From the Director's Desk:
Remaining Vigilant: A Tale of Two Markets
When writing the conference wrap-up edition of the Pellet Wire I included “Remaining Vigilant” in the subject title with every intention of writing copy that supported a headline. I didn’t. I just missed it, authored my commentary on the conference, and moved on. I even included a link to the Ft. Drum biomass power plant story that inspired the headline in the industry news section. Since the last edition of the Pellet Wire another story has been published that serves as an interesting contrast to the Ft. Drum story, so add a few words, and voila’, an opening commentary presents itself for this week.
I’ve been following the development and operation of the biomass power plant at Ft. Drum for a decade. Renewable energy deployments at military bases always drew a specific interest from me as I spent six years in the Army National Guard and have been on a few military bases. Friends of mine trained at Ft. Drum. So the story that the power plant could be idled next year was disappointing to say the least. The passage from the article written by Brendan Straub that was most disturbing reads, “The 60-megawatt biomass facility on Fort Drum may be the next to go after state legislation, that would recognize biomass as renewable energy, failed to pass.”
There’s plenty to talk about here and we could go deep on the efficiency rates of power from biomass vs. heat from biomass or the role of incentives in renewable development but we can all agree that a state law that fails to recognize biomass as renewable energy is a travesty and a testament to how politicized science has become.
Compare the decision of the State of New York for instance to the news published just after the last edition of the Pellet Wire went into production. As June closed out the U.S. Industrial Pellet Association praised the EU Council General for their continued support for primary woody biomass within the Renewable Energy Directive. The release noted, “Amendments to the directive that would declassify ‘primary woody biomass’ as renewable energy was proposed by the European Parliament’s Environment Committee in May, but have failed to gain momentum after the Transport, Regional Development, Agriculture and Development Committees all voted to continue the use of primary woody biomass, and they are now joined by the 27 member states of the EU.”
In summary, the state of New York has decided that biomass is not renewable while the 27 member states of the European Union believe it is. It is all so dizzying. The good news is that wood pellet heating is economically viable without government support, feed-in tariffs or other mechanisms that can go away with the stroke of a pen. The state of New York’s notion of whether or not biomass is renewable has little bearing on the enormous economic benefit New Yorkers heating their home with wood pellets this winter will enjoy over their fossil-fuel burning neighbors. Still, having decisions like the one from New York on the books is a headwind for our industry and one that we need to take seriously. One of the key tenets of our sector is our renewable status and it is a status we must defend vigorously.
Next Week Pivotal in Tax Credit Negotiations
Those following the Pellet Wire know that the Pellet Fuels Institute and our industry colleagues are hard at work to see the wood pellet appliance and wood stove tax credit extended and expanded as Congress churns through new spending packages, budgets and tax extender ideas and scenarios.
Our latest intelligence suggests that a climate and tax bill could be forthcoming this month. Remember that a tax package was one of the pathways our advisors thought was most likely to result in an extension and perhaps expansion of the appliance tax credit now set to expire in 2023. Our work over the last 6-8 weeks has been to target members of the Senate finance committee specifically to outline the benefits of wood pellet production in their state and to ask for their support for an extension and expansion (to include commercial installations) wherever they may see it.
Now, it seems that the strategy was a timely one the specific language of such a piece of legislation may be under development. It is now when our hoped-for language will either find its way into the bill, or won’t. The good news is we’ve had staff-level contacts with a number of key Senators and as I’ve mentioned had a great conversation with Senator Mike Crapo (ID) himself about the tax credit and its importance to our sector. I feel great about that. Thanks again to everyone who has made time to talk about their businesses on our outreach calls.
Finally, I’m putting everyone on notice for next week. We’ve got some advocacy work underway that may require a nudge from constituents to get some traction. I’ll be working directly with you if and when those situations come up and all that may be required is to place a short phone call asking your Senator and their staff for their support.
I suspect we’ll have some answers on what the status of the tax credit’s go-forward status is before school starts and perhaps by the end of the month.
—Tim Portz
Executive Director
