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Bill: ANWR Revenue to Support Development of Cellulosic Ethanol, Solar, Fuel-Cells and Coal-to-Liquids
28 July 2006
US Representative Devin Nunes (R-CA) introduced the “American-Made Energy Trust Fund” bill ( H.R. 5890). The bill’s provisions would increase the tax credits for cellulosic biomass ethanol, extend tax incentives for solar and fuel cell property, promote coal-to-liquid fuel activities, and open up ANWR (Arctic National Wildlife Refuge) for oil and gas exploration and production.
The bill would take the lease and royalty revenues from ANWR and place them in a trust fund. All monies placed in the American-Made Energy Trust Fund could only be used for the development of new alternative energy technologies. ANWR’s direct revenue to the US Treasury is estimated at $40 billion during its lifetime of production at today’s oil prices.
Specifically, the fund would implement the following provisions:
Cellulosic Ethanol Tax Credit. The cellulosic-based ethanol (CBE) credit will be $0.74/gallon on top of $.51/gallon for corn ethanol blender’s credit (VEETC) for a total of $1.25/gallon. This credit will be capped at $1.25 billion. The CBE credit will disappear at $71 a barrel.
Coal-to-Liquid Tax Credit. Extends the $0.50/gallon Coal-to-Liquid (CTL) excise tax credit from the current sunset of 2009 to 2023 and sets an overall cap of 3 billion gallons. The CTL credit would be phased out as the price per barrel of oil goes above $45 and will disappear at $70 a barrel.
Solar and Fuel-Cell Investment Tax Credits. Extends Energy Policy Act residential and business solar and fuel cell investment tax credits through 2012, with enhanced modifications to the residential solar credit ($2,000 per .5kW installed). Extends the residential and business tax credit through 2012.
Advanced Biofuel Technologies Program Funding. Provides grants to improve the commercial value of forest biomass for electric energy, useful heat, transportation fuels, and other commercial purposes (authorized at $500 million).
Integrated Biorefinery Demonstration and University Biodiesel Programs Funding. Develops programs on cellulosic biomass, biofuels, bio-based products, and integrated biorefineries, as well as biodiesel fuel for electric power generation with industry and institutions of higher education.
Improved Biomass Use Grant Program Funding. Commercial byproducts from municipal solid waste (MSW) and cellulosic biomass loan guarantee program. This will assist institutions in the construction of facilities for the processing and conversion of MSW and cellulosic biomass into fuel ethanol and other commercial byproducts.
Investment in production technology, facility construction, and capacity improvements. Provides loan guarantees for four projects to demonstrate the commercial feasibility and viability of converting cellulosic biomass or sucrose into ethanol. Furthermore, provides funding for research, development, and implementation of renewable fuel production technologies.
Commitment to Clean Energy Fund. Provides financial commitment by investing in projects that avoid, reduce, or sequester air pollutants and greenhouse gasses. This includes but is not limited to such projects as advanced fossil energy, hydrogen fuel cells, advanced nuclear energy, carbon sequestration, and energy efficiency technologies.
The bill has been referred to the Committees on Resources, Energy and Commerce, and Science.
Resources:
The American-Made Energy Freedom Act (H.R. 5890)
July 28, 2006 in Cellulosic ethanol, Coal-to-Liquids (CTL), Fuel Cells, Policy, Solar | Permalink | Comments (61) | TrackBack (1)
Comments
Posted by: Majeasy | July 28, 2006 at 08:11 PM
No.
Posted by: Joseph Willemssen | July 28, 2006 at 08:30 PM
Majeasy:
It is “oil polluter”, not “oil producer”. Just walk to the nearest parking lot of any store or mall in US/Canada and look for yourself. Then wipe a napkin over any car and take a look at this oil/dust gum. Pay attention that any minor bump or hole on the roads is visibly marked from afar by blackish drops of oil, shaken from cars. At the beginning of any rain, road surface is extremely slippery due to water/oil emulsion. Practically all windshields are coated with ugly shining glare of oily deposits, impairing vision at night, especially when you are lit from incoming car. You won’t believe what amount of oil is separated at stormwater oil separating wells, where equipped. Most of this oil is due to low-quality oil pan gaskets, universally used by most of car manufacturers, but other gaskets add to this amount too. This problem is practically unheard in Europe.
Posted by: Andrey | July 28, 2006 at 09:55 PM
Increase CAFE standards to 40 MPG, and implement a heavy fuel tax with rebates for low-income people and drivers of efficient cars.
