Houston Chronicle


Tax credits for biodiesel and wind energy were extended under a deal struck by Republicans and Democrats late Monday night, according to sources close to the discussions. With the House expected to vote on the spending plan late Tuesday, time for additional measures was running out.

According to draft legislation circulating Tuesday morning, the tax credit for biodiesel, which expired in 2017, would be extended through 2022, a boon for farmers and oil refineries. And the tax credit for wind turbines, which is currently winding down, will get extended for another year, giving projects begun before the end of 2020 a tax credit worth 40 percent of that awarded to existing turbines.

The deal also extends until 2020 26 additional tax credits that had expired in 2017 and 2018 , as laid out in bipartisan legislation introduced earlier this year. Among those on the list were geothermal energy, electric scooters and motorcycles, coal plants owned by Native American tribes and energy efficient homes.WASHINGTON – The future of federal support for several burgeoning energy technologies fell into doubt Monday as Democrats and Republicans in Congress failed to reach agreement on maintaining and expanding subsidies for biofuels, electric vehicles and renewables.

Biodiesel and wind tax credits extended, as Congress prepares to vote- oil and gas 360

Source: Houston Chronicle

In recent days, Republicans and Democrats were working on a compromise that could have expanded tax credits for electric cars and other clean energy technologies, while extending the credit for biodiesel, which farmers and oil refineries want reinstated following its lapse at the end of 2017. But on Monday evening, House Democrats released a bill without any such provisions, leaving energy companies little time to sway congressional leaders.

“The window for getting this done is closing, and we’re not hearing anyone is close to an agreement,” said Paul Winters, a spokesman for the trade group National Biodiesel Board.

Energy lobbyists had spent months trying to get their respective industry’s tax credits expanded or extended as Congress debated next year’s federal spending.

House Democrats had pushed to expand credits for electric cars, which are currently capped at 200,000 vehicles per manufacturer — a limit Tesla and General Motors have already hit. At the same time, they were pushing to extend tax credits for wind and solar energy, both of which are scheduled to wind down in the years ahead, while creating a new tax credit for energy storage such as large-scale batteries.

But they faced opposition from Republicans, including President Donald Trump, who has called for an end to the electric vehicle tax credit. Rep. Kevin Brady, R-Woodlands, has long opposed so-called tax extenders, which are used to offer short-term tax relief to certain favored industries, as irresponsible fiscal policy that increases the federal budget deficit for the sake of political deal making.

“’Business as usual’ not acceptable for temp tax provisions (extenders),” he tweeted Monday afternoon. “Reforms required: make permanent those w/value, glide path out/end the rest.”

Expectations leading into the weekend were that Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, would support clean energy tax credits in exchange for Democratic support of extending the $1 a gallon tax credit for biodiesel, a renewable fuel supply which converts oils made from corn and soybeans into diesel.

Willing to deal

Centered in the Midwest farm belt, biodiesel has developed into an industry worth billions of dollars a year, attracting interest from traditional refiners such as San Antonio-based Valero.

“Most Republicans object to [the electric vehicle tax credit], but Sen. Grassley was willing to deal in exchange for biodiesel,” Kenny Stein, policy director of American Energy Alliance, which lobbied to end tax credits for wind and electric cars, said Monday morning. “He’s willing to give away a lot.”

Grassley’s office did not respond to a request for comment Monday evening.

The energy tax credits still could be added to the spending bill before the House is expected to vote on it later this week. But by late Monday, energy lobbyists were not optimistic about their chances.

The ramification for the biodiesel sector appeared particularly acute, with some biodiesel facilities already shutting down, unwilling to keep waiting for Congress to restore funding, Winters said. Texas is the second largest biodiesel producer after Iowa with a capacity to turn out almost 400 million gallons of biodiesel a year, according to the Department of Energy.

“There are House Democrats and Senate Democrats, and everyone has their own priorities. And Republicans spent four years trying to kill off all the tax extenders,” Winters said. “People were just talking past each other.”

Nothing for nukes

The nuclear energy industry didn’t even get that far. A tax credit for which the industry lobbied for to support existing nuclear facilities was not included in the energy package released by House Democrats last month. Despite calls by scientists to expand nuclear energy to reduce greenhouse gas emissions and address climate change, U.S. environmentalists long held opposition to nuclear power has turned away many Democrats.

“It is a good day when the nuclear industry goes begging and gets nothing,” Lukas Ross, a senior policy analyst with the activist group Friends of the Earth, said last month.”Dangerous, polluting nuclear energy has no place in our low-cost, low-carbon clean energy future.”

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