Congressional Support for Farm Energy Programs Will Boost Rural America

Much attention has been focused in recent weeks on Farm Bill Energy Title programs – federal initiatives that offer farmers and rural businesses the opportunity to contribute to this nation’s energy strategy and add to their bottom line.

But the future of these programs is uncertain as they are no longer a funding priority among lawmakers who cite lean budgetary times and who have been set on slashing nonmilitary spending across the board. What policy makers in Washington always seem to forget is that these programs generate revenues in parts of rural America that have been in a steady economic decline for at least four years.

Despite our concerns, the 25x’25 Alliance recognizes that lawmakers have the challenge of trying to do more with less. The latest House and Senate budget resolutions and appropriations bills have made it clear that numerous agricultural programs, especially those within the Energy Title, are targeted for deep cuts, or outright elimination.

But the Alliance also recognizes the need to maintain a strong rural economy that supports a diverse energy portfolio. And in comments submitted last week to the Senate Energy, Nutrition and Forestry Committee, we warn lawmakers that regardless of their efforts to reduce the federal deficit, they should not sacrifice critical national priorities that will ultimately leave the nation on a sounder economic footing in the future.

These priorities include the Farm Bill Energy Title Programs that 25x’25 has supported since their inception because they strengthen our national security, create jobs, and produce new economic opportunities and investments in rural America.

The Rural Energy for America Program (REAP) supports a wide array of agriculture-based energy efficiency and renewable energy projects through grants and loan guarantees that have positively impacted every state in America by supporting nearly 13,000 projects and leveraging more than $3 billion in private investment. The program allows farmers to save on energy bills and even become energy producers, all while creating jobs in manufacturing, installing, and maintaining renewable energy and energy efficient systems.

Last year alone, REAP provided more than $35 million to farms, ranches and rural small businesses. However, because program grants can cover no more than 25 percent of the total project costs, they also generate considerable private and outside investment in addition to the federal support. Unfortunately, the House budget would cut mandatory REAP appropriations from $50 million this year to just $1 million in FY 2018, and the Senate’s proposal would cut REAP to $7.6 million.

One example of success can be seen in how the U.S. ethanol industry – in a relatively short period of time – has dramatically increased the amount of energy we produce domestically, significantly reducing our need to import oil. To continue down this path towards energy independence, Congress must continue to support the development of cellulosic ethanol and similar advanced biofuels from corn stover, switchgrass, poplar trees and other biomass sources. Many of the programs found within the Farm Bill’s Energy Title are designed to meet this need.

The Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program that provides critical financing for commercial-scale advanced biorefineries. It reduces investor risk, provides good-paying construction and operation jobs, and broadens the feedstocks used to develop biofuels. Unfortunately, this program currently has no funding.

Similarly, the Biomass Crop Assistance Program (BCAP), which ensures that advanced biorefineries will have the biomass energy feedstocks they need by providing assistance to help farmers and foresters plant and collect next-generation, purpose-grown energy crops and other biomass key to ensuring the near-term commercialization of low-carbon advanced biofuels, biopower and bioproducts, has also been decimated over the past two appropriation cycles.

Lawmakers are also slashing funding for collaborative research efforts that support the production of biomass feedstocks, as well as research on the biofuels and biobased products they can generate – efforts that can lead to cost-saving innovations that will allow the bioenergy industry to stand on its own, without the support of federal dollars.

A fully-funded Farm Bill Energy Title represents less than 1 percent of the cost of the current Farm Bill, adopted in 2014. Yet, the economic and societal benefits it produces are beyond measure, contributing to the nation’s drive for energy independence with rural America leading the way. And yet more cuts in Energy Title programs are under consideration, even as low commodity prices and stale export markets have hurt net farm income.

In the coming months, as work to develop the 2018 Farm Bill advances, we hope that the Agriculture Committees in both houses will continue to defend and support the Energy Title programs that demonstrate an honest commitment by Congress to achieve the crucial goal of a viable and resilient rural America. These programs have proved themselves worthy of reauthorization and robust funding.

 

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25x'25 Comments Call on EPA to Advance High Octane Fuels with Ethanol

The deadline is fast approaching for submitting comments to EPA on their Reconsideration of the Final Determination of Mid-term Evaluation (MTE) of greenhouse gas (GHG) standards for model year 2022-25 cars and light trucks. The 25x’25 Alliance is offering input and recommendations that address the agency’s specific request for comments pertaining to the impact of the standards on advanced fuels technology; particularly, the potential for high-octane blends.

Over the past several years 25x’25 has been working with partners in the agriculture and auto manufacturing sectors to make the case that high-octane fuels can be delivered cost effectively through the use of ethanol. Research has shown that high-octane, low-carbon (HOLC) ethanol blends, paired with optimized engines, are among the lowest cost means of achieving compliance with fuel economy and greenhouse gas (GHG) standards for model year (MY) 2022-2025 and beyond.

