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New Year Brings Positive Outcomes

By Michael McAdams | March 04, 2013

In my last Biomass Magazine column, I wrote of the upcoming election and the number of things that could potentially be affected, depending on certain outcomes. For the most part, the election brought a number of favorable outcomes for the advanced biofuels sector.

After a long and contentious battle, the Advanced Biofuels Association and a large coalition prevailed in earning support of the administration’s proposal to utilize the Defense Production Act to expedite the development of drop-in advanced biofuels for military use. I am delighted to inform  readers of those who became the heroes of this battle, which ensued on the Senate floor right after the elections, before the big man slid down the chimney. 

 Sen. Mark Udall, D-CO, with the support of Sen. Patty Murray, D-Wash., led the fight against the amendment by Sen. Inhofe, R-Okla., which would have restricted the U.S. Navy’s purchasing power to only buy advanced biofuels at the same basic price of incumbent refinery-produced products. Given the 100-year head start, this was hardly a fair provision, and was so constricted in the manner in which it was written it that it would have made it very difficult for the military to carry out certain missions that require specially made fuels. In the end, the Senate defeated Inhofe’s provision by a bipartisan vote of 62 to 37. 

 The Senate then began debate on a second amendment by Sen. Kay Hagan, D-N.C., to delete a prohibition on the use of Defense Department funds to build plants under the proposed DPA program, proposed by Sen. John McCain, R-Ariz.  Given McCain’s status as the ranking member of the Senate Armed Services Committee, this was a particularly difficult amendment to defeat. With Hagan’s superb effort and the support of Sen. Susan Collins, R-Maine, however, the coalition was able once again to post a bipartisan win and pass of Hagan’s amendment by a vote of 54-41.  The effort put the Senate in an excellent position to negotiate with the House in the upcoming conference. 

At the conference, negotiators with the strong support of Navy Secretary Ray Mabus and Defense Secretary Leon Panetta were able to negotiate a narrow compromise, also eliminating similar limiting amendments that passed the House Armed Services Committee by a narrow vote of 32-29.  This allows the DPA program to move forward, and we expect the first phase of funding to be announced as soon as the end of March. 
 In addition to the victories on the Defense Authorization Act, Congress was able to pass a number of biofuels tax credits along with the fiscal cliff legislation just after the first of the year. The provisions extended the biodiesel, renewable diesel and cellulosic tax credits, and also added algae as a qualified feedstock in the newly written advanced biofuels tax credit. All these provisions were extended retroactively to apply in 2012 and will lapse at the end of 2013.

This coming year will see a significant challenge to the renewable fuel standard 2, but I’ll save that subject for my next column. The year will be challenging, and your engagement and continued efforts are a must. Thanks for all you do.

Author: Michael McAdams
President, Advanced Biofuels Association
202-469-5140
Michael.McAdams@hklaw.com

 

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