WASHINGTON, March 14, 2012 -An amendment to the surface transportation bill that would revive and extend expired and existing renewable energy tax credits, including those for biofuels, wind energy and solar power, failed to get Senate approval Tuesday. Senators voted 49-49 on the amendment from Sen. Debbie Stabenow, D-Mich., leaving the measure far short of the 60 required by Senate rules for adoption.
The Senate also rejected another amendment to the bill, S.1813, from Sen. Jim DeMint, R-S.C., that would have eliminated virtually all existing energy-related tax credits. The measure, which also required 60 votes for passage, fell 27-72. DeMint’s measure would have eliminated all credits Stabenow tried to extend, as well as cut the enhanced oil recovery tax credit and the tax credit for producing oil and gas from marginal wells, applying the savings to a corresponding reduction in the corporate tax rate.
The Stabenow measure fell short despite her efforts on the Senate floor to paint the amendment extending 19 different tax credits as legislation that would prevent a tax hike increase occurring when the credits expire. Claiming the tax credits help support 2.7 million jobs, she unsuccessfully pleaded: “We cannot allow a tax increase on American businesses that are creating clean energy jobs in America.”
The biodiesel industry was severely disappointed by the failure of the Stabenow amendment to gain traction. Many saw the measure as a last chance to resuscitate a $1-per-gallon tax credit enjoyed by the biodiesel production industry before it expired last year. Biomass and solar advocates were equally disappointed because the Stabenow measure would have revived a “Section 1603” Treasury Department program that offered grants in lieu of tax credits for facility construction before it, too, expired last year.
If enacted into law, the Stabenow measure also would have extended tax credits for companies producing advanced biofuels, and sustained the Accelerated Depreciation Allowance for cellulosic biofuel plant property beyond their expiration at the end of this year. It would also extend tax credits for companies that install flex-fuel and E85 (85% ethanol) blender pumps.
Adam Monroe, president of Novozymes North America, said the measures would provide “long-term, forward thinking and stable policy [that] is central to private investment.”
Growth Energy CEO Tom Buis argued that extending the credits was critical “as long as oil maintains it’s near monopoly over the market.”
Also set back by the amendment’s failure was a significant campaign by the wind industry to extend through 2013 a 30% tax credit on production, which is set to expire at the end of this year. Industry leaders say the wind energy sector supports directly and indirectly more than a half a million jobs.
Stabenow’s amendment would also have renewed the Advanced Energy Manufacturing Tax Credit, a 30 percent tax credit for companies that re-equip or build new facilities for clean energy product manufacturing. The energy manufacturing credit expired in 2010.
DeMint told fellow Senators Tuesday his measure killing energy-related tax credits would also eliminate complaints of energy companies avoiding taxes through special tax treatment. He said the “free market should be allowed to work” and the government should not be “trying to pick winners and losers.”
But Senate Finance Committee Chairman Max Baucus, D-Mont., argued that DeMint’s measure was unbalanced, taking a far higher toll on the renewable energy than the oil and gas industry.
The Senate also turned back an amendment from Sen. Pat Roberts, R-Kan., that would have eliminated tax credits for renewable energy sources, required the White House to expedite approval of the proposed Canada-to-Texas, Keystone XL pipeline, expanded domestic oil exploration and development, and extended a freeze on federal employee wages through 2013. The measure, which would have used the savings to fund tax deductions for college tuition and other non-energy credits, fell 41-57.
Original story printed in March 14, 2012 Agri-Pulse Newsletter.
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