The fact that EPA is even taking comments on a process that was abruptly closed in the last weeks of the Obama administration is attributable to the joint decision made in March by EPA Administrator Scott Pruitt and the National Highway Traffic Safety Administration (NHTSA) to reconsider the standards previously established for MY2022-2025 light-duty vehicles, and to set them back on the previously agreed-to schedule that coincides with NHTSA’s rulemaking due April 1, 2018.

For the first time in the MTE process, EPA has recognized the importance of considering fuels and engines as a system, and has explicitly invited comment on the role that fuel properties, especially octane rating, can play in facilitating compliance with the long-term fuel economy and GHG emissions standards.

It is important to note that EPA and DOE have continuously endorsed the utility of higher-octane fuels in achieving more efficient performance of the nation’s new car fleet, which will continue to use gasoline in large volumes to power internal combustion engines for many decades to come. Furthermore, the endorsement of the federal agencies is supported by a 2011 recommendation from the Alliance of Automobile Manufacturers to increase the minimum gasoline octane rating, commensurate with an increase in ethanol use, to help achieve future requirements for the reduction of GHG emissions.

High-octane gasoline, available for general use, could be used by automakers to support increased introduction of higher efficiency internal combustion power trains that can better address increasingly stringent fuel economy and emissions performance standards within the next few years. As performance standards are considered beyond model year 2025, high-octane fuel will be even more critical for supporting the deployment of compliant systems. It should also be noted that current “premium” fuel is not a viable solution for automakers because the octane rating is not high enough and the retail fuel price is cost-prohibitive to consumers. Ethanol provides the most cost-effective source of higher-octane that can be made widely available to markets across the country by 2025 though the use of existing and expanding distribution infrastructure.

By identifying the need to increase the octane rating of regular gasoline, EPA would open up competition in the marketplace, and allow ethanol producers and feedstock providers, like American corn growers, the opportunity to supply lower cost and cleaner octane. Additionally, increasing octane requirements would provide automobile manufacturers with near-term technology options they can utilize to achieve reduction in GHG emissions, improve fuel economy of the nation’s light duty fleet, lower fuel costs to consumers, and support sustainable job growth throughout the United States.

25x’25’s specific recommendations in response to EPA’s request for comments include:

  • Harmonize EPA’s GHG and NHTSA’s fuel economy standards to achieve the same net regulatory effect.
  • Establish a minimum octane level of 98 RON.
  • EPA’s own technical modeling done in their Technical Assessment Report (TAR) utilized the benefits of high-octane fuels, such as having an “R-Factor” of 1.0 and using a 93 AKI (98 RON) fuel instead of an 87 AKI (91 RON) fuel. Additionally, EPA should correct its fuel economy equation (“R-factor”) to accurately certify vehicles running on ethanol blends.
  • EPA should change the current Tier 3 fuel regulation to focus on the utility of octane rather than the specific use of the term “premium” fuel; thereby changing all references in the Tier 3 Preamble to “high-octane” fuel instead of “premium” fuel.
  • Approve an alternative certification fuel with 25 percent ethanol and a minimum octane rating of 98 RON.
  • Correct the outdated “MOVES2014” model used in calculating GHG emissions from ethanol.
  • Allow Reid vapor pressure (RVP) relief to E15 and higher ethanol blends.
  • Update the lifecycle analysis of corn ethanol.

Unfortunately, the encouragement offered by EPA’s reconsideration of GHG and fuel efficiency standards is tempered significantly by the agency’s notice of data availability (NODA) that was released this week and suggests further reductions to the advanced biofuel blending requirements under the Renewable Fuel Standard (RFS) for 2018 and, for bio-based diesel in 2019. Industry stakeholders had already expressed disappointment with the agency’s proposed reductions to advanced and overall biofuel requirements when it issued its proposed RFS rule in July, and are even more opposed to the current consideration.

25x’25 encourages its clean energy partners to tell EPA that if properly designed and implemented, future GHG and fuel efficiency standards can work in tandem with programs like the RFS to reduce emissions and fossil fuel consumption. Yet, that means creating opportunities for more biofuels that can help to attain future environmental and efficiency goals, not less.

 

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National Clean Energy Week to Underscore Economic and Energy Security Benefits

Some of the nation’s leading clean energy organizations are bringing their forces together next week to observe the first annual National Clean Energy Week (NCEW), a public awareness and lobbying campaign that will focus on the economic and energy security benefits offered by the clean energy sector.

The week renews the focus on economic and energy security benefits offered by the clean energy sector. These benefits and others will be spotlighted by the industry associations, businesses, non-profits and advocates in the clean energy space who are joining to stage activities in Washington, DC, and across America.

