BioDieselNow - Renewable biodiesel fuel

The H.R. 5351 bill to be voted on this week is pretty big --  I only hope all areas have been carefully considered and tweaked for improvement. The changes on the Biodiesel side looked appropriate to me. Thoughts?

Here's what Pelosi, Hoyer and Rangel have release about it in a statement:

"The bill extends and expands tax incentives for renewable electricity, energy and fuel, as well as for hybrid cars, and energy efficient homes, buildings, and appliances. It does not add to our deficit, but rather repeals $18 billion in tax subsidies for Big Oil companies."

From Section 211 & 212:

EXTENSION AND MODIFICATION OF CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

(a) In General- Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended by striking `December 31, 2008' and inserting `December 31, 2010'.

(b) Uniform Treatment of Diesel Produced From Biomass- Paragraph (3) of section 40A(f) is amended--

(1) by striking `diesel fuel' and inserting `liquid fuel',

(2) by striking `using a thermal depolymerization process', and

(3) by striking `or D396' in subparagraph (B) and inserting `or other equivalent standard approved by the Secretary for fuels to be used in diesel-powered highway vehicles'.

(c) Coproduction of Renewable Diesel With Petroleum Feedstock-

(1) IN GENERAL- Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following flush sentence:

`Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term `biomass' has the meaning given such term by section 45K(c)(3).'.

(2) CONFORMING AMENDMENT- Paragraph (3) of section 40A(f) is amended by striking `(as defined in section 45K(c)(3))'.

(d) Effective Date-

(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008.

(2) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM FEEDSTOCK- The amendments made by subsection (c) shall apply to fuel produced, and sold or used, after February 13, 2008.

 

CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUCTION.

(a) Biodiesel Fuels Credit- Paragraph (5) of section 40A(d), as added by subsection (c), is amended to read as follows:

`(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE UNITED STATES- No credit shall be determined under this section with respect to any biodiesel unless--

`(A) such biodiesel is produced in the United States for use as a fuel in the United States, and

`(B) the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the location of such production.

For purposes of this paragraph, the term `United States' includes any possession of the United States.'.

(b) Excise Tax Credit- Paragraph (2) of section 6426(h), as added by subsection (c), is amended to read as follows:

`(2) BIODIESEL AND ALTERNATIVE FUELS- No credit shall be determined under this section with respect to any biodiesel or alternative fuel unless--

`(A) such biodiesel or alternative fuel is produced in the United States for use as a fuel in the United States, and

`(B) the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of such biodiesel or alternative fuel which identifies the product produced and the location of such production.'.

(c) Provisions Clarifying Treatment of Fuels With No Nexus to the United States-

(1) ALCOHOL FUELS CREDIT- Subsection (d) of section 40 is amended by adding at the end the following new paragraph:

`(6) LIMITATION TO ALCOHOL WITH CONNECTION TO THE UNITED STATES- No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term `United States' includes any possession of the United States.'.

(2) BIODIESEL FUELS CREDIT- Subsection (d) of section 40A is amended by adding at the end the following new paragraph:

`(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE UNITED STATES- No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term `United States' includes any possession of the United States.'.

(3) EXCISE TAX CREDIT-

(A) IN GENERAL- Section 6426 is amended by adding at the end the following new subsection:

`(h) Limitation to Fuels With Connection to the United States-

`(1) ALCOHOL- No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States.

`(2) BIODIESEL AND ALTERNATIVE FUELS- No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States.

For purposes of this subsection, the term `United States' includes any possession of the United States.'.

(B) CONFORMING AMENDMENT- Subsection (e) of section 6427 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

`(5) LIMITATION TO FUELS WITH CONNECTION TO THE UNITED STATES- No amount shall be payable under paragraph (1) or (2) with respect to any mixture or alternative fuel if credit is not allowed with respect to such mixture or alternative fuel by reason of section 6426(h).'.

(d) Effective Date-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008.

