Alternative Energy Technologies

Indiana Department of Environmental Management, DieselWise Indiana  - Application Deadline is May 15, 2009

The DieselWise program is grant availability for projects designed to significantly reduce diesel emissions across Indiana.  The total estimated funding for this competitive grant opportunity is in excess of $2,000,000.  DieselWise Indiana anticipates awarding cooperative agreements from this announcement ranging from $25,000 to $250,000, subject to availability of funds and the quality of proposals received.  Additional funds may be available in the near future.  Project proposals submitted under this grant announcement may be awarded for funding from these additional funds.  Preference will be given to applicants that are willing to provide a financial match and/or in-kind match, provide actual historic idling hours pre-installation and post installation of idle reduction technologies, along with a commitment to maximize the use of any installed diesel emission reduction technology.  Information can be found at http://www.in.gov/idem.5255.htm

USEPA Small Business Innovation Research Program - Solicitation closes May 20, 2009

The U.S. Environmental Protection Agency’s (EPA) Small Business Innovation Research Program supports small businesses in developing new environmental technologies.  The EPA anticipates the total funding that will be available for Phase I projects issued under this announcement will be $1.8 million. A total of $70,000 is available in funding for each EPA Phase I award. Recipients of Phase I awards will be eligible to compete for a much larger (up to $295,000) two-year Phase II award. Companies with fewer than 500 employees are eligible.  Solicitation closes May 20.

SBIR Phase I green building materials and systems research topics are:

• Building Materials and Site Management
• Energy and Indoor Environmental Quality
• Water Use and Management

HUD Brownfields Economic Development Initiative Funds - Application Deadline June 16, 2009
 
The Department of Housing and Urban Development (HUD) published a notice of availability of $20 million in Brownfields Economic Development Initiative (BEDI) funds (74 FR 20494) on May 4.  David Kaminsky, who works on development grants in HUD's Office of Economic Development, said the funds will be awarded competitively, and individual grants are capped at $2 million. BEDI grant funds are targeted for use in redeveloping brownfield sites as part of larger urban economic development projects, according to HUD. Brownfields are underutilized, abandoned or vacant sites where expansion or redevelopment may be burdened by confirmed or suspected environmental contamination, according to HUD. Kaminsky said BEDI grants must be used in conjunction with a new guaranteed loan under Section 108 of the Housing and Community Development Act. Section 108 is the loan guarantee provision of the Community Block Grant Program administered by HUD. The application deadline is June 16. The funds are coming from fiscal year 2008 and fiscal year 2009 appropriations, according to HUD. See http://www.hud.gov/offices/cpd/economicdevelopment/programs/bedi/funding09/index.cfm.

Modern agriculture is affected by more than just traditional farm policy - in other words, the statutes and programs that offer financial supports and incentives for production agriculture.  Today, new and changing policies and regulations require different strategic and business planning considerations.  Agriculture policy now is inextricably linked to rural, energy, trade, climate change, nutrition, transportation and infrastructure policies not to mention food safety, financial services and environmental regulations. 
 
This increasingly important set of policy priorities coupled with a new political administration in Washington, D.C. with a strong will to act suggest that the agriculture industry be prepared for something other than the status quo.  In just the last few weeks, several announcements and actions that connect the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA), the Congress, the court system and the agriculture industry support this view. 
 
Consider the following:
 
1.  EPA's greenhouse gas endangerment finding  After a thorough scientific review ordered in 2007 by the U.S. Supreme Court, the EPA issued last week a proposed finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. The gases in question are: carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, per fluorocarbons and sulfur hexafluoride. 
 
As the proposed endangerment finding states, "in both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act."  The report continues, "the science clearly shows that concentrations of these gases are at unprecedented levels as a result of human emissions, and these high levels are very likely the cause of the increase in average temperatures and other changes in our climate." 

Many industries send out warning signals at the first sign of "over-regulation" and agriculture is no exception.  This specific finding is a slippery slope for agriculture - especially the livestock industry that could be subject to new permit requirements for structure construction or modification and ultimately naturally occurring methane emission fees per animal to the tune of $175 per dairy cow, $87.50 per beef cow and $21.87 per hog (according to the American Farm Bureau Federation).  