Just a listing of some of the national organizations who comprise NCEW’s Steering Committee is impressive in its broad range and high level of commitment: Advanced Energy Economy (AEE), the American Council on Renewable Energy (ACORE), the American Wind Energy Association (AWEA), the Biomass Power Association (BPA), the Business Council for Sustainable Energy (BCSE), Citizens for Responsible Energy Solutions (CRES) Forum, Clean Energy Business Network (CEBN), the Energy Storage Association (ESA), the National Hydropower Association (NHA) and the Solar Energy Industries Association (SEIA).

That’s a list reflecting wind, solar, hydro, biopower, efficiency and other clean energy resources, and their pursuit of an energy future that is as void of carbon emissions as possible. And those interests aim to impress upon policy makers and elected officials next week that the readily abundant and reliable forms of clean energy across this nation are spurring job growth and driving technological innovation.

They intend to showcase how they are helping to make the industry stronger, and influence the discussion around common sense clean energy solutions that directly address America’s need for abundant, reliable forms of energy.

Specifically, NCEW forces are set to defend production and investment tax benefits granted by Congress two years ago that are set to continue through 2022. Some in the sector fear lawmakers may try to repeal those tax breaks early during tax code reform debate Congress wants to take up this year.

The trade groups are also expected to use findings from a recently released DOE grid study to reinforce the value of renewables in building and sustaining grid resiliency.

And these advocacy groups are also expected to underscore the value of their industries to the U.S. economy. As pointed out by one of the groups when next week’s observation was announced, the huge increase of renewable generation in electricity markets has made the American renewable energy industry one of the nation’s fastest growing economic sectors. New power generation represents the largest source of private sector infrastructure investment in the United States over the past six years, the groups say.

It’s a $200 billion industry, as large as the pharmaceutical manufacturing sector, and it supports 3 million workers across the country. Participants during the week will tell lawmakers that more should be done to support policies that increase investment in cost-competitive renewable and clean energy generation – to harness the nation’s abundant domestic energy resources, drive economic development and help achieve environmental objectives.

The week will highlight innovative technologies that range from solar, wind and demand response to combined heat and power, energy efficiency, energy storage – and everything in between – and are providing reliable energy solutions for the American economy, all while driving down costs for consumers.

These are groups that have come together to influence the discussion around common sense clean energy solutions that directly address America’s need for abundant, reliable forms of energy. It’s important that policy makers listen to the calls from these clean energy interests and remove barriers to innovation at the federal and state level to expand the deployment of advanced energy and bring secure, clean, reliable, affordable power to all Americans.

 

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Bills Offer First Energy Policy Advance in 10 Years; Boost to Farm Energy Programs

Legislation currently pending in Congress offers a path to the nation’s first major energy policy breakthrough in 10 years, while another measure would strengthen renewable energy and energy efficiency programs important to rural America.

On the broader scale, S. 1460, the Energy and Natural Resources Act of 2017 (ENRA) currently pending in the Senate, does not singularly promote renewable energy. But it contains provisions that could boost infrastructure, including transmission lines, that could better accommodate distributed energy resources like wind and solar power. The measure would also boost research into energy storage that can be used by grids to improve the dependability of power coming from intermittent sources like wind and solar.

And while the energy efficiency provisions offered by the bill fall short of what advocates have called for in recent years, they do boost energy savings performance contracts, weatherization assistance and state energy programs.

Authored by Sens. Lisa Murkowski (R-AK) chairman of the Energy and Natural Resources Committee, and Maria Cantwell (D-WA), the committee’s ranking member, the bill is the successor to broad, bipartisan legislation that passed the Senate in 2016, but ran into conference committee resistance from the House and could not be revived before the clock ran out on the 114th Congress.

The senators say the latest bill reflects some changes brought about through discussions with House members who had reservations about some provisions in the bill last year. But they also say it builds on recent technological breakthroughs to bring substantial benefits, including energy savings and expanded energy supplies, while giving priority to innovation, modernization and the security of the electric grid.

Of greater significance to clean energy advocates, however, is that it marks an effort to move for the first time in a decade bipartisan legislation that can modernize and build on the nation’s energy and resource policies. While it’s not the path to the comprehensive energy policy long sought by 25x’25, it could be a solid start to wider energy policy discussions in the near future.

For example, those discussions could lead to the restoration of language from last year’s version of the bill that identifies forestry biomass as carbon neutral feedstock, a designation that could expand the use of woody biomass as a source of electrical and thermal energy.

In June, Senate Majority Leader Mitch McConnell (R-KY) enhanced the prospects for passage of the latest Murkowski-Cantwell bill by giving it the procedural okay to bypass the Energy Committee and be brought directly to the Senate floor. Still, the sponsors are having to rely on a gap in a busy Senate calendar that is expected to be consumed by tax reform, relief aid for Florida and other southeastern states slammed by Hurricane Irma, fiscal 2018 spending bills, a needed extension of the National Flood Insurance Program set to expire Sept. 30, and a renewal of funding for the National Children’s Health Fund set to run out at the end of this month, among other items on a crowded legislative agenda.

