What’s Good for Algae is Good for Renewables

November 12, 2013 |

rosenthalBy Mary Rosenthal
Executive Director, Algae Biomass Organization

I had the privilege of sitting in the Science, Space, & Technology Committee Room of the Rayburn House Office Building last month for the launch of the new Congressional Algae Caucus with its bi-partisan chairmen, Republican Matt Salmon of Arizona and Democrat Scott Peters of California. They, along with a bi-partisan group of members from Hawaii to New York and many places in between, came together on the first day of business after the shutdown ended to make algae among their first priorities.

The primary purpose behind the caucus is to increase the awareness in Congress about the incredible benefits algae can provide in terms of renewable fuels, products and economic development.

As we shared our legislative priorities with the caucus and as I listened to the discussion, it struck me how many of the policy priorities for algae-based fuels were not only achievable in today’s political environment, but could also benefit the biofuels industry at large.

Master Limited Partnerships

One example that should resonate with any biofuel company is the current limitation of Master Limited Partnerships (MLP), which are used to finance large energy projects. MLP’s are taxed as partnerships, but have ownership interests that can be traded like corporate stock on a market. As a result, MLP’s can often more easily assemble the capital needed to get large projects off the ground.

Unfortunately, none of that capital can support renewable energy because only oil and gas projects qualify for MLP treatment. Biofuels, wind or solar projects are left in the cold.

Yet I was encouraged to hear strong support for allowing renewable energy to take advantage of the MLP structure from the chairs, as well as from Congressman Jared Polis (D-CO) and Susan Davis (D-CA). All agreed that parity in the tax code is something that people of both parties should be able to agree on.

Legislation to change the rules and enable renewable energy projects to qualify for MLP’s has been created in the Senate by Senator Chris Coons (D-MD) and Jerry Moran (R-KS.), entitled the Master Limited Partnerships Parity Act. In the House, HR 1696, the Master Limited Partnerships (MLP) Parity Act, is cosponsored by Ted Poe (R-TX) and Mike Thompson (D-CA).

The Renewable Fuel Standard and algae

The panelists from ABO, including member companies, made a strong case for the continued importance of the RFS. When it came to the discussion of ensuring parity amongst benefits for various feedstocks, again there was consensus that the tax and regulatory structure should allow for a level playing field. This benefits all feedstocks, production technologies and biofuels.

We made the case that waste CO2 shouldn’t be treated as waste, but rather as an input for low carbon, domestically produced biofuels. Producers like Algenol stated their intent to actually purchase CO2 – which upends the entire notion of carbon capture and sequestration. We made the case that the best way to sequester carbon is to leave it underground – replacing it with biofuels grown aboveground. The more we can get policymakers to understand that waste is a valuable resource, the better it is for a variety of next generation providers, from cellulosic to MSW.

Last, we talked about the need for regulations and the tax code to recognize algae cultivation and harvesting as a form of farming, and thus qualify for the myriad benefits made available to our friends in the agriculture industries. By ensuring parity for algae, we can set the table for other new crops or types of agriculture that may not have yet been conceptualized. Again – a level playing field.

The Congressional Algae Caucus

The bottom line is that the Congressional Algae Caucus, while advocating for policy changes or other support mechanisms for the algae industry will simultaneously be helping to support the broader biofuels industry. This is good news for entrepreneurs, researchers, farmers and investors that are leading our nation to a new energy future.

Members of this caucus won’t agree on everything, but coming on the heels of a difficult government shutdown they are proof that a spirit of bipartisan cooperation is working to build a stronger America.

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