In response, Nebraska Senator and former Secretary of Agriculture Mike Johanns has co-sponsored legislation that would protect animal agriculture from any greenhouse gas regulations promulgated by EPA.  Citing the significant economic value his state reaps from commercial red meat production, Johanns suggests this "cow tax" could cost Nebraska's farmers and ranchers tens of thousands of dollars per farm per year.
 
Before the finding takes effect, EPA is required to hold it open for public comment for 60 days and then issue proposed regulations which again would be subject to a public comment period. So EPA’s “deliberative process” could take another two years or more. Meanwhile, last week's announcement will increase pressure on Congress to move ahead on climate change legislation.

2.  Comprehensive climate change legislation  Climate change is near the top of the legislative agenda. In the Senate, Energy and Public Works Committee Chairman Barbara Boxer (D-CA) says she’ll do her best to work with anyone who seeks to move legislation quickly.  The House Energy and Commerce Committee is holding hearings now on a draft released by Chairman Rep. Henry Waxman (D-CA) and Rep. Ed Markey (D-MA) that proposes a mandatory cap-and-trade system to reduce greenhouse gas emissions.

The House Agriculture Committee wants a seat at the table on climate change, too. Committee staffers are currently reviewing stakeholder responses to a 29-question survey regarding the role of agriculture and forestry in a carbon reduction program. The input will be used in “crafting principles that could be part of any subsequent legislation,” explained Ag Committee Chairman Collin Peterson, who says the panel will launch its own hearings on the issue in the next few weeks.

3.  EPA does not appeal court decision on pesticide applications  The U.S. Justice Department recently announced it will not appeal a federal court decision that could eventually require farmers to seek permits from the EPA for all pesticide applications and open the door to citizen lawsuits.  The U.S. Court of Appeals 6th Circuit issued the decision on the case, National Cotton Council vs. EPA, in January, nullifying an earlier EPA ruling that allowed chemical applications to be regulated under existing federal pesticide regulations. Instead, the pesticides applied in or near waterways will now be classified under the Clean Water Act. The change, if allowed to stand, carries significant implications for agriculture as a user of pesticides unable to completely control runoff caused by rainfall. 

A wide range of other beneficial pest control activities could be subjected to lawsuits from activists claiming that the use of pesticides is prohibited under the Clean Water Act unless authorized by permit.  This is of great concern to mosquito control officials and pest managers for forests, recreational waterways, irrigation canals and parks. 

In a March 6, 2009 letter, Agriculture Secretary Tom Vilsack asked EPA Administrator Lisa Jackson to seek a rehearing and request reversal of the 6th Circuit's decision. Senate Agriculture Committee Chairman Tom Harkin, (D-IA) and Ranking Member Saxby Chambliss (R-GA) weighed in with a similar letter.  But those requests were rebuffed, and the EPA has indicated they would be requesting a two-year implementation plan for the ruling. 

4.  EPA seeks public comment on raising the ethanol blend level to E15  EPA's broad reach into agriculture also is evident in its renewable fuel mandate authorities.  EPA is currently seeking public comment on a waiver application submitted by representatives of the ethanol industry to authorize up to 15 percent ethanol blends with gasoline.  The 30-day comment period will run through at least May 20, 2009. By law, the EPA is required to grant or deny the request no later than December 1, 2009.  Since 1978, the limit has been a 10 percent volume ethanol blend (E10) for conventional (non flex-fuel) vehicles.

According to the EPA release, the applicants contend that increasing the blend rate is needed to bring greater investment to next generation biofuels technologies and commercialization.  And the higher blend rate is arguably critical to fulfilling the 2007 Energy Independence and Security Act's renewable fuel mandates.  Opponents (typically environmental and consumer groups and small engine and car manufacturers) counter that the increased blend rate might damage pollution control equipment, reduce air quality, and undermine vehicle and equipment performance and warranties.