Subject all non-commercal vehicles with mileage below 20 MPG to an additional heavy consumption and carbon tax.
No additional oil-drilling would even be needed if this were done. And Americans would adapt to the new reality in a heartbeat.
Political suicide for whoever backs such a program, though.
Posted by: BlackSun | July 28, 2006 at 11:04 PM
Angelo said the public won't revert to ignorance. Who said they had already reverted away from igorance?
While there are environmental arguments for not drilling in ANWR, that wasn't my argument. If you are running out of a domestic resource, you don't stop running out by redoubling your efforts. The U.S. peaked in 1970 and has been going downhill since then. ANWR won't change that. If we are going to use oil, let's drain Saudi Arabia first since they are apparently imprudent enought for that to happen. The Kuwaitis, on the other hand, are apparently waking up to the fact that their oil is a finite resource and may soon begin to restrict output in accordance with that reality.
As for as oil leaks go,there is a big difference between oil leaks from oil pans dispersed over thousands of square miles and oil leaks concentrated in a small, environmentally sensitive place. If you were to dump a couple of millions of gallons of oil on my mountain property, I would hardly be consoled by the fact that this quanity is being dispersed all over America.
We can make a planned, orderly transition now that truly does something significant in the conservation area or we can use the sledge hammer approach and wait for the downward curve in oil production. Regardless, we need to think of ANWR as a possible reserve in the future for critical things like pharmaceuticals and other critical non fuel uses.
The push to ANWR is a diversionary tactic to make people feel like we can continue our addiction indefinitely, that all we need to do is drill more. Let's spend the next ten years doing something truly significant to cure our long term addiction, not wasting it by pursuing ultimately futile attempts to solve our problems with more supply.
If the increase in prices have lit such a fire upon people, why has our consumption increased by over 1% in the last year.
ANWR wouldn't come online for years. What do we do in the mean time? From what I see, take our SUVs on vacation to my mountain area in Colorado.
Posted by: t | July 29, 2006 at 07:29 AM
_t_,
i owe you one....
you changed the mind of one short sighted person, me
also, my wife was wrong....i can learn new tricks...
Posted by: Majeasy | July 29, 2006 at 08:19 AM
Andrey: "bird shot in elephant ass" ... that's funny
I find myself torn between a desire for Oil to run out so that we can get on with moving on to sustainable sources of energy and a fear of the pain of change. I think this legislation is a reflection of this conflict in the general population and legistlators in particular.
Posted by: Neil | July 29, 2006 at 08:39 AM
The ANWR issue is not about getting oil. It is the first step in eliminating all wildlife reserves. Just west of ANWR is the Naval Petroleum Reserve which doesn't have a single well. The question we should be asking Congress is not why ANWR but why not the Naval Petroleum Reserve? Could it be that they created a petroleum reserve that has no petroleum?
Posted by: tom deplume | July 29, 2006 at 09:26 AM
In the cost-benefit analysis of ANWR the thing I keep coming back to is the real benefit to the US public, which is proportionately small, and the benefit to the oil companies that keep pushing and pushing and pushing on this issue like Chinese H2O torture.
It has been pointed out so many times that at current consumption ANWR holds a few months of oil. This is a principle issue. The US Government is doing little to incentivize real efficiency and spending all its time crafting new riders to please its friends in big oil.
This trade they are proposing is transparently cynical in its attempts to appease environmentalists and energy security hawks, and I would suggest at the end of the day CTL and the dirtier, old-school technologies are going to get the lions share of funding while solar and biofuels are again left out in the cold.
Want oil from ANWR? Start with a $1/gal tax on gas, call it the Patriot Tax. Then take that money and put it into alt fuel and energy development (and gas subsidies for working poor people in real need). Time for US Consumers to wake up and stop looking for someone to drill for them to support their SUV and wanton driving addictions.
If we still need the oil desperately after that's been in place for a year or two, then we look at a plan that is actually fair (spreads out the oil wealth between companies, government, and trust fund with transparency) and low-impact as a last resort.
Posted by: Lance Funston | July 29, 2006 at 11:43 AM
Why do we need new legislation. Keep the oil in the ground, let the prices rise, and there will be incentive for conservation and private industry to develop alternatives. Just as oil is a fungible, so are dollars, and I don't trust this trust fund to be spent for what it was intended any more than Social Security.
I tend to agree that this is simply a ploy to roll back enviromental protections. The two issues that conservatives keep pushing that make no sense to me are ANWAR and eliminating the Inheritance Tax. Neither has any real economic benefit, and neither has a visible constituency supporting them.
