Colorado Bar Association Environmental Law Section February 22, 2006 David Hiller State Issues Counsel for U.S. Senator Ken Salazar

Key Renewable Energy Provisions Energy Policy Act of 2005  Provides $2.7 billion in production tax credits to encourage the production of clean electric power from wind, closed-loop biomass, open-loop biomass, geothermal, irrigation power, landfill gas, and trash combustion.  $2.7 billion in tax incentives to encourage efficiency and conservation, including energy efficient appliances and energy efficient building construction.

Key Renewable Energy Provisions Energy Policy Act of 2005  Requires manufacturers to use 7.5 billion gallons of ethanol and biodiesel by 2012 –Reduce oil consumption by 80,000 bbls/day by 2012 –Reduce the trade imbalance by $64 billion; –Create 234,840 new jobs in the U.S. economy; –Increase U.S. household income by $43 billion; –Add $200 billion to the GDP; and  Creates $6 billion in new investment in renewable fuel production facilities

Key Renewable Energy Provisions Energy Policy Act of 2005  Extends the biodiesel tax credit for producers for five years.  Allows small producer tax credit for biodiesel and ethanol producers that generate less than 60 million gallons per year. –Provides credit of 10 cents per gallon for first 15 million gallons produced. –Up to $1.5 million in tax credits each year.  Offers $874 million in tax credits for the purchase of alternative-fuel and hybrid vehicles – from $2,000 for small cars to $40,000 for buses.

Key Renewable Energy Provisions Energy Policy Act of 2005  Provides a 30 percent tax credit (up to $30,000) for investments in alternative fuel refueling stations. –Qualifying fuels include E85 ethanol blend and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. –Credit expires December 31, 2007.

Key Renewable Energy Provisions Energy Policy Act of 2005  Provides loan guarantees for up to 4 cellulosic ethanol plants. –Cellulosic ethanol is the ethanol of the future – it will provide substantial oil savings when it is economically feasible. –The loan guarantees are for up to 80% of the project, up to 250 million.

Key Renewable Energy Provisions Energy Policy Act of 2005  Mandates DOE biodiesel testing program with diesel engine makers and biodiesel producers to study the impact of biodiesel on operation of diesel engines and engine emissions  Requires Departments of Commerce, Interior, and Agriculture to use energy efficient vehicles, including alternative fuels.  Establishes an Advanced Biofuels Technologies Program –To develop value-added bioproducts (e.g. fertilizers, herbicides, and pesticides) from the production of biodiesel.

Senator Ken Salazar COLORADO RENEWABLE ENERGY SUMMIT JANUARY 11, 2006 King Center Community College of Denver To increase understanding of the role of energy in America’s national security and economic prosperity. To provide information regarding renewable energy research, development and production. To discuss the next steps for renewable energy in Colorado and the Nation.

VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY ACT “Set America Free Act” S Introduced November 16, 2005 VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY ACT “Set America Free Act” S Introduced November 16, 2005

“Set America Free Act” S Sponsors: Senator Salazar (D–CO), Senator Bayh (D–IN), Senator Brownback (R-KS), Senator Coleman (R–MN), Senator Graham (R-SC), Senator Isakson (R-GA), Senator Lieberman (D- CT), Senator Lugar (R–IN), Senator Nelson (D-FL), Senator Obama (D – IL), Senator Sessions (R-AL)

Set America Free Act presents an action plan to save: 2.5 million barrels per day by million barrels per day by million barrels per day by 2031

“Set America Free Act” S By 2012, 10 percent of each auto manufacturer’s fleet must include technology that will result in a 25 percent increase in fuel efficiency over and above CAFÉ standards.  Acceptable technologies include flexible fuel, clean diesel and electric or hybrid engines.  The percentage of the fleet required to have these technologies will increase by 10 percent annually until it reaches 50 percent in 2017.

S includes specific methods for achieving these goals:  Retooling tax credits for manufacturers and suppliers of advanced diesels and hybrids.  Tire efficiency program for tires used on light duty vehicles.  Efficiency standards for heavy duty vehicles (trucks, buses, etc).  Lifts the per manufacturer cap on consumer tax credits for the purchase of hybrids and advanced diesels.

 Allows hybrids to qualify under the Energy Policy Act of 2005 alternative fuels fleet requirements.  Provides a tax credit for large private fleets for purchasing more efficient vehicles for their fleets.  Creates an R&D program for electric drive transportation and light-weight materials.  Closes the SUV tax loophole, which provides perverse incentives to small businesses to purchase SUVs over other vehicles. (This section is taken verbatim from Senator Salazar’s Reduce Incentives to Guzzler Gas bill, S. 1852)

Sen. Salazar’s Recommendations For Federal Action 1.Set an Energy Independence Target of 25x25 2.Provide full funding for NREL 3.Extend Production Tax Credits for renewables through Increase use of flex-fuel vehicles 5.Expand transmission for electric power from renewable resources

Sen. Salazar’s Recommendations For Federal Action 6.Accelerate R&D to produce hydrogen with renewable energy 7.Support small, locally and community owned renewable energy projects 8.Help REAs increase use of renewables 9.Increase funding for clean coal R&D 10.Promote safe, secure nuclear energy, including permanent waste storage

Colorado Bar Association Environmental Law Section February 22, 2006 David Hiller State Issues Counsel for U.S. Senator Ken Salazar