By Jim Snyder and Kevin Bogardus - 04/10/07 07:51 PM EDT
More than 20 companies or trade groups have hired lobbyists in recent weeks to push their particular non-fossil fuel or other “climate-friendly” technologies on Capitol Hill. Roughly three-quarters of those clients are hiring lobbyists for the first time, according to a review of Senate lobbying records.
Lobbyists say the business is being driven by three things: the push to curb global warming; growing interest in finding a replacement for imported oil; and the continuing maturation of technologies from solar power to fuel made from vegetable oil.
Some of that new money was expected to come from the oil and gas industry. The House has passed a bill to create a multi-billion-dollar renewable fund through higher royalties on oil companies operating in the Gulf of Mexico.
But the Senate has not followed suit, and there may not be a significant boost in direct federal financial support for renewable energy at all, one lobbyist said.
Meanwhile, growing competition for the money that is available among more companies and new technologies could actually undercut some support for particular renewable-fuel technologies. The renewable lobby has suffered from balkanization in the past, and while there are new entrants, there doesn’t appear to be widespread evidence that they are developing a cohesive voice.
That said, attitudes toward renewable energy have shifted, even if that doesn’t necessarily translate into big expenditures. Sources describe a high level of enthusiasm from the renewable-energy community about its future prospects on Capitol Hill.
Tim Urban, a tax lobbyist at Washington Council Ernst & Young, has several clients in the renewable-energy industry. He said he had faced a number of doubters in Congress in past years when he made pitches, but their numbers are falling.
“Members were not unanimously sold on making renewable energy a high priority and devoting federal revenues to support development,” Urban said. “These days, when you go in to meet with members, even ones that weren’t fervent supporters, there is a significant amount of interest in renewable energy.”
That interest extends to the White House, traditionally a bastion of support for the oil and gas industry.
President Bush, himself a former Texas oilman, has called for cutting gasoline use by 20 percent over the next 10 years, in part through the use of alternative sources of energy.
Congress is also starting to act. New Mexico Sens. Jeff Bingaman (D) and Pete Domenici (R), chairman and ranking member of the Senate Energy and Natural Resources Committee, introduced a measure before the April recess that would increase requirements for renewable-fuel production to 8.5 billion gallons by 2008 and to 36 billion gallons by 2022. The committee will hold a hearing on the bill tomorrow.
“You are clearly looking at a Congress that is trying to bring renewable gallons to the marketplace,” said Michael McAdams, a lobbyist for Hart Downstream Energy Services, an energy consultancy.
K Street’s new roster of clients includes new coalitions for cellulosic ethanol, which is made from fibrous plants like switchgrass, and for a type of solar power that uses giant parabolic mirrors to generate electricity.
The Cellulosic Biofuel Working Group hired Van Ness Feldman, which has a broad energy law and lobbying practice, to lobby for tax and other federal support for cellulose feedstock — a Holy Grail technology of renewable fuels. It can be grown much more cheaply than corn, but turning it into fuel is currently prohibitively expensive.
Meanwhile, the concentrating solar power industry has hired Capitol Counsel, a new Democratic-dominated lobbying firm that specializes in tax policy, to help form a new coalition that likely will have seven to 10 members.
Tax incentives helped develop the concentrating solar industry in California, while Arizona is building a new 60 megawatt plant. The industry also is looking to expand further now that more and more states are mandating that utilities get a certain percentage of their power from renewable energy sources.
In addition, Congress is likely to pass a federal renewable standard, further boosting renewable-energy efforts.
“People across the country get that we need to find sustainable solutions to environmental problems like global warming — not only for the environment’s sake but to improve public health and quality of life,” said Lloyd Ritter, a former senior counsel to Sen. Tom Harkin (D-Iowa), the new chairman of the Senate Agriculture Committee.
Interest in renewable energy is so high that Ritter decided to build his new practice around it. His firm, Green Capitol, represents the Biotechnology Industry Organization, an influential trade group.
Much of the lobbying effort is focusing on expanding tax breaks like the production tax credit available to renewable-energy sources to generate electricity.
The tax break now gives a 1.9-cent break for every kilowatt of power generated. The credit has spurred rapid growth in the wind-energy industry.
Congress adopted the credit in a major energy bill adopted in 2002. The credit was also available to a process called “closed loop biomass,” in which a crop is grown and harvested specifically to produce electricity.
There are no closed-loop facilities that now get the credit. But Urban and Washington Council Ernst & Young recently signed with the Biomass Investment Group, which believes it has found a crop that makes the process economically viable.
Congress must extend the production tax credit beyond one- and two-year increments to reassure nervous Wall Street investors necessary to finance these capital-intensive projects, said Jerry Whitfield, chief operating officer at the Biomass Investment Group.
Beyond Capitol Hill, more lobbying is underway. Former Rep. Dennis Hertel (D-Mich.) is lobbying with the Livingston Group for Energy Conversion Devices, a developer of solar panels and fuel cells. His efforts include selling solar panels to the Energy Department and hydrogen-energy fuel cells to the Pentagon for use in military vehicles.
Rep. Jim Oberstar (D-Minn.), the chairman of the House Transportation and Infrastructure Committee, has written a bill to require the Department of Energy to install solar panels on its roof. And Hertel predicts there will be competition for such a project, which has long been planned but never executed.
The Energy Act of 2005 included subsidies to support biodiesel fuel, in particular of the type made from soybeans and grain commodities. Now others want a slice of the pie.
“Policymakers should not be in the business of picking winners and losers, but letting the marketplace decide,” said Dave Gillespie, president and CEO of H2Diesel, a new biodiesel company based in Houston, Texas.
Gillespie, a former vice president at Duke Energy Co., has hired a team of lobbyists at Greenberg Traurig to create tax incentives that are more “technology-neutral.”
“All are we saying is there is room for other products to fulfill parallel needs,” said Gillespie.