Of particular interest to the 25x’25 Alliance is another measure that would reauthorize and assure funding for the energy programs under Title IX of the current farm bill. The legislation from three Midwest senators would bolster the farm energy programs through 2023, and would be seen by advocates as a needed response in the face of severe, deep funding cuts to the programs as proposed in fiscal 2018 spending bills pending in Congress.

By restoring to the fiscal strength intended by lawmakers when they were created as far back as 2002, initiatives like the Rural Energy for America Program, the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, the Bioenergy Program for Advanced Biofuels and the Biomass Crop Assistance Program can help agricultural producers and rural businesses deploy more renewable energy projects and cut energy costs. Among other provisions, the reauthorized energy section would also support advanced biofuel production, improve the market for sustainable agriculture feedstocks and help keep sugar prices stable.

We encourage our 25x’25 partners and other clean energy advocates to engage lawmakers in Washington and urge them to actively support and pass the modest legislation proposed by Murkowski and Cantwell, as well as the bill that would fully restore farm energy programs. The former has the potential to set the stage for broader, more inclusive energy policy discussions. The latter offers a needed boost to a rural American economy hammered by low commodity prices and reduced farm incomes for more than three years.

 

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Congress Should Sustain Support of Ag and Forestry Adaptation, Mitigation Practices

The debate underway in Congress this week on disaster relief spending in the wake of Hurricane Harvey has, as could be expected, raised contentions that the storm, which produced the most severe rain event in U.S. history, can be attributed in part to climate change.

That assertion, in turn, has sparked the usual arguments over whether climate change is real; to what degree it exists and what causes it.

Despite the assertions of some policy makers, there is overwhelming scientific agreement that some extreme weather and climate events have increased in recent decades, according to a recently disclosed draft of a wide-ranging federal climate change report. The draft, which awaits approval from the Trump administration, shows the average temperature in the United States has risen rapidly and severely just since 1980. The past four decades have been the warmest of the last 1,500 years, scientists say.

While they might not go near the term “climate change,” U.S. ag producers are growing in their consensus that volatile weather – heavy precipitation that cause floods; extreme drought that spark wildfires and enable pest infestation; tornados that destroy croplands, farm structures and equipment – is a worsening reality.

Congress has always played a critical role in aiding U.S. citizens in their efforts to come back from natural catastrophes – and rightly so. The loss of life, property and any semblance of normality that comes with these disasters require our leaders to respond with compassion and prompt support to help with rebuilding efforts.

Another key aspect of any disaster response is to provide the means to help mitigate future catastrophes – such as when the federal government aided in the restoration and shoring up of levees around New Orleans following Hurricane Katrina.

While not sharing the profile of larger, singular catastrophic events, the pressure that changing climate conditions are putting on America’s farmland and forests is posing a growing threat to our nation’s ability to produce the essential food, feed, fiber and fuels that our country – and, for that matter, a large part of the world – depend on.

That’s why it’s important for policy makers to maintain their support of longstanding programs and funding that encourage innovation and accelerate the development of measures that address the huge challenges faced by agricultural productivity in the face of a growing global population and a changing climate.

There are already some initiatives in place to address the necessity of having farmers, ranchers and forestland owners adapt to the extreme weather that comes with climate change. And there are significant efforts underway to promote practices that mitigate its causes, despite the administration’s announcement to withdraw from the Paris Climate Accord.

The goal of these efforts mirror that of the North American Climate-Smart Agriculture Alliance (NACSAA). That is to sustainably increase agricultural productivity; enhance the capacity of producers to adapt to changing conditions, whether it be higher temperatures or greater precipitation; improve their resilience against these often adverse conditions; and deliver ecosystem services such as improved soil quality, cleaner air and water, and wildlife habitat.

But the research and development of land management and production practices that mitigate climate change through carbon sequestration, as well as contributing to the reduction and/or avoidance of greenhouse gas (GHG) emissions, are just as important in the changing environment in which we live.

Farmers are finding ways to ensure that their operations make smarter use of increasingly more limited resources, and provide more food while emitting fewer carbon emissions. They are doing this through activities like increased crop rotations, utilizing cover crops, using drought-resistant seeds, applying better input management, reducing water usage, and implementing no- and low-till crop production systems, among others. Simultaneously, forest management is advancing to the point that global forestlands are becoming even greater carbon sinks.

The 25x’25 Alliance urges partners and all stakeholders to call on policy makers to give priority to those efforts that promote adaptive management and mitigation strategies for the agriculture sectors. Prime examples of those efforts include the work being done by USDA’s Agricultural Research Service, the Natural Resource Conservation Service and, even more to the point, the department’s seven Regional Hubs for Risk Adaptation and Mitigation to Climate Change, which provide tools and information to farmers, ranchers, and forest landowners on ways to adapt and adjust their resource management.

