colorado bar association environmental law section february 22, 2006 david hiller state issues...
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Colorado Bar AssociationColorado Bar AssociationEnvironmental Law SectionEnvironmental Law Section
February 22, 2006February 22, 2006
David HillerDavid HillerState Issues Counsel forState Issues Counsel for
U.S. Senator Ken SalazarU.S. Senator Ken Salazarwww.Salazar.Senate.Govwww.Salazar.Senate.Gov
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Provides $2.7 billion in production tax credits to Provides $2.7 billion in production tax credits to encourage the production of clean electric power encourage the production of clean electric power from wind, closed-loop biomass, open-loop from wind, closed-loop biomass, open-loop biomass, geothermal, irrigation power, landfill gas, biomass, geothermal, irrigation power, landfill gas, and trash combustion.and trash combustion.
$2.7 billion in tax incentives to encourage $2.7 billion in tax incentives to encourage efficiency and conservation, including energy efficiency and conservation, including energy efficient appliances and energy efficient building efficient appliances and energy efficient building construction.construction.
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Requires manufacturers to use 7.5 billion Requires manufacturers to use 7.5 billion gallons of ethanol and biodiesel by 2012 gallons of ethanol and biodiesel by 2012 – Reduce oil consumption by 80,000 bbls/day by 2012Reduce oil consumption by 80,000 bbls/day by 2012– Reduce the trade imbalance by $64 billion;Reduce the trade imbalance by $64 billion;– Create 234,840 new jobs in the U.S. economy;Create 234,840 new jobs in the U.S. economy;– Increase U.S. household income by $43 billion;Increase U.S. household income by $43 billion;– Add $200 billion to the GDP; andAdd $200 billion to the GDP; and
Creates $6 billion in new investment in Creates $6 billion in new investment in renewable fuel production facilitiesrenewable fuel production facilities
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Extends the biodiesel tax credit for producers for Extends the biodiesel tax credit for producers for five years. five years.
Allows small producer tax credit for biodiesel and Allows small producer tax credit for biodiesel and ethanol producers that generate less than 60 ethanol producers that generate less than 60 million gallons per year.million gallons per year. – Provides credit of 10 cents per gallon for first 15 million Provides credit of 10 cents per gallon for first 15 million
gallons produced. gallons produced. – Up to $1.5 million in tax credits each year.Up to $1.5 million in tax credits each year.
Offers $874 million in tax credits for the purchase Offers $874 million in tax credits for the purchase of alternative-fuel and hybrid vehicles – from of alternative-fuel and hybrid vehicles – from $2,000 for small cars to $40,000 for buses. $2,000 for small cars to $40,000 for buses.
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Provides a 30 percent tax credit (up to $30,000) Provides a 30 percent tax credit (up to $30,000) for investments in alternative fuel refueling for investments in alternative fuel refueling stations.stations. – Qualifying fuels include E85 ethanol blend and any Qualifying fuels include E85 ethanol blend and any
mixture of diesel fuel and biodiesel containing at least mixture of diesel fuel and biodiesel containing at least 20% biodiesel20% biodiesel. .
– Credit expires December 31, 2007.Credit expires December 31, 2007.
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Provides loan guarantees for up to 4 Provides loan guarantees for up to 4 cellulosic ethanol plants.cellulosic ethanol plants.– Cellulosic ethanol is the ethanol of the future – it Cellulosic ethanol is the ethanol of the future – it
will provide substantial oil savings when it is will provide substantial oil savings when it is economically feasible.economically feasible.
– The loan guarantees are for up to 80% of the The loan guarantees are for up to 80% of the project, up to 250 million. project, up to 250 million.
