Braley’s push to include biofuel investment in stimulus package passes first hurdle

If the economic stimulus package currently being debated in the U.S. House includes a boost for investment in biofuels when it is passed, it may be thanks in large part to Rep. Bruce Braley.

Braley worked with Rep. Tammy Baldwin (D-Wisconsin) to pass an amendment that would make biofuel projects eligible for the “Temporary Program for the Rapid Deployment of Renewable Energy and Electric Transmission Projects,” which was already written into the proposed stimulus package.

The U.S. House Energy and Commerce Committee, of which Braley is now a member, took up the proposed amendment and passed it on a voice vote Thursday afternoon, making the amendment a part of the bill that will be debated by the full U.S. House.

“The purpose of the economic stimulus package is to create jobs and boost our economy,” Braley said. “My amendment will help biofuel makers invest in the latest technologies and create jobs in Iowa. Investing in renewable energy will help grow our economy out of this crisis and reduce our dependence on foreign oil.”

The temporary program that would now include a stipulation for biofuels was modeled after the U.S. Dept. of Energy’s Loan Guarantee Program. It is designed to speed commercial adoption and use of advanced renewable energy technologies by providing low-interest, government-backed loans to companies investing in the implementation of technologies.

Prior to the Braley-Baldwin amendment, the list of technologies eligible for loan guarantees under the stimulus package did not include biofuels. As now written government officials would determine if the technologies applying for the monies would likely become commercial and produce transportation fuels “that substantially reduce lifecycle greenhouse gas emissions compared to other transportation fuels.”

The stimulus also offers good news for wind energy. As it is currently written, the stimulus would extend the Renewable Energy Production Tax Credit, which includes a wind energy tax credit, for three additional years beyond the current Jan. 1, 2010 expiration date. Braley has also introduced legislation that would further extend this tax credit for seven years.

In addition, the stimulus would also create a temporary 30 percent investment tax credit in wind energy, which companies could take in lieu of the production tax credit.

Unfortunately, hopes for renewable energy incentives within the debated stimulus package was not enough to save roughly 100 jobs at Clipper Windpower, which began production in Cedar Rapids in 2005. The plant has been used as a backdrop for many politicians, local and national, as they have discussed renewable energy and the promise of “green” jobs.

Renewable energy incentives, including Braley’s newly passed amendment, comprise roughly $6 billion in tax relief, or less than 1 percent of the estimated $865 billion economic stimulus plan. In addition to extending and expanding existing tax credits for renewable energy, the stimulus package also proposes $1.6 billion of new clean renewable energy bonds and $2.4 billion of qualified energy conservation bonds.

Sale of energy bonds would finance facilities that generate electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, marine renewable and trans combustion systems. A third of the bonds would be available to government projects, a third to public power providers and a third to electric cooperatives.

The conservation energy bonds would be used to finance government programs and incentives to reduce greenhouse gas emission.

Outside of tax incentives, the stimulus package also includes $51.85 billion (or roughly 6 percent of the total estimated $865 billion) that would be earmarked to create “green” jobs while reducing the nation’s dependency on foreign oil. Such jobs would be in a wide variety of industries, but all would be created as government and the private sector seek and implement new ways to be more energy efficient.