President Takes Steps to Boost Biofuels, Coal Use

More taxpayer subsidies are apparently underway as Administration recasts rhetoric toward job creation.

by on Feb.03, 2010

Energy independence or more pandering to big business lobbyists?

President Barack Obama today announced a series of steps his Administration is taking as part of its strategy to “enhance American energy independence while building a foundation for a new clean energy economy, and its promise of new industries and millions of jobs.”

The announcement comes as the Administration is under attack for its failure to create jobs despite promises to do so, and with unemployment at levels not seen since the Great Depression.

At a meeting of Republican and Democratic governors, the President proposed three measures would boost biofuels production and reduce dependence on foreign oil – all of them now cloaked as job creating.

The measures at first glance will be controversial, as they seem to require vast new taxpayer subsidies to special interest groups in the agriculture and energy industries. The administration is also under attack for growing deficits, of course, by the Republican party, which turned a budget sur into a breathtaking deficit after eight years of rule, one that is only getting worse since the collapse of the financial markets in the fall of 2008 and the ensuing and ongoing great recession.

Perhaps the most controversial item as details emerge will be the President’s call for five to ten commercial demonstration projects to be up and running by 2016 of so-called “clean coal” projects, particularly carbon capture and storage (CCS).

Fuelishness or News?

The President in a memorandum established an Interagency Task Force on Carbon Capture and Storage to develop a “comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies.”

The Task Force will be co-chaired by representatives of from the Department of Energy and Environmental Protection Agency, and include participants from at least nine different agencies and offices. The Task Force shall develop within 180 days a plan to overcome the barriers to the deployment of widespread affordable CCS within 10 years. How the inevitable subsidies that will emerge for energy companies will be funded was not specified.

Also controversial will be a proposed U.S. Department of Agriculture rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. The President’s Biofuels Interagency Working Group released its first report – Growing America’s Fuel. The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, lays out a strategy to advance the “development and commercialization” of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets.

Corn ethanol, heavily subsidized already by taxpayers and protected from the import much less expensive sugar-cane ethanol, based on EPA’s updated modeling, meets the 20% GHG reduction requirement qualifying it for use as a conventional biofuel – not an advanced biofuel, which must meet a 50% reduction requirement.

USDA already provides grants and loans, and other financial support to help biofuels and renewable energy commercialization. BCAP has begun to provide matching payments to folks delivering biomass for the collection, harvest, storage, and transportation of biomass to eligible biomass conversion facilities. Expect more agricultural subsidies to be forthcoming.

President Obama said, “Now, I happen to believe that we should pass a comprehensive energy and climate bill.” The reference is to the climate change bill that seems to be stalled or perhaps dead in the Senate.

“It will make clean energy the profitable kind of energy, and the decision by other nations to do this is already giving their businesses a leg up on developing clean energy jobs and technologies. But even if you disagree on the threat posed by climate change, investing in clean energy jobs and businesses is still the right thing to do for our economy. Reducing our dependence on foreign oil is still the right thing to do for our security. We can’t afford to spin our wheels while the rest of the world speeds ahead,” Obama concluded.

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4 Responses to “President Takes Steps to Boost Biofuels, Coal Use”

  1. JM in San Diego CA says:

    The carbon dioxide output from burning coal is irrelevant*. As long as you can keep the soot and sulfur down, coal is fine.

    However, the government put large amounts of American coal “OFF LIMITS” in the 1990s, especially the desirable low-sulfur product.

    We will continue to need fossil fuels until nuclear fusion comes of age. Radioactive waste is nearly non-existent with a fusion reactor. (Too bad useful power output is nonexistent, too.)


    * In the absence of alternative power plants, like nuclear, solar, hydroelectric, geothermal or wind, the power is going to come from burning something. The oxygen doesn’t care what the carbon source is. It will oxidize the carbon. Conversion of power plants from coal to natural gas doesn’t affect the carbon cycle.

  2. Ken Zino says:

    Well, two points come to mind. The amount of CO2 generated is higher with coal than with natural gas per unit generated as I recall. And since we generate 40% of our power in the U.S. on average with coal, in some regions it’s more, it is relevant, unless you dismiss global warming/man made CO2 effects.

    The other point about sulfur and soot is well taken. And here the power industry for decades refused to install scrubbers and other clean technology on plants, and, worse, successfully fought regulation requiring it. How these costs are allocated now will require close scrutiny in lobbyist dominated WADC.

  3. JM in San Diego CA says:

    Yes, coal is less efficient in producing electricity by about 15 percent. (Might not burn as hot; temperature differential usually improves the efficiency.)

    So, shutting down the coal plants would cut the carbon conversion but the cost would go up, since the coal plants are the cheap ones. I regard Global Warming as a con, so the CO2 doesn’t bother me.

    Let me guess how those costs are to be allocated: One way or another, end-user pays it all. (If I buy a textbook for Econ 101, I think it’s in there. ;-)


  4. Ken Zino says:

    JM: LOL