Reid vows to hold vote on renewable tax credits, calls for LNG tax reform

Source: Debra Kahn, E&E reporter • Posted: Friday, September 5, 2014

LAS VEGAS — Senate Majority Leader Harry Reid (D-Nev.) today said he would bring tax extenders for renewable energy to the Senate floor this year, lambasting Republicans for their opposition earlier in the year.

Tax credits for wind energy, biomass, energy efficiency and other energy sources are among a package of about 50 credits and other incentives that expired in January or are set to lapse at year’s end.

“Earlier this year, Senate Republicans filibustered legislation that would have extended these renewable tax credits,” he said at the National Clean Energy Summit, a one-day conference in Las Vegas. “I’ll bring them to the floor before the end of this year for a vote.”

The renewable tax credits are included in a broader “tax extenders” package that is expected to be taken up in the lame-duck session. Of the 50 or so credits in the overall package, about a dozen target renewable energy, efficiency, biofuels and related areas. The most important among them is the production tax credit (PTC), which subsidizes wind, biomass and a few other renewable energy sources. Getting another extension remains a top priority, especially for the wind industry and its allies on the Hill, but conservative groups have ramped up opposition to the clean energy credits in recent years, and renewal is by no means a sure thing.

Reid tried to bring the extenders bill to the floor earlier this summer, but Republicans filibustered it to protest his refusal to allow votes on their amendments (E&E Daily, May 16).

The renewable credits have encountered particular resistance in the House, where a tax reform proposal rolled out earlier this session by Ways and Means Chairman Dave Camp (R-Mich.) would have eliminated the PTC and pared back its value for some current recipients.

But negotiations between the two chambers over tax extenders are not expected to begin in earnest until after the election. Several other credits in the Senate extenders bill are important to Republicans, so clean energy boosters hope they will wind up riding along with the whole package.

Reid also criticized billionaire conservative backers Charles and David Koch without mentioning them by name.

“We must repel the negative forces that seek to undermine the support for clean energy,” he said. “I think each of you know who I’m talking about. These negative forces are spending hundreds of millions of dollars to promote their personal empire.”

Separately, Reid also called for tax reform to lessen the disparity between taxes on liquefied natural gas and diesel. Since LNG and diesel are both taxed according to their volume, but LNG is less energy-dense, LNG’s tax is effectively higher, discouraging a switch from diesel.

“This issue of dealing with natural gas is not a partisan issue,” Reid said. “We’ve offered amendments that passed the Senate. … It’s so important to do this. We need a bridge to renewable energy.” The LNG-diesel issue is not addressed in tax extenders, although Senate Finance Chairman Ron Wyden (D-Ore.) has said fixing the disparity between how the two fuels are taxed is a top priority.

“The tax code isn’t helping,” said Myron Gray, UPS’s president of U.S. operations. He said the tax disparity amounted to a difference of $65,000 over the life of a tractor.

$105M USDA loan guarantee for advanced biofuels plant

Reid and Agriculture Secretary Tom Vilsack also announced a $105 million loan guarantee for a proposed waste-to-energy plant in Nevada.

The Fulcrum BioEnergy Inc. plant 20 miles east of Reno, Nev., is intended to convert municipal garbage to diesel and jet fuel. It will initially focus on aviation fuel, company officials said.

“It’s helping to reduce greenhouse gas emissions and helping us reduce our dependence not just on foreign oil, but oil generally,” Vilsack said.

Reid first announced the loan guarantee from USDA’s Biorefinery Assistance Program in 2012 (E&ENews PM, Aug. 6, 2012). At the time, company executives said they would start construction in early 2013 and begin commercial production 18 months after that.

Fulcrum CEO Jim Macias said construction should now begin later this year and take two years at a cost of $200 million.