Bill Contains Conrad Provisions Benefiting ND,Creating Jobs, Boosting Economy
07/29/05
Washington - Senator Kent Conrad announced today that a national energy bill that promotes substantial investment in North Dakota is one step closer to becoming law. The comprehensive energy bill has passed both chambers of congress and is now on its way to the President for his signature.
“This bill takes steps toward greater energy independence for the United States and lays the groundwork for a plan that promotes substantial investment in North Dakota’s energy sector,” Senator Conrad said. “But still, even bolder steps must be taken to make the U.S. more energy independent.”
A senior member of the Senate Finance Committee, Senator Conrad crafted several energy tax incentives intended to increase the development of North Dakota’s energy industry. The legislation, approved by both Houses of Congress, includes many of Senator Conrad’s initiatives, including a provision that will help develop plans for a proposed $750 million coal-to-liquid fuel plant in North Dakota. Additional Conrad provisions include:
An Extension of the Renewable Energy Production Tax Credit: One of Senator Conrad’s most important energy policy goals is to develop North Dakota’s potential for wind power, a clean, abundant source of energy. To that end, Senator Conrad secured a two-year extension of the renewable energy production tax credit.
Clean Coal Tax Credits: The energy bill includes Senator Conrad’s tax credits for power companies that use clean-coal technology. These credits include $800 million for a 20 percent investment tax credit for power plants using the most advanced clean coal technology, and $500 million for a 15 percent investment tax credit for other advanced clean coal power plants. During consideration of these tax credits in the Finance Committee, Senator Conrad worked with his colleagues to ensure that plants burning lignite coal would qualify for the credits. Senator Conrad’s measures would strengthen North Dakota’s lignite coal sector, an industry that has created some of the best-paying jobs in the state.
Ethanol and Biodiesel Tax Credits: Ethanol and biodiesel offer tremendous economic potential for North Dakota, which is home to many fuel-producing crops. Senator Conrad drafted an assortment of tax credits in the Energy Bill to encourage the production of these renewable fuels.
These include the extension of existing biodiesel credits through 2008 and the creation of a 10 cents per gallon credit for biodiesel producers.
Senator Conrad also helped secure a Renewable Fuels Standard, requiring the use of 7.5 billion gallons of renewable fuels, like biodiesel and ethanol, by 2012. This standard will increase demand for many of North Dakota’s fuel-producing crops. In addition, he expanded an existing 10-cent-per-gallon ethanol credit for 30-million-gallon-per-year ethanol plants to include facilities that produce up to 60 million gallons of ethanol per year. This tax credit could be worth up to $1.5 million for most of North Dakota’s existing or planned ethanol plants.
Expanded Existing Ethanol Tax Credit: Senator Conrad expanded an existing 10-cent-per-gallon tax credit for ethanol plants to include plants that produce up to 60 million gallons of ethanol per year. As a result, additional North Dakota ethanol manufacturing plants will be eligible for a tax credit worth up to $1.5 million per year—encouraging the production of this renewable energy source.
Coal-to-Liquid Fuel Federal Loan Guarantees: As the price of oil increases, coal-to-liquid fuel is becoming a more attractive option in coal-rich states like North Dakota. Senator Conrad inserted a provision in the Energy Bill to ensure that any future facilities that produce transportation fuel from coal in North Dakota will qualify for federal loan guarantees. This provision will help obtain funding for a proposed $750 million coal-to-liquid fuel plant in North Dakota.
Renewable Energy Bonds for Cooperatives and Tribes: Senator Conrad drafted this provision in an effort to encourage co-ops, public power systems and Indian tribes to invest in wind and other renewable energy projects. The Energy Bill provides $800 million for these organizations to expand their renewable energy development by issuing a new category of tax credit bonds.
Investment in North Dakota’s Transmission Capacity: Senator Conrad has taken action to make sure that electric consumers in North Dakota continue to receive cheap, reliable power. He developed tax incentives to help utilities invest in electricity transmission and pollution control. Specifically, the energy bill accelerates the depreciation period of transmission lines, providing a needed boost in funds for companies to invest in new high voltage transmission lines. Another Conrad provision will facilitate investments in pollution control property by providing critical financial assistance to power companies that have made the decision to spend more money on pollution control. This will foster a growing demand for North Dakota’s energy resources and help keep our air clean.
Natural Gas Incentives: Senator Conrad supported several provisions in the Energy Bill to encourage companies to invest in new natural gas infrastructure. Specifically, these provisions will accelerate the depreciation period of natural gas distribution and gathering lines. This initiative could result in lower natural gas prices in the long term.
The federal energy bill also calls for $30 million to be set aside for the development of 10 enhanced oil recovery demonstration projects in the Williston Basin. These demonstration projects will not only increase oil production, but will also prevent carbon dioxide from escaping into the atmosphere by injecting it underground.
In addition, the energy legislation calls for further development of clean coal technology. The bill secures federal loan guarantees for new lignite-fired coal plants and authorizes a Department of Energy program to study mercury removal from lignite coal.
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