Hill Heat

September 18, 2008

Pass Clean Energy Incentives; Strip out Provisions that Support Dirty Fuels

Dear Senator,

On behalf of our millions of members and activists, we urge Congress to pass the clean energy tax incentives included in the Energy Improvement and Extension Act of 2008 and strip the bill of incentives for dirty fossil fuels. Congress should take this opportunity to promote a new energy economy and begin the fight against global warming, and not reward the big oil and dirty coal industries.

The bill would extend federal tax incentives for energy efficiency and renewable energy technologies that have expired or will expire at the end of this year. These incentives must be extended immediately to avoid significant harm to the developing clean energy industries in the United States. The technologies produced by these industries play a vital role in reducing global warming pollution, creating new high-wage jobs in our country, and saving consumers and businesses money on their energy bills.

The extensions would help consumers and businesses reduce their energy consumption immediately, and in so doing blunt the impact of high energy bills. The greater use of energy efficiency and renewable energy spurred by extending the incentives would also decrease demand for natural gas, which in turn would help reduce natural gas prices. High natural gas prices are putting significant upward pressure on inflation and consumer energy bills. The incentives will help create new high-wage jobs in the clean energy technology sector and help the U.S. gain ground on other countries that are already ahead of us in the development and deployment of clean energy technologies.

The renewable energy and efficiency provisions have broad support from the nation’s largest retailers, leading appliance makers, commercial real estate industry, home insulators, architect association, the solar industry, biomass industry, wind industry, and environmental groups. However, the bill currently contains several controversial provisions on dirty fuels that we urge Congress to strip before the bill becomes law. These dirty liquid fuel provisions in the bill would be a major setback in efforts to solve global warming. Extraction of these fuels – tar sands, oil shale and liquid coal – can produce more than twice the amount of global warming pollution as conventional oil. Supporting these fuels through tax incentives is completely at odds with mandatory carbon reductions that we expect Congress will enact in the near future.

The “Refinery Expensing” provision in the bill promotes the production of oil shale and tar sands fuels. This provision expands the Internal Revenue Code Section 179C tax credit to refinery property that is used to directly convert oil shale and tar sands into liquid transportation fuels. The extraction, refining and combustion of oil from shale is likely to generate upwards of four times more greenhouse gasses than conventional fuels and would be mined from some of our most precious wildlands in the Rocky Mountain West.

Tar sands oil from Canada is being extracted from the heart of Canada’s Boreal forest, one of the last large intact ecosystems on Earth. The devastating extraction process turns the pristine forest into a moonscape. Tar sands could be produced in the Western United States as well. Canadian tar sands oil already is being refined in refineries in the Midwest and Rockies regions and makes up 8% of the fuel use in our country. Of the half dozen U.S. refinery expansions in the permitting stage, most are multi-billion dollar expansions to take more tar sands oil from Canada. Supporting these refinery expansions through the tax code will impose high costs on taxpayers when oil companies operating in the tar sands are making record profits.

Provisions that incentivize liquid coal are also problematic. Relying on liquid coal would nearly double the global warming pollution per gallon of transportation fuels and increase the damage of coal mining to communities and ecosystems across the country. This fuel has yet to emerge as a significant transportation fuel in the United States and is not a viable fuel in a world where carbon must be reduced. Congress should therefore not provide any support to the development of liquid coal.

Extending the clean energy tax incentives would maintain the growth of energy efficiency and renewable energy industries, which are essential to reducing global warming pollution. We urge you to support clean energy incentives and strip the dirty fuels provisions before the bill is sent to the president. Sincerely,

Karen Wayland, Legislative Director Natural Resources Defense Council Tiernan Sittenfeld, Legislative Director League of Conservation Voters Cindy Shogan, Executive Director Alaska Wilderness League Jennifer S. Rennicks, Federal Policy Director Southern Alliance for Clean Energy Betsy Loyless, Audubon Shawnee Hoover, Legislative Director Friends of the Earth Marty Hayden, V.P. Policy and Legislation Earthjustice