It is critical for lawmakers to embrace the efforts of those in agriculture and forestry who are working to maximize the use of our natural landscapes to adapt to and mitigate climate change. Policy makers should remember that these practices also improve the bottom line of farm and forest operations when rural communities continue to face lean economic times. It’s a win-win for the nation and for rural America.

 

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Harvey Shows Vulnerability of Domestic Fuel Supply, Need for More Ethanol

All of us in the 25x’25 Alliance are offering our thoughts and prayers, and in several cases assistance to those who have suffered and continue to struggle with the horrific devastation brought by Tropical Storm Harvey to Texas and Louisiana.

First making landfall last Friday as a Category 4 hurricane, Harvey has wreaked havoc along Texas’ northern gulf coast and across the towns and cities of southeast Texas, dropping the greatest rainfall totals ever recorded for one location in the nation’s history and leaving Houston, Beaumont and Port Arthur virtually underwater. It is now expected to take a path northeast, possibly reaching as far as Kentucky.

The death toll and property damage continue to rise, yet the nation has come together in support of those who have suffered. The degree to which people have come to assist one another, from neighbor to neighbor, business to business, city to city and state to state, has been unprecedented.

Harvey continues to present huge logistical challenges, not the least of which is the virtual shutdown of the oil refinery business in South Texas, including the closure of more than a dozen refineries and the Colonial Pipeline, which on a daily basis carries at least 100 million gallons of gasoline, heating oil and aviation fuel as far as New York. The disruption in Texas is resulting in uncertain gasoline supplies and higher prices at stations across the country.

The impact the storm has had on the oil industry puts a spotlight on the vulnerability of the nation’s transportation fuels, and the need to develop and expand policies and safeguards that can maintain an adequate supply in times of unprecedented catastrophe.

One way to do so is to diversify our transportation fuels, and domestically produced ethanol is an excellent example of a fuel that can help fill the void caused by disruptions in gasoline supplies. Ethanol is less expensive (it’s currently priced about 50 cents cheaper than gasoline blendstocks) and has served over the past decade to boost revenues and create jobs, particularly in economically hard-hit rural areas where jobs are needed.

Furthermore, with lower emissions, ethanol has offered a cleaner source of transportation fuel that can also raise the octane of gasoline making the fuel cleaner and more efficient in vehicles optimized to run on them.

And while U.S. oil development has grown in recent years mitigating U.S. dependency on foreign oil, ethanol has facilitated even greater U.S. energy security by further reducing the need to import oil from nations hostile to the United States (in 2015, some 24 percent of petroleum products in this country were imported, a share that could have risen to 32 percent without domestically produced ethanol).

Geographic positioning, an abundant supply and readily available means of transportation (principally railroads), make ethanol a critical part of this nation’s energy strategy. The widespread production of ethanol throughout the nation stands in stark contrast to an oil industry that focuses so much of its processing and exporting in a region that has, and will likely continue to remain, susceptible to calamitous weather episodes. Yet, as the benefits of ethanol as a high-octane, low-carbon alternative to gasoline continue to grow, there are still shortsighted federal policies limiting its use.

Under the current conditions, EPA has conditionally recognized the disruption occurring in gasoline supplies, lifting Clean Air Act requirements for gasoline and diesel fuel sold in Texas, Louisiana and 10 other Southeastern states, and the District of Columbia. The agency approved and expanded a waiver covering reformulated gasoline, low Reid vapor pressure (or RVP, a common measure of volatility) and low-emission diesel requirements for the region.

The waiver announced late Wednesday represents an expansion of an earlier, narrower version that originally applied only to Texas and Louisiana and would have essentially limited the use of low-cost, locally available ethanol supplies to help alleviate gas price spikes resulting from Harvey to only those two states. The expansion allows for greater relief to others states that are likely to be impacted by higher fuel prices over the coming weeks, and will essentially end the summer limits to the sale of E15 in many of these areas.

25x’25 commends EPA for allowing for expanded use of higher ethanol blends in this time of crisis, but the agency can and should do more by removing the regulatory roadblocks that are blocking the introduction of mid-level ethanol fuel blends. Ethanol is helping meet fuel needs during this ongoing crisis, but it is also a viable means of meeting the nation’s future transportation fuel goals.

 

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DOE Grid Study Exposes Policy Irony

The release late Wednesday night of the long-awaited DOE grid study brought with it some relief for renewable energy advocates. The study, requested by Energy Secretary Rick Perry, verified what the DOE, the department’s national laboratories, academic and the energy sector itself have said for several years: the decline in coal- and nuclear-fueled “baseload” power is principally attributable to the rise of cheap natural gas price.

Growing renewable energy contributions to the grid – including solar, wind and biomass, among others – are also a part of the transition, but pose no risk to the reliability and resiliency of the grid, the report notes.

While the report offers a number of recommendations, none present a scenario that the Trump administration could use to attack state and federal policies that support renewable energy.

