Expand Renewable Energy Use

Naturally renewable energy sources such as solar, wind, geothermal, and hydro are basically free, beyond the initial capital investment and some relatively small on-going operations and maintenance costs.  As such, we should exploit them to the maximum extent possible, wherever it makes sense.  Currently, natural renewables generate a little over 10% of the total electricity produced, with hydro at just over 9% and wind at just over 1%; geothermal lags at just .3% and solar is very disappointing at .04%.

Biologically renewable energy and fuel sources must also be exploited to the maximum extent possible; as long as they are sustainable, cost effective, and do not use or displace food crops to provide the feedstock.  We will produce about 9 billion gallons of ethanol this year with a mandate to rise to 36 billion gallons in 2022 and we produce about 500 million gallons of biodiesel annually.  We currently use about 385 million gallons of gasoline and about 175 million gallons of diesel each day.

Our objective with naturally renewable energy sources is to maximize their use wherever it is economically feasible and environmentally sound to do so and to at least double or triple the total energy produced from those sources in the next 5 - 10 years.

Our objective with biological renewables is to maximize their use such that we produce at least 10% of our total gasoline and diesel requirements from renewable sources using biowaste and non-food biomass products as feedstock in the next 10 years.  In order to achieve these objectives the following actions are required:

Extend the investment and production tax credits for renewable energy
The tax credits for investing in and producing electricity from renewable sources seem to be working well for commercial power generation, especially wind systems, and should be extended for at least 2 more years.  Less obtrusive, more efficient, and much more bird/bat friendly vertical axis wind technology should be given larger production tax credits than conventional wind turbines.  The full tax credits should also be applied to commercial power generated from incremental hydro, landfill and solid waste systems, as well as most if not all biomass systems.  Incentives, such as loan guarantees, should be provided to build the infrastructure necessary to efficiently integrate the electricity generated from renewable sources into the power grid.

Expand residential tax credits for renewable energy
Currently there is a tax credit for purchasing and installing a solar heating/electric system or a fuel cell system in a residence that expires at the end of this year.  It should be extended for several more years, the credit should also be extended to businesses, and it should be expanded to include other types of renewable energy production such as micro-hydro and micro-wind systems.  A feed-in tariff system requiring utility companies to purchase any excess electricity generated from renewable sources at above market rates is also necessary.  Utilities should be allowed to sell that renewable capacity at higher rates to consumers who wish to purchase "green" electricity.

Encourage significant expansion of hydro energy production
Hydro power generation has many advantages over wind and solar and it is estimated that we have only tapped about 12% of the total hydro power available, which is not encumbered by environmental or legal restrictions, and that power comes almost exclusively from large scale dam projects.  Smaller scale mini and micro hydro projects that serve a neighborhood, small community, or even a larger area, and that do not require a reservoir or impact the natural flow of the water, should be very strongly encouraged with feed-in tariffs, production tax credits, investment tax credits, grants, and loans or loan guarantees as appropriate.  Waterways with existing dams that do not currently have power generating equipment installed or those that could increase capacity should be included in the incentives.  Easements or other permission that allows state and local governments access to and use of federally owned bridges and other waterway infrastructure in order to attach waterwheels and/or turbines should also be provided.

Encourage significant expansion of geothermal energy production
Strongly encourage the building of as many new commercial geothermal power plants and the expansion of capacity at existing plants as is practical with loan guarantees or other incentives as appropriate.  Residential and business use of geothermal for HVAC and hot water should also be strongly encouraged by at least doubling the current tax credit.

Replace ethanol mandates with sustainable biogas and syngas mandates
Corn-based ethanol mandates have been less than successful and any new mandates must require the use of biowaste and sustainable, non-food biomass sources.  The new mandates should specify production levels of biogas and synthesis gas or syngas, both of which can be used directly as fuel, further processed into usable gaseous fuels such as methane and hydrogen, processed into synthetic liquid fuels such as butanol, methanol, and ethanol, or used as building blocks for other chemical processes.  Our focus should be to encourage the production of as much biogas and syngas as possible and let the market decide how much of what to produce from them.  Techniques used to convert biomass and biowaste directly into oil (e.g. thermal depolymerization) should be given the same treatment and incentives as biogas and syngas production.  Existing ethanol production facilities can be easily adapted to produce or use feedstock flexible biogas and/or syngas as well as producing various end products based on demand with, at most, minor incentives.

Encourage significant expansion of biodiesel production
Biodiesel can be produced using waste oils, fats, animal products, or any oil producing plants and about 80% of the cost of producing biodiesel comes from the price of the feedstock.  Soybean oil accounts for over 75% of U.S. biodiesel production and the current price of soybeans no longer make it economically viable even with crude oil prices over $140 and subsidies approaching $2/gallon.  In order to substantially increase biodiesel production, new sources of less expensive and sustainable feedstock must be developed. 

An alternative source of feedstock, oil producing algae, that does not compete with food crops in any way and can produce 5,000 - 15,000 gallons of oil per acre per year, was the subject of a nearly 20 year long Department of Energy research program that ended in 1998.  The research indicated that using algae as a feedstock to produce biodiesel would be commercially viable with crude oil prices above about $20 - $30/barrel.  We should strongly encourage the rapid development of a very large algae oil production capability with short-term subsidies, loans, loan guarantees, and any other appropriate incentives.  These incentives can be paid for by reducing some of the subsidies now applied to soybeans and other crops and eliminating the "splash and dash" subsidy.

Other high oil yielding feedstocks that are hardy, drought tolerant, and do not displace land that would otherwise be used for food production should also be strongly encouraged with appropriate short-term incentives.  Jatropha, for example, meets those requirements and is estimated to be a commercially viable feedstock to produce biodiesel with crude oil prices above about $40 - $45/barrel.

Encourage co-location of biowaste production and refining facilities
Co-locating biorefineries with major biowaste producers, such as livestock and poultry farms, slaughterhouses and meat packing plants, agriculture, forestry, and sawmills or with biowaste aggregators such as landfills and sewage treatment plants, should be strongly encouraged with accelerated depreciation and loan guarantees as appropriate.  Additional incentives may also be appropriate to encourage the construction and operation of a biorefinery within the next 3 to 5 years to quickly build capacity.  Significant additional incentives should be offered to refinery facilities that also install and operate a power plant using whatever biofuel is produced to generate electricity that is consumed on-site or sold under a feed-in tariff system.

Develop an effective biofuels logistics program
Producing the feedstock used for biofuels is only part of developing the large and vibrant biofuels industry necessary to meet our goals.  Logistics and infrastructure issues must also be addressed; collection and transport of the feedstock to a biorefinery and the storage, transportation, and delivery of intermediate products for further refinement or end use products for consumers.  Incentives, such as loan guarantees, should be provided to build the pipelines and develop the other infrastructure necessary to efficiently produce and distribute rapidly growing quantities of various biofuels.