And yeah I know why that happens. Wind is popular. So by renewing the credit a year at a time that credit can always be held hostage for whatever else the committee chairs want to pass that might otherwise not get through.

At the national Wind Energy convention in Los Angeles last year I was talking to a representative in the booth for a manufacturer of big castings for rotor hubs, etc.

They were out of capacity, but needed longer-term certainty of orders before making such a big capital investment. As we get whole one-year extensions of credits.

A 10 cent per kwh subsidy diversion would be much better.  And wouldn't expand the debt.

It would be predictable, giving the market in renewable energy devices long term stability.  Thus encouraging investment in mass production.  In turn lowering costs.

This patchwork is not working.  

http://amazngdrx.blogharbor.com/blog

The patchwork will continue as long as we pretend that renewables only need a jumpstart to be competitive with other sources of energy. A carbon tax would change the process and effectively be a permanent subsidy for low carbon energy.

JMG, good question. The answer to it is rather straightforward: you subsidize cellulosic ethanol because once you have the necessary breakthrough, a whole new world opens up and humanity is saved.

With competitive cellulosic ethanol, the entire world can replace all oil and prevent catastrophic climate change.

If you have an alternative to biofuels which can pull this off, then please let us know.

There's only enough biomass resource for 10% replacement of oil.

And that replacement would destroy carbon sink activity in the soil and actually increase GHG.  Corn ethanol doubles GHG and cellulosic generates one and a half times the GHG of oil based fuels.

Turning wilderness into cropland releases millenia of stored carbon in the soil.  It's a completely dead end for planet earth.

http://amazngdrx.blogharbor.com/blog

...Why, of why, are they wastin' valuable resources tryin' to pass a bill that has been given a nearly guaranteed chance of veto?

We don't have veto-proof majority, and yet they still insist on tryin' to pass a bill that will get vetoed.

Why?  Do they think it'll highlight the prez's dismal record on renewables and the environment?  News flash-we already know that!

Seriously, I'm all for try, try, again and keep on tryin' no matter what...but this almost makes a half-dozens they've tried to pass with renewable tax credits.

Think a change in strategy might be in order by now?

They need to attach it to a bill that has massive support for other things, and they need to do it in such a way that it doesn't raise flags over taxes.

Why they didn't try to attach it to the Farm Bill, I'll never figure out...

Without getting into the debate over how much potential there is for cellulosic ethanol to substitute for gasoline, even if one believes that there are great breakthroughs waiting to be made in bringing down the cost of producing cellulosic ethanol, those breakthroughs will come through R&D.

What this bill does is, effectively, subsidize consumption of cellulosic ethanol, through a tax break to blenders (which, in the presence of trade barriers, essentially ensures that most of the production will take place domestically). It also gives more than double the tax break to cellulosic ethanol as to cane-based ethanol from Brazil, which has an energy balance and carbon footprint similar to that of cellulosic ethanol.

It is legitimate to ask whether a blender's credit is a cost-effective way of encouraging R&D on cellulosic ethanol. Look at the one that has been benefitting corn ethanol: it, in one form or another, has been around in the USA since 1978 -- i.e., for 30 years. The cellulosic-ethanol tax credit may be scheduled to end after "only" seven years, but given the history of policy in this area, why should anybody assume that it won't be extended?

Yet if production costs really do come down, the industry will still benefit from a $1.01/gallon tax credit.

Now, multiply $1.01/gallon times your chosen share of an annual gasoline demand of around 140 billion gallons a year, and you can readily see how much this one subsidy will cost the U.S. treasury after a few years.

Despite what Jonas says, it is not simply a case of tax credits or nothing. No country can afford to subsidize itself off of oil by simply subsidizing an alternative to be sold at the same price as the fuel it is replacing.

These are only my personal opinions.

Make that "Now, multiply $1.50 per gallon of gasoline equivalent (to account for ethanol's lower heat value) times your chosen share of an annual gasoline demand of around 140 billion gallons a year, and you can readily see how much this one subsidy will cost the U.S. treasury after a few years."

These are only my personal opinions.