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April 10, 2007

Re: A Bad Idea Whose Time Has Come?

[Re: A Bad Idea Whose Time Has Come? 4/10/277]]

I'm not sure the Oregon bill is as blindly bad as you imply. 

To start, the incentive is a tax credit, so the producer needs to make a profit, that is produce more than it costs. 

Second, for the most part, the kind of issue you address is only one of many biofuels (as taken from the bill text (search for HB 2110 here):

“(A) Forest or rangeland woody debris from harvesting or thinning conducted to improve
forest ecological health and reduce uncharacteristic stand replacing wildfire risk;
”(B) Agricultural residues;
“(C) Offal and tallow from animal rendering;
”(D) Food wastes collected as provided under ORS chapter 459 or 459A;
“(E) Yard or wood debris collected as provided under ORS chapter 459 or 459A;
”(F) Wastewater solids; or
“(G) Crops grown solely to be used for energy.

Third, of course we are subsidizing a ”more costly“ energy mechanism because there isn't the infrastructure, economies of scale and design effciencies because we haven't generated energy this way to scale before.  (I am not defending the use of excess energy input, but rather things like forest biomass for which we don't have conversion plants and for which we don't have convenient hook-ups to the grid located where the biomass is, etc.).  Those are reasons to subsidize the process in order to help get it to scale.

Fourth, Oregon isn't a big corn or other producer of ethanol feed stock, so I'm not as concerned that suddenly this will turn around and the other 6 renewable fuels will diminsh in importance here.

While I like the ”net renewable“ concept, it would penalize new technologies if it wasn't a penalty also applied to fossil fuels as well, which use fossil fuels to refine them, transport them, etc.  Normally this is accounted for in the cost of production, and I'm unsure of why this wouldn't be the case here too for renewables as well for the most part.  A net renewable would also be very difficult to calculate for each separate producer. 

An easier approach, and to level the playing field, would be to increase the tax on fossil fuels -- this would build in the incentive to find alternatives and to cut mileage.

All in all, I would much rather have this bill in place even as it stands and modify it to improve it in the future than to throw out the baby with the bathwater and have no support for other fuel types today.

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