Posted by: JM | July 29, 2006 at 12:59 PM
I have one idea for two car families. Leave the SUV in the garage and use the higher milage car for most things. Just that behavior change multiplied by millions of families will save more than ANWR and ethanol combined.
Posted by: sjc | July 29, 2006 at 10:51 PM
History of the Naval Petroleum Reserves:
http://www.fe.doe.gov/programs/reserves/npr/npr-90years.html
NPR Number 4, now called NPR Alaska, was created in 1923, explored through 1970s.
The NPR Production act of 1976 authorized exploration but not production at NPR Alaska.
Areas were leased, no production allowed, leases expired. Pressure continues to allow it. Interest is in areas adjacent to Prudhoe Bay.
http://www2.hawaii.edu/~fukuyama/Oil_Exploration_North_Slope.html
Posted by: Ron Fischer | July 29, 2006 at 11:29 PM
Uugh,
Besides all the great points that have been made before, let's think about the revenue that would actually be generated. $40 billion over the LIFE of the reserve? What a pittiance, and how long would it take before any of that cash would work its way to actually generating research into alternative fuels? More likely then not the oil companies would find a way to hijack the money anyway.
Look, doubling the federal tax on gas/gallon to 36.6 cents/gallon would generate approximately $20 billion PER YEAR in revenue that could IMEDIATELY be used to fund an Apollo Project sized alternative energy and conservation endeavor that could radically change how we power our civilization if we implement it correctly.
The representatives proposal is an excelent bait and switch scheme - I don't think many of us are slow enough to fall for it. And by US I mean the overwhelming majority of the nation.
Peace,
Cosmo
Posted by: Cosmo | July 30, 2006 at 05:51 AM
Why couldn't we do this AND increase the federal tax? Increasing supply while decreasing demand is a win-win for consumers.
Posted by: Angelo | July 30, 2006 at 08:08 AM
On the topic of increasing the federal tax on gasoline, how difficult would it be to implement this only for all non-commercial uses? Maybe some sort of tax rebate on the increase that commercial users could recoup when filing taxes every year? We wouldn't want to drive up the costs on everything and spur inflation by increasing this tax across the board. I don't think commercial users need any more incentive to minimize their consumption of petroleum these days. They are always looking at the bottom line. Non-commercial users tend to be driven by something else....
Posted by: Angelo | July 30, 2006 at 08:14 AM
Think about the time lag. ANWR is said not to produce oil for 10 years after you begin. Royalties would not be paid until 10 years from now and even then not much. That would set renewables back 10 years. If you want to fund $20B now for renewables paid back by ANWR, maybe...read the fine print first.
Posted by: sjc | July 30, 2006 at 03:38 PM
That last point was a very good one....I agree, this would be much better if the deal was a lump sum that could be invested in research right now, with the royalties being used to pay down this "loan". Not a bad idea. Well, get it in the bill!
Posted by: Angelo | July 30, 2006 at 03:46 PM
"As long as this bill clearly earmarks these revenues for both shorter term and longer term alternatives, it's in our best interest. Environmentally and economically."
Yes even today, there is a fool born every minute. How can drilling in ANWR be in our environmental best interest?
Sad you represent the majority..
Posted by: FYI co2 | July 30, 2006 at 04:11 PM
"Yes even today, there is a fool born every minute. How can drilling in ANWR be in our environmental best interest?"
You have to look at the bigger picture. If this is a compromise that will pass through Congress and help fund investments in things such as cellulose ethanol, other types of biomass, solar, and fuel cells (I'm not a proponent of using them in transportation, by the way), then yes, I believe it will ultimately lessen our negative impact on the environment over the long run.
What would you suggest we do? I'm sure you have a thousand bright ideas like so many other self-proclaimed "environmentalists" that have little to no chance of getting off the ground floor over the short-term. The only way some of these ideas will get rolling is to compromise and find economically responsible solutions. I didn't want drilling in ANWR any more than anyone else, but we've dug a pretty big hole for ourselves. Additionally, there are so many more significant environmental issues that we need to concern ourselves with.
Yes even today, there is an ignorant, short-sighted jackass born every minute. Watch who you are calling a fool.
Posted by: Angelo | July 30, 2006 at 06:53 PM
Of course I was referring to US Representative Devin Nunes (R-CA) fool.
BTW ANWR is not a short term fix 10-20 years for 2% of our current consumption. And if you want to believe the oil co.s are going to do a clean job of it, look at what they did with drilling in our Gulf, occupation of Iraq and the Exxon Valdez!
