Congressman Denny Rehberg

Bill Will Include Coal-to-Liquids Provisions for Montana

WASHINGTON, DC - Montana’s Congressman, Denny Rehberg, joined a bipartisan group of members in introducing the American-Made Energy Freedom Act, which includes provisions to spur development of coal-to-liquids technology in Montana.

“It’s time to buy American energy,” said Rehberg, a member of the House Energy and Water Appropriations Subcommittee.  “A great place to start is right here in Montana where we’re already working to develop new innovations such as coal-to-liquids.”

Rehberg’s bill directs all lease and royalty revenues generated from energy produced from the Artic National Wildlife Refuge (ANWR) into a trust fund.  This trust will fund a range of programs to promote alternative energy development including tax credit extensions for cellulosic ethanol, coal-to Liquid (CTL) fuels, solar and fuel cell investments, renewable fuels development and Clean and Advanced Energy Loan Guarantee Programs.

“It’s a threat to our economy and to our Nation’s security to be so reliant on foreign sources of energy,” said Rehberg. “But there’s no one solution to our energy crisis. This bill has many important aspects for Montana and will help us look at tomorrow’s technologies, including coal-to-liquids, ethanol and bio-mass.”

Coal-to-Liquid development is particularly important in Montana and several CTL projects are in initial stages across the state.  U.S. coal deposits contain more energy than the world’s oil reserves, containing what is comparable to one trillion barrels of oil.  Montana is estimated to have nearly 120 billion tons of coal.

“There are a lot of pieces to the energy puzzle,” said Rehberg. “And Montana has a lot of those pieces.  This legislation will allow us to use today’s energy needs to pay for tomorrow’s energy alternatives.”

Other sponsors to the bill are: Joe Barton (R-TX), Dan Boren (D-OK), Dennis Cardoza (D-CA), Robert E. (Bud) Cramer, Jr. (D-AL), Lincoln Davis (D-TN), Ralph Hall (R-TX), Ron Lewis (R-KY), Tim Murphy (R-PA), Devin Nunes (R-CA), Charles W. (Chip) Pickering (R-MS), John Shimkus (R-IL), John Boozman (R-AR), Shelley Moore Capito (R-WV), Jim Costa (D-CA), Henry Cuellar (D-TX), Phil English (R-PA), Jack Kingston (R-GA), Charlie Melancon (D-LA), Collin C. Peterson (D-MN), Richard W. Pombo (R-CA), Mike Ross (D-AR), and Ed Whitfield (R-KY).

The following is a summary of the bill:

American-Made Energy Freedom Act

Securing Long Term Solutions:  The bill funds alternative, renewable, and advanced energy incentives.

R      Energy Independence Trust Fund:  Creates a trust fund in which the lease and royalty revenue from oil production in ANWR is deposited.  The funds will be used to pay for the following provisions.

R      Cellulosic Ethanol:  Develops a production tax credit for cellulosic ethanol (CBE).  The credit will be $.74/gallon on top of $.51/gallon for corn ethanol blender’s credit (VEETC) – for a total of $1.25/gallon.  This credit will be capped at $1.25 billion.  The credit will be phased out as the price per barrel of oil goes above $40; the CBE credit will disappear at $71 a barrel.  The CBE tax credit has a minimum production requirement of 5 million gallons per year per taxpayer and it is capped at 25 million gallons per year per taxpayer.  The caps remain in place until 10 plants are online and producing CBE.  Once this is accomplished, all caps are removed until $1.25 billion is expended.  Furthermore, the price per barrel phase-out band is adjusted for inflation annually.

R      Coal-to-Liquid:  Extends the $.50/gallon Coal-to-Liquid (CTL) excise tax credit from the current sunset of 2009 to 2023 and sets an overall cap of 3 billion gallons.  The CTL credit would be phased out as the price per barrel of oil goes above $45 and will disappear at $70 a barrel.  The CTL tax credit has a minimum production requirement of 15 million gallons per year per taxpayer and it is capped at 150 million gallons per year per taxpayer.  The caps remain in place until 5 plants are online and producing CTL.  Once this is accomplished, all caps are removed until $1.5 billion is expended or 2023.  The tax credit is transferable at the discretion of the producer.  Furthermore, the price per barrel phase-out band is adjusted for inflation annually.

R      Solar Power:  Extends Energy Policy Act residential and business solar and fuel cell investment tax credits through 2012, with enhanced modifications to the residential solar credit ($2,000 per ½ kw installed).  Extends the fiber-optic distributed sunlight investment tax credit to 2013.

R      Fund Section 210 of the Energy Policy Act:  Provides grants to improve the commercial value of forest biomass for electric energy, useful heat, transportation fuels, and other commercial purposes (authorized at $500 million).

R      Fund Section 932 of the Energy Policy Act:  Develops programs on cellulosic biomass, biofuels, bio-based products, and integrated biorefineries, as well as biodiesel fuel for electric power generation with industry and institutions of higher education.  Appropriate such funds as necessary.

R      Fund Section 1510 of the Energy Policy Act:  Commercial byproducts from municipal solid waste and cellulosic biomass loan guarantee program:  provide loan guarantees to private institutions for the construction of facilities for the processing and conversion of municipal solid waste and cellulosic biomass into fuel ethanol and other commercial byproducts.

R      Fund Section 1511 of the Energy Policy Act:  Renewable fuel loan guarantee and grant program: cellulosic biomass ethanol and municipal solid waste loan guarantee program – renewable fuel production research and development grants (authorized at $100 million) – cellulosic biomass ethanol conversion assistance (authorized at $650 million).

R      Fund Section 1512 of the Energy Policy Act:  Conversion assistance for cellulosic biomass, waste-derived ethanol, approved renewable fuels (authorized at $750 million).

R      Fund Section 1514 of the Energy Policy Act:  Advanced biofuel technologies program to demonstrate advanced technologies for the production of alternative transportation fuels (authorized at $440 million).

R      Fund Title XVII of the Energy Policy Act:  Incentives for innovative technologies – loan guarantees for projects that avoid, reduce, or sequester air pollutants or emissions of greenhouse gases and employs new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the guarantee is issued.

Securing Short Term Relief:  The bill provides a short term source of crude oil.

R      Opens the Arctic National Wildlife Refuge (ANWR) to exploration for energy resources (Lease Revenue = $3 billion; Royalty Revenue = $36 billion/30yrs).