5.  New environmental and climate position at USDA   Agriculture Secretary Vilsack announced last week the creation of a new environmental and climate position in his inner office.  Robert Bonnie will serve as Senior Advisor to the USDA Secretary for Environment and Climate.   Referencing that two out of the three key goals of President Obama for USDA are tied to the environment, Vilsack will rely on Bonnie to help guide broad natural resource and climate policy and program decisions.  Bonnie has worked for the Environmental Defense Fund (EDF) for over 14 years with extensive experience in carbon credit programs and conservation initiatives for endangered species.

Independently, each of the above should be important to agriculture, but taken collectively they are evidence of an intensifying regulatory landscape for the industry.  Every part of agriculture - from crop and livestock production, food processing and manufacturing to alternative energy production - is affected by these developments.  Increasingly, EPA will be shaping environmental and climate policy that directly affects agriculture.  Climate change legislation and related programs will be developed and implemented - it's not a matter of if, but when and what form.  Agriculture must communicate with the new political and policy leaders, engage in the policy formation and influence more beneficial rather than harmful outcomes for the industry.
 

Commentary from Beth Bechdol, Director of Agribusiness Strategies, Attending USDA's 85th Annual Agricultural Outlook Forum

1. Helping small farms (many of which are specialty crop producers) become mid-sized farms by encouraging more consumption of fruits, vegetables, and nuts
2. Improve the safety and security of the food system
3. Rebuild and revitalize rural communities
4. Develop more renewable and alternative energy opportunities for agriculture
5. Enhance conservation stewardship programs

"Green" projects and programs may be another way the federal government is hoping to pull the struggling economy out of the red.  The bill provides for billions of dollars of tax relief for qualifying energy and climate change projects through changes in the renewable energy tax credits, the Department of Treasury renewable energy grant program and energy and transmissions appropriations.

Read more about the impact on renewable energy and green projects.

Blog written by Paul Jones.

Tax Provisions in the American Recovery and Reinvestment Act Provide Relief to Taxpayers and Promote Clean Technology and Renewable Energy
As expected, the United States Congress passed, and last week the President signed into law, sweeping economic recovery legislation that expands existing, and establishes new, tax incentive programs to promote clean technology, renewable energy and green jobs.  The legislation also provides businesses tax relief in certain areas.

Read the entire alert about the American Recovery and Reinvestment Act.

Blog written by Paul Jones.

Congress is in the process of passing economic recovery legislation that would (if enacted) expand existing, and establish new, tax incentive programs to further those goals.  Specifically, the American Recovery and Reinvestment Tax Act (the Act) contains several provisions that would provide expanded or additional sources of funds for green projects.  If enacted in its current form, the Act would, among other things:

• Establish a 30% credit for investment in facilities that manufacture advanced energy property;
• Extend Code Section 45 renewable energy production tax credits by increasing the placed in service date for three years (through 2012 for wind and 2013 for other qualified facilities);
• Allow temporary election to claim 30% investment credit under Code Section 48 in lieu of the Code Section 45 production tax credit; and
• Expand the volume for Clean Renewable Energy Bonds (CREBs); and
• Expand the volume for the recently established Qualified Energy Conservation Bonds (QECBs), which like CREBs, are tax credit bonds.

The Act contains several other provisions, including those that would expand the New Markets Tax Credit program, revise certain tax-exempt bond limitations, and provide relief for cancellation of debt income.

Read the full text of an Ice Miller alert which contains more details on the points above.

According to the summary of the American Recovery and Reinvestment Bill by the Committee on Appropriations (Obey, D-WI, Chair) action, and action now, is needed to pull the economy out of a "crisis not seen since the Great Depression." The bill contains targeted efforts to have clean, efficient American energy, summarized by the Committee as:

CREATE JOBS WITH CLEAN, EFFICIENT, AMERICAN ENERGY
To put people back to work today and reduce our dependence on foreign oil tomorrow, we will make investments aimed at doubling renewable energy production and renovate public buildings to make them more energy efficient. America’s energy shortcomings present a huge opportunity to put people to work in ways that will transform our economy.

