ABO Legislative Review – July/August

As the House and Senate left Washington for their August work period, a flurry of legislation important to the Algae Biomass Organization (ABO) made progress, including some significant milestones for us. In particular, the Senate Finance Committee passed a tax extenders bill which includes parity tax treatment for algae with other biofuels.This is one of ABO’s legislative priorities, and we were very pleased to see our language included in this legislation.

We are seeing algae become a more significant player in the politics of biofuels. In early July, at the Biomass 2012 Conference in Washington DC sponsored by the Department of Energy, algae was mentioned by almost every key speaker. Secretary Chu mentioned algae in the 2nd sentence of his presentation. There was a separate panel discussion dedicated to algae, where two ABO member companies, Sapphire Energy and Algenol Biofuels, were showcased.

Our ability to produce fuel compatible with fossil fuels, coupled with the fact that we do not compete with food crops for land, makes algae very attractive from a policy perspective.

FY 13 Defense Appropriations Bill

The Senate Defense Appropriations Committee passed the FY 13 Defense Appropriations bill on Thursday, August 2. This bill would fund the Department of Defense’s programs and activities for Fiscal Year 2013.

In a “win” for the biofuels community, the Senate Defense Subcommittee approved a bill includes $70M for the Navy biofuels program as requested in the President’s budget, and added $100 million to the Defense Production Act “to build production capacity for critical defense-related initiatives,” which provide potential additional funding for the Navy’s military biofuels program.

This bill still must pass the full Senate. Timing on a Senate vote is not certain since the House and Senate have agreed to implement a six-month continuing resolution (CR) in September, which would fund the government at existing levels through the election. ABO continues to lobby for this bill to pass the Senate and has worked diligently with a variety of trade organizations on collaborative meetings and outreach during the past weeks. We will continue to be encouraging our members to connect with their Representatives and Senators on this important bill.

The House Defense Appropriations bill does not fund the $70 million requested by the Administration for the Navy biofuels project, but the House did add $50M in general funds for defense-related initiatives. The differences between the House and Senate versions would be worked out in conference when Congress reconvenes in September.

National Defense Authorization Act

As noted, ABO continues to work with a coalition of biofuels groups to fight the anti-biofuels language which was added to the Senate versions of the National Defense Authoziation Act (NDAA). This language prohibits the Department of Defense from purchasing biofuels which are not cost-competitive with conventional fuel. It also effectively prohibits the Pentagon from funding biorefineries. This thinking is very short sighted and a limiter of innovation.

The Senate Armed Services Committee staff indicate the National Defense Authorization Act may reach the Senate floor the last couple of weeks in September but would not be surprised if this was delayed until later in the year. Staff surmises that the bill is unlikely to reach conference with the House of Representatives until after the elections in November.

Farm Bill

On Thursday, August 2, the US House of Representatives passed HR 6233, the Drought Relief Aid Bill, by a vote of 223-197. This bill provides assistance to farmers hard-hit by drought.

Passage of this bill resulted in the House of Representatives returning to their districts for the August work period without passing a comprehensive Farm Bill.When Congress reconvenes in September, discussion about passage of the Farm Bill, which expires at the end of September, will continue.

The Senate has passed a 5-year Farm Bill which includes an Energy Title with mandatory funding. ABO worked with other biofuels groups to support this title and the mandatory funding.

The Senate bill does, however, include language to prohibit algae from participation in the Biomass Crop Assistance Program (BCAP). BCAP is a program with two parts. In the past, algae has been prohibited from participation in one part of the program. The Senate language would eliminate our participation in both parts of the program. ABO is working with Senate staff to eliminate the language which prohibits algae’s participation in BCAP. The language which prohibits algae’s inclusion in BCAP is not part of the House Farm Bill draft, therefore, we will also work with House staff to support their BCAP language.

The future of the Farm Bill legislation is uncertain. House leadership is not anxious to have a floor fight over this bill as it will highlight divisions among their members. At the end of August, Speaker Boehner attempted to have the House vote on a clean one year extension of the existing Farm Bill programs with the addition of drought relief. When it became clear that this one year extension would not pass the House, leadership instead offered the drought assistance package on its own.

September promises to bring more discussion and debate over the Farm Bill proceedings.

Tax Extenders

Also on Thursday, August 2, the Senate Finance Committee approved the Family and Business Tax Cut Certainty Act of 2012. The bill, which received bipartisan support in the Committee, would extend the tax credit for the production of cellulosic biofuel through the end of 2013.

The bill would also extend the cellulosic biofuel tax credit to algae-based fuel for the first time.

These provisions are part of a larger legislative package that would extend dozens of tax credits that have either expired or are set to expire at the end of this year. The full Senate is not expected to vote on the legislation until September at the earliest. However, the bipartisan support for the inclusion of algae-based biofuel in the Senate Finance Committee is a significant milestone that will put the algae industry in an excellent position going into the legislative debates ahead.


Mary Rosenthal

Executive Director,
Algae Biomass Organization

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