(2) PROVISIONS CLARIFYING TREATMENT OF FUELS WITH NO NEXUS TO THE UNITED STATES-

(A) IN GENERAL- Except as otherwise provided in this paragraph, the amendments made by subsection (c) shall take effect as if included in section 301 of the American Jobs Creation Act of 2004.

(B) ALTERNATIVE FUEL CREDITS- So much of the amendments made by subsection (c) as relate to the alternative fuel credit or the alternative fuel mixture credit shall take effect as if included in section 11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users.

(C) RENEWABLE DIESEL- So much of the amendments made by subsection (c) as relate to renewable diesel shall take effect as if included in section 1346 of the Energy Policy Act of 2005.

See H.R. 5351

In general I like it.  There are a few things I wish

1= That incentives and regulations were put in place to help transistion us =away= from corn and soy, or other food crops, and =towards= higher yielding oil crops.

2= An explicit incentive and mandate for algoil biodiesel 

3= That Big Oil, now getting record profits, was given an incentive, or even an outright mandate, to pump money into the biodiesel field.

That $18B no longer going to Big Oil could fund a great deal of biofuel research...

I am =VERY= glad the loophole involving non domestic biofuel has been closed.  That one was bleeding the USA of lot's of tax payer dollars.

 I think they may want to take another look at fuels produced outside the US. The US military should be encouraged to buy alternative energy abroad to foster the development of local production to meet the some of the consumption of the military abroad.

I think the repeal of those big oil tax thingys will among other things provide a strategic reserve as less development should take place of oil fields here in the States. I think that is a pretty good long term strategy.

 Looks like it passed the House now on to the Senate.

Anybody get the feeling Bush will Veto this one? 

It is pure pandering and politics by Pelosi and congress in an election year. It will never pass the Senate, nor should it. Specifically, H.R. 5351 contains $18 billion in new taxes and does nothing to increase domestic production and lower overall energy costs.

With the cost of our domestic oil exploration and production increasing by nearly $10 billion every year and gas prices rising by the day, now is not the time to hamstring the American economy by mandating the use of alternative energy sources that may have only limited capabilities in today’s marketplace. Although alternative energy sources hold promise for the future, significant challenges and research remain before they can provide reliable and cost-effective energy for American consumers. Congress should promote free market solutions that promote open competition among all fuels rather than attempt to pick winners and losers in the energy marketplace.

dereckbc:

H.R. 5351 contains $18 billion in new taxes

 

Removing $18B in =tax breaks and subsidies= from an industry presently turning the largest profits in history is NOT "$18B in new taxes."

The oil industry does not need government handouts any longer.  If it ever did.

That $18B is =our= tax money.  Not the oil companies.  That $18B =of ours= is needed elsewhere more than it is needed in the hands of the oil companies.

If nothing else, we have a $156B economic stimulus package to pay for...

On the whole, this is a very good bill and should be supported. 

Voltaire:

Removing $18B in =tax breaks= from an industry presently turning the largest profits in history is NOT "$18B in new taxes."

Spoken like a true Democrat, redistribute wealth.

dereckbc:

Voltaire:

Removing $18B in =tax breaks and subsidies= from an industry presently turning the largest profits in history is NOT "$18B in new taxes."

Spoken like a true Democrat, redistribute wealth.

?? =Redistribute=??  That $18B is not money that the oil companies earned.  It's money citizens earned and payed as taxes.

No one is taking money away from the oil companies that they earned by ending the $18B in federal subsidies.  In fact, doing such a thing is =exactly the opposite= as "wealth redistribution" since that money is the taxpayers and not the oil companies.

If anything, I'd think someone against wealth redistribution would be be even more against tax breaks or subsidies than they would be against taxes in general.

Tax subsidies and tax breaks are blatent attempts at wealth redistribution.

...and while we can debate the value of wealth distribution elsewhere, it can not be denied that if you are against wealth redistribution you must logically be against tax breaks and tax funded subsidies.

To argue otherwise is a contradiction bordering on hypocrisy.