• Reliable, Efficient Electricity Grid: $11 billion for research and development, pilot projects and federal matching funds for the Smart Grid Investment Program to modernize the electricity grid making it more efficient, secure and reliable and build new power lines to transmit clean, renewable energy from sources throughout the nation.
• Renewable Energy Loan Guarantees: $8 billion for loans for renewable energy power generation and transmission projects.
• U.S. General Services Administration (GSA) Federal Buildings: $6.7 billion for renovations and repairs to federal buildings including at least $6 billion focused on increasing energy efficiency and conservation. Projects are selected based on GSA’s ready-to-go priority list.
• Local Government Energy Efficiency Block Grants: $6.9 billion to help state and local governments make investments that make them more energy efficient and reduce carbon emissions.
• Energy Efficiency Housing Retrofits: $2.5 billion for a new program to upgrade HUD sponsored low-income housing to increase energy efficiency, including new insulation, windows and furnaces. Funds will be competitively awarded.
• Energy Efficiency and Renewable Energy Research: $2 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities to foster energy independence, reduce carbon emissions and cut utility bills. Funds are awarded on a competitive basis to universities, companies and national laboratories.
• Advanced Battery Loans and Grants: $2 billion for the Advanced Battery Loan Guarantee and Grants Program, to support U.S. manufacturers of advanced vehicle batteries and battery systems. America should lead the world in transforming the way automobiles are powered.
• Energy Efficiency Grants and Loans for Institutions: $1.5 billion for energy sustainability and efficiency grants and loans to help school districts, institutes of higher education, local governments and municipal utilities implement projects that will make them more energy efficient.
• Home Weatherization: $6.2 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
• Smart Appliances: $300 million to provide consumers with rebates for buying energy efficient Energy Star products to replace old appliances, which will lower energy bills.
• GSA Federal Fleet: $600 million to replace older vehicles owned by the federal government with alternative fuel automobiles that will save on fuel costs and reduce carbon emissions.
• Electric Transportation: $200 million for a new grant program to encourage electric vehicle technologies.
• Cleaning Fossil Energy: $2.4 billion for carbon capture and sequestration technology demonstration projects. This funding will provide valuable information necessary to reduce the amount of carbon dioxide emitted into the atmosphere from industrial facilities and fossil fuel power plants.
• Department of Defense Research: $350 million for research into using renewable energy to power weapons systems and military bases.
• Alternative Buses and Trucks: $400 million to help state and local governments purchase efficient alternative fuel vehicles to reduce fuel costs and carbon emissions.
• Industrial Energy Efficiency: $500 million for energy efficient manufacturing demonstration projects.
• Diesel Emissions Reduction: $300 million for grants and loans to state and local governments for projects that reduce diesel emissions, benefiting public health and reducing global warming. This includes technologies to retrofit emission exhaust systems on school buses, replace engines and vehicles, and establish anti-idling programs. 70% of the funds go to competitive grants and 30% funds grants to states with approved programs. Last year EPA was able to fund only 27% of the applications received.

See the entire Committee on Appropriations summary. We'll all be watching Congress as they consider the bill in the next few weeks and its environmental and green provisions. Stay tuned for action!

Or so said John Doerr at the U.S. Senate Committee on Environment & Public Works briefing titled, "Investing in Green Technology as a Strategy for Economic Recovery."  The noted venture capitalist, a partner at Kleiner Perkins Caufield & Buyers, urged Chairman Barbara Boxer (D-CA) and the committee to encourage the enactment of vital policies to ensure speed and scale in addressing green technology.  Advocating for a unified national smart grid and a price on carbon/carbon emissions, among other policy objectives he identified as vital, Mr. Doerr stressed that the United States must account for the cost of emitting greenhouse gases.  Stating that, "battery-breakthrough's are the holy grail of greentech," Mr. Doerr cautioned that ingenuity and entrepreneurship must be fostered and developed domestically so that the United States is not left in the dust of its global competitors.  Mr. Doerr's remarks followed the introduction by Tom Friedman, author of Hot, Flat and Crowded: Why We Need a Green Revolution, who in colorful terms described the need to simulate massive innovation by a price signal.  Mr. Friedman did not advocate for a mechanism but prescribed that it must be accurate in speed, scope and scale.   After all, he reminded the panel, Green IS the new Red, White and Blue.  For a full replay of the hearing, go to http://epw.senate.gov/public/ under the "majority" page and view the recent webcast.