Lynn Thorp, National Campaigns Coordinator Clean Water Action Linda Lance, Vice-President for Public Policy The Wilderness Society Debbie Sease, National Campaign Director Sierra Club Elizabeth Thompson, Legislative Director Environmental Defense Fund Steve Porter, Director of Climate Programs Center for International Environmental Law Marchant Wentworth, Legislative Representative Union of Concerned Scientists Anna Aurilio, Director, Washington Office Environment America Judy Duffy, Advocacy Director League of Women Voters of the United States Robert Dewey, V.P. Government Relations Defenders of Wildlife

NWF:

Dear Senator: On behalf of our four million members and supporters and the hundreds of thousands of hunters, anglers and other outdoor enthusiasts in our ranks, we write in opposition to the Energy Improvement and Extension Act of 2008 (H.R. 6049). While we strongly favor the critical extensions of incentives for conservation and renewable energy we oppose H.R. 6049 because it includes substantial new subsidies for dirty fuels that will dramatically increase global warming pollution and threaten millions of acres of wildlife habitat. The clean energy tax incentives have passed both the Senate and House several times, and we applaud the Senate’s efforts to move these into law. Unfortunately, by including sweeping new federal subsidies for oil shale, tar sands and liquid coal refining, the bill no longer represents the kind of progress America needs to confront global warming. We specifically oppose:

Refinery Incentives for Oil Shale & Tar Sands: The “Refinery Expensing” provision in the bill promotes the production of oil shale and tar sands fuels. This provision expands the Internal Revenue Code Section 179C tax credit to refinery property that is used to directly convert oil shale and tar sands into liquid transportation fuels.

Oil shale development would put at risk millions of acres of wildlife habitat throughout the Rocky Mountain West important to hunters, anglers and other wildlife enthusiasts. Moreover, producing transportation fuels from oil shale and tar sands would dramatically increase global warming pollution.

Oil shale production is five times more CO2 intensive than conventional drilling and gasoline production. The United States cannot change course on its rising global warming pollution levels while quintupling the CO2 in our tanks.

A viable shale industry would also have significant direct impacts on wildlife, and inevitably collide with consumer water needs in the arid West. Shale production requires five gallons of water to produce one gallon of fuel, and the vast majority of shale is located in arid states with limited water resources. The federal government reports that a viable shale industry would consume upwards of 315 million gallons of water daily – 130 percent of the City of Denver’s daily water use. Combined with the massive disturbance of land and habitat caused by shale extraction, this fuel presents a grave risk to sensitive wildlife habitat in the Rocky Mountain West.

Tar sands production is four times more CO2 intensive than conventional drilling and gasoline production. Tar sands also threaten wildlife habitat as they are currently being mined from Canada’s boreal forest, and could be produced in the Western United States as well. Of the half dozen U.S. refinery expansions in the permitting stage, most are multi-billion dollar expansions to take more tar sands oil from Canada. Supporting these refinery expansions through the tax code will impose high costs on taxpayers when oil companies operating in the tar sands are making record profits.

Incentives for Liquid Coal: the “Carbon Capture and Sequestration Demonstration Projects” and the “Extension and Expansion of the Alternative Fuels Credit” would promote coal to liquid transportation fuels. The production and use of coal-based transportation fuels would more than double the global warming pollution per gallon as compared to conventional gasoline. It would also increase the devastating effects of coal mining felt by communities and wildlife stretching from Appalachia to the Rocky Mountains.

NWF strongly supports provisions in the bill that would extend federal tax incentives for energy efficiency and renewable energy technologies that have expired or will expire at the end of this year. These incentives must be extended immediately to avoid significant harm to the developing clean energy industries in the United States. The technologies produced by these industries play a vital role in reducing global warming pollution, creating new high-wage jobs here at home, and saving consumers and businesses money on their energy bills.

The extensions would blunt the impact of high energy bills by encouraging greater use of energy efficiency and renewable energy, and therefore decrease demand for natural gas. High natural gas prices are putting significant upward pressure on inflation and consumer energy bills.

However, the increased global warming pollution and destruction of important wildlife habitat that would result from the oil shale, tar sands, and CTL provisions in H.R.6049 outweigh the benefits of these clean energy incentives. The United States cannot change course on its rising global warming pollution levels while dramatically increasing the CO2 in our tanks. We therefore regrettably urge opposition to the bill.

Thank you for your consideration.

Sincerely,

Larry Schweiger
President & CEO
National Wildlife Federation