Grassley, biodiesel producers irked as energy plans are dropped from Senate jobs bill

Senate Majority Leader Harry Reid’s (D-Nev.) decision to push a pared-down jobs package that omits several energy provisions is drawing criticism from biodiesel producers seeking extension of lapsed tax credits. Sen. Charles Grassley (R-Iowa), a proponent of the industry, isn't thrilled either.

An extension through 2010 of biodiesel tax credits was part of a jobs plan unveiled by Senate Finance Committee leaders Thursday morning. But the $1-per-gallon biodiesel blending credit and several other energy provisions are no longer in what Reid said will be the first of several jobs measures.

“Clearly, the National Biodiesel Board is disappointed that Senate leadership decided to pull the biodiesel tax incentives from the current jobs bill,” said Michael Frohlich, a spokesman for the trade group. He added that leadership should recognize that “saving 23,000 jobs that are in immediate jeopardy is inextricably linked to a true job-saving and creation agenda.”

The trade group calls the credits vital to the battered industry. Frohlich said the producers will seek to have the Senate add extension of the credits – which lapsed at the end of 2009 – to the current package or another measure soon.

“This really is an immediate need to this industry,” he said.

Extension of the credits is a top priority for Grassley, the Finance Committee’s top Republican. Iowa has over a dozen biodiesel plants, according to the Iowa Renewable Fuels Association.

Jill Kozeny, a spokeswoman for Grassley, said there is biodiesel production in 44 states overall. “They are losing jobs since the credit expired at the end of the year, and restoring the credit as quickly as possible is essential to saving these renewable energy jobs,” she said.

But with Reid’s decision, Grassley and other lawmakers will have to look to subsequent bills for their favored energy measures.

Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.), for instance, is pushing to expand a tax credit program for manufacturing “clean” energy equipment that was launched in the 2009 stimulus law.

A spokeswoman for Reid said leadership plans to work in a “bipartisan manner” on measures such as tax extenders and extension of unemployment insurance after passage of the jobs plan.

“Furthermore we plan to pass additional job bills throughout the year – this is the start not the finish,” spokeswoman Regan Lachapelle said in an email.