Washington’s Fireworks: More Distraction than Democracy

As a slew of tax incentives approach final sunset, new solutions are needed on Capitol Hill
By Michael McAdams | July 25, 2011

The crackling and colorful fireworks in Washington went well beyond this year’s Independence Day celebration on Capitol Hill and are proving to be more of a distraction to our nation’s progress, especially when it comes to transforming the energy policy of the United States to one of renewable, clean technologies like those of advanced biofuels. The political back and forth and uncertain future of public policies and regulations are leaving our country vulnerable to the steady progress of other nations and competitors like China.

A recent Pew Environment Group report, Who’s Winning the Clean Energy Race?, found clean energy investments in China reached $34.6 billion last year, more than any other country, almost doubling the U.S. investment of $18.6 billion. Now that’s something worth shooting off rhetorical fireworks in Washington rather than the political jabs we’re certain to see more of leading into a presidential election year.

Last month, members of the Advanced Biofuels Association met on Capitol Hill and were fortunate to get a glimpse of the thoughtful leadership our nation needs to fortify our technology and economic defenses against the Chinese and others. But even with the encouraging discussions we had with leaders and the pragmatic solutions offered, the domestic advanced biofuels industry still faces a near-term future of diminished policy support from Washington.

While lawmakers look at every program to slice and dice for cost savings, one of the most promising economic engines, the domestic biofuels industry, could be in desperate need of a tune-up by the end of the year as numerous tax policies and incentives are set to expire along with a downward trend of policy support. You had better have a seat, because here is what I’m talking about:

• The renewable diesel credit it set to expire Dec. 31.
• The biodiesel credit is set to expire Dec. 31.
• The alternative fuels mixture credit is set to expire Dec. 31.
• The advanced alcohol tax credits as part of the VEETC are set to expire Dec. 31.
• In another year, the cellulosic biofuels production tax credit will expire on Dec. 31, 2012.

In other policy developments in Washington’s questionable support of our burgeoning industry, the House of Representatives recently passed legislation in support of a coal-to-liquids program, and there is a lack of funding for the reverse auction at the U.S. DOE, as well as a reduction in funding for the Biomass Program, Integrated Biorefining and ARPA-E at DOE.

The verdict is still out on the fate of the Biomass Crop Assistance Program, which reduces risk for producers who volunteer to grow new energy crops, and should be reauthorized in the next Farm Bill.

The decisions Congress makes today on renewable energy will undoubtedly guide our nation for generations. Yesterday’s answers simply will not fit the new equation of the future. Now is the time for Washington to consider smarter investments based on performance, for example, not a lifetime of subsidized assistance.

Our transition to clean, renewable energy alternatives is well under way but our sluggish economic circumstances demand short-term and consistent policies that will encourage market certainty and ultimately accelerate the commercial deployment of advanced and cellulosic biofuels. So it is essential that Washington explore a new set of solutions for its next steps in renewable energy policy, one that provides short-term certainty, strengthens our economic security and puts folks back to work.

A new Gallup poll shows that Americans’ satisfaction with the direction the United States is going hit a two-year low in July, dropping from 20 percent in June to just 16 percent last month. Now is not the time for the distraction of political fireworks. Bold leadership is needed to capitalize on the American ingenuity that will help drive a global revolution in clean energy using advanced biofuels technologies. The burden is on our industry to take a step back from the politics and come together to strategically reassess the appropriate role the federal government should play in supporting and further developing the advanced and cellulosic companies in the United States.

Author: Michael McAdams
President, Advanced Biofuels Association
(202) 469-5140