While no crystal balls were used and no firm predictions made, the group of distinguished speakers brought together by Ice Miller last week all agreed that the potential for some significant change and uncertainty was ahead for the agriculture industry.

Sen. Richard Lugar self-titled his remarks “VeraSun, GMOs and CO2” and referred to many of the challenges and opportunities ahead for the industry.  Despite the concerns over ethanol producer VeraSun’s financial situation, Lugar is “still excited about the prospects” for alternative energy and continues to “argue strenuously for ethanol.”  He remains concerned about the world trading system and some countries’ apprehension to address food crises and ultimately use technologies like GMO crops to feed those who are hungry.

Finally, he discussed the importance of carbon sequestration in the future but encouraged thoughtful consideration of it by each farm, household and factory.  Listen to his remarks.

In the end, Lugar frankly commented that the uncertainties are great and that some luck was going to be needed in the coming year.  Listen to his remarks.   He closed suggesting the need for “the right language and statesmanship” on all of these issues was critical and told industry leaders to “be prepared.”  “This will be not just a year of marketing, but also one of advocacy and community meetings,” he advised.

Roger Bernard of ProFarmer and Farm Journal magazine described the Nov. 4 election results and the still uncertain outcome of key Senate races.  Listen to his remarks.  Bernard also highlighted several areas of agriculture that could be impacted by the election results. Below is a slide from his presentation that touches on some of those key issues.  View his entire presentation.



Dave Lyons of Louis Dreyfus expressed concern from the perspective of a leading multinational grain shipping and processing company about future trade prospects for agriculture.   The future regulatory oversight of the financial and commodity markets also will have an impact on Dreyfus and many other agribusiness firms.  Lyons voiced concern about early hints at a combined Commodity Futures Trading Commission and Securities Exchange Commission and hopes agriculture can keep its own regulator.  Listen to his remarks.

Jeff Simmons of Elanco provided strong direction to the audience to fight strenuously for continued use of key agricultural technologies.  Referring to a question asked of him about Proposition 2 that passed in Calif. and will prohibit some very traditional livestock production methods, Simmons shared some of his direct experience working with Elanco in the United Kingdom – a country that turned away from agricultural productivity advancements following food safety crises and pressure from strong activist groups.  Listen to his remarks.

Renewable energy was a significant issue during the recent election campaigns.  Dr. Wally Tyner of Purdue University explained the current market dynamics for biofuels vs. petroleum and addressed some likely policy debates that will unfold in 2009 for current renewable energy programs and supports.  Listen to his remarks.

What Sen. Lugar described as being a “tough year” for the industry may at least gain some clarity as the new personalities and leadership in agriculture soon will be in place.  Roger Bernard posited this about President-Elect Obama…."Which Obama will take the White House – the pragmatist or the politician?"   The question holds true for every new political leader that touches agriculture – we now must wait to see who those new leaders will be.

As Associated Press business writer Michael Liedtke observed in his October 20, 2008 article Feeling Financial Squeeze, VCs Curtail Investments, “Although a drought hasn't set in yet, it's looking inevitable as the ripple effects of a worldwide financial crisis rattle venture capitalists.”

According to data released by Thomson Reuters, PricewaterhouseCoopers and the National Venture Capital Association, venture capital investments have recently experienced the largest decline since spring of 2003 following the dot com bust.

Many venture capital firms are advising the management teams of their portfolio investments to revise their short-term business plans to reduce costs by laying off staff and trimming budgetary spending in expectation of a worsening recession.

Although venture capital investments have experienced the largest drop off in the last decade, there is a silver lining in the form of a rising interest in biotechnology and alternative energy.  As stated by Terry Kosdrosky in Private Equity Has Toolkit to Ease Troubled Market, “Political leaders and the public are hungry for renewable sources of energy that will lessen the country's dependence on foreign oil and cut down on pollution.”

