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Domestic Bio-Fuels Committee Passes Renewable Fuel Package

Wednesday, March 11, 2009

Domestic Bio-Fuels Committee Passes Renewable Fuel Package

Bi-partisan legislation will keep Wisconsin a leader in renewable fuel development and production

MADISON – Wisconsin entrepreneurs, farmers, foresters and fuel sellers would benefit from a package of recommendations approved today in the final meeting of a special legislative committee studying domestic biofuels. The proposals were written by committee co-chairs Senator Pat Kreitlow (D-Chippewa Falls) and Representative Scott Suder (R-Abbotsford).

“With consumers already embracing renewable fuels and ample opportunities for growing jobs in the biofuels industry, our committee proposals seek ways to coordinate the many biofuel initiatives at the state level, expand availability for tax credits, periodically assess the status of crops used to make biofuels and set up a process that guards against the complacency that has kept America dependent on foreign oil for far too long,” said Kreitlow.

Because of tight budget conditions, the committee’s recommendations do not include any new funding but do increase the related fields that could qualify for credit programs that already exist. For example, retailer tax credits to install E-85 pumps could be used for a new generation of “blender pumps” that give consumer more choice about the ratio of renewable fuels to use in their vehicles. Growers of biofuel crops would have new access to carbon offset credits and also benefit from use-value assessments that determine property taxes.

“Biofuel crops like switch grass and hybrid trees represent new opportunities for farmers and foresters in northern Wisconsin to benefit from a 21st century energy policy,” said Suder. “New fuels are creating jobs in my district and they’re going to do the same in research labs, former paper mills and in more farms and forests statewide. It is critical to identify areas like these where jobs will grow fastest as the economy recovers.”

The biofuels package includes a provision that is designed to alert the industry to any significant downturn in renewable fuel sales. Committee members felt no need to bring back a debate over fuel sales mandates because the consumer marketplace has already put Wisconsin well ahead of a new federal mandate. As a result, this creates a “backstop” just above the federal standard, and if sales fall to that level it will trigger a study by the Department of Agriculture, Trade and Consumer Protection to assess the reasons for the sales downturn and make recommendations. Those recommendations can be used by the biofuels industry to make adjustments in crops, manufacturing or distribution of fuel to the marketplace.

“A lot of noise was made years ago about state renewable fuels sales requirements which were addressed by the Bush Administration through establishing a single federal standard,” said Kreitlow. “Further, a significant upgrade in federal clean air standards has more than offset any suggestion that renewable fuels would somehow impact other industries. Our committee has heard from numerous witnesses who debunked the assertions about biofuels made by people with a vested interest in defending our dependence on foreign oil.”

“This committee crossed political and philosophical lines to study the full range of biofuels and find ways the industry can grow in a way that benefits Wisconsin businesses,” said Suder. “Retailers get a seat at the table designing any new system to take advantage of federal renewable fuel credits. They also get protection from suppliers who might otherwise try to force them to buy all of their renewable fuel from Big Oil which would then hoard the federal fuel credits. Finally, we charge state agencies with sharing information on best practices so that fuel quality makes Wisconsin a national leader for biofuel sales.”

The following is a summary of the areas included in the committee’s recommendations:

·       Biennial Assessment of Biofuel Feedstocks and other information

-       What is being grown, where and other supply and demand factors

-       Information designed to help best locate new facilities, crops, jobs

-       Information on best practices for growing and manufacturing to ensure high quality product while also minimizing environmental impact

·       Expanded Opportunities for State Tax Credits

-       Include the production, harvesting, storing and transportation of other biofuel feedstock

-       Blender pumps as well as E-85 pumps (For blends like E-15 and other consumer choices)

-       Carbon offset credits

-       Use-value property assessment similar to other crops on Wisconsin’s working lands

·       Renewable Fuels Sales Tracking and Alert to Market Changes

-       “Backstop” to warn of sales downturn (triggered at 10% above federal standard)

-       Triggers a DATCP process to assess market conditions, information for industry

-       Mechanism to begin a rulemaking process if no objection by legislature

-       Explore whether a system to trade renewable fuel tax credits works for WI retailers

-       Retailer protection against Big Oil forcing them to have only 1 biofuel supplier

·       State Agency Coordination, Education and Leadership

-       Authorize Office of Energy Independence to be central point of data and collaboration

-       Increase use of renewable fuels in state fleet by reducing gas use 50% by 2015

-       Procedure to set up a marketing and research program if industry desires