continue to fight for the expanded use of renewable energy sources during upcoming negotiations with the House of Representatives on a final version of the legislation.
The energy tax incentives included in the bill were developed in the Senate Finance Committee, of which Grassley is the Chairman. The tax incentives in the bill extend the production tax credit for electricity produced from renewable sources including wind, biomass, and other renewables for three years.
Here are several provisions from the tax incentives package.
Wind energy – Since the inception 13 years ago of the wind energy tax credit, wind energy production has grown considerably. Every 10,000 megawatts of wind energy produced in the United States can reduce carbon monoxide emissions by 33 million metric tons by replacing the combustion of fossil fuels. Wind energy also helps to empower rural communities to reap continued economic benefits. The installation of wind turbines has a stimulative economic effect because it requires significant capital investment which results in the creation of jobs and the injection of capital into often rural economic areas.
Biomass – Open loop biomass includes organic, non-hazardous materials such as saw dust, tree trimmings, agricultural byproducts and untreated construction debris. The development of a local industry to convert biomass to electricity has the potential to produce enormous economic benefits and electricity security for rural America. In addition, studies show that biomass crops could produce between $2 billion and $5 billion in additional farm income for American farmers.
Pig and Cow Manure – Anaerobic digestion of manure improves air quality because it eliminates as much as 90 percent of the odor from feedlots and improves soil and water quality by dramatically reducing problems with waste run-off. The technology used to create the electricity results in the production of a fertilizer product that is of a higher quality than unprocessed animal waste. By using animal waste as an energy source, an American livestock producer can reduce or eliminate monthly energy purchases from electric and gas suppliers and provide excess energy for distribution to other members of the community.
Small producers credit for the production of ethanol and Biodiesel – Modern science is allowing us to slowly substitute natural renewable agricultural sources for traditional petroleum. Renewable fuels like ethanol and biodiesel will improve air quality, strengthen national security, reduce the trade deficit, decrease dependence on the Middle East for oil, and expand markets for agricultural products.
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