Venture capital and private equity funds have followed the emerging trend of new companies seeking to stake a founding interest in these industries.  For example, Liedtke cites statistics supporting a 21 percent increase in venture capital investments in biotech startups from last year, while alternative energy, was close behind with a 17 percent increase.

In addition to venture capital opportunities in the U.S. biotechnology and alternative energy industries, Kosdrosky also points to growing opportunities overseas, stating “With growth stunted in the U.S., many private equity firms are looking to put their money to work in growing markets such as China and India.”

The current financial climate has forced venture capitalists to focus their resources on existing investments rather than taking on new challenges.  What does all this mean?  Despite the downturn in the global economy, opportunities for lucrative venture capital investment still exist, albeit in new forms and perhaps in sectors not previously considered.  As blogger Seth Levine wrote in his October 22, 2008 post of VC Adventure, “Be flexible. Seek outside input. Be introspective. Stop and consider what you're learning and if it effects key assumptions behind your business idea. Tweak what you're doing.  Repeat.”

I received a letter today as a US Green Building Council (USGBC) member from Rick Fedrizzi the CEO, President and Founding Chair of USGBC.  It was interesting to read his take on what will happen to the green building movement in a world where the financial crisis has stolen the headlines.  Mr. Fedrizzi's position is that it is "greed that led the world economy into crisis."  He takes that position that this greed will not defeat our commitment to good work.  "Fear will not dominate our agenda.  And our commitment to change - even in the face of so great a challenge - will not waver."

Mr. Fedrizzi continues that "Change doesn't wait on Washington. And it doesn't depend on Wall Street. Change comes from within."  The green building movement has been demonstrating that fact for more than 15 years.  Before there was a single government green building policy, before the business community stood up and took notice, before there was a LEED - there was you. Thousands upon thousands of committed individuals dedicated to doing better by doing good.  You've built this movement.  You're building sustainable communities.  And every single one of us has a contribution to make towards pulling our country out of this crisis."

I think that Mr. Fedrizzi's justification can be used to contemplate that more than green building - but green development, clean technology and the associated green jobs  -  will pave the way for a brighter economic future.  "It will save money.  It will save energy.  It will help save our climate.  And directly relevant to today's economic environment, it will create good, green, local jobs."  His example is that USGBC estimates that a 100% commitment to greening existing commercial buildings alone would create more than 1.5 million new opportunities for employment for out of work Americans.

While I think it is oversimplifying social, business and cultural issues to say that greed got us here, I can agree that green can lead us out.  Doing well by doing good is both a sustainable business and sustainable environmental message.  If getting everyone in our business communities to be "greedy" - "greedy" in energy savings, "greedy" in job creation in our state, "greedy" in the reduction of greenhouse gas emissions, then I say environmental greed is good.

With all of the talk of economic stabilization, recession, toxic debt, and presidential debates, green development discussions can get pushed to the curb. However, climate change is a hot topic among the presidential contenders. As part its efforts to address the country's economic situation the House approved H.R. 1424, the Emergency Economic Stabilization Act of 2008 (the Act) on October 3rd. The Senate passed the bill on October 1, 2008. President Bush signed the legislation.   While the purpose of the Act was not "green" legislation, several provisions of the Act, especially those relating to bond development, were included and further green development opportunities. As summarized by the National Association of Bond Lawyers the provisions include:

• Another $400 million in Qualified Zone Academy Bonds (QZABs) authority for 2008 and 2009;
• $800 million in new Clean Renewable Energy Bonds (CREBs) authority and extension of the termination date for existing CREBs by one year;
• Extension and modification of the authority to issue Green Building and Sustainable Design Project Bonds (Green Bonds) until 2012;
• Tax-exempt bond relief to federally declared natural disaster areas in 2008 and 2009; and
• A new category of tax-credit bonds called Qualified Energy Conservation Bonds (see www.nabl.org). These and other provisions of the legislation address climate change and sustainability matters. Stay tuned for further developments!