Instead, the report notes that grid operators have long addressed reliability concerns as renewable energy penetration has deepened on the grid. For example, the nation’s power grid managed the cross-county solar eclipse flawlessly despite the drop and rise in solar output as the eclipse shadow moved across the United States. Still, the report emphasized the need to focus on resiliency, especially in light of severe weather events.

Among the report’s recommendation is a call for the Federal Energy Regulatory Commission (FERC) to accelerate efforts to improve energy price formation in wholesale power markets, and create fuel-neutral markets that adequately compensate resources for essential reliability services to the grid. Among those “ready” resources that could be targeted for compensation are additional fuels like coal stored on-site. The study said pricing mechanisms must be “fuel and technology neutral,” but the scheme offers an obvious advantage to coal.

The study also recommended lowering costs and speeding up permitting for grid infrastructure such as nuclear and coal generation, as well as allowing coal-fired power plants to improve efficiency and reliability without triggering new regulatory approvals and associated costs.

Helping legacy energy interests to the extent called for in the DOE report underscores the recent trend of coal and nuclear companies and advocates openly seeking federal and state funding help to maintain money-losing nuclear and coal power plants.

Southern Company has reportedly asked the Trump administration to speed up and even increase the disbursement of $8.3 billion in federal loan guarantees to help with two reactors being built at the Plant Vogtle facility in Georgia, the only nuclear construction project in the country. The utility company, which has seen cost overruns jack up the cost of the plant to a staggering $25 billion, is also asking Congress for an extension of tax breaks for nuclear power. (Plans for a similar extension for the doomed V.C. Summer Plant being built in South Carolina fell through in congressional budget negotiations earlier this year, shutting the $25 billion project down.)

Nuclear power generators have been successful in obtaining subsidies from state governments to keep open plants that are operating at a loss. Subsidy programs in New York and Illinois have been upheld by federal courts in recent weeks – decisions that will likely open the possibility of bailouts in other states. And in search of help for a flagging coal industry – an economic mainstay of his state – West Virginia Gov. Jim Justice is promoting to a White House that strongly supports the sector a $15-per-ton direct subsidy for coal-fired power plants that use Appalachian coal.

The merits of the requests for help aside, that they are coming from interests that have long opposed virtually any federal help for renewable energy development is, at best, paradoxical. A recent study shows that federal subsidies over the past six decades for fossil fuels and nuclear power dwarf those extended to renewable energy technologies.

Yet coal and nuclear interests continue to ask for what are essentially subsidies that are traditionally designed to overcome a technological hurdle and spark innovation that can benefit society. Coal and nuclear are established industries, and any assistance Washington could offer the two legacy energy interests would violate the free-market principles critics of renewable energy have stood on in taking a hard line on tax credits for wind, solar and other alternative energy sources.

Renewable energy stakeholders are urged to make the case with lawmakers and regulators that their focus should be on smart policy that supports new energy technologies and not on old, “mature” technology that is no longer competitive. Tax credits for solar, wind and other renewables are phasing out over the next several years as they become competitive in the marketplace. The decline in those tax credits are part of a deal made to move clean energy onto a “level” playing field. Don’t allow coal and nuclear interests to change the rules of the game just as the renewable energy sector becomes a force to be reckoned with.

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Pruitt, EPA Should Heed Court Ruling, Boost RFS Biofuel Blending Levels

In a radio interview in Iowa late last week, EPA Administrator Scott Pruitt made pretty clear the rational that went into his agency proposing lower levels of cellulosic biofuels, advanced biofuels, and total renewable fuels that would be required for blending under the next Renewable Fuel Standard rule: “Production levels and demand matter.”

Pruitt goes on to express his concern that his agency is being “used in setting those [RFS blending targets] in a way to encourage ‘blue-sky’ thinking.” He is referring to the concept that the standard’s annual blending targets (Renewable Volume Obligations, or RVOs) were set by the 2007 law that reauthorized and strengthened the RFS to encourage oil refiners to build the infrastructure required to meet the blending levels prescribed.

Pruitt’s characterization of EPA and its role in setting the RFS RVOs does not set well with renewable fuel advocates because it seems to run contrary to a federal appellate court ruling earlier this month that found that the EPA was wrong in previous years when it set lower biofuel levels.

The U.S. Circuit Court of Appeals for the District of Columbia held that EPA exceeded its authority in previous years when the agency interpreted the law establishing the RFS as giving it the authority to reduce biofuel mandates if it determined there was insufficient infrastructure to deliver it.

Furthermore, the court ruling finds that EPA erred when it allowed the oil industry to control the volumes of renewable fuels offered to consumers, and said the RFS statute does not allow the agency to rely on demand-side factors under the oil industry’s control as a basis for setting annual volumes.

What Pruitt calls “blue-sky thinking” is, in fact, what Congress designed 10 years ago – an RFS program that will drive investment and innovation by providing stability and incentives for the development of clean alternative fuels.