Key Renewable Energy Provisions Key Renewable Energy Provisions Energy Policy Act of 2005Energy Policy Act of 2005
Mandates DOE biodiesel testing program with diesel Mandates DOE biodiesel testing program with diesel engine makers and biodiesel producers to study the engine makers and biodiesel producers to study the impact of biodiesel on operation of diesel engines and impact of biodiesel on operation of diesel engines and engine emissionsengine emissions
Requires Departments of Commerce, Interior, and Requires Departments of Commerce, Interior, and Agriculture to use energy efficient vehicles, including Agriculture to use energy efficient vehicles, including alternative fuels. alternative fuels.
Establishes an Advanced Biofuels Technologies Establishes an Advanced Biofuels Technologies ProgramProgram– To develop value-added bioproducts (e.g. fertilizers, herbicides, To develop value-added bioproducts (e.g. fertilizers, herbicides,
and pesticides) from the production of biodiesel. and pesticides) from the production of biodiesel.
Senator Ken SalazarCOLORADO RENEWABLE ENERGY SUMMIT
JANUARY 11, 2006King Center
Community College of Denver
To increase understanding of the role of energy in America’s national security and economic prosperity.
To provide information regarding renewable energy research, development and production.
To discuss the next steps for renewable energy in Colorado and the Nation.
Energy Solutions are Enormously Challenging
Energy Solutions are Enormously Challenging
We need a balanced portfolio of optionsWe need a balanced portfolio of options
Energy security• Secure supply• Reliability
Energy security• Secure supply• Reliability
Economic productivity• Growth in demand• Price volatility
Economic productivity• Growth in demand• Price volatility
Environmental impact• Land and water use• Emissions
Environmental impact• Land and water use• Emissions
UncertaintyUncertaintyand riskand risk
www.seia.org
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Europe
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U.S.
U.S. Market Share
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Source for market data: Paul Maycock, PV News, Volume 24, No. 3 March 2005
PV Shipments and Market Share
BIODIESEL MARKET SIZE (B100)
0100200300400500600700800900
1,000
2003 2004 2005 2006
U.S.
EU
Mill
ion
Gal
lons
Ethanol Production Has Positive Ethanol Production Has Positive National, State and Local National, State and Local
Economic BenefitsEconomic Benefits
In 2004 the ethanol industry:
Supported the creation of more than 147,000 jobs. Added $1.3 billion to federal tax revenues. Increased tax revenue for local governments by
$1.2 billion. Reduced farm program costs by $3.2 billion due to
increased value of commodities. Lowered fuel costs for consumers.
Faster growth than conventional energy...
RenewablesCoal Oil HydroGas Nuclear
1990-2000growth (%
pa)
-2
0
2
4
6
8
10
Increasing Renewables in the Energy Mix
Technologies
Policies Markets
ReducingRisk
ReducingRisk
CapitalMobilization
CapitalMobilization
Ethanol Production
0
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2
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2002 2004 2006 2008 2010 2012
Cellulosic Ethanol
Conventional Ethanol
RFS
• Renewable Fuels Standard mandates 7.5 billion gallons by 2012
• Total US gasoline market ~140 billion annual gallons
Actual and Projected U.S. Ethanol Production 2002-2012Billion Gallons of Production
U.S. Biodiesel Production
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Total US distillate fuels market is approximately 60 billion gallons per year
2005Estimate
2006Forecast
Based on ORNL & USDA Resource Assessment Study by Perlach et.al. (April 2005) http://www.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf
The 1.3 Billion Ton Biomass ScenarioBillion Barrel of Oil Equivalents
The emissions challenge
21%
41%38%
22%
44%
34%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Transport Power Heat Transport Power Heat
Overall Capacity• Power capacity up 48% to
5800GW
Fossil Fuels• Gas increases 87% • Coal increases 43% • Oil increases 12%