 

This is nothing less than the end of a Corporate Welfare item. This is not some fledgling industry in need of startup capital, as long as their profits are as high as they currently have been. they don't need the subsidies of our tax dollars. We should put credits of this sort toward alternate energies. Not ethanol, but actual <NET GAIN> oil alternatives or sources (biodiesel, wind, solar, wave, etc.)

Voltaire:

?? =Redistribute=??  That $18B is not money that the oil companies earned.  It's money citizens earned and payed as taxes.

The bill changes the current 'deduction' and 'credit' requiring domestic oil companies to pay more in taxes. (reducing their tax deduction and tax credit from what it is in 2007 is actually increasing their taxes in 2008 -- ie. A tax increase on those companies.)

Details: The 18 billion (over ten years) that we are talking about is on the 'tax revenues raised' from integrated oil companies sales of domestically produced oil and gas (13+B) and credit they tax for the foreign taxes they pay (4+B). This 'change' will now require additional taxes be paid by domestic oil companies on oil and gas in the U.S. and is in effect is a tax increase on them. The down side for the rest of us is that it makes it less attractive to produce oil and gas domestically ... something the bill was suppose to be 'incentifying.'  Domestic production and exploration is part of energy independence and security.

Personally at a time of high oil prices, congress should be renewing the domestic incentives and correcting the abused areas. Its great that the House has patched up the loopholes, but at a time of high energy costs I don't see changing the current energy bill that will costs domestic production 18 billion more in taxes as a way to encourage independence from foreign oil?

Rich at least some can see the light and call a spaid a "N". The Senate will kill it for what it is, if not the presidenrt will. The only way for it to pass is to break the oil connection and quit SHOOTING ourself in the foot. It is pure political pandering to morons who want the USA to fall into UN hands.

If one believes in "free market forces above all else", then one must logically believe that all industries should pay similar tax rates.  With no industry specific tax breaks, loopholes, or subsidies.

In addition, it is flawed logic to call the removal of such favored financial status, or of such treatment and "wealth redistribution" in your favor, a "tax increase".  When such favors are removed, all that has happened is that you are now competing more fairly than before. 

If one believes in "the free market", any sound industry should be able to compete on fair terms; and those who believe in "the free market " above all else must logically also believe that any company or industry that can not survive without such props does not have the right to exist.

Finally, the petrochemical industry is turning in the highest profits not only in its history but in the =entire= history of =all= corporate profits.  See Exxon Mobil's, and others, results over the last 5 quarters to confirm.  THESE FOLKS DO NOT NEED TAX BREAKS OR OTHER FINANCIAL FAVORS.

If the oil companies can not compete under the present circumstances, then they never will be able to.

Let's also bear in mind that all of these petrochemical companies are large multi-nationals.  They could not care less about "being patriotic" to the USA.  The US has not been the major focus of supply for them in quite some time and it never will be again no matter what financial incentives are dangled in front of them.  The raw supply with best ROI and EROI is simply not in the USA.  It is elsewhere in the world and has been for quite some time.

So worries about "disincentives" against domestic oil pumping are misguided.  The only way such sources of crude oil are going to become "domestic" is if we conquer Mexico and some other Central and South American countries... 

Voltaire:

So worries about "disincentives" against domestic oil pumping are misguided.  The only way such sources of crude oil are going to become "domestic" is if we conquer Mexico and some other Central and South American countries... 

And if we would "conquer" south of our border, the U.S. government would require so much red tape, taxation and government intervention that those petroleum sources will be to challenging for businesses to deal will .... it will be cheaper to go somewhere else. One only has to listen and watch corporations to see they are moving their profit centers to countries welcoming development. They go to to where corporations can operate without the tax burden the U.S. forces on them. Liberals don't get it ... profitable and tax free corporations create job and keep profits here at home. Tax them more than their international competitor and its a no-brainer to leave. Those believing that taxing companies and individuals with wealth at higher rates is the way to generate more tax revenue are dead wrong in the long run. I hope some can speak clearly and help voters understand this before its too late.