Look at the big picture, it's called politics and may the oil lobby prevail now & suckers get a promise for later, duh.
People in the US must learn to conserve/sacrifice and not continue to rape the environment all around the world.
Posted by: FYI co2 | July 30, 2006 at 07:12 PM
I've been questioning the idea for a while now that producing oil in ANWR is going to be some kind of environmental disaster.
Much like Andrey said up above...if oil production is so inherently damaging, why don't we see more evidence of it? In Alaska, for example...why don't we see images of the devastation caused by existing production on the North Slope? My guess is that it's because no such devastation exists, thus the environmental extremists have to resort to fearmongering.
More personally, much of my family is in Oklahoma. They started producing oil there in 1905, well before the idea of environmental controls arose, and they've produced billions of barrels since then. And yet...Oklahoma is lush, green, and fertile.
Most of the other objections to ANWR are silly, too. Production is only going to be about 2% of consumption? That's true of any field, as is the "there's only six months' oil there!" line. No one field is going to produce all we need.
The important thing is that we reduce overseas dependence. Even though we can't eliminate it, the smaller our level of imports are, the less damage there will be from a supply disruption.
Of course, we still have to deal with the demand side of the equation. But focusing *only* on demand is every bit as foolish as focusing only on supply. From a national security perspective, we have to do both.
Posted by: Matthew | July 31, 2006 at 06:09 AM
From my perspective, the main reason we should not drill ANWAR is because a major paradigm shift needs to occur relative to our energy economy. So let us say we drill ANWAR. Does anyone really think that that is the end of it? That the fossil fuel industry will stop at that point and never need to drill in any other environmentally sensitive locations? The president already passed a bill to allow drilling in a National Park (monument? I'll double check) while everyone was distracted paying attention to ANWAR.
The point is, we need to morph from an energy intense society to a more conservation based one, and drilling every patch in the ground with at least some potential oil is perpetuating the same mentallity that has gotten in the mess we are in now.
Furthermore, from an energy security point of view, I think we should hold onto every reserve we've got for as long as possible. Peak oil is here folks, and the Kuwaiti's already have reassesed their estimated reserved to approximately half the previously assessed value. It wouldn't shock me that other "semi-corrupt" regemes throughout the world have over estimated their reserves as well. It make great goepolitical sense to maintain our potential reserves as long as possible. When the rest of the world is starving for oil, it would be great to know that in an emergency, we have a fall back position.
Anyway, if I were a congressman, I would be willing to drill ANWAR if and ONLY if it were acompianied by a bill that made dramatic changes in research an funding of alternative fuels, increased CAFE standards, helped consumers afford more energy efficient technologies, ala tax breaks etc, etc, etc. This bill would really have to be the first step in transforming our nation. I just do not see that bill in that light.
For those of you who think that drilling ANWAR is not so bad, I hope I have put forth a reasonable argument to that point of view.
Peace,
Cosmo
Posted by: Cosmo | July 31, 2006 at 07:21 AM
"And yet...Oklahoma is lush, green, and fertile."
Maybe take a closer look under your lush, green and fertile-dustbowl?.
http://www.odl.state.ok.us/usinfo/maps/dustbowl/index.htm
In March 2000 Koch Ind. was subject to the largest civil fine ever imposed under US federal environmental law. They were responsible for more than 300 oil spills in 6 states, primarily OK, TX and KS. I've driven thru Oklahoma, and while there are some nice spots, I just don't think it's a pristine ecosystem vis-a-vis the ANWR.
We can get significant funds for alt. energy now by asking oil companies to pay for their (ab)use of our public lands and adding a $.50/gal gas tax- of course this would require some politicians with a spine to implement...
Posted by: fyi CO2 | July 31, 2006 at 07:52 AM
Bonds are good vehicles for advance funding. Issue a renewables bond and pay it back with revenues from ANWR. This would fund renewables today. We may need to have cellulose ethanol in full production in 10 years, not just getting it started in 10 years.
Posted by: sjc | July 31, 2006 at 08:11 AM
FYI - The dust bowl was caused by drought. The act of drilling and extracting oil does not cause droughts.
And sure, there are going to be oil spills anywhere you produce oil - that's a given. But the idea that oil production is a precursor to environmental devastation just doesn't jibe with reality.
Posted by: Matthew | July 31, 2006 at 08:35 AM
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did i read this right?
The biggest oil producer in Canada (way bigger then everything else combined) is leaking oil pan gaskets....
LOL