With the public comment period open until Aug. 31 and a final rule set to be adopted by Nov. 30, 25x’25 has submitted remarks to EPA that shares the biofuel industry’s belief that in lowering RVOs of cellulosic biofuels in 2018 and maintaining level biomass-based diesel volumes in 2019, the agency “has ignored the intent of the RFS – establishing a market for a prolonged period of time – and has focused solely on current actual production volumes in setting the yearly RVO targets.”

In calling on Pruitt and EPA to increase the target for cellulosic biofuels – a biofuel that is made from woody biomass, purpose-grown grasses, wastes and byproducts and can generate at least 60 percent fewer greenhouse gas emissions than gasoline – from a mere 283 million gallons, 25x’25 says the slow development of this advanced biofuel over the past decade has been due, in part, to a lack of policy incentives caused by low blending targets set under the RFS in years past.

“By not taking into account the evolving and growing state of the cellulosic biofuels industry and by applying an overly-restrictive standard for cellulosic ethanol, EPA is sending a signal that it does not appreciate nor acknowledge the significant potential of this sector,” 25x’25 says.

The alliance also question’s EPA logic in setting a target for biomass-based diesel – 2.1 billion gallons – that remains unchanged from the previous year, despite the fact that the biodiesel industry is operating at only about 60 percent of capacity, and is seeking an RVO of at least 2.9 billion gallons. Biomass-based diesel, like cellulosic ethanol, is also an EPA-designated “advanced” biofuel due to the big reductions in carbon emissions it offers when compared to petroleum-based diesel.

The appellate court ruling puts the burden on EPA to accommodate for the past shortfall in total renewable fuel volumes resulting from the agency’s flawed interpretation of “insufficient domestic supply.”

25x’25 requests that the EPA establish and implement a plan as part of the 2018 Final Rule that will restore the shortfalls in total renewable fuel volumes experienced in 2014-2016. 25x’25 is confident such a plan will help to spur investment in infrastructure needed to distribute higher-biofuel blends, and that it will bring underutilized production capacity back online, while also lifting feedstock prices that will benefit rural America.

The 25x’25 Alliance calls on stakeholders to urge EPA and the Trump administration to revise their proposal and increase volume targets for cellulosic, advanced and total biofuels in order to drive the investment and growth needed to maintain the expansion of cellulosic and advanced biofuel production. Failure to do so will discourage the prospects for billions of dollars of future investments in second- and third-generation production technologies – investments that will go to rural areas where jobs are crucial.

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Combustion Engines are Not Going Anywhere for Quite A While

The following guest blog has been written by Reg Modlin, the former director of regulatory affairs at FCA Fiat Chrysler Automobiles, where he served for more than 43 years. He is currently a senior advisor to the Ag-Auto-Ethanol Work Group, a stakeholder effort to develop strategies that will accelerate the transition of transportation fuels to higher octane/lower carbon blends for use in the U.S. light-duty vehicle fleet.

Flags have gone up in recent days as a result of articles proclaiming the coming of the electric car and the resulting disruption in the automobile industry. Relax. There is nothing new in any of these articles.

Regulations governing greenhouse gases (GHG), fuel economy and fuel consumption in all of the major markets are on the same trend line and have been for years, despite the “news” implied in the articles.

The driving assumption is that 80-percent reduction in GHG emissions by 2050 is needed. With that goal observed, all new vehicles produced and sold by about 2030 would have to be full battery electric or hydrogen fuel cell powered. This is the basis for the regulatory trend lines. The big questions? Will the technology evolve to support that goal? Will the cost of technology be in line with the customer’s willingness to buy? And, most importantly, will the customer, in fact, buy the product? In the United States, in the rules adopted in 2012, these challenges were noted and the concept of a mid-term review of the proposed standards was aimed at addressing the question of consumer demand.

Electric vehicles will dominate new vehicle sales by about 2030, unless they don’t. The reasons for vast electrification to not occur are the usual hurdles of high cost and lagging consumer demand. Even if electrification does take hold, liquid-fueled internal combustion products in the legacy fleet will need fuel until well past 2050. And this only addresses light duty transportation. Yet to be considered are heavy duty vehicles, rail and air. Those are larger technology challenges.

Positions from Volvo and Daimler are particularly noteworthy.

Volvo headlines claim that they are moving out of internal combustion engines. This is not supported by the facts. They may be pursuing a marketing strategy to not deploy solely internal combustion engine equipped products. However, internal combustion engines would be included in mild-hybrid (Start/Stop), hybrid and plug-in hybrid systems. Any full electric powered products would have to be a very small percentage of their proposed fleet. The inclusion of such technologies is likely to be part of every manufacturer’s strategy. Note that Geely, a Chinese company, owns Volvo. Given that China is attempting to leap-frog to electrically powered transportation, that ownership naturally moves the premium Volvo brand into the country’s fast push toward electric powered vehicles. For Geely to set up their premium brand to represent the path toward electrification would be a natural step. This would be a strategy found in many of the world’s automobile manufacturers.