Back to oil ... and fairness. I do agree with you Voltaire that all should compete fairly. Incentives from the government are not in the best interest for economic success ... BUT there is the little thing about "incentives for the sake of energy independence and security" ... and that's why its important to stimulate and develop alternatives and expand domestic oil exploration and extraction. 

Rich:

 One only has to listen and watch corporations to see they are moving their profit centers to countries welcoming development. They go to to where corporations can operate without the tax burden the U.S. forces on them. Liberals don't get it ... profitable and tax free corporations create job and keep profits here at home. Tax them more than their international competitor and its a no-brainer to leave. Those believing that taxing companies and individuals with wealth at higher rates is the way to generate more tax revenue are dead wrong in the long run. I hope some can speak clearly and help voters understand this before its too late.

Right again Rich, libs like Voltaire do not get it. The US has the second highest corporate tax rate in the world, and US citizens wonder why companies are leaving in droves to places like Ireland where corporate tax rate is 12% taking all those jobs and tax dollars with them. Just like domestic oil production and refining, the Libs want to destroy what little we have left. I don't understand why they want to destroy the very foundation of our country and the opportunities it gives us all.

dereckbc:

I don't understand why they want to destroy the very foundation of our country and the opportunities it gives us all.

Because liberals are socialist at the core. IMHO they don't see the macro economic picture and how capitalism and free enterprise need to be unfettered in order to keep our country strong. They believe that asset redistribution can be done without harming the economy and that our way of life in the U.S. is unfair to the rest of the world. Prepare for the future Dereck ...  one world government. Hmm ...  is that prophesy?

 Sorry Nate ... forgot this was not in the general/politics area. 

Rich:

Prepare for the future Dereck ...  one world government. Hmm ...  is that prophesy?

I don't know but I think I know how to spell it: U-N

dereckbc:

Right again Rich, libs like Voltaire do not get it. The US has the second highest corporate tax rate in the world, and ...

I not only "get it" better than you, I know and research my facts better than you.

I also do not misuse words like Liberal and Conservative the way you do.  My fellow Libertarians and Utilitarians would be quite surprised to hear me described as a Liberal.

and Rich?  Liberals and Socialists are NOT the same thing.  Both groups would be insulted if called by the other label.  Definitions and descriptions of both philosophies are readily available

http://www.worldwide-tax.com/

Nation              CorporateRate     IndividualRate          VAT

Argentina-->	35%	9-35%	21%
-->Australia	30%	17-47%	10%GST
Austria	25%	21%-50%	20%GST
-->Belgium	33.99%	25-50%	21%
Brazil	34%	15-27.5%	17-25%
Bulgaria	10%	10%	20%
Canada	19.5%(federal)	15-29%(Federal)	5%(gst)
China	25%	5-45%	17%
Cyprus	10%	20-30%	15%
Czech Rep.	21%	15%	19%
-->Denmark	24%	38-59%	25%
-->Egypt	40%	20-40%	-
Estonia	22%	22%	18%
Finland	26%	8.5-31.5%	22%
-->France	33.33%	10%-48.09%	19.6%
Germany	38.34%(average)	15-42%	19%
-->Gibraltar	33%	17-40%	-
Greece	22/25%	0-40%	19%
-->Hong kong	17.5%	16-20%	-
Hungary	16%	18% and 36%	20%
India	30-40%	10-30%	12.5%
-->Indonesia	30%	5-35%	10%
Ireland	12.5%	20-41%	21%
Israel	27%	10-47%	15.5%
Italy	33%	23%-43%	20%
Japan	30%	5-40%	5%(consump)
Latvia	15%	25%	18%
Lithuania	15%	15%/24%	18%
-->Luxemburg	29.63%	6-38.95%	15%
Malta	35%	15-35%	18%
-->Mexico	29%	3-29%	15%
-->Monaco	33.33%	0%	19.6%
-->Morocco	35%	0-41.5%	20%
Montenegro	9%	15%	17%
-->Netherlands	29.6%