Low-Carbon• Nuclear stays flat • Hydro increases 29%• Renewables increase 234%
2004 2020
CO2 Emissions By Sector
2020 Scenario
Source: IEA World Energy Outlook, 2004 Source: IEA World Energy Outlook, 2004
CENTRAL HIGH PLAINS ECONOMIC OPPORTUNITY
5.6 Million Acres Potential ForBiodiesel Energy Crops (W. Wheat)
220 Million Gallons B100 Annually
$3.5 Billion Regional New Income
19,000 Regional Net New Jobs
Renewable Energy: A Potential Engine for Economic Growth in Colorado
• Plentiful resources
• NREL and university R&D centers
• Targeted industry for economic development
VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY ACT“Set America Free Act”
S. 2025Introduced November 16, 2005
VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY ACT
“Set America Free Act”S. 2025
Introduced November 16, 2005
“Set America Free Act”S. 2025
Sponsors: Senator Salazar (D–CO), Senator Bayh (D–IN),
Senator Brownback (R-KS), Senator Coleman (R–MN), Senator Graham (R-SC), Senator Isakson (R-GA),
Senator Lieberman (D- CT), Senator Lugar (R–IN), Senator Nelson (D-FL), Senator Obama (D – IL), Senator Sessions (R-AL)
Set America Free Act presents an action plan to save:
2.5 million barrels per day by 2016
7 million barrels per day by 2026
10 million barrels per day by 2031
“Set America Free Act”S. 2025
By 2012, 10 percent of each auto manufacturer’s fleet must include technology that will result in a 25 percent increase in fuel efficiency over and above CAFÉ standards.
Acceptable technologies include flexible fuel, clean diesel and electric or hybrid engines.
The percentage of the fleet required to have these technologies will increase by 10 percent annually until it reaches 50 percent in 2017.
S. 2025 includes specific methods for achieving these goals:
Retooling tax credits for manufacturers and suppliers of advanced diesels and hybrids.Tire efficiency program for tires used on light duty vehicles.Efficiency standards for heavy duty vehicles (trucks, buses, etc).Lifts the per manufacturer cap on consumer tax credits for the purchase of hybrids and advanced diesels.
Allows hybrids to qualify under the Energy Policy Act of 2005 alternative fuels fleet requirements.Provides a tax credit for large private fleets for purchasing more efficient vehicles for their fleets.Creates an R&D program for electric drive transportation and light-weight materials.Closes the SUV tax loophole, which provides perverse incentives to small businesses to purchase SUVs over other vehicles. (This section is taken verbatim from Senator Salazar’s Reduce Incentives to Guzzler Gas bill, S. 1852)
Sen. Salazar’s Recommendations Sen. Salazar’s Recommendations For Federal ActionFor Federal Action
1.1. Set an Energy Independence Target of Set an Energy Independence Target of 25x2525x25
2.2. Provide full funding for NRELProvide full funding for NREL
3.3. Extend Production Tax Credits for Extend Production Tax Credits for renewables through 2012renewables through 2012
4.4. Increase use of flex-fuel vehiclesIncrease use of flex-fuel vehicles
5.5. Expand transmission for electric power Expand transmission for electric power from renewable resourcesfrom renewable resources
Sen. Salazar’s Recommendations Sen. Salazar’s Recommendations For Federal ActionFor Federal Action
6.6. Accelerate R&D to produce hydrogen with Accelerate R&D to produce hydrogen with renewable energyrenewable energy
7.7. Support small, locally and community Support small, locally and community owned renewable energy projectsowned renewable energy projects
8.8. Help REAs increase use of renewablesHelp REAs increase use of renewables
9.9. Increase funding for clean coal R&DIncrease funding for clean coal R&D
10.10. Promote safe, secure nuclear energy, Promote safe, secure nuclear energy, including permanent waste storageincluding permanent waste storage
Colorado Bar AssociationColorado Bar Association
Environmental Law SectionEnvironmental Law Section February 22, 2006February 22, 2006
David HillerDavid HillerState Issues Counsel forState Issues Counsel for
U.S. Senator Ken SalazarU.S. Senator Ken Salazarwww.Salazar.Senate.Govwww.Salazar.Senate.Gov