Look at Daimler. The German company announced that they were aiming at full electrification by 2030. Then, they explained how they were backing up that plan with a completely new family of internal combustion engines and applying 48-volt electrical systems to boot. Again, there is nothing new here. Germany is a strong supporter of the aforementioned goal of 80-percent reduction of GHG emissions. Daimler is on record in support of the goal. However, they are backing up their support with technology packages that will continue to improve performance of their conventional portfolio, whether or not electrification becomes successful.

Both Volvo and Daimler, among others, have gotten some attention with good headlines, even though they acknowledge they are doing what the whole industry is having to do while betting on the potential for market acceptance of electrified vehicles.

Whether electrification of light duty vehicles will dominate the market before 2050 will hold media and public interest until we see how the industry evolves. Until then, and for decades after, liquid fuel will be used in transportation throughout the world. And what automakers and policy makers must resolve is whether we will reduce carbon emissions from the fleet using more efficient internal combustion engines paired with low-carbon, high-octane fuels or will we continue to ignore the issue and continue to use current regular gasoline formulations? The challenge is to create a resounding drumbeat of “we need a better fuel for the future,” whether or not electrification becomes successful.

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Federal Climate Report Demands Action, Not Debate Over Semantics

Two events have conjoined on the national stage this week, serving to underscore the reality that climactic conditions continue to pose new challenges to agricultural and forestry producers that are working to adapt to those changes, and it has reinforced the critical role that front-line agencies like USDA’s Natural Resources Conservation Services (NRCS) play in meeting the needs of farmers, ranchers and forestland owners.

Disclosed earlier this week was a draft of a Climate Science Special Report – part of the National Climate Assessment that is mandated by Congress to be completed every four years – compiled by 13 federal agencies, including USDA, that positively asserts that the consequences of a changing climate are calamitous and are, in fact, taking a toll now on the nation and the way business is done.

While there may be some discomfort within the ag and forestry industries over the words “climate change,” the reality is that producers in the sectors will tell you that their operations are being hammered by increasingly erratic weather, drought, high nighttime temperatures, as well as the emergence of new pests and invasive species.

The farm community’s supposed aversion to climate change nomenclature gave rise to another media story this week. A newspaper website reported on emails that were sent from a politically appointed deputy director to NRCS personnel shortly after President Trump’s inauguration that suggested alternative ways of referring to climate change, citing a “shift in perspective within the executive branch.” Trump has made clear his disdain of science supporting climate change, but USDA officials this week were quick to deny any political pressure was put on agency employees to avoid the use of the term “climate change.”

But what is nothing more than a kerfuffle over bureaucratic semantics only diverts from what has been the essential message that U.S. farmers, ranchers and foresters have been telling federal officials over the past several years: help is needed, and needed now.

For generations, those who produce our nation’s food, feed and fiber have come up with innovative ways to adapt to challenges they face. But the challenges being posed today by a changing climate – inconsistent growing seasons, a wildfire season twice as long as it was 30 years ago, and an increased threat of pest outbreaks, drought and flood over the next 50 years – are more complex than ever. They threaten our food supply and impose tremendous costs on producers and rural economies. Drought alone was estimated to cost the country up to $150 billion from 2011 to 2013.

There is a critical role that still needs to be played by USDA, the NRCS and the seven research centers – or hubs – designated by the Agriculture Department three years ago to help U.S. producers of food, feed and fiber to create innovative solutions to the challenges posed by a changing climate, including support for adaptation.

Now is hardly the time for policy makers to engage in dogmatic denial of the damage that is occurring on the ground. The government agencies charged with the protection and stewardship of our natural resources, including soil and water, must be given the enabling policies and funding that allow them to do their job of supporting the nation’s landowners during these times of volatile environmental conditions and weather extremes.

Policy makers should also be reminded that farmers, ranchers and forestland owners can – and should – play a huge role in mitigating climate change. Through strategies like climate smart agriculture advocated by stakeholder-directed initiatives such as Solutions from the Land (25x’25’s parent organization), farmers, ranchers and foresters develop the tools that can increase commodity output, adapt land-use and livestock-production practices to improve their resiliency, and reduce greenhouse gas emissions, particularly carbon. (Federal researchers reported last year that U.S. lands have been sequestering much more carbon than they emit, creating a net “carbon sink” over the last three decades. The sequestration of a net 762 million metric tons of CO2 offset 11 percent of economy-wide greenhouse gas emissions in 2014.)

It’s time for policy makers in Washington, at the state level and in local governments to heed the science-based warnings contained in the latest U.S. climate science report and address the damaging consequences a changing climate is imposing now and the even greater dangers it is presenting to our future. The strategies that are needed must be implemented at all levels and scales and must recognize social, economic, security and political factors. We have just begun to make progress and conversations with stakeholders should avoid becoming bogged down due